Yesterday’s Gongwer report had an interesting article about a possible proposal to privatize the State’s liquor monopoly. The proposal was referenced by John Kasich as a news conference last week. According to Kasich this could raise $1-1.5 billion in one time money for this budget.
Reporters at the news service were smart enough to request a copy of the proposal the Governor referenced and it turns out it came from a boutique investment banking shop in Northeast Ohio called Western Reserve Partners, LLC.
An investment bank with interest in privatization? That’s got to be completely altruistic, right?
Um, no. Investment banks pocket hefty proceeds on deals like this – sometimes in the ballpark of 10% of the total take, or $100-150 million in this case. Not a bad payday if you can get it.
So was this a new idea? Well, no in fact, they’ve been thinking about this for a while. According to Gongwer:
Mark Filippell, a managing director of Case Western, said his firm had been considering the possibility of privatizing the division for years, but finally acted after Gov. Kasich publicly encouraged people to submit budget proposals. (Gongwer, Jan 13)
So they were just sitting on the sidelines, and were only reluctantly responding to Mr. Kasich’s public request for ideas? Or could it be that the four contributions totaling over $7,500 made by Mr. Filippell may have helped to open the door with team Kasich to get their ideas in front of the Governor?
And it certainly can’t hurt that three of the firm’s other associates ponied up another $2600. (source: Secretary of State campaign finance database)
If they get the state’s banking business, their investment will have been well worth it. Let’s just remember what Kasich said the other day:
“we’re going to have to have bankers to help us do things” ( source: Gongwer, Jan 8 )