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Re: Ohio Officials Now Believe More Than $10 Million in Rare Coins Is Missing
Article published July 10, 2005
Ex-state aides use old ties to make, raise cash
Lobbyists steered funds to Bush while they enriched themselves
By JAMES DREW
and STEVE EDER
BLADE STAFF WRITERS
COLUMBUS - From the governor's office to the Ohio Republican Party, high-ranking staff members have traded their official titles for personal riches and the influence that comes with helping select a U.S. president.
A select group of key players in state government have used the same network of connections they established in their official positions to make money for themselves and raise loads of cash for their party and President Bush, a Blade investigation shows.
The payoffs come in the form of lucrative state and federal lobbying deals, political consulting pacts, and having the pull to convince campaign contributors to support their candidates.
With their political mentors still holding all of the state's top offices, the newly minted lobbyists can guarantee that they have the ears of key decision makers in Columbus and access to offices they used to help run.
To political opponents, the success of the governor's former staff in profiting off the network they established serving the state is symptomatic of dominance of the Ohio GOP and the failures of one-party rule.
"It's a huge problem," said state Sen. Marc Dann, a Democrat from suburban Youngstown. "It is a natural outgrowth of the pay-to-play environment."
As long as officials comply with regulations on lobbying and consulting, Republicans contend that there should be no problem with high-ranking state officials taking advantage of opportunities as they arise.
"By and large, our party is one of good government, ethical people, and following the rules," said Mark Weaver, a Republican strategist. "There are occasional exceptions, and we've got a far better record than when the Democrats ran the state in the 1980s."
Some observers say the concerns with high-ranking government officials morphing into lobbyists extend far beyond Ohio to the nation's capital. Critics believe too many public servants on all levels of government are looking ahead to their next jobs by making policy decisions that are designed to curry favor with potential clients.
"It is certainly an issue in Congress," said Mary Boyle, a spokesman for Common Cause, a nonprofit government watchdog organization based in Washington. "Never have so many members of Congress been leaving elected office and becoming lobbyists.
"It kind of assumes that people are entitled to cash in on the government service. And public service should be a reward itself," Ms. Boyle said.
Life after politics
For Gov. Bob Taft's closest aides, the same connections that served as the backbone of their official careers in his administration became the lifeblood of their political afterlives once they began departing Ohio's highest office in 2003.
Mr. Taft's former chief of staff, Brian Hicks, and his assistant, Cherie Carroll, had plans in place to quickly cash in on the ties they had established in more than a decade working for the state's most influential elected official, documents released by the governor's office last week show.
Mr. Hicks' firm, Hicks Partners, has raked in more than $700,000 in state and federal lobbying deals and political consulting fees since the business opened two years ago, shortly after he left the governor's office.
Mr. Hicks did not return calls seeking comment for this story.
After nine years with the Ohio Republican Party, Tom Whatman stepped down as executive director and opened his own lobbying and consulting firms in 2002. Since then, his firms - Strategic Public Partners and Whatman & Associates - have collected about $500,000 as lobbyists in Washington and worked on a number of issue advocacy campaigns.
Mr. Whatman, who considers Ohio GOP Chairman Bob Bennett his mentor, was considered a Bush Pioneer because he raised at least $100,000 for the President's re-election campaign. Mr. Bennett was also a Bush Pioneer.
Dwayne Sattler, a former aide to Republican U.S. Sen. Mike DeWine, became a lobbyist after leaving public service. Between 1999 and 2003, Mr. Sattler worked for Nicholas Wise, another former DeWine staffer, helping to collect more than $2 million in lobbying fees during those years.
In 2004, Mr. Sattler started his own firm, Network Government Relations, which collected about $135,000 last year lobbying on the federal level for clients including the Ohio Board of Regents - whose chairman was Tom Noe, the former Toledo-area coin dealer now facing multiple state and federal investigations.
Mr. Sattler did not return calls seeking comment for this story.
Mr. Noe, also a Bush Pioneer, convinced the Ohio Bureau of Workers' Compensation to invest $50 million in a rare-coin fund. In May, his attorneys told the state that up to $13 million was missing from the fund.
The coin dealer, who was the northwest Ohio organizer for the Bush-Cheney campaign, is closely connected to Mr. Hicks, Mr. Whatman, and Mr. Sattler.
A governor's praise
As Mr. Hicks announced his plan to leave Mr. Taft's administration, he received a glowing recommendation from his longtime boss. Mr. Hicks was the architect of three of Mr. Taft's statewide campaigns.
"Brian has been an extraordinary chief of staff, astute, loyal, and exceptionally hard-working," Mr. Taft said in a written statement at the time. "Above all, he has assembled and ably led a very strong team in the governor's office."
Before he even set foot out of the governor's office, Mr. Hicks already had his first consulting gig - leading Mr. Taft's campaign to sell voters on the Third Frontier Project ballot issue, a $1.6 billion plan to stimulate high-tech jobs. While Hicks Partners received $203,625 to run the unsuccessful campaign, it also prompted ethical questions about Mr. Hicks running the campaign so soon after leaving the governor's office.
"It's reasonable to be still connected to elections and government. The problem becomes when they trade in on their relationships with the public officials still in office," said Catherine Turcer, legislative director for Ohio Citizen Action. "We have created the revolving door. You have to take a year off before you directly lobby, which is good.
"The problem is you can still consult. Is consulting lobbying by a different name?" Ms. Turcer asked.
Mr. Hicks also quickly lined up jobs working for President Bush's re-election campaign and state Supreme Court races, as well as consulting for the Republican Governors Association.
His new firm, Hicks Partners, was in business.
And Mr. Weaver, the Republican strategist, said the business' success had more to do with Mr. Hicks' smarts than his connections.
"Brian Hicks has a reputation of being one of the smartest people in and out of government," Mr. Weaver said. "His intelligence and hard work have paid off for him. I've seen it up close. I know how good he can be. And his clients do too."
On his firm's Web site, Mr. Hicks bills himself as "the most powerful unelected official in Ohio." His company boasts "an extensive level network of contacts in Ohio, Washington, D.C., and throughout the country."
"Hicks Partners will ensure your voice is heard at the highest levels of government," the Web site says.
The fact that Hicks Partners can guarantee its clients that it has close ties to the most influential people in politics is precisely the problem with the system, Senator Dann said.
"What's sad is that these kids think it's their entitlement to cash in on this," Mr. Dann said.
"You have to blame the elected officials that are in charge," he said. "If it wasn't clear that Brian Hicks didn't have influence over Bob Taft, he wouldn't have made a dime.
Since its inception in 2003, Hicks Partners has attracted a who's who of the Taft administration, beginning with the governor's former chief of staff:
<LI>Ms. Carroll, the firm's vice president for government relations, served as Mr. Hicks' assistant in the governor's office.
<LI>Beverly Martin, senior vice president, served as deputy chief of staff to Governor Taft for five years. She joined the firm in February.
<LI>Ann Husted, vice president for public relations, joined Hicks Partners last fall after serving as communications director for Mr. Taft.
<LI>Jessica "Scottie" May, vice president for finance, raised $25 million for Governor Taft's campaigns.
Today, a sampling of Hicks Partners' client list names more than 25 business and political organizations, including National City, SBC, Republican Governors Association, and Bush-Cheney '04.
Mr. Hicks' relationship with the Bush administration dates to its earliest days - during the Florida recount after the 2000 election. Mr. Hicks and other aides, who learned about elections law while working in Ohio's secretary of state's office under Mr. Taft in the 1990s, headed to Florida to help with the recount.
Mr. Hicks remained in close contact with the Bush administration, regularly receiving e-mails from David Rachelson, the White House's former associate political director in Ohio, about administration appearances in Ohio. The same e-mails were often sent to Ms. Carroll and Mr. Whatman.
On Feb. 27, 2003, White House aide Collister "Coddy" Johnson sent them an e-mail about a conference call on the 2004 election cycle.
A month later, Mr. Johnson forwarded them an analysis from a University of Maryland professor that showed counties in Ohio where the Bush campaign in 2004 could pick up more votes than in 2000.
The analysis found that Lucas County was among the counties where the Bush campaign could pick up the most votes in the 2004 election.
Mr. Noe was chairman of the Bush-Cheney campaign in northwest Ohio. Mr. Bush received 87,160 votes in Lucas County last year - 13,818 more than in 2000.
Mr. Noe cited turnout efforts throughout northwest Ohio as a major factor for Mr. Bush carrying Ohio over John Kerry.
On June 2, 2003, David Payne, who is director of appointments to boards and commissions for Mr. Taft, wrote an e-mail to Ms. Carroll: "Brian said that I should work with you to schedule a time for me to sit down with him to discuss Bush/Taft chairs."
On July 15, 2003, Mr. Taft announced that Mr. Hicks would resign as chief of staff at the end of the month.
A week after the announcement, Mr. Hicks - still serving on the governor's staff - was in Washington to visit Ohio congressmen, U.S. Sen. George Voinovich, and Ken Mehlman, who was Mr. Bush's campaign manager in the 2004 race.
Earlier in 2003, an Ohio political strategy session with Mr. Mehlman, Mr. Johnson, and possibly Karl Rove, the architect of Mr. Bush's campaigns, was on the agenda for Ms. Carroll and Mr. Noe after the White House's celebration of Ohio State University's national championship football team.
Gaining GOP clients
In August, 2003, Mr. Hicks formed his consulting and lobbying firm, Hicks Partners, with offices in Columbus and Washington, and his earliest clients included Bush-Cheney '04, the Republican Governors Association, and the Republican National Committee.
The fund-raising included an October, 2003, lunch event in Columbus that raised $1.4 million for the Bush campaign - an event that is now being investigated by the U.S. attorney's office and the FBI.
Federal investigators are probing whether Mr. Noe violated federal campaign laws and are focusing on donations made at the fund-raiser, which Mr. Noe attended.
In May, Mr. Hicks told The Blade that Mr. Noe was among 35 to 40 table hosts at the fund-raiser. Mr. Whatman also told The Blade that he hosted a table at the event.
"Name a Republican in the state and my guess is they were at the event and a lot were hosts for a table," he said.
Hosts were in charge of filling tables of 10 - with donors each giving $2,000. Table hosts vying to be Bush "Pioneers" or "Rangers," like Mr. Noe and Mr. Whatman, could add money they collected for the President at the event to their fund-raising totals.
"People presented checks from their accounts and went through the appropriate security measures," Mr. Hicks told The Blade in a past interview. "If you look at the FEC and other Web sites, everyone is listed there. It is not hidden who donated. The vast majority of people contributed on the 28th, the 29th, and the 30th."
Mr. Hicks said there were fewer contributors from Cincinnati at the Columbus event because Mercer Reynolds, a businessman who was a Bush "Pioneer" in 2000, had held a fund-raiser about three weeks before in Cincinnati.
"Mercer cleaned up some southern money and then we did a big statewide pull. We went to a number of the President's supporters in Cleveland and asked them to host tables and support the event," Mr. Hicks said.
'Banner political year'
On Nov. 3, 2004, one day after the November, 2004, election, Mr. Hicks released a statement on how his firm had "notched a banner political year."
"We had a great year because we had great clients,'' Mr. Hicks said. "I am delighted that we batted a thousand at the ballot box and were involved in raising more than $9 million for our clients."
Mr. Hicks noted that Mr. Bush had carried Ohio with 51 percent of the vote, Judge Judith Ann Lanzinger - a Toledo area appeals court judge - had won her Supreme Court race, along with Terrence O'Donnell, and the Republican Governors Association had maintained its six-seat majority status.
Mr. Noe was Judge Lanzinger's campaign manager.
A Blade computer analysis shows that more than one-third of Mr. Hicks' lobbying clients were major contributors to the Republican Governors Association, for which he raised money from November, 2003, to November, 2004. At the helm during that year: his former boss, Governor Taft.
Of the $355,580 contributed to the association by Mr. Hicks' clients, $215,820 came from ACS State and Local Solutions and $34,065 from Imagitas.
The association, and its counterpart, the Democratic Governors Association, have "527" committees that are named after a section of the Internal Revenue Service Code. Unlike candidate funds, political action committees, and party accounts, "527s" can receive unlimited contributions under federal campaign-finance laws.
Mr. Hicks' firm asked other Columbus lobbyists if their clients would contribute to the Republican Governors Association.
Lobbyist Rich Hillis said Ms. May, vice president of finance for Hicks Partners who raised money for Mr. Taft's two gubernatorial campaigns, usually would talk to him about the GOP governors' group. Ms. May received about $30,000 directly from the association in 2003.
Clients of Mr. Hillis, who is considered a close ally of Mr. Hicks, and lobbying partner Brooke Cheney, contributed $343,630 to the governors' association in the year that Mr. Taft was RGA chairman.
The largest givers were $152,500 from Pfizer Inc., $77,510 from Goldman, Sachs & Co., and $46,195 from R.J. Reynolds Tobacco Co.
"They do it through their national operations," Mr. Hillis said. "I encourage clients to participate in the political process."
Mr. Hillis said the Republican Governors Association is a "good place to get some face time and recognition. I'm a firm believer that the system works well as long as it's in daylight."
Close to Taft staff
During a May 27 news conference on the unfolding Tom Noe rare-coin scandal, Mr. Taft acknowledged that Mr. Noe had also raised money for the GOP governors' group.
The former Toledo-area coin dealer - who has sold two homes in northwest Ohio and is now reportedly living in Florida - had a close relationship with several members of Mr. Taft's staff.
From fall, 2002, until last year, Mr. Noe held what his friends called the "Noe Supper Club" in the wood-paneled private boardroom at Morton's steakhouse blocks from the Statehouse in Columbus, where Mr. Noe would pick up the tab. There were about eight or nine "Noe Supper Club" parties, which featured expensive steaks, flowing drinks, and large tips.
One supper club regular, who spoke on the condition of anonymity, said participants included Mr. Sattler and Ms. Carroll; two former Taft aides who became lobbyists, Doug Moormann and H. Douglas Talbott; Beverly Martin, the governor's deputy chief of staff, who joined Mr. Hicks' lobbying and consulting firm, and Jim Mermis, the former head of the state Bureau of Employment Services, who is now a lobbyist.
"Occasionally, Sam and Maggie Thurber were there, Bernie [Noe] once in a while," the source said.
In May, the Ohio inspector general asked for e-mails, phone records, and personnel files of four current and former employees of Governor Taft's office, including Mr. Hicks and Ms. Carroll, for an ongoing investigation.
The Blade reported in May that Mr. Hicks twice rented a $1.3 million Florida Keys home owned by Mr. Noe for family vacations at below-market rates.
Mr. Hicks and Ms. Carroll were accused in 2004 of violating the state's lobbying law when the Taft administration picked one of their lobbying clients to administer a prescription drug discount program.
The state Ethics Commission found there was "insufficient evidence" that Mr. Hicks and Ms. Carroll violated the revolving door law that prohibited them from lobbying the governor's office for one year.
Mr. Taft is also under investigation by the Ohio Ethics Commission for errors and omissions on his financial disclosure forms pertaining to a number of golf outings that went unreported. Mr. Noe's attorney has confirmed that he played golf with the governor at least twice at Toledo's exclusive Inverness Club where Mr. Noe was a member, but he would not say who paid for the outings.
After leaving his post as executive director of the Ohio Republican Party, Mr. Whatman said he had a choice between accepting a position with the Republican National Committee or starting his own lobbying and consulting firms.
He chose the more lucrative option, launching Strategic Public Partners and Whatman & Associates.
"After nine years at the party, I was ready to do something else. The idea of working for myself was always my goal," he said in an interview last week.
In growing his business, Mr. Whatman tapped in to Ohio GOP Chairman Bob Bennett, using him as a consultant to his firm. They worked together with the state party for nine years.
In four years, Mr. Whatman's Washington client list has brought in about $500,000 for Whatman & Associates, U.S. Senate lobbying records show.
His clients include the Cincinnati Museum Center, Crown Equipment Co., and the Federal Home Loan Bank of Cincinnati.
In Ohio, Darrin Klinger, vice president for public affairs for Whatman & Associates, is a registered lobbyist in Columbus with GrafTech International, HDR Inc., and Ohio Warehouse Association as his clients.
Mr. Whatman's firm was closely aligned with the Bush campaign. He was a Bush "Pioneer" for raising at least $100,000 for the President's re-election campaign, and Mr. Klinger took a leave of absence to work as the executive director of Mr. Bush's Ohio campaign.
Mr. Klinger was listed in an e-mail about the Feb. 24, 2003, Ohio political strategy session at the White House that featured high-ranking political advisers of the President, including Ken Mehlman and possibly Karl Rove, to which Mr. Noe was invited.
Mr. Whatman said he often ran into Mr. Noe on Capitol Hill. He said he looked into partnering with Mr. Noe on a business venture and recruited the coin dealer to participate in a political program.
The business venture involved NorthPoint Communications, which was trying to work with communications firms to build a nationwide alternative to cable for broadband and satellite communications.
"I recruited Tom to be part of that enterprise, but it was a good idea that never went anywhere," Mr. Whatman said.
Politically, Mr. Whatman said he and aides to former House Speaker Larry Householder (R., Glenford), now the Perry County auditor, created an advocacy group called YourOhio.org that was designed to play a big role in the 2006 statewide election. "We recruited Tom to be one of the board members," Mr. Whatman said.
Mr. Whatman said the other trustees were Dennis Wojtanowski, a lobbyist and former high-ranking aide to Democratic Gov. Richard Celeste, and Jackie Woods, former president of SBC Ameritech Ohio.
"We just never figured out how it was going to work," he said.
Last year, a federal grand jury subpoenaed companies that did campaign work for Mr. Householder, who had planned to run for statewide office in 2006.
Mr. Whatman was subpoenaed for information about Informed Citizens of Ohio, a campaign fund formed by Mr. Householder that raised and spent money to elect Republican candidates for the state Supreme Court in 2002.
Federal authorities began an investigation, in part based on an anonymous nine-page memo that was leaked to investigators. The memo accused the House Republican campaign fund of overcharging vendors, with the money being skimmed to Mr. Householder and top campaign aides.
The memo made no reference to Mr. Whatman. Mr. Householder and his aides denied any wrongdoing.
"People always assume [consulting] is much more glamorous and lucrative than it really is," he said.
Business with regents
A political upstart who earned his stripes as an aide to Mr. DeWine, Dwayne Sattler knew where to go to make money after he left public service.
In 1999, he became a lobbyist with Wise & Associates and began doing work on Capitol Hill for organizations such as the Ohio Department of Job and Family Services and the Greater Columbus Chamber of Commerce.
In 2003, Mr. Sattler directed business from the Ohio Board of Regents to the firm. Mr. Noe was chairman of the board in February, 2003, when Wise & Associates registered as a lobbyist for the regents.
A regents spokesman yesterday could not say whether Mr. Noe was instrumental in helping Mr. Sattler land that contract.
But U.S. Senate records show that Wise & Associates registered as a lobbyist for the regents on Feb. 25, 2003 - while Mr. Noe was in Washington with Mr. Sattler on business.
Mr. Noe was appointed by former Gov. George Voinovich to serve on the Ohio Board of Regents and reappointed by Gov. Bob Taft.
In e-mails released last week by the governor's office, Mr. Noe asked Ms. Carroll to request that the White House allow "the person he will have with him in DC" to attend President Bush's celebration with Ohio State's football team on Feb. 24, 2003.
Ms. Carroll also requested a White House tour for herself, along with Mr. Noe and Mr. Sattler. It's unclear whether Mr. Noe or Mr. Sattler took part in the events.
The next year, the Ohio Board of Regents signed on with Mr. Sattler's new business, Network Government Relations. Mr. Sattler's new business quickly gained contracts to lobby for firms and organizations including the Regents, EmployOn, Columbus State Community College, the Ohio Supercomputing Center, and TolTest.
In July, 2002, Mr. Sattler began to receive $6,500 monthly payments from a group that oversees job-training programs in the Columbus area, the Central Ohio Workforce Investment Corp.
Last year, he resigned as the group's interim director after Franklin County commissioners learned that Mr. Sattler had worked as a lobbyist for two firms that had received contracts from the agency: Euclid's EmployOn and Columbus State Community College.
The emails released last week by Governor Taft's office also document the relationship between Mr. Sattler and the governor's office. In one e-mail, Ms. Carroll describes Mr. Sattler as a "good friend of mine."
Mr. Sattler was such a good friend that in December, 2002, Ms. Carroll invited him to join her and the governor's communications director, Ann Husted, for a lunch meeting to discuss the "Third Frontier and how it is connected with the Board of Regents."
In a May, 2003, letter to Ms. Carroll and Mr. Hicks, Mr. Sattler drafted a letter on behalf of the Ohio Board of Regents lobbying Congress for $7 million in funding from the Third Frontier Network.
"Brian, as I know you have heard, the effort is very different this year," he wrote. "We are working both the Congress as well as the Administration. There will be no question of commitment or follow through this year."
GOP: It's not unusual
Ohio Republican leaders said last week there is nothing unusual about high-ranking state officials parlaying their government experience into lucrative lobbying and consulting careers.
Bob Bennett, chairman of the Ohio Republican Party, said through a spokesman: "Just about every Democrat lobbyist in Ohio worked at one time for the Ohio Democratic Party or some elected Democrat in state or national government."
Jason Mauk, a spokesman for the Ohio GOP, said the people who make the transition from the public sector to the private sector "have a unique set of skills related to their profession."
He said members of both political parties have a history of becoming lobbyists or consultants after leaving public jobs and it is "not a conspiracy."
Herb Asher, an Ohio State University political analyst, argues that the state needs more safeguards to hinder people who see their public careers as stepping stones to wealth.
He said the state's limitations that forbid an official from lobbying their governmental agency for one year after their departure are not especially meaningful because "there is a giant loophole."
"You can be a consultant," he said. "A lot of people think that's a distinction without a difference."
The system, he said, works to create incentives for "questionable behavior" among people leaving state government as former officials learn how the law work.
"You see many people who have done very, very, very well - people who had worked formerly in the legislature, formerly in the executive branch - people who are at a young age approaching millionaire status."
He said stricter revolving door policies might have a positive effect.
"It would simply make it more difficult for that person who sees public service as a path to fortune and riches," he said.
Staff writers Mike Wilkinson and Joshua Boak contributed to this report.
Contact James Drew at: email@example.com or 614-221-0496.