Wednesday, June 15, 2005


Ohio Republicans: cooking up a real mess?

Ohio is a Republican state, and for the most part has been for most of its history. For a time, in the 1970’s, we had two Democrat senators, Glenn and Metzenbaum, but for much of the fist half of my life Jim Rhodes was the Governor (1963-71 and 1975-83), and we’ve had Republican governors Voinovich and Taft since then, with Democrats Gilligan and Celeste sandwiched in between. Both Senators have been Republican (Voinovich and DeWine) for several years, the Auditor, Secretary of State and Atttorney General, the other state-wide offices, have all been Republican for at least two cycles, with the office-holders “rotating” the offices because of term limits, and Republicans control both houses of the legislature and the Supreme Court. President Bush, of course, carried Ohio both times (even with tens of thousands of apparently fraudulent new voter registrations in the four large heavily Democrat counties, where registered voters in 2004 outnumbered the population).

This is not to say, though, that Ohio is a true one-party state. While Republicans have dominated state-wide offices, control of the legislature and Supreme Court have passed back and forth, and, like in other states, the bigger cities, Cleveland, Dayton, Cincinnati and the Youngstown-Warren area in the northeast corner, are overwhelmingly die-hard Democrat in their orientation and bastions of pro-big labor loyalists. This is the land of Congressional representatives the likes of Dennis Kucinich (the former boy-mayor who bankrupted Cleveland before moving on up to congress) and Jim Traficant (who planned an abortive re-election campaign from his cell in a federal penitentiary).

With this as a background, realize that Ohio Republicans, under the supposed “leadership” of Governor Bob Taft, are cooking up a real mess here in the Buckeye state, a veritable witches’ brew of carelessness, foolishness, and downright stupidity that may provide a real opportunity to Ohio Democrats and a Democratic presidential candidate in 2008. First, you have both Republican Senators acting like fools, Voinovich over the Bolton nomination and DeWine joining McCain and Co. in caving in and selling out over the filibuster compromise. While I believe that Voinovich, and perhaps DeWine, too, was deliberately posturing for the cameras back home (previous posts here and here), they certainly have done nothing by these actions to endear themselves to the core Republican constituency. And the real danger here is that the resentment engendered among conservatives may be translated into lukewarm support for the next Republican who really needs the support of that core constituency. And the next Republican who needs that core is not likely to be Voinovich or DeWine.

The next Republican who needs that support is likely to be Jim Petro, Ken Blackwell, or Betty Mongomery, in a run for the governor’s mansion. These three Republicans occupy the other three state-wide elective offices, and played “musical offices” last time around, swapping jobs because of term-limits. The problem is, there is now a logjam at the top. Both Voinovich and his one-time lieutenant governor, DeWine, have moved up to the U.S. Senate, and Taft will be term-limited. There’s nowhere else to put anybody. Petro, Blackwell and Montgomery all want to be governor, and none can afford to wait forever. Unless a deal is brokered, there will be a Republican primary which could be a three-way internecine bloodletting. Blackwell, the Secretary of State who managed the 2004 election in Ohio, gained valuable exposure from that process and is clearly the favorite among hard conservative voters. Either Mongomery or Petro, though, seem to be preferred by the state party apparatchiks, and both are less identified with “conservatives” and considered more “moderate”. Any of the three would normally have to be considered a strong favorite against any possible Democrat candidate.

But the morass bubbling to the surface today doesn’t involve that potentially messy three-way primary. Like the feckless duo in the Senate who have perhaps alienated the party’s conservative base somewhat, the current state government is in danger of poisoning the waters against any future Republican candidate for Governor, as well as any Presidential contender. How? By making it look more and more like the state of Ohio is being governed by the Keystone Cops!

First, and without going into a lot of detail, there is an ongoing, pointless and stupid pissing contest between the Republican Supreme Court and the Republican Legislature over school funding. You want to really get people cranked off at their state government? Start screwing around with their schools! This same scenario is now being repeated in state after state. Somebody sues, claiming their school district doesn’t have as much money to spend as some other school district, and the state courts, whether Republican or Democrat, jump in and decide that school funding by property taxes is unconstitutional because it results in unequal expenditures. These activist courts then take it upon themselves to order the state legislature to find some other way to fund schools, rather than the 200-year old property tax method. State legislatures, perhaps understandably, don’t take kindly to state courts ordering them to legislate this or that, and the battle is joined. This has now gone on for years in Ohio.

Governor Taft, while he certainly did not create this problem, has provided no discernible leadership on this issue. Couple this with a state budget proposed by Taft that reduces the amount of state money to local school districts, and you have the Republican Governor being blamed for school districts across the state closing buildings and reducing staff. Now whether these reductions to a bloated public school system like, say Cleveland, are actually a bad thing or a good thing is arguable. But people don’t like it. Particularly when, having been told the state can not afford any more spending on education, the state suddenly announces, as Ohio did last week, that a SURPLUS of 1.3 BILLION dollars has suddenly been discovered.

After months of talk about Ohio’s budget woes, it turns out there’s a surplus of over a billion and a quarter dollars? Shouldn’t somebody in Columbus have known that? Or been able to figure it out? Before they started closing schools and libraries? So instead of being good news, the surplus looks like ineptitude, and instead of relief at necessary cutbacks being less than feared, there is a certain level of anger and resentment over cutbacks already made. These questions may very well come back to haunt any Republican gubernatorial candidate. And when people realize that Taft’s budget proposal contains a provision, as part of a “tax reform” package, which is likely to be included in the final budget when passed and which in effect authorizes a $45 million dollar property tax increase which will not be voted on, there will be more anger directed at Republicans.

This is certainly not the worst of it, though.
Today’s Cleveland Plain Dealer carries a story about the state maintaining investments with an investment broker for 18 months after he was indicted for scamming clients:

The Ohio Bureau of Workers' Compensation allowed Alan Brian Bond to continue investing $50 million of its money for at least 18 months after Bond was indicted on charges of taking more than $6.9 million in kickbacks that were billed to his clients.

The bureau lost $3.86 million in that investment, according to spokeswoman Emily Hicks.

As is usual with this type of story, there’s the political angle. Bond was also a contributor to some well-known Ohio politicians:

In 1997 and 1998, campaign finance records show, Bond and two of his associates gave $5,500 to Republican Ken Blackwell, then state treasurer; $2,000 to Democrat Lee Fisher, who was running for governor of Ohio; and $1,000 to Republican Betty Montgomery, then attorney general.

The saving grace here is that Bond was giving money to candidates from both parties. The downside is that this revelation is only the most recent in a series of disclosures that could spell big trouble for the GOP and, at a minimum, makes the Taft administration look like a bunch of inept bunglers.

As the Plain Dealer, a thoroughly Democrat-leaning paper, is only too happy to point out (and rightly so):

The Albriond investment loss is the latest embarrassment for the bureau which pays the medical bills of workers who have been injured on the job and compensates them for lost wages.

Last week, the state acknowledged it lost $215 million in investments handled by Pittsburgh-based MDL Capital Management, and that one of two funds with American Express Asset Management lost $8.5 million more. Another of that firm's less-risky funds posted a $3.7 million gain at the end of last month, partially offsetting that loss.

An additional $10 million to $13 million appears to be missing from the bureau's rare-coin investments, which were handled by Republican fund-raiser and supporter Tom Noe.

A little more detail on the political angles: MDL Capital Management, which lost $215 million in state money, is a minority-owned business which received special consideration under laws enacted during the Voinovich administration, and employed the daughter of old Voinovich ally George Forbes, the Democratic former Cleveland City Council President, current head of the Cleveland NAACP, and a member of the Worker’s Comp oversight committee at the time of the investments and losses. Forbes has since resigned that position, and there is no evidence that his daughter’s employment in any way influenced anyone’s decision to invest with MDL.

The losses on the “rare coin fund” were the first to come to light, and were treated as kind of a joke at first, things like “hey, Bob [Taft], I’ve got some baseball cards in my attic the state might want to invest in.” It now appears that an employee of the coin dealer, who actually handled the state’s investments, may have been systematically looting the fund. And now there is also word,
as reported by the Plain Dealer, that the principal, a well-known Republican fund-raiser, is being sued for collection by a bank and is being investigated for possible improper fundraising activities while the investigation into Ohio’s lost investment money continues:

A federal grand jury in Toledo is seeking to determine whether Noe illegally reimbursed as many as two dozen contributors to a Bush fund-raiser in October 2003 and circumvented campaign finance laws.

Meanwhile, state investigators are examining a $55.4 million rare-coin investment that Noe managed for the Bureau of Workers' Compensation.

The Bush-Cheney campaign has already returned Noe’s contributions.

So why hasn’t the proverbial stuff hit the fan yet in Ohio? Well, it probably helps that prominent Democrats also figure into this mess in at least a peripheral way. But the rumblings have started, and there have been some hints in various media that Taft may have known about the losses months ago, before the budget was proposed, and before the election. And if anyone can connect the dots and show the Taft administration concealed the investment losses, or improper actions on the part of administrators overseeing Ohio’s investments (and a couple of heads have rolled already), things will get awfully loud in a hurry here in the Buckeye State.

And the Republicans, through a combination of carelessness, shortsightedness, and just plain old fashioned stupidity, will have brought it upon themselves. They'll have done it the old-fashioned way: they'll have earned it.

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All Blessings,coins
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