Frank O’Bannon Dead at 73; Kernan Indiana’s New Governor

CHICAGO — Frank O’Bannon, a “gentleman and dedicated Hoosier” who died Saturday morning after serving six and half years as the governor of Indiana, was remembered by colleagues and constituents alike as a man who stopped to shake hands almost all the time and pushed education funding even in the hardest of times.

“I think you’re going to have a hard time finding anybody to say anything negative about him,” said James Merton, head of public finance for City Securities Corp. “I never knew him to play games. He was as straightforward and honest as they come.”

O’Bannon, 73, whose first term began in 1997, was elected for a second and final term in 2000. The Democratic governor died at 11:33 a.m. Central Daylight Time on Saturday, and Lieut. Gov. Joseph Kernan was sworn in as governor Saturday afternoon. O’Bannon could not run for re-election next year due to state term limits.

Doctors at Northwestern Memorial Hospital in Chicago said Saturday that O’Bannon’s condition worsened that morning when the swelling in his brain increased. O’Bannon suffered a stroke Sept. 8 when he was in Chicago to attend an economic development conference.

Family members chose to comply with O’Bannon’s living will and forgo further means of life support, allowing him to die naturally, O’Bannon’s press office said. Indiana residents were asked to attend a display and memorial in the rotunda of the Indiana statehouse Thursday as family members prepared for a private service in his hometown of Corydon.

Meanwhile, the business that O’Bannon made a priority continued as Kernan was expected to welcome participants today to the first-ever conference in the state to focuses on investing in transportation-related projects to help business. Businesses and bond officials will come together at the conference to discuss the new tool for funding that came when the state broadened the Ports of Indiana’s ability to issue debt as a conduit for private development.

“No one in this administration worked harder than the governor himself,” said Mark Moore, the director of the Indiana Development Finance Authority. “That really has been, for me, sort of the model that we have to think about.”

In the last few years, O’Bannon led the state during the time when a budget surplus became a budget shortfall of nearly $1 billion with a poor economy hitting the state’s manufacturing base hard. Still, the unemployment figures in Indiana are still up, said Moody’s Investors Service analyst Nicole Johnson.

“We’re hearing about a recovery, but it’s not happening in most of the manufacturing jobs yet,” Johnson said. “Revenues didn’t come in quite as much as expected because the economy continues to be weak.”

Though he had not intended to run for governor, Kernan will now finish the 16 months left in O’Bannon’s term. He faces a challenge to continue the momentum that some bond market participants say the administration started.

As lieutenant governor, Kernan oversaw the Department of Commerce, which manages economic development in the state. He accompanied O’Bannon on the many trips he made to promote his economic development program, Energize Indiana. O’Bannon was open to new ideas, which should show in the state as some of his economic development plans come to fruition, according to Phil Genetos, an attorney with Ice Miller. Genetos remembered O’Bannon’s works as chairman of the Indiana Housing Finance Authority and secretary treasurer of the Indiana Development Finance Authority.

“He’s always been very approachable, very interested in trying ideas that other places have tried and seeing if they work in Indiana,” Genetos said. He pointed to the recent adoption of legislation that will allow the Ports of Indiana to issue bonds to help companies that want to build in the state.

Along with Energize Indiana, which includes a host of funding options for growing business development in the state, the port legislation has put some things in motion that should bring results in job creation, Genetos said. O’Bannon had been working since June on promoting Energize Indiana, which he proposed to pay for by using securitized tobacco settlement funds. Though the legislature voted against issuing the bonds for the program, the bulk of O’Bannon’s plan was approved.