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Monday, September 01, 2014
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Published: Sunday, 5/15/2005

A litany of bad news

As the revelations continue in the bizarre scandal that has come to be known as "coingate," we're reminded of that old rock 'n' roll radio commercial: The hits just keep on comin'.

The investment of $50 million in public funds in rare coins, the state's belated decision to liquidate the funds, and the Bureau of Workers' Compensation's refusal or inability to open all investment records to full public scrutiny have been well documented by The Blade.

Now we learn that the state was on the verge of dumping another $25 million into Capital Coins I and II, funds managed for the BWC investment portfolio by Tom Noe, one of the Republican Party's most generous benefactors. The payment was never made once the story broke.

And we discover that Mr. Noe's deep-pocket ties to the Republicans are deeper than we thought. Gov. Bob Taft's former chief of staff, Brian Hicks, stayed at the Noe home in the Florida Keys, paid far less for the privilege than the going market rate, and never reported it to the Ohio Ethics Commission, as required by law.

As the bad news continues for Mr. Noe and the BWC, we worry on the public's behalf about another disturbing prospect - that the liquidation of the coin funds could put the state in the awkward position of having to deceive potential buyers about the true nature of its coin inventory.

There is only one natural market for rare coins, and that is the relatively compact world of coin collectors. The value of a particular coin held by the state is what a prospective buyer is willing to pay for it. Maximizing funds from a liquidation could thus require misperceptions about just what coins the state holds, or how many of them - hence the bureau's "trade secrets" defense.

That is unsavory, shameful, a violation of the public trust, and utter folly. The state has no business snookering coin collectors or anyone else. The simplest solution is for the BWC and the Capital Coin Funds to fully disclose.

Since first reporting what has since become a statewide story, The Blade has sought to obtain BWC records related to Capital Coin Funds I and II. But from that day to this, the BWC has said no on the most crucial records.

What we did get was a package of documents with significantly redacted, or blacked out, entries. All the while the bureau has insisted that the funds have performed well, generating a profit, so what's the big deal.

However, we believe that denying public information to the public is a very big deal. Secrets have no place in the investment of public money. So The Blade has filed suit at the Ohio Supreme Court to shine the light of day on files and materials that clearly are public records.

We look incredulously at a lawsuit filed by Mr. Noe in Franklin County Common Pleas Court, naming The Blade and the BWC, to prevent disclosure. Does he expect the Supreme Court to bow out? No matter which court decides the issue, we are confident we will get the public records; Mr. Noe should understand that game is up.

Does the BWC's stonewalling reflect the unhappy prospect that the coin funds have not done as well as advertised?

It's possible that the BWC liquidation of the coin funds could ultimately produce the unsettling news that the state's original $50 million stake in rare coins is no longer there, or cannot be recovered. But the state should not have been in such a speculative venture in the first place.

Merely backing away from a plan that was a bad idea from its inception does nothing to resolve the public's concerns, or ours, about the specifics of investing $50 million of the taxpayers' money in an investment that no other state in the union has dared try.

Liquidation of the rare-coin funds should not deter at all the ongoing investigation by Ohio Inspector General Tom Charles. Too many questions remain unanswered.

State Sen. Marc Dann correctly argues that Mr. Noe should not earn a commission on the sale of coins when he already pocketed a profit from their purchase. That would give new meaning to the term "double-dip" and it would be an added insult to the taxpayers.

Mr. Noe's decision to step down from his seats on the Ohio Board of Regents and the Ohio Turnpike Commission is appropriate; it's tough to imagine that he could have much effectiveness on either board in view of the controversy that continues to swirl around him.

It's a shame that the Bureau of Workers' Compensation has forced the taxpayers to invest the state's legal resources in defense of the Capital Coin Funds' dark cloud of secrecy, when it would be so easy to finally let the sun shine in.



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