Taft's office told in October about $225 million loss; e-mail from Conrad said firm overleveraged account

Gov. Bob Taft's office learned seven months ago - not this week - that the Ohio Bureau of Workers' Compensation had lost $225 million in a high-risk investment. An Oct. 26, 2004 e-mail stated that the "entire value" of the portfolio managed by MDL Capital Management was down about $225 million.

Kaptur alerts colleagues of unfolding scandal
Brown says illegalities put presidential election in question

WASHINGTON - As the word spread Tuesday night that the Ohio Bureau of Workers' Compensation had lost $215 million in a high-risk investment, U.S. Rep. Marcy Kaptur alerted her colleagues to the mounting concerns in her home state.

Miss Kaptur, during a statement on the floor of the U.S. House of Representatives on Tuesday night, said "there is a major political scandal that is unfolding in the state of Ohio."

Political ties strong for MDL's executive

In Ohio, eyebrows were raised by the fact that MDL Capital Chief Compliance Officer Mildred Forbes is the daughter of Cleveland NAACP President George Forbes, who is a member of the Ohio Bureau of Workers' Compensation oversight board. Mr. Forbes said yesterday he will step down.

Last year, House Democratic Leader Bill DeWeese named Mr. Lay to the state's new Commonwealth Financing Authority, which administers a $1 billion fund that finances state economic stimulus programs. Mr. Lay "is nonpareil in his knowledge of the financial management world," Mr. DeWeese said at the time.

Workers' comp bureau concealed $215M loss; Taft, Petro knew about fund's woes many months ago

The bureau acknowledged that the fund, managed by a Pittsburgh-based investment firm, lost the money between February and September, 2004. MDL Capital Management relinquished control of the fund in November.

Although the bureau has known about the losses since September, it wasn't revealed until yesterday, a day after The Blade began making calls upon learning that state investigators had uncovered huge losses at the bureau.

A spokeman for Gov. Bob Taft said last night that Mr. Taft had been told in September that there was an investment loss at the bureau - a loss of $10 million to $20 million.

Budget Scandal News : Index
Deals brokered by firm linked to earlier investment scandal
Taft office told in fall of lost millions
Trail of lost state funds
State loses $215 million
Noe ex-employee investigated in theft of coins State cash may have filled Colorado wine cellar
Oversight board in '98 had concerns about coin deals
Governors' ex-aide linked to campaign probe

Coingate timeline of events

 

Special audit will follow money trail

 

Taft: Separate investment, insurance functions at workers’ comp