Wall Street pins Kasich to the wall
by Pari Sabety
Let’s recap where we are in that rolling drama called JobsOhio…As has been observed by BudgetWatcher, Leonidis on this site, and others, the JobsOhio legislation has raised serious constitutional questions about the ability of the legislature and the Governor to give away public assets to a private enterprise. Because, at its most fundamental, that is what is happening with the JobsOhio transaction.
Ohioans have been here before. They’ve seen lots of these job creating schemes come and go. In 1851, after bailing out canal companies to whom they’d lent millions of dollars, Ohio’s citizens passed a constitutional referendum that forebade the state to lend any aid or credit to a private company. It is this vexing requirement that is the most important barrier that must be overcome for the JobsOhio bonds to be successfully sold to Wall Street.
ProgressOhio filed suit in lower courts, and that suit created enough of a “shadow” over the constitutionality of the transaction to sow doubt on Wall Street. If JobsOhio is found to be unconstitutional, then the bonds have no value, and Wall Street bondholders will be left holding the bag. Just as Ohio’s citizenry was in the canal days. So for this transaction to go forward, the single most important item that the Kasich Administration must produce is a definitive legal opinion from the state’s Attorney General that the transaction is constitutional.
An attorney argued to Leonidas that Kasich could merely dismiss Goodman, appoint another Director, force them to sign the papers, and all would be well. But no. That wouldn’t work because Wall Street still needs a legal opinion that the transaction is constitutional.
Who could produce that legal opinion? In a transaction of this significance, the state’s Attorney General issues these opinions. Time to wake Mike DeWine.
Pari Sabety is a certified public accountant who served as director of the Ohio Office of Budget and Management from 2007 to 2011.
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