Thursday, December 22, 2005


Will the cracks open up?

The PD's Sabrina Eaton thinks so:
Abramoff might finally explain his motive in providing luxury travel to Scotland, offers of a Super Bowl trip and help in getting tens of thousands of dollars in campaign cash for Ney and other congressmen. If federal prosecut-ors decided that amounted to bribery in exchange for legis lative favors, it could crack open one of the biggest congressional scandals in modern history and potentially end the careers of Ney and others who become ensnared, ethics watchdogs say.

. . .

Testimony from Abramoff and any transactional records he provides could be central to any case the federal government might build against Ney, said Melanie Sloan, a former federal prosecutor who heads Citizens for Responsibility and Ethics in Washington. Sloan, who has worked as an attorney for several Capitol Hill Democrats, says it's likely Ney will face bribery charges.


Noe: Another $2 million missing

Actually, he and his lawyers didn't say that exactly, but that appears to be one of the implications of the "facts" that came out in the newser his lawyers staged on Wednesday.

First, for us, it's hard to separate this news conference from the meeting his lawyers had with prosecutors several days ago. The fact that his mouthpieces felt the need to have this news conference suggests that the private meetings didn't go so well.

Anyway, as The Blade and others report, the thrust of Noe's attorneys' comments were, "Hey, what's the big deal, the coin fund still made an $11.8 million profit."

As far as we can tell, there was not a lot of dispute over whether a "profit" was made. Back in May, we posted at length about a previous lowering of the level of the "profits" from $15 million and had this from the Blade:
The bureau told The Blade for weeks that Mr. Noe had turned over $13.3 million in investment returns since 1998. But they acknowledged two weeks ago that Mr. Noe was allowed to reinvest $5.4 million of the state's share of the reported returns, expanding Ohio's investment in the Noe coin funds to $55.4 million.
So, we went from $15 million to $13.3 million, and now there seems to be another drop of $1.5 million in "profits" not to mention the fact that the $5.4 million is still unaccounted for.

As we noted in another May post, these returns - at best - were nothing to brag about and would have gotten any other investment manager fired. The point then, and now, is that on a risk-adjusted basis, whatever return Noe got sucked compared to investment returns if the money could have been invested in a venture similarly risky. Remember, also, that investment managers at the state's pension funds were expecting investment returns on the order of 10 percent a year.

Today's story also points to another place where the numbers still don't add up. This new story states:
According to the second coin-fund's general ledger, coin sales only generated a 3 percent return.
Obviously, we haven't been given access to the ledger, so we don't know what this is based on. But, based on the numbers that had been made public in April and May, both ourselves and the Blade staff put the returns in the 4-5 percent level for the first fund and 6-7 percent for the second fund.

In other words, the info in the ledger now suggests that the reported returns on the second fund were roughly double of what they really were. So, what numbers are we working with now? We wish the Blade reporters could be a little more forthcoming about these differences.

Either way, we don't see any way that this news conference ultimately helps Noe.

Wednesday, December 21, 2005


Ney sphinct-o-meter alert [Updated]

The needle just pinged in the red zone again:
Jack Abramoff, the Republican lobbyist under criminal investigation, has been discussing with prosecutors a deal that would grant him a reduced sentence in exchange for testimony against former political and business associates, people with detailed knowledge of the case say.

. . .

The case has shaken the Republican establishment, with the threat of testimony from Mr. Abramoff, once a ubiquitous and well-connected Republican star, sowing anxiety throughout the party ranks.

. . .

Lawyers for Mr. Volz, Mr. Ney and Mr. Rudy did not return calls for comment.repeatedly said he had done nothing improper.
[Update] We should have noted that this is a convenient time for Ney to be doing some fact finding.


And Springer says he's out . . . [Updated]

From WCPO:
The man who was Cincinnati mayor and is a current talk show king issued that statement Tuesday via the Democratic Party.

Over the past two years, Springer traveled throughout Ohio raising money and talking about running.

He now said he believes Ohio congressman Ted Strickland is the clear front-runner and is throwing his support behind Strickland.
Despite the comment above, there is no mention of this on the ODP homepage.

[Update] And Springer tells Hallett he's all about unity:
With Rep. Ted Strickland of Lisbon emerging as the front-runner, "what purpose does my running now serve?" Springer said in a statement that appeared to endorse Strickland.

"We have a candidate and a wonderful opportunity for unity," Springer said. "Let’s not blow it. Accordingly, I believe it would be irresponsible, divisive and a betrayal of principle for me to jump into the race at this late stage."

Tuesday, December 20, 2005


Portune in as ODP vice chair

Redfern today named Hamilton Co. Commission Todd Portune to be the apparent #2 leader in charge of the the big urban areas:
Portune has been given responsibility for big-county grassroots efforts and reaching out to elected officials to build the party in a state that played a major role in helping President George W. Bush win re-election last year.

. . .

“Todd Portune is the kind of young dynamic leader (who) has shown Democrats in Ohio how to win a county office in a “red” county by strong grass roots and outreach initiatives,” Redfern noted.

He said Portune’s strength in appealing to swing voters is imperative for Democrats to win in large counties.
. . .

While the Democrats have trouble winning seats in the General Assembly and statewide offices, he will concentrate on improving grassroots efforts in the larger counties and reaching out to locally elected officials.

. . .

At a press conference today in Columbus, Redfern said he hoped to open satellite offices for the Democratic party in Cleveland and Southwest Ohio.
[Update] The ODP's official release is here.


Reward time: $1,000 $1,025 $1,125 $1,225 bucks says put up or shut up on voter fraud!

[Update 1] - Thanks for bumping it up, Eric.

[Update 2] - Thanks BlueCollarBaby

[Update 3] - Thanks Wes F. in North Adams

[Update 4] - Thanks Pounder

[Update 5] - Thanks Scott

[Update 6] - Thanks Anonymous!

[Update 7] - Thanks Solon Democratic Club!

[Update 8] - Thanks to the redoubtable Sen. Marc Dann!

[Update 9] - Thanks to General Washington

(Hey - we're well past $1,000!! Can we make it $1,500?? A big "thank you" goes to some great bloggers and readers for making this possible. And - of course - additional contributions are always welcome.)

In 2004, with all of Bob Bennett's ballyhoo about the supposed Democratic voter fraud - said ballyhoo dutifully covered by the Statehouse Steno Pool - we offered a $100 reward to the first reporter to document organized voter fraud.

We had no takers. Of course, the $100 was a measely amount. Through the generous commitment of fellow travelers, we upped the reward to $500. Still no takers. Of course, that was no surprise to us since it was pretty obvious that THE WAS NO ORGANIZED VOTER FRAUD in 2004.

Well, given that authors of HB 3 have called the ghost of voter fraud past to buttress their arguments, we at the Hypothetically Speaking World Headquarters have decided to re-offer our $500 $1,000 reward and open the contest to anyone (not just reporters) who can document organized voter fraud.

And, maybe some of our friends will step forward to raise the reward even higher.

As before, there are some rules. Here they are:
  1. This must have occurred between Jan 1, 2002 and our deadline below.
  2. There must be substantial evidence that it was initiated in Ohio.
  3. There must be substantial evidence that it occurred in Ohio.
  4. This is about "organized fraud," not the work of some deranged loner or hustler. A few anecdotes won't make the cut.
  5. This is about "organized" fraud - that means it is rooted in a known organization and evidence exists that someone in a paid position of significant authority in the organization was aware of it. This excludes the work of lone front-line volunteers and temps. In other words, you can't collect the reward by reporting on the isolated work of a few idiots (read "Defiance crack heads").
  6. This is about fraud for political gain, not the schemes of con men, junkies or crack heads who worm their way into a job with some campaign or 527 or PAC for personal gain.
  7. You must report the evidence to the appropriate law enforcement officials, or document they are aware of it.
  8. The reward will be paid via $500 $1,000 in gift certificates to Trader Joe's.
  9. Any disputes will be settled by Columbus Dispatch columnist Ann Fisher (who doesn't have a clue that we've tapped her for this job).
  10. Deadline for submitting a claim for the reward is midnight Jan. 31, 2006.

Monday, December 19, 2005


Deal dance beginning?

Any theories on what's going on with Noe and prosecutors? Someone wanted everyone to know that meetings have started with the prosecution/investigation team, and the Blade dutiful reported on them here and here.

Aside from the question of who went public with the fact that the meeting was taken place, the obvious second question is, "What's the purpose of the meetings?" Given that this is apparently the first formal meeting of involving Noe's attorney, most of the attorneys we've checked with speculate that it was probably the second round of a poker hand where all the players are done with their initial posturing and everyone starts to place hard bets about who has what. To be sure, it doesn't take two hours to get some dates put into everyone's calendar. And, if Jon Richardson, Noe's lawyer, asked for the meeting, it's pretty certain that Richardson felt he had something significant to gain.

With the grand jury still hearing from witnesses, we have to think that public knowledge of such a meeting benefits prosecutors more than it does Noe. Time is probably starting to run short for those who are in a position to cut their deals, and seeing a Noe mouthpiece talking to prosecutors might be just enough to get others to take a deal and run, themselves.


BWC overreacting?

Warning - this is for investment wonks.

We've been meaning to post on this for a while, but in reaction to the Noe and MDL problems, we think BWC is about to make a big mistake that will cut it off from future investment opportunities. BWC needs to be making wise, responsible investment decisions and not swinging from one extreme to the other. But that's exactly what is getting ready to do in a few days.

This is not about being good stewards of assets BWC is intrusted with. This is about weak-need leadership and looking for the easy way out. Hey - if you don't want to be on the BWC board and your can't stomach the fiduciary responsibilities that come with it, the answer is simple. Resign.

This writer nails it:
So imagine my surprise when I looked through the nursery window at the Ohio Bureau of Workers’ Compensation, and found only one crib filled. It seems that smart reform was stillborn; while only dumb reform survived, staring intently at the glint off a rare coin.

In six days, OBWC will release enough sensitive information that it will never again receive access to a private equity fund. Not a venture capital fund, not a buyout fund, not a mezzanine fund and not a fund-of-funds. In fact, I’d be surprised if it even received much detailed information for the 68 funds in which it already has invested.

. . .

So if this is intentional strategy, then it is simply a case of political cowardice. Sure that’s bad, but imagine the alternative: OBWC leadership will release the information because it doesn’t know any better. This second scenario is significantly worse, because it means that incompetents will be investing beneficiary dollars for years to come.
BWC's problem, per se, wasn't that some of its managers made stupid investments. It's problem was that it didn't have a set of policies and procedures with sufficient independent checks to catch these stupid investments.

Investment operations, whether its PERS or BWC or even the one in BankOne, have to be structure to assume it's managers are making bad investments (ironically, the most import time to be looking over their shoulders is when the returns on the investments are good) and that they have a way of detecting these bad or crooked bets early.


Odd omission

The Blade's Joshua Boak sets out to document the scandal record, but besides those around the Noe affair, isn't the fundraising schemes involving Bob Ney other big story for Ohio?

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