INDIANAPOLIS (AP) — Indiana’s top child-protection official resigned Monday amid questions of whether he violated his agency’s code of conduct through his involvement in a child neglect case involving his grandchildren.

Department of Child Services Director James Payne said he was stepping down immediately after The Indianapolis Star reported Sunday that he had worked behind the scenes to discredit his own agency’s recommendations in the case.

Payne — who has led the agency since its creation in 2005 — said Monday that the disclosure of information involving his grandchildren “without regard to its impact on those children is tragic beyond belief.” He said he was resigning immediately so that his family’s personal case wouldn’t be used to distort the work of DCS employees who have been credited with improving the agency.

Gov. Mitch Daniels praised the changes at DCS under Payne, a former Marion County juvenile court judge.

“The leading national authorities are unanimous in praising Indiana’s improvements in child protection, often labeled ‘worst to first,’ during Jim Payne’s tenure,” Daniels said in a statement Monday.

Daniels said DCS Chief of Staff John Ryan will serve as interim director effective immediately. Ryan declined comment Monday.

Payne’s resignation was announced as lawmakers gathered to propose changes to a centralized child abuse and neglect hotline that has been criticized by lawmakers of both parties, police, prosecutors and advocates.

House and Senate Democrats, who have been pressing for reforms at DCS, cheered upon learning Payne had stepped down.

“It seems to be an agency in turmoil, and this is too important of an agency to be in turmoil,” said Sen. Tim Lanane, D-Anderson. “They need to be functioning effectively.”

Foster parents and grandparents testified Monday at a state legislative hearing about their frustrations dealing with the state. Many said Payne’s alleged abuses only further angered them.

Dennis Easley told lawmakers he and his wife have gotten nowhere in fighting the state for custody of two of their grandchildren. He said he chafed at a response from the state that his concerns were labeled “outlandish allegations.” Easley then held up a copy of the Star, and read aloud a passage about Payne’s efforts to help his son.

"’Outlandish allegations’ became real because it was his grandchildren,” he said.

Bruce Greenberg, president and CEO of the Mishawaka-based Family & Children’s Center, said he wasn’t surprised by the resignation. He characterized Payne’s leadership as “heavy handed” and said his management style created a culture of fear within the agency.

“I would say the general sentiment from the provider community is that they’re not unhappy to see him go,” Greenberg said.

Daniels said many of the attacks on Payne “have ranged from innocently ignorant to despicably political and self-interested,” but he said he respected Payne’s decision to shield his family from further criticism.

The Indianapolis Star story questioned Payne’s involvement in a case stemming from a 2009 divorce filing by Heather Payne against John Payne, the director’s son, 10 days after her husband was arrested for drunken driving. Heather Payne sought and received a protective order and custody of their four children, including two fathered by John Payne.

John Payne alleged that Heather Payne often left the children on their own for hours, and said the oldest, a 13-year-old, was responsible for watching the others.

The children were removed from their mother’s custody in 2010, after DCS was notified that the children had been left alone while their mother traveled to Ohio. A DCS case worker took the children into protective custody and placed them with Payne and his wife.

While the children were in the Paynes’ care, James Payne was the target of an investigation into whether he slapped one of his grandchildren. He was investigated and cleared by his own agency, The Star reported.

He wrote to The Star of the slapping allegation: “It never happened, never would, and the allegations were unsubstantiated by an out-of-state case manager.”

In November 2010, DCS returned the children to Heather Payne, and a Hamilton County judge approved the move. That pitted DCS staff against the director and led to his involvement in helping write a legal brief that included a stinging attack on the agency, The Star reported, citing documents it reviewed.

James Payne never stepped aside from his leadership role with the agency while involved in his grandchildren’s case. He never notified Daniels of his involvement in the case or that he, at one point, was the target of an investigation, the newspaper reported.

Payne told The Star that Daniels’ staff knew his grandchildren had been placed with him and that his only role in the case was “as a grandparent, father and husband,” and not in any professional capacity.

Ryan, in an email to The Associated Press on Sunday, noted that since the children were returned to Heather Payne, “to assert that ... Payne influenced this situation with his professional position is absolutely false.”

INDIANAPOLIS (AP) — The Democrat and Libertarian candidates for governor say Indiana’s Department of Child Services needs more help from the next governor following a series of child deaths and the resignation of its director.

Libertarian Rupert Boneham told business and political leaders at an Indianapolis Chamber of Commerce’s event Monday that DCS needs more workers to help children and should explain where it spends its money.

Democratic John Gregg says rather than budget cuts like Gov. Mitch Daniels made to the agency, the agency needs more money.

Republican candidate Mike Pence says DCS already is improving child protection in Indiana.

DCS Director James Payne resigned Monday following a report in The Indianapolis Star that he became involved in a case involving his grandchildren and a custody dispute between their parents.

Posted 9/25/2012