Who's better for business? Profiles and the plans in a close race for governor.

• Author: Kaelble, Steve
• Position: Cover Story

AT FIRST GLANCE, THE two major candidates for Indiana governor exhibit a number of similarities.

Both were born elsewhere: Democratic Gov. Joe Kernan in Chicago and Republican challenger Mitch Daniels in Pennsylvania. Both moved to the Hoosier state when they were 10, Kernan to South Bend and Daniels to Indianapolis. Both left home but eventually were lured back to Indiana.

Both major candidates earned college degrees in government, and Kernan and Daniels each have spent years in both the private and public sectors. Each of the candidates has experience overseeing major governmental budgets--in Kernan's case the city government of South Bend as well as the Indiana state government, and in Daniels' case the budget of the federal government.

Daniels and Kernan both have crossed the state numerous times in recent

months, visiting schools as well as businesses ranging front a Steel Dynamics minimill to Emma Lou's restaurant in Princeton. Such visits are important to any statewide candidate, but especially to one like Daniels who hails from the capital city and thus may be greeted with a grain of skepticism by out-state Hoosiers.

So who's best for Indiana's business future? You be the judge. On the pages that follow, the candidates have submitted their opinions and policy proposals relating to a number of issues of importance to the state's business community. For a glimpse of the two major-party candidates themselves, read on....

"MY MAN MITCH."

In the book Life 2.0, author and Forbes publisher Rich Karlgaard chronicles the moves of successful business people from trendy addresses on the coasts to smaller towns. Republican candidate Daniels finds inspiration in the book and has been recommending it to others as he wanders the Indiana campaign trail.

"Indiana has a lot to offer entrepreneurial businesses," Daniels says. It is blessed with a great location and lower costs of living and doing business, he says. And the quality of life can't be beat. Daniels is certain that the Hoosier state is .just the kind of end-of-the-rainbow place that Karlgaard says is so appealing to so many successful people. "Most businesses you can put anywhere. People are looking for quality of life," Daniels says.

What will help Indiana solidify that kind of place on the map is a more business-oriented state government, he believes. And, he adds, who better to spearhead such a transformation than a candidate with a strong business resume? "If you believe that two problems facing the state are economic development and dysfunction in state government, a person who comes from the world of business is, maybe, a better fit than a career politician," Daniels says.

His Indiana business credentials are solid. He joined the senior management team at Indianapolis-based Eli Lilly & Co. in 1990, and by 1993 was heading Lilly's North American pharmaceutical operations. He was named senior vice president of corporate strategy and policy four years later, handling strategic decision making and new-business development.

Before joining Lilly, Daniels sat at the helm of a smaller but also prominent Indiana operation, the Hudson Institute. "It's essentially a small business except for its non-profit status," he observes. And when he took over in 1987, it was a small business in financial straits. There was no endowment, which meant that the research organization had to create and market viable research products. During his time at Hudson, Daniels claims success in leading a financial turnaround.

Daniels gets a lot of mileage out of the fact that he's never held public office. He says he's talked to plenty of voters around the state who mew that as an asset, not a liability. The truth of the matter is that, though he hasn't been an elected official, Daniels has plenty of experience in government. To begin with, after he graduated from North Central High School in Indianapolis he earned a bachelor's degree from Princeton in government and public affairs, followed later by a Georgetown law degree.

As for work experience, he held a number of different jobs under Richard Lugar, first when Lugar was mayor of Indianapolis, then after Lugar moved to Washington as a U.S. senator from Indiana. Daniels was chief of staff for Lugar during his first eight years in Washington.

He also had two stints at the White House. During the Reagan era in the mid-1980s, he served as senior advisor and liaison to state and local officials. And when George W. Bush moved in at the beginning of 2001, Daniels returned to the White House to serve as director of the Office of Management and Budget, a post he held until the middle of last year, when he returned to Indiana to prepare for his gubernatorial run. When Daniels tossed his hat into the ring, the president offered a hearty endorsement of the candidate he referred to as "my man Mitch."

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