Board has ties to firms that got help
JobsOhio says assistance came before JobsOhio began operating in July 2011.
Posted: 12:05 a.m. Wednesday, July 31, 2013
BY LAURA A. BISCHOFF - COLUMBUS BUREAU
Six of nine members of the JobsOhio board of directors have direct financial ties to companies that have received tax credits and other assistance from state government or JobsOhio since Gov. John Kasich took office in 2011, public records show.
The directors are employed by, sit on the board of or hold stock in companies that have received assistance from either the state of Ohio or JobsOhio, the newly created non-profit established by the Kasich’s administration. JobsOhio also assisted two subsidiaries of Worthington Industries, a Columbus-based company that has contributed heavily to Kasich and where he served as a director between 2001 and 2010.
JobsOhio spokeswoman Laura Jones said the state assistance to the companies came before JobsOhio began operating in July 2011. Still, JobsOhio documents list some of these companies as getting assistance from the non-profit.
“We have a conflict of interest policy that we have in place that we utilize here at JobsOhio,” Jones said. “If there is a conflict, it’ll be brought to the attention (of the full board) and policy will be followed on how to go forward with that.”
Progress Ohio Executive Director Brian Rothenberg, a frequent critic of JobsOhio, said better transparency would result in more taxpayer protections.
“This smacks of self-dealing in a country club atmosphere of doling out the public’s money,” he said.
Until Kasich took office, the Ohio Department of Development managed the state’s economic development and job creation efforts. Kasich argued that the state needed to be more nimble and rely on experts with business experience to get better results.
With cooperation from the General Assembly, he replaced the department with the Development Services Agency, created JobsOhio and funded the new non-profit with bond proceeds, state money and private donations. Eight of the board members are appointed by Kasich; the board then appointed the chief investment officer, John Minor, who is the ninth director.
JobsOhio is in charge of marketing the state as a good place to do business and helping arrange loans, grants and tax breaks for companies creating jobs. JobsOhio said in its 2012 annual report that JobsOhio and its partners helped 277 companies that committed to creating or retaining 75,612 jobs and invest $5.8 billion in the state. The group is exempt from state audits, public records laws and some ethics laws.
Matt Mayer, president of Opportunity Ohio, a conservative think tank, said government assistance going to businesses connected to JobsOhio directors “smells badly and it smacks of corporate cronyism.”
“This is why in some cases economic development entities are not private or quasi-private,” he said, arguing that public entities have more transparency.
Jones said the JobsOhio board, although “very engaged,” does not weigh in on what incentive packages companies should get. Instead, JobsOhio managers make recommendations on business tax breaks to the state Development Services Agency. The DSA considers the recommendations and goes through a public approval process, she said.
But a spokesman for the Democratic Party said the process provides too little public scrutiny.
“Those who have worried from the outset that the JobsOhio model invites scandal have been vindicated today,” said Matt McGrath, Ohio Democratic Party spokesman.
Although JobsOhio is a private entity, it has close ties with state government: many of its employees used to work for the state; it has a contract with the state Development Services Agency to negotiate incentive packages; and Kasich is its biggest supporter. JobsOhio’s 58-page 2012 annual report mentions Kasich’s 11 times and displays five photos of him.
JobsOhio helped line up tax credits for two subsidiaries of Worthington Industries, a steel-processing company that paid Kasich more than $600,000 in director fees between 2001 and 2010. Kasich’s state ethics disclosures also indicate he received a deferred compensation payout from the company in 2012.
Employees and managers of Worthington Industries have been supporters of the Ohio GOP and Kasich’s political career, contributing more than $62,000 to the Kasich-Taylor campaign committee – including $10,000 from Chief Executive John McConnell just a week after a Worthington Industries subsidiary, Artiflex Manufacturing, received approval for a $109,863 state tax break. McConnell and his now late father contributed $512,000 to the Ohio Republican Party between 2004 and 2012, state records show.
Kasich spokesman Rob Nichols said Kasich had divested himself of Worthington Industries before taking office, but delayed paperwork resulted in the last deferred compensation payment coming in 2012.