The Center for Public Integrity (CPI) recently issued a report accusing Governor Mitch Daniels, who once was President of North American operations for Eli Lilly, of illegally marketing medicines that caused thousands of people to get sick and die.

It’s a riveting story but it’s not true. Instead, the report, written by Joanne Kenen and Rochelle Sharpe, is full of misstatements, inaccuracies, and outright falsehoods. If the Center for Public Integrity had any integrity it would yank the piece, apologize to Governor Daniels, and start asking who pushed to release such a sleazy ad hominem assault.

Here’s the gist of the allegations:

In the decade that Daniels climbed the corporate ladder at Eli Lilly, the company was illegally marketing its leading osteoporosis drug, Evista, as well as its blockbuster antipsychotic, Zyprexa, putting tens of thousands of patients in harm’s way. Lilly pleaded guilty to two criminal misdemeanors, paid more than $2.7 billion in fines and damages, settled more than 32,000 personal injury claims — and copped to one of the largest state consumer protection cases involving a drug company in U.S. history, a review by iWatch News shows.

Eli Lilly engaged in illegal activity. But here’s the gist of its unlawful actions: Eli Lilly was accused of providing doctors with medical information that Zyprexa could be used to treat agitation in people diagnosed with dementia and sleep disorders in people with schizophrenia. The government calls the distribution of such material without FDA approval a “false claim.” A “false claim” is not a false statement. Rather, it’s clinical data or published studies that confirm the effectiveness of new uses for existing medicines.

In other words, if Eli Lilly shared medical studies demonstrating that using a drug prevents cancer, it would be breaking the law.

In fact, that’s what Lilly was fined $36 million for in 2005. The government had gone after it for telling doctors that Evista — originally approved to reduce bone loss — was also effective in preventing cancer in postmenopausal women. In 2007 the FDA approved Evista as a cancer preventive. During this time Medicare and Medicaid were paying for the off-label use of both Zyprexa and Evista.

Kenen and Sharpe also allege that under Daniels Lilly downplayed Zyprexa’s side effects of significant weight gain and increases in blood sugar that could cause diabetes. In fact, the federal judge presiding over Zyprexa litigation noted “the original 1996 Zyprexa label listed the relevant adverse events; in 2003 the FDA… required a hyperglycemia and diabetes warning; the American Diabetes Association and other groups in 2003… issued a consensus statement on antipsychotic and weight gain and diabetes… a Dear Doctor Letter went out in March 2004. “

Further, since 1999 the company has published hundreds of articles examining the association between Zyprexa, glucose levels, and obesity and including research intended to help predict weight gain. That’s in addition to scores of other papers written by others.

Still Kenen and Sharpe want to link Daniels to thousands of Zyprexa-caused injuries and deaths. To dramatize their case, the authors introduce us to Ellen Liversidge, who states: “Eli Lilly killed my only son.” Her son Rob, 39, died in 2002 after taking Zyprexa. “I think they are terrible. They hid the side effects of so many drugs.”

In fact, as Liversidge notes in another interview, her son died because “the intensive care unit team did not have his blood-sugar level checked for signs of hyperglycemia.”

Liversidge is a member and founder of two organizations with ties to Ann Blake Tracy, an advisor to the Scientology-backed Citizens Commission on Human Rights, and Dr. Peter Breggin, who over the years has claimed that treating mental illness with medicine is a form of abuse.

Breggin has been an “expert witness” in many of the lawsuits against Zyprexa.

And Breggin is also a featured blogger on the Huffington Post, whose founder, Arianna Huffington, is a CPI board member.

Huffington and Breggin share a particular animus against Eli Lilly and Daniels in particular.

Since 1998, Huffington has waged a war of words against Eli Lilly for promoting Prozac and Zyprexa. She alleged in 2002 that Daniels was behind an effort to protect vaccine makers from lawsuits from parents who claimed shots made by Lilly and others caused their children’s autism because they contained thimerosal. In 2005 she launched the Huffington Post and featured several anti-vaccine and pseudoscience fearmongers as bloggers, including Andrew Wakefield, Jenny McCarthy, and of course, Peter Breggin.

Did either Breggin or Huffington suggest or contribute to CPI’s report? The link between CPI and Huffington’s campaign against Mitch Daniels bears more scrutiny than the baseless claims that the Indiana governor presided over an orgy of criminal behavior.