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Published: Tuesday, 3/20/2012 - Updated: 2 years ago

Ohio treasurer attends board of deposit session

Appearance at panel is 1st since election

BY TOM TROY AND JIM PROVANCE
BLADE STAFF WRITERS

COLUMBUS — Ohio Treasurer Josh Mandel, who is seeking election as a U.S. senator, attended his first meeting of the Ohio Board of Deposit on Monday, after enduring ridicule from Democrats for sending surrogates to the monthly meetings of the board of which he is chairman.

The board, made up of the treasurer, auditor, and attorney general, decides where to invest billions of dollars in state funds.

Attorney General Mike DeWine and state Auditor David Yost, fellow Republicans who also do not typically participate in person, attended the meeting as well. It lasted about five minutes.

Democrats derided Mr. Mandel's maiden visit to the board, and Mr. Mandel explained his attendance.

"Every two years there is a very important board of deposit meeting during which we decide where the tax dollars and retirement dollars of the people in the state of Ohio will be handled," Mr. Mandel said.

"Today we made that decision, and so I appreciated both Attorney General DeWine and Auditor Yost joining me there today. I have a lot of respect for them. I also have a lot of respect for their staff."

"We have one of the most professional and experienced teams in the country, and we're proud to take our team and stack it up against any treasurer's team throughout the nation," Mr. Mandel said.

His Democratic critics have accused Mr. Mandel of not doing his job and focusing his attention instead on his campaign for the U.S. Senate.

Mr. Mandel, who took office in January, 2011, two weeks ago won the Republican nomination to run for the Senate against Democratic incumbent Sherrod Brown.

Justin Barasky, spokesman for Senator Brown's re-election campaign, said Mr. Mandel went to the board of deposit meeting to distract attention from the revelation last week that he flew to the Bahamas for a fund-raising event.

"He was just fund-raising in the Bahamas instead of doing his job, so he has to create some headlines," Mr. Barasky said.

Mr. Mandel's staff issued an announcement Monday that he had acted against two banks accused of defrauding Ohio pension funds.

Mr. Mandel removed the Bank of New York Mellon and Boston-based State Street bank as "international custodians" for $41 billion of Ohio pension funds. He then appointed replacements.

The two banks were appointed to hold public funds by Mr. Mandel's predecessor, Democrat Kevin Boyce.

On March 12, Mr. DeWine sued Bank of New York Mellon alleging fraud, deceptive practices, and breach of contract when conducting foreign currency exchange transactions.

State Street is being sued by the U.S. Department of Justice and other states over similar fraud and deceptive-practice allegations, according to the treasurer's office.

Mr. Barasky said that if Mr. Mandel believed the banks were defrauding Ohio's pension boards he should have acted as soon as he took office, rather than 14 months later.

"If this is true, what the heck has he been doing for the last year-plus in allowing this to go on?" Mr. Barasky said. "It was certainly a political stunt by Mandel."

During his 2010 campaign against Mr. Boyce, Mr. Mandel accused Mr. Boyce of "cronyism and corruption" because he awarded a state investment contract to State Street Corp. about the same time that the Boston firm hired a friend of his deputy treasurer and chief financial officer.

Democrats have been attacking Mr. Mandel for two months over his no-shows at board of deposit meetings.

The Associated Press reported that every state treasurer since the early 1980s had attended at least some board of deposit meetings in person.

The Mandel office has defended his decision to always send a top staffer, chief financial officer Seth Metcalf, who is also the treasurer's general counsel, because of his financial expertise.

Mandel spokesman Seth Unger has cited the high credit ratings of the state and the performance of the state's investments since Mr. Mandel took office as evidence of the soundness of his decisions to rely on a designee.

In February, the Ohio Democratic Party issued a mock invitation to Mr. Mandel to attend a board of deposit meeting.

When the board met Jan. 26, Mr. Mandel was raising money for his Senate campaign in Washington.

Contact Tom Troy at tomtroy@theblade.com or 419-724-6058.



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