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Published: Friday, 5/25/2012

Mandel returns funds being checked by FBI

Certain campaign contributions under investigation

BY TOM TROY AND TONY COOK
BLADE STAFF WRITERS
Ohio treasurer Josh Mandel gave back $105,000 after his contributors came under suspicion. Ohio treasurer Josh Mandel gave back $105,000 after his contributors came under suspicion.
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Ohio Treasurer Josh Mandel, the Republican candidate for U.S. Senate, has returned $105,000 in campaign contributions to employees of a northern Ohio direct-marketing firm in response to an FBI investigation.

The money came from 21 donors affiliated with Canton-based Suarez Corporation Industries and has raised questions because many contributors had no record of giving to federal campaigns and some did not appear to have high incomes.

In a letter to the donors, Mr. Mandel's campaign treasurer, Kathryn Kessler, said the campaign was refunding "any contributions that appear to be under investigation by federal authorities.

"We believe we have no reason to be concerned with the contributions, but out of an abundance of caution and until the investigation is complete, we believe this course of action is most appropriate," Ms. Kessler's letter said.

RELATED ARTICLE: Campaign contributions prompt FBI probe

Although the campaign provided a copy of the letter to The Blade, it would not explain the timing of the decision or how long it has been aware of the federal probe.

The Blade revealed the unusual pattern of contributions in August.

The company's owner, Benjamin Suarez, and 16 of his employees (plus some of their spouses) gave about $200,000 to Mr. Mandel and U.S. Rep. Jim Renacci (R., Wadsworth) last year. Each of those donors gave $5,000, the maximum allowable amount, to one or both candidates.

Mr. Mandel, who was sworn into office as state treasurer in January, 2011, is running against Democratic incumbent U.S. Sen. Sherrod Brown of Ohio. Mr. Renacci is facing U.S. Rep. Betty Sutton (D., Copley Township) because of congressional redistricting.

Campaign-finance experts have said the donations from Mr. Suarez's employees were unusual because many of the employees had never before given to federal campaigns and because some lived in modest homes.

In the past, wealthy individuals -- including the now-imprisoned, rare-coin investor Tom Noe -- have tried to skirt federal campaign-finance law by illegally funneling contributions through other people.

Mr. Suarez has said the employees are paid well and were not reimbursed by him or his company.

He did not return calls from The Blade on Thursday, but he told the Canton Repository that FBI agents began questioning his employees in September and continued to do so through February. He said he and his employees have also turned over financial records.

He also said that it was at the request of the two campaigns that he called his chief financial officer, Michael Giorgio, and asked him to find out if any employees wanted to contribute. Mr. Giorgio did not return calls from The Blade.

Mr. Mandel's decision to return the donations comes just days after his campaign announced it was putting the money in a separate account pending the outcome of the investigation. That earlier announcement was prompted by media reports disclosing the FBI investigation.

Travis Considine, spokesman for the Mandel campaign, refused to answer questions from The Blade about the timing of the decision or about when the campaign first learned of the FBI probe.

The Renacci campaign, on the other hand, plans to keep the money unless the investigation reveals the contributors broke the law.

"When we first learned of the Obama Administration's investigation into this group of Republican donors several months ago, we decided not to rush to judgment and took [the] same course of action taken by Betty Sutton when one of her donors was under federal investigation between 2008-2010," said James Slepian, Mr. Renacci's chief of staff. "Since that time, no new information regarding the inquiry has surfaced and there remains no reason to believe these donors acted improperly. Should we ever hear otherwise, the donations will be returned."

Ms. Sutton's campaign donated $7,000 it had received in 2006 from U.S. Rep. Charles Rangel of New York and his political action committee to charity after the House Ethics Committee reprimanded him for taking trips to the Caribbean that were improperly funded by corporations.

Democrats on Thursday attacked Mr. Mandel's decision to refund the donations.

"Josh Mandel is a politician who can't be trusted, and the fact he has been shamed into returning $105,000 in illegal contributions only after an FBI investigation became public goes right along with hiring unqualified political cronies and missing every single board of deposit meeting his first year in office," said Justin Barasky, a spokesman for the Brown campaign.

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



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