INDIANAPOLIS (AP) — Indiana's legal bill in its lawsuit with IBM Corp. over a canceled welfare outsourcing contract could grow by more than half its original value, topping $8 million by the end of next June, state documents reveal.
Critics of the administration of Republican Gov. Mitch Daniels criticized the growing costs Tuesday while his press secretary and a spokesman for welfare administrators defended them.
The Family and Social Services Administration will pay as pay as much as $8.05 million through June 30 to the well-connected Indianapolis law firm of Barnes & Thornburg to represent it in the lawsuit with IBM under an amended contract approved Aug. 30 by the attorney general's office. The original contract approved a year ago paid the firm $5.25 million over the same length of time
The firm's attorneys on the case include longtime Republican activist Peter Rusthoven and Brian Burdick, the brother of Daniels' deputy chief of staff, Betsy Burdick.
FSSA sued IBM to recover more than $400 million it paid before Daniels canceled the 10-year, $1.37 billion contract in 2009 amid complaints about the automated welfare system IBM had installed. The Armonk, N.Y.-based technology giant countersued for about $100 million for costs including computer equipment it claims the state has held onto.
The contract's original terms called for FSSA to pay Barnes & Thornburg $5.25 million over the course of three state fiscal years ending June 30, 2012, but the amended terms show the agency paying $5.25 million through June 30, 2011, and the additional $2.8 million during the current state fiscal year that began July 1.
Rusthoven is billing the state $475 per hour, Burdick is charging $405 per hour, and John Maley, a third attorney, is charging $465 per hour.
"This is a sweetheart deal from the get-go, and it just got sweeter for Barnes & Thornburg," said Julia Vaughn, policy director for the government watchdog group Common Cause/Indiana. "It's disappointing that they've come back to the public trough."
Daniels' press secretary Jane Jankowski, defended the administration's use of the firm.
"They're among the best in the business, and if there had been a conflict, the firm would not have been selected," Jankowski said.
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As far as B&T law firm being "among the best in the business," Jankowski should talk to attorneys in the legal profession who quickly would set her straight. Barnes & Thornburg is about power and political influence and often quality legal work is not the firm's bailiwick. B&T's legal work is typically subpar when it comes to the bigger law firms such as a Baker & Daniels or Ice Miller.
Noting that the hourly rate of the five Barnes & Thornburg attorneys identified in the contract as working on the deal are John Maley - $465; Brian Burdick - $405; Peter Rusthoven - $475; Patrick Price - $255; Curtis Greene - $265, the Indiana Law Blog crunches the numbers:
"If all 5 lawyers are working at once, that is $1,865/hour. If all 5 lawyers are working at once, 8 hours/day for 50 weeks a year, that is 2,000 hours x $1,865/hour = $3,730,000 per year ..."So are we to believe Burdick, Rusthoven and Maley set aside all their other clients to work full-time, indeed overtime, on this case?