Ball State Hires Former Governor’s Sister to Investigate Losses

MUNCIE, Indiana – Ball State University Trustees have taken an ugly situation and made it even worse by hiring the sister of the then sitting governor who administered over all public universities when the university lost $13.1 million, and then covered it up for three years. This should be an obvious “conflict of interest”, but in Indiana, maybe not. Especially if it has to do with education and friends of Mitch Daniels.

If you remember, while still governor, Mitch was hired as university president for Purdue by the board of trustees for which he appointed 80% to their seats. The board traveled to Illinois to ratify their decision and refused to share hiring documentation with newspapers who requested them via public information requests.

Gannett Newspaper Covers for Ball State from Beginning

On Friday, the local Gannett owned StarPress reported the Trustees were hiring Deborah Daniels to investigate into the investment losses fiasco, but failed to tell readers that Deb is the sister of former Governor Mitch Daniels. The same story was covered in the IBJ out of Indianapolis, who did disclose the relationship. The StarPress excluded the family connection. Readers should ask, “Why?”

As we mentioned many times in Muncie Voice, most notably here and here, and here, Ball State has used The StarPress to rationalize and justify how a 60-year-old female “maverick” employee “bought risky investments” from slick investment brokers, who ended up losing all the principal, and then orchestrated a cover up so the university wouldn’t learn about it. She also kept it from her husband who is a vice president of risk management for Ball State.

With the help of The StarPress, Ball State officials were allowed to weave this fabulous tale of deceit blaming one employee and federal investigators for telling them to be silent, so as not to tip-off the two criminals who ripped off the university. Even though we learned one of the con men was already in jail, and the other had talked with the university often about the loss, and even knew the employee he conned had been fired.

Bottom line – ZERO accountability from the university. NONE. No valid or acceptable explanation about how an employee could wire and then conceal a loss of $13.1 millions dollars. You would think a financial statement somewhere wouldn’t balance or maybe an auditor would notice it missing. NOTHING.

The university had to be told by outside federal investigators they were victims of a crime and money was lost. We accept this employee screwed up and deserved to be fired, but nobody has accepted responsibility for the university’s lack of minimal financial and audit controls which should have detected such a large loss. Not one person above this investment officer was fired for their lack of due diligence.

All the employees have either retired or found other jobs, with or without the help of senior employees.

Now, six years after the transaction first took place, and three years after Ball State learned they had been hustled out of millions of dollars, the Board of Trustees are going to investigate into the ordeal. However, they aren’t hiring a forensic accountant to investigate and report details to taxpayers.

Code of Ethics Are Meaningless in Indiana

No, they sought out the sister of the then presiding governor of Indiana – Mitch Daniels. As we mentioned above, Mitch landed his job at Purdue under a wrath of conflict. Also, during his governorship, Mitch lost $500,000,000 with his friend Richard Mourdock. In case the zeros throw you off, that’s a HALF OF A BILLION DOLLARS. He also slashed over $300,000,000 from the budgets of public education in Indiana.

As we stated before in Muncie Voice, based on the information we’ve reviewed, and reactions from state lawmakers and auditors, we believe that university officials were told by federal officials that Ball State’s name would be excluded while prosecuting the guilty parties. By keeping Ball State’s name off the record, they could avoid the public embarrassment.

While certainly helpful to then president, Jo Ann Gora, it was beneficial to state officials as well. However, this would require the assistance from a high level state official in Indianapolis. We can understand why Jo Ann Gora would not want alumni and donors to learn she couldn’t keep track of money. We can also see how it would look for the governor of the state – it would be embarrassing and taxpayers would demand answers.

We applaud the board hiring an investigator, but the motive for hiring Ms. Daniels, screams “conflict of interest”. Most boards would hire an “independent forensic accountant” to learn how this happened and make recommendations to avoid it from ever happening again.

As a result of hiring Ms. Daniels, we wonder if the board wants to learn the truth, or are they simple wanting to continue whitewashing the circumstances like they’ve done from Day 1?

We sent an email to the Inspector General, David Thomas, who handles ethical violations for the state. We asked:

  1. Why isn’t Indiana hiring a neutral third-party to investigate this matter?
  2. How can Indiana support hiring a relative of the then sitting governor to investigate this matter? Isn’t this in strict violation of “conflict of interest” guidelines for the State?

However, as we’ve learned in Indiana the past several weeks, ethics mean little to the Inspector General and state lawmakers.

Tony Bennett Gets Off With Hand Slap

Former Governor Daniels right-hand man, who ran Indiana’s school privatizing effort for Daniels, was slapped on the wrist with a $5,000 fine for using public resources during his reelection campaign. He was exonerated for changing grades for a republican campaign donor because, “his grade changing scheme resulted in 12 other schools receiving higher grades causing them to receive less state money”.

We have Mr. Bennett’s email chain, and the original problem arose when Christel House Academy, and twelve other charter schools, received failing grades. Tony, Mitch Daniels, Mike Pence and Brian Bosma were holding up charter schools as the answer to replace failing public schools. Unfortunately, the A-F Accountability Scale proved that Charters didn’t outperform the public schools.

So, what did they do?

They changed the way charter schools were measured. Voila, end of problem. Since Tony Bennett instructed them to change grades for all charter schools, he was found innocent of violating ethics rules.

While this isn’t “technically an ethics violation”, the press has mainly ignored the story dispels the Republican Myth of “Charters Outperform Public Schools.” This myth is key to Hoosier republicans.

They enjoy closing down public schools and handing them over to charter schools owned by their buddies. They are stealing public dollars, but they don’t consider it “theft.” The newspapers don’t hold them accountable, so they get away with it.

“Honest to Goodness”, it’s theft.

It’s also unethical. We don’t really care what the appointed Inspector General rules with his appointed Ethics Commission.

Sorry folks, but this state has become a cess pool of unethical lawmakers. Where are the moral leaders? We won’t see ethical leadership because Gannett owned newspapers refuse to use their constitutional powers to hold lawmakers accountable. Hoosier values mean nothing anymore – It’s obvious the so-called “evangelical wing of the republican party” is just a scheme to get a block of Christian votes. These folks don’t have any morals – they are sellouts to the Almighty Dollar.


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Todd Smekens

Journalist, consultant, publisher, and servant-leader with a passion for truth-seeking. Enjoy motorcycling, meditation, and spending quality time with my daughter and rescue hound. Spiritually-centered first and foremost. Lived in multiple states within the USA and frequent traveler to the mountains.

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