Ex-George H.W. Bush aide tied to Ohio workers scandal

[LightningFlash]

Cut from article

"Well-known Philadelphia conservative pundit Joe Watkins -- a former aide to ex-President George H.W. Bush as well as Dan Quayle -- was managing director in the 1990s and early 2000s of the firm now wrapped up in a fast-growing GOP political scandal.

Watkins, a frequent guest on CNN and other cable networks, was a managing director and principal of MDL Capital Management when it first started doing business with Ohio in 1998. But he reportedly left shortly before 2003, when Ohio officials teamed up with MDL on a new hedge fund investment that lost a whopping $225 million in workers' compensation funds."

"The massive hedge fund loss is the newest tentacle of the scandal that's become known as "Coingate," because the workers' fund may be missing $10-12 million in assets in an investment with a rare coin dealer. The dealer, Tom Noe, also is a key GOP figure and major fundraiser for President Bush in Ohio, the state that narrowly gave him the final 20 electoral votes for his narrow re-election.

Watkins was the managing director and a principal of MDL Capital after 1995 -- when it bought another investment firm that the Philadelphian was working for -- and left some time prior to March 2003, based on news accounts. In 1998, Ohio's worker compensation fund invested $355 million in a long-bond fund with MDL Capital.

According to a story in today's Toledo Blade:

But in 2003, the bureau agreed to MDL’s proposal to create an “active duration fund,” which would act like a hedge fund.

Mr. Gasper reallocated $100 million from the long-bond fund into the active duration fund and another $125 million was added later.

But by September, 2004, the $225 million investment had no value. The bureau ordered MDL to close the fund and it recovered $9 million, the bureau said in a memo to Mr. Taft released on Tuesday.

The article also raises questions about MDL's political connections in Ohio, because it hired the daughter of a member of the workers' fund's oversight panel three years ago. In 1998, Pittsburgh-based MDL -- headed by Pennsylvanian Mark D. Lay -- applied to Ohio to get involved in a program called “emerging managers” — designed for minority-owned and small firms.

The Blade coverage does not mention Watkins, who more recently has been a substitute host on CNN's now-defunct "Crossfire" and a weekend host on Philly's WPHT-1210 talk radio.

Attytood has been trying to contact Watkins today by phone and email but so far has been unsuccessful -- we'll post an update or post a new item if and when we reach him.

UPDATE: We spoke with Watkins tonight. He said been traveling and had not seen any of the news reports regarding MDL, and as a result did not wish to comment. "

http://www.pnionline.com/dnblog/attytood/archives/001992.html

Official H.W. Bush aide left in 2003?

Scandal involving Thomas Noe, Blackwell, connected to CNN substitute reporters, H.W. Bush, White House? Is this why Bush is visiting Ohio this week, why am I not surprised anymore? :shrug:

[donkeyotay]

1. Some history of losing other people's money

from May 7th, 2004 print edition:
MDL Capital Acquring Garrison

MDL is the fourth-largest minority-owned asset management firm in the country, managing more than $3.5 billion in fixed assets. Garrison is an institutional money manager with assets of $200 million, down from $750 million in summer 2002.
…
Talks between Garrison and MDL began late last year, said Chuck Gomulka, who along with Charles Zappala, is an owner and director of Garrison. They also have held a minority stake in MDL since it was launched 12 years ago.
…
Garrison, originally known as RRZ Investment Management Inc., has lost several high-profile clients, starting in summer 2002 when it was fired by Allegheny County for pension fund losses of $33 million. Within a month, the Commonwealth of Pennsylvania also dropped the firm….


http://www.bizjournals.com/pittsburgh/stories/2004/05/10/story5.html?page=1

[MelissaB]

2. I think bush may have some covering butt to do in Ohio.

I'm waiting for this to blow wide open! Thanks for posting this.

[autorank]

3. KICK, Great One LighteningFlash!!! Timely

:kick: