Ohio Supreme Court to Hear Lawsuit about BWC Memos

The Ohio Supreme Court has agreed to hear a lawsuit filed July 6 by State Sen. Marc Dann demanding that Gov. Bob Taft release certain Bureau of Workers' Compensation (BWC) memos that Dann asserts are related to agency investment decisions that have cost the state hundreds of millions of dollars.

Dann, a Youngstown Democrat, in the lawsuit charges that he made a public records request on June 13 for weekly memos from former Ohio BWC Administrator Jim Conrad who resigned in the wake of the agency's investment scandal to Taft's office but Taft's legal counsel denied most of the requests, citing "executive privilege."

Dann contends that the memos updated Taft on Ohio BWC activities.

Dann also requested memos that Taft's office received from Jim Samuel, Taft's Ohio BWC liaison, and other Ohio BWC officials. The senator's lawsuit contends that he has not received any of those memos.

The Ohio Supreme Court on July 11 agreed to consider Dann's complaint and set a timetable of about a month for both parties to file their evidence and briefs.

Attempts to reach Dann for a previous Occupational Hazards.com story on the Ohio BWC scandal were unsuccessful, but Dann on his blog says, "It's sad that in the midst of the biggest scandal in Ohio history, Gov. Taft has chosen to not release all records."

Dann says he created his blog titled "Coins for Change: Fighting Corruption and Strengthening Ohio" to meet the need for "a 'go-to site' for the latest developments in the broadening corruption scandal that is gripping Ohio's government."

A series of investment gaffes made by Ohio BWC have made the agency and Taft the subject of numerous unflattering stories and editorials in Ohio newspapers in recent months.

The investment debacle first came to light with news that a rare-coin fund in which the agency invested is reporting a $13-million shortfall. The missing money sparked a lawsuit filed May 24 by the state attorney general's office against the fund's manager, rare-coin dealer and prominent Republican contributor Tom Noe, who is under investigation by state and federal authorities.

The Ohio attorney general's office also has filed a lawsuit against an investment firm accused of fraud, breach of contract and other "irresponsible and inappropriate activities" that ultimately led to the agency losing $215 million it invested with the firm last year.

On July 7, the agency announced it lost $71 million in fiscal years 2002 and 2003 through investments with Allegiant Asset Management, a wholly owned subsidiary of Cleveland-based National City Corp. Ohio BWC announced it is terminating its investment dealings with Allegiant.

Despite revelations of such investment losses, the agency insists that its state insurance fund is fully funded and has an approximate value of $14.3 billion. In a previous interview, bureau spokesperson Jeremy Jackson told Occupational Hazards.com that the agency's losses will not impact injured Ohio workers.

For more on Ohio BWC's investment issues, read "Lawsuit Alleges Firm's 'Irresponsible' Activities Cost Ohio BWC $215 Million" and "Major Changes at Ohio BWC."

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