Ind. state senator asks AG to reject contract

John O'Brien Jan. 10, 2007, 2:04pm


INDIANAPOLIS, Ind. - A Democratic legislator has asked Indianapolis Attorney General Steve Carter to refuse a $1.16 billion contract that will partly privatize state welfare programs.

Democrat Vi Simpson sent Carter a letter Jan. 9 pleading with the Republican not to sign the contract and claiming that Gov. Mitch Daniels' proposed 10-year contract with a business group led by IBM is unconstitutional in that it violates a four-year maximum on Medicaid contracts.

"It is unknown to me whether or not you have approved this contract as of this date," Simpson wrote. "If you have not, I would urge you to return this agreement to the Governor so he may negotiate a legal contract with his vendor.

"If you have approved the contract, please forward the legal justification for doing so to me and other members of the General Assembly."

Carter's office responded with a letter stating that his office approved the contract Dec. 27 after specifically reviewing its legality as it pertains to the statute Simpson cites.

IBM will administer the state's welfare eligibility, food stamps and Medicaid programs as a result of the contract.

A report in the Indianapolis Star says that Democrats are upset that Gov. Daniels did not involve them in negotiations and have indicated that they might attempt to head off the funding for the contract during the next General Assembly session.

Also, the administration says the deal will save taxpayers more than $300 million, though Democrats counter by saying IBM will be more worried about profits.

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