Ind. Governor Race May Go Down to Wire

INDIANAPOLIS – Mitch Daniels (search) and Joe Kernan (search) took vastly different paths to the Indiana governor's race.

Daniels was a Washington operative who left the Bush White House to return to his roots. Kernan, the Democrat, rose through the political ranks at home, going from mayor to lieutenant governor before being appointed governor.

The contrasting resumes are part of an intriguing campaign that is one of the most competitive of the 11 governor's races nationally. The campaign has turned into a slugfest over jobs, government scandal and corporate greed, and is shaping up to be an extremely close contest.

"I think right now it's certainly too close to hazard a guess on who might win," said Robert Schmuhl, a professor of American studies at the University of Notre Dame.

Daniels served as chief of staff for Sen. Richard Lugar (search) and was a political director for President Reagan, an executive at pharmaceutical giant Eli Lilly & Co., and most recently budget director under President Bush.

The president, in fact, gave Daniels the nickname "My man Mitch" — a tag that Daniels has touted for months.

Kernan was a prisoner of war in Vietnam, a mayor of South Bend, lieutenant governor for nearly seven years. He stunned both parties in late 2002 by saying he would not run for governor, but he was sworn into office in September 2003 after Gov. Frank O'Bannon died, and is now seeking a full term.

The two have hit the campaign trail by land and by air in a race that is expected to be the most expensive campaign in Indiana history.

Although Daniels is wealthy from years at Eli Lilly, he has spent months painting a down-home image by traveling the state in a donated recreational vehicle he calls "RV One."

He has pledged to lead Indiana to economic revival following tens of thousands of job losses and says he will stop an "endless stream of scandals and fiascos" in state government. They include a scam to produce phony IDs at the Bureau of Motor Vehicles and the hiring of a felon to oversee a state pension fund.

Daniels also notes often that Indiana faces an $830 million budget deficit and owes more than $710 million in back payments to schools, universities and local governments.

"If you had been to all the places I have been, you would understand how strange it sounds to people when you tell us that all is well in our state, things are working out just fine," Daniels told Kernan in a televised debate.

Kernan, who has piloted a private plane to some campaign stops, says Indiana's economy is on the rebound. He credits some of that to tax-restructuring and economic development packages he helped push through as lieutenant governor.

He has announced plans to step up job-training programs, overhaul state government and seek importation of prescription drugs from Canada if the federal government does not take additional steps to help senior citizens with drug costs.

"With all of the challenges that we face, it is not time to be negative, not to be looking at ways that we can tear down our state, tear down the people who live here, but instead to uplift them, inspire them," Kernan said.

But Kernan has gone negative recently, blasting Daniels over the sale of an Indianapolis utility.

Daniels was among several utility board members or directors who sold their stock of IPALCO Enterprises in the months before the utility was sold to Virginia-based AES Corp. A large debt and worldwide drop in power prices caused AES stock to plummet from nearly $50 in March 2001, when the merger closed, to 92 cents in October 2002. Many retirees lost their life savings.

The Kernan campaign has run a radio commercial that calls it "Indiana's Enron." Daniels has said he sold his stock to meet federal conflict-of-interest guidelines when he was appointed White House budget director.

How the issue will play with voters on Election Day is anyone's guess.

A recent statewide poll showed 46 percent favored Daniels and 43 percent preferred Kernan. The poll's margin of error was plus or minus 3 percentage points. The poll, conducted on behalf of The Indianapolis Star and WTHR-TV, found that 8 percent of respondents were undecided, and 30 percent said they could still be persuaded to vote for another candidate.

With so many voters still on the fence, the rhetoric from the campaigns is expected to intensify.

"The gloves are off," Schmuhl said.