Tom Noe, whose failed rare-coin deal with the state has triggered multiple investigations and rocked Ohio's Republican leadership, was charged yesterday with illegally funneling $45,400 to President Bush's re-election campaign.
Gregory A. White, the U.S. attorney for the Northern District of Ohio, announced a three-count indictment against Mr. Noe, saying he used two dozen people as conduits to make illegal campaign contributions at a $2,000-a-seat fund-raiser in Columbus.
In doing so, Mr. Noe skirted federal campaign finance funding limits while meeting a pledge to raise $50,000 for the Oct. 30, 2003, fund-raiser. The Bush campaign later named Mr. Noe a Pioneer for raising at least $100,000 overall.
The Noe case is the largest campaign money-laundering scheme prosecuted by the U.S. Justice Department since new campaign finance laws were enacted by Congress in 2002, said Noel Hillman, chief of the Justice Department's public integrity section.
This case represents one of the first and most important examples of this new enforcement posture under the new law and is one of the most blatant and excessive criminal campaign finance schemes we have encountered, Mr. Hillman said.
A federal arrest warrant has been issued for Mr. Noe, 51, and Mr. White said he expected him to surrender within a day. Authorities said they were negotiating for Mr. Noe's surrender so that he can make an initial appearance in federal court.
A federal grand jury impaneled in Toledo returned the indictment yesterday, alleging that Mr. Noe exceeded federal campaign limits, that he knowingly and willfully used others to make the contributions, and that he caused the Bush campaign to file a false campaign finance statement.
If convicted on the felony charges, Mr. Noe could face as many as 5 years in a federal penitentiary for each count and a fine of nearly $1 million.
Bill Thompson, one of Mr. Noe's attorneys, said he is reviewing the indictment with Mr. Noe and is finalizing bond arrangements.
He said he would have no further comment.
Prosecutors and Jon Richardson, Mr. Noe's Toledo attorney, said the two sides did not negotiate in an attempt to reach a plea agreement.
The indictments mark the first criminal charges against Mr. Noe, who is under investigation by federal and state authorities in Ohio and Colorado.
Ohio officials have said Mr. Noe has stolen millions of dollars from two rare-coin funds he operated for the Ohio Bureau of Workers Compensation, which invested $50 million with him, beginning in 1998.
Although they were not named in the indictment, a number of prominent local officials gave money to the Bush campaign and testified before the grand jury investigating Mr. Noe, including Toledo City Councilman Betty Shultz, Lucas County Commissioner Maggie Thurber, and Donna Owens, former Toledo mayor.
In addition, former state representative Sally Perz and her daughter Allison testified. All of them, including Ms. Thurber's and Allison Perz's husbands, gave money to the Bush campaign. All gave $2,000, except for the Thurbers, who each gave $1,950.
Conduits not named
Mr. Noe was the only person named in the indictment and prosecutors said federal rules prohibit them from identifying the conduits.
Ms. Shultz is on the ballot Nov. 8, seeking another four-year term on City Council. She has repeatedly declined to talk about her grand jury testimony.
Earlier this year, she told The Blade that she had made the contribution with her own money.
In addition to "conduits" who received between $1,750 and $4,000 from Mr. Noe to make either one or two contributions, prosecutors claim that the former rare-coin dealer used two people as super-conduits, giving them $6,000 and $14,300 that they then split with others who attended the fund-raiser.
Prosecutors said that Mr. Noe asked the donors to fill out cards stating they were making the contributions with their personal funds "when, in fact, they used [Mr.] Noe's funds to make contributions."
Mr. Noe also allegedly told "several" conduits that if they were asked about the payments "they should lie and say the payments were loans from [Mr.] Noe."
In an effort to disguise the scheme, prosecutors said Mr. Noe gave the conduits different amounts, usually just below the ultimate contribution amount.
For instance, prosecutors said he gave one conduit $1,750 on Oct. 22, 2003. That person then contributed the maximum $2,000 on the same day.
Prosecutors believe the Bush-Cheney campaign was unaware of Mr. Noe's alleged laundering.
The chief fund-raiser for the event, Jessica "Scottie" May, testified before the grand jury in July.
She works for Hicks Partners, the Columbus lobbying and political consulting firm hired to run the fund-raiser.
The firm is run by Brian Hicks, Gov. Bob Taft's former chief of staff. Mr. Hicks was convicted of an ethics violation this summer for accepting a cut-rate vacation at Mr. Noe's home in the Florida Keys.
Since the revelation of Mr. Noe's dealings with the state, the announcement of the federal investigation, and the subsequent convictions of Governor Taft and Mr. Hicks for ethics violations, Democrats and activists have seized on the opportunity for change.
Democrats have tried to paint Mr. Noe and the Taft administration as part of a culture of corruption and used near-daily press conferences and attacks to make their point.
Yesterday, members of the group Reform Ohio Now attended the press conference, holding up signs about Mr. Noe's coin funds.
"I still have many questions now that we've come this far," said Teresa Fedor, a Democratic state senator from Toledo who was at the press conference. "Our question is, how much of this money is state money?"
Mr. Hillman, the chief of the Justice Department's public integrity section, said the indictment does not allege that state coin-fund money was funneled to the Bush-Cheney campaign. However, if that proved true, he said it could be considered an "illegal" source of campaign funds. That could trigger a stiffer penalty, he said.
The Blade was the first to report in April that the state had invested $50 million in Mr. Noe's two rare-coin funds, that coins were missing from the funds, and that Mr. Noe had written off $850,000 in bad loans he had made with state money.
The revelations launched several state investigations that are ongoing.
The indictments yesterday in the federal campaign money-laundering case mark another point in the rapid fall of a man who less than a year ago was celebrating at the President's inaugural and who had the ear of power brokers in Columbus and Washington.
Since the investigations began, he has resigned from posts at the U.S. Mint, the Ohio Board of Regents, and the Ohio Turnpike Commission.
He has sold his Maumee condominium and his million-dollar home on Lake Erie as well as boats and cars. He surrendered his passport to state authorities months ago.
Politicians from Washington to California including President Bush have sought to return Mr. Noe's political contributions, which exceed $200,000 since 1990.
Many have testified
In two months of grand jury testimony, a number of well-known or well-connected people made the trip to the U.S. District Court downtown to testify before the grand jury.
Among those who testified were:
They were given immunity from prosecution in exchange for their testimony, Mr. Kulish said. Mr. Kulish gave $2,000 and Mr. Swy and his wife each gave $1,000 to the Bush-Cheney campaign.
Theodore Wasky, special agent in charge of the Cleveland FBI office, said as many as 40 agents worked the case over the past year.
He said other aspects of the investigation are continuing and issued a stern warning to people who may have information regarding the Noe probes.
I would encourage anyone with information to get on the train.
Either you're on the train or you are on the tracks, and the train is coming down those tracks, Mr. Wasky said.
Staff Writer Christopher D. Kirkpatrick contributed to this report.
Contact Mike Wilkinson at:email@example.com or 419-724-6104.