Ohio ethics panel asked to probe firm of Bell's niece

State Democrats claim family ties led to work

Left to right Shayla Bell, Mayor Mike Bell, Karen Jarosz, Laura Rieger, and Brad Rieger during Zoo To Do at the Toledo Zoo Friday, 06/17/11, in Toledo, Ohio.

The chairman of the Ohio Democratic Party has asked the Ohio Ethics Commission to investigate the $656,000 in federal grants and loans the city of Toledo has awarded to a development company owned by Mayor Mike Bell's niece.

In a brief letter yesterday, Chris Redfern, the party's chairman, formally requested the ethics commission "to commence an investigation into the contractual relationship that exists between the City of Toledo and Shayla Bell."

Ms. Bell, 27, started Fort Industry Development shortly after her uncle took office in January, 2010. Since then, the city has awarded Ms. Bell's company five contracts to buy, rehabilitate, and sell foreclosed homes. The rehabilitation work itself is performed by a general contractor. Fort Industry also is to receive two more contracts, which would bring the total close to $1 million.

"I think it's clear that Shayla Bell wouldn't have received one penny if her last name wasn't Bell," Mr. Redfern said.

City officials dispute that claim. Mayor Bell has said his niece earned the contracts on her own initiative with no assistance from him. She had to qualify with the city's neighborhoods department to begin receiving the contracts.

She had no prior construction or development experience, but she teamed up with two businessmen from an established commercial and industrial glass company in creating Fort Industry. That gave the firm the experiences and financial wherewithal to qualify for the program, neighborhoods department staff has said.

Although all of Fort Industry's contracts with the city are signed on behalf of the mayor, Adam Loukx, the city's law director, said conflict-of-interest rules barring public officials from awarding contracts to immediate family does not apply because a niece is not immediate family.

"It seems to me like pure politics," Mr. Loukx said of the complaint.

Steve Herwat, deputy mayor of operations, said yesterday that city officials believe the contract award was the result of a competitive bid process and that political contributions by the two involved businessmen were made prior to the time the mayor held office.

A state law prohibits no-bid contracts to those who have contributed more than $1,000 to the campaign of an officeholder with ultimate responsibility for awarding the contract. Toledo Mirror and Glass owners Jim Nicholson and Paul Pellioni both contributed more than $1,200 to the mayor's campaign and each owns 24.5 percent of Fort Industry.

Mr. Herwat said city leaders do not feel the award violated a state law.

"Simply put, these are the facts, not speculation that a violation of law may have occurred or was likely. As you see, the law, with its multiple points, has clearly been followed," Mr. Herwat said in a statement released last night.

"With respect to Mr. Redfern's request for an ethics investigation we are confident that the Ohio Ethics Commission, if it investigates this matter, will reach the same conclusion as our department of law."

Paul Nick, executive director of the ethics commission, said he could not talk about the particular case, but he said the state's ban on awarding public contracts to family members does not include nieces unless they live in the same household as the officeholder.

Mr. Redfern argued the relationship between the mayor and Ms. Bell is more like a father-daughter relationship than a typical uncle-niece relationship.

Mr. Bell has said he has a particularly close to his niece, especially since her father -- the mayor's brother -- died in 2008. Ms. Bell worked on the mayor's campaign and is accompanying him on his trip to Asia this week. The mayor could not be reached for comment yesterday.

The mayor, who ran as an independent, has angered Democrats and union leaders in recent weeks because of his support for Issue 2, which reverses some public employee union bargaining rights, and because of his attempt to negotiate wage freezes and benefit cuts with the union representing city workers.

Mr. Redfern didn't hesitate to tie his request for an investigation to those issues.

"I think it's important for everyone to realize, Mr. Bell has been an outspoken advocate of Senate Bill 5 and is pushing to take pension benefits and wages away from Toledo city workers at the very time that he is rewarding a family member with public dollars," he said.

While that message might resonate with some union activists, the funds awarded to Ms. Bell's company are federal dollars earmarked for a U.S. Department of Housing and Urban Development program called the Neighborhood Stabilization Program.

Mayor Bell has said he supports Senate Bill 5, which will be Issue 2 on the November ballot, because it would give him the tools he needs to balance the city's budget.

Jon Stainbrook, chairman of the Lucas County Republican Party, criticized Mr. Redfern's motivations for filing the complaint.

"Plain and simple, it looks like a Democratic witch hunt," he said. "This witch hunt is against Mike Bell, a mayor who has the audacity to think independently of the Democratic party and to speak his mind about Issue 2. Therefore, he's being attacked."

The complaint doesn't mention Ms. Bell's two partners in the business, Mr. Nicholson and Mr. Pellioni, though a Blade article about them was attached to the complaint.

Mr. Nick said his agency doesn't handle election law complaints, but could refer them to the Ohio Elections Commission.

Contact Tony Cook at: acook@theblade.com or 419-724-6065.