Treasurer candidates exchange accusations

By D.A. Wilkinson

The police chief said he is awaiting results from a state investigation.

SALEM — As Election Day approaches, each candidate in the Columbiana County treasurer’s race says the other is misinformed on county investments, while Salem police are awaiting results of a probe in a state House contest.

Salem Treasurer James Armeni, a Republican, on Tuesday claimed that Democratic county Treasurer Nick Barborak has much of the county’s funds in unsafe investments.

Barborak, the incumbent, said, however, the $26 million in county money is safe.

Armeni, who is challenging Barborak, said county records show that 59 percent of the county’s money is invested with Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency has placed the Federal National Mortgage Association, known as Fannie Mae, and the Federal Home Loan Mortgage Corp., known as Freddie Mac, into temporary public ownership to save them from collapse after upheaval in the mortgage industry.

Those agencies provide funds for commerce but do not issue home mortgages.

Armeni said the county money is at risk. He added that Salem’s funds are all in secured programs so the city will not lose any public money.

But Barborak said the county money is in a separate, protected category in the Fannie Mae or Freddie Mac programs.

Barborak said the county does not invest in mortgages or “commercial paper,” which is a short-term but unsecured loan.

Salem’s investment board works with a group, Productive Portfolios Inc. of Rocky River, Ohio, that invests funds for 23 Ohio counties as well as cities and school districts.

Armeni had the company compare the county’s returns with that of the rest of its customers. Armeni said the results showed the county was losing more than $133,000 a year in revenue.

“I am calling for an internal audit of the county’s investment portfolio by the county investment advisory board and to release their findings to the public so the citizens of Columbiana County will know how much of their money is at risk in this critical time,” Armeni added.

Many government agencies put funds into the State Treasury Asset Reserve, or STAR Ohio program, or conventional certificates of deposit.

But Barborak said the county was getting a better rate of return using a company rather than STAR or CDs.

Meanwhile, Salem Police Chief Robert Floor said he is awaiting results of a probe by the Ohio Bureau of Criminal Identification and Investigation into a leak in a local investigation that was used to attempt to smear a candidate.

Caroline Hergenrother of Salem, a Republican, is running for the 1st House district seat against incumbent state Rep. Linda Bolon, D-Columbiana.

Hergenrother and her husband, Kurt, were involved in a dispute with several people at Stooges Tavern about 12:55 a.m. Sept. 21.

A short report that did not mention any names stated there was an incident inside the bar that led to an altercation outside.

Internal, investigative notes are confidential under state law, but they were leaked to the media.

Hergenrother has said the situation doesn’t affect the issues in the race.

County Republican Chairman David Johnson challenged Bolon to discuss her role in the leak. She did not respond.

Johnson said he had heard nothing more about the case.

wilkinson@vindy.com