Ohio Gov. John Kasich and Ohio Republican Party officials may not have been on the conference call with reporters Wednesday to hear State Senator Eric Kearney's explanation of how he and his wife have amassed state and federal tax liens of $825,000, but the glee flowing from the GOP officials over the tax lien problems Democrats are mired could be heard loud and clear.
Slideshow: Kearney tax documents, spreadsheet pages
Sen. Eric Kearney, a 50-year old African-American from Cincinnati who is term limited next year, was recently picked by the Democrat's gubernatorial hopeful Ed FitzGerald of Cleveland to be his Lt. Governor running mate. Reporters hurled a battery of questions on the sizable state and federal tax liens he, his wife and their publishing company, Sesh Communications and KGL Media Group, Inc, have amassed since they started their business in 2001.
Commonly reported at $1 million by news sources before today's media call, the new figure is pegged by Sen. Kearney at $825,000, an amount he said is this high due in part to added interest and penalties. The tax liabilities stem from the 10-person publishing business he and his wife own, whose business shortfalls over the years caused the Kearneys to dip into their own pockets to keep it afloat.
On the call with Sen. Kearney was Ohio Democratic Party communication operative Matt McGrath, who sent reporters documents, including 48 pages of federal tax liens and other documents that date back to September of 2007, and a spreadsheet of IRS account balances and lien information compiled by KGL Media Group, a for-profit company formed in Ohio in 2001 by Kearney, an attorney, and his wife Jan-Michele Lemon Kearney, who together own and publish the Cincinnati Herald among other publications.
McGrath, who came to ODP as its strategic communications advisor for next year's election following his work for Obama for America in Michigan last year, told reporters the top of the Democratic ticket, Cuyahoga County Executive Ed FitzGerald who selected Sen. Kearney to be his running mate, wasn't on the call. McGrath said FitzGerald was out campaigning for governor, an election that is eleven months away that recent and reliable polling shows will be a close one if third party candidates are on the ballot and if Democrats can mount a strong campaign.
The $825,000 figures is reached by adding $561,000 in IRS liens to $83,000 in federal back taxes owed by his wife, plus $95,000 in unpaid state taxes related to KGL he says are still being disputed and, finally, $86,000 in federal payroll tax liabilities attributed to an affiliated company that dissolved in 2004 that he and his wife owe.
Conference calls like the one today only fuel doubts about whether the ticket of FitzGerald-Kearney, neither of which have never run statewide before, can withstand the inevitable and unrelenting attacks Ohio Republicans will fire at them through Election Day next November. Based on the repeated questions from reporters trying to understand Sen. Kearney's spreadsheet numbers, gaining the high ground with mainstream and nonmainstream media and reporters will be an tiring uphill climb.
Sen. Kearney was asked whether he thinks his disclosure of information today will counter accusations that label him as a tax cheat, deadbeat and crook, and whether he and FitzGerald are prepared to have this issue confront them until Election Day next year regardless of efforts to explain it or satisfy the outstanding debts that as of this November 27 totals $825,000.
Some have already called on Sen. Kearney, for the good of the party and the ticket, to do the right thing and remove himself from consideration, because FitzGerald has said his pick stays.
Long-time Capital Square watchers say that if Kearney does not leave soon, Gov. Kasich will win easily next year.
Sen. Kearney said he and his wife have taken responsibility and that it's part of public life. "We're rolling with that," he said, adding that "We're going to succeed." He said he's fully aware that the Ohio GOP will continue to attack him with ads over the next 11 months, but he's been attacked with this information before, in his last election, and won. Sen. Kearney, 50 years of age and a native of Cincinnati, is term limited next year.
Kearney tried to underscore that the numbers are much higher due to added interest and penalties. He repeatedly said that approximately $95,000 in state tax liens is a disputed figure, but regardless, $63,292.99 has been paid toward it.
He noted to reporters that his Joint Legislative filings were reviewed by the council for his caucus before they were filed, and that he gave no thought, and JLEC did not question, whether when he used the acronym ODOT it meant anything other than the Ohio Department of Taxation, not to be mistaken for the Ohio Department of Transportation. He clarified that the State of Ohio does not have a lien against him personally.
The question of whether a lawsuit filed against him by American Express for the amount of about $14, 000 was related to payments to cover short comings with the business, Sesh Communications which is owned by KGL Media, Inc.? Sen. Kearney did not elaborate, but said it was not.
For reporters who found difficulty fully understanding the spreadsheet numbers, and who showed their frustration with answers, Sen. Kearney said his release of this information today represented an "unprecedented amount of information and data ... and documents ... that no other candidate for Lieutenant Governor has provided before." Helping to explain that is the fact that no other candidate for Lt. Governor has had the tax problems Sen. Kearney and his wife have today.
Can Ohioans expect him, if elected, to manage his state office any better than he's managed a company he owns with his wife? Sen. Kearney said he and his wife have taken responsibility for the tax liabilities because they want to keep the service the Cincinnati Herald provides to the community, given it's been in business for over 50 years, during which time it has faced different challenges.
Going through these challenges and working out obligations an payment plans, he said, is something that relates to average Ohioan. "Entrepreneurship is often a roller coaster ride ... and small business owners will understand exactly what I'm saying, " he said near the end of the call. If elected, he said, voters will have someone in the office of Lt. Governor who "intimately understands that."
In a reference to Ohio's incumbent chief executive, Gov. John Kasich, who worked for six years for Lehman Brothers, the failed Wall Street investment bank that triggered the housing meltdown that sent the nation into the Great Recession of 2007-08, Sen. Kearney said, "I did not work for a major Wall Street or New York company ... I have a small company that employees 10 people."
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