Details about Kasich and Kvamme’s implementation plan for JobsOhio are finally starting to come out and it’s becoming increasingly clear that the problems with JobsOhio’s lack of oversight and transparency are not going to go away.
ProgressOhio has made the news lately discussing the announcement that Kasich would be setting aside a “$24 million pool of Third Frontier funds for distribution to local chambers of commerce and other private, regional economic development agencies.” As ProgressOhio points out, “The announcement came after most of the agencies or their partners endorsed SB5” – leaving a lot of unanswered questions about who is getting funds from JobsOhio and why.
The distribution of funds to local chambers of commerce (or organizations that were largely organized by the local chambers)was announced at a public press conference by Kasich. But there are plenty of decisions being made behind the scenes. Decisions involving how to spend OUR money. Decisions that could be influenced by – or could benefit – people with close relationships to JobsOhio directors and employees. Decisions we’ll never know about.
I want to address one specific question involving Mark Kvamme – but bear with me while I provide a little background and context first…
MARK KVAMME COMES TO OHIO
During the first week of January, 2011, Kasich announced he would be bringing on California Venture Capitalist Mark Kvamme to head the Department of Development.
Kvamme was supposed to stay here 5 or 6 months to help create his brainchild: JobsOhio, a new private organization that would effectively take over all economic development efforts from Ohio’s Department of Development.
Months after his originally scheduled departure date, Kvamme is still here. He recently took on the role of Chief Investment Officer for JobsOhio and Crain’s Cleveland reported yesterday that he now has an Ohio driver’s license and he recently “bought a farm near Sunbury.”
Like Kvamme, questions about the problems with JobsOhio won’t seem to go away either.
NO TRANSPARENCY/OVERSIGHT FOR JOBSOHIO EMPLOYEES
From the beginning, concerns over transparency and oversight for JobsOhio have been raised. And the final version of HB1, the bill authorizing the creation of JobsOhio, confirmed those concerns, all but removing ethics and oversight requirements currently in place at the DOD and other state agencies.
According to the bill, “records created or received by JobsOhio are not public records,” directors and employees of JobsOhio do not need to file ethics or financial disclosure forms like every other state official and employee, and when JobsOhio does hold one its limited number of public meetings, they are allowed to close those meetings to the public if they want to discuss “personal financial statements” or “to consider personnel matters related to an individual employee of the corporation.”
JobsOhio’s funding source has also been called into question.
NO APPROVAL NEEDED TO HIRE FINANCIAL ANALYSTS
Kasich’s budget (HB153) allows JobsOhio to take control of Ohio’s liquor profits against which it will sell bonds to raise money to pay to pay the state for a lease on the profits, the leftover capital for operating costs.
The transfer of this state asset (Liquor Profits) to JobsOhio will require the state and JobsOhio to hire experts with this type of experience. But, as Innovation Ohio points out in a recent report Kasich’s budget grants the directors of OBM, Commerce and Development “the authority to hire underwriters, investment bankers and financial advisors without any legislative or government oversight.” That means no competitive bidding and no asking the State Controlling Board for spending approval.
LSC’s analysis says:
The Director of Budget and Management also, without need for any other approval, may retain or contract for the services of specified persons such as financial advisers to effect the transfer agreement.
Let me recap:
- Kasich and the GOP-controlled legislature have given Mark Kvamme control of billions in state assets (liquor profits) against which to issue bonds to pay for JobsOhio.
- They have removed all oversight from Kvamme including all ethics and financial disclosure requirements and the requirement to reveal publicly his personal relationships with people doing business with the state.
- They have given Kasich appointees, not elected officials, the authority to hire financial consultants – including those responsible for underwriting bonds – without any competitive bidding or approval from the State Controlling Board.
What could POSSIBLY go wrong?
MARK KVAMME’S PERSONAL RELATIONSHIPS
So back to Kvamme.
The central Ohio rumor mill has been grinding out news about Mark Kvamme for months. While Kvamme may be buying a farm and moving to our wonderful state, Kvamme’s soon-to-be ex-wife and daughter are still living in the Bay Area. Court records show that Kvamme’s wife filed for divorce on May 19th – and while we don’t know the exact reason, it seems reasonable that his divorce and his change of heart on moving to Ohio might be related to the other big Kvamme rumor: his girlfriend.
The rumor mill tells us that Kvamme’s girlfriend here in Columbus is Megan J. Browning, daughter of Voinovich’s OBM director Greg Browning and Senior Vice President at the investment banking firm George K. Baum & Company.
According to her online bio, Megan Browning specializes in exactly the type of financial advising and underwriting that will be needed to implement the JobsOhio funding plan. She “has served as financial advisor” to the state in the past and worked as “underwriter for the State’s Liquor Profit Bonds” – the same bonds that will need to be paid off by JobsOhio’s lease and the same type of bonds that JobsOhio will be issuing to provide its funding.
Now let me be clear here: I am not saying there is anything illegal, immoral, unethical or even unlikable about the relationship between Kvamme and Browning. Kvamme is free to date anyone he likes, and he and Megan certainly do seem to have a lot in common despite the 16 year age difference.
But if there was something questionable, how would we know?
Did the whole idea to sell off liquor profits comes from Mark Kvamme’s girlfriend? Will she benefit from the payoff of the current liquor bonds? Is she going to get any of the contracts to underwrite the new bonds? If so, will they hire her without any competitive bidding? Has she influenced any other decisions about JobsOhio’s financing? Has she given Mark any large gifts? Has she sent any emails to Mark that might have helped direct business to her company?
Probably not. But we don’t know. And we WON’T know. Because Kvamme and the GOP intentionally created JobsOhio in a way that prevents us from knowing what it does, how it does it, who is influencing it and who might be benefiting and why.
Again, I’m not saying there is anything wrong with Kvamme dating a financial analyst who does work for the state of Ohio.
But the entire system of transparency and oversight was set up to specifically address cases like this. Cases where there could be the appearance of impropriety. And when that system is tossed out in the name of ‘moving at the speed of business’ – how are we supposed to know?
Ronald Reagan liked to use the phrase “Trust, but verify”
Kasich and Kvamme are simply asking us to Trust.