Shortchanged again
3/24/2006POLITICS and coin collecting are worlds apart, and ne'r the twain should meet. If we haven't coined that adage yet, we should.
Unfortunately Ohio, where "Coingate" has been unraveling on a daily basis for the past 10 months, is heading for another crossing of the two.
Politics and coins will be on the grand stage at the end of March when the Buckeye State begins the liquidation of its holdings in the now-infamous Capital Coin Fund Ltd. II through a sealed-bid sale.
Even before prospective bidders could learn what numismatic collectibles would be offered in the sale, Ohio's current attorney general and candidate for governor was crowing that the state would make a profit of at least $1 million from the sale.
While such a pronouncement may be music to the ears of Ohio taxpayers (and voters), it was surely strange to any coin collector or coin dealer who may have thought even once about bidding in the sale. (There are some rare and highly desirable coins in this sale.)
The politician's boasting is based on the fact that the liquidators hired by the state of Ohio, before announcing the procedures for the sealed-bid sale, negotiated a purchase agreement with Spectrum Numismatics International, the firm that had sold the rare coins and paper money to the Spectrum Fund Ltd., a subsidiary of Capital Coin Fund Ltd. II.
In essence, the liquidators succeeded in setting a minimum bid for the entirety of the fund's holdings, so that's how the attorney general is already counting profit.
Yet, the procedures for the sealed-bid sale are even more bizarre.
The 3,400 coins and notes to be sold have been divided into 100 lots. So forget attempting to bid on just one coin. No catalog with lot descriptions and pedigrees will be made available.
An inventory list by lot number and relatively poor digital images of grouped coins are posted at a Web site (www.frostbrowntodd.com/coins).
Prospective bidders may view the lots in Columbus by appointment only, beginning March 21. But here's the kicker: In order to view the lots in person, one must wire a refundable cash deposit of $10,000 to an account established for the sale.
Should you decide to bid on one of the lots, guess what! Another deposit is required for your bid to be valid. The bidder must put up to 10 percent of his bid amount (net of the initial $10,000 deposit, if applicable), again by wire transfer. And the bid must be made on bid documents and be mailed or communicated by fax by the 5 p.m. March 29 deadline.
The seller (state of Ohio) also notes: "Seller has received an offer for all of the collectible coins, currency, and other assets for a price equal to the total reserve amount for all lots.
"Accordingly, Seller may choose not to sell one or more lots - even if Seller receives a bid that exceeds the reserve amount for that lot. Seller is not obligated to accept any bids, and Seller may withdraw items for sale at any time."
While the state of Ohio may require competitive bidding, the hired guns directing this show have come up with the most hostile and bidder unfriendly method yet devised.
In all likelihood the taxpayers of Ohio have been shortchanged again by bumbling bureaucrats and politicians diving for cover.
The 3,400 items for sale deserve the dignity afforded in a grand format numismatic catalog, with proper descriptions. And each coin and paper note should be offered individually. How else can the true market value be established?
Editor's note: Beth Deisher is editor of Coin World, a newsweekly and America's largest consumer publication for collectors of numismatic items. Her column appeared in the March 13 edition.