IBM files court motion to depose Daniels, aide

Gov. Mitch Daniels and his chief of staff were both deeply involved in Indiana's decision to outsource the automation of welfare intake, and they should provide depositions in lawsuits over IBM Corp.'s cancelled $1.37 billion contract in the project, a lawyer for the company argues in a brief filed this week in Marion Superior Court.

The brief filed Tuesday by IBM attorney Andrew Hull notes Daniels at one point told a state employee union representative that the decision to upgrade Indiana's welfare eligibility system would "be made by me and me alone" and that Daniels personally signed the contract with Armonk, N.Y.-based IBM.

It also contends Chief of Staff Earl Goode was directly involved in all stages of the project from its inception to, after Daniels fired IBM in October 2009, the creation of a hybrid system that uses both automated intake and more face-to-face contact between state case workers and clients.

"Both Governor Daniels and Mr. Goode were intimately involved in all stages of the project, including key events at issue in this lawsuit," Hull wrote in the brief.

A telephone message seeking comment was left Wednesday with a lawyer representing the state.

The Indiana Family and Social Services Administration is suing IBM for more than $1.3 billion, claiming the company breached one of the biggest outsourcing deals in state history. IBM wants the state to pay more than $50 million it says it's owed in deferred payments and equipment costs.

Attorneys for Daniels and FSSA requested a protective order earlier this month seeking to shield Daniels and Goode from having to provide depositions in the counter lawsuits. It said forcing them to testify would be "unnecessary and burdensome."

The state said a 150-year-old Indiana law shields Daniels from having to provide testimony, but IBM argues the law refers only to being served subpoenas and civil arrests.

It wasn't clear when the judge hearing the lawsuits, Marion Superior Court Judge David Dreyer, would rule on whether Daniels and Goode must provide depositions. He has scheduled a hearing in the case for April 15.

Dreyer ruled last week that the state needed to make available to IBM certain documents it argued were privileged, including e-mail messages from Daniels and other state employees.

Problems including dropped calls, long hold times and missing documents led Daniels to fire IBM as the lead contractor on the automation project.