COLUMBUS - Hundreds of pages of investigative reports released yesterday by prosecutors reveal how three investment department employees with the Ohio Bureau of Workers' Compensation were swept up in the scandal that has gripped the state agency for more than two years.
The documents were made public yesterday, more than a week after Peter Hoffmannbeck, Frederick Zigler, and Keith Zolkowski were convicted on 11 misdemeanor charges of violating state ethics laws by accepting $6,745 worth of golf outings, travel, meals, and entertainment from firms doing or seeking to do business with the bureau. A Franklin County Municipal judge ordered the trio to pay thousands of dollars in restitution, fines, and perform community service.
Authorities said Mr. Hoffmannbeck in February, 2002, accepted payment from Jones Trading for expenses at a seminar in the Bahamas - a trip valued at $4,336 - two years after Jones Trading received only $1,725 in bureau commissions. Mr. Hoffmannbeck's wife and child also took part in the trip, the investigative report says.
Questioned in Chicago by Ohio investigators, Ray Murray of Jones Trading said the bureau was a fairly new client so he invited Mr. Hoffmannbeck, a senior equity trader, and a guest to the Bahamas.
Mr. Murray said the commissions paid to Jones Trading by the bureau jumped from $152,646 in 2001 to $299,000 in 2002 because he had "developed his relationships" with Mr. Hoffmannbeck and Mr. Zolkowski, whom he said he met around 2001. Mr. Murray did not make a sworn statement and it was not tape recorded by investigators.
Mr. Zigler told investigators that he asked Terrence Gasper, the bureau's chief financial officer, in 1997 or 1998 what to do if companies offered him gratuities such as free football tickets.
Mr. Zigler, a senior investment officer, said Gasper replied: "Oh, you can either just take them or you can write them a check and ask them to give you the money back."
According to the investigative report, Mr. Zigler said Gasper explained that a cancelled check would make it appear like a gift was not accepted.
Mr. Zigler told investigators he didn't know if the governor's office recommended investment companies.
"I wasn't high enough up,'' he said.
Mr. Zigler said he met in 2005 with Brian Hicks, Gov. Bob Taft's former chief of staff and lobbyist, who introduced some money managers. Mr. Zigler said he couldn't recall the names.
A spreadsheet compiled by investigators lists 31 meals that Mr. Zigler had with Clarke T. Blizzard, an investment marketer, from 1997 to 2003. Gasper also attended several of those outings, the document says.
Blizzard is set to be sentenced in federal court in Akron on Thursday for conspiring to bribe Gasper. Blizzard, who pleaded guilty and is cooperating with investigators, is also expected to appear in court in Franklin County where he was indicted on a related felony money laundering charge.
Blizzard faces a maximum penalty of five years in prison and a $250,000 fine on his felony federal conviction.
Gasper is scheduled to be sentenced in Akron on May 9. Gasper pleaded guilty nearly a year ago to massive corruption charges, admitting he accepted bribes from money managers and marketers in exchange for doling out lucrative investment pacts.
Gasper, who has been cooperating with the task force, will continue working with investigators after sentencing, said Gregory White, U.S. Attorney for the Northern District of Ohio.
Gasper faces a maximum of 20 years in prison, although his sentence will likely be reduced because of his cooperation with authorities.
In total, 16 people - including former Ohio Governor Taft, former Toledo-area rare-coin dealer and GOP insider Tom Noe, and Mr. Hicks - have been convicted on criminal charges stemming from the task force.
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