State loses $215 million

Cleveland Plain Dealer ^ | June 8, 2005 | Sandy Theis, Julie Carr Smyth, T.C. Brown

[Columbus Dawg]

Columbus - A politically connected investment firm lost $215 million in Bureau of Workers' Compensation money, triggering an agency shake-up, a wide-ranging criminal investigation and calls by Democrats for Gov. Bob Taft's recall.

Losses by the Pittsburgh-based MDL Capital Management dwarf the estimated $10 million to $13 million missing from BWC's rare-coin investments and raise new questions about the abilities of former bureau administrator Jim Conrad, who initially soft-pedaled information that surfaced about the losing investments.

Agency officials believe the losses are among the largest by a single money manager in BWC history, but emphasize that the $14 billion portfolio is solvent and the losses will not hurt businesses or injured workers.

[Columbus Dawg]

Now things are getting really interesting. While the Democrats are obviously attacking Republicans here, there are questions regarding Democrats being involved here. Forbes and Hammond, mentioned in the articles, are Democrats. This company, MDL, donated money to....you guessed it....Sen. John Kerry.

It will be interesting to see whether Democrats will demand that Kerry give his contributions from MDL back.

[EagleUSA]

It will be interesting to see whether Democrats will demand that Kerry give his contributions from MDL back.
------
I think we already know the answer to this one. Immediate denial, a mental disorder of the left, will set in. After all, the left, unlike the right, is not accountable for its actions. Just ask any one of them.

[Asclepius]

Rare coins? Pension funds invested in ... rare coins?

[E Rocc]

This is also a smoke screen. Ohio finally passed direly needed workman's comp reform a few years back, replacing the horrifically fraud-prone old system that was costing Ohio jobs.

The unions put together and managed to pass a referendum that brought the old system back.

-Eric

[Buckeye Battle Cry]

Bob Taft (Square Bob Sponge Tax) will go down in history as the single worst Governor the State of Ohio has ever been inflicted with.

[sharktrager]

Did they check under the bed?

[Columbus Dawg]

I did not mind one of the Democrats suggestions (even though I don't think by law we can do it).....Recalling RINO Bob.

[Blogger]

Hate to say you're right on this one, but you're right. Blackwell, will hopefully be better.

[goarmy]

"While the Democrats are obviously attacking Republicans here..."

Yup, the internet and the press are already associating Jim Petro and Kenneth Blackwell (2006 Ohio GOP gubernatorial candidates) with this mess.

[JohnnyZ]

the internet and the press are already associating Jim Petro and Kenneth Blackwell (2006 Ohio GOP gubernatorial candidates) with this mess.

How so? Blackwell would seem to be rather removed as he has frequently disagreed with the Taft admin. Wouldn't this be closer to state AUDITOR Betty Montgomery's turf?

[Liz]

This company, MDL, donated money to....you guessed it....Sen. John Kerry.

Wow, watta surprise (/sarc).

[Grampa Dave]

Surprises like that just keep happening.

[Buckeye Battle Cry]

I love Blackwell. I have since he was my Mayor back in the early 80's.

[Liz]

As I keep saying----an honest politician is one, who when he's bought, stays bought.

[Grampa Dave]

A loyal boughtee, eh?

[Blogger]

I love Blackwell as well. But I liked George Voinovich too and what a disappointment he has been as a senator! Hopefully power won't corrupt Ken B.

[HallowThisGround]

This underscores the problems with unrestricted investment in state pension funds. Do we really want government agencies monitoring employee pensions? They can't even spend their own budgets properly!

[Columbus Dawg]

This stuff about "out-of-the-box" investing was passed back in I believe 1996. This was going to allow agencies, like BWC, to invest in things other than the typical bonds, Treasuries, money markets, etc. This was supported by then-Governor Voinovich and it passed the General Assembly. The one major figure who was against it was the then-Treasurer of the State of Ohio, J. Kenneth Blackwell.

The major problems appear to be just in BWC at this time. The former director just recently resigned. To my knowledge, he was well thought of by many in the public and by workers. I think the problem was with the board in charge. With the recent revelations, I agree with Ken Blackwell that the Justice Department should be investigating this along with the State.

[Columbus Dawg]

There are some other things in the story that I think need mentioning.

"MDL has been fired, and investigators are inquiring about the firm's human resources manager, Mildred "Mimi" Forbes, daughter of Bureau of Workers' Compensation Oversight Board member George Forbes. The panel approves all BWC investments."

"George Forbes, president of the Cleveland NAACP and a former City Council president, did not return phone calls from The Plain Dealer."

Interesting indeed.

"Lay's company and its Ohio lobbyist, former Democratic Columbus City Councilman Jerry Hammond, have donated to elected officials in Ohio and Pennsylvania, where the bulk of their public business occurs."

I live in Columbus and Hammond is shady. While on Council, he made one of his many votes on a contract to some company and he told an aide that he "wanted the maximum contribution possible from them. I'm serious." Hammond's problem was, he didn't know the microphones were on.

"Changes ushered in during the Voinovich years also gave the agency more authority to consider Ohio-based firms and those owned by women and minorities for the lucrative investment work. MDL is a minority-owned business."

Oh the humanity!

[HallowThisGround]

This was supported by then-Governor Voinovich and it passed the General Assembly. The one major figure who was against it was the then-Treasurer of the State of Ohio, J. Kenneth Blackwell.

Dawg. You're absolutely right. I am sure Voinovich is in tears over it now! ;-)

I must admit when this idea was being floated back in the mid-90's (I was in Indiana and the State Treasurer there promoted the same), I was at first excited about it. I began to worry quickly as I though through it more clearly.

Problem is, these are true pensions, not individual accounts thus prone to abuse and ignorance as the market fluctuates. It's just like when you borrow your Dad's Joe DiMaggio autographed baseball to go play outside. All you know is its function and move upon the expediency of finding it in his closet when you can't find your own. Pensions should be directed by strict investment policy or we have these sorts of problems.