toledoblade.com --

COLUMBUS - Attorney General Jim Petro waited more than a month to begin taking legal action after learning that two state-owned coins worth $300,000 were reportedly stolen from the suburban Denver office of Tom Noe's rare-coin venture with the Ohio Bureau of Workers' Compensation.

But Mr. Petro, who first read about the bureau's $50 million investment with Mr. Noe in The Blade on April 3, is adamant he took appropriate measures to protect the bureau's assets as soon as there were questions of wrongdoing.

"The first story simply said he was an influential guy in the Republican Party and he had a contract with BWC," Mr. Petro told The Blade last week. "I might have looked at it that it's not the world's greatest investment from my perspective, but that's not a cause of action."

A "breach" of contract, "possible misappropriation," or "misdeed" - would be necessary to begin legal proceedings, but there "was not any sense of illegality at that point," he said.

While The Blade did report that Mr. Noe was a prominent contributor who had given thousands of dollars to Republican political campaigns, the newspaper did reveal on April 3 that two coins worth about $300,000 were reportedly stolen from a suburban Denver office and that $850,000 in bad debt had been written off. Soon after, The Blade reported that the debt was caused by a convicted felon hired by Mr. Noe and that an additional 119 coins were missing from the Colorado office worth $93,000.

Mr. Petro said last week that he waited until May to take any legal steps toward protecting the state's assets after monitoring the case during April. He filed suit May 24, and a judge agreed to freeze the assets and turn over the state's property to the bureau.

"When you go back in history as this story unfolded, I was, like any lawyer on behalf of a client, immediately in contact with our client, had a lot of contact with the general counsel at BWC, and the executive director and just began to monitor it," he said.

The fact that he did not take action sooner, his critics claim, is evidence that the attorney general was putting his contributor ahead of the state's interests - even as concerns mounted. Mr. Petro this week returned $6,000 in contributions from Mr. Noe, who is facing multiple state and federal investigations.

Mr. Petro has also acknowledged that Tom Noe's wife, Bernadette, may have contacted his office and successfully directed special counsel work to the law firm where she worked. He also considered the Noes to be friends.

State Sen. Marc Dann, a Democrat from suburban Youngstown, said the relationship between Mr. Petro and his contributor was too close for comfort and that the attorney general might have been reluctant to "rattle the cage of Noe" with next year's gubernatorial race on the horizon.

"It's a violation of legal ethics to put your personal interest ahead of your clients," said Mr. Dann, an attorney who has been an outspoken critic of the coin investment. "The question is whether [Mr. Petro] was a lap dog or a guard dog.

"What I ought to expect is that he ought to be a watch dog."

Mr. Petro said he did what was legally prudent throughout the entire process and based on the information that he had.

"To the extent you can lock this up legally, I think we have," Mr. Petro said, adding that a unique legal remedy - known as a prejudgment attachment - was granted to preserve as much of the state's assets as possible when the state took Mr. Noe to court late last month.

Mr. Dann said there were warning signs everywhere that Mr. Petro ignored while waiting more than 50 days to file a lawsuit on behalf of the bureau to secure the state's assets.

"There was sufficient evidence from the first week of The Blade's story, yet Jim Petro refused," Mr. Dann said. "I would have immediately torn apart whatever documents my client had at the Bureau of Workers' Compensation and within a couple days … had a lawsuit filed against Noe."

At the least, filing a lawsuit could have resulted in halting the operation - maybe temporarily - to determine if there was more evidence of wrongdoing, Mr. Dann said.

Mr. Petro said it is not so simple. But when the time came on May 24, his attorneys were ready.

"They were in court at 8:30 in the morning," Mr. Petro said.

But three weeks earlier, Mr. Dann and state Sen. Eric Fingerhut (D., Cleveland) wrote Mr. Petro asking him to file a lawsuit on behalf of the bureau and seek a receivership to "protect the state's investments."

On May 23, Mr. Dann repeated his request to the attorney general. A spokesman at the time said Mr. Petro was continuing to evaluate his options.

A day later, a judge approved a motion by Mr. Petro to have Mr. Noe turn over control of the coin funds to the bureau. Mr. Noe's legal representation did not fight the order.

"Your best likelihood to recover is if you can get hold of the assets early," Mr. Dann said. "He essentially gave Noe [52] days to change records, to change documents, move things around, and cover his tracks."

Still, Mr. Petro said he is hopeful that Mr. Noe will be held accountable if charges are proven to be accurate.

"Obviously, Tom Noe should be held accountable for breaching his fiduciary duties to the bureau and for breaching his contract to the bureau," he said.

Working within the law, Mr. Petro said he and other responsible officials have lived up to their responsibilities.

"All of the parties involved have done what can be done as this case has unfolded," he said.

Ultimately, Mr. Dann said it will be up to voters.

"The people of the state can draw their own conclusions about what happened," he said. "People can draw their own conclusions on whether Jim Petro was a lapdog, a guard dog, or a watchdog based on what he did over those 55 days."

Blade Columbus Bureau Chief James Drew contributed to this report.

Contact Steve Eder at: seder@theblade.com or 419-724-6728.

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