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Sunday, August 20, 2006

Ind. Gov't. - "Political players helped pave way for Major Moves"

Patrick Guinane of the Munster (NW Indiana) Times has two stories today on Major Moves and the law firms involved.

The first is headed "Political players helped pave way for Major Moves." Some quotes:

INDIANAPOLIS | Four firms that received $1.6 million in legal and consulting work connected to the private leasing of the Indiana Toll Road have made $90,585 in campaign contributions to Republican Gov. Mitch Daniels during the last three years.

And one top attorney encouraged engineering firms to bankroll an ad blitz in support of the lease while he was under contract with the state.

The Daniels administration says such political considerations play no role in the awarding of contracts and the state simply selected the most qualified firms.

To bolster that argument, Chuck Schalliol, chairman of the Indiana Finance Authority -- the state agency that owns the Toll Road -- points to the losing law firms. Indeed, all nine of those unsuccessful bidders have given at least $2,000 to the governor's campaign, including nearly $146,000 by Baker & Daniels, Indiana's largest law firm.

The ubiquity of such contributions illustrates the well-traveled intersection between government and politics. The overlap, critics argue, drowns out individual residents. * * *

To help pave the way for Major Moves -- the governor's 10-year road building plan tied to the Toll Road lease -- the state incurred a total of $22.3 million in transaction expenses. THe bulk of that -- $20.1 million in consulting fees -- went to Goldman Sachs, a New York-based global investment bank that did not make campaign contributions to Daniels or any other Indiana politician.

The remaining legal and consulting work was shared by seven firms, with the biggest chunk -- $1.3 million -- awarded to Ice Miller, the state's third largest law firm. The Indianapolis-based company employs several high-profile political players on both sides of the aisle, including state Rep. Luke Messer, a former executive director of the Indiana Republican Party, He joined the firm's lobbying team in April, one month after helping the Toll Road lease clear the House without a vote to spare. Ice Miller also is the former employer of Harry Gonso, who now serves as Daniels' chief of staff.

Near the top of the Ice Miller roster is John Hammond III, a veteran Republican powerbroker the state hired at $331 hourly to work on the Toll Road transaction. Hammond has contributed $20,699 to Daniels' campaign, and in January he gave a pep talk to engineering firms concerned about the legislative fate of Major Moves.

Such firms, along with construction trades that also stand to benefit from the road plan, helped steer more than $300,000 this year to Aiming Higher, a nonprofit advocacy group that used the contributions to fund a multimedia ad campaign in the weeks before the General Assembly OK'd the Toll Road lease. * * *

Hammond said he made the Aiming Higher sales pitch on his own time and the political contributions made by him, his firm and other Ice Miller staff are not intended to win state contracts or influence policy decisions.

"You cannot expect there to be any return favor," he said. "I think, in general, our view is you're trying to support people who are going to support policies that are good for the state of Indiana and the citizens of Indiana."

Ice Miller has made $7,386 in corporate contributions to Daniels' campaign since 2003 and, beyond Hammond, six other Ice Miller staffers who worked on the Toll Road contract have given a total of $11,008.

Schalliol, who serves as state budget director, noted that most major law firms make regular donations to both political parties. In fact, several other Ice Miller attorneys hired for the Toll Road work are regular patrons of Democrats and gave more than $3,500 to the re-election bid of Democratic Gov. Joe Kernan, who was defeated by Daniels in 2004. * * *

State Public Finance Director Ryan Kitchell, the Indiana Finance Authority's top administrator, said Ice Miller was chosen because of its highly respected work on corporate mergers and acquisitions and because it offered a 15 percent discount from its standard hourly rates.

"The IFA sought qualified Indiana firms to submit (proposals)," Jane Jankowski, the governor's press secretary, said Friday. "IFA selected what it considered to be the best firm available to handle the transaction based on the responses."

In addition to the contributions by Ice Miller and Mayer, Brown, Rowe and Maw, Daniels' campaign has received $35,492 from Krieg DeVault, an Indianapolis law firm that helped defend against the Toll Road lawsuit, and $6,000 from Crowe Chizek, an accounting agency hired to provide an independent analysis of future toll revenues.

A second story examines "the political connections of legal and consulting firms hired to pave the way for Major Moves." Some quotes:
Ice Miller, the state's third-largest law firm received $1.3 million in legal work. The firm, plus seven Ice Miller attorneys or pubic affairs specialists that worked on the contract, have made a total of $39,093 in campaign contributions to Republican Gov. Mitch Daniels since 2003. John Hammond III, one of the Ice Miller attorneys hired by the state, also lobbied engineering firms to contribute to Aiming Higher, a advocacy group that bankrolled an ad blitz in support of Major Moves.

Mayer, Brown, Rowe and Maw, the mammoth Chicago law firm that handled the privatization of the Chicago Skyway, lost its bid for the main Toll Road contract but received $312,000 in subcontracting work via Ice Miller. Mayer, Brown, Rowe and Maw gave $10,000 to Daniels' campaign in 2004 and the firm employs former state Rep. Dan Dumezich, a Schererville Republican and fundraiser for Secretary of State Todd Rokita and other GOP candidates.

Krieg DeVault, another large Indiana law firm, lost out on the contract that went to Ice Miller, but it and another firm shared $91,187 in legal fees related to the short-lived citizen lawsuit filed against the leasing of the Toll Road. During the last three years, Krieg DeVault has made corporate contributions of $35,492 to Daniels' campaign.

Crowe Chizek, an accounting firm that has done Toll Road work in the past, was paid $20,000 to complete an independent analysis projecting potential toll revenues through the duration of the lease. The company has contributed $6,000 to Daniels' campaign since 2003.

All seven of the other Indiana law firms that competed against Ice Miller for the main Toll Road legal contract have contributed at least $2,000 to Daniels' campaign. Three of those firms have given more than $30,000 since 2003, including nearly $146,000 contributed by Baker & Daniels, the state's largest law firm.

Of course, several of these large Indianapolis firms have been retained in state matters other than the toll road. For instance, this Indianapolis Star story from June 23rd headed "Lawyers win big in million-dollar fight over lottery ticket" reports in a side-bar that the law firm Baker & Daniels has received $450,00 in legal fees so far for representing the State in the dispute. The body of the story states:
The lottery already has ponied up more than $450,000 to pay lawyers to fight the suit and now is agreeing to set up a $600,000 pot to resolve the entire matter, once and for all.

Posted by Marcia Oddi on August 20, 2006 09:28 AM
Posted to Indiana Government | Indiana Law