Liquidate in the open
5/26/2005The state should forget any notion of keeping its coin inventory secret or deceiving potential buyers
AS THE Ohio Bureau of Workers Compensation continues to bob and weave on the issue of full disclosure in the growing "Coingate" scandal, the State of Ohio could be putting itself in the utterly untenable position of minimizing its losses by deceiving potential buyers of its rare coins.
Gov. Bob Taft, who stoutly defended Maumee coin dealer Tom Noe initially but now is said to finally be "fed up" with this whole mess (welcome to the club, Governor), has ordered a complete inventory of all rare coins owned by the state.
Equally belatedly, Attorney General James Petro this week obtained a court order freezing the assets of Mr. Noe's coin funds and transferring control to the BWC.
We wish we could be encouraged by these developments, but the governor also asked Mr. Petro to secure an "expert opinion" on whether publicly releasing the inventory would compromise the BWC's ability to retrieve a maximum return.
That sounds a lot like the same old stonewall against full disclosure we've seen from the BWC since The Blade first reported in April that the bureau had given Mr. Noe $50 million to invest in rare coins.
Frankly, while we and all Ohioans hope that liquidation of the coin inventory will recover the state's investment, there is a strong likelihood that it will not.
The BWC has argued that complete disclosure of its rare-coin inventory would compromise "trade secrets." But there is no place for secrecy in the investment of public money; the liquidation process must be conducted openly and ethically.
To shield the process is a shameful violation of the public trust, and it could put the state in the position of snookering coin collectors. The value of a coin is what a buyer is willing to pay for it. If maximizing the state's return depends on potential buyers' misperceptions about just what the state holds, that is abhorrent governmental behavior.
It's possible that sophisticated and savvy coin collectors will not be duped even if details about the inventory's content is withheld. But it could be the hundreds of lesser valued coins - the sort that ordinary collectors can afford - that could be sold at artificially high prices if the process is not totally transparent.
State Auditor Betty Montgomery has hired Sotheby's, the respected international art auction house, to appraise the state's collection of rare coins. Sotheby's appraisal, as with everything else associated with the coin inventory, should be shared with the public.
The bad news swirling around this scandal seems never to end. The Ohio Ethics Commission confirms that it is investigating possible violations of state law. On Sunday The Blade reported that a rare-coin dealer hired by Mr. Noe to buy and sell coins with Ohioans' money failed to mention a $250,000 loan from Mr. Noe and payments of $25,000 a month when he filed for bankruptcy protection in Kentucky.
Now the Inspector General is looking into the possibility that several current or former members of the governor's staff used Mr. Noe's lodgings for a deeply discounted rental rate.
What will finally qualify as good news? When the Bureau of Workers Compensation gets out from under an investment it should have never made in the first place, does so in the hard light of day, and BWC Director James Conrad resigns or is fired.
What's required here is a thorough investigation of why the state undertook this ill-advised investment in the first place, and a detailed examination of possible criminal wrongdoing by anyone involved.
Anything less and the public will have no confidence in the outcome.