Saturday, April 30, 2005

Nickels and Dimes 

You may recall the mild brouhaha that developed a couple of weeks back when it came out that the state of Ohio had invested millions of dollars in the unregulated and highly speculative rare-coin market:
Controlling the money for the state? Prominent local Republican and coin dealer Tom Noe, whose firm made more than $1 million off the deal last year alone.

The agreement to invest the money in rare coins is rare itself: The Blade could find no other instance of a state government investing in a rare coin fund. Neither the state nor Mr. Noe could provide one . . . .

The Ohio Bureau of Workers' Compensation has continued to be the sole investor in Mr. Noe's Capital Coin funds despite strong concerns raised by an auditor with the bureau about possible conflicts of interest and whether the state's millions were adequately protected.

And the state has maintained its stake in Capital Coin despite documented problems:

  • Two coins worth roughly $300,000 were lost in the mail in 2003.

  • The firm has written off $850,000 in debt over the last three years to cover a failed business relationship.

  • Mr. Noe has loaned some of the state's money to a local real estate business that buys and sells central-city homes. A state auditor could not find documents to prove if the loans were sufficiently covered by the value of real estate that a Capital Coin subsidiary held as collateral . . . .
Mr. Noe is a former chairman of the Lucas County Republican Party who has given more than $11,000 in campaign contributions to both Governor Taft and Mr. Voinovich, now a Republican U.S. senator, over the last decade. He has given tens of thousands more to Republican candidates around the state.

He worked hard to get President Bush re-elected last year; as chairman of the Bush team's efforts in northwest Ohio, he frequently talked with Karl Rove, one of the President's top advisers.
On the returns front, however, the state had nothing to complain about, having pocketed over ten million bucks from the arrangement -- even after Capital Coins' robust 20% commission. The problem lies in certain small favors that Mr. Noe may have done for his Republican benefactors:
FBI agents swept into Mr. Noe’s Maumee condo about 7:30 p.m., spending three hours scouring the home of one of the most prominent Republicans in northwest Ohio. They were looking for evidence of violations of federal campaign contribution laws.

The federal probe is studying Mr. Noe’s campaign contributions to the President, and specifically contributions made by others who may have received money from Mr. Noe, possibly allowing him to exceed the $2,000 spending cap . . . .

Mr. Noe, 50, is a coin dealer and former chairman of the Lucas County Republican Party. He manages two rare-coin funds that have received $50 million from the Ohio Bureau of Workers Compensation.

That investment arrangement is currently under a separate investigation being conducted by the Ohio inspector general . . . .

At issue is whether Mr. Noe gave people money in order for them to give to the Bush campaign, allowing Mr. Noe to exceed federal spending limits, law-enforcement sources said.
UPDATE (via Joe of AmericaBlog): Let's update the tote board. When we last checked in, the number of rare coins in the Ohio state portfolio that had inexplicably vanished stood at 2. The latest tally? 121.

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