Another 4.8 M loss for OH, BWC borrowed investment $$ to pay bills

[Blue Diadem]

BWC Borrowed $250M from its Investment Funds

COLUMBUS (AP) -- The state Bureau of Workers' Compensation, after losing hundreds of millions of dollars in investments, borrowed $250 million last month from two investment funds to pay some of its bills, a spokesman for the bureau said Friday. The bureau also disclosed last week that it had lost $215 million in a hedge fund.

Several state agencies were already investigating the bureau over a questionable investment in rare coin fund from which $10 million to $12 million is missing. The bureau said Friday it borrowed $125 million from each of two American Express investment funds. One of the American Express Asset Management funds had lost $8.5 million of its Ohio investments as of May 31 while the other had posted a $3.7 million gain, according to bureau records.

"We had bills to pay. We needed the money," bureau spokesman Jeremy Jackson said. Jackson said the $4.8 million in losses with American Express are the last significant ones the bureau expects to find.

Attorney General Jim Petro also announced Friday that he is suing MDL Capital Management of Pittsburgh to recover the $215 million loss for the state's insurance fund for injured workers. Petro, a Republican running for governor next year, said the bureau was led to believe other investors would invest in the MDL fund when the bureau was actually the fund's only shareholder.

more at:
http://www.wtol.com/Global/story.asp?S=3463155

[indepat]

1. The only shareholder: this smells of massive fraud and makes one wonder

who all made out like bandidos. God, how I will love it when justice is served.

[htuttle]

10. This whole thing reads like a huge mob shakedown

If some RICO prosecutions don't come out of this, we'll all know that Ohio is the place to be for organized crime!

New Jersey is going to be SO jealous...

[slaveplanet]

11. mobsters all-Sopko complicit

Pete Katz of the Cleveland Scene magazine nails it...

a must read...
http://clevescene.com/issues/2005-06-08/news/kotz.html

Bob's Mob

The scene: At an abandoned warehouse outside Columbus, notorious mob boss Roberto "No-Chin" Taft has summoned his top henchmen to a secret meeting. The Taft Organized Crime Family has been linked to a scheme to defraud the state of $12 million in rare coins. G-Men are swarming Columbus. The family's very survival is at stake.

Taft: My friends, my heart weeps. For many years we have benefited from this thing of ours. With our friends in insurance, banking, energy, and nursing homes, we have earned untold riches. Anyone who wishes to do business in this state, they must first pay us. But now it is all being threatened. Our associate, Mr. Noe, has failed to protect our rare coins and collectibles racket. He has brought unwanted attention to us all.

Consigliere Jimmy Petro: Godfather, my heart sobs too, though mixed with periodic convulsions. Noe has been a good earner for us. His generosity is known to our friends in Washington. But we can no longer offer him our protection. We must make Noe sleep with the fishes before he sings to the feds.

Taft, pounding his fist on the table, his face crimson with fury: Petro! Why must you always speak of fishing? We have pressing business matters --

Petro, interrupting, fear engraved in his face: My deepest apologies, Godfather. It was my desire to employ a traditional criminal euphemism, implying that I wish to make Noe dead. Sadly, I have failed you, Don Roberto.

Taft, regaining composure: Petro, it is I who must apologize. It is a sign of our declining fortunes that we can no longer speak fluent criminal. For this, I am responsible. But I must agree: Noe should sleep in the freezer. How do you propose we do this?

DU'er Toucano provided this entry in Ohio forums;

The whitewash effort is in full swing. Don't let them get away with blaming Gasper.

Oversight Committee Chairman Sopko whose chief duty is, "Making recommendations on BWC policy, investments and premium rates..." ( http://www.ohiobwc.com/basics/guidedtour/generalinfo/ab... ) has contributed (along with his son) $45,350 to Republican candidates and $600 to Democrats in the past 15 years. Another $12,000 to Republican federal candidates in 2004 alone.

This far exceeds the previous chairs' contributions which are a.) Rachel Longaberger: $18,600 Republicans, $5,000 Democrats and b.) Neal Schultz, $12,200 Republicans, $3,000 Democrats.

This is about pay to play when the player, by his own admission, can't hit the ball.

Petro needs to sieze the minutes of the commission's monthly meetings and find out exactly what Sopko said at the time about this investment that was clearly offshore and clearly unregulated by the Securities and Exchange Commission.

Aggregate contributions by the 5 voting members of the commission break out as follows:

To Republicans: $67,940 (67% from Sopko and son)
To Democrats: $4,950

Mark Lay of MDL has contributed $5,000 to Ohio Republican candidates including Betty Montgomery. Interesting that a resident of Pennsylvania has such a concern about the Republicans staying in control in Ohio.

There is no record of Terry Gasper making a contribution to either party. What a surprise!

Sopko is trying to claim the investment info wasn't shared and his comittee only had "custodial powers"....

[seemslikeadream]

2. OHIO

http://eclectech.co.uk.nyud.net:8090/b3ta/bounceexplode2.gif

[Jose Diablo]

3. Republicans raiding peoples money

they do this whenever they get 'elected'. Then they blame it on 'tax and spend' Democrats.

This doesn't surprise me. What surprises me is how people let them do this over and over again.

Bu$h should have been put behind bars for Kennedy, but his Republican buddies bailed his narrow ass out of that too.

They just keep stealing and killing.

[donkeyotay]

4. MDL based in Bermuda?

You mean the Bermuda Triangle where all our money disappears?

That's the first I heard that. I thought these people were from Pennsylvania. Before MDL it was Garrison. Before that it was RRZ. But it was basically the same people doing the same things. Between the 3 companies, according to accounts I read by googling, these companies probably lost at least $683 million of other people's money.

[Blue Diadem]

5. OMG, wait til you read this: fine print/contract goes by Bermuda laws!

$215 MILLION AT STAKE
Ohio faces distant fight for workers' comp loss
Legal battle may stretch to Bermuda, Britain

If all goes wrong, Ohio Attorney General Jim Petro could end up in England before a panel of "silks" in the House of Lords as he argues his case for Ohio's injured workers.


The Republican gubernatorial candidate's case might get to London and to the legal world of barristers and wigs by way of the British commonwealth of Bermuda.

It seems that state officials didn't read the fine print of a contract with MDL Capital Management, an investment company that in a few months last year lost $215 million owned by the Ohio Bureau of Workers' Compensation.

If state officials had read the contract, they would have noticed at the bottom of Page 4 a clause stating that the contract would be governed by the laws of Bermuda and that any disputes concerning the contract would be decided by "the courts of Bermuda

more at:
http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20050612/NEWS24/506120355/-1/NEWS

[Al-CIAda]

6. What are the means of compensation? Lifetime supply of Bermuda shorts? n/t

[Blue Diadem]

7. Ha! I can picture that!

Me thinks Ohio won't be seeing that money ever again..

[donkeyotay]

8. "we needed the money." That's why people rob banks.

We had bills to pay. We needed the money," bureau spokesman Jeremy Jackson said.

So, when they needed $250 million to "pay bills," does that mean to cover their checks to disabled workers or to keep the lights on?

Does anyone know what kind of fees Ohio has paid out for all these great financial services?

Thanks for the post. I will go read the Blade's latest now. Long live the Blade!

[donkeyotay]

9. How many pension funds are invested in derivatives?

And how many managers have been on the wrong side of the bet on interest rates? There are probably other states with similar probs.

MDL's Active Duration Fund, which sold bonds "short" in anticipation of interest rates increasing, had bet in the wrong direction and imploded over August and September.

And there's something else about this. When a derivative is made, supposedly somebody has to take the other side of it. I don't understand it very well, but remember the recent scandal about advisers not disclosing that they were getting fees from the investments they recommended to their clients? Getting paid on both sides, in essence, and consequently not giving the best advice? Well, who benefited when Ohio lost? Did someone else make $215 million? And how much was paid in fees?