Ohio Law

News and Announcements from the Supreme Court of Ohio and Other Governmental Entities Within the Buckeye State.

Wednesday, June 08, 2005

What's Next for the BWC?

This tale of woe continues for the citizens of the state of Ohio. With the news of authorities seizing 3,500 bottles of wine, 265 cigars, hundreds of rare coins, computers and documents from a former employee of coin dealer Tom Noe in the latest news from the coin fund situation that is now reaching scandal proportions, news now reaches the Buckeye citizenry that there was a $215 million loss in connection with a "hedge fund" last year.

The Toledo Blade reports that both Governor Taft and Attorney General Petro knew of the loss last year, but say that they did not not know the full extent of the loss until yesterday.

Tina Kielmeyer, the Ohio Bureau of Workers' Compensation's interim director, informed Gov. Bob Taft of the losses in a memo Tuesday, though the agency has known about the situation since last fall.

The investment in the hedge fund with MDL Capital Management of Pittsburgh was made without the knowledge of then-bureau director James Conrad, Kielmeyer said. An outside investment consultant told the bureau nearly 85 percent of the losses were the result of MDL taking investment risks beyond what the contract permitted, according to the memo.

The least they could have done is put the $225 million hedge fund investment in a one-year CD that pays 4% and made about $9 million.

I'm sure we haven't heard the last of this.

Later

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