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AKRON - Terrence Gasper, who used his power as chief financial officer of the Ohio Bureau of Workers' Compensation to steer millions of dollars in investment funds to brokers and marketers in exchange for illegal gifts and favors, was sentenced yesterday to five years and four months in prison.
Moments before his sentencing, Gasper told U.S. District Judge David Dowd, Jr., that he wanted bureau employees to understand that there was a "small group of political appointees in senior management" during his tenure from 1995 to 2004 who called the shots at the agency.
"Their agenda was totally political in nature, often to the detriment of what the bureau was trying to do. It was very frustrating for those of us who were more professionally inclined," said Gasper, who didn't identify the officials.
Gasper also told Judge Dowd that he "actively opposed retaining" certain investment managers.
"I was compelled to retain them by my superiors. I did not pursue or intend to support their participation at the bureau," Gasper said. He declined to comment after his sentencing.
Inspector General Tom Charles disputed Gasper's comments about politics infecting the bureau's management under two Republican governors, saying Gasper was responsible for the decisions that the investment department made.
"With Terry Gasper, this was the person at the center of pay-to-play. As the [chief financial officer], he was the man and he's going off to prison," Mr. Charles said. Later the inspector general added: "He had the key to the vault; he had power of attorney."
Mr. Charles said James Conrad, the bureau's former CEO-administrator, gave Gasper power to make investment decisions because of the large size of the agency and because of his financial expertise.
But Attorney General Marc Dann, a Democrat, said that questions remain about how politics influenced the bureau's investment practices.
"While Mr. Gasper acknowledged in court what many of us have known all along, that the BWC became a veritable ATM machine that was used by Republican political appointees to reward campaign contributors, we still don't know who was pulling the strings," he said.
"Mr. Gasper referred to 'superiors' who compelled him to retain politically connected investment managers. But until we bring those superiors and the people who were pulling their strings to justice, we won't be able to close the book on this scandal once and for all," Mr. Dann said in a written statement.
Gasper pleaded guilty in June, 2006, to a federal racketeering charge for accepting use of an oceanfront Florida condo from brokers Michael W. Lewis and Daniel P. O'Neil, $25,000 from Republican power broker and former Toledo-area coin dealer Tom Noe, and $20,000 from marketer Clarke T. Blizzard - all of whom did multimillion-dollar business with the agency in charge of insuring injured workers.
Gasper's sentencing was delayed until yesterday as he cooperated with a federal-state task force that has netted the 16 public officials and money managers - including former Gov. Bob Taft and Noe - who have been convicted since The Blade began reporting in April, 2005, on problem investments at the bureau.
Gasper, who was hired at the bureau when George Voinovich was governor, could have received 20 years in prison on the federal charge. But in plea agreements, prosecutors recommended a prison sentence from six to seven years, citing Gasper's cooperation with investigators. Judge Dowd lowered that range and picked five years and four months.
Gasper, who joined the bureau in 1995 after leaving a high-ranking post at Borden Corp. in Columbus, testified for the prosecution at the trial of Mr. O'Neil and Mr. Lewis, who were charged with bribing Gasper in exchange for bureau investment business
A jury in November acquitted the two men after a trial in which Gasper acknowledged he had given conflicting statements to investigators and defense attorneys referred to Gasper as a liar.
Gasper will continue to cooperate from a federal prison because the investigation into the bureau's investment practices continues, assistant U.S. Attorney Benita Pearson said. Gasper, who has lived in the Columbus suburb of Worthington, would like to serve his prison term in Morgantown, W.Va., his attorneys said.
Judge Dowd ordered Gasper to pay a $60,405 fine: $15,000 for the use of the condo owned by Mr. O'Neil and Mr. Lewis purchased; $20,405 for the amount that Blizzard paid Gasper, and $25,000 for the investment that Noe gave Gasper in the name of his former girlfriend.
Gasper made key decisions regarding both the failed $50 million Noe rare-coin investment and the bureau's failed offshore hedge fund managed by Mark D. Lay of MDL Capital Management in Pittsburgh, which lost $215 million. Gasper was forced to resign in 2004 after the hedge-fund loss.
Noe is serving a 27-month sentence in federal prison for illegally laundering thousands of dollars into President Bush's re-election campaign through friends and colleagues. He also was sentenced last year to 18 years in state prison for stealing millions of dollars from the rare-coin funds he managed for the bureau.
Yesterday afternoon, Gasper was sentenced to five years in Franklin County Common Pleas Court on a felony money-laundering charge for accepting the $25,000 from Noe and six months on a misdemeanor charge of failing to disclose sources of income, gifts, travel, meals, entertainment, and gratuities on his annual ethics statements and was fined $1,000.
The prison term will run at the same time as the federal sentence, meaning Gasper won't be sent to a state prison.
Last year, Franklin County Prosecutor Ron O'Brien said Gasper accepted thousands of dollars in gifts, meals, sporting tickets, and other gratuities from "substantial dozens" of other BWC vendors.
Gasper both asked for and was given the gratuities on at least 150 instances, Mr. O'Brien said.
David Freel, executive director of the Ohio Ethics Commission, said Gasper's plea meant that he knowingly committed crimes while working for the bureau and that he had plenty of opportunities to report unlawful activities by others.
"He lied all the way through the process of what he did at the outset," Mr. Freel said, adding that Gasper began to tell the truth only after he was under investigation.
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