Friday, May 13, 2005


Breaking knuckles

From the NYT:
President Bush called the dissenting Republican, Senator George V. Voinovich of Ohio, on Wednesday, the day before the Senate Foreign Relations Committee, on which Mr. Voinovich serves, was to take up the nomination, the White House spokesman, Scott McClellan, said.

Karl Rove, the president's powerful political adviser, and Andrew H. Card Jr., the chief of staff, also called to chat with Mr. Voinovich in recent weeks, Mr. McClellan said.

[. . . ]

The vote was delayed by Mr. Voinovich, who insisted on having more time to investigate accusations about Mr. Bolton's temperament and management style.

The senator has met administration officials, as well as Mr. Bolton, and has visited with Senator Bill Frist, the majority leader.

But he was careful not to take the White House and the leadership by surprise. In the days leading up to the vote, he informed Senator Richard G. Lugar, the Foreign Relations Committee chairman, and Dr. Frist of his decision. "Senator Voinovich arrived at his decision," said Eric Ueland, Dr. Frist's chief of staff, "and we arrived at the process for moving the nomination to the full Senate."


Parsley froths with is own intolerance

Those that whine the loudest are often the guiltiest.

Case in point is Ohio's reigning wingnut reverend, Rod Parsley. In his book (apologies to real authors) Silent No More, Parsley asserted, "The liberal left has been fully exposed for its breathtaking intolerance and boundless sense of moral superiority."

Well, lo and behold, speaking of breathtaking intolerance and moral superiority, the Rev. Rod's May 1 sermon broke some new ground:
Americans need to wake up.

I will give you some basics about Islam, then I will let you go.

Out the outset I must state three important truths that I will provide support for later.

Here they are.

Number one. The god of Christianity and the god of Islam are two separate beings. Excuse me, Mr. Bush – I support you. You need to stop saying that the god of Islam and the god of Christianity are the same god. They are not the same god. They are not the same entity. And I will prove that to you.

Number two. Mohammad received revelations from demon spirits, not from the living god.

Number three. Islam is an anti-Christ religion that intends, through violence, to conquer the world.
Isn't it about time to hold Parsley accountable for this inflamatory crap. And, isn't it about time that some of Ohio's reporters ask politicians like Pat Tiberi and Ken Blackwell - who love to share the podium with the reverend - if they either 1) agree with Parsley's comments about Islam, or 2) wish to distance themselves from Parsley.

Thursday, May 12, 2005


NBC too target Ney's relationship to felon, gambler

Drip, drip, drip. . .

NBC has a story on Bob Ney tonight that has to do with a trip to England to meet with thrice-convicted felon and supposed aviation entrepenuer Nigel Winfield.
"My only interest was trying to meet a congressman and see what we could do," says Winfield.

In London, Winfield says Ney attended meetings, one over dinner at a casino with Winfield and Fouad al-Zayat, a Syrian-born businessman who heads FN Aviation. Zayat is one of London's biggest gamblers, betting hundreds of thousands of dollars on roulette in a sitting.

Experts say Ney's trip may violate House rules.
The story goes on to say that Ney claims he parlayed $100 into $34,000 during gambling on one of these trips.

No, seriously! No. No way was this a convenient way to launder a bribe. No, no way. Hey, these aviation guys are the totally legit type.

The biggest guffawer came from Ney's mouthpiece:
Ney's lawyer insists the trip was entirely proper and consistent with House rules. However, he says the congressman can't discuss his activities because of "national security implications."
National security implications? Man, these guys can come up with some fuckin lulus when their ass is in a sling, can't they?

Bob - doesn't that part about breaking House rules mean another appointment before the Ethics Committee?

And, aren't some of your constituents going to go apeshit when they find out one of your pals was involved in a deal to swindle The King?

[UPDATE] - We suspect the Elvis/Winfield link has something to do with the Lisa Marie, E's airplane, aka Flying Graceland, which he bought from Winfield in 1975.


Candidates for 2nd CD primaries set

Cincinnati local politics is not our strong suit, so we are leaving it up to others to describe the contest to see who fills the Portman vacancy.

Adam at has some of the details here, and the Cincinnati blog has more on the Dems endorsements here.


Noe: Do roads lead to Householder - Part II

In our earlier post, we suggested that there was more than a strong likelihood of a link between the federal fundraising investigation into Tom Noe and the investigation into Larry Householder.

The Blade's dynamic duo of Drew and Wilkinson doesn't provide the smoking gun yet, but they do start making some intriguing links to Householder that hint at something more to come:
[Former Taft aide Brian] Hicks isn't the only high-powered Ohio official to be a guest at one of the Noes' Florida homes.

Larry Householder, former speaker of the house, said he dropped in on the Noes in November and watched Ohio State beat Michigan in football at the Noes' new $2 million home in nearby Tavernier, Fla.

The Noes sold the Islamorada home in 2003 for $1.3 million, two years after buying it for $665,000.

Mr. Householder said he was attending a meeting of the National Conference of Insurance Legislators at Duck Key, about 30 miles southwest.

"I just dropped in," he said. "He didn't give me any money. He didn't spend anything on me. We just watched a ball game and ate pretzels."

Mr. Householder said after the game he returned to the insurance legislators' conference and did not need to disclose his visit to Mr. Noe's house because he didn't stay overnight or receive anything.
On one hand, that seems pretty innocent. On the other, it seems like Householder and Noe must have been in pretty close contact with each other to know they would be in the same part of Florida at the same time.

The Blade story is a great read beyond the Householder facts. Seems Brian Hicks was able to rent Noe's million-dollar retreat for a mere $100 a night, max, when similar properties were renting for $5,000 a week.
Mr. Hicks defended the rental agreement and said he did nothing wrong.

He said he did not disclose it to the Ohio Ethics Commission because he felt he paid market value for the stay.

Members of the executive branch must disclose the source of gifts if the value exceeds $75. They cannot accept gifts from people who have matters before that particular agency or who do business or are seeking to do business with that agency.
Personally, we hope Brian sticks to the line of argument. If that's the best he can come up with for the Blade, then the it makes it harder and harder for the Inspector General and the feds to sweep this under the rug.


'what she said

Jesse actually scooped the Ohio papers by two days on the Taft numbers:
The fact is that Taft is just...well, a pointless politician, if such a construction makes sense. He's a conglomeration of three branches of Ohio Republicans - the religious, the economic, and the gun.
Read it all.


Call Voinovich now

This is like a replay of the 2004 elections. The Ohio vote - i.e., Sen. George Voinovich - will be the key to the Bolton nomination outcome.

The lastest news of the tawdry Bolton saga comes from Raw Story, with commentary on these developments from James Wolcott.

Sen. Voinovich's office is taking a telephone tally today. That means, when people call his office they want you to get to the point about favoring Bolton or opposing him. They don't want your name, number, etc. Just your views.

So, please, call away: (202) 224-3353

[UPDATE] - A disappointing, but not unexpected development, from the LA Times:
A critical Republican senator, George Voinovich of Ohio, agreed to let the nomination go to the full Senate but he called the diplomat "arrogant" and "bullying."

"This administration can do better than that," Voinovich said in the first big battle of President Bush's second term

Voinovich said he could not vote for the nomination, but would agree to send it to the floor without a recommendation of approval or disapproval.

"We owe it to the president to give Mr. Bolton an up-or-down vote on the floor of the U.S. Senate," Voinovich said.

Don't bother trying to make sense of this. This is the same guy who as governor actually cried real tears when he was confronted by poor mothers who wanted to know why he proposed to slash low-income benefits. He made the cuts anyway.

Call his office anyway. We don't want to see his office justify it based on some bullshit phone poll.

Wednesday, May 11, 2005


Coins are lousy investment - Part IV: Hats off to the Blade

Apologies and kudos to the writers at the Toledo Blade. We have heard from a couple of apparently better-read readers that Blade reporter Chris Kirkpatrick did exactly the kind of analysis that we had criticized the Dispatch (and by implication, other papers) for failing to do. And, even better for our ego, Mr. Kirkpatrick comes up with about the same return we did (our rough estimate: 4%-5%) -
Because of the risk, numerous experts have told The Blade they believe rare coins are not a proper investment vehicle for public money. But the state of Ohio and its Bureau of Workers' Compensation Fund have chosen since 1998 to invest $50 million in two rare coin funds - Capital Coin Fund I & II - set up and managed by Tom Noe, a local coin dealer and prominent Republican fund-raiser. No other state has invested money into such a venture.

The return from Mr. Noe's funds has averaged 4.5 percent a year since 1998 for the first fund and 6.8 percent a year since 2001 for the second fund, according to state records based on numbers submitted by Mr. Noe.
Getting 4.5% one year for a high-risk investment is alarming. Getting it for two years is so alarming that it should have put the investment manager on the "watch" list. Getting 4.5% for three years should put the investment director on the "watch" list. Getting it for four years should put the BWC director on the "watch" list. Getting 4.5% for six years is more than enough to get them all fired and them and the Workers' Compensation Commission possibly sued for failure to uphold their fiduciary responsibilities.


Conrad's wishing well

Good job by the Blade's cartoonist Kirk Walters, here


Coins are lousy investment - Part III

Although we have suggested that BWC Director James Conrad may be hurt by the Coingate scandal, we don't want to suggest that he is the only one whose culpability needs to be examined.

Unlike other state agencies, BWC has a special 5-person Workers' Compensation Oversight Commission. From the BWC website:
The oversight commission meets monthly. Its primary role is to advise and consent on workers’ compensation matters. Duties of the commission include:
-- Making recommendations on BWC policy, investments and premium rates;
-- Reviewing the effectiveness of policies and operations;
-- Reviewing independent financial audits of BWC
Although this gives the commission somewhat less power than a corporate board of directors, the fact that it has both advice and consent responsibilities shows that it is also meant to be more than window dressing for Conrad's operations.

As shown above, the commission is responsible for being the check and balance for BWC executive investment decisions.

The current commission is composed of:
The commission also has several non-voting members including
Our point is that it appears a lot of people on both sides of the aisle were snoozing while the coin investment deal was on the books. Since this thing stretches back to 1997, no one can claim they were taken by surprise.

Our guess, however, is that the Commission has acted up until now the same way the pension systems' boards of trustees acted, namely, as a rubber stamp for the director and the investment officers.

So, now the question is, are members of the BWC Commission helping behind the scenes to get to the bottom of Coingate, or are they attempting to cover their ass?

Wouldn't that be an interesting line of investigation for some of the sleuths at the Blade and the Dispatch? And, to the extent its the latter, shouldn't there be some demand for some resignations from that commission?


Coins are lousy investment - Part II

Others are starting to agree with us that the BWC's infamous coin investments are bad, even without the Noe and missing coins scandal. From the Dispatch:
But much of those assets were in coin inventory, and critics say there’s no way to verify whether the coins are worth what was reported.

Bureau officials have said they expect to get a full return on the state’s investment, as long as the process isn’t rushed into "a fire sale."

[. . . ]

"If (the investment) is as lucrative as they say it is, then we wouldn’t expect the need for a discount to sell it," said J. Richard Dietrich, chairman of the accounting department at Ohio State University’s Fisher College of Business.
And Petro appears to be scared shitless by the audit and liquidation process that's ahead now that Petro/Conrad have decided to cut bait on the coins.
Petro was asked to recommend someone to oversee that process, and he said he is considering several firms and individuals.
Petro claims he wants to find someone "scrupulously independent" to do this, but that could easily be done in one day. The fact that this search for a liquidator is being strung out over several days means that there must be a lot of negotiating going on behind the scenes over exactly what the liquidator can and can't do.

The most potentially troubling part of the Dispatch story was a reference to the leader of the Ohio Senate:
Senate President Bill M. Harris, R-Ashland, said yesterday that Senate Republicans are drafting legislation related to state investing issues, but he declined to elaborate.
That's not a good sign. The Ohio legislature, as shown by how they partially succeeded in screwing up the public employee pension funds last year, would love to politicize investments even more, not less. These are the same guys who tried to legislatively force the pension funds into using only Ohio brokers, bankers and money managers. In other words, more thiefs and con men like Noe.

There are a lot of Republicans who think that the Noe investment deal was great. The only objection they have is that Noe got caught.

Tuesday, May 10, 2005


"We're Christocrats"?

From the Dispatch's Joe Hallett:
Merging the pulpit with politics, 1,070 Ohio pastors were asked yesterday to register 400,000 new "values voters" and urge their flocks to press a moral agenda at the Statehouse.

The Rev. Rod Parsley told the prospective "Patriot Pastors," gathered with a sprinkling of Republican politicians, that evangelical Christians must halt America’s moral decline, saying, "We are the largest special-interest group in Ohio and America today, and I for one say enough is enough."

[. . .]

Sitting at the head table with Parsley for breakfast were Ohio Secretary of State J. Kenneth Blackwell, a GOP candidate for governor, and U.S. Rep. Pat Tiberi, a Columbus Republican.

[. . .]

Parsley said Center for Moral Clarity chapters have been formed in 80 of Ohio’s 88 counties and evangelical voters were being registered without regard to political affiliation.

"We’re not Democrats; we’re not Republicans; we’re Christocrats," Parsley said.
Actually, it sounds like he may want them to be "Christ-o-consumers". Has Parsley been cross-breeding with the Mary Kay and Amway crowd?:
Parsley stood on a stage surrounded by four big television screens and flanked with posters of his best-selling book, Silent No More — which ushers sold in the aisles as he spoke — and passionately urged the audience to become politically involved.


Blackwell amendment not finding supporters

We're sure this won't last long, but it is a little surprising - even encouraging - that Blackwell's bait-n-switch "spending limitation" amendment hasn't been backed by any major political player or newpaper. In fact, the opposition is still growing.

We reported a couple of weeks back about the formation of the Coalition for Ohio's Future. Although Blackwell may try to claim that these are just disgruntled labor groups, the names of participants in the coalition members seem pretty impressive at this early date, including AARP, Ohio United Way, Ohio Council of Churches, the League of Women Voters and dozens of other community, education and religious groups.

What's Blackwell got? Bupkis. Well, not exactly bupkis. He's got Phil Heimlich and the reverends Parsley and Johnson in his corner.

Maybe Blackwell thinks this is going to be a simple replay of Issue 1. Maybe he thinks it's going to be even easier. Overconfidence and bravado have never been lacking in Blackwell, and this time it might backfire.

Furthermore, the anti-amendment folks are really starting to unload on the entire concept of this proposal. The Dispatch's Joe Hallett this past Sunday wrote:
While her Republican rivals -- Secretary of State J. Kenneth Blackwell and Attorney General Jim Petro -- pull on each other's shirttails in their race to out-conservative each other, [Betty] Montgomery is calculating that enough Republicans still hover around the center for her to win the nomination.

Thus, she had an audacious Wednesday when she did what most other Republicans have been afraid to do - ferociously attack the "tax and expenditure limitation'' that Blackwell wants voters to insert in the Ohio Constitution.

Experienced appraisers of state budgets - Republicans and Democrats alike - predict disastrous consequences for the budget and Ohio's economy if Blackwell's plan is approved. In a Columbus speech, Montgomery labeled it a "too-good-to-be-true scheme'' that would put governance of the state on "autopilot'' because it "effectively runs over representative government by handcuffing the governor and the legislature.''
Speaking of Montgomery, Betty appears to be making opposition to the amendment a centerpiece to her campaign, and she is not mincing words. The Beacon-Journal's associate editor Michael Douglas reported on a speech she recently gave at the Columbus Metropolitan Club, saying:
Montgomery explained the dangers [of Blackwell's amendment], the inflexibility "handcuffing the governor and the legislature... absolving them of responsibility for making tough fiscal decisions, leading to reduced investments in education and higher education at exactly the time that we need smart investments in these very areas if we are to succeed as a state."

Montgomery argued that the Blackwell proposal "may not be illegal, but it's the kissin' cousin of consumer fraud because it promises something that just cannot be delivered.''
Damn. "Kissin' cousing of consumer fraud"? Talk about a great slogan for the anti-amendment campaign! Will that fit on bumper stickers, we wonder?

Douglas went on to emphasize what Blackwell can't excape from - that a similar amendment enacted in Colorado in 1992 has been a disaster:
Don't believe it? Ask the governor of Colorado, long a champion of his state's strict constitutional limits on spending, limits very much like the Blackwell plan. Bill Owens now campaigns across the state urging voters to suspend the limits and allow the government to spend an additional $3 billion.

Owens cites essential road projects that have been postponed, and a University of Colorado that has suffered deep and debilitating spending reductions. Ohioans should note a critical difference. Colorado has a growing population. In other words, Ohio would likely have a worse time.
The comparisons to Colorado are important and inevitable and recently caught the attention of the Plain Dealer's Brent Larkin:
If you think education is important to a state's economic future, you'd better start looking for a new place to live.

That's because Ohio is only one election away from becoming perhaps the worst place in the na tion to educate the young - from kindergarten all the way through graduate school. And that election isn't the one they will hold next year for governor. It's the one apparently headed for the ballot this November.

[. . . ]

[The amendment] just might damage this state in ways that would be felt for decades. By almost any measure, Ohio is already a state headed in the wrong direction. With a little push from Blackwell, this would finish the job.

[. . . ]

In the last 15 years, some measures show Colorado's job growth rate plummeting from second in the nation to 49th. The state's Republican governor now wants to change the spending limits. And leading the charge to make that change is Colorado Rep. Brad Young, who describes himself as "a conservative Republican and proud of it."

Because Medicaid and other entitlements gobble up close to half of Ohio's budget, amending the Constitution to restrict spending might mean emptying the prisons, closing the parks and yanking kids off Head Start.

What it would do to education, especially higher education, is far worse. Because the Constitution requires Ohio to provide a "thorough and efficient" system of primary and secondary education, cuts to K-12 education spending would be deep and painful - but not mortal.

But higher education - the key to any state's economic prosperity in the 21st-century economy - has no such constitutional protection. So an amendment that restricts state spending would leave governors and legislators with no choice but to gut funding for higher education in ways that would devastate Ohio's two- and four-year state colleges and universities.

This state's pathetic support of higher education already has damaged its quality and priced potential students out of the marketplace. In considering the Blackwell plan, all Ohioans should heed these words from Cleveland State University President Michael Schwartz:

"It treats all of state government as an expenditure and none of it as an investment. So, fundamentally, what Mr. Blackwell is essentially saying is there shall be no public investment in the public's own future. That is beyond shortsighted. It's absolutely designed to propel the state into the past."
Larkin also addresses the strategy of offering a "Blackwell Lite" watered-down version of the amendment, but quickly discards it:
The other option is go to war with Blackwell on this issue. Try to stop him now - before it's too late.
Blackwell's bragging that his polling numbers are showing his proposal will win easily. We have no doubt that the polling numbers favor him. But for chrissakes, these are polling numbers from last fall!

This amendment has something in common with the Bush administration's Social Security: the more people get to know about it, the more they will hate it. We suspect Blackwell understands that, too. Nothing else could explain why he would suddenly hold a news conference, as he did last week, just to trot out data that's half a year old.

Sunday, May 08, 2005


Economic growth and radical conservatism

The wingnuts in the Statehouse have been telling us that cutting regulations, taxes and lawsuit liability is key to economic growth. Perhaps they have their head up their ass.

Alabama just won the "Competitiveness" award from Site Selection magazine. The selection was based on a "10-category index of business expansion activity based largely on new and expanded facilities tracked by Conway Data and Site Selection's proprietary New Plant database."

In trying to understand why Alabama did so well, the editors interviewed Neal Wade, Director of the Alabama Development Office. Here is what he said about what is important:
"What we keep hearing from CEOs and other business leaders looking to expand is, 'We can find a site anywhere, but it's finding a trainable work force with a strong work ethic that is the difficult part,' " says Wade.
By the way, despite the conservatives chant that Ohio is uncompetitive because of corporate taxes, collective bargaining, environmental regulations, etc., Ohio ranked 6th in the Site Magazine competition, trailing only Alabama, Michigan, Georgia, Kentucky and Indiana.


Coins are lousy investment - Part 1

The Blade has two new stories about Coingate here and here, raising important questions about the criminal side of the scandal.

From a public policy point of view, however, the Dispatch's Niquette, Craig, and Hallett team have one of the better stories that's been written here, along with a historical sidebar by Chainsaw.

But, as we noted before, team writing on Dispatch stories often leads to a watered-down product where the writers pierce the surface waters, but never collectively can go deep enough to hit the target.

The thing that the N-C-H team got close to but missed, in this case, is that the investment in rare coins, based soley upon their returns, was a lousy, lousy, lousy investment.

Why is this important? Because Jim Conrad's best defense so far has been to say, "Hey, Noe might have some problems, but we've made an impressive $15 million back on our investment of $50 million."

Conrad is taking advantage of N-C-H's financial ignorance. In reality, the $15 million gain from an investment, half of which stretches back to 1997 and the other half from 2001, represents a average annual return of roughly 4%-5%.

That is nothing to brag about and Conrad is trying to bullshit the press. This is a horrible investment and it's this kind of return could and should get you fired in at heartbeat at one of the state's pension funds.

And, it's not just the raw rate of return. This pathetic return is actually worse because it needs to be risk adjusted. In other words, riskier investments require higher returns to justify the risk in the first place. Why invest in coins for 5% when a AAA bond could have done the same thing.

Likewise, coins have tremendous exposure to what's known as "counter-party" risk. How safe are the people you must have transactions with. This can be any thing from sheer credit worthiness to criminal history. As events have shown, the coin market is full of counter-party risk.

There are several other risks this kind of investment involves that we won't go into here. However, once all the risks are taken into consideration, our guess is that the coins should have been supplying a return of 30-50% to be considered a sucess and to justify the kind of risk they are exposed to.

As we pointed out before, there exists tremendous risk in this kind of investment because the lack of a liquidity due to a small marketplace. There are only a handful of people in the world that trade in coins this rare, and this particular marketplace is full of asymetries and opacities.

It's no wonder that some experts interviewed for the Dispatch story had this comment, strictly on the merits of a coin-based investment:
It’s surprising the bureau would allow such leeway because the fund was created for coin investments, said J. Richard Dietrich, chairman of the accounting department at Ohio State University’s Fisher College of Business.

Investment experts say they know of no other major public entity that invests in rare coins, and some said they would not consider it because of the risk and questions about whether the market extends much beyond collectors.

"It doesn’t pass the smell test with me," said Michael J. Clowes, editorial director of Pensions & Investments, which covers news about pension funds.
The real laugher is the comment from BWC's chief investment guy:
James S. McLean, the bureau’s chief investment officer, suggested that critics might not fully understand coin investing and that other managers are envious of the coin funds’ profits.
Envious? We doubt there is an investment manager in Ohio that would trade places with McLean to stand in the shitpile he's help create.

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