A second grand jury is investigating the expanding state scandal involving Tom Noe and his failed $50 million rare-coin funds.Judge Charles Wittenberg of Lucas County Common Pleas Court confirmed that a special grand jury met for the first time yesterday and is expected to meet monthly into November.
He declined to say why the grand jury is meeting, but sources told The Blade yesterday that it will not only focus on Mr. Noe but also will look at “the broader issues” surrounding problems at the Ohio Bureau of Workers’ Compensation.
Since 1998, the bureau has invested $50 million in two rare-coin funds that Mr. Noe set up, plus $5.4 million in alleged profits that bureau officials allowed Mr. Noe to reinvest in the funds in February.Bureau officials were on the verge of investing an additional $25 million with Mr. Noe until The Blade began writing about problems with his coin funds in early April.
In late May, state officials shut down the Noe funds. They confiscated Mr. Noe’s inventory and records after his lawyers revealed that up to $13 million from the funds was unaccounted for.
Two weeks ago, Ohio Attorney General Jim Petro held a press conference to announce that an initial review of the confiscated records showed that Mr. Noe stole nearly $4 million of the state’s money.
A special grand jury, used infrequently in Lucas County, was sworn in July 22 by Judge Wittenberg, the administrative judge for the court.
Yesterday’s session was the panel’s first. It is expected to meet the first Wednesday of September, October, and November, and possibly longer.
Judge Wittenberg identified Tom Matuszak as one of the prosecutors presenting the case to the special grand jury. Mr. Matuszak is one of the lead investigators on the Noe case for the Lucas County prosecutor’s office.
Jon Richardson, one of Mr. Noe’s attorneys, said he “wasn’t aware, but I’m not surprised” that a special grand jury was meeting. He said the ongoing nature of its work indicates to him that it is an investigatory body.
Grand juries are used to hear from witnesses and review evidence presented by prosecutors in order to determine if enough proof exists to charge someone with a crime. Prosecutors also may ask grand juries to issue subpoenas in order to secure additional evidence.
Alan Konop, a veteran criminal defense attorney in Toledo, said the impaneling of a special grand jury is a common investigative tool allowing prosecutors to gather evidence and compel testimony without first filing a criminal charge.
“It’s a very effective tool, especially because of the subpoena,” Mr. Konop said.
And without a grand jury, prosecutors cannot force potential witnesses to talk with them.
“The method of getting people to talk is the subpoena,” Mr. Konop said.
He said Lucas County Prosecutor Julia Bates’ office is taking the right approach, similar to the one taken by the U.S. attorney’s office. “It’s a very measured way of doing it. It’s a very logical way of doing it.”
Ms. Bates is working with Franklin County Prosecutor Ron O’Brien and both U.S. attorneys for Ohio, Gregory White of Cleveland and Greg Lockhart of Columbus. The four have formed a task force to investigate Mr. Noe and his coin funds, as well as an ever-widening group of state officials involved in troubled bureau investments.
Since early June, a federal grand jury in Toledo has been hearing evidence about Mr. Noe and whether he illegally funneled money to the Bush-Cheney re-election campaign.
Federal investigators are trying to determine if Mr. Noe gave money to people to donate to the campaign, allowing Mr. Noe to skirt spending limits.
Several prominent Republicans have testified before the federal grand jury, including Betty Shultz, a member of Toledo City Council; Maggie Thurber, a member of the Lucas County commission; former Toledo mayor Donna Owens, and former state representative Sally Perz.
They all attended an October, 2003, Bush fund-raiser and all contributed to the campaign.
The Ohio inspector general is also investigating the state coin-fund debacle, and the Ohio Ethics Commission is investigating ethical violations in the office of Gov. Bob Taft concerning gifts from Mr. Noe.
Last week, the ethics investigation netted its first criminal convictions when former Taft aides Brian Hicks and Cherie Carroll were found guilty of violating state ethics laws.
Mr. Hicks, the governor’s former chief of staff and now a Columbus lobbyist, vacationed at the $1.3 million Florida Keys home of Mr. Noe and his wife, Bernadette, while paying below-market rates for his stays.
Ms. Carroll, Mr. Hicks’ former assistant in the governor’s office and now an employee of his lobbying firm, allowed Mr. Noe to buy her numerous meals at expensive Columbus restaurants.
A judge convicted the two of violating Ohio ethics laws and fined them each $1,000.
