Connected law firm’s deal with Indiana grows

Indiana's legal bill in its lawsuit with IBM Corp. over a canceled welfare outsourcing contract could grow by more than half its original value, but representatives for the administration of Republican Gov. Mitch Daniels defended the costs Tuesday.

The administration of Republican Gov. Mitch Daniels will pay as pay as much as $8.05 million through June 30 to the well-connected Indianapolis law firm of Barnes & Thornburg to represent the Family and Social Services Administration in the lawsuit with IBM under an amended contract approved Aug. 30 by the attorney general's office. The original contract approved a year ago paid the firm $5.25 million over the same term.

The firm's attorneys on the case include longtime Republican activist Peter Rusthoven and Brian Burdick, the brother of Daniels' deputy chief of staff.

FSSA is suing IBM to recover more than $400 million it paid before Daniels canceled the 10-year contract in 2009 amid complaints about the automated welfare system IBM installed. IBM argues FSSA owes the company about $100 million for costs including computer equipment the state has held onto..

Indiana House Minority Leader Patrick Bauer, D-South Bend, called the higher costs ""wasted money, good money after bad." Indiana Senate Minority Leader Vi Simpson, D-Bloomington, said FSSA should be spending the money to help vulnerable people who have seen their benefits cut because of budget cuts.

FSSA spokesman Neal Moore said Armonk, N.Y.-based IBM "is doing all it can to run up the costs in hopes the state will give up."

However, IBM spokesman Clint Roswell said the company has sought to speed up the case but the trial was pushed back to next January at the request of the state.

Julia Vaughn, policy director for the government watchdog group Common Cause/Indiana, said the contract was "a sweetheart deal from get-go" for Barnes & Thornburg.

Daniels Press Secretary Jane Jankowski the firm's attorneys are "among the best in the business" and would not have been chosen if there had been a conflict of interest.

Barnes & Thornburg spokesman Ty Gerig said the firm would have no comment on the contract..