ChaCha supporters circle the wagons

Boosterism is a proud middle-American tradition, deftly parodied by Garrison Keillor. But even a fabulist like Keillor would be hard-pressed to come up with townspeople as self-satisfied and uncritical as the boosters of Bloomington, Indiana, who have stood relentlessly behind local search startup ChaCha. Despite the questions Valleywag and others have raised about a deal between ChaCha and Indiana University, whose president, Michael McRobbie, is a former ChaCha board member, the townfolk have stood steadfastly behind their local tech hero. Take, for example, the reaction to a story in the Indiana Herald-Times calling for "aggressive disclosure" (subscription required) regarding the deal. The conclusion was similar to ours and seemed obvious — but not obvious to at least one local booster.


The Herald-Times wrote:

The lesson here is not that there was anything legally or ethically wrong, at least until such evidence surfaces, which it has not. Rather, it is one of recognition of situations and of McRobbie's changed role... Aggressive disclosure that spelled out any and all connections — even ones that seemed coincidental or even accidental — could have gone a long way to blunt the thrusts of critics.
But that seemingly innocuous view, hardly holding McRobbie's feet to the fire, has its own critics. Lee Marchant, a Bloomington resident, has written a letter to the editors chastising the local paper and Valleywag for daring to ask questions:
To the editor:

Your Aug. 12 editorial, "Aggressive disclosure would clear air about IU dealings," left me wondering, what's your point?

It was unfortunate that Indiana media gave credence to the innuendo and inaccurate statements about the IU-ChaCha alliance that were anonymously posted in a self-described Silicon Valley "tech-gossip rag." The fact that no one by name stood behind these statements should have been a tip-off as to their veracity.

In response, McRobbie immediately disclosed all details of his involvement with ChaCha, and they were publicly reported. He resigned from the ChaCha board before taking over as IU president. He gained nothing from ChaCha. The only potential beneficiaries in this deal are IU and the people of Indiana if ChaCha catches on and becomes another successful Indiana business.

It sure looks as if someone in California is not happy that IU is getting together with Scott A. Jones, one of the tech industry's most successful innovators, to develop what could well be a much better Internet search engine than anything up to now. It should be welcomed by all who want Indiana to prosper. If someone in California doesn't like it, and whines about it anonymously on the Internet, we should ignore it.

-LEE MARCHANT, Bloomington

Just a few errors here:
  • My Valleywag posts were not anonymous, and I stand behind them.
  • I am not in California — if I'm in California, then Bloomington, Indiana is downtown Palo Alto. Moreover, half of my family lives in Indiana!
  • The only "inaccurate statements" reported here were made by Indiana University vice president Brad Wheeler, to the press, and by ChaCha in its SEC filings.
  • McRobbie did not immediately disclose his involvement with ChaCha. He allowed Wheeler to speak, incorrectly, on his behalf. A ChaCha PR flack further muddled matters in a statement left in a comment on Valleywag. Valleywag and others questioned those statements, and finally McRobbie chose a consistent story (subscription required), though one that differed from previous tales told. Plenty of questions about this deal remain.
  • The information ChaCha publicly disclosed in an SEC filing was false, a fact conceded by the company when it stated its intention to refile the document.
  • It's absurd to suggest McRobbie gained nothing from ChaCha.
  • And even more absurd to claim the primary beneficiary of this deal is not ChaCha and its shareholders.

Unsurprisingly, like ChaCha, Lee Marchant has benefited from close ties to Indiana University. Marchant received an oversized check for $25,000 in March from Indiana University for his "community lobbying effort" to keep a local military base, also tied to the university, open.

No wonder Mr. Marchant would prefer to ignore our coverage of goings-on in Bloomington. It doesn't fit with a booster's fantasy world view, where every deal is above board, and the ethics of every local notable are above average.