Thu December 26, 2013
Looking Back on Year 2 For JobsOhio
The second full year of operation for the state’s public-private economic development organization was nearly as rocky as its first one. Gov. John Kasich has made it clear many times that he stands behind his keystone creation JobsOhio. At his final public speech in December, he called it “the most important economic development tool in America.”
“JobsOhio went through some political nonsense, and that – we’ve kind of cleared the brush on that, I guess they’ve kind of given up on that. And now this organization is starting to grow.”
Kasich says the state has gained nearly 175,000 jobs since he took office, which he says puts Ohio halfway back to what it lost in the recession. But Democrats say the state is 44th in the nation for job growth, and they lay the blame on JobsOhio. Several times during 2013 they presented bills related to JobsOhio, the most comprehensive of which was the so-called JobsOhio Accountability Act, which would require salaries, meetings and records to be made public, for JobsOhio to be subject to audit and for a website to be set up to track its funds. Rep. John Carney of Columbus was asked how he expected the bill to be received by a Republican-dominated legislature that has embraced JobsOhio.
“I think we certainly expect to be taken seriously by the taxpayers of the state of Ohio. Whether or not the Republican legislature wants to wake up to the fact that right now, they are allowing all of this money to be shielded – they’re acting as if liquor profits are private money. John Kasich didn’t bless this money and turn it into private money,” said Carney.
But the only JobsOhio bill that Republicans took up was one that would ban the state auditor from auditing its books, but would require an appointed outside auditor to review them. Republican Auditor David Yost protested that measure, and subpoenaed JobsOhio’s records in March. An independent audit of JobsOhio released in October showed it finished the fiscal year with around $182 million after receiving almost $188 million, most of that from the $1.5 billion dollar lease on the state’s liquor profits. A month later, Yost released his audit of JobsOhio with records that were grudgingly turned over to him. Yost’s audit showed concerns about $60,000 that was spent with no receipts, and it found some JobsOhio directors failed to sign ethical conduct pledges. However, Yost said there were no problems that resulted from not having those pledges in place. But ethics questions still dogged JobsOhio, especially after a July investigation by the Dayton Daily News showing that six of the nine members of JobsOhio’s board of directors had direct financial ties to companies that got tax credits from JobsOhio or from the state. Democratic candidate for governor Ed FitzGerald used that report to call for an investigation of JobsOhio and to once again highlight the Democrats’ key campaign issue in 2014.
“I mean part of what’s frightening about this situation is we don’t even know what other conflicts are out there," said FitzGerald. "We don’t know what other lines might have been crossed. We have to guess based on the disclosures of the privately held corporation.”
Meanwhile, the man who’d been brought in from California to be the first head of JobsOhio had left that position, but had become an Ohio resident; he bought a farm in central Ohio and turned up at the annual Sale of Champions auction at the Ohio State Fair. A few months later, a $50 million dollar investment from Ohio State University in Mark Kvamme’s firm Drive Capital brought questions about the $9 million in fees Kvamme stands to receive, and whether his friendship with former OSU president Gordon Gee helped him secure the deal. And a big ruling on JobsOhio lies ahead. If the Ohio Supreme Court decides that a coalition of progressive and conservative activists have standing to sue, that could open the door for a ruling on the constitutionality of JobsOhio itself.