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Published: Sunday, 12/30/2012

BLADE INVESTIGATION

Ohio smiles on workers' political gifts

Incentives seem to follow firms with hefty political donors

BY KRIS TURNER
BLADE BUSINESS WRITER

First of two parts

Companies whose employees made sizable contributions to campaigns and political groups in Ohio received larger incentives to create jobs and aid industry from the state than did those that donated less or not at all, a seven-month Blade investigation found.

Employees of businesses that received more than one loan or grant from the state contributed $39,244 on average to candidates, political action committees, or political parties. Their companies were awarded an average of $1.06 million. The average contribution when there was only one grant or loan was $10,492. Those businesses received $358,224 on average.

“The agency doesn’t pay attention to — or even care — who makes political contributions, and that’s consistent regardless of the party in power,” Todd Walker, Ohio Development Services Agency spokesman, said in a statement released to The Blade. “The focus is job creation and contractual covenants regarding conflicts of interest.”

The Blade reviewed more than 10,000 loans and grants awarded since July, 2007, from the agency, which was formerly the Ohio Department of Development, and identified 1,159 companies that received funding. The rest receiving state loans and grants were cities and villages, school districts, nonprofits, and economic development agencies.

Of the 1,159 businesses that received a grant or loan, employees at 495 companies made political contributions.

Those contributions pumped more than $11.3 million into Ohio’s political system from 2002 to the present.

READ MORE: Investigation of solar group leads to questions about state

The Blade compiled the history of the political giving by reviewing thousands of campaign-finance records in which contributors listed where they worked. In Ohio, contributors are required to list their place of employment if they donate more than $100.

Employees at 664 companies, which is about 57 percent of loan and grant recipients, didn’t contribute to Ohio campaigns. Those companies received a total of $287.7 million in incentives. Companies whose employees did donate received a total of $327.3 million in incentives.

The trends among businesses whose workers donated were blatant.

Republican candidates received about $5.7 million, compared with the about $1.3 million contributed to Democratic contenders. But former Gov. Ted Strickland, a Democrat, was elected in 2006 and received the most contributions of any politician — $736,059 — The Blade’s investigation showed. Mr. Strickland lost his re-election bid to Republican John Kasich in the 2010 midterm election.

Governor Kasich received the second-highest amount of contributions from state-funded companies — $664,030.

Employees at the 213 companies that received more than one round of state funding donated about $8.4 million in the past decade, with their firms receiving $170 million from the state. Workers at the 282 businesses receiving one grant or loan from the state contributed $2.96 million, and their firms got $84 million.

The state often attaches job-creation requirements to funding. If companies fail to meet state-mandated requirements, they don’t receive the full award from the state.

The companies whose employees made the most political donations include manufacturing firms and financial institutions, such as Crown Equipment Corp., Timken Co., and Forest City Enterprises.

Although some of the same companies ranked among the highest to receive state financing, green energy, science, and technology companies topped that list. Those businesses include CSX Corp. Inc., Xunlight Corp. of Toledo, and Diagnostic Hybrids Inc.

Jeff Linton, a spokesman for Cleveland-based Forest City Enterprises, said donating to a campaign or political group is up to an employee’s discretion and isn’t dictated by the company. Forest City’s employees ranked third highest among the contributors, donating about $883,153. The company was awarded two grants worth a total of $1.2 million in 2010 and 2011.

“[Campaign donations are] not a matter of corporate policy,” he said.

Employees at Cincinnati Insurance Co. donated $500,523, and the company received four grants totaling $200,000 from 2008 to 2010. Scott Gilliam, the firm’s vice president and government relations officer, said the company typically donates to school levy issues only and does not have a political action committee.

“We do have a number of associates of the company who make voluntary contributions of their own as they see fit with their involvement in the civic process,” Mr. Gilliam said.

Loan misuse alleged

The Blade began its investigation into the state Development Services Agency’s loan and grant programs after problems emerged at Perrysburg’s Willard & Kelsey Solar Group, a solar-panel manufacturer that received a $5 million loan from the state in 2009 and laid off most of its 80-person work force in January, 2012.

Earlier this year, The Blade revealed that executives at Willard & Kelsey used company funds for more than $1 million in executive payouts, trips to Detroit Tigers and Pittsburgh Steelers sporting events, and airline tickets for family members.

Willard & Kelsey’s former chief executive officer, Bill Mitchell, who was fired from the firm in 2009 and died in 2011, stated in emails obtained by the newspaper that company executives misused a state loan from the former Ohio Department of Development.

The state was unaware of the layoffs, as well as the company’s spending practices.

After Willard & Kelsey failed to make several loan payments and missed several deadlines to submit paperwork to state officials, its loan was called due. Unable to pay the state the millions it owes, Willard & Kelsey’s loan was referred to the Ohio Attorney General’s Office for collection in September.

Donor to Strickland

Governor Strickland, who was an ardent supporter of green energy, received at least $26,400 from executives or, in one case, the wife of an executive of Willard & Kelsey.

Willard & Kelsey was the 10th largest donor to Mr. Strickland among the companies that received state funding.

In previous interviews, Mr. Strickland has denied any connection between political contributions and state grants and loans awarded to contributors. A spokesman for the former governor said he was not available for an interview.

Although a substantial difference exists between contributions from employees who work at companies that received one state incentive and those that received more, it isn’t necessarily meant to curry favor, some businesses said.

Contributions made by Crown Equipment employees aren’t meant to buy politicians or garner state development dollars, said John Maxa, Crown Equipment’s vice president and general counsel. Crown’s employees donated $1.34 million, making it the largest donor among the companies that received funds. The company, which is based in New Bremen, Ohio, and produces forklifts and material-handling equipment, received four grants from 2008 to 2009 totaling $2.1 million.

Contributions are a private matter, and it’s one reason the company doesn’t have a political action committee, he said.

“The Crown name is not associated with any issue, and it’s all done individually,” Mr. Maxa said. “I haven’t been involved in any conversations where [a contribution] might result in any grant or incentive from the state.”

Tomorrow: A look at what candidates received the most money.

Contact Kris Turner at: kturner@theblade.com or 419-724-6103.



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