Dann and Fedor: "It is time to clean house" after $215 million has vanished

Wednesday, June 8, 2005

FOR IMMEDIATE RELEASE Contacts: Amanda Conn/Melinda White (614) 466-5899 Tuesday, June 7, 2005

BWC memo details $215 million missing from state coffers for close to a year (Columbus)- A memo dated today from the Ohio Bureau of Workers’ Compensation indicates $215 million has vanished from state funds and has been missing since November 2004. The memo is from the interim director of the BWC, Tina Kielmeyer, to Governor Bob Taft. Kielmeyer was appointed by Taft after her predecessor James Conrad was forced to resign in the wake of the severe magnitude of the current Coingate scandal. “It is time to clean house and it needs to be done today,” said State Senator Marc Dann (D-Liberty Twp.) who has been one of the leaders in initiating the investigations that have discovered the Coingate corruption. “It is astounding to me that there’s nobody who can stand up and ask questions and take real action. We need to appoint an independent unbiased overseer who is willing to stand up to donors and ask the tough questions immediately.” The loss according to the memo was discovered on November 3, 2004. Additionally, Attorney General Jim Petro hired the law firm of Schottenstein, Zox and Dunn to look into the matter. The memo states BWC recommended MDL to the Oversight Commission and initially gave the investment fund $55 million to invest, and then the next five years provided an additional $300 million for the company to manage on behalf of the BWC. MDL is part of the emerging investment fund that was set up by the BWC. Rare coin dealer Tom Noe’s Capital Coin I and II funds are part of the big umbrella fund that state used to invest BWC money. Noe is currently under investigation by state and federal authorities after at least $12 million was discovered missing from his Capital Coin funds. “There are obviously bigger fish to fry in this scandal,” said State Senator Teresa Fedor (D-Toledo). “Noe was just a little minnow and now we have a 215 million pound whale on the line. Money has been stolen from the pockets of Ohio’s businesses and injured workers. Meanwhile, the Republicans have been getting fat checks to pad their bank accounts. All of it "hush money" to keep pay-to-steal alive and well in the state of Ohio. “Taft is in the middle of this scandal, and he has the audacity to appoint another administrator directly connected to the scandal,” Senator Fedor said. “Tina Kielmeyer was promoted from the assistant gate-keeper of corruption to the top job thanks to Mr. Taft. There is no excuse for the culture of corruption that has been created in Ohio." The memo states the reason for the vanished funds is due to the fact a majority of the “losses resulted from the investment manager leveraging the account beyond the risk parameters established in the contract.”