Voinovich avoids political fallout of Ohio scandals

Paul Mifsud, left, the focus of a corruption inquiry when he was chief of staff for then-Gov. George Voinovich, consults with attorney William Meeks in 1997. Mr. Mifsud served six months in a jail work-release program and died from lung cancer in 2000.

TOM POWELL / Associated Press

WASHINGTON - Shielded by distance and time, U.S. Sen. George Voinovich has avoided the fallout from a scandal that is threatening his political allies in Columbus, even though the controversy has its roots in his two terms as governor.

In a political career that spans four decades, Mr. Voinovich's closest aides have faced accusations of corruption and wrongdoing.

While numerous confidants and appointees have found themselves on a crash course with investigators, government watchdogs, and political opponents, Mr. Voinovich has emerged unscathed.

"He's Mr. Teflon; he is able to sneak out of this stuff and nothing sticks," said Sandy Buchanan, executive director of Ohio Citizen Action, which has clashed over the last two decades with the two-term senator.

The controversy that has placed the Bureau of Workers' Compensation under the microscope is the latest example.

In a May 27 news conference addressing problems with the state's rare-coin investment with Tom Noe, Gov. Bob Taft shifted some of the responsibility to Mr. Voinovich, a fellow Republican.

"While the state entered this investment under the prior administration, it continued during my tenure as governor," Mr. Taft said.

Last month in Washington, Mr. Voinovich said he would not comment on Mr. Taft's efforts to share blame.

"The governor has to do whatever he has to do," said Mr. Voinovich, 68.

When asked what he knew about the scandal that had forced the resignation of one of his own appointees, James Conrad, the bureau's former administrator, Mr. Voinovich, said: "I've paid attention to it, but I have a few other things that are on my mind here in Washington, as you can well imagine."

Curt Steiner, who was Mr. Voinovich's chief of staff from 1996 to 1998, said his former boss "set a high ethical standard" as governor and never would have predicted the trouble gripping his successor's administration.

"Some of the things that happened in and around the administration unfortunately go with the territory," he said. "I would say the last place anybody would have expected a problem was in the bureau."

During the mid-1990s, Mr. Voinovich's chief of staff, Paul Mifsud, recruited Terrence Gasper as the bureau's chief financial officer. The two pushed for a change in state law that widened the workers' compensation bureau's investment authority to include such things as rare coins.

In 1998, the final year of Mr. Voinovich's tenure as governor, the bureau made a pact to invest with a rare-coin dealer - Tom Noe, a Toledo-area Republican campaign contributor. By then, Mr. Voinovich already had appointed Mr. Noe to the Bowling Green State University Board of Trustees and the Ohio Board of Regents.

In a recent interview, Mr. Voinovich described Mr. Noe as a "decent guy" - a "nice man, nice family, cared about the community." He recalled events he attended where Mr. Noe was present, including the coin dealer's 50th birthday party last year.

"I'll never forget that night because there was supposed to be a roast, but I'm not very good at roasting," Mr. Voinovich said. "I just basically congratulated him as a person that's very busy that could have been out playing golf and doing a lot of other things that he gave of his time to his responsibilities in terms of higher education, and I think at the time he had taken on the turnpike responsibilities."

In 2003, Mr. Taft appointed Mr. Noe to the Ohio Turnpike Commission.

The senator also spoke highly of Mr. Noe's wife, Bernadette, the former chairman of the Lucas County Republican Party and county elections board.

"She's a vivacious, well-organized person. They are a nice family," he said.

But Mr. Voinovich said he didn't know what to think about what's transpired with the Noes during the past three months. He said he had no knowledge of Mr. Noe's coin deal with the state until he read about it in The Blade, which broke the story April 3.

In total, the bureau invested $50 million with Mr. Noe. In May, the coin dealer's attorneys told Ohio authorities that up to $13 million of the state's assets are missing.

"You know something? I don't know what to say, except to say that I'm disappointed in what I've read," said Mr. Voinovich, who has returned $4,000 in campaign contributions given to him by Mr. Noe. "And, I owe Tom a call."

Before the coin investment, Mr. Voinovich had installed several of the key players within the bureau. He appointed a five-member oversight commission that would oversee the bureau's investment policies, and in 1995, he tapped James Conrad to become the bureau's administrator.

Mr. Conrad resigned on May 27 - a day after the revelations of the missing millions in the coin funds. Mr. Conrad did not return calls seeking comment.

Mr. Conrad's loyalty to Mr. Voinovich dates to the 1980s, when he was his high-ranking aide while Mr. Voinovich served as Cleveland's mayor from 1979 to 1989.

"He is such an old hand, the guy in the inner circle who always was the go-to guy for Voinovich,'' said Ms. Buchanan of Ohio Citizen Action.

Another Voinovich appointee, former Cleveland City Council President George Forbes, a Democrat, resigned from the oversight commission after it was revealed that MDL Capital Management had hired his daughter, Mildred "Mimi" Forbes, as an executive in 2001. On June 7, the bureau announced it had lost $215 million in a risky hedge-fund investment with MDL.

The bureau's dealings with MDL, which is based in Pittsburgh, also caused the removal of Mr. Gasper as the bureau's chief financial officer.

Mr. Gasper told another bureau official to "give MDL a break" as losses mounted with the investment last year. Those orders had come from Mr. Conrad, the former administrator of the bureau, who had been asked by Mr. Forbes to go easy on the company, according to records that the governor's office released. Mr. Conrad and Mr. Forbes have denied those accounts.

Mr. Voinovich said last month that he had not heard of Mr. Gasper.

"I read the name in the paper today," he said on June 9, two days after the bureau announced its losses with MDL.

In light of what's transpired, the senator expressed disappointment about the impact of the scandals on the bureau, which he considered one of the shining achievements of his administration.

Mr. Voinovich said during an interview with The Blade last month that he thought Mr. Conrad was "doing a super job," returning millions back to employers in premiums because of solid investments and management.

"I know this: I don't know all of the details of the investment thing or whatever it is, and that part of it I feel very bad about because it's a blemish on something that frankly looked pretty good," he said.

But Mr. Taft apparently didn't feel that way.

In a June 25, 1998, weekly report to Mr. Voinovich, Mr. Conrad noted that Mr. Taft, who was secretary of state and running for governor, had told the Self-Insured Association in Cleveland that if elected, he would "bring professional administration to the bureau."

"Needless to say those comments did hurt the morale of many team members here," Mr. Conrad wrote. "I hope if he equates professional to insurance types, he remembers what the last two 'professionals' did to the bureau, to the businesses and injured workers in the state of Ohio."

Mr. Voinovich wrote on the memo: "Too Bad. I wonder who was advising him?'' and "He will never match your record. The Best Ever!!!"

Mr. Taft said last week that he kept Mr. Conrad as head of the bureau because he had a "very high reputation as an excellent public administrator with an excellent track record."

The man perhaps most responsible for Mr. Voinovich's political success was also one of the most scandal-plagued power brokers Ohio has seen in recent memory.

Paul Mifsud, left, the focus of a corruption inquiry when he was chief of staff for then-Gov. George Voinovich, consults with attorney William Meeks in 1997. Mr. Mifsud served six months in a jail work-release program and died from lung cancer in 2000.

Paul Mifsud was the focus of a corruption investigation while serving as Mr. Voinovich's chief of staff. When the dust settled on Mr. Mifsud's wrongdoing, he served six months in a jail work-release program.

In 1997, State Inspector General Richard Ward forwarded an allegation to prosecutors that Mr. Mifsud improperly solicited campaign contributions from an Akron architect who wanted to get more state contracts. Franklin County Prosecutor Ron O'Brien concluded there was "insufficient evidence for a bribery prosecution where the burden of proof is beyond a reasonable doubt."

The bribery allegation centered on a 1994 meeting in Columbus that Mr. Mifsud held with an architect and a former state lawmaker. But varying accounts of what took place during that meeting made it unclear to investigators whether Mr. Mifsud linked contributions to state contracts.

Mr. Ward conducted a 15-month investigation into Mr. Mifsud's activity and released a 186-page report. The inspector general's report highlighted several allegations that Mr. Mifsud presided over a "pay-to-play'' scheme that linked campaign contributions to state contracts for professional design services and construction management.

The report found "no reasonable cause to believe" that Mr. Mifsud steered contracts or acted inappropriately - except in the case of Thomas Banks, a Columbus contractor.

A 1997 indictment accused Mr. Mifsud of receiving expensive improvements to the Marysville, Ohio, home of his then-fiancee, without paying the contractor, Mr. Banks, who later received $3.7 million in unbid state contracts. Mr. Mifsud also was indicted for allegedly destroying or removing a public document to foil an investigation into the matter.

Mr. Mifsud, who was charged with five felonies, three misdemeanors, and violating ethics laws, could have been sentenced to 11 years in prison if he had been convicted on all counts.

Mr. Voinovich called for a thorough investigation of the allegations, "letting the chips fall where they may."

"When these allegations against Paul Mifsud first arose, I said that he had exercised bad judgment in allowing a contractor who has done business with the state of Ohio to perform work on the residence of his then-fiancee," Mr. Voinovich said in a statement at the time.

"According to the grand jury, that first instance of bad judgment was then followed by a later act of even worse judgment. If these allegations are true, I am very disappointed."

Ohio Democratic Chairman David Leland said Mr. Voinovich could not distance himself from the Mifsud case.

"Every governor has to be responsible for the people to whom he gives power and authority," Mr. Leland said.

Mr. Mifsud later pleaded guilty to two misdemeanor charges, landing him in a jail work-release program. He served six months in Union County, northwest of Columbus, and was released in April, 1998. He died two years later after a 14-month battle with lung cancer.

On the eve of Election Day in 1998 - the day Mr. Voinovich was elected to his first term in the Senate - he faced the most serious accusation of his career.

Mr. Voinovich, who began his political life as a state representative in 1967, was accused of conspiring with his late brother, Paul, to launder campaign money in 1994. Paul Voinovich died in 2002.

The Ohio Elections Commission dismissed the complaints about eight months after the election when a special investigator said he could not find "proof beyond a reasonable doubt" of wrongdoing.

The investigation was hindered by conflicting testimony, the death of a key witness, and an ex-lobbyist who pleaded the Fifth Amendment.

The investigation also called into question the conduct of Mr. Voinovich's brother, who owned The V Companies, and Vincent Panichi, a longtime friend of George Voinovich who also served as his campaign treasurer and personal accountant.

The 1998 complaints before the elections commission came out of a federal grand jury probe in Cincinnati pertaining to possible corruption in eastern Ohio. Mr. Panichi told the grand jury that then-Governor Voinovich approved a plan by his brother to launder $60,000 in campaign money.

The scandals involving Mr. Voinovich's appointees largely came to light under Mr. Taft's administration, once Mr. Voinovich had moved on to Washington.

One example is the turmoil in the agency once known as the Department of Human Services.

In 2001, Arnold Tompkins, who was hired by Mr. Voinovich as director of the agency, pleaded guilty to unlawful interest in a public contract and an ethics violation for steering contracts to firms and then taking the companies on as clients after leaving office.

Mr. Tompkins, who could have faced six months in jail and $2,000 in fines, was sentenced to probation and community service for his crimes.

In 2003, Randall Fischer, executive director of the Ohio School Facilities Commission, was fined $1,250 after pleading no contest to charges that he had accepted $1,289 in gifts from contractors. Mr. Voinovich appointed Mr. Fischer to head the agency in 1998.

Mr. Fischer could have been sentenced to up to seven months in jail for two misdemeanor ethics violations of accepting gifts from those doing business with the commission and then failing to reveal the gifts in his financial disclosure statement.

"This isn't a meal at Max and Erma's or a round of golf at $20 or $30 at a public course," David Freel, executive director of the ethics commission, said at the time.

On the cusp of Mr. Voinovich's departure to Washington in 1998, a scandal engulfed the Department of Insurance over the failure of the agency to properly regulate PIE Mutual Insurance, the state's largest malpractice insurer.

David Randall, the former deputy director of the state Department of Insurance, agreed at the time to plead guilty to two felony charges of bribery and a misdemeanor charge of lying to investigators about his relationship with a lobbyist.

He was sentenced to 75 days in jail and five years' probation.

In 1989, when he announced his campaign for governor, Mr. Voinovich lashed out at the scandals that tarred Gov. Richard Celeste, a Democrat who was barred by term limits from running the next year for a third term.

"We've all read the news accounts of scandals and mismanagement in this administration,'' Mr. Voinovich said.

"Thank goodness for the Statehouse press corps because throughout all of this we've never even heard a peep from the three amigos," referring to Democratic state Auditor Thomas Ferguson, Attorney General Anthony Celebrezze, and Secretary of State Sherrod Brown.

A year later, Mr. Voinovich defeated Mr. Celebrezze, and Mr. Taft unseated Mr. Brown. Mr. Ferguson won re-election but lost in 1994 to Republican Jim Petro.

But allegations of corruption in his administration dogged Mr. Voinovich in his first term as governor.

In 1994, Mr. Voinovich dismissed David Sturtz as state inspector general, the official in charge of investigating state corruption.

Mr. Sturtz told Mr. Voinovich in a letter: "You preached ethics, you promised more, but in the end you failed to deliver. For a politician, I cannot think of anything more damaging than not keeping your word to the people who entrusted you with their vote to make you the state's leader."

Now some are wondering if scandals and mismanagement will bring down Ohio's Republicans in the 2006 elections. The GOP controls every statewide executive post.

Democrat Tim Hagan, a Cuyahoga County commissioner who ran unsuccessfully for governor against Mr. Taft in 2002, said Mr. Voinovich must "pay the price for who you associate with and bring into government."

Mr. Steiner, who succeeded Mr. Mifsud as chief of staff, said it's too early to determine who should be held accountable for the failed investments at the Bureau of Workers' Compensation.

Like Mr. Voinovich, he said he didn't know about the state's rare-coin investment with Mr. Noe until The Blade's April 3 story.

"The issue of accountability will not be determined until all of the facts are reported," said Mr. Steiner, who is senior vice president for external relations at Ohio State University.

Roldo Bartimole, a former Cleveland newspaper reporter who keeps an online journal, said Mr. Voinovich is the "luckiest politician who ever lived."

"Wherever he goes, things are not bad until he leaves."

Contact James Drew at: jdrew@theblade.com or 614-221-0496.