toledoblade.com --

COLUMBUS - Secretary of State J. Kenneth Blackwell was not initially concerned or even shocked that the Ohio Bureau of Workers' Compensation had invested $50 million in rare coins.

In fact, Mr. Blackwell told The Blade on April 5 that "most people" wouldn't find it "unreasonable" that the state had invested in rare coins with Tom Noe, who has said through his attorneys that at least $10 million of the state's assets are missing.

"When you run a fund the size of $18 billion and you're looking at $50 million, beyond what one's disposition might be, is that an irresponsible amount of risk? Most people would say no," Mr. Blackwell said on April 5 - two days after The Blade's initial report on the coin investment.

Two months later, Mr. Blackwell told The Blade that the coin scheme carries the "potential smell of organized crime" and needs to be addressed in the federal government.

"It's serious," he said. "It's not a marginal issue or an issue that you play with in the margins. This gets to the heart of the integrity of governance. It is an important issue."

Opponents, though, say Mr. Blackwell and his Republican colleagues who were in a position to react and avert this problem did not do their jobs.

And state Sen. Teresa Fedor (D., Toledo) said Mr. Blackwell's initial reaction to the coin scandal is indicative of the thought that contributions and influence-peddling caused leaders to turn a blind eye to potential wrongdoing.

"It is irresponsible for him to think that the amount of money had to reach a threshold to say it was OK to misappropriate funds," Ms. Fedor said. "If this were a person who did not have the political influence [Mr. Noe] did, I'm sure Mr. Blackwell would have thought differently."

Mr. Blackwell this week returned $3,000 in contributions from Mr. Noe.

Mr. Blackwell disputes that he had any interest in protecting Mr. Noe, or his wife, Bernadette. Mr. Blackwell accepted Ms. Noe's resignation from the Lucas County Board of Elections early last month amid problems at the county elections office unrelated to the coin scandal.

Mr. Blackwell said his "battle" with the Noes over the elections board serves as clear evidence that he would not allow a contributor to interfere with his decision-making.

"I just haven't been a favorite of the Noes for quite some time," he said, describing the couple as "rough-and-tumble political bosses."

Ms. Fedor said Mr. Blackwell's acceptance of Ms. Noe's resignation in April was a politically calculated move to distance himself from a brewing scandal.

"He was very much aware of what was going on," she said. "He is a politician. He is going to know how to politically maneuver around this situation."

The secretary said he has a record of going out on a limb to root out people who don't play by the rules - even if it means implicating his own party.

"I haven't been afraid to challenge the status quo or to identify and attempt to out the wrongdoers, even if they were [Republicans]," he said.

Back in early April, Mr. Blackwell told The Blade that concerns about the prominent Republican campaign contributor would not be "swept under the rug."

More than six weeks later, Mr. Blackwell's office confirmed that it was investigating Mr. Noe for possible state campaign finance law violations. The Toledo-area coin dealer has been under investigation by federal agents for allegedly laundering money to the Bush campaign to skirt campaign finance laws and a grand jury convened in Toledo last week.

Mr. Blackwell said his office's investigation is very limited because of legal restraints, but he is working with the federal government.

"If the notion is somebody gave a $2,000 contribution, we don't have the authority to see if this was within the person's income bracket," he said.

Ms. Fedor said Mr. Blackwell waited too long to begin that investigation.

"Mr. Blackwell had an obligation to see whether any state or local contributions were given to people, and whether those contributions came from the state's workmen's comp fund," she said.

Mr. Blackwell, though, is adamant that he acted appropriately in this case. And, had other officials followed his lead in the 1990s on legislative reform creating more oversight on the bureau and transparency, this scandal potentially could have been averted, he said.

"It is amazing how much of this would have been caught" with transparency or the "two-key" approach, he said.

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