GUBERNATORIAL CANDIDATE Financial scandal outrages Blackwell

The GOP gubernatorial candidate criticized members of his own party.
By DAVID SKOLNICK
VINDICATOR POLITICS WRITER
YOUNGSTOWN -- Ohio Secretary of State J. Kenneth Blackwell, a 2006 Republican gubernatorial candidate, said he is as outraged as anyone about the financial scandal at the state's Bureau of Workers' Compensation.
Blackwell was in Youngstown on Friday to speak at the Youngstown State University's 30th annual Institute on Taxation luncheon and for a gubernatorial fundraiser at the Youngstown Club.
After the speech, Blackwell said he unsuccessfully argued in 1996 to have the BWC Oversight Commission give up its investment oversight authority to the state treasurer, a position he held at the time.
Millions lost
Democratic legislators are pushing that change after it was revealed that a BWC fund managed by MDL Capital Management Inc. of Pittsburgh lost about $215 million. At least $12 million from rare coin investments controlled by Tom Noe, a prominent Republican fund-raiser, is missing.
"We lost that argument, but sometimes nothing focuses people's attention on something like a scandal," Blackwell said.
Blackwell wants the U.S. Securities and Exchange Commission to investigate the BWC, something Democratic legislators also want. Blackwell is also calling for the Public Integrity Section of the U.S. Department of Justice to investigate the BWC scandal.
Blackwell didn't receive any political contributions from MDL. Also, he received about $3,600 from Noe and his wife, less than several other Ohio Republicans.
Opposition
But Blackwell received $67,130 from BWC fund manager employees, among the highest amount of any current elected official in Ohio.
"I think it should be illegal to take money from fund managers," said state Sen. Marc Dann of Liberty, D-32nd. "Blackwell's got real problems. We really need to cut down the money given to statewide candidates."
Blackwell said he has no plans to return the money given to him by fund managers.
"I've never had a position that influences the decisions made by the BWC," he said. "Right now, if you take a look at Jim Petro's campaign funds, much of it can be traced back to lawyers. Are we talking about prohibiting that?"
Blackwell along with Petro, the state's attorney general, and Ohio Auditor Betty Montgomery are planning on running in the 2006 Republican gubernatorial primary.
Petro filed a suit Friday against MDL alleging fraud and breach of contract.
'Bipartisan mess'
Blackwell said the BWC scandal is a "bipartisan mess," pointing out that two Democrats sit on the BWC Oversight Commission.
"Republicans have controlled the state for 10 years," Dann countered. "All the information [to the two Democrats] came from the governor-appointed BWC director."
Blackwell, a staunch conservative from Cincinnati, is currently the front-runner among Republican gubernatorial candidates, according to state polls.
During his Friday speech, Blackwell spent much of his time criticizing his fellow elected Republicans, including state legislators and Gov. Bob Taft.
Blackwell said Taft's plan to overhaul the state's tax system is poorly conceived and will raise taxes. He said legislators are controlled by wealthy special-interest groups.
"We need to shake up how the state does business," he said.