Ohio Governor John R. Kasich is digging in his heels to protect how far public eyes can peer into his pet private job-creation group, JobsOhio.
From the day in the fall of 2010 when he announced he would privatize Ohio's formerly public economic development in order for the state to work at the "speed of business" instead of the "speed of statute" to revitalize a heartland state that lost more than 400,000 jobs during the Great Recession of 2008, Gov. Kasich and his allies in government and business have defended the secrecy surrounding JobsOhio, despite calls by open government advocates who argue that keeping taxpayers in the dark when hundreds of million or maybe billions in funds flow in and out of an organization protected from prying public eyes is bad policy.
At the center of this controversy stands Ohio's Republican Auditor of State Dave Yost, who says he has the authority to audit public and private funds captured by JobsOhio, the first order of business a friendly GOP legislature pursued in 2011. Team Kasich said today that Yost's reach into the private side of JobsOhio represents unprecedented access to its nonpublic dollars and will send a chill to business if the auditor's authority is not checked by lawmakers.
James C. Boland, who has served as chairman of the JobsOhio board since July 2011 and is chairman of the JobsOhio audit committee, wrote an op-ed in the Cincinnati Enquirer Tuesday that said that transparency with the expenditure of public money is fundamental to democracy, so is the right of private individuals, private corporations and private nonprofits to keep their business private. If an Ohio business can no longer be certain of guarding its privacy from the prying eyes of Big Government, he said, "they’ll soon find some other state in which to do business, expand and hire."
In a coordinated response to the growing controversy, which has already become an issue that will play an important role in Gov. Kasich's coming campaign to win a second term in 2014, Gov. Kasich's Press Secretary Rob Nichols issued the following statement on JobsOhio.
"JobsOhio is working. After losing 400,000 jobs Ohio is now up more than 116,000 jobs and the $9 billion in new investment that JobsOhio has helped attract is part of that success. JobsOhio is indeed moving at the speed of business," Nichols said in an email to the media. "The Auditor’s attempt to re-write the law to make JobsOhio a slow, bureaucratic public body again will kill JobsOhio and its job creation efforts. And if companies that accept economic development incentives fear that government auditors will seize and disclose their confidential business records, then that will kill job growth in the state of Ohio."
Team Kasich said it supports public review of JobsOhio’s public funds and the release of its private-funds audit report, but is urging the General Assembly to "act quickly to prevent a chilling effect on job creation caused by a mistaken, overly-intrusive interpretation of the Auditor’s duties." If the General Assembly takes another course, Nichols said, "we would, of course, respect their decision, however, the House and Senate leaders have already made clear their positions and we're hopeful for a quick legislative resolution."
Allowing JobsOhio to continue helping job creators grow and thrive, and allowing job creators to operate without fear of government officials forcing them to disclose their confidential business information, Nichols said, is very important.
Boland's op-ed in the Enquirer today asks if private enterprises that accept job-creation grants, loans or other state funding should be forced to disclose their private finances to their competitors? Will political parties accepting taxpayers’ funds have to disclose their contributors? Will private charities accepting public funds be forced to disclose detailed information about the sources, identities and amounts of their private donors?
Boland makes his case that JobsOhio's economic development model is both working and has developed significant momentum. "I am proud of JobsOhio’s accomplishments and have full confidence in its mission to drive economic development for our state," he said, adding that the fate of JobsOhio may not seem important to some, "but it’s the canary in the coal mine – an early warning sign to every private corporation in Ohio and every nonprofit as well. What State Auditor Dave Yost is asking of JobsOhio could soon harm them as well."
Meanwhile, JobsOhio’s chief financial officer is required to appear before state Auditor Dave Yost by noon today with all of the financial records of the privatized development agency in hand, according to a published report.
“I don’t think the event you’ve described is likely,” Yost said yesterday when asked by a reporter what happens if JobsOhio fails to comply with his March 5 subpoena, according to one news source. Auditor Yost’s subpoena requires Kevin Giangola, JobsOhio's financial officer, to supply JobsOhio’s bank statements, revenue ledgers, payroll and other financial records to Yost.
Giangola could be asked to delivery testimony if he shows up with less than the information Auditor Yost requested via subpoena. Reports indicate Yost believes the expected exchange of information will happen, notwithstanding the disagreement between the two statewide officeholders.
The Cleveland Plain Dealer wrote that JobsOhio President and Chief Investment Officer John F. Minor Jr. refused to concede that Auditor Dave Yost had authority to review the job development corporation's books and "reserves its legal rights to protect the corporation from this unwarranted and unlawful governmental intrusion into the affairs of a private, non-profit corporation."
JobsOhio has received millions in state grants in addition to the original $1 million allocated by the state. It has also received $7 million in secret private donations. It was learned today from another Statehouse news group that JobsOhio now plans to return the $1 million it received from the state when the legislature created the private non-profit entity along with any grant money it received since July 2011.
Money flowing to JobsOhio has become a testy issue for both pro- and anti-JobsOhio advocates. Reports indicate that JobsOhio spent $3 million on salaries for its 22 employees, who also spent $150,000 on travel. Other reports on the group's actions indicate it spent $367,000 for office remodeling and $362,000 for office furniture last year.
As for Auditor Yost, he says on his agency's Website that "government ... is an instrument meant to enable each one of us to fulfill our duty to God, family and country. So long as I hold office, I will help make sure that state and local government works for the citizens of Ohio, not the other way around."
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