Report: Former Head of Ohio Workers’ Fund Urged Others to Remain Quiet

The former head of the Ohio state’s insurance fund for injured workers urged subordinates to be discrete about the fund’s $215 million investment loss in the days leading up to the 2004 election, a newspaper reported last weekend.

In an Oct. 27, 2004, e-mail message to the Bureau of Workers’ Compensation’s chief legal counsel and ethics officer, John Annarino, agency director Jim Conrad noted his worry that news would spread about the loss in a hedge-fund investment with Pittsburgh-based MDL Capital Management.

Conrad told Annarino that he and James McLean, the bureau’s investment director at the time, should put on a positive face to make the agency’s investment staff feel at ease if they expressed concerns.

“Jim told me this morning that he thought the major chance of us getting involved with the MDL situation is with a leak from OUR employees,” Conrad wrote in the message to Annarino, The (Toledo) Blade reported Sunday.

MDL founder Mark Lay alleges in court documents that bureau officials hid the loss until after the election, in which Ohioans narrowly voted for President Bush over Democratic Sen. John Kerry, giving Bush the electoral votes he needed for re-election.

The bureau is suing MDL to recoup its losses.

“State officials have left little doubt that the timing and substance of their public disclosures, as well as their entire litigation strategy, have been manipulated and planned for political purposes,” Lay’s attorneys wrote last month in asking a federal judge to dismiss the case.

In other messages to top aides, Conrad openly discussed his desire for Kerry to lose.

Conrad declined to comment. He was forced out of his job in 2005 amid a separate scandal over the bureau’s $50 million investment in rare coins, which was managed by now-indicted GOP fundraiser Tom Noe.

Mark Rickel, a spokesman for Gov. Bob Taft, said allegations of a cover-up leading up to the election are “absurd.”

Annarino, who now works in the private sector, did not return messages seeking comment, the Associated Press said.

Terrence Gasper, the bureau’s former chief financial officer, pleaded guilty in June to state and federal charges of accepting gifts in exchange for state investment business. He is cooperating with investigators.