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by Brian Howey

NASHVILLE, Ind. - There was a reason Indiana Democrats jumped in bed with Richard Mourdock en route to his stunning 61-39 percent upset of U.S. Sen. Dick Lugar on May 8. They were salivating over playing the "Chrysler" card.

That strategy began emerging this past week.

Here's the setup: Treasurer Mourdock had used teacher and state police pension funds to buy Chrysler bonds - rated at junk status - in July 2008 at 43 cents per dollar of face value. As the American auto industry teetered on the brink of bankruptcy and liquidation, President George W. Bush used $80 million of Toxic Asset Relief Program funds to rescue Chrysler and General Motors in late 2008. At that time, experts from the Brookings Institute said that the collapse of Chrysler and GM would jeopardize as many as 150,000 Indiana jobs.

After President Obama was sworn in that next January, he ordered the two companies to restructure, rejecting their plans later that spring. By late spring, both entered what was to be an expedited bankruptcy process. With Chrysler poised to merge with the Italian automaker Fiat S.p.A., Indiana Treasurer Mourdock responded to the New York law firm Case & White looking to challenge the merger, a challenge that every other hedge fund and bank rejected. "Never did I imagine I would be the sole person fighting the Obama Administration against an automobile bailout," Mourdock told WISH-TV. "This is not what I want to do. This is not fun, but somebody has to do it so we're going to hold the ground."

After spending $3 million of Indiana taxpayer money in his suits against the merger to recover what would be $6 million in pension fund losses, the case was twice rejected by the U.S. Supreme Court. In the bankruptcy court, the U.S. government lowered the debt exchange offer to 29 cents on the dollar. U.S. Rep. Joe Donnelly, the Democratic Senate nominee, explained, “He was suing to get a lower amount."

During a May 29, 2009 interview with Human Events, Mourdock said,  “The Chrysler deal is a clear violation of the Fifth Amendment to the Constitution and more than 150 years of bankruptcy law."

But there was a political angle for the ambitious Mourdock. A tracker for the Democratic party video recorded Mourdock saying at a May 23, 2011 Tea Party event in Indianapolis, “As many of you know I took a position in the Chrysler bankruptcy that took us to the United States Supreme Court twice on behalf of Indiana’s retired teachers and state police officers. So I built up some name ID which is very important in politics.”  

In Mourdock's worldview, he was defending the U.S. Constitution. To Indiana Democrats he is low hanging fruit. In a March 26-27 Howey/DePauw Indiana Battleground Poll, Lugar had a 50-29 percent edge over Donnelly when we polled the general election matchup, while the same survey showed Mourdock and Donnelly tied at 35 percent. A Global Strategies Poll for Donnelly after the primary has the two tied at 40 percent, and a Rasmussen Reports online survey released last Friday has the race tied at 42 percent.

So the Indiana Senate race - which Lugar would have been in commanding position - is now a pure tossup.

But even more intriguing to Indiana Democrats was this Howey/DePauw survey result: by a 51-44 percent margin, general election voters favored the auto rescue, including more than 60 percent by independent voters who will ultimately decide the Senate race.

As the Lugar/Mourdock race drew to a close, Chrysler Group reported first-quarter net income of $473 million, up more than 300 percent. Its vehicle sales increased by 33 percent. Chrysler finished 2011 with a $183 million profit. And it has paid back all but $1.3 billion to American taxpayers. The company employs nearly 60,000 people, including well over 5,000 in the Kokomo area where it is hiring for three shifts off the street and has invested more than $1 billion in its facilities, as well as thousands more with Cummins Engines in Columbus and Seymour.

It prompted President Obama and Vice President Biden to visit Kokomo in November 2010, where Obama observed, "After a couple of tough years, this plant is now running at full capacity and that's why I'm here today." Earlier this year, Obama told a UAW convention in Detroit, "I placed my bet on American workers. But you don't have to take my word for it. Just ask the Chrysler workers near Kokomo, Indiana.”

As the Lugar/Mourdock race headed for the homestretch, it seemed as if Indiana Democrats, the Mourdock campaign and allies like the Club for Growth and FreedomWorks were working in coordinated fashion, keeping Lugar's residency issue in the headlines. Indiana Democratic Chair Dan Parker is now reaping the dividends, saying, “Three years ago Richard Mourdock tried to kill the American auto industry. It wasn’t just Chrysler. His suit would have had dire consequences for Toyota in Princeton, GM in Fort Wayne, Cummins in Columbus - all over the state. Richard Mourdock may not want to talk about it now, but he proudly made his political name by putting Indiana at risk. We’re going to hold him accountable.”

There’s a reason Democrats are seeking copies of all Mourdock legal contracts and emails related to Chrysler. It’s an opportunity to possibly pick off a Senate seat.

(The columnist publishes at www.howeypolitics.com. Find him on Twitter @howeypol. Contact Howey at This e-mail address is being protected from spambots. You need JavaScript enabled to view it )