Embracing a new era of openness

A new website details the mission of the Fort Wayne-based Schwab Foundation, pulling no punches regarding a dark period in its history.

A Fort Wayne businessman, Olin Schwab, formed the foundation in 1989 to help Allen County students choose careers. He ran the organization until he died in 1991, leaving nearly $4 million as an endowment to be administered by the foundation board.

“Unfortunately, in 2002, Mr. Schwab’s dream – and the Foundation – was temporarily derailed by unscrupulous board leadership,” reads a web page on the organization’s history. “The malfeasance was uncovered in 2005 and immediate steps were taken to correct the situation.”

In 2002, the board’s three remaining members fired the staff and removed outside financial oversight. Board members bought a $1.5 million resort home near Las Vegas, tried to buy a $1 million vacation home in Wisconsin, spent lavishly on travel, paid themselves with luxury vehicles and annual salaries, and relocated the foundation to Nevada.

After a Journal Gazette investigation in August 2005, the foundation was sued by the attorneys general of Indiana and Nevada, the board members were removed, the Vegas house was sold, the foundation moved back to Indiana and a new board was installed.

Since that time, the Schwab Foundation has awarded nearly $1.5 million to non-profit groups serving students.

The new website, www.SchwabFoundation.com, highlights the board’s new transparency, with easy access to its financial records and information on grant recipients.

Swift decision for Gov. Daniels

The Indiana Supreme Court acted with surprising swiftness in overturning a judge’s ruling that ordered Gov. Mitch Daniels to testify in the civil lawsuit between the state and IBM. The two sides have sued each other over the cancellation of a $1 billion contract to improve the state’s welfare system.

Just hours after hearing oral arguments, the justices ruled that an 1852 state law prohibits the governor from being forced to testify in a civil lawsuit.

And that law is clear. Perhaps a distinction could be drawn that the IBM lawsuit is a special case – it is anything but frivolous – but it’s also difficult to believe that an 1852 law was adopted simply to protect the governor from nuisance suits.

That same law, by the way, offers the same protection to the secretary of state and the superintendent of public instruction, other officials who have been drawn into legal matters.