Tuesday, October 11, 2005

DeLay: Old and Busted; Coingate: New Hotness

So many scandals to choose from. How does a guy ever have the time to decide? Got this one over the hot sheet from George, and frankly, this one seems to have some legs, is fairly interesting, involves Republicans in Ohio, and has been completely undercovered. So far it seems to be a local story, but given that it involves even more improper fund transfers for even more Republicans, it illustrates a systematic pattern of deception and improper funds that is plaguing the Republican Party. See, now you can say you’re down with the cool kids because you know the new hotness. Who says we don't provide a public service? Read on…

COLUMBUS — Tom Noe often transferred tens of thousands of dollars from the Ohio rare-coin funds he managed to his personal business before bankrolling Republican candidates and causes with contributions and loans.

A Blade examination of the accounting records from Mr. Noe’s $50 million rare-coin venture shows a pattern of large sums of money moving from the coin funds to his personal business, Vintage Coins and Collectibles, in the days and weeks before the coin dealer and his wife, Bernadette, made contributions to Republican candidates ranging from President Bush to U.S. Sen. George Voinovich and Gov. Bob Taft down to Lucas County Auditor Larry Kaczala.

Mr. Noe typically listed the payments from the coin funds to Vintage Coins as "profit distributions" or "coin purchases."

But both of those explanations have been assailed as fraudulent by Ohio Attorney General Jim Petro, who has branded Mr.

Noe a thief and accused the former Toledo-area coin dealer of running a Ponzi scheme and making questionable coin trades with the state fund.

Last month, Mr. Petro accused Mr. Noe of diverting coin-fund money to his personal business and then to his personal checking account to pay for his former Catawba Island home, landscape his home in the Florida Keys, and pay off a business loan. Mr. Petro said the accusations largely came from "tracking the flow of dollars" out of the coin funds to Mr. Noe’s personal accounts and measuring the "proximity of the transfers" before large purchases or payments.

According to the computerized accounting records of Capital Coin I, II, and their subsidiaries, Mr. Noe since 1998 transferred more than $19 million from the state coin venture into his business accounts at Vintage Coins, including more than $13 million for "coin purchases" and more than $1.7 million in "profit distributions." In that same time period, Vintage Coins transferred about $5 million back to the coin funds, the records show.

As Mr. Petro lodged accusations about how Mr. Noe bought houses and paid-off loans with state coin fund money, he stopped short of making claims about how the coin dealer paid for political contributions and loans he and his wife doled out, totaling more than $300,000 since 1998 — the year he received his first installment of $25 million from the Ohio Bureau of Workers’ Compensation to invest in rare coins.

Mr. Petro, who has returned $6,100 in campaign contributions from the Noes because of concerns that the money could have come from state funds, said during a news conference that coin-fund money could have been used for political purposes, but his office is focusing on "personal resources" in building its civil case against the coin dealer.

William Wilkinson, a Columbus attorney representing Mr. Noe, said no state coin funds were used to make campaign contributions.

"Look at the coin-fund check register. You don’t see any checks written to any campaign committees," he said.

...

Mark Anthony, a spokesman for Mr. Petro, said last week that the attorney general’s office is in the process of building its case against Mr. Noe and is sharing information with criminal investigators. He would not speak specifically about what role campaign contributions will play in Mr. Petro’s civil suit against Mr. Noe.

During his Sept. 29 news conference, Mr. Petro said his office is looking at "any instance where money is diverted" from the state "for uses other than investment," but he said his office had not considered whether Mr. Noe improperly used state funds for political contributions.

State Sen. Marc Dann, a Youngstown-area Democrat who has emerged as a vocal critic of the state’s investment in rare coins, said any link between state funds and campaign contributions should have been the first issue that Mr. Petro examined.

"Sometimes if you are doing your job as a lawyer, you have to go after things even though it might be personally embarrassing," Mr. Dann said. "Jim Petro has a duty to look at it as a civil recovery for the state. If someone used our money to make campaign contributions, we should have our money back."

Posted by crimnos @ 9:00 AM