The Blade puffs its chest once again about breaking the Noe Coingate story, and about having accomplished its true mission in the process:
The Blade first reported in April, 2005, about problems with a $50 million rare-coin investment the bureau placed with Tom Noe, a GOP fund-raiser and Toledo-area coin dealer.
Fallout from the scandal helped end a dozen years of GOP power in the state.
This is getting really tiresome. So I’ll ask a couple of questions.
Quick: How much money has the State lost in the Noe affair?
Think hard ….. Ready?
Answer — Surprise! Probably nothing:
State likely to recoup over $50M in Noe case
Asset liquidation nets $42M so far
COLUMBUS — The sale of rare coins and other memorabilia should bring more than the $50 million the state gave a coin dealer convicted of stealing from the funds he managed for the workers’ compensation bureau, the broker handling the collection’s liquidation said yesterday.
….. “It is clear now we are going to retrieve more than $50 million. The question is how much,” Mr. Brandt said.
The state confirmed the total raised so far and it expects the sale of remaining assets to surpass $50 million as well, said Leo Jennings, a spokesman for Attorney General Marc Dann.
….. Noe was awarded the state contracts by the Ohio Bureau of Workers’ Compensation. The former chief financial officer of the bureau and an investment marketer also were sentenced in the scandal. Overall, the bureau has lost $300 million in investments since 1998.
All right, a reasonable riposte would be that the money could have been invested for a few years and achieved at least a modest return return of 6% or so per year. Fair enough — Go ahead and be aggressive in all the assumptions. Assume the state will only break even, and that the lost investment income is about $17 million (6% for at most 5 years on $50 million, compounded).
Heck, even throw in the $13.7 million stolen, even though I believe that at least part of what has been recovered includes a portion of that $13.7 million. Thrown in another 5 years of lost investment income on the $13.7 million, and make the loss on stolen money $18 million.
So the highest conceivable worst-case loss on Mr. Noe’s handiwork is $35 million ($17 mil plus $18 mil).
Next question: How much money did the state lose with Mark Lay, the oh-so-conveniently unnamed, and oh-so-typically non-party-identified, Democratic “investment marketer” named in the last paragraph of the excerpt?
Think hard ….. Remember that it’s a long distance from Noe’s worst-case loss to the BWC’s total losses of $300 million noted in the excerpt above …..
Answer: $216 freaking million — and unlike the recovery noted in Noe’s case, Lay’s trading losses are NOT coming back. The money that could have been made on Lay’s disappeared capital will compound on itself — FOR-EV-ER.
There’s certainly no “Free Tom Noe” movement in the works here, but where’s the perspective?
It’s clear from the Blade’s ongoing celebration that its workers’ comp scandal investigation was driven far more by its own opportunistic partisanship than it was by any desire to inform Ohio’s taxpayers and voters of the full breadth and scope of the Bureau’s problems and losses. If the Blade’s journalists weren’t on a partisan mission, Mark Lay’s name would be at least as well-known in Ohio as Tom Noe’s.
The main point — We’re right back to where RAB was at the top of this morning’s SOBer Thoughts post. Ohioans wouldn’t have to put up with, or even worry about, cronies of either party siphoning off or poorly investing state money if the whole workers’ comp system was handled by private and competing insurance companies — as is the case, I must note once again, in 47 states.