Outrage: ACS Consultant Named New Head Of FSSA

If you thought the stench of political corruption in the Daniels and Ballard administrations couldn't get worse, it just did. Unbelievably, Gov. Mitch Daniels, who is on a trade mission to Japan and China, has announced Michael Gargano, a former paid consultant for ACS, is the new Secretary of the Family and Social Services Administration. Until now, he has been the chief of staff to Anne Murphy, who took over for Mitch Roob, another former ACS executive before he joined the Daniels administration. Gargano became chief of staff after Murphy took charge of the agency. It was Roob's decision to enter into a controversial privatization agreement with IBM and its partner, ACS, for FSSA's welfare services. After the privatization failed so badly, Gov. Daniels terminated the contract after Roob had left the agency to run IEDC and Murphy had taken over the agency. The state and IBM have traded lawsuits against each other, and some estimates calculate the state's losses on that deal as high as $500 million. The state oddly decided to retain ACS as the lead contractor for welfare services despite its role in the failed privatization effort.

Adding to the controversy was the Daniels' administration's insistence that Barnes & Thornburg represent the state in that lawsuit, notwithstanding the fact that the firm has served as ACS's paid lobbyist in the State of Indiana in matters before the Daniels' administration and the Indiana General Assembly, as well as the City of Indianapolis. An engagement agreement signed by the law firm with the state detailed the conflicts of interest anticipated by the firm's representation of the state because of its representation of ACS.

I first reported on Gargano's gigantic conflict of interest on October 15 after Murphy announced she was leaving her position. I noted Gargano's role as the owner of the Watertown Group, which at that time still had an active website on the Internet that boasted of its role as a consultant for a number of state agencies, including FSSA, as well as his role as a consultant for ACS. Shortly after I posted that bit of information, the link to the firm's website went dead. Gargano's appointment takes effect on November 15 according to the press release issued by the Governor's office. The Governor's press release conveniently omits the fact that Gargano once worked as a consultant to ACS.

Gargano is married to Ann Lathrop, the president of the CIB and a former ACS executive, who succeeded Barnes & Thornburg's Bob Grand in that role. Prior to that, she served as the CIB's treasurer. She was appointed to the CIB at the recommendation of Grand. Grand's service on that board raised serious conflict of interest concerns because he and his law firm had represented Simon family interests, including the Indiana Pacers. The CIB just recently under Lathrop's leadership agreed to give a $33.5 million additional subsidy to the Pacers, which use Conseco Fieldhouse rent-free under a lease arrangement that makes the team responsible for the operating and maintenance expenses of the facility, but allows the team to pocket all revenues it generates from both game and non-game events.

CCC President Ryan Vaughn triggered controversy when this blog disclosed he was a registered lobbyist for ACS but was participating in the Ballard administration's controversial 50-year privatization agreement for the city's parking meter assets with ACS. Vaughn insisted the state lobbying reports were filed in error by a paralegal of his firm and should not have indicated he was a registered lobbyist for ACS. Vaughn's boss at Barnes & Thornburg, Joe Loftus, who is a paid personal adviser to Mayor Greg Ballard at the same time he is registered to lobby for ACS, insists he has not participated in any discussions concerning the parking meter lease on behalf of his client. I just earlier reported on Vaughn removing Councilor Christine Scales from the Public Safety Committee after she told him and her fellow councilors she could not support the ACS parking meter lease deal Vaughn is pressing members of his caucus to support.

My question is how much more of this crap do we have to tolerate before a federal prosecutor or the Marion County Prosecutor, who are supposed to be representing the public's interest, steps in and starts an investigation into these tangled webs of conflicts that are raping the taxpayers of this state and city. Enough is enough already. Where is the outrage? Where is the news media? Absolutely unbelievable.