Ohio Workers’ Compensation Scandal Pulls in Governor

September 5, 2005

An ongoing investigation into investment mismanagement claims within the Ohio Workers’ Compensation Bureau has led to the charge of Republican Gov. Bob Taft with violating state ethics laws by failing to report gifts such as dinners and golf outings on his annual financial disclosure reports.

Although the charges are all misdemeanors that resulted in a $4,000 fine for the governor, they are connected to a larger scandal involving Thomas Noe, a friend of the governor’s, who has been accused by state officials of mishandling and possibly stealing millions of dollars from the state workers’ comp fund.

The controversy began in April when it was uncovered that Noe invested $50 million of the comp fund’s money in rare coins and memorabilia. Noe’s attorneys have since stated that as much as $13 million of the original amount is unaccounted for. In June, investigators discovered that the bureau had lost an additional $215 million through MDL Capital Management of Pittsburgh.

Currently, a task force involving the Justice Department, the FBI, state police, the state ethics commission and prosecutors from two counties are investigating and have been granted $645,000 in additional funds to continue the investigation.

In the wake of the investigation, Ohio Insurance Director Ann Womer Benjamin announced the creation of a fraud and enforcement division out of the department’s Office of Investigative and Licensing Services Division.

The scandal has larger implications for the Republican governor, who was instrumental in getting President Bush elected and faces reelection himself next year. Columbus Mayor Michael Coleman, who is seeking the Democratic nomination for governor in 2006, said the charges are part of an Ohio “culture of corruption.”

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Insurance Journal West September 5, 2005
September 5, 2005
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