Kernan criticizes Daniels for 2001 IPALCO deal, job loss

INDIANAPOLIS -- Gov. Joe Kernan stepped up criticism of Republican opponent Mitch Daniels on Tuesday for backing the sale of Indianapolis utility IPALCO Enterprises to a Virginia-based company in 2001.\nThe Daniels campaign said there was widespread agreement before the sale that it was in the best interest of shareholders and accused Kernan of making a personal attack.\nKernan said the deal resulted in the loss of 400 Indiana jobs and a stock plummet that cost many IPALCO workers, retirees and shareholders tens of millions of dollars. Daniels, who was a member of IPALCO's board, has defended the deal, saying he did nothing wrong in selling his company stock before the sale to AES Corp. closed.\nKernan said Tuesday that Daniels has for months been attacking him and the state government in television commercials and in campaign speeches and that he felt compelled to respond.\n"I'm not saying he is a bad person," Kernan said. "I'm just saying he made bad judgments along the way."\nHe indicated that a television commercial on the issue would begin airing in the coming days.\nDaniels was among several IPALCO board members who sold their stock in the months before the sale. AES shares fell from $49.60 after the merger closed in March 2001 to 92 cents in October 2002.\nDaniels has said he backed the sale in the best interests of the utility and its shareholders and sold his stock to meet federal conflict-of-interest guidelines after he was appointed White House budget director by President Bush in early 2001.\nSecretary of State Todd Rokita, a Republican, has cleared Daniels and five other former IPALCO board members of wrongdoing in selling their stock in company. The deal is still the subject of two federal lawsuits.\n"At the time of that transaction, everyone felt it was in the best interest of shareholders," Daniels campaign manager Bill Oesterle said. They included board members, shareholders who voted for the sale and numerous industry analysts, he said.\nOesterle said Kernan, who was lieutenant governor and headed the state's economic development efforts when the IPALCO sale was completed, "never said anything about this transaction before it happened." \nHe said Indiana lost more than 100,000 jobs under Kernan's watch, however.