JobsOhio controversy continues; State Auditor Dave Yost seeks financials

by MARC KOVAC | CAPITAL BUREAU CHIEF Published:

Columbus -- The Republican state auditor is demanding access to financial documents, Democratic lawmakers are demanding more public scrutiny of the nonprofit JobsOhio, one Republican leader is chastising both of the former, and Gov. John Kasich is calling the whole thing a misunderstanding over a complicated issue.

Such was the status March 7 in a growing controversy over the private office that coordinates the state's economic development programming, the millions of dollars in public funding it has received and the lack of public information on the nonprofit's spending and donors.

"Sometimes you read things and it appears one way," the governor told reporters March 7. "It's really just a little disagreement about how we should proceed. The simple fact of the matter is I favor all public money being able to be audited by our state auditor, plain and simple. … But you don't want to go in and audit the private books of private industry by the auditor. That's beyond his authority."

The brouhaha focuses on JobsOhio, the nonprofit created by Kasich and lawmakers two years ago to reach out to existing companies and firms thinking about expanding into Ohio, negotiating economic incentive packages and helping to commercialize research and technologies developed at the state's universities.

Most of JobsOhio's dealings are conducted outside of the public spotlight, a setup supporters say is needed during business negotiations. However, the nonprofit is required to publish an annual report disclosing its completed deals.

According to that report, which was released this month, JobsOhio worked with 277 companies that committed to creating 20,979 jobs and retaining another 54,633 in 2012, with $5.8 billion in new capital investment.

But documents also indicated the nonprofit has received more than $5 million in public funding, and a number of employees received six-figure salaries.

Subpoenaed

Yost this week issued a subpoena seeking financial statements, "bank statements for ALL accounts," lists of JobsOhio contributors and other documents.

The subpoena requires JobsOhio representatives to appear at the auditor's office at noon on March 19 to turn over the documents and provide additional testimony.

"The governor and I have the same goal: to make sure JobsOhio's money is working for the people of Ohio -- creating jobs and growing this economy for our families," Yost said in a released statement. "It's important to look at the total picture. The private bond proceeds trace directly back to the public money."

Development Services Agency Director Christiane Schmenk sent a letter to Yost earlier this week seeking "agreed-upon procedures" for auditing public grants provided to Jobs Ohio.

And Laura Jones, a spokeswoman for JobsOhio, indicated the office would provide information on public funding.

"We welcome the auditor's review of the funds DSA provided to JobsOhio and looking forward to working with him in those efforts," she said in a released statement."

Both Kasich and Batchelder said they fully expect an accounting of the public funds used by JobsOhio.

"We think that the auditor should audit all public money that's involved in anything, whether it's JobsOhio, whether it's a company that gets a tax incentive," Kasich said. "… We're in full agreement that when it comes to the use of public dollars, the auditor ought to be able to look at all of it, and we welcome him to do that."

But both also said the state auditor and others do not have authority to demand public review of private financials.

Kasich said such requirements would be "disruptive" and "unworkable" for private businesses and nonprofits.

"I'm waiting for him to try to get into Chrysler Motors or Fiat, whatever they call it now," Batchelder said. "We bought a lot of cars this year. Where'd that money go? What's going on over there?"

He added, "It's very distressing to those of us who have a really strong feeling about the necessary success of [JobsOhio]. ... Our problem here is that you have somebody who for whatever reason wants to try to intervene into this."

Criticism

State Rep. and Democratic Party Chairman Chris Redfern called JobsOhio "Gov. Kasich's reelection slush fund" and criticized the nonprofit for being "shrouded in secrecy."

"… We still don't know what corporate interests or campaign donors fund JobsOhio," Redfern said, adding later, "... $4.3 million has been appropriated from [the Development Services Agency, formerly the Ohio Department of Development] into JobsOhio and no one over the course of the last couple of days has told you where any of those dollars were spent."

Rep. John Carney, a Democrat from Columbus, said he planned to introduce legislation requiring public audits of JobsOhio's books. Comparable legislative attempts last session were unsuccessful.

"Unfortunately, our legislature, led by the Republicans, abdicated their responsibility and authority over the spending of those dollars and gave a blank check to JobsOhio…," Carney said. "The taxpayers giving a $100 million blank check to an entity that is afraid to come forward to explain how they spend $5 million of your dollars has to make taxpayers wonder why would the legislature give that sort of broad authority to this entity."

Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.

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