Ohio investment scandal reaching beyond workers' comp [Better keep your eye on STRS]

JULIE CARR SMITH
Associated Press

June 14, 2006

COLUMBUS, Ohio - A sweeping investigation into bribery for investment contracts at the state insurance fund for injured workers has returned authorities to familiar territory: Ohio's pension funds and the state treasury.

The list of the top 10 to 15 brokers doing business with the Ohio Bureau of Workers' Compensation contain many of the same firms that handle investments for state pension funds and the Ohio Treasurer's Office, Franklin County Prosecutor Ron O'Brien said Wednesday.

He confirmed the state investment investigation has expanded to the Ohio's five public pension funds, as first reported in The Columbus Dispatch.

"It would not be unexpected to see many of the same names arising (in our investigation)," he said. "However, whether there is anything illegal is as yet unclear."

In April, a board member of the State Teachers Retirement System was convicted of ethics violations for taking gifts from clients of the pension fund while she oversaw their contracts. In August, the former chairman of the Ohio Police and Fire Pension Board pleaded guilty to three misdemeanor ethics violations over receiving and improperly reporting similar gifts.

In 2004, a trio of allies to then-Ohio Treasurer Joseph Deters were convicted in a pay-to-play scandal at that office in which preferential treatment of brokers was linked to campaign giving.

O'Brien's office is part of the large law enforcement task force investigating a state investment scandal that began with rare-coin dealer Tom Noe's contracts with the workers' comp agency. He is accused of stealing more than $1 million from the coin fund, and the former executive in charge of investments at the workers' comp agency says Noe bribed him with money to help secure the coin contract.

Terrence Gasper, former chief financial officer, pleaded guilty in state and federal court to accepting stays at a Florida condo, money for his son's tuition and other gifts in exchange for doling out investment business.

He was the first bureau official convicted in a yearlong political scandal in Ohio that has shaken the GOP-dominated government and given Democrats hope of regaining some seats, including governor. Prosecutors say more charges are expected this month.