Betty had her fingers in the PIE long before Noe!
Montgomery tied to donor scandal before Noe
Toledo Blade, November 4, 2006
By JAMES DREW
BLADE COLUMBUS BUREAU CHIEF
COLUMBUS -- In March, 1996, Republican Attorney General Betty Montgomery used a hand-written note to thank Larry E. Rogers for pouring $35,000 into her campaign — the day before a new state law took effect that limited contributions to $2,500.
“Larry, if you don’t mind, on occasion I’ll try to stop by [NOT to ask for money] to update you on the issues we’re working on and to get your advice,’’ Ms. Montgomery wrote to Rogers, the president and chief executive of PIE Mutual Insurance Co.
Less than two years later, Ms. Montgomery and other GOP elected officials that Rogers showered with campaign contributions shunned him.
In February, 1998, a special counsel appointed by Ms. Montgomery convinced a judge to order the liquidation of PIE because its liabilities exceeded its assets by $240 million.
A month after the GOP swept all statewide executive races in November, 1998, including Ms. Montgomery’s re-election as attorney general, a grand jury indicted Rogers for bribery, ethics violations, and insurance-code violations.
“Larry, if you don’t mind, on occasion I’ll try to stop by [NOT to ask for money] to update you on the issues we’re working on and to get your advice,’’ Ms. Montgomery wrote to Rogers, the president and chief executive of PIE Mutual Insurance Co.
Less than two years later, Ms. Montgomery and other GOP elected officials that Rogers showered with campaign contributions shunned him.
In February, 1998, a special counsel appointed by Ms. Montgomery convinced a judge to order the liquidation of PIE because its liabilities exceeded its assets by $240 million.
A month after the GOP swept all statewide executive races in November, 1998, including Ms. Montgomery’s re-election as attorney general, a grand jury indicted Rogers for bribery, ethics violations, and insurance-code violations.
As Ms. Montgomery and other Republican candidates grapple with the fallout from the Tom Noe rare-coin scandal heading into Tuesday’s election, others have not yet let go of the PIE scandal, which also involved influence-peddling at the highest levels of state government.
Tom McManamon is among them. A former employee of a PIE subsidiary, he wants to know why the Ohio Department of Insurance pushed the medical malpractice insurer into oblivion.
A lawsuit filed by Mr. McManamon alleges that David Meyer, an assistant director of the Ohio Department of Insurance, ignored transactions that would have shown PIE with a surplus of $80 million in 1998.
“Meyer reached a conclusion that this company should be taken down, when the most he should have concluded is that its management needed to change,’’ said Kenneth Seminatore, a Cleveland lawyer representing Mr. McManamon and former counsel to Blue Cross Blue Shield.
In court documents, Mr. Seminatore alleges that Mr. Meyer buried PIE “to provide political cover for the massive political contributions” that Rogers and other PIE executives made to Ms. Montgomery, who received $87,000, and Gov. George Voinovich, who received $85,000.
“It was because of the contributions ... that Meyer wanted to publicly appear ‘tough’ to protect the image of the Ohio Department of Insurance,’’ Mr. Seminatore wrote. “In essence, any perceived ‘sins’ of the state officials in accepting the massive contributions would be ignored, forgotten, or forgiven because of the state’s zealous actions against PIE.’’
Lawrence Pratt, the assistant attorney general representing Mr. Meyer and the state Department of Insurance, said Mr. McManamon’s allegations are “pure wild, unsupported conjecture, better suited for a novel than a courtroom.”
The lawsuit, which is pending in Franklin County Common Pleas Court, is a reminder that Ms. Montgomery’s ties to a flashy GOP businessman, big contributor, and fund-raiser — and eventual convicted felon — did not start with Tom Noe.
Nancy Seaholm, Rogers’ secretary at PIE, told the FBI in 1998 that political figures who often came to the PIE offices and met with Rogers included Ms. Montgomery; U.S. Sen. Mike DeWine, who received $30,500 in contributions from Rogers; then-Ohio House Speaker Jo Ann Davidson, now co-chairman of the Republican National Committee; Mr. Voinovich, now a U.S. senator, and Bob Bennett, chairman of the Ohio Republican Party.
As part of a deal with federal prosecutors in 2001, Rogers pleaded guilty to conspiracy, insurance fraud, tax evasion, and making false statements to the Federal Election Commission. He was sentenced to 40 months in prison and ordered to pay $13 million in restitution to the Ohio Department of Insurance.
Tom McManamon is among them. A former employee of a PIE subsidiary, he wants to know why the Ohio Department of Insurance pushed the medical malpractice insurer into oblivion.
A lawsuit filed by Mr. McManamon alleges that David Meyer, an assistant director of the Ohio Department of Insurance, ignored transactions that would have shown PIE with a surplus of $80 million in 1998.
“Meyer reached a conclusion that this company should be taken down, when the most he should have concluded is that its management needed to change,’’ said Kenneth Seminatore, a Cleveland lawyer representing Mr. McManamon and former counsel to Blue Cross Blue Shield.
In court documents, Mr. Seminatore alleges that Mr. Meyer buried PIE “to provide political cover for the massive political contributions” that Rogers and other PIE executives made to Ms. Montgomery, who received $87,000, and Gov. George Voinovich, who received $85,000.
“It was because of the contributions ... that Meyer wanted to publicly appear ‘tough’ to protect the image of the Ohio Department of Insurance,’’ Mr. Seminatore wrote. “In essence, any perceived ‘sins’ of the state officials in accepting the massive contributions would be ignored, forgotten, or forgiven because of the state’s zealous actions against PIE.’’
Lawrence Pratt, the assistant attorney general representing Mr. Meyer and the state Department of Insurance, said Mr. McManamon’s allegations are “pure wild, unsupported conjecture, better suited for a novel than a courtroom.”
The lawsuit, which is pending in Franklin County Common Pleas Court, is a reminder that Ms. Montgomery’s ties to a flashy GOP businessman, big contributor, and fund-raiser — and eventual convicted felon — did not start with Tom Noe.
Nancy Seaholm, Rogers’ secretary at PIE, told the FBI in 1998 that political figures who often came to the PIE offices and met with Rogers included Ms. Montgomery; U.S. Sen. Mike DeWine, who received $30,500 in contributions from Rogers; then-Ohio House Speaker Jo Ann Davidson, now co-chairman of the Republican National Committee; Mr. Voinovich, now a U.S. senator, and Bob Bennett, chairman of the Ohio Republican Party.
As part of a deal with federal prosecutors in 2001, Rogers pleaded guilty to conspiracy, insurance fraud, tax evasion, and making false statements to the Federal Election Commission. He was sentenced to 40 months in prison and ordered to pay $13 million in restitution to the Ohio Department of Insurance.
62 ‘conduits’ used
From mid 1990 to fall, 1997, Rogers used 62 people — referred to as “conduits’’ — to make $500,000 in illegal campaign contributions, court records say. Rogers and his wife made another $1 million in contributions using funds from PIE to federal, state, and local candidates in Ohio, Kentucky, West Virginia, Maryland, and Missouri — all states where the company was regulated, his plea agreement states.
None of the conduits was charged and the plea agreement does not identify which candidates received the illegal contributions.
As the PIE scandal broke in 1998, Democrats criticized Ms. Montgomery for not immediately returning campaign contributions from Rogers.
Democrat Lee Fisher, who was running for governor then and is Ted Strickland’s running mate this year, returned $10,100 that his campaigns received from Rogers to the fraud section of the state Department of Insurance.
A spokesman for Ms. Montgomery noted at the time that she formed a task force to investigate PIE and Rogers, and took decisive action as the Department of Insurance’s legal counsel to push for the company’s liquidation. It took her four years to return Rogers’ contributions.
Last year, Ms. Montgomery returned contributions of $8,150 from Noe and his wife, Bernadette, within days after authorities alleged that $13 million was missing from the rare-coin funds that Noe controlled.
But Democrats have accused Ms. Montgomery of failing to oversee the Bureau of Workers’ Compensation both as attorney general from 1995 through 2002, and as auditor over the past four years. Ms. Montgomery is running for attorney general against Democrat state Sen. Marc Dann in Tuesday’s election.
Ms. Montgomery declined repeated requests for an interview over the past few weeks, but her campaign press secretary, Jen Detwiler, took a swipe this week at Mr. Seminatore, the lawyer who is suing the department of insurance for the PIE liquidation.
Ms. Detwiler said in a statement Thursday that Ms. Montgomery in the mid 1990s was instrumental in shutting down the proposed merger of Columbia/HCA and Blue Cross Blue Shield — “a deal in which Ken Seminatore stood to make a lot of money.”
“Seminatore has been using the legal system ever since to grind his political ax,’’ Ms. Detwiler wrote.
Mr. Seminatore replied: “Betty Montgomery is the world’s leading expert on trying to deflect blame.”
None of the conduits was charged and the plea agreement does not identify which candidates received the illegal contributions.
As the PIE scandal broke in 1998, Democrats criticized Ms. Montgomery for not immediately returning campaign contributions from Rogers.
Democrat Lee Fisher, who was running for governor then and is Ted Strickland’s running mate this year, returned $10,100 that his campaigns received from Rogers to the fraud section of the state Department of Insurance.
A spokesman for Ms. Montgomery noted at the time that she formed a task force to investigate PIE and Rogers, and took decisive action as the Department of Insurance’s legal counsel to push for the company’s liquidation. It took her four years to return Rogers’ contributions.
Last year, Ms. Montgomery returned contributions of $8,150 from Noe and his wife, Bernadette, within days after authorities alleged that $13 million was missing from the rare-coin funds that Noe controlled.
But Democrats have accused Ms. Montgomery of failing to oversee the Bureau of Workers’ Compensation both as attorney general from 1995 through 2002, and as auditor over the past four years. Ms. Montgomery is running for attorney general against Democrat state Sen. Marc Dann in Tuesday’s election.
Ms. Montgomery declined repeated requests for an interview over the past few weeks, but her campaign press secretary, Jen Detwiler, took a swipe this week at Mr. Seminatore, the lawyer who is suing the department of insurance for the PIE liquidation.
Ms. Detwiler said in a statement Thursday that Ms. Montgomery in the mid 1990s was instrumental in shutting down the proposed merger of Columbia/HCA and Blue Cross Blue Shield — “a deal in which Ken Seminatore stood to make a lot of money.”
“Seminatore has been using the legal system ever since to grind his political ax,’’ Ms. Detwiler wrote.
Mr. Seminatore replied: “Betty Montgomery is the world’s leading expert on trying to deflect blame.”
On ‘dangerous turf’
Herb Asher, an emeritus professor of political science at Ohio State University, said Ms. Montgomery is vulnerable. Although she has more money than Mr. Dann’s campaign and polls have shown her ahead, some have shown Ms. Montgomery’s support below 50 percent — which is “slightly dangerous turf for a well-known incumbent,’’ Mr. Asher said.
“Her contest today is closer than many people expected,’’ he said.
The state’s decision to liquidate PIE took an enormous human toll.
An estimated 16,000 insured physicians and claimants in eight states where PIE sold medical malpractice insurance were affected by PIE’s collapse, Mr. Seminatore said.
Thousands of doctors had to scramble to find new coverage, and patients had to wait years to get their day in court. No victim could get more than $300,000 on any claim from the state guaranty fund, further victimizing some whose damages were worthy of more money.
Mr. McManamon’s lawsuit is pending in Franklin County Common Pleas Court with Judge John Bender, a Republican.
Mr. Seminatore, the attorney representing Mr. McManamon, said he sees many similarities between the PIE scandal and the one that has swirled around Noe, who is on trial in Lucas County Common Pleas Court for allegedly embezzling more than $2 million from the coin funds he managed for the Bureau of Workers’ Compensation.
“The system in Columbus for the last 40 years is that when something gets so ugly that it sees the light of a headline, the first thing that happens is that the responsible public officials declare outrage over the scandal, demand an investigation by the inspector general — who reports to the governor — who makes sure that two or three underlings get indicted and convicted of some minor crimes and then the investigation stops,’’ Mr. Seminatore said.
Contact James Drew at: jdrew@theblade.com or 614-221-0496
“Her contest today is closer than many people expected,’’ he said.
The state’s decision to liquidate PIE took an enormous human toll.
An estimated 16,000 insured physicians and claimants in eight states where PIE sold medical malpractice insurance were affected by PIE’s collapse, Mr. Seminatore said.
Thousands of doctors had to scramble to find new coverage, and patients had to wait years to get their day in court. No victim could get more than $300,000 on any claim from the state guaranty fund, further victimizing some whose damages were worthy of more money.
Mr. McManamon’s lawsuit is pending in Franklin County Common Pleas Court with Judge John Bender, a Republican.
Mr. Seminatore, the attorney representing Mr. McManamon, said he sees many similarities between the PIE scandal and the one that has swirled around Noe, who is on trial in Lucas County Common Pleas Court for allegedly embezzling more than $2 million from the coin funds he managed for the Bureau of Workers’ Compensation.
“The system in Columbus for the last 40 years is that when something gets so ugly that it sees the light of a headline, the first thing that happens is that the responsible public officials declare outrage over the scandal, demand an investigation by the inspector general — who reports to the governor — who makes sure that two or three underlings get indicted and convicted of some minor crimes and then the investigation stops,’’ Mr. Seminatore said.
Contact James Drew at: jdrew@theblade.com or 614-221-0496
posted by Kathie Bracy at 11:32 AM
<< Home