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"Conrad Resigns, Taft Reacts: Dann Says Not Good Enough"
"By George NelsonYOUNGSTOWN, Ohio -- Friday's announcement that the director of Ohio's Bureau of Workers' Compensation would resign amid the growing "Coingate" scandal -- and Gov. Bob Taft's statement that he did not know the bureau was investing in rare coins -- did little to mollify state Sen. Marc Dann of Liberty.If the governor didn't know, he should have known, Dann said. As for Conrad, he's the "scapegoat" for a "culture of corruption" that permeates the Republican-controlled state government, the Democrat claimed. Dann's comments followed Conrad's announcement that he would step down, effective June 3, and Taft's news conference in Columbus -- both coming one day after it was revealed that as much as $12 million of BWC's $50 million investment in a rare coin fund managed by Thomas W. Noe, a top GOP fund-raiser, could not be accounted for."The news of the day, in my mind, is pay-to-play has become pay-to-steal, that the culture of corruption and the kind of things that go on in order to raise campaign contributions with state money is beyond my wildest paranoid imagination," Dann told The Business Journal.Dann became an outspoken critic of how BWC funds were being invested in rare coins and memorabilia controlled by Noe, the former Lucas County Republican Party chairman, shortly after The Blade in Toledo published its first reports in early April concerning the unusual investments. Over the subsequent weeks, the newspaper revealed Noe's close ties to nearly every Republican who holds statewide office and uncovered the fact that coins valued at more than $400,000 were missing. The Blade also revealed that Noe's hiring of a convicted felon resulted in his fund writing off $850,000 in losses, and that his fund made questionable investments in other non-coin collectibles such as valuable letters and papers. According to today's edition of The Blade, federal and state authorities are pursuing criminal and civil charges against Noe for allegedly misappropriating the missing BWC money. The Bureau of Workers Compensation began investing in Noe's rare coin fund in 1998, and continued to do so despite concerns raised by a BWC auditor regarding potential conflicts of interest and whether the state funds were adequately protected. Questions also have been raised whether Noe -- a so-called Pioneer fund-raiser for the Bush Cheney 2004 re-election campaign -- used some of the money to make contributions to Republican candidates. A federal investigation reportedly is under way.In Ohio, beneficiaries of Noe's generosity have included Taft, U.S. Sens. George Voinovich and Mike DeWine, Attorney General Jim Petro, Auditor Betty Montgomery, former Treasurer Joseph Deters, and members of the state Supreme Court, five of whom recused themselves from hearing three public records cases regarding Noe's investments of BWC funds.Noe also contributed $1,000 to the 2002 17th district congressional campaign of Ann Womer Benjamin, now director of the state Department of Insurance. But Noe didn't restrict his interest in politics to Ohio -- last year he donated $10,000 to Gov. Arnold Schwarzenegger's "California Recovery Team." The $400,000 in lost coins should have been enough for Taft, Petro or Montgomery to launch an investigation, Dann said. "What did we get instead? We got the governor stonewalling, defending Tom Noe right up to yesterday," he said. "We got the attorney general hesitating to sue, the auditor hesitating to audit," giving Noe time to put his affairs in order "and perhaps evade prosecution or minimize the chance we're going to recover some of this money." What is just as troubling to Dann, he said, is that Ohio officeholders were so addicted to campaign contributions that they couldn't stand up to Noe "when it was clear that there were big problems with this investment." For the governor, attorney general and auditor, "their loyalty to their campaign contributions was stronger than their loyalty to Ohio."Taft would not say at Friday's news conference whether Conrad was fired or resigned voluntarily. "I am outraged, I am angered, I am saddened, and I am sickened by what we learned yesterday from Mr. Noe's attorney," the governor said.Dann calls Conrad a "scapegoat" for the scandal. He said he attended Taft's press conference, and heard the governor claim he didn't know about BWC's investments in the rare coins until the stories appeared in The Blade. Dann disputes that, saying Taft was given a memo about the situation four days before the first Blade story was published. "If he didn't know then he wasn't asking very good questions," Dann declared. Taft acknowledged accepting contributions from Noe and he and his staff had asked the GOP donor to raise money for him, Dann noted, and he often visited Noe's shop between appointments in Toledo. "It's clear that there was a very cozy personal relationship between the governor and Noe," Dann asserted, "and the claim he didn't know just lacks credibility."Dann said the inspector general needs to continue his investigation, and he wants Petro to "aggressively pursue a fraud claim." The state senator also is calling on all public officials who received contributions from Noe -- including Bush and Schwarzenegger -- to return money to BWC to help make up for the lost funds. The political ramifications of the scandal aren't lost on Dann, the Ohio Democrat taking the lead in attacking the Republicans for the scandal. Most statewide officeholders are up for election next year, and both Petro and Montgomery -- along with Secretary of State Kenneth Blackwell, who also has accepted contributions from Noe -- are running to be the Republican nominee for governor. "This has broad implications for the state party in Ohio, and it's going to be a long time before we're going to be able to restore people's confidence in government down here," Dann remarked. Conrad was appointed administrator of the Ohio Bureau of Workers Compensation in September 1995 by then-Gov. George Voinovich. Under his command, BWC greatly reduced rates paid by Ohio businesses and profited handsomely from its investments.In April, the last time Conrad visited Youngstown, The Business Journal asked him about the wisdom of BWC investing in rare coins. At the time, the extent of the scandal was the Blade's revelation that nearly $400,000 worth of rare coins were missing.Conrad defended the $50 million investment in Noe's fund, explaining it had generated returns greater than other BWC investments.In announcing he would resign, Conrad said, the scandal was diverting attention from the bureau's work. "The last thing I want to do is distract from the outstanding progress we have made together over the years," he said. If Taft had hoped the announcement of Conrad's resignation -- which came on the cusp of the Memorial Day holiday -- would get lost as people headed off for the three-day weekend, those expectations likely were dashed. Within an hour of the announcement, the news was featured on media Web sites around the country and by afternoon was being reported on the site of The Guardian in Great Britain.Visit the Toledo Blade at www.toledoblade.com"