Though the $1.37-billion project proved disastrous for many of the state's poor, elderly and disabled, it was a financial bonanza for a handful of firms with ties to Daniels and his political allies, which landed state contracts worth millions.
The disparate effects underscore the risks of handing control over public services to the private sector. Whether the approach will ultimately improve services and save money remains a matter of fierce debate in Indiana. But the state's experience shows that without adequate safeguards, privatization can compound the very problems it is designed to correct: bureaucratic burdens, perceptions of influence-peddling and a lack of competition.
It's an issue that is likely to persist, as Republicans in statehouses nationwide turn to private companies as they seek to shrink government and weaken the hold of public-sector unions. One of the main proponents has been Daniels, who privatized a prison and a major toll road and sought unsuccessfully to lease out the state lottery, cultivating a reputation for fiscal discipline that led major party figures to urge him to run for president in 2012. He recently declined, but retains considerable influence in his party.
Republican Gov. Scott Walker of Wisconsin is seeking to privatize aspects of his state's welfare programs, much as Daniels did — an idea that has drawn warnings from federal officials who noted the problems Indiana encountered.
That's right: under the state's privatization program, tens of thousands of Indiana's citizens lost their public assistance, while the companies that administered the program made millions at taxpayer expense. Worse, those same companies were -- you guessed it -- major donors and friends to Indiana Republicans like Mitch Daniels.
Critics say that in Indiana, the privatization process barreled forward with little public input and was marred by the appearance of conflicts of interest. Despite the massive nature of the changes he was proposing, Daniels insisted he did not need legislative approval. And the only public hearing occurred after he announced he would proceed with the project.
Key players involved in the process had ties to Affiliated Computer Services, the company that benefited the most from the deal. Mitch Roob — a Daniels appointee who ran the state's Family and Social Services Administration when it awarded the contract — was a former ACS vice president. As the state began the project, Roob occasionally sought advice from former Indianapolis Mayor Stephen Goldsmith, a political ally of Daniels and fellow privatization advocate who also had been an ACS vice president.
It proves that the whole "free markets" and "privatization" scheme is nothing more than another avenue for the GOP to give taxpayer money to their corporate owners. Imagine that. Oh, but let's remember this is exactly what Republicans want to do at a national level with their plan to "reform" Medicare and Medicaid. Scott Walker is trying the exact same plan in Wisconsin next. And if Republicans get control of the White House and the Senate in 2012, then they'll do the same thing to the entire country.
Republicans don't want anyone taking a look at Mitch Daniels' record too closely. There's a reason why he suddenly decided he wasn't going to run in 2012, and I guarantee you this disaster of a privatization program is exactly why.
They have to screw the entire country over before Mitch Daniels gets too much attention in the press.