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Kasich’s ex-jobs czar is entity’s co-founder

Kvamme's firm could reap $9M it got from OSU

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COLUMBUS — The venture capital firm co-founded by Mark Kvamme, Gov. John Kasich’s former jobs czar, stands to make at least $9 million in management fees on a $50 million, 10-year investment made by Ohio State University.

That assumes the contract terms match those Drive Capital Fund proposed to the Ohio Public Employees Retirement System — details later obtained by the liberal advocacy group ProgressOhio. A similar contract received from Ohio State through a public-records request was heavily redacted.

Drive Capital’s proposal to OPERS — which that agency turned down — called for Columbus-based Drive Capital to collect 2 percent in fees during the first six years of its investment and 1.5 percent a year during the last four. Once the full investment is recouped, Drive Capital would then get 20 to 30 percent of the profits.

“Mark Kvamme … who came to Ohio and said he was going to work for the government for $1, will stand to make under these terms — if they’re applied to Ohio State — $9 million plus 20 percent of the profits after the investment is made whole, plus a half a million in capital start-up costs for the company,” said ProgressOhio Executive Director Brian Rothenberg.

“Now I don’t know about you, but that’s not a $1 a year,” he said. “That’s about $9 million-plus reasons … to spend your time at JobsOhio.”

Ohio State did not take issue with ProgressOhio’s application of the OPERS details to the school’s investment deal with Drive Capital.

“It is not appropriate for us to comment on OPERS decisions,” said Ohio State spokesman Gayle Saunders. “We do affirm our decision that Ohio State has a legal obligation under the Ohio Uniform Trade Secrets Act … not to disclose trade secrets.”

Drive Capital did not reply to email inquiries sent via its Web site, which touts economic opportunities in the Midwest but states that the region is underserved by venture capital.

Kasich spokesman Rob Nichols said any suggestion that Mr. Kvamme curried favor with the governor in hopes of landing such a deal are “absolutely absurd.”

Mr. Kvamme, then a partner with Sequoia Capital, became friends with then-Congressman Kasich in Washington. When the Republican was elected governor in 2010, Mr. Kvamme agreed to head his cabinet’s Department of Development until Mr. Kasich could set up the private, nonprofit JobsOhio to absorb many of that department’s economic development functions.

However, Mr. Kvamme was still a legal California resident and could not be named to the cabinet. Instead, he worked out of the governor’s office until he became a JobsOhio board member and interim chief investment officer, a post he left a year ago to set up the venture-capital firm that focuses on Midwest business innovation.

E. Gordon Gee, a JobsOhio board member and then Ohio State’s president, was among those Mr. Kvamme approached to invest.

“We all know we have this history of taxpayer money being misused,” said Catherine Turcer of Common Cause Ohio. “We don’t have to go back very far to think about Coingate. 2005 is not a distant memory for most of us. If we had not had good open-records [law], we would not have been able to figure out what was going on and that, in fact, our public dollars were being misused.”

Tom Noe, a former Toledo coin dealer, is currently serving a state prison sentence for stealing from a $50 million coin investment he managed for the Ohio Bureau of Workers’ Compensation. An investigation by The Blade revealed influence peddling in state government that made the investment possible.

There have been no allegations of illegal activity involving Drive Capital, but Mr. Rothenberg and Ms. Turcer questioned the different ways state entities have responded to their public-records requests.

In addition to the OPERS pension system, a pitch also was made to the Ohio Police and Fire Pension Fund. Neither invested. Ohio State turned over documents with large portions of information blacked out. The police and fire fund said it signed a nondisclosure agreement preventing it from sharing the information, while OPERS fully complied with ProgressOhio’s request.

ProgressOhio also challenged a revolving-door policy at JobsOhio that allowed Mr. Kvamme to walk away from the job-creation entity to create Drive Capital, then solicit investments from state government entities.

Contact Jim Provance at: or 614-221-0496.

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