(ohio) Workers' Comp ignored warning about brokers' fees

[salin]

Workers' Comp ignored warning about brokers' fees


Friday, August 26, 2005
T.C. Brown and Julie Carr Smyth
Plain Dealer Bureau

Columbus - Federal regulators warned the Ohio Bureau of Workers' Compensation three years ago that a trio of politically connected investment brokers were getting excessive fees, but that warning was ignored.

Former investment officers for the bureau hid the U.S. Securities and Exchange Commission warning from their superiors, bureau officials said.

When the SEC did not get an adequate response, it notified Ohio Attorney General Jim Petro of its concerns last year.

Petro rejected action based on information from the bureau that the SEC's concerns were unwarranted.

more: http://www.cleveland.com/news/plaindealer/index.ssf?/base/news/1125049231292520.xml&coll=2

Any wonder how these folks have lost more than 250 million of their investments including 13 million just to Noe? Any question, any longer that their decision to allow some "higher risk" investments for a "new (fund) managers program" had anything about earning higher returns for the tax payer funded bureau of workman's comp - appears more and more clear that this was viewed as a pork fund for donors to get rich on and a slush fund to funnell back money to the GOP.

[acmavm]

1. The republicans picked over Ohio like it was a dead carcass and they

were a bunch of maggots.

[Maeve]

2. Interesting, urp, analogy---I'd say like a flock of buzzards

We have quite a few of those in Ohio (offically, they are Turkey Vultures and they return to the town of Hinkley every March 15th)

[salin]

3. parasites

sucking up the public dollars - throwing a little bit back to the republican party and its candidates - and getting filthy rich in the process. Classic GOP. I would bet there are schemes like this in GOP statehouses under the banner of "privatization" across the country. Ohio, right now, is just giving us a tiny peek into how it plays out.

[salin]

4. Blade has this as well - hard hitting

http://toledoblade.com/apps/pbcs.dll/article?AID=/20050826/NEWS24/50826001

from the article:

The SEC first wrote to bureau chief investment officer Bob Cowman on Nov. 8, 2002, about the excessive fees of 6 cents per trade. On Feb. 7, 2003, the bureau’s new chief investment officer, Terry Gasper, wrote back to federal regulators that the fee level was appropriate.
Unsatisfied, an SEC lawyer wrote to Attorney General Petro on March 17, 2004, about the fees, which the federal agency said were too high for the services that the bureau was receiving from several firms.
‘Possible abuse’ cited


“This letter is to inform you of possible abuse of discretion by the Ohio Bureau of Workers’ Compensation in paying excessive brokerage commissions,” Diane Dallianis of the SEC wrote to Mr. Petro.

Chief Counsel Elizabeth T. Smith replied for Mr. Petro that the trading fees were acceptable


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Is Petro still running for Governor? I can't imagine he thinks he can survive all of his approval for the goings on at the BWC

[DoYouEverWonder]

5. More proof why private investing of Social Security

is a very bad idea. I've never once heard W or anyone else mention all those brokerage fees that you get hit with when you invest in the 'market'.

[salin]

6. more of an indication of why some WANT ss privatization

especially if they do it not with "private accounts" but in big funds that folks can chose from (bigger bulk value for high fees.)

[oscar111]

7. workers comp a rip-off of middle class?

pls sum up in one or two sentences, the bottom line for workers who get injured

is this WC thing a way to cap damage claims, thus very bad?

[Algorem]

8. Taft was present when golf was topic,Governor spoke at ethics sessions

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20050826/NEWS01/508260403/1056

Friday, August 26, 2005

COLUMBUS - Gov. Bob Taft made opening remarks at mandatory ethics seminars for state employees in 2003 and again this spring where a memo on free golf was either discussed or referred to in handouts.

Prosecutors used the May 2001 document by the Ohio Ethics Commission as the linchpin in their case against Taft, saying any golf he was treated to after that ruling should have been reported.

After his Aug. 18 conviction for ethics violations, Taft said he learned this summer of the commission's four-year-old memo, which included golf outings in the ban on accepting gifts worth at least $75.

"Not until too late, and I take responsibility for that," Taft said. "I didn't become aware of that, unfortunately, until earlier this summer."...

[Algorem]

9. Taft's search overlooked 8 more gifts,Ethics panel to look into new info

Friday, August 26, 2005

http://www.cleveland.com/news/plaindealer/index.ssf?/base/news/1125048621292520.xml&coll=2

-- One week after his conviction for failing to disclose gifts -- most of them free golf games -- Gov. Bob Taft announced that his self-described "exhaustive search" failed to turn up eight other items.

The admission quickly shifted the debate from Taft's ethics to his competence, and it came just hours after an unusual alliance debuted a new interactive Web site, MoveOnTaft.org, to try to force the governor from office 16 months before his term expires.

"It looks like the governor is going back to court," said Ohio Roundtable President David Zanotti, whose group is sponsoring the Web site with Ohio Citizen Action.

A Franklin County judge found Taft guilty of four charges for failing to report gifts from some of the state's most influential lobbyists and business leaders. One of his golf partners was tainted coin-dealer Tom Noe, who invested $50 million of Bureau of Workers' Compensation money and is accused of misappropriating millions...

[Algorem]

10. Opposing groups unite in effort to remove Taft- MoveOnTaft.org

http://toledoblade.com/apps/pbcs.dll/article?AID=/20050826/NEWS24/50826006/-1/NEWS

Article published Friday, August 26, 2005

Two Ohio political activist organizations have launched MoveonTaft.org, a Web effort to persuade lawmakers to impeach Gov. Bob Taft after his convictions on ethics charges last week.

COLUMBUS — A pair of grassroots activist organizations that rarely see eye to eye announced yesterday they have joined forces in a campaign to drive Gov. Bob Taft from office because of his conviction on ethics violations.

Two political polar opposites — the often-conservative Ohio Roundtable and liberal-leaning Ohio Citizen Action — yesterday launched MoveonTaft.org, the backbone of an effort to pressure lawmakers into removing the embattled governor, who failed to report dozens of golf outings, meals, and sports tickets from businessmen and lobbyists on his state-mandated ethics forms.

Mr. Taft, already burdened with calls for his resignation from the left and right, yesterday acknowledged that he failed to report eight additional gifts valued above $75 he received between 1999 and 2004 as required by state law. The list of undisclosed gifts is being forwarded to the Ohio Ethics Commission, which recently completed a two-month investigation of the governor’s ethical violations.

Even before yesterday’s admission by the governor’s office, David Zanotti, the president of Ohio Roundtable, said during a news conference announcing the MoveonTaft.org campaign that Ohioans overwhelmingly believe the governor should step aside in the aftermath of his criminal convictions...

[salin]

11. Coin dealer headed to grand jury

Coin dealer headed to grand jury

By Jonathan Ellis
08/26/2005

An Evergreen rare coin dealer who is linked to a massive political scandal in Ohio could be standing before a grand jury in the next few weeks.

Authorities confirmed Monday that they are preparing to present evidence to a grand jury in a case involving Michael Storeim, who is being investigated in the disappearance of two rare coins that were paid for by the Ohio Bureau of Workers' Compensation.

snip

Nelson said the case will be ready for the grand jury after he receives more information from Ohio and federal investigators. In addition, authorities are waiting for a report from international police investigators in Australia, where Storeim went shortly after reporting the coins missing in October 2003. Storeim reported that the coins weren't inside a U.S. Postal Service box that was delivered to his business.

Noe, Storeim's employer at the time, never reported the missing coins to Ohio authorities. Noe and Storeim have since parted ways, with Storeim accusing Noe of taking $400,000 of his property after another employee accused Storeim of skimming profits from the company.

more: http://www.canyoncourier.com/story_display.php?sid=1006

[Algorem]

12. Petro's inaction on fees surprised SEC

http://www.cleveland.com/news/plaindealer/index.ssf?/base/news/112513558337090.xml&coll=2

Saturday, August 27, 2005
-- Attorney General Jim Petro's decision not to investigate excessive broker commissions unearthed at the Ohio Bureau of Workers' Compensation by federal regulators came as a surprise to the U.S. Securities and Exchange Commission, a lawyer on the case said Friday.

"The SEC can't tell the attorney general what to do, but certainly we were disappointed by the response and the inaction," said Diane Dallianis, an attorney-adviser in the SEC's Chicago regional office. "Why wouldn't they care when constituents' money is at stake?"

The SEC first identified the exor bitant fees paid to three politically connected firms -- Great Lakes Capital Partners, U.S. Dis count Brokerage and Mantor Watson Securities -- in a 2002 examination.

It was only after a fruitless 16-month exchange with members of the bureau's investment staff that Dallianis sought to involve Petro, letters show...