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Published: Friday, 7/1/2005

BWC reviews investment with firm facing probe

BY STEVE EDER
BLADE STAFF WRITER

COLUMBUS - The Ohio Bureau of Workers' Compensation announced yesterday that it is investigating its relationship with a private equity firm that is facing an informal probe by the U.S. Securities and Exchange Commission.

The firm, Brantley Partners, a money manager for the bureau since February, 2001, controls $12.7 million in bureau money with a market value of about $12.1 million, according to a statement released yesterday by the bureau.

The agency said Ennis Knupp, & Associates a firm hired to monitor its portfolio, would review the investment in Brantley Partners IV fund.

The bureau is already reeling from the news by Tom Noe's attorneys that up to $13 million in assets from the state's $50 million rare-coin funds is unaccounted for. Last month, the bureau disclosed that it lost $215 million in a hedge-fund investment.

Robert Pinkas, the managing general partner of Brantley, said yesterday that he believes the bureau has little to worry about when it comes to the investment with his firm.

He expects they will find it to be "worth substantially more than they gave us."

"[Brantley Partners IV] is, and will be, a very successful fund," Mr. Pinkas said. "Whatever investigation they need to make, they are free and capable of making, and I have no problem with that."

He added, "I welcome Ennis, Knupp coming in and taking a look at the bureau's investment because I think they will be pleasantly surprised at what it's worth."

Earlier this week, Brantley Partners announced that the SEC was conducting an "informal inquiry, the focus of which we believe to be our valuation procedures, in particular the valuation of our investment in Flight Options International, Inc." Flight Options is a company that sells and manages private planes.

"We intend to cooperate with the SEC and will provide information and documents to the SEC on a voluntary basis," Brantley Partners said in its SEC filing.

Brantley, which has offices in suburban Cleveland and California, says it manages about $300 million in committed capital, mostly through pension funds, insurance companies, and banks. It has dozens of investment partnerships with groups including Bank of America, and organizations such as Ohio Police & Fire Pension Fund, and the State Teachers Retirement System of Ohio.

While bureau officials announced details of their plans to review investments, Gov. Bob Taft yesterday was saddled with more questions about the scandal as he signed his final budget bill near Dayton.

When asked if calls for his resignation because of the scandal had overshadowed his other accomplishments by his administration, Mr. Taft said: "I have a job to do, and what really matters is what we do. I measure my performance based on what we have accomplished for the people of this state."

Questions also remain unanswered about the "errors and omissions" in Mr. Taft's financial disclosure statements regarding a number of golf outings.

Mr. Taft yesterday again refused to provide more detail about the disclosure statement omissions that have prompted an investigation from the Ohio Ethics Commission.

"We are complying completely with the Ohio Ethics Commission," he told reporters. "I initiated this, and we will have further information as soon as it becomes available. I certainly would like to get the information as soon as I can."

Also yesterday, the office of Legislative Inspector General Tony W. Bledsoe confirmed that Tom Noe had been assessed a $500 fine for not registering as a lobbyist. He was fined $100 for his failure to register himself as a lobbyist for five companies: Thomas Noe, Inc., Capital Coin Fund, Visionary Rare Coins, Rare Coin Enterprises, and Delaware Valley Rare Coin.

Contact Steve Eder at:

seder@theblade.com

or 419-724-6728.



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