INVESTIGATION Report: BWC managers gave millions to GOP
Gov. Bob Taft received $700,000 from the bureau's investment managers.
CLEVELAND (AP) -- Companies hired to manage investments for the scandal-plagued state insurance fund for injured workers have donated millions of dollars to the campaigns of top Ohio Republicans while contributing little to Democrats, a newspaper's analysis shows.
Almost two-thirds of the 212 money managers hired by the Bureau of Workers' Compensation gave a total of nearly $5 million to Republicans from 1997 through 2004, The Plain Dealer reported Sunday.
Several investigations are under way into bureau investment losses topping $240 million, including up to $13 million from a $58 million investment in rare coins and a $215 million loss in a hedge fund. The rare coin fund was managed by top GOP donor Tom Noe, the subject of a federal investigation into possible campaign finance violations.
The Plain Dealer analyzed 2.8 million campaign contributions to Ohio politicians and state party accounts from employees of bureau money managers, their parent corporations and political action committees. The companies include large banks and investment firms.
Gov. Bob Taft, elected to two terms during the period of the newspaper's analysis, received $700,000 in contributions from these companies, more than any other Republican in a statewide office.
The companies also donated to Attorney General Jim Petro, Secretary of State Kenneth Blackwell and state Auditor Betty Montgomery. All three Republicans are candidates for governor next year.
Only one Democrat, former attorney general and one-time gubernatorial candidate Lee Fisher, received significant contributions from the bureau money managers, ranking 10th in the Plain Dealer analysis.
Catherine Turcer of Ohio Citizen Action, a nonpartisan organization that advocates for stricter campaign finance laws, called the contributions "the grease on the wheels of government contracts."
The bureau money managers that contributed the five largest amounts to politicians and committees earned a total of nearly $11 million in fees and commissions between early 1998 and this June, according to state records.
Money managers said there were no connections between their contributions and the contracts, which are awarded through competitive bidding.
"We support candidates who we believe have an understanding of the business and economic issues facing our state," banking company National City said in a statement.
National City, whose subsidiary, National City Investment Management Co., has a contract with the bureau, contributed $938,000 to politicians -- the most of bureau money managers during the eight-year period.
Another contractor, Cincinnati-based Fifth Third Bank, contributed $558,000 to politicians, most of them Republicans.
Fifth Third spokesman Larry Magnesen said the donations are not meant to influence but "support candidates who are pro-growth and pro-business."
The investment scandal at the workers' comp bureau has prompted Taft to appoint three volunteers to review all outside investments for the bureau and recommend policy changes. Ohio Lottery Commission Director Tom Hayes, who is leading the effort, said he will probably recommend a policy prohibiting firms with bureau contracts from giving money to politicians.
"You have to break the chain," he said. "Our recommendation will center around the fact that if you give, you can't get."
Taft spokesman Mark Rickel said the governor supports a ban on contributions from money managers to governors and candidates for governor. Rickel said Taft sees nothing wrong in the contributions he has received because the money was raised legally.
Petro spokesman Matt Cox said Petro supports a $1,000 limit on contributions from any employee of a company or firm doing work with the state. Montgomery also supports limiting contributions from employees of firms with state contracts.
Blackwell believes poor management, not political contributions, is to blame for the bureau's problems.
"The issue is putting in the necessary safeguards to prevent elected officials and bureaucrats from being asleep at the switch," said Blackwell spokesman Carlo LoParo. "We need to move the investment authority from the bureau to the state treasurer's office, where risky investments are not allowed."