As goes Ohio, so goes the nation

[Guest guest]

As goes Ohio, so goes the nation

 

 

>

> http://www.nytimes.com/2005/06/17/opinion/17krugman.html

>

> June 17, 2005

>

> What's the Matter With Ohio?

> By PAUL KRUGMAN

>

> The Toledo Blade's reports on Coingate - the unfolding tale of how

> Ohio's Bureau of Workers' Compensation misused funds - deserve much

> more national attention than they have received so far. For one

> thing, it's an entertaining story that seems to get weirder by the

> week. More important, it's an object lesson in what happens when you

> have one-party rule untrammeled by any quaint notions of independent

> oversight.

>

> In April, The Blade reported that the bureau, which provides

> financial support for workers injured on the job, had invested $50

> million in Capital Coin, a rare-coin trading operation run by Tom

> Noe, an influential Republican fund-raiser.

>

> At first, state officials angrily insisted that this unusual use of

> state funds was a good investment that had nothing to do with Mr.

> Noe's political connections. An accounting investigation revealed,

> however, that Mr. Noe's claims to be running a profitable business

> were fictitious: he had lost millions, and 121 valuable coins were

> missing.

>

> On June 3, police raided the Colorado home of Michael Storeim, Mr.

> Noe's business associate, and seized hundreds of rare coins. After

> changing the locks, they left 3,500 bottles of wine, valued at

> several hundred thousand dollars, in the home's basement.

>

> On Monday, Mr. Storeim told police that someone had broken into his

> house over the weekend and stolen much of the wine, along with

> artwork, guns, jewelry and cars. As I said, this story keeps getting

> weirder.

>

> Meanwhile, The Blade uncovered an even bigger story: the Bureau of

> Workers' Compensation invested $225 million in a hedge fund managed

> by MDL Capital, whose chairman had strong political connections. When

> this investment started to go sour, the bureau's chief financial

> officer told another top agency official that he had been told to

> " give MDL a break. "

>

> By October 2004, state officials knew that MDL had lost almost the

> entire investment, but they kept the loss hidden until this month.

>

> How could such things happen? The answer, it has become clear, lies

> in a web of financial connections between state officials and the

> businessmen who got to play with state funds.

>

> We're not just talking about campaign contributions, although Mr.

> Noe's contributions ranged so widely that five of the state's seven

> Supreme Court justices had to recuse themselves from cases associated

> with the scandal. (He's also under suspicion of using intermediaries

> to contribute large sums, illegally, to the Bush campaign.) We're

> talking about personal payoffs: bargain vacations for the governor's

> chief of staff at Mr. Noe's Florida home, the fact that MDL Capital

> employs the daughter of one of the members of the workers'

> compensation oversight board, and more.

>

> Now, politicians and businessmen are always in a position to do each

> other lucrative favors. Government is relatively clean when

> politicians are sufficiently afraid of scandal to resist temptation.

> But when a political machine controls all branches of government, and

> those officials charged with oversight are also reliably partisan,

> politicians feel safe from investigation. Their inhibitions dissolve,

> and they take full advantage of their position, until the scandals

> become too big to hide.

>

> In other words, Ohio's state government today is a lot like Boss

> Tweed's New York. Unfortunately, a lot of other state governments

> look similar - and so does Washington.

>

> Since their 1994 takeover of Congress, and even more so since the

> 2000 election, Republican leaders have sought to make their political

> dominance permanent. They redistricted Texas to lock in their control

> of the House. Through the " K Street Project " they have put lobbying

> firms under partisan control, starving the Democrats of campaign

> funds. And they are, of course, trying to pack the courts with

> partisan loyalists.

>

> In effect, they're trying to turn America into a giant version of the

> elder Richard Daley's Chicago.

>

> These efforts have already created an environment in which

> politicians from the right party and businessmen with the right

> connections believe, with good reason, that they have immunity.

>

> And politicians who feel that they can exploit their position tend to

> do just that. It's a likely bet that the scandals we already know

> about, from Coingate to Tom DeLay's dealings with the lobbyist Jack

> Abramoff, are just the tip of the iceberg.

>

> The message from Ohio is that long-term dominance by a political

> machine leads to corruption, regardless of the policies that machine

> follows or the ideology it claims to represent.

>

>