COLUMBUS — Next year’s expected Democratic candidate for lieutenant governor agreed Wednesday that he, his wife, and his newspaper publishing business are on the hook for more than $800,000 in back state and federal taxes, but he insisted that should not disqualify him from the ticket.
In a conference call with reporters, state Sen. Eric Kearney (D., Cincinnati), Ed FitzGerald’s running mate, supplied what he called “unprecedented” financial disclosure.
“It goes to something every Ohioan can understand,” he said. “Our small business went through tough times. We faced those challenges. We accepted responsibility and didn’t take the easy path of just shutting our doors and hiding.”
“We faced the facts,” he said. “We came through with a payment plan with the Internal Revenue Service. That’s something the average Ohioan can understand.”
He said Mr. FitzGerald, Cuyahoga County’s executive, has not asked him to walk away from the ticket.
“I’m in to stay,” Mr. Kearney said. “My wife and I made the decision we were going to do this.”
Mr. FitzGerald did not participate in the call.
“We’ve learned that FitzGerald thinks his running mate’s tax issues aren’t a big deal,” said Chris Schrimpf, spokesman for Ohio Republican Party chairman Matt Borges. “We’ve learned that FitzGerald allowed his running mate to lie to the media about the extent of his problems. We’ve learned that FitzGerald did not fully research his running mate before announcing his selection.”
“We also learned that when times got tough, FitzGerald is nowhere to be seen,” he said. “FitzGerald, a proud FBI agent, clearly ran a bad process and came to a poor decision. If FitzGerald fails his only decision as a candidate, he is clearly nowhere near ready to be a statewide officeholder.”
Mr. Kearney spent more than 90 minutes talking to reporters and going over spreadsheets to explain the differences between the personal and business tax-debt issues.
The total outstanding tax bill, including penalty and interest, was set at nearly $826,000. This includes:
■ $561,069 owed in federal taxes by the publishing business he and his wife own, known alternately as KGL Media and Sesh Communications.
■ $83,074 he and his wife owe in federal taxes through their roles with the business.
■ $95,121 owed in state taxes, an amount Mr. Kearney stressed is in dispute.
■ $86,512 in payroll liabilities owed by Gite/Hanover/Presse Inc., a now-dissolved affiliate of Sesh.
“This disclosure is unprecedented and goes beyond what is required by state ethics law,” Mr. Kearney said. “Our finances were an open book to the campaign, and we took the time needed, at some political cost, to make sure you got the most complete information.”
The Senate Democratic leader brings geographic and racial diversity to the ticket and adds state legislative experience to Mr. FitzGerald’s local government and law enforcement background.
Mr. Kearney’s opposition to tax cuts pushed through the General Assembly by Mr. Kasich and fellow Republicans supports Mr. FitzGerald’s narrative that the administration has worked to benefit wealthy Ohioans at the expense of the middle class.
Mr. Kearney insisted his problems haven’t cost him the upper hand on that issue but actually should bolster his credibility.
“My tax issues from being a business owner … are something my wife and I took responsibility for and have a plan to address,” he said. “I have to pay more in sales tax because of Governor Kasich’s tax policies. The argument to be made is, as a business owner, I might actually get a tax cut based on his tax policies, and I still don’t think they’re fair … They’re not fair to working families.”
The controversy has bogged down the campaign at a time it hoped Mr. Kearney would generate some excitement, particularly among the party’s African-American supporters.
While the campaign insisted it knew of Mr. Kearney’s tax problems, it had to scramble to pull together figures and details to answer reporters’ questions about the extent of the problems. That allowed details to trickle out as more liens filed in Hamilton County were found and the reported total tab climbed to an estimated $1 million. That figure did not include what had been paid.
Mr. Kearney attributed the financial woes to the struggles he and wife Jan-Michele have had keeping the publishing firm afloat. The company publishes the “historic” Cincinnati Herald, aimed at the African-American community, among other products.
He said the company was in financial trouble when they bought it, although the tax liens in question accrued on their watch.
Mr. Kearney noted he has had next to nothing to do with running the company since he became a state senator in 2005, although the couple continued to put their own money into it.
Democrats had been critical of Ohio Republican Party Chairman Matt Borges for back taxes he owed, but Mr. Kearney said he did not participate in that criticism.
“I’ve never met Matt Borges,” he said. “I don’t know anything about his tax situation. I will not comment on it. I’m concerned about moving forward.”
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