COLUMBUS -The Ohio Ethics Commission is investigating whether a former high-ranking aide to Republican Gov. Bob Taft violated state ethics laws by accepting $39,000 from Tom Noe.
A major question in that probe is whether Mr. Noe, a Toledo-area rare-coin dealer and prominent Republican, used state funds or his own money for the payment to H. Douglas Talbott, the ethics agency said.
Mr. Talbott, also a former aide to Gov. George Voinovich, served as director of boards and commissions for Mr. Taft from 1999 until May, 2000, when he left to become a lobbyist.
Mr. Talbott said he accepted $39,000 as a "loan" from Mr. Noe in September, 2002, to help buy a house in Lakeside, Ohio, for $213,000.
When he worked for Mr. Taft, Mr. Talbott consulted with Mr. Noe about appointments to state boards and commissions and stayed in touch with him after leaving the governor's office.
Mr. Talbott said he has not repaid the money to Mr. Noe, but he plans to do so with interest. Bill Wilkinson, Mr. Noe's attorney, didn't return a message seeking comment.
Reached for comment yesterday, Mr. Taft said: "It certainly doesn't look good on the surface, but it is a matter pending before the Ethics Commission, and it would be inappropriate to say anything more until the commission makes a ruling."
Mr. Noe's lawyers told law enforcement officials last week that $10 million to $12 million was missing from the rare-coin fund he set up in 1998 with $25 million from the state Bureau of Workers' Compensation. The bureau provided another $25 million in 2001.
A task force of state and federal authorities is investigating the misappropriation of state assets in the Capital Coin funds that Mr. Noe controlled.
Mr. Noe also is under investigation by the FBI for alleged campaign finance violations and is suspected of laundering political contributions to President Bush's re-election campaign. A federal grand jury convened in Toledo heard a second day of testimony yesterday.
When Mr. Talbott was director of boards and commissions for Mr. Taft, Mr. Noe was reappointed to the Ohio Board of Regents and the state's commemorative quarter committee.
In July, 2003, Mr. Taft appointed Mr. Talbott to the state Board of Cosmetology, which required Mr. Talbott to file an annual financial disclosure statement.
The Ethics Commission investigation will determine whether Mr. Talbott should have disclosed the $39,000 as a gift or if he should have listed Mr. Noe as a creditor on his ethics forms covering 2003 and 2004. It is a first-degree misdemeanor to falsify an ethics form, with a maximum penalty of six months in jail and/or a $1,000 fine.
Mr. Talbott, 41, has denied any wrongdoing and said he will return the ethics form covering 2004 that he didn't fill out completely and list Mr. Noe as a creditor.
David Freel, executive director of the Ethics Commission, said there is no provision in state law for an "amended" ethics form. Public officials can provide an "addendum," which triggers an examination whether the person inadvertently failed to disclose information or there was a "knowing falsification," Mr. Freel said.
State Sen. Jeff Jacobson, a Republican from suburban Dayton, said officials must fill out their ethics forms "correctly.''
"The big issue is, 'Is it unusual to get the loan from somebody you worked with previously?' Certainly, it is not something I've heard of before, and it is the kind of situation that, while not illegal, is something that should be avoided as the appearance of impropriety."
But Secretary of State Ken Blackwell, a Republican, said the controversy over Mr. Talbott is a reminder of why the legislature should adopt a "lobbyist ethics reform'' bill. In 1999, Mr. Blackwell worked with Mr. Jacobson and other legislators pushed a bill to tighten ethics rules for lobbyists, but the bill never became law.
Neil Clark, a former GOP Senate staffer and now among the most powerful Statehouse lobbyists, said Mr. Talbott's decision to accept $39,000 from Mr. Noe was "poor judgment.''
"I hope this isn't indicative of a culture that has been occurring," he said.
Sen. Teresa Fedor (D., Toledo) said The Blade's story about Mr. Talbott showed that the rare-coin investment scandal is expanding into the upper circles of the GOP-controlled state government.
"They cooked up their own deals, their own schemes, and anyone who supports this or went along with this pay-to-play scheme needs to be held accountable," she said.
Mr. Talbott said he wasn't required to disclose the $39,000 from Mr. Noe to his lender, Fifth Third Bank, because the money was used as a down payment.
Mr. Talbott said Mr. Noe either wrote the $39,000 check directly to the seller of the Lakeside home, Columbus real estate executive Larry Schottenstein, or Mr. Talbott signed it over to Mr. Schottenstein.
A section of the mortgage filed in Ottawa County states: "Borrower shall be in default if, during the Loan Application process, Borrower or any other persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender."
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