OHIO FINANCES Valley Democrats demand equality in scandal review
They recommend an equally bi-partisan panel with subpoena power.
By DAVID SKOLNICK
VINDICATOR POLITICS WRITER
YOUNGSTOWN -- Mahoning Valley Democratic legislators are calling for the creation of a bipartisan committee with equal party representation to investigate the financial scandal at the Ohio Bureau of Workers' Compensation.
A workers' compensation fund managed by MDL Capital Management of Pittsburgh lost about $225 million. Also, at least $12 million from capital coin investments controlled by Tom Noe, a prominent Republican fund-raiser, is missing from a separate fund invested in rare coins. Noe is being investigated by federal and state authorities.
At a press conference Thursday, the Valley Democrats laid the blame for the scandals at the feet of elected Republicans, most notably Gov. Bob Taft, and, to a lesser extent, Attorney General Jim Petro and Auditor Betty Montgomery.
At least one Taft staff member knew about the MDL-managed fund problem in October, but the governor said he hadn't heard about it until this week.
"The question is what didn't Taft know and when didn't he know it," said state Sen. Marc Dann of Liberty, D-32nd.
Dann has been a vocal critic of how Republicans have handled the financial scandal at the BWC.
Dann spoke at the press conference along with state Sen. Robert F. Hagan of Youngstown, D-33rd, and state Reps. Kenneth Carano of Austintown, D-59th, and John Boccieri of New Middletown, D-61st.
Creating a committee
The four are proposing that a committee with an equal number of Republicans and Democrats investigate the BWC's investments and policies.
The committee would have subpoena power and a staff of lawyers and accountants to review the BWC, Dann said.
The heads of the Republican-controlled Ohio House and Senate want to create a committee to review BWC's past investment practices and recommend changes to state law. But they want the committee to consist of four Republicans and two Democrats because the GOP has such large majorities in the state Legislature.
That won't work, the four local legislators said.
Carano said no Democrat in the state Legislature would participate in a committee unless both parties had equal representation.
"If they want to cover this up, they can do it alone," Dann added.
The four legislators also want to request that the U.S. Securities and Exchange Commission investigate the BWC, that the BWC Oversight Commission voluntarily give up its investment oversight authority to the state treasurer for at least a year, and that investment authority at the agency be given to the state treasurer.
Some of the harshest words by the local Democrats were for Taft. Taft has said he was outraged and disappointed when he heard about the investment losses, but he didn't know anything about them until this week.
"I suggest the governor fire himself, but given his incompetence, he'd probably fire the wrong person," said Hagan, whose brother, Tim, was soundly defeated for governor by Taft in 2002.
Hagan said Republican one-party rule at the state level led to arrogance by the political party, and a system that rewards Republican contributors over constituents.
"Don't think this pay-to-steal scandal hasn't trickled down to the taxpayers already," he said.
The legislators noted that BWC increased its rates to small businesses recently by 4.4 percent.
The four also said they are sure the MDL and Noe scandals are just the tip of the iceberg when it comes to Republican corruption at the state level.
Boccieri, who is looking at running next year for a number of political offices including secretary of state or Congress, said Democratic outrage at the BWC problems has nothing to do with politics.
"That is an outrageous claim," he said. "It's not about Democrats or Republicans. It's about injured Ohioans and small business owners.
He said he found it "reprehensible" to accuse Democrats of playing politics with the issue.
But that's exactly what Jason Mauk, an Ohio Republican Party spokesman, says it is.
"This is unproductive politically-motivated rhetoric," he said. "Democrats hope to gain a political advantage out of this rather than provide the substantive leadership to move the state forward. They're doing what they do best: protesting and complaining."
Petro sent a letter Thursday to the leaders of the Ohio House and Senate asking them to change state law to require the attorney general to review and approve any state contract in which a state agency is spending or investing more than $1 million.
Mauk acknowledges that the BWC scandal is a black-eye for the state, but he said elected Republican officials will address and resolve the problem. Several elected Republicans received political contributions from those at the center of this issue.
While the local Democrats said Republicans shouldn't be trusted to investigate the BWC's investments, Mauk responded that Ohioans haven't trusted Democrats in more than a decade to lead the state. Mauk is referring to the inability of Democrats to win statewide races.
"Democrats have created a circus, and [House Minority Leader] Chris Redfern and Marc Dann are fighting to see who's the head clown," Mauk said.
Dann acknowledges he is interested in being the Democratic leader of the Senate next year, and has been approached about running for statewide office. But he says he is completely focused right now on the BWC issue.