Indiana's Gov. Daniels Assailed by IBM

Rare corporate slap pushed aside by potential GOP vice presidential candidate.

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In a fight that could affect his attractiveness as a vice presidential nominee, IBM has launched a stinging attack on Indiana Gov. Mitch Daniels who is refusing to testify on why he canceled a $1.37 billion IBM welfare-modernization contract.

"What is Governor Daniels trying to hide?" said an unusually harsh release from IBM spokesman Clint Roswell.

At issue is Daniels' involvement in agreeing to the 10-year computer contract, then rejecting it after three years in 2009, claiming that it wasn't working. Indiana sued IBM in May 2010 to take back the $437 million it paid the computer giant and IBM counter-sued for $100 million.

Last week, a state judge ordered Daniels to give a deposition within the next 60 days because of his involvement with the deal. Daniels, noted for his pledge to be a transparent governor, said he would appeal and predicted the ruling wouldn't hold up because of a state law that shields Daniels and other state officials from being deposed for lawsuits.

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"There's a reason Indiana has had a law for a hundred-and-some years," Daniels said. "Governors wouldn't do anything but sit around in lawyers' offices if every contract could be subject to a deposition. So I'm not expecting it to happen."

IBM doesn't agree. In its statement, IBM said, "It is indeed unfortunate both sides will have to spend yet more time and resources debating Governor Daniels' refusal, but we look forward to being ultimately able to question the governor under oath as ordered by [Marion Superior Court Judge David Dreyer] and, during trial, to prove that the state of Indiana has refused to honor its contractual commitments to IBM and even now continues to use millions of dollars of IBM equipment in its hybrid system without any compensation to IBM. Only Governor Daniels knows why the state has refused to keep its contractual promises. What is he hiding?"

It is unclear if Daniels' stance will help or hurt him politically. His position is similar to presidents who claim executive privilege. A spokeswoman said, "This isn't about Mitch Daniels; the law exists to protect all governors."

Daniels, a former Reagan political director, former budget director for George W. Bush and popular two-term governor, has been the focus of renewed political buzz wishing that he would get into the GOP presidential race, something he has rejected. He also tops many GOP lists for vice president.

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