Voinovich denies diversion of funds

By Joshua Benton
Blade Columbus Bureau

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COLUMBUS — Governor Voinovich has formally denied approving a 1994 transaction that has landed him in legal trouble with the Ohio Elections Commission.

But the governor’s campaign treasurer continues to say that the governor personally OK’d a money-laundering scheme to hide thousands of dollars that would end up in the hands of his brother, Paul Voinovich.

The men made their statements in affidavits filed yesterday with the election commission. Their accounts differ in large and small ways from the versions given to federal investigators earlier this year.

Five men have been accused of illegally diverting $60,000 from the governor’s 1994 re-election campaign committee. The campaign’s finance reports said the money was used for “voter program development” by a political consulting company, Mamais & Associates.

But documents obtained in a federal grand jury investigation this year show that the money ended up in the hands of Paul Voinovich and lobbyist Michael Fabiano, to pay them back for work done for the governor’s campaign.

The varying accounts the men give in their affidavits focus on a supposed meeting in the summer of 1994, at which the governor allegedly approved the deal. Campaign treasurer Vincent Panichi said the meeting included the governor, Paul Voinovich, and himself.

But the governor and Paul Voinovich, in their affidavits, deny that any such meeting took place.

Mr. Panichi’s memories of the circumstances of the meeting are sketchy. He said that it happened outdoors, but does not remember where, or when. He said that he “was not focusing on what the two brothers were saying” during a key part of the conversation. And he said that the governor might not have heard everything said, because “Governor Voinovich often wears a hearing aid, and I really do not know what he did or did not hear.”

But Mr. Panichi said he is clear on the substance of the meeting.

Paul Voinovich said he had somehow provided money to pay for the work of Ray Gallagher, a Cleveland-area union leader who had been lining up union support for the governor, Mr. Panichi said. And Paul Voinovich “wanted or expected to be reimbursed.”

Mr. Gallagher had been doing Voinovich campaign work while working for Mr. Fabiano. Mr. Fabiano, under an unrelated business deal, had been paying Paul Voinovich $6,000 a month. According to an IRS investigation, Paul Voinovich agreed to lower that amount by $2,500 a month so that Mr. Fabiano could use the balance to pay Mr. Gallagher for his campaign work.

According to the paper trail gathered by federal investigators, the reimbursement to Paul Voinovich arrived that fall. The Voinovich campaign wrote a $60,000 check to Mamais & Associates, which allegedly acted as the deal’s middle man. Then, Mamais & Associates transferred $28,500 to Mr. Voinovich’s companies and $28,500 to Mr. Fabiano’s, keeping $3,000.

Mr. Panichi backtracked on a few points in his affidavit, saying that some of his statements before the grand jury were “what I assumed or believed,” not “what I knew or heard.” But he stood by his statements that the governor specifically approved the deal at the summer meeting.

The Voinovich brothers, in their own affidavits, deny that version of events. The governor said he had no knowledge of any relationship between his brother and Mr. Gallagher, or between Mr. Fabiano and Mr. Gallagher. He said he did not know Mr. Gallagher was getting paid to work for his campaign, and thought that the payment to Mamais & Associates was for services performed by the company.

“I have read the Grand Jury testimony by Mr. Panichi. … I have absolutely no recollection of any such meeting and, to the best of my knowledge, do not believe that any such meeting occurred,” the governor said in his statement.

Had he known about the alleged money laundering, “I would never, never have approved payment to Mr. Mamais,” he said.

In his statement, Paul Voinovich said that the cutback in Mr. Fabiano’s monthly payment to him was not intended to pay for Mr. Gallagher’s campaign work. He said he did not know Mr. Gallagher was doing campaign work at the time.

The cutback was given to Mr. Fabiano because he was having trouble paying all his bills, Paul Voinovich said. And it was made clear to Mr. Fabiano that Paul Voinovich expected to be paid back, he said.

Paul Voinovich said he had a single phone call with his brother over the matter after discovering that Mr. Gallagher was doing campaign work, but after that he “had no further discussions with anyone else concerning this matter” – including Mr. Panichi.

In contrast, Mr. Panichi said that the subject came up at the supposed meeting.

Nick Mamais, the head of Mamais & Associates, was named in the original complaints, filed in October by Secretary of State Bob Taft.

But Mr. Mamais died in January, 1997, of a head injury when he slipped on ice at a wrestling tournament.

Governor Voinovich won election to the U.S. Senate on Nov. 3. He potentially faces a fine and loss of office if found guilty, although it is unclear legally if the loss of office could apply to his new Senate seat.

Francis Fela, vice president of Paul Voinovich’s companies under the umbrella The V Group, was named in the complaint. He filed an affidavit supporting Paul Voinovich’s version of events.

Mr. Fabiano was required to file a response to the allegations yesterday, as well, but he did not. There likely won’t be any penalty for his not filing, said Philip Richter, executive director of the election commission.

The commission could choose to accept his response sometime between now and Thursday, when the election commission will hold a preliminary hearing on the entire matter.

Mr. Richter said the commission has never refused to accept a late response.

Factory farm rules in Ohio called loose; Group warns of environmental dangers

By Joshua Benton
Blade Columbus Bureau

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COLUMBUS — Ohio doesn’t do enough to regulate its factory farms, and the state’s environment suffers as a result, according to a report issued yesterday by a national environmental group.

The Natural Resources Defense Council said Ohio and other states regulate the enormous complexes with the same hands-off attitude they use for small family farms. The group writes that manure from the farms pollutes nearby air and water.

“Factory farms have polluted our surface waters, our ground water, and our air,” the report says. “It’s time to recognize the damage that animal factories are wreaking on our environment.”

Under Ohio law, a factory farm is one with more than 750 dairy cows, 1,000 beef cattle, 2,400 hogs, or 100,000 poultry. Ten years ago, fewer than a dozen of these industrial-sized farms existed in Ohio. About 110 are in operation today.

The group’s findings match the complaints of Ohioans who live near the Buckeye Egg Farm, the giant poultry producer that has been criticized often about environmental matters.

Neighbors have complained about the odor caused by the large amounts of manure generated by Buckeye Egg’s chickens, including the 2.2 million chickens near Mt. Victory, O., in Hardin County. They say that the manure attracts swarms of flies that stretch for miles, that their homes have been attacked by beetles, and that the manure has polluted their water.

But an official with the Ohio Environmental Protection Agency said the report’s criticisms are overblown and biased.

“I believe the authors of the report have an agenda to put forward, and they used information that would help them do just that,” said John Sadzewicz, deputy director of the EPA’s water programs.

Among the report’s claims:

* Ohio does not require air pollution control permits for factory farms. Mr. Sadzewicz said that EPA attorneys examined the issue and found that, as agricultural operations, such permits should not be required for megafarms.

* Ohio does not allow local control over factory farms. Mr. Sadzewicz said that, as agricultural operations, they are exempt from local zoning, as are family farms.

* Ohio allows megafarms to sell off some of the millions of gallons of manure they produce to other farmers, without making the identities of those farmers public. Residents say that prevents them from tracking the manure to make sure that it doesn’t run off into streams.

Mr. Sadzewicz said the EPA knows which farmers get the manure and can do its own checking. But companies can request that the information not be made public under Ohio’s trade secrecy laws.

The report criticized the state for being slow to enforce rules and unwilling to hold public hearings, both of which Mr. Sadzewicz said aren’t accurate claims.

Senate approves funds for area projects

By Joshua Benton
Blade Columbus Bureau

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COLUMBUS — The Ohio Senate approveda $1.72 billion capital budget yesterday that will provide money for the Fallen Timbers battfield, work on the Valentine theatre and projects at Fort Meigs. It will pay for dozens of community projects around the state.

The bill, which lays out bricks-and-mortar spending for the next two years, includes $505 million for school facilities improvements and $549 million for state colleges and universities.

Other big budget items: prison construction, state park maintenance, and flood relief for southern Ohio.

The House passed the measure on Tuesday, 86-11. It now goes to Governor Voinovich for his signature.

The capital budget moved through the Legislature with unusual speed.

Yesterday morning, the Senate Finance and Financial Institutions committee unanimously approved the bill.

In the afternoon, the measure went to the full Senate, which passed it 28-1.

Most controversially, the bill allocates $44 million to help build stadiums for the Cleveland Browns and the Cincinnati Bengals.

But for legislators, the most hotly contested section was the money set aside for community projects. For Lucas County, the bill provides $44.7 million for com munity projects, putting it behind only Franklin and Cuyahoga counties.

Among local projects getting financial help are the restoration of the Fallen Timbers battlefield ($2 million), work on the Valentine Theatre ($3.5 million), and renovations and a museum of military history at Ft. Meigs ($2.9 million).

Sen. Michael Shoemaker (D., Bourneville) proposed an amendment that would divide the state into eight sections with equal population. Each section would be guaranteed an equal amount of money for community projects in future capital budgets. But the amendment was defeated on a voice vote just before the final vote was taken.

Move to elect port board is rejected; House panel rids bill of proposal

By James Drew and Joshua Benton
Blade Columbus Bureau

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COLUMBUS — A legislative committee yesterday rejected an amendment that would have allowed voters to elect members of the Toledo-Lucas County Port Authority board, saying the experiment would have created a fifth arm of state government.

State Rep. Sally Perz (R., Toledo) urged fellow members of the House Transportation Committee to oppose the amendment, crafted by state Rep. Jack Ford (D., Toledo) in the weeks leading up to the Nov. 3 election. By a 55 to 45 per cent ratio, Lucas County voters rejected the port authority’s 0.4-mill renewal levy.

“I have another philosophical problem with giving the voters – who we all know don’t vote – more power … ” said Ms. Perz, who was re-elected Nov. 3. “It’s not as if the voters of Lucas County are storming the Statehouse saying, `Should you give us the opportunity to vote, we would guarantee we would have different members on the port board.”‘

The committee voted 9-3 to defeat the amendment and then unanimously to refer the bill to the full House of Representatives for approval. The bill would make the most comprehensive change in port authority law in four decades.

Mr. Ford’s amendment would have en abled Lucas County voters to elect the 13 port authority board members in nonpartisan elections starting in November, 1999. The directors would have served for four years.

He said one reason he took up the issue is that he has growing concerns about the makeup of the port authority board, which has only one woman and one African-American, and up until September, no board members lived in the city of Toledo.

Currently, the mayor of Toledo, with consent of the city council, appoints six board members, and county commissioners appoint six. The city and county share one appointment.

Two polls commissioned this fall showed voter support for election of port authority board members.

Rep. Sylvester Patton (D., Youngstown), who carried the amendment for Mr. Ford, said Lucas County would have been a “pilot project” for the state to determine if election of port board members is more effective than appointment.

“Our charge as legislators is to look for the best government possible,” he said.

But Rep. Lynn Olman (R., Maumee) said he did not see any evidence that port authorities with elected members perform better than those with appointed boards.

Committee Chairman Sam Bateman (R., Milford) said he voted against the amendment “because that’s what they wanted.” By “they,” he meant the Toledo-Lucas County Port Authority and the committee’s members from Lucas County, Mr. Olman and Ms. Perz.

Mr. Bateman said representatives of the Toledo-Lucas County Port Authority had contacted his office in the last few days to express their opposition. Mr. Bateman, who is recuperating from neck surgery, said he didn’t recall their names.

Ms. Perz told committee members that the amendment is part of a conflict in Lucas County over the port authority.

“This change may or may not help the current situation. I am also philosophically against coming to the state legislature to resolve something that is really a community issue,” she said.

James Seney, the former Sylvania mayor who now works for the state Department of Development, urged the committee to defeat the amendment for two reasons.

He said state law positions port authorities as “tools” of locally elected governments and accountable through the appointment process.

“If we directly elect port authority board members, we then sever the employer-employee relationship between the local government[s] and the port authority,” he wrote in a memo distributed to committee members.

Mr. Seney, who is co-chairman of the Ohio Port Authority Council, said that by directly electing port board members, the state would create a “fifth independent local government unaccountable to the existing counties, cities, villages, and townships.”

Reps. Rex Damschroder (R., Fremont) and Kirk Schuring (R., Canton) agreed.

“I don’t think we need another level of government,” Mr. Damschroder said.

Several members of the committee said their “no” votes were aimed at keeping the expensive political process away from uncompensated jobs.

“It’s very hard to get people to serve in office when it is a volunteer thing,” said Rep. John Carey (R., Wellston). “And I think it would be really hard to get someone to go through the expense of running for office, unless they had a special interest of some kind.”

Rep. Mark Mallory (D., Cincinnati) agreed, saying that political campaigns aren’t right for port authorities.

“There are enough elected issues as it is. I don’t want to put all the burden of money in a political campaign on the port boards.”

Decision on cellular towers in hands of Ohio’s top court

By Joshua Benton
Blade Columbus Bureau

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COLUMBUS — The Ohio Supreme Court heard oral arguments yesterday on whether cellular phone companies should have to follow township zoning laws when they erect communication towers in nonresidential areas.

If the high court agrees with an appeals court ruling, local governments would have no say in whether or not the tall towers go up in certain areas.

The justices heard a case from Stark County’s Plain Township, in which two cellular companies – AT&T Wireless and Ameritech Wireless – wanted to build a 165-foot tower. The township zoning director obtained an injunction to stop construction because the tower would violate township zoning laws.

The companies appealed the case, arguing that they are public utilities to whom township zoning laws don’t apply. An appeals court agreed, meaning that any wireless communications company could build a tower wherever they pleased, as long as it was outside a city or residential area.

Under Ohio law, public utilities can build structures necessary to do their work – such as electrical towers or telephone poles – without interference from zoning laws, according to Gene Naujock, manager of planning for the Toledo-Lucas County Plan Commission.

William Brown, attorney for the wireless companies, said that cellular service is widespread enough that it should qualify as a basic utility and thus be able to avoid zoning restrictions.

But Plain Township attorney Scott Piepho said that cellular phone service isn’t as essential to life as traditional utilities, such as natural gas, electricity, or water. He noted that, unlike with most utilities, rates for cellular phone calls are not regulated by the government.

Mr. Naujock said he would oppose letting wireless companies have too much leeway. “You’ve got a tower that’s 85, 100, 125 feet high, and it becomes a pretty visible object intruding into an area,” he said. “They’re not considered essentials for life. They’re bonus services. A community can survive without them.”

Attorneys for both sides agreed that the case would have no impact on zoning restrictions in residential areas. Under current state law, zoning laws can be applied to towers in those areas.

The Supreme Court will issue its ruling next year.

Voinovich aide decides against Washington job

By Joshua Benton
Blade Columbus Bureau

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COLUMBUS — One of Governor Voinovich’s longtime aides won’t be following him to Washington after all.

James Conrad, who heads the Ohio Bureau of Workers’ Compensation, was named chief of staff for Senator-elect Voinovich more than two weeks ago. But he declined the post yesterday to remain in state government.

“I’ve dedicated my career to public service, and what I enjoy most about it is working at a level where I am close to the public,” Mr. Conrad said in a statement. He would not consent to an interview.

The change of heart came to light when Governor-elect Bob Taft announced he would reappoint Mr. Conrad as chief executive officer and administrator of BWC.

“I am confident that under his guidance the agency will continue to build upon the successes it as enjoyed during the past three years,” Mr. Taft said.

Mr. Voinovich immediately named Ted Hollingsworth as his new Senate chief of staff. Mr. Hollingsworth has headed Ohio’s Washington office since 1993.

In a prepared statement, Mr. Voinovich said Mr. Conrad came to the realization “that management responsibilities in the Senate were not what he anticipated. After careful review, Jim felt more comfortable remaining in Ohio.”

Mr. Conrad has been a key adviser to Mr. Voinovich, from his years as mayor of Cleveland through his two terms as governor. In the 1990s, he has led four cabinet-level state offices: the Ohio Department of Administrative Services, the Ohio Bureau of Employment Services, the Ohio Department of Human Services, and BWC.

Mr. Hollingsworth, 36, has represented Ohio offices in Washington since 1987, when he went to work in the office of then-U.S. Rep. Mike DeWine. In 1991, he moved to the Ohio Washington office, which lobbies for the state’s interests in federal government.

He is a 1984 graduate of Haverford College and received a master’s degree from Columbia University in 1986.

Taft spokesman Brett Buerck said most Voinovich cabinet members will not be rehired, and that the governor-elect “would prefer to start with a new team” when he takes office.

He said that during the weekend Mr. Taft began calling Voinovich cabinet members, telling some they will not be reappointed and asking others to reapply.

He said Mr. Taft has not decided whether Commerce Director Donna Owens, a former Toledo mayor, will be retained.

Mr. Conrad is the first cabinet appointment Mr. Taft has made, Mr. Buerck said.

During the fall campaign, Mr. Taft said he would ask for the resignations of Voinovich cabinet members so he could to start with a new team. But the transition team has since learned that cabinet members’ terms end when Mr. Voinovich leaves office, so resignations are unnecessary, Mr. Buerck said.