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Tuesday, October 21, 2014
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Published: Friday, 6/10/2005

Public blindsided again

AFTER two months of staggering revelations in the "Coingate" scandal, Ohioans now must cope with one more remarkable and disgusting example of arrogant, out-of-control, one-party rule.

In a confession stunning in its scope, the Ohio Bureau of Workers' Compensation admitted this week that the taxpayers lost $215 million in just a few months last year in a high-risk hedge fund that went south almost as fast as the state bought in.

A memo to Gov. Bob Taft's office last October from then-BWC Director James Conrad reported that the hedge-fund manager, MDL Capital Management of Pittsburgh, adopted an investment strategy that went far beyond the bureau's established risk limits.

Only now, seven months later, is the massive loss uncovered, and yet the governor's press secretary insists that Mr. Taft never saw Mr. Conrad's e-mail, never was told about it, never talked to Mr. Conrad about it, and only learned the extent of the loss this week.

That's beyond belief, but why should the citizens of Ohio believe anything this governor or his minions utter any more?

This is what passes for fiscal responsibility and oversight in the highest office in the state? And who at the BWC failed to grasp a basic tenet of investing in the first place - that such funds are not considered high risk for nothing?

Let's not forget that MDL and its top executives had contributed thousands of dollars to Ohio Republicans, including Governor Taft and Auditor Betty Montgomery. It all seems so convenient - and so familiar. The contributions flow in; the taxpayer dollars flow out, just as they did in the case of Mr. Noe.

It's discouraging to hear Attorney General James Petro's insistence that he has remained silent about the BWC's MDL investment losses because as attorney general, he is the Bureau of Workers' Compensation's lawyer.

Like Ms. Montgomery, Mr. Petro longs to be governor and is running hard for the job already. He needs to understand that the clients who should matter most to him are the citizens of Ohio. If that's a concept he struggles with, he should resign and become a full-time candidate.

Of course, his political prospects, along with Ms. Montgomery's, are problematic now. Ohioans surely have come to realize that when one party dominates and controls virtually all of state government for four terms, a sense of entitlement and keen disrespect of the people of Ohio are the result.

It's all about enriching one's political friends and impoverishing one's enemies.

That's why an attempt by legislative Republican leaders to stack their own newly created BWC investment review committee with four Republicans and just two Democrats is such a stupid idea. Unless the Democrats have equal representation, they will not participate, and the committee will have no credibility at all.

At the same time, we don't assume and neither should the leaders of the Ohio Democratic Party that their candidates only have to show up on the ballot in November, 2006, to recapture the executive and legislative branches of state government.

Many Ohioans - certainly including most of the folks who live in rural areas and the state's rapidly growing suburbs - distrust the Democratic Party because they see it as a party in bed with the public employee unions, a party concerned only with the welfare of the inner cities, and a party that loves to raise taxes.

Those are perceptions that make the Democrats' smooth return to power anything but a given.

In the meantime, Ohio is ill served by a governor who says he accepts responsibility for this mess but won't talk further to the newspaper that broke the story.

We were dismayed the other day when a Blade reporter tried to talk to the governor as Mr. Taft arrived at his Bexley mansion. "You'll have to call the office," Mr. Taft told him.

Call the office? Tried that, governor. They don't know what to say either.



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