JobsOhio: Boon or bust for Kasich?
So, the Ohio Ethics Commission said this week it has no reason to investigate Gov. John Kasich’s ethical relationship with a company that received more than $500,000 in state tax credits.
End of story, right?
Well, maybe not.
It is a story that involves JobsOhio, the private non-profit economic development firm created by Kasich soon after he became governor to replace the public Ohio Department of Development.
It is a story latched onto by Ed FitzGerald, the Democratic candidate who will take on Kasich next year when the Republican governor runs for a second term. FitzGerald trails considerably in the polling; and is at a huge financial disadvantage in campaign dollars compared to a governor who has $4.4 million in campaign funds in the bank.
FitzGerald needs a horse to ride; and JobsOhio is a convenient one.
Here are the facts in the case where the chairman and executive director of the Ohio Ethics Commission said there was no reason to investigate Kasich.
After Kasich left his seat in the U.S. House in 2001 he joined the board of Worthington Industries, a central Ohio steel processor, and sold his stock in the company and severed ties with it after being elected governor over incumbent Democrat Ted Strickland in November 2010.
But, according to an Associated Press investigation, Kasich continued to receive deferred compensation for serving on the Worthington in 2011 and 2012, while he was governor.
According to AP, the Ohio Tax Credit Authority began approving a series of job-creation tax credits for two subsidiaries of Worthington Industries. JobsOhio recommended the tax credit to the Ohio Tax Credit Authority. “
FitzGerald ran to the Ohio Ethics Commission, amending an earlier complaint about alleged conflicts of interest involving JobsOhio and Kasich.
Kasich’s lawyer, D. Michael Grodhaus sent the Ohio Ethics Commission a letter outlining Kasich’s relationship with Worthington Industries saying Kasich received the deferred payments because that was agreed on in 2008.
“It has been suggested that because two Worthington-affiliated companies received certain tax credits from a state board during his tenure as governor he has a conflict of interest,’’ Grodhaus wrote. “Nothing could be further from the truth.”
JobsOhio has been a source of controversy ever since Kasich created it. His argument that JobsOhio, made up of business people with experience in job creation, would be more efficient and more successful than the bloated bureaucracy the Ohio Department of Development had become.
But when State Auditor Dave Yost, a Republican, tried to conduct an audit of JobsOhio, the Kasich administration balked and the Republican legislature passed a legislation saying that auditing JobsOhio was not within Yost’s purview.
Last month, the Dayton Daily News reported that public records show six of nine members of the JobsOhio board of directors have direct financial ties to companies that have received tax credits or other state assistance since Kasich became governor. A spokeswoman for JobsOhio said the assistance came before JobsOhio began operating in July 2011.
Still, it has been fodder for the Democratic grist mills. The Ohio Democratic Party staged a series of press conferences around the state last week with prominent Democrats decrying potential conflicts of interest in JobsOhio. Here in Cincinnati, it was State Rep. Denise Driehaus of Clifton and State Rep. Connie Pillich of Montgomery, who is running for state treasurer in 20114, taking the lead on the issue.
Responding to the Dayton Daily News article, Pillich said “it’s a symptom of a larger problem. It reeks of secrecy, self-dealing and everything bad government can be.”
Kasich has brushed aside the criticism, calling it “purely political.”
On the matter of JobsOhio, Kasich said on Thursday “the fact of the matter is that whether it is friend or foe, if they are going to create jobs and the incentives necessary to encourage them are within the bounds of reason and reflect a proper return on investment, we want to do it.”
This is August 2013. The election for Ohio governor is 15 months away.
But FitzGerald and the Ohio Democrats are going to try to keep this JobsOhio ball in the air all the way to the finish line.
Cue the 30-second TV ads about the Republican governor who created an out-of-control agency that rewards his buddies.