Daniels might take a hit as IBM and state trade legal swipes over welfare

May 14th, 2010 by admin Leave a reply »

edicaid cut off to a Hoosier who missed her welfare appointment — because she was hospitalized with terminal cancer.

Welfare benefits denied to a deaf person — because she couldn’t do a telephone interview.

A nun who lost Medicaid benefits and was deemed uncooperative when she missed a telephone interview because she had to play the organ on a Holy Day — though she repeatedly tried to reschedule.

Indiana now wants IBM to pay for those horror stories and more, arguing in a lawsuit filed in Marion County on Thursday that the company failed to deliver a welfare system that gave the neediest Hoosiers timely, accurate help.

IBM has countered with its own lawsuit, arguing that it gave Indiana the centralized, privatized welfare eligibility system the governor’s administration wanted, and that the state was responsible for many of the problems by underestimating the number of welfare applicants.

The state wants to recoup the $437 million IBM has been paid for the 10-year, $1.37 billion contract that Gov. Mitch Daniels canceled in October.

In addition, the state wants IBM to foot the bill for any federal fines that might come for the welfare fiasco and to pay damages from lawsuits Hoosiers have lodged because the welfare assistance they were entitled to was delayed or denied..

Far from giving back any money, IBM argues that it’s owed about $100 million more, including $43 million in deferred fees and $9 million for computer equipment and furniture.

Regardless of who pays, there may be a political price for Daniels.

He came to office in 2005 as a champion of putting public business in private hands wherever it seemed to make economic sense. Ignoring critics who argued that welfare wasn’t the right venue for such changes, and the fact that similar efforts had failed in Texas and Florida, Daniels announced the contract with fanfare in late 2006.

Now, the episode threatens to be a blot on his legacy as governor, and could tarnish his luster as a potential Republican candidate for president.



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