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Published: Tuesday, 11/6/2007

Lessons of Coingate

MARK D. Lay's defense was that it wasn't a crime for a professional money manager like himself to lose $216 million in Bureau of Workers' Compensation investment funds, even after he lied about the mammoth risk he was visiting on Ohio taxpayers.

Thankfully, such self-serving nonsense was rejected by the federal court jury in Akron that convicted Lay, who may turn out to be the final defendant in the slew of prosecutions stemming from the 30-month-old Coingate scandal.

Just a few years ago, Lay was a wealthy, Ivy League-educated entrepreneur from Pittsburgh, investing billions of dollars for a host of prominent clients and being hailed as the best of a new generation of young black businessmen.

Now he's staring at up to 20 well-deserved years in federal prison for using a Bermuda hedge fund to defraud the Ohio agency, whose administrators handed out taxpayer money to political friends and benefactors in an amazingly cavalier - and criminal - fashion before their schemes were revealed by The Blade in 2005.

Perhaps Lay will cross paths with Toledo's Tom Noe, who's doing time in a federal penal facility for funneling illegal contributions to President Bush's 2004 campaign. After Noe finishes there, he's due to begin an 18-year sentence in state prison for looting a $50 million rare-coin investment windfall directed his way by corrupt BWC officials.

Lay and Noe were, of course, central figures in the most sensational confluence of criminality and politics in Ohio history. Taken together, their actions resulted in a criminal conviction for the sitting governor, the ethically challenged Bob Taft. And, in the 2006 elections, voters routed the GOP from its 16-year pinnacle of state government dominance.

Republican spinmeisters would rather shuck responsibility by trying to convince the public that this unprecedented misuse of public money was a bipartisan matter because, while Noe was a GOP insider, Lay also had made campaign contributions to Democrats and employed the daughter of George Forbes, the legendary black Democratic political force from Cleveland.

Moreover, the ink was barely dry on The Blade's initial Coingate exclusives before Republican operatives claimed that, compared to the Bureau of Workers' Compensation's $18 billion investment pool, the loss of $300 million or so was insignificant.

As in the case of the Akron jury, Ohioans didn't buy into such pettifoggery. They knew that those who headed the party of opportunity, as the GOP fancies itself, were mostly intent on using their clout to line the pockets of friends and associates and maintain their political power.

Unfortunately, the Taft Administration was able to keep the lid on the news of the BWC theft until after the 2004 presidential election, in which Ohio tipped the presidency to George W. Bush by fewer than 120,000 votes. Was history cheated? You bet.

State investigators now appear ready to close the books on Coingate even though one central question - who hatched the scheme in the first place? - has been left largely to conjecture. Also, we cannot understand why James Conrad, the former BWC administrator, has never been called to account for a mess that took place on his watch.

Nonetheless, the conviction of Mark Lay goes a long way toward redressing the wrongs of a painful chapter in Ohio history, one that will resonate as long as politicians hold the power to invest public money.

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