The chief investment officer of the Ohio Bureau of Workers' Compensation yesterday became the latest top official to be forced out of the agency because of a scandal that has spurred multiple civil and criminal investigations and shaken public confidence in the bureau and in state government.
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COLUMBUS -- The chief investment officer of the Ohio Bureau of Workers' Compensation yesterday became the latest top official to be forced out of the agency because of a scandal that has spurred multiple civil and criminal investigations and shaken public confidence in the bureau and in state government.
Tina Kielmeyer, the bureau's interim administrator-CEO, fired James McLean, citing "lack of effectiveness" and "poor decision making" in a termination letter issued to the agency's top investment official. He has held the post since 2003.
The announcement came exactly three months after Mr. McLean was placed on paid administrative leave amid revelations about the bureau's failed investments in rare coins and a Bermuda hedge fund.
The bureau's investment problems came under scrutiny from state officials and federal and state prosecutors after The Blade in April began reporting on a $50 million investment the agency made with former Toledo-area coin dealer Tom Noe.
Last month, a management review team appointed by Gov. Bob Taft to examine the bureau's operations suggested a number of changes, including hiring a "highly competent chief investment officer." In total, the bureau has lost about $300 million because of failed investments.
"After a thorough evaluation of the investment department's operation under your direction, including the findings of the Management Review Team, your leadership of the investment department does not meet my expectations," Ms. Kielmeyer wrote in the letter to Mr. McLean.
"Your lack of effectiveness, and poor decision making has only led me to conclude that it is now time to move the investment operations at BWC in a new direction with new leadership."
Mr. McLean, who declined to comment last night, has defended himself against criticisms of his leadership, saying his department performed well considering its lack of staffing and resources. Mr. McLean was placed on leave to allow investigators "unfettered access" to his files, Ms. Kielmeyer said in yesterday's letter.
Mr. Taft appointed Ms. Kielmeyer to lead the bureau on an interim basis after former Administrator-CEO James Conrad resigned in May amid revelations that up to $13 million was missing from the coin fund managed and controlled by Mr. Noe.
Mr. Noe, a former Republican fund-raiser, is facing a number of state and federal investigations. Ohio Attorney General Jim Petro has said the former Maumee resident stole about $4 million from the state's coin fund, which he managed.
Mr. Noe and his wife, Bernadette, both former chairmen of the Lucas County Republican Party, have moved to their Florida Keys home and refuse to talk with reporters.
Last fall, the bureau's former chief financial officer, Terry Gasper, was forced to resign after the bureau lost $215 million in a Bermuda-based hedge fund managed by MDL Capital Management, which is based in Pittsburgh. Bureau officials did not publicly disclose the MDL losses until June.
The state's relationship with the coin funds and with MDL began before Mr. McLean took over as chief investment officer in August, 2003. In a March 31, 2005, memo, just four days before The Blade first reported on the coin investment, Mr. McLean said he would recommend approving an additional $25 million investment with Mr. Noe.
Also yesterday, Ohio Attorney General Jim Petro announced he has filed a motion in Franklin County in hopes of blocking National City Bank from interfering with Ohio's lawsuit against Mr. Noe. The bank is trying to collect debt owed by Mr. Noe.
The attorney general said in a statement that the bank is trying to "move to the front of the line to recover its losses from Mr. Noe" and that the bank's concerns have nothing to do with the state's complaints against the coin dealer.
Mr. Noe's assets have been frozen, and he is required to gain court approval before liquidating any item valued at more than $5,000.
The bank wants to collect Mr. Noe's debt from the liquidation of several of his business interests. Mr. Petro's office said it opposes a request by Mr. Noe to sell off his stake in seven business assets for more than $660,000.
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