« Running with scissors | Home | Currency cold war »

May 18, 2005

Coingate revisited

Coingate, you might recall, is a nice little Republican shitstorm brewing in Ohio. For the past seven years, the Ohio Bureau of Workers’ Compensation has invested $50 million in rare coins—not the obvious place to park state cash that is supposed to pay medical bills and benefits for workers injured on the job. The vehicle chosen was Capital Coin Funds, a company controlled by Tom Noe, a well-known Republican fund-raiser.

All this started going south a few weeks ago, thanks to some crack investigative reporting by the Toledo Blade. Noe is being investigated by both the U.S. Justice Department and the FBI for possible federal campaign contribution violations. And around 120 of the state’s coins have gone missing, either lost or stolen—possibly by one of the money managers who (despite having been convicted of a fraudulent coin transaction) was hired by Noe to trade coins on the state’s behalf. All this prompted Ohio’s Inspector General to launch an investigation into Noe’s coin funds, and the state’s decision to invest in them.

But there’s more. The state, having concluded that the rare-coin market is maybe a little too hazardous—although not before almost handing Noe another $25 million to invest—is dissolving the funds to recoup its cash. That’s not as straightforward as it sounds:

The Ohio Bureau of Workers’ Compensation acknowledged yesterday that Tom Noe has paid far less to the state from rare-coin investments than previously reported. Bureau officials said they decided last year to allow Mr. Noe, a prominent Republican fund-raiser and local coin dealer, to reinvest $5.4 million in alleged profits from two coin funds established with $50 million from the state, rather than take a payment from him.
For the past several weeks, bureau officials have told reporters that Mr. Noe had turned over $13.3 million in rare-coin profits. Copies of checks provided to The Blade — and signed by Mr. Noe — add up to $7.9 million. Bureau spokesman Jeremy Jackson said yesterday that Mr. Noe was allowed to retain $5.4 million in profits and reinvest them in his rare-coin funds.
In response to questions from The Blade about claims of investment returns, the bureau provided a document last month that showed the $5.4 million as “payment received [booked]” on Feb. 15. Mr. Jackson apologized yesterday, saying it was unclear in the records that the payments attributed to Feb. 15 were instead reinvested.
The development means that the two Noe coin funds, which the state is in the process of dissolving, have $55.4 million in them that the state is seeking to recoup.

Now, 43 days after the Blade first broke the story, State Auditor (and Republican candidate for governor) Betty Montgomery says she will conduct a special audit of the bureau’s investment. Montgomery is an acquaintance of Noe, and has received $4,350 in campaign contributions from him since 1990. Which is why the audit will be carried out by an independent firm.

Noe, who with his partners made $3.3 million in profit from the state’s investment, is of course no stranger to the White House:

He was President Bush’s northwest Ohio campaign chairman in last year’s presidential race and because of the contributions he raised for the President, he earned the coveted status of a Bush “pioneer.”

You really couldn’t make this stuff up.

Posted by Stephen at 12:41 AM in Politics | Permalink | Comments (1) | TrackBack (0)

Trackback Pings

TrackBack URL for this entry:
http://www.disinterestedparty.com/cgi-bin/mt/mt-t.cgi/139

Comments

It just keeps getting better... you did hear the latest - that Noe is charged with criminal theft because $10-$13 million (MILLION!!!) is missing and assumed misappropriated, apparently invested in baseball cards, old photographs, and a lot of crap that is going to lose big money for the state.
I only wish i had sold Tom Noe my son's Pokemon and YuGiOh card collections before the state shut the door.

Posted by: kb at May 28, 2005 2:24 AM