Wednesday, August 09, 2017

'PensionGate' Can Make Ohio Dems Winners In 2018

 Virtually no Ohio newspaper, television or radio station or even political blog has figured out what the single biggest issue, that if prosecuted properly by Ohio Democrats between now and Election Day next year, could install them back in the winner's circle in Columbus.

After two terms of a hard-right, Christian conservative turned Wall Street banker like Gov. John Kasich and his CPA sidekick Lt. Gov. Mary Taylor, Ohio is the worse for wear.

Lousy Ingredients, Lousy Government

One national ranking of states after another shows Kasich the reformer and complicit accomplice Taylor, a former state auditor, have colluded to rob cities and schools of billions, while gifting billions to poor performing for-profit charter schools whose owners kickback in campaign contributions with the same appreciation credit card companies offer cash-back when a purchase is made.

Under the guise of balancing a state budget racked from devastating effects delivered courtesy of the 2007 Great Recession, put in play lest it be forgotten from trillions of income tax cuts financed on the national credit card by then President George W. Bush and his then budget director, Ohio Sen. Rob Portman, Team Kasich sold his flim flam budgeting ideas and misguided public policies as smart, business-based reforms, when what they did was to stall the economy when other states slipstreamed a rising national economy. They also bloomed into a billion-dollar-plus budget shortfall that plagued Gov. Kasich's last budget, which austerity-minded Republicans filled with cuts from elsewhere. Team Kasich reversed Papa John Pizza's sales pitch—Lousy ingredients, lousy government. But it was part of the great reformer's elaborate political showmanship.

A Better Issue

Sen. Portman waltzed to an early and resounding victory last year over the governor Ohioans elected in 2006 to turnaround the state from an array of economic problems decades in the making, incubated in the GOP hothouse that favors private interest growth over safeguarding the public interest.
Voters recoiled in 2006 after years of overt corruption and pay-to-play politics culminated in the now famous scandal called Coingate. Like Rip Van Winkle, voters woke up from a long sleep, as Ohio Republicans fleeced their constituents with media going along for the ride.
"Coingate is a nickname for the Tom Noe investment scandal in Ohio revealed in early 2005 in part by Toledo, Ohio newspaper The Blade. The Ohio Bureau of Workers' Compensation (BWC) invested hundreds of millions of dollars in high risk or unconventional investment vehicles run by people closely connected to the Ohio Republican Party who had made large campaign contributions to many senior Republican party officials.
"A rare coin investment fund has attracted particular scrutiny after it was reported that two coins worth more than $300,000 had been lost. Further investigation then revealed that coins worth $10–$12 million were missing and that only $13 million of the original $50 million invested could be accounted for. Tom Noe was convicted of running a criminal enterprise, the theft of $13 million from the fund, and of keeping a second set of books to cover for it." [Source:]
Tom Noe is still in stir in a state correctional facility after he and accomplices defrauded the state in the pay-to-play corruption drama known as Coingate. Voters in 2006 had enough of GOP control of state government that enabled political insiders like Mr. Noe to run roughshod with Ohio funds. Mark D. Lay, an investment banker from Pittsburgh also involved in Coingate, found himself behind bars like Mr. Noe after the dust settled.

After two-consecutive terms each, first by George V. Voinovich then Robert Taft, Ted Strickland, a pragmatic former Democratic congressman representing a large swath of Appalachia Ohio, was elected governor in 2006 by a wide margin. It was an electoral feat Democrats have been unable to duplicate since, not just for governor but for auditor, treasurer, secretary of state or attorney general.
Statewide Democratic candidates got shellacked in 2010 and 2014, as they continued their run of failures to take control in the House or Senate, with the exception of a two-year period from 2008-2010 when Democrats took majority control of the House. Meanwhile, some political pundits believe outdated political history augers well for a switch next year from Republican to Democrat as all statewide offices become open seats now that current GOP incumbents become term-limited.
Why would voters who have turned Columbus red by trashing Democrats in election after election for decades—dating back 33 years to when Democrats last controlled the Ohio Senate—suddenly vote in Democrats? Will the new national Democratic agenda dubbed "A Better Deal" win the new political war, with all its new contours and non-traditional markers, that's been brewing from Election Day last year when Donald Trump thumped Hillary Clinton in red Ohio by nearly nine points or almost one-half million votes?

Is there any issue that would so rile Buckeye voters, Republican, Democrat or in between, that they would vote out Republicans by voting a Democrat back into the governor's office, especially after eight years of Gov. Kasich talking a good game about jobs and progress but delivering little on wages or the quantity and quality of jobs or education performance their the average wage earner can look to with pride on how his taxes are being spent?

If Ohio Democrats want an issue that can work to their advantage again, like Coingate did 11 years ago, and comes with a built-in constituency of millions of Ohio current and retired workers who vote, it's starring them in the face. So far they've failed to see it and assess it, so using it to batter ram a message that political change is needed to protect the funds from vulture managers who would fly off with billions and leave little behind may not be imminent.

Hedge Fund Fees

Gov. John Kasich spent years working on Wall Street for Lehman Brothers before running for governor in 2010. He's stated without equivocation that Ohio's retirement pension systems are "rock solid." That claim is fake news on par with declarations that come from the Trump White House on a daily basis on matters easily fact checked as false.

But for all the words Ohio's Big Eight newspapers print every day on issues big and small, the story that looms for Democrats, if they choose to seize the day on it despite it not garnering much ink with Buckeye media so far, is just how hollow, or overvalued as experts might call some of its key holdings are, that jeopardize retirement pension funds that suffered low investment returns throughout Gov. Kasich's seven years. While returns for retirees were low, the returns for hedge fund managers in the form of fees was high. Ohio retirees have been sold a bill of goods whose value is far lower than it should be.
"Ohio’s largest pension plans are at risk of falling significantly short on their obligations to hundreds of thousands of Ohioans. In fact, Ohio ranks ahead of only Mississippi in terms of the level of unfunded liabilities relative to the size of the state’s income." [Source:]
Mr. Kasich built a reputation over 40 years in elected politics as a great reformer who's now allowed state pension funds to be looted by Wall Street money managers of the ilk he worked with while at Lehman Brothers. The theft of millions in management fees is akin to the graft Tom Noe engaged in when Robert Taft was governor. The caper isn't that dissimilar to the more recent scandal of people being drained of lifetime earnings by Bernie Madoff, the New York investment man who ran a Ponzi scheme of historic proportions.

If the problem in Ohio is anything like it is in Rhode Island, where the Security and Exchange Commission has been called in to investigate whether "individuals are criminally responsible for the mismanagement of the state’s pension fund which has since cost Rhode Island 'nearly a billion dollars,'” Democrats have a real dragon that can breath the kind of fire that could motivate voters to wake up the sleeping giant of self-interest.

Are there issues that play to the Democratic agenda of a better deal on education or jobs or healthcare or infrastructure? Yes. Will selling these issues work for Democrats next year? Maybe and maybe not, given the reluctance of Ohio media to crank up outrage over misspent funds or misguided policy by the Kasich Administration, which has stiff-armed reporters at all levels who tried to warn Republican voters last year that John Kasich's run for president was ginned up as something different, when it was just Donald Trump's agenda without Trump's over-the-top bombast and outlandish attitude. Kasich's run, and his claim of being the "adult in the room" was fake news anyone could figure out with a little research.

Dems Have The Issue, But Can They See and Seize It?

Democrats have an issue that cuts across all segments of society and all political persuasions that can win the day for them next year. The sooner they figure out how to communicate how bad off Ohio's pension retirement funds really are, the better off they will be in pushing Kasich-friendly Republicans and media into a corner from which they can see no other culprit but themselves. Gov. Kasich and his team have sold pensioners down the Ohio river who will pay more during their working lives, only to receive less when they eventually retire.

Hedge fund managers showed up when Kasich won his first term in 2010, and have taken the most while delivering the least, under the cover of night as media fails to dig down to find out why the state's pension funds are in such terrible shape, based on hedge fund investments that could be as hollow as Mr. Kasich's claim of being the adult in the room.
"Despite having assets of more than $150 billion, some estimates show that Ohio needs to increase pension funding by at least $275 billion to be fully funded—that’s almost $25,000 per Ohio citizen. If lawmakers fail to make the decision about how to close the gap now, future generations will bear the burden of higher taxes, reduced government services, or even reduced benefits." Source:]
Republicans have no one else to blame but themselves for the deplorable plight Ohio's retirees face. If Coingate helped Democrats win some statewide seats in 2006, surely PensionGate can help them do the same next year.

Former Fox News investigative reporter John Damschroder has sounded the alarm.
"It's politically crazy Ohio Republicans are taking this sort of risk after Coingate and Crofters," he said, calling it a sign of political incompetence by Ohio Democrats that the issue is ignored.
Writing for the Fremont News Messenger, Damschroder sees a breakdown in media scrutiny that such an investment strategy executed during record highs for the stock markets have forced pension cuts for more than a million Ohioans without much coverage.
During his run for president on the Republican Party platform last year, Gov. Kasich called Ohio's pension funds rock solid, when they are in fact a national leader in high risk low reward investment, according to Mr. Damschroder, a Fremont native who worked in Gov. George Voinovich’s administration, writes about business and economic development in Sandusky County. He notes that no Ohio political or media figure has said word one about Kasich's fiction on how rock solid the pension is for millions of Buckeyes.
Democratic candidates for governor and auditor can led the charge on restoring the value Ohioans deserve who have worked and contributed to a state retirement system that has fallen flat on Kasich's watch.

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