June 27, 2012

Will state enact a ‘Daniels Rule’?

by Dave Kitchell
Local Columnist

— Sometimes people talk past an issue, meaning they talk it to death. Sometimes they think past an issue, meaning they read too much into coincidence. And sometimes, they can anoint their way past an issue. That sort of happened last week when the Purdue University Board of Trustees voted unanimously to name Gov. Mitch Daniels their next university president.

Trustees praised his record as governor and his ability to be progressive in leading the state. But they may have anointed their way past some logical questions that Republicans would be asking if a Democratic governor were appointed Purdue president, or questions Purdue trustees themselves would be asking if Daniels had been named Indiana University president last week.

What’s the problem with a sitting governor being hired to lead a state university? There are reasons why Daniels should have considered fully, even though he deferred the conflict-of-interest question at last week’s press conference to a Purdue official, who claimed the matter had already passed muster with legal counsel.

Maybe so, but what Daniels can do legally and what he should do ethically are not necessarily the same thing. What government official would question Daniels or call him on this one is an open-ended question with no answer in a Republican-controlled state government that is as politically incestual as it has been in the past quarter century.

The Indiana Ethics Commission would be the logical place where ethics issues such as this one ought to be addressed. But who appoints the five commission members? Daniels does. Shouldn’t the Indiana General Assembly at least question the ethics of this decision? They’re not in session. Besides, there are Republican majorities in both houses.

What about Indiana Attorney General Greg Zoeller’s position on this one? He’s a Republican, too.

Whether you love, hate or don’t care one way or another about Daniels taking the job, what you should care about is that the system has no checks and balances to prevent corruption and conflict of interest that will likely promote Daniels to the state’s highest-paid employee in January. There is no law against what he’s doing, and that is probably because it’s never happened before in Indiana. Previous legislators may never have envisioned a time when a governor and not an administrator from the world of education, would lead a university.

That may be cause for ending his rule over the state in 2013 with a “Daniels Rule” that prohibits former governors from accepting presidencies of state universities until after they leave office. We already prevent certain government officials from lobbying government until after they leave it, but there’s more.

Let’s consider some reasons why the ethics of this situation merit further review:

1. In 2010, the chairman of the Indiana Utility Regulatory Commission was fired by Daniels when it was determined the chair was aware the IURC’s attorney, Scott Storms, had been pursuing a job with Duke Energy while he was still working for the state, overseeing Duke’s case before the IURC. Storms and Duke’s Indiana head were both placed on administrative leave when news broke about the conflict of interest. But two years later, Daniels essentially is committing the same conflict of interest in that he sought a job with Purdue while the university secured millions in state funding as part of its annual budget which is either signed into law or vetoed by Daniels. But more to the point, Daniels also has input on decisions affecting other Indiana public universities, and that inherently presents a conflict of interest. Would Indiana University officials for instance prefer that the next Purdue president pick their trustees?

2. Daniels won’t exactly take a pay cut to go to Purdue. As governor, he’s paid $107,000 annually. But outgoing Purdue President France Cordova is Indiana’s highest paid state employee, pulling down more than three times what Daniels earns now. In fact, his next salary was not reported after the trustees hired him. It’s an amount taxpayers have the privilege of knowing under state access laws and which trustees are obliged to disclose.

3. What Daniels had going for him as a candidate for this job was a quid pro quo. He appointed a majority of the trustees who in turn contributed thousands of dollars to his campaign for governor. After trustees and Daniels scratched backs in reciprocation, trustees scratched Daniels’ back again. Now, if Daniels amasses cash he can contribute to a 2016 presidential campaign, he’ll have the same Purdue trustees to thank for his own personal Boilermaker Political Action Committee at the expense of Indiana taxpayers.

4. Indiana cracked down on a conflict of interest involving former House Ways and Means Chair Sam Turpin, R-Brownsburg, who was eventually indicted for bribery, perjury and filing a fraudulent campaign report. Turpin had accepted at least $50,000 from an engineering firm that had contracts with riverboat casinos in Indiana.Yet higher education in Indiana apparently doesn’t force the issue the way it did in Turpin’s case because what Daniels is doing is legal, and he is accepting considerably more than what Turpin collected.

5. Indiana already has a two-term limit on governors, weaning even the best governors away from the state trough after eight years. But Daniels, as Purdue president with no prior academic administrative experience, has already been granted a special exception to the age 65 retirement rule at Purdue, and could serve longer as Purdue president than he served as governor.

6. Purdue trustees, and I note here that I am a Purdue alum, have no teeth in their current conflict-of-interest bylaws. In fact, if there is a conflict raised before the board, they can vote to make it not a conflict according to their own bylaws, essentially allowing them to look the other way. Who holds them accountable? The governor who appointed them, who in this case, they just hired.

7. Academic environments, by definition, are places where ideas from all viewpoints, parties and countries are welcomed and embraced. By choosing a partisan president who likely will remain politically active in his new job, the environment will at least have the appearance of not being open-minded to faculty, students or administrators whose beliefs or personal histories run contrary to Daniels’.

Short of former House Speaker John Gregg being elected in November and a majority change on the Purdue board of trustees, the Indiana Ethics Commission or both, this kind of story of “executive privilege” that benefits the connected in Indiana may continue unchecked indefinitely. The only two-party system we may have are ethical Republicans and Republicans who anoint themselves past whatever barriers are before them.

• Dave Kitchell is a columnist for the Pharos-Tribune. He can be reached through the newspaper at