The Ohio legislature, dominated by a friendly supermajority of Republican lawmakers, encased Gov. John R. Kasich's pet, privatized job development group JobsOhio in a scrutiny- and oversight-proof shell, which showed again Thursday that it cannot be cracked.
The Ohio Ethics Commission ruled it had no reason under Ohio law to dig deeper into accusations from Kasich's Democratic challenger Ed FitzGerald that conflict of interest issues exist between the governor, the business leaders he appointed to the board and some of the companies they represent, that asked for and were granted funds and tax credits for development through the Ohio Tax Credit Authority.
Creating JobsOhio was the first order of business for the General Assembly in 2011. Acceding to Kasich's requirements for the group, which initially included him as its CEO until issues of unconstitutionality forced him to abandon that strategy, dutiful lawmakers exempted the new private nonprofit from the kind and level of public scrutiny that apply to most other state agencies.
Today's action to take no action by the OEC keeps JobsOhio a black box operation that Kasich and supporters can declare is a magic hat that creates jobs in ways unable by previous state agencies whose charge is economic development without without showing how the rabbits are being produced.
At issue today before the OEC, created in 1973, was whether a conflict of interest situation existed between Gov. Kasich and subsidiaries of Worthington Industries, a Columbus steel manufacturer on whose board then citizen-Kasich served and was paid over $600,000 for that service. Kasich terminated his board relationship with Worthington Industries, whose founder and children have been big backers of Kasich's dating to his first elected office in the Ohio Senate in the late 1970s. Kasich exited the board after winning election in 2010 but filings showed he continued to receive deferred compensation from the company.
Merom Brachman, a big name in Ohio Republican politics who along with his wife have contributed to Kasich's political campaigns over the years, and OEC executive Director Paul Nick said during a public session today that it decided that deferred compensation did not represent a conflict for Kasich based on a similar case that came before it during the administration of Democratic Gov. Ted Strickland, who Kasich narrowly beat in 2010, the year of the rise of the Ohio Tea Party movement.
Closing the curtain on FitzGerald's complaint, OEC Chairman Brachman said a strong precedent for deferred compensation existed.
As for the money Kasich received in 2011 and 2012, the governor's attorney, D. Michael Grodhaus, said it represents payment for serving on the company’s board from 2005-08. Grodhaus said there was nothing Kasich did or could have done related to Worthington Industries that would have affected those previously agreed-to payments.
“It has been suggested that because two Worthington-affiliated companies received certain tax credits from a state board during his tenure as governor he has a conflict of interest. Nothing could be further from the truth,” Grodhaus said, according to published reports.
Brachman, OEC's chairman, called it a "clean break and clear as a whistle." Brachman went so far as to call FitzGerald's complaint a "red herring." Critics of Kasich said Brachman, a long-time friend and campaign contributor to previous Kasich campaigns, should have excluded himself from the decision.
According to reports, Brachman himself gave $500 to Kasich’s transition team and $2,850 to Kasich’s congressional campaigns in the 1990s. His wife Judith has donated $9,000 to Kasich’s gubernatorial campaigns, including $5,000 last year. Kasich’s campaign returned the favor in 1990 with a donation of $ $500 when she ran unsuccessfully for state treasurer.
The ruling gave Gov. Kasich's spokesman Rob Nichols the chance to push back on FitzGerald as nothing more than a little known politician looking for an issue to raise his name recognition. "The Ethics Commission confirmed what we said from the beginning: These were amateurish political cheap shots that have no basis in fact."
FitzGerald, a former FBI Agent who was elected Cuyahoga County's first executive, said in a statement, "This whole mess of cronyism and self-dealing at JobsOhio – which now includes Governor Kasich himself – is clearly unethical, and if it isn’t illegal, it ought to be."
Following today's decision by the OEC, Team FitzGerald blasted out an email questioning the secrecy of JobsOhio. "There's a reason students aren't allowed to grade their own tests, why pitchers aren't allowed to call their own strikes, and why you wouldn't let Al Capone guard the bank vault. Why wouldn't that same principal apply to the public's money as well?" FitzGerald asked.
As one online post about today's decision said, "Kasich and his cronies have designed new policies and departments and done everything they could to keep the details secret claiming they are protecting businesses ... they are protecting the deals they have made under the table because in the light of day they would probably stink. and we could see who is greasing the palms and who benefits."
Meanwhile, the OEC isn't the last hurdle JobsOhio need clear before it doesn't have to look over its shoulder anymore for wood-be tacklers. If the Ohio Supreme Court moves forward with a constitutional challenge brought by ProgressOhio and two Democratic state lawmakers and allows another attorney's complaint filed last week to likewise proceed on the grounds that JobsOhio, by any other name, is a public agency subject to public record requests and other oversight prevented under its enabling legislation, Gov. Kasich may find himself in a political pickle that may not play well with voters next year when he hopes to win a final term.
Kasich critics and opponents of JobsOhio argue the private non-profit is a state agency because it acts like one, and because it used state liquor profits to bond to fund its own operation. OEC's decision today does not mean Jobs Ohio is free and clear from scrutiny and public oversight forever or until Kasich leaves office.
On Aug. 7, state Democratic Chairman Chris Redfern asked the OEC to make financial disclosure forms they do collect related to JobsOhio public. OEC's response was that JobsOhio, per its enabling legislation, is exempted from its oversight. Under state law, financial disclosure forms are secret.
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