Thursday, September 01, 2005

 

Dann forces Petro's to reverse himself

Gotta love Sen. Marc Dann.

After Petro offered up a pathetic explanation of why he didn't pursue the SEC's allegations of trading and brokerage irregularities at BWC for two-and-a-half years ("I was only BWC's lawyer blah, blah, blah . . .), Dann provided Jim & Co. with a refresher course on the AG's duties and rights under the Ohio Revised Code. Dann also demanded that Petro release documents to show what (if any) investigation Petro made into the BWC allegations.

At first, Petro tried to stare down Dann but with increasing public attention to the matter and increasing pressure from his supporters and other Republicans, guess who blinked first?
Ohio Attorney General Jim Petro reversed course and said yesterday that his office will investigate a federal agency’s allegations of investment problems at the Ohio Bureau of Workers’ Compensation.

In an interview Tuesday night, Mr. Petro stuck to the stance he took last year that the U.S. Securities and Exchange Commission’s suspicions about “possible abuse” in the bureau’s payments to three brokerages were unfounded.

But under pressure from state Sen. Marc Dann (D., Warren) to produce records that would prove that Mr. Petro’s office investigated the SEC’s concerns last year, Mr. Petro said he decided later Tuesday night to relaunch his office’s investigation of the bureau.

. . .

He said he now questions the guidance and cooperation bureau officials gave his then-chief counsel, Elizabeth Smith.

“At that point in 2004, there was no reason to doubt their truthfulness,” Mr. Petro said.

“On reflection, in 2005, there were incidents that occurred that caused us to think maybe they weren’t as entirely as accurate in their portrayal — and we were their lawyers — as I would like, so we’re going back to it,” he said.
It's important to remember what happened. The SEC - not exactly a hotbed of leftwing hysteria - supplied Petro with information that appeared to show that BWC officials had "abused their discretion." ("Abuse of discretion" is a polite way of saying BWC officials looked the other way while the brokers they had on contract looted the agency.)

What did Petro do? He chose to diss the SEC officials, who are the federal investment cops, and side with operatives and political bretheren at BWC without doing one iota of independent investigation. (We have this mental image of Petro playing Senor Wences and Terry Gasper his head in a box: "S'all right?" "S'all right!").

More than one political career has been destroyed by such a miscalculation.

We would also like to note that we have a technical disagreement about how some of the timeline to this story has been reported. Petro has implied that he got involved in this issue in 2004, and many newspaper articles (including the one above) keep allowing Petro to get away with this.

The idea that Petro didn't know of the SEC inquiries until 2004 is simply not credible. Documents show that the SEC contact BWC officials in writing in November 2002. That letter also indicates that the SEC also had telephone conversations with BWC officials even earlier.

As we understand it, a formal contact from an attorney with SEC, in any form, should have automatically triggered notice being given to the BWC's chief legal officer, John Annarino, not to mention then-Administrator, Jim Conrad. The AG's office also maintains a Workers (sic) Compensation Section that "provides legal counsel and representation to the administrator of the Ohio Bureau of Workers' Compensation."

Between Conrad and Annarino, one of them would have been compelled to notify the AG's WC Section of the SEC inquiries when they occurred. If they didn't, there better had been a good reason why. And with Annarino still on the job, we'd like to see the press corps vigorously pursue the issue of was informed and when.

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