On the morning of October 2nd we revealed that James Leftwich, former head of the Ohio Department of Development, was running a private consulting company while working as an “economic development adviser to Governor John Kasich.” New records obtained from Wright State University show that Leftwich was not only consulting for WSU while receiving a state salary, but that Leftwich may have used his connections at the state to secure and maintain those consulting contracts. Emails also show Leftwich was working to secure state funding from Ohio’s Third Frontier program for his client, money that would be used to fund start up companies Leftwich would partially own.
State payroll records and WSU contracts show that between March and August of 2012, Leftwich was paid $51,166 by the Ohio Department of Development. Wright State University paid Leftwich $90,000 in consulting fees over the same six month period. Leftwich resigned from his position with the state on October 5th, three days after we published our original post.
The University was aware of Leftwich’s position with the state when he was hired to help create and fund start-up companies based on research from WSU professors. Leftwich’s contract specifies that he can only work on WSU business during hours he is not paid by the state unless he first obtains a written waiver from his “department head”. Leftwich, however, scheduled frequent meetings during work hours with WSU.
The personnel file and emails requested from the Department of Development fail to show that Leftwich asked for waiver from anyone at Development or that he discussed his work at Wright State with the Ohio Ethics Commission, a common practice in a situation where a state employee has a second job.
There also appear to be issues with the way Leftwich obtained the contract with Wright State.
Emails from WSU show Leftwich touted his ability to set up meetings with JobsOhio’s Mark Kvamme and a member of the Third Frontier Commission, both organizations that work directly with the Department of Development, while he was negotiating his contract with the university. In one email Leftwich says he spoke with Bruce Langos, a representative of the 3rd Frontier Commission, who Leftwich claims is “more than willing to review items prior to going in front of the commission and socializing them with others if he feels they have merit.” An email sent the next morning contained a revised version of the contract Leftwich was trying to get signed and another reminder that he was planning to meet with Mark Kvamme. That afternoon, Leftwich sent a follow-up email mentioning that he spoke with Mark Kvamme about WSU and that Kvamme was interested in “putting together a roadshow to take to VCs in” California.
Kvamme, Langos and Leftwich were all appointed by Governor Kasich.
If it is determined that Leftwich was selling access to his co-workers at other state-based development organizations in exchange for his contract with WSU, this would violate state law. According to Ohio Revised Code Section 102.03(D): “No public official or employee shall use or authorize the use of the authority or influence of office or employment to secure anything of value.”
After contracts were signed, Leftwich arranged a meeting with Kvamme and Kristi Tanner of JobsOhio. Based on a scheduling email sent by Leftwich, it appears Kvamme was acting as a representative of JobsOhio, the publicly-funded development organization that is currently caught in legal limbo over constitutional issues. Internal policies at JobsOhio also forbid employees like Kvamme and Tanner from using their positions for personal gain. Kvamme made a surprise announcement that he was leaving JobsOhio to start his own Midwest VC fund on the same day we published our original post about Leftwich.
Leftwich’s search for public and private funding options for WSU also offered him another personal financial benefit. As part of the plan, the University and Leftwich determined that Leftwich’s company Viance Partners would own a 25% stake in the start-ups created under this program.
Back when Kasich first appointed Leftwich to lead the Department of Development we warned “Leftwich might be worse than Kvamme.” Sadly, it looks like we may have been correct.
The challenge we have in reporting on this story is that records maintained by JobsOhio have been made exempt from Ohio’s Public Records Laws. Fortunately, allegations of selling access would fall under the jurisdiction of the Ohio Inspector General’s Office. The IG’s Office has the ability to subpoena and review records well beyond what is available under the Open Records Laws, including records maintained by non-governmental entities. They also have the ability to compel key witnesses to submit to an interview – including witnesses who don’t work for the state.
We have been critical of the Office of the Inspector General in past months. Much of this criticism has focused on the Office’s decision to pursue seemingly minor allegations of wrongdoing that could have been better handled by a Department’s HR staff. Nonetheless, the Office did pursue an investigation against Kasich’s school chief (even if we ultimately disagree with the charging decision by the Republican prosecutor in Franklin County.) This is precisely why Ohio has an Inspector General – and we urge him to open an investigation into Leftwich and, by association, Kasich and Kvamme, as soon as possible.
What the documents show:
In short: Leftwich was paid upwards of $10K a month by the state AND $20K a month by WSU for six months. While Leftwich was trying to get his contract with the university signed, he mentioned multiple times that he could get the university meetings with Mark Kvamme and 3rd Frontier representatives, people he worked with as part of his job at Development and people who help supply funding to Wright State. As part of the proposal he developed with the university, Leftwich would assist in obtaining funding for start-up companies that would be 25% owned by Viance Partners – Leftwich’s company.
EMAILS FROM WRIGHT STATE UNIVERSITY
2/27/2012: Jim Leftwich sends Wright State University his “Technology Services Proposal” on behalf of his company Viance Partners (he appears to be the CEO and lone employee) The goal is to review research at WSU and look for opportunities to sell, license or create start-up companies to profit from the technology.
3/7/2012: Jim Leftwich emailed Robert Fyffe, Wright State University vice president for research and graduate studies, outlining some “opportunities” he was working on to help Wright State. He claims there is a “real sense of urgency” and asks for authorization to proceed with work on behalf of the university . In the email Leftwich mentions that he’s already spoken with Bruce Langos, “our regional rep to the 3rd Frontier Commission”. Leftwich says Langos is “more than willing to review items prior to going in front of the commission and socializing them with others if he feels they have merit.”
In the same email, Leftwich tells Fyffe that he is “meeting with Mark Kvamme tomorrow afternoon to update him on the efforts of Viance Partners. He can be a great source of capital from the West Coast funds.”
3/8/2012: In the morning Leftwich sends an updated contract proposal to Fyffe again mentioning he will be meeting with Mark Kvamme that afternoon. (hint hint: sign this proposal and I’ll hook you up with my man Mark)
3/8/2012 : That evening, Leftwich sends another email saying he “had a great meeting with Kvamme… He thinks there are a lot of opportunities. Talking about putting together a roadshow to take to VCs in Ca.”
3/23/2012: Initial contract for Phase I of the work appears to have been signed authorizing $12,500 per month payment to Leftwich.
4/24/2012: Leftwich sends an email on confirming Mark Kvamme’s availability to meet on May 17th.
5/4/2012 : Leftwich sends WSU his first invoice (for March and April work) for $25,000.
5/10/2012: Leftwich confirms “Mark Kvamme, CEO of JobsOhio, and Kristy (sic) Tanner, Aerospace General Manager for JobsOhio” will be visiting the university.
5/15/2012: Leftwich sends a Agenda for the Kvamme/Tanner visit highlighting which technologies they will be pitching throughout the day
5/17/2012: Kvamme visits WSU along with Kristi Tanner, the JobsOhio Managing Director for Advanced Manufacturing.
7/18/2012: Phase II/III contract signed authorizing $20k/Month payments to Leftwich
7/30/2012: Leftwich sends out “New Venture Start-Up Plan” – His company will be 25% owner of all new start-ups funded under the plan
8/29/2012: Leftwich sends an email with information about the 3rd Frontier program from which he plans to seek funding
9/10/ 2012: Kvamme sends an email to Fyffe saying the Third Frontier Technology Validation and Startup Fund is “our most imminent opportunity for funding”
Leftwich began receiving monthly payments of $12,500 from the University in March 2012. In July, those payments switched to $20,000 per month. On July 19th, 2012 Leftwich and university representative Jerry Black signed a contract that guaranteed the continued payment of $20K per month through June, 2013, a total of $240K at the maximum payout.
A clause in the contract requires Leftwich to certify that “payment(s) under this Agreement is for effort not performed during hours for which he/she will be receiving regular compensation for his/her primary employment from any agency of the State of Ohio” otherwise “written authorization from the Primary Consultant’s department head must be obtained.” No such authorization documents were included in Leftwich’s personnel file and none could be provided by the Department of Development.
Leftwich continued to be paid a large salary by The Department of Development during this work from March through August. State payroll records show Leftwich was paid $51,166 over that six month period.
Relevant documents are included below. As you read these, keep in mind that Leftwich was being paid $85 an hour by the State of Ohio while he was exchanging these emails.