Thursday, September 08, 2005

 

Petro in free fall

It happened to Tom Noe, Bob Taft, Brian Hicks, and Mark Lay, just to name a few. Now it continues to rain day after day on Jim Petro's career.

Today, all of Ohio is learning (thanks to the Dayton Daily News) that Jim-boy kept law firm, Schottenstein Zox & Dunn doing work for his office even after SZD lawyer David Robinson failed to notify the AG's office about the enormous losses being incurred by BWC's MDL fund.

Yesterday, Sen. Marc Dann made available a pathetic set of documents Petro provided that purports to show that his office "investigated" SEC allegations of mismanagement at BWC. As Dann points at, the AG's "big" investigation into the SEC complaints amounted to a half-page of scribbled notes.

We also noted something interesting in one of Petro's documents. He included a recent 3-page rant sent to the SEC just 10 days ago. In his frothing, Petro writes:
We cannot, however, blindly accuse companies with whom the BWC has or had contracts of wrongdoing without sufficient assurances that such wrongdoing may have occured . . .
The reason we quote this is because it reveals Petro continued willful ignorance and attempts to misdirect the media regarding the SEC allegations and his office's incompetency. The SEC simply raised that it appeared that BWC investment officials had "abused their discretion."

What is "abuse of discretion?" Attorney readers may split hairs with us, but for the lay people out there, it means this: When making decisions, BWC investment managers must act in the best interest of the fund. The gist of the SEC charges is that BWC managers were - inexplicably - paying enormously excessive fees, including fees to brokers who were incapable of executing the stock trades.

Despite Petro's spin, the SEC didn't accuse brokers, per se, of wrongdoing. The SEC suggested that some of the brokers may have violated National Association of Security Dealers' conduct guidelines, but these are professional rules - not laws - and Petro knows it.

Finally, as we noted in a previous post, Petro is going to get mud all over him today or tomorrow when it presents the case for the opponents of the Reform Ohio Now measures.

We can already imagine GOP chair Bob Bennett's advice to Petro: Like Larry Householder and Joe Deters, you best career bet might be to start looking for a safe, rehabilitative county job.

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