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Coins of the Realm

By Christopher Hayes, The Nation. Posted June 29, 2005.


'Coingate,' a scandal at once farcical and outrageous, touches nearly every prominent elected Republican in Ohio and could finally pave the way for a Democratic resurgence in the state.

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It's hard to think of a state outside the Deep South where the Democratic Party has been more thoroughly whupped than Ohio. For over a decade, Republicans have controlled the governor's mansion and all statewide constitutional offices and had near two-thirds majorities in both state legislative chambers. Both US senators are Republican, as are twelve of eighteen Representatives.

The sad fact is that the GOP has encountered precious little resistance on its path to hegemony; Democrats have been out-fundraised more than 2-to-1 and fight each other harder than they fight their Republican opponents. Lucas County, around Toledo, has two tribes of Democrats--the local press refers to them as Team A and Team B--whose members regularly battle each other for local office.

"The Ohio Democratic Party is so terrible and ineffectual," a friend who worked on the campaign in Ohio last year recently told me, "it ought to be taken into receivership."

But things might be about to change. Thanks to the arrogance and corruption of the state GOP and the tireless investigative journalism of the Toledo Blade, every day Ohio voters are learning more about "coingate," a scandal at once farcical and outrageous, that touches nearly every prominent elected Republican in the state and could finally pave the way for a Democratic resurgence.

The scandal starts back in 1997, when the state's Bureau of Workers Compensation, which provides workplace injury insurance for Ohio's workers, decided to start an "emerging managers" program that would allow outside managers to invest some of the fund's $18 billion in assets. With then-Governor George Voinovich's direct appointee at BWC calling the shots on who got the money, the $500 million set aside for the program offered a jackpot of prime contracts that could be doled out to supporters. In all, one hundred fifty-four fund managers were contracted to invest BWC money under Voinovich and his successor, Bob Taft.

Enter Thomas Noe, a GOP rainmaker (and Bush Pioneer) from the Toledo suburbs who, along with his wife, Bernadette, has contributed more than $200,000 to Republican candidates over the past fifteen years. Noe made his fortune in the rare coin business and somehow convinced the BWC that it could do the same.

In 1998, he got a contract to invest $25 million of state money in coins, with 80 percent of the profits supposedly going to the state. It was an unorthodox deal: not a single other state invests in the completely unregulated rare coin market, and there was no supervision of Noe, who acted as the main assessor of the collection's value and kept the coins stashed in warehouses around the country, all but one of which state overseers never visited. When the contract was reviewed in 2000, a state auditor immediately recognized the potential for self-dealing.

Noting that Noe and his associates "could potentially be realizing profits on sales of coins to the [fund]" he warned, "such a situation presents a conflict of interest and potentially exposes both the managers and [the bureau] to allegations of improper activity."

Not only did then-Republican State Auditor (and now Attorney General) Jim Petro ignore this warning, Noe was rewarded with another $25 million. The Blade's reporting has revealed that the auditor's concerns were well-founded: 121 precious coins have disappeared, including two worth $300,000 that were "lost" en route to a business partner of Noe in Colorado named Mike Storeim, who's since been accused of scamming the fund. Noe wrote off $850,000 of debt owed to the coin fund by another partner who had served a year in federal prison for laundering drug money, and after much prodding, Noe has now admitted that he can't account for somewhere between $10 and $12 million in state money--cash that investigators suspect he stole.


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Christopher Hayes is a contributing editor of In These Times and the Chicago editor of Just Cause magazine.

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This coin scheme is a beaut.
Posted by: mazur on Jun 29, 2005 2:07 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
I'm sure Ukrainian kuchmists would give it an A with merit! Keep up the good work!

:E

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Coins
Posted by: wannabersc on Jun 29, 2005 6:03 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
I was stationed in San Francisco. At the downtown BART station I met a guy with a little table, some cups and a silver dollar... I wonder if he was a Republican?

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Coins, coins, who's got the coins
Posted by: bookwoman on Jun 29, 2005 6:09 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
First of all, anyone who deals in collectibles, even true believers, knows that they rise and fall in value. Even the value of a coin in its ultimate value as a piece of precious metal, i.e., gold, silver, etc. rises and falls on the demand of the market. This whole idea was so stupid that it reinforces Lord Acton's statement that absolute power corrupts absolutely.

On another level however, I find it interesting that this whole story has broken out just as George Voinovich took his stand against the Administration's nominee, John Bolton. We know that the Administration and its minions eat their own. Just consider the PalmeWilson case or more recently the criticism of the Republican's own appointees to the Supreme Court, especially Justice Rehnquist. Is it possible that they are willing to feed Voinovich to dogs because he is a bit of a maverick and is not toeing the line.

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GOP "Coingate" hits proverbial fan in Ohio
Posted by: neilemac on Jun 29, 2005 6:25 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Great reporting, it's about time someone exposed the GOP corruption, and like you stated, it's most likely just the tip of the proverbial iceberg. Added to the debacle of the voting irregularities voiced by believable vigilent press after Ohio's controversial Presidential vote last year , maybe the Democratics will have a chance at redemption with that seemingly "rightwing" populace. namasté

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Ohio's Shell Game
Posted by: padicake on Jun 29, 2005 9:54 AM   
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Liars and thieves! What will it take to get the conservative voter's attention? Steal their money!

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Take my stand-up comic act --- Please.
Posted by: Lincoln fan on Jun 29, 2005 11:54 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
This story would have been much funnier if they had invested in baseball cards. You know the comic who says,"You might be a redneck if---" I have noticed that you might be a Conservative if you always refer to your money as "hard earned" and you refer to taxes as "my confiscated hard earned money".

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George Ryan
Posted by: pjrsullivan on Jun 29, 2005 12:56 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Much has been made of the scandal in Illinois of those who were selling licenses. George Ryan is being pulled over the coals still, related to that issue.

A much bigger issue is the fact that Ryan freed several people from death row. Several were tortured in local police stations and confessed to every crime that occured since WWI.

The head torturer in chief, a chicago police office, retired and was not brought to the bar of justice, not only not brought to justice, he received a contract from the city of Chicago to provide services for the city.

The dirty little secret is, that the city of Chicago, through the Criminal Intelligence Department, was providing death squad units that operated with the connivance of British and Mossad assistance. Hence a torturer in Chief can retire and go on the City payroll again, while the criminal law community uses the services of ole "Winkin, Blinkin and Nod.

A similiar scenario was played out in the Rubin "Hurricane" Carter case. The local Police had 2 cars ready, ones that matched the description of those owned by Carter. When Carter came to town and they saw what type of car he was driving, they then went over and shot to death a few hapless barroom patrons. It was the obvious that Carter did it because the assailants drove away in the same make and model car that Carter was driving.

With George Ryan, his real crime in the eyes of the criminal elite is that he had the decency to free those who had suffered wrongly. Robert Cooley the convicted Chicago fixer wrote a book about Chicago politics where he named the judges as issuing contract hits, and after this became known, the judges still remain on the bench.

A suburban Chicago police chief, Mike Corbitt, now deceased, also wrote a book telling of using Iraeli military jets to fly drugs into the city. Our political structures are really a big joke, regretably the joke is always on us.

One after thought. The folks that Ryan freed, if they were innocents, then who were the real perpetrators? If I can spell it out, the intelligence units hire some poor mind degraded person to do the hands on, and then throw evidence down to arrest another person. If you should knock down one of the criminal elite and give them their turn, the criminal elite start shouting,"Terrorism." Yet, when the criminal elite give us our turn, they consider that, "Cost effectiveness"

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» RE: George Ryan Posted by: PECKERWOOD
Another Republican scam? No!
Posted by: sheherezade on Jun 29, 2005 1:00 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
As an long-time coin collector I know that the rare coin market is tasty and at the moment. There is a company called Professional Coin Grading Service (PCGS) (from Texas!) who own coin magazines, coin dealerships, auction houses, and more, and sell overpriced products on T.V. and online. They pretty much set the market, and also the trends for rare coin scams. The rare coin industry is unregulated. If PCGS were, say, a securities company, the principals would be serving jail sentences. As it is, leave it to Republican criminals, I mean Republican Party members, to use rare coins to figure out a way to steal millions of dollars from Americans. It's highly doubtful if $50 million dollars in coins ever existed except on paper. There may have been actual rare coins, but $5o million dollars worth is alot of coins. But, if it's from Texas, or if it has to do with a Republican, and there's alot of manye to steal, Yeeehaw!

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» RE: Another Republican scam? No! Posted by: Lincoln fan
» RE: Another Republican scam? No! Posted by: sheherezade
First Reform Campaign Financing
Posted by: Lincoln fan on Jun 29, 2005 2:05 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
It is true that the system itself is at fault and that real reform is required. In my opinion campaign finance reform is the most important. Politicians need campaign funds, they cannot get elected without funds. Special interest groups provide the funds often to both parties and the candidates are beholden to the contributors. Whoever is elected knows that he'll need money again for the next election, so he is trapped. He must give a little so that he can stay in office to serve his constituents.

One way to reform is to have campaigns paid for entirely by taxpayers. This has not been popular because people don't want their tax money going to support the opposition. This objection could be overcome by having each voter allocate his share of the fund to the candidate(s) he supports. For more details go to:

hhtp://lwww.lincolninitiative.org

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