Cordray: Kasich ODOD Privatization Plan Fails Transparency Test

COLUMBUS – Today, Ohio Attorney General Richard Cordray held a press conference call with reporters to highlight the numerous transparency issues plaguing Congressman John Kasich’s proposal to privatize Ohio’s Department of Development (ODOD).

“As Attorney General, I have the responsibility to ensure that the people’s business is conducted in a way that is transparent and accountable,” Cordray said.  “At a time when the state must focus all of its efforts on job creation, Congressman Kasich’s plan to take Ohio’s job creation efforts behind closed doors causes me great concern.”

Last week, the Columbus Dispatch reported that a taxpayer funded nonprofit, like the one proposed by Congressman Kasich, would not be held to the same open record laws that govern the ODOD.  Under current open records laws, many of them enforced by the Attorney General, voters can obtain correspondence, e-mails, and other records from the ODOD. [Columbus Dispatch, 8/19/10]

Congressman Kasich took his behind-closed-door proposal one step further by stating that he would give taxpayer funded bonuses to the CEO’s who would sit on the board and employees who work at this private entity.  He also declared that he would not require them to disclose their bonuses.  [Kasich Press Gaggle, 8/17/2010 Part 1; Part 2]

“Congressman Kasich’s proposal raises serious legal and ethical concerns,” Cordray said.  “Kasich has already failed to come clean with the people of Ohio by refusing to disclose the millions he made in Wall Street bonuses during his time at Lehman Brothers.  Now, he wants to apply those same Wall Street principles to an entity that would be responsible for putting Ohioans back to work.”

As required by a new law enacted by the General Assembly, the Attorney General’s office last fall began to review economic development awards made by the Ohio Department of Development to ensure that businesses that received grant money from the ODOD are complying with the terms and conditions of their agreements. [R.C. 125.112]

“We’ve been working very hard on our Economic Development Accountability Program to fulfill our obligations under this new law,” Cordray said.   “Promises were made by businesses to keep and create jobs in Ohio, and those promises must be kept.”

“Congressman Kasich’s proposal would do away with that line of accountability, eliminating oversight over your tax dollars,” Cordray added.  “Maybe that’s how things are done on Wall Street, but taxpayers in Ohio expect and deserve better.”

Ohio Newspapers on Congressman Kasich’s Plan to Privatize ODOD:

Ever since James Rhodes (Republican) created the development department, the office has been driven (to lesser and greater degrees) to meet the needs of business. Now Kasich would diminish the public role. That invites questions about accountability, worries about misplaced priorities, private ambitions fueled by public dollars. What would be the mechanism for oversight? To prevent favoritism? [Akron Beacon Journal, 8/19/10]

What guarantees that a 12-member, CEO-laden board will act in the public’s best interest? How does Kasich plan to keep the CEOs from rewarding friends’ companies or punishing would-be competitors when reviewing applications for tax abatements, loans or other state incentives? And what’s to keep Kasich from using the board and the state resources it would oversee to reward his own political supporters? [Columbus Dispatch, 8/22/10]

Is it really wise to have a board totally under the governor’s control? That seems like an invitation to shenanigans, as well as a poor way to maintain continuity from one administration to the next. There are also big concerns — though perhaps not insurmountable — about the transparency of such a nonprofit. [Cleveland Plain Dealer, 8/23/10]