With Mahalo Answers, the latest Web project from Brooklyn-born blog blowhard Jason Calacanis, you can pay people to Google for you with fictional bucks. Genius!

Hoosier-powered search engine ChaCha has unveiled a feature developed with the help of $2 million in Indiana state funds: mobile-phone-based searches. Scott Jones, the serial entrepreneur behind ChaCha, would like everyone to believe that this is a whole new category of search. Actually, it's something Google has been doing for years. (Try texting a search query to 46645 on your phone.) ChaCha's innovation? Instead of getting an answer back in seconds from a Google server, you have to wait minutes for a human "guide" to respond.

Hoosier-powered search engine Chacha is turning to an unlikely source to fund its already cozy deal with Indiana University. Chacha is introducing Google AdSense ads to the university's search results. ChaCha already features both Google and Yahoo ads as sponsored links, on its public search, but until recently IU had a strict policy against advertising:

The startup has released a Star Trek-themed search toolbar for Web browsers. Every search made through the toolbar means a donation to the production of Star Trek: New Voyages. The fan series is better-produced than the original series it honors, but it cranks out episodes at a glacial pace: three episodes in as many years.

Scott Jones, serial entrepreneur, has received an additional $8 million in funding from Mort Meyerson, formerly of Perot Systems and EDS, for his startup ChaCha. You'd think with such wealthy backers, Jones wouldn't have to tap the public till. But no: ChaCha was recently granted $2 million from Indiana's 21st Century Technology Fund administered by the Indiana Economic Development Corporation to build new, innovative features. What are these innovations that will debut next year, and how did the already well-funded startup receive this state-funded aid?

When we first began to cover the many close relationships between flauntrepreneur Scott Jones's ChaCha search engine and Indiana University, the Indiana Herald-Times was one of the few local newspapers to closely question the relationship. Steve Hinnefeld of the Herald-Times was even following Valleywag's coverage, and came to similar conclusions: Although nothing legally wrong occurred, IU officials' failure to disclose their ChaCha ties was suspicious. However, since then the newspaper has provided the issue little attention. Why?

Remember ChaCha, the "human-powered" search engine based in Indiana with curiously deep — and poorly disclosed — ties to local power brokers? Now, Indiana University contends its decision to select human-assisted search engine ChaCha had nothing to do with those ties. University president and former ChaCha board member, Michael McRobbie, had nothing to do with it. Neither did newly appointed university trustee and Chacha investor and advisor, Jack Gill. The decision was made solely by the university's CTO Brad Wheeler. Oh, but never mind that Wheeler was appointed by McRobbie, his predecessor in the CTO post. A new Fortune profile of Chacha CEO and founder Scott Jones makes this telling of events even more suspiciously convenient.

We'd heard of state birds, but official state websites? Yes. Mitch Daniels, Indiana's governor, helped select human-powered search engine ChaCha as the state's official website. He also played a role in conscripting Indiana University staff as unpaid "guides" for ChaCha. Now it's time for Scott Jones, CEO and founder of ChaCha, his investors, and friends to return the favor. Tomorrow, Jones will be hosting a fundraiser at his megamansion, inviting business leaders both Midwestern and bicoastal with the hope of raising a million dollars in a single day.

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.

Scott Jones, CEO of search engine ChaCha, has built a high-tech wonderland of a mansion in central Indiana to rival any abode in Silicon Valley. The 27,000 sq. ft. English country manor, selected by HGTV as the No. 1 home in America, melds old-world charm with a hardcore nerd's wet dreams. Amenities include the obligatory, and thoroughly geeky, automated lighting, air conditioning, and media systems controlled by touchscreen and a workstation sporting eight large LCDs (one of twenty-six computers in the home). Jones's playthings, however, don't stop with the typical high technology.

The Herald-Times of Bloomington, Indiana has followed up (subscription required) on our previous story questioning the Indiana University-ChaCha deal. The local paper's charitable conclusion: Neither side lied, but both independently made contradictory "inadvertent errors." As did the newspaper, in reporting on a new development — without pointing out the glaringly obvious ChaCha link. Newly appointed Indiana University trustee Jack Gill is not a full-time resident of Indiana, a requirement for trustees appointed by the Governor to the University — but he's also a venture capitalist and major investor in ChaCha (PDF).

In the comments to my piece raising questions about the deal between Indiana University and "human-powered" search engine ChaCha, PR flack Liza Dittoe says she'd like to point out some "errors." By which we assume she means her client's copious mistakes. Oh, but "inadvertent mistakes," she says. How exactly does a CFO and general counsel "inadvertently" make the mistake of signing and certifying as true a form being submitted to the SEC? Isn't it his job to be attentive to these matters? And how difficult is it to know whether or not someone's still on your board?

Indiana University's decision to partner with "human-powered" search engine ChaCha shouldn't have been controversial. ChaCha's based in Indiana and was founded by two IU alumni. Universities often have ties to local startups. Did anyone question Stanford's use of Google, or a professor's investment in the company? No, the controversy comes because no one actually believes that ChaCha is a better search engine than Google, and, more importantly, the partnership conscripts the university's library and IT staff into working for the search engine for free. And it's always the coverup, never the cime. In attempting to downplay university president Michael McRobbie's ties to ChaCha, university officials made the situation much, much worse. Someone's lying. It's just a question of to whom, and when.

NICK DOUGLAS — When I hear someone saying they're the next Google, I wonder: Does this shit happen in other industries? Does Bob sit around Bob's Boise Brewery and say "I'm gonna make the next Bud Light! Yep! Bob Light, baby!" Actually, that probably happens. But that doesn't help the odds of these wannabe Google-killers. The following sites aren't just grad-school projects that wisely focused on a niche. They all think they're the next big thing in search, and they're all wrong.