Thursday, October 27, 2005



When I started Down With Tyranny, people kept asking me if I lived in Ohio. I don't. But I was writing all the time about the Republican scandal epidemic there. And at the center-- surrounded by Governor Bob Taft, Secretary of State Ken Blackwell, arch crook and DeLay/Abramoff henchman Congressman Bob Ney, Attorney General Jim Petro, both U.S. Senators, half a dozen other Ohio congressmen, half the state legislature, and a gaggle of other GOP offcials, is Republican kingpin Thomas Noe. Today's Toledo Blade, the crusading newspaper that uncovered this scandal while the one party state of Ohio fought furiously and viciously to cover it up, has announced that Noe has been indicted by a Federal Grand Jury for laundering money into Bush's re-election campaign, allowing Ohio Secretary of State Blackwell to steal the state's electoral votes for Bush (and hence handing him "re-election").

A few months ago a local California magazine asked me to write a summary of the Ohio scandal-- with an L.A. point of view-- but the editor resigned and the article never got published-- until now:

Outside of Ohio not too many people have heard about "Coingate," although it could turn out to be the biggest political/financial scandal since Teapot Dome! Even though it's been headlines for weeks in Ohio, the national mass media doesn't seem to want to talk about it. Maybe it's a little too complicated. Financial shenanigans involving political figures are always FAR MORE complicated than celebrities accused of molesting young boys or a runaway bride or a man who kills his wife. But since Arnold Schwarzenegger has now been implicated in the whole mess, maybe it's time for Californians to start paying some serious attention. Briefly, here's the story so far:

An Ohio Republican Party kingmaker (and former GOP Lucas County Chairman), Thomas Noe, is at the center because he was able to convince the state of Ohio to make a couple of extraordinarily risky, highly unorthodox-- some would say "bizarre"-- investments with the State Workmen's Compensation Fund. Noe, a Bush-Cheney Pioneer (which means he was able to raise at least $100,000 for the presidential campaign), has been very-- make that very, very-- active in financing Republican candidates in his home state, at least a couple of governors, a couple U.S. senators, the state auditor, state attorney general, the secretary of state, a gaggle of congressmen and state legislators... 5 of the 7 Supreme Court judges. What a generous guy! Civic minded? Well, turns out that Ohio state government is pretty much an experiment in one-party rule-- no checks, no balances. Every non-judicial statewide official is a Republican. So it wasn't all that difficult for Noe to get his hands on millions of dollars of Workmen's Compensation Money and put it into (what was termed "invest in") his highly speculative rare coin (and collectible baseball cards!!) fund.

Aside from making hefty commissions on the "investments," the Republican Party high-roller seems to have lost (literally) MILLIONS of dollars in coins. This isn't just a case of coins decreasing in value, but a case of tangible, physical items... just gone. And "strangely"-- according to an anonymous law enforcement source quoted in the Toledo Blade, records show, for example, Noe bought one coin for $100,000 but then claimed to have sold it for $1. (What happened to the other $99,999.00 from that "sale?") Meanwhile the generous contributions continued to flow unabated into GOP coffers. In fact, Noe was illegally reimbursing anyone he could coral into donating to the 2004 Bush Cheney campaign. Noe (currently extremely incommunicado) is under investigation-- in fact almost half a dozen of them. Many of his Republican-best-buddies-in-high-places have been returning some, though by no means all, of the money they got from him, including President Bush (a paltry $4,000 of the over $100,000 Noe gave BushCheney), Governor Taft, and the man many Democrats claim corrupted the Ohio presidential election results in 2004, Secretary of State/current GOP gubernatorial candidate Ken Blackwell. Did what looks very much like stolen money wind up unduly influencing the presidential election? Perhaps a nonpartisan Special Prosecutor will be appointed? Not likely; like Zimbabwe, Ohio is functioning as a one-party state. Meanwhile, the first non-Ohio politician other than Bush, to have been a known recipient of Mr. Noe's largesse has been identified: the Governor of California, Arnold Schwarzenegger. The Ohio coin dealer gave the money last year to a Schwarzenegger fund that supports the California governor’s legislative priorities. In other words, the tainted $10,000 Noe gave him, very likely stolen from Ohio State Workmen's Compensation funds, and which Ohio newspapers are reporting Schwarzenegger won't return, is being used along with other contributions from multinational corporations to push Arnold's highly dubious agenda in the "special election" he's foisting on California in November. The irony of using working people's money to push viciously anti-working people laws is seen as the height of irony by many Democrats.

Schwarzenegger, who campaigned in the state of Ohio for Bush-Cheney in the closing days of the 2004 election, has business interests including the Arnold Classic bodybuilding competition in Columbus. "Allegations about Mr. Noe became public a year after we accepted his contribution," Marty Wilson, executive director of Schwarzenegger’s fund, said Friday. "As he was an active Ohio Republican party fund-raiser and donor, we had no reason at the time to question his contribution."
Under California law, the California Recovery Team organization (the front for Schwarzzenegger's special interest/corporate money collection operation he plans to use to blanket the state of California with TV and radio advertising to push his reactionary agenda before the Special Election) can accept unlimited corporate or individual contributions. Schwarzenegger and his team have gone back and forth on whether or not they plan to return the $10,000 to the Ohio Workmen's Compensation Fund, saying yes one day and no the next day.

It sounds pretty bad-- around $55 million in Workmen's Comp money "invested" and something like $12 million missing. But it gets worse! As the investigation-- driven almost entirely by pressure from readers of the Cleveland Plain Dealer and the Toledo Blade-- expanded it suddenly turns out that the poor Workmen's Compensation Fund was being looked on by Republican office holders charged with the fiduciary responsibility for protecting it as a honeypot for political donors even beyond Noe. Last week it was publicly announced, although the Governor Taft and Attorney General Petro have been aware of this-- and denying it-- since just before the election, that another $225 million have been lost. This time it was a different firm, one in Pennsylvania which runs hedge funds, and which is also a major donor to Ohio Republican politics.

Meanwhile Ohio officials responded to the unfolding scandal by attacking the newspapers pressing the investigations, claiming, at first, the whole thing was a vendetta and that the so-called "investments" were profitable. The Governor (of Ohio) who has not been indicted yet, was quoted on April 8 as screaming at a reporter from the Blade that "[Noe] was making money for the state; what's the problem?" Noe and his wife Bernadette (who was GOP chairman of Lucas County during the presidental election) have personally donated over $200,000 to Ohio Republican candidates and PACs in the last 15 years-- and those are just the above-board contributions, not the illegal ones like the reimbursements to Bush-Cheney donors. The Pittsburgh hedge fund managers have shovelled hundreds of thousands more into the Ohio state GOP-- but it turns out to have been money well-spent for them-- and for the Ohio GOP, if not for the state tax-payers. Youngstown Democratic State Senator Marc Dann is calling the mess "a culture of corruption... It's more than a guess that some of the money could have made its way to the campaign committees of Republican officeholders, starting at Toledo city council and going up to Arnold Schwarzenegger and the president. I can now go into any bowling alley or barber shop and mention Tom Noe's name and have everyone understand what corruption in our state means," continued Dann. "People understand when money is stolen, and they understand the connections to the Republican Party. The GOP might try to give back the money, but they're still tainted."

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At 3:49 PM, Blogger Joel said...

Wow! I had no idea it was this bad. And it just keeps getting worse. Thanks for the insight.


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