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Published: Monday, 8/22/2005

Golf gave partners access to governor

BY JAMES DREW
AND STEVE EDER
BLADE STAFF WRITERS

COLUMBUS - Gov. Bob Taft said he innocently failed to disclose a number of golf outings with old friends, but critics charge that he is guilty of allowing the lobbyists and businessmen who hosted him at Ohio's most exclusive courses to bend his ear and influence his decisions.

The list of Mr. Taft's undisclosed golfing partners included dozens of businessmen who had lucrative state contracts or faced state regulation as well as campaign contributors, who, along with members of their companies, gave more than $230,000 to the governor's campaigns, a Blade investigation showed.

The governor's golfing partners also included lobbyists who have represented dozens of companies seeking state money, deregulation, or policy change.

Last week, Mr. Taft pleaded no contest to four first-degree misdemeanor ethics violations for failing to disclose dozens of gifts on his state-mandated financial disclosure forms. A judge ordered him to pay a $4,000 fine and issue a written apology to all Ohioans.

His political opponents say the governor should be held responsible for abusing his power and fostering a "pay-to-play system."

Critics allege two prime examples of influence-peddling among the golf partners: Curt Steiner, a powerful lobbyist, and Tom Noe, who has been accused of stealing millions from the $50 million rare-coin fund he managed for the Ohio Bureau of Workers' Compensation.

"The hosts of the golf outings were looking for something from state government," said House Minority Leader Chris Redfern (D., Catawba Island). "They were looking for access to those involved in state government. They wanted something, obviously. It is evident when you see the name Curt Steiner several times. Tom Noe wanted something, and he got what he needed, along with the lobbyists for utilities and huge corporations." Mr. Redfern said House Democrats plan to meet tomorrow to discuss whether to pursue the impeachment of Mr. Taft.

Before his day in court, Mr. Taft's administration was reeling from a far-reaching investment scandal in the Ohio Bureau of Workers' Compensation that's led to a high-level resignation, multiple investigations, and the criminal conviction of the governor's former chief of staff on ethics charges.

On 52 occasions since 1998, Mr. Taft failed to disclose the source of golf outings, gifts, meals, and sports tickets he received. Under the state ethics code, officeholders must report gifts that exceed $75 in value.

"These were recreational events with friends, primarily on the weekends, and we don't have a pay-to-play system," Mr. Taft told reporters after his Thursday court appearance. "There is no connection between golf or contributions and state contracts in our administration."

On Thursday Mr. Taft said, "Contracts are awarded based on merit, based on qualifications, based on experience and performance under our administration."

After Mr. Taft's court appearance on Thursday, Columbus city prosecutors released a state Ethics Commission investigative report on the governor, which detailed his unreported golf outings and shed light on what the commission found during its inquiry.

The report lists several sections of relevant ethics laws, including the prohibition on public officials accepting anything of value "that is of such a character as to manifest a substantial and improper influence upon the public official or employee with respect to that person's duties."

Later in the report, in a section that lists those who paid for Mr. Taft's golf outings that he did not include on his ethics form, the Ethics Commission states: "Some of these individual sources, as well as persons who were present during the events, were persons doing, seeking to do business with, regulated by, or otherwise interested in matters before the state of Ohio."

Alex Knott, a spokesman for the Center for Public Integrity, a nonpartisan watchdog group based in Washington, said: "It appears as though the people he plays golf with have more interest at stake than lower golf scores. It is important that when they are giving gifts like this, they are giving themselves four hours of access with the prime leader of the state." Even though several of the people who joined Mr. Taft on the golf course had state contracts, the governor has maintained he did not know about Mr. Noe's state coin fund until The Blade first reported it on April 3. The governor said last week that Mr. Noe tried to conceal the investment, and the coin dealer's attorney has demanded Mr. Taft retract that statement - which he has not done.

Mr. Noe's attorney, William Wilkinson, said there was a face-to-face discussion with the governor about the contract in May, 2001. The governor has said a conversation probably took place on May 13, 2001, but Mr. Taft does not recall a discussion about coins. Mr. Noe golfed with Mr. Taft at Inverness Club in Toledo and attended a brunch there that day.

"There is an avalanche of evidence that will show that Mr. Noe's association with the coin fund was widely known, and making the assertion of concealment is preposterous," Mr. Wilkinson said yesterday, declining to elaborate.

Many of Mr. Taft's golfing partners also have had business relationships with the state and contributed to the governor's campaigns:

  • On one occasion, Mr. Taft golfed with the former CEO of Nationwide Insurance. On another, he accepted Columbus Blue Jackets hockey tickets and dinner with current Nationwide CEO Jerry Jurgenson and his wife, Patty. Nationwide is regulated by the state's insurance department.

    Mr. Taft has also received more than $33,000 in contributions from Nationwide employees.

  • In 2001, Mr. Taft teed off with two lobbyists - Mr. Steiner and Bob Blazer - along with Jack Ruscilli, the CEO of Ruscilli Construction.

    Ruscilli Construction is one of the biggest winners in the state's aggressive school building program. The company calls itself "the largest builder of schools in the state of Ohio."

    The company has built more than 242 school buildings in the past decade worth more than $2 billion, according to its Web site - and a substantial share of that money came from public funds. Mr. Ruscilli, and his employees, have given at least $15,000 to the governor's campaigns.

  • On June 9, 2001, Bob Smialek, CEO of Applied Innovation, joined Mr. Taft for golf at Scioto Country Club. Less than two weeks later, Mr. Smialek made a $1,000 contribution to the governor's re-election campaign.

    Applied Innovation, based in Dublin, Ohio, provides computer services to government entities, including the U.S. Department of Defense.

  • On several occasions, Mr. Taft golfed with attorneys and partners in Schottenstein, Zox & Dunn, a Columbus-based law firm, that represents the Ohio Bureau of Workers' Compensation. Since 2001, the bureau has paid the firm at least $369,483 to evaluate equity managers and investigate a failed Bermuda hedge fund investment that cost the agency $215 million.

    Employees of the firm, which at one point represented Mr. Noe's coin fund, have contributed more than $16,000 to Mr. Taft's campaign.

    Less than two weeks before a Sept. 24, 2000, golf outing, David Robinson, a partner with the firm, contributed $250 to the governor. Mr. Robinson received a $10,000 retainer from Mr. Noe.

    In 2003, Toledo-area businessman Mike Wilcox hosted Mr. Taft for an $80 round of golf at Inverness. Mr. Noe and J. Robert Sebo, a Bowling Green State University trustee and member of the board of directors of Paychex Inc., took part.

    Mr. Sebo in an interview on Friday called his round of golf with Mr. Taft a "once in a lifetime opportunity."

    "It is about creating associations with people who you are trying to do things with. It makes sense to me that I would have some sort of knowledge or association with someone I have business with," Mr. Sebo said.

    In 2002 Mr. Taft appointed Mr. Sebo, who helped build Paychex into a publicly held corporation in 1983, to the BGSU board of trustees. Last year, Mr. Sebo gave $4.4 million to BGSU, including $3.3 million to construct a new athletic center.

    Mr. Sebo said he did not recall any discussion of business with Mr. Taft during that round of golf in 2003.

    "The governor and I were partners and we got beat. If the governor of any state calls me tomorrow and asked me to golf, I would. I see nothing but a positive in that for myself," Mr. Sebo said.

    The governor often found himself in the company of lobbyists during his golf outings.

    Mr. Steiner, who was chief of staff during part of George Voinovich's second term as governor, paid for six of Mr. Taft's golf outings from 1998 to 2001, according to the Ohio Ethics Commission investigative report.

    Mr. Steiner's lobbying clients included insurance giant UBS PaineWebber and Ohio State University Health System, a Medicaid provider for the state Department of Job and Family Services.

    In 2003, Mr. Steiner was registered as a lobbyist for Accenture, formerly known as Andersen Consulting.

    Mr. Steiner was Governor Voinovich's chief of staff in 1997 when the inspector general's office found that Arnold Tompkins, former director of the state Human Services Department, steered a multimillion-dollar consulting contract for welfare reform to Accenture against the advice and recommendation of a contract review committee and his staff.

    After leaving state government, Mr. Tompkins formed a consulting firm and entered into contracts with Accenture.

    In 2001, Mr. Tompkins 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. He could have been sentenced to six months in jail and $2,000 in fines but instead was sentenced to probation and community service for his crimes.

    Mr. Steiner became senior vice president for external relations at OSU in 2004. He is a registered lobbyist for the university, but no private companies.

    In April, Mr. Taft's administration chose Accenture to work on a multimillion-dollar computer system for the state.

    Late last week, Tony Bledsoe, the legislative inspector general, released his review of Mr. Taft's golf outings. State law requires lobbyists and/or lobbyist employers to report certain spending on state officials.

    The legislative inspector general released a list of "possible expenditure omissions," including Mr. Steiner for golf with Mr. Taft on five occasions in 2000 and 2001.

    It is a first-degree misdemeanor for a lobbyist to knowingly file a false expenditure statement. The maximum penalty is a $1,000 fine and up to six months in jail.

    The legislative inspector general can make referrals for prosecution to the Ohio attorney general's office.

    Mr. Steiner said he had met with Ethics Commission investigators and "answered all of their questions to the best of my ability" about the golf outings. He declined to comment when asked if he had failed to report golf outings as expenditures on his lobbyist statement.

    Mr. Steiner rejected the notion that a "pay-to-play" culture exists in state government. "I have known Bob Taft since his days as a Hamilton County commissioner. We played golf before he was governor. I have other opportunities to talk to him at various places, and I didn't need to play golf with him," he said.

    "These are not friends," said Craig Holman, who lobbies for campaign-finance laws on behalf of Public Citizen, a government watchdog organization. "These are people who have business with the government. Governor Taft has talked about the principles of ethics in government, but it's unfortunate he chooses not to live by them."

    Mr. Holman said several states and local governments are deciding that "pay-to-play is a major problem" and are searching for ways to curb it. "I suspect Ohio will come to that realization fairly quickly," he said.

    Ohio has a law that sets a $1,000 limit on what candidates may receive from an individual, and his or her spouse, with at least 20 percent ownership in a company with a state contract.

    But that rule is waived if the contract is competitively bid, according to the Ohio Department of Administrative Services. The Ohio law is drafted so poorly that it cannot be enforced, said Mr. Holman, in large part because those who seek government contracts are not required to disclose their campaign contributions when they submit bids.

    "A good pay-to-play restriction will help solve a lot of these problems of corruption at the state and local levels," Mr. Holman said. "States are handing out contracts worth more than ever before, and lobbyists are realizing this is their new business.

    "They are in there schmoozing with state officials for the purpose of getting state contracts. It is exactly what Tom Noe has done. It is one of the major factors that is bringing Bob Taft down."

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



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