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Inspector general slams Dann on fund misuse

By Marc Kovac

Tuesday, December 23, 2008

By Marc Kovac

COLUMBUS — Former Ohio Attorney General Marc Dann used campaign contributions as a “personal honey pot” for everyday living expenses, including outfitting his home with security improvements and providing cellular phones for his wife and children.

And subordinates Anthony Gutierrez, Leo Jennings and others who were implicated in the scandal that led to Dann’s resignation earlier this year participated in the spending spree and misuse of state resources.

That’s according to a report released Monday by the state’s inspector general, who for months has been investigating Dann’s administration and campaign financing.

The lengthy findings include allegations of cronyism and “hiring missteps,” sexual harassment, and other improper activities and wrongdoing under Dann’s leadership.

“This office was built for disaster,” Inspector General Thomas P. Charles told reporters Monday afternoon.

Investigators found the actual working environment under Dann “to be even more unprofessional and dysfunctional than was reported.”

“As a young and promising politician, Marc Dann had a meteoric rise, improbably upsetting former Attorney General Betty Montgomery in 2006,” according to the report. “Following his election, he installed several unqualified and incompetent supervisors in key management positions. In turn, those people helped Dann turn the office of the ‘people’s lawyer’ into a house of scandal.”

The report added: “Regrettably, Marc Dann used his position as attorney general to indulge himself, his family and his friends. By tapping these easily available contributions, which were given to him by more-than-willing interested outside parties, he supplemented his statutory wage from the state of Ohio and used the money to pay personal expenses that had no relation to his office or his campaign.”

The findings have been referred to multiple other agencies, including the Ohio Elections Commission, the state Ethics Commission, the Internal Revenue Service and the Franklin County Prosecutor’s Office.

The multiagency investigation reviewed campaign finance, use of state property and equipment, management and personal issues, potential ethics violations and other “potential criminal violations” that occurred under Dann’s administration.

The resulting report includes details of the inappropriate personal interactions and relationships involving Dann, Gutierrez and Jennings and several female subordinates — which “would eventually topple the attorney general.”

“It was very difficult not to make that report an X-rated report,” Charles said, referring to the level of profanity used among Dann’s subordinates in the office. “You wouldn’t for a moment stand [to] work in an office with all the vulgarity and all the goings-on. And it went on way, way, way too long.”

Additionally, investigators recommended increased oversight of the attorney general’s office, something that would require legislative action.

“The power that comes with that office, the money that comes through that office, the collections, the outside counsel, it goes on and on,” Charles said. “Then add campaign finance transition accounts, spend it as you wish kind of thing. So I think there’s oversight needed.”

He added, “You put together those kinds of things, then you add partying, late nights, bringing people on for all the wrong reasons, and it got worse.”

Among other issues outlined by the inspector general:

UShortly after his election in 2006, Dann incorporated an “unregulated, nonprofit business” called the Marc Dann OAG Transition Corp., through which Dann was able to tap more than $195,000 for personal use, according to the report.

On checks to Dann’s wife’s dinnerware business, to his wife (Alyssa Lenhoff), Gutierrez and Jennings, the report said, “None of these payments was publicly disclosed or fell under the regulation of any entity.”

On $12,000-plus in payments to Lenhoff’s dinnerware business, the report concluded, “It is difficult to fathom how these two expenditures comported with any of the nonprofit’s stated purposes. ... The dishes were certainly not costs associated with the attorney general’s inauguration in 2007, nor did they ‘provide educational opportunities and related services’ connected with ‘consumer protection and other duties’ related to the office,” according to the report.

“The logical conclusion is that these expenditures, along with a $5,000 check to Gutierrez, $9,596.50 in payments to Jennings’ Progressive Solutions Group and a $9,955 check to Lenhoff, which made its way into the Danns’ personal bank account, were for the benefit of the attorney general, his spouse and friends.”

UDann made “similarly lavish payments from his campaign account” including checks to employees already on the state payroll. Among the recipients were Jennings, Mary Beth Snyder and the M&R Land Co., owned by longtime friend [Atty.] Michael Harshman,” according to the report.

Upward of $40,000 in campaign funds were used for security improvements to Dann’s house in Liberty Township, including windows installed by Gutierrez, who padded invoices “and converted the money for his personal use,” the report said.

On the system itself, investigators noted, “we are left to conclude that Dann used his campaign account to fund a major capital improvement for his home — an improvement from which he would reap future benefits without any expense to himself,” according to the report.

U“Dann spent more than $30,000 for food and beverages [from the campaign account] and [he] used money donated by campaign contributors as a personal honey pot — an account that he used for his everyday living expenses.”

UInvestigators found an “unusually high number” of expenditures labeled as “travel expenses.” Dann spent upward of $48,000 from his campaign account for travel for himself and family members, according to the report.

UA security detail from the Ohio State Highway Patrol essentially served as a taxi service for Dann’s family, including on one occasion taking his daughter and some friends to a Miley Cyrus concert in Cleveland, according to the report.

UInvestigators confirmed Dann’s inappropriate relationship with his scheduler, Jessica Utovich, who “first captured Dann’s attention in early 2007 when she passed his seat at Zeno’s bar in Columbus,” according to the report. On three occasions, Utovich arranged private rendezvous with the attorney general at hotels.