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Editorial: State Auditor Dave Yost snags a minnow

Beacon Editorial

The Beacon recently received (Tuesday, September 18) a press release from State Auditor Dave Yost (and candidate for Ohio Attorney General) touting that the Walnut Township Fiscal Officer had been ordered to step down following a guilty plea.

It’s a sad story and incomplete story. Back in 2014, Walnut Township Fiscal Officer Lynn Kraner told trustees she knew someone who might be interested in the township’s zoning secretary position. It is a very part-time position, averaging a few hours a month at probably $10 -12 per hour. Hours are totally dependent on whether the Zoning Commission or Board of Zoning Appeals meets that month. It’s not an easy position to fill due to the mediocre compensation and limited hours.  Nevertheless, the secretary must be available to attend two possible Thursday night meetings a month should either of the boards get an agenda.

Finding a reliable and accurate zoning secretary isn’t easy. Trustees often get only a couple of applications if that. Kraner didn’t make the hiring decision; she simply passed on the name of someone who might be interested. She didn’t tell trustees it was her sister which some might have viewed as an attempt to get favorable treatment for her. According to the press release, her sister earned a grand total of $1,915 over nearly 24 months.

The release includes a sanctimonious quote from Yost. “Nepotism has no place in government. All job candidates are entitled to a level playing field and cannot be hired based on their relation to current employees.” Kraner’s sister wasn’t hired based on her relation to the fiscal officer;  trustees weren’t aware of the relationship. Her sister was likely the only capable candidate to apply; she may have been the only candidate.

Only Yost’s abuse of his prosecutorial discretion, could turn this minor misstep into a first-degree misdemeanor guilty plea to “having an unlawful interest in a public contract.” Yost allowed his assistant chief legal counsel to act as special prosecutor and his office reportedly spent about a year “investigating” this issue. Kraner made the same rational choice that most of us would when facing the Auditor’s essentially unlimited legal resources. You plead guilty to avoid going bankrupt defending yourself.

Criminal prosecution is supposed to be based on demonstrating criminal intent. There is none here. Where is her “unlawful interest” in her sister earning a pittance as a very part-time secretary?

Kraner is a minnow caught up in Yost’s efforts to embellish his law enforcement credentials for his campaign for attorney general. While Yost has been chasing a minnow, he’s let some sharks swim freely.

Here’s a very egregious example. In 2014, Frank Harmon, owner of Ohio Insurance Services, formed a Council of Governments, to cooperatively provide health insurance to a total of 157 townships, villages, cities, fire districts and health districts in Ohio. The group was called Ohio Public Entity Consortium – Healthcare Cooperative (OPEC-HC) and covered about 3,200 employees. Locally, Licking and Union townships, Village of Hebron and Village of Buckeye Lake joined OPEC-HC. All members had to sign on for three years (2015 thru 2017).

Harmon, who had sold conventional health insurance to many of the members, aggressively promoted the cooperative, citing it’s excellent benefits, cost-saving features and more stable funding levels. The bloom quickly went off the rose in early 2016, following a 25 percent rate increase for 2016 and hints of a mushrooming deficit with the cooperative’s administrator, Jefferson Health Plan (JHP). Some entities recognized the budding crisis earlier than others. In May 2016, the township administrator for Hamilton Township (Warren County) wrote a personalized letter to Yost detailing JHP’s massive lending of member reserves to OPEC-HC and the overall risk to public dollars due to the OPEC-HC’s “poorly conceived” pool, bad claims experience and negative reserves. He asked Yost to have someone in his office take a look at OPEC-HC.

To make a very long and complicated story short, OPEC-HC’s financial problems continued to grow and its coverage ended at the end of 2017. Council of Governments are required to be audited by the State Auditor as was Jefferson Health Plan. Yost ignored the very credible tip in May 2016 and did not audit OPEC-HC nor look at JHP’s multi-million dollar loan of member reserves to OPEC-HC.

Each of the 150+ OPEC-HC members is audited every two years by Yost’s office. It seems odd that apparently none of these audits questioned expenditures of tens to hundreds of thousands of dollars to OPEC-HC. Surely a few auditors asked about these payments and were told about the healthcare cooperative and its organization as a Council of Governments. We’ll probably never know how many flags were raised, but we know they were totally ignored until last summer. An August 2017 one-time story in The Dispatch prompted Yost to suggest that OPEC-HC and JHP try to work out an agreement to preserve health coverage for all OPEC-HC members. Their settlement didn’t have any member input nor the required two-thirds member approval, and lead to OPEC-HC’s dissolution at the end of year. Yost’s chief legal counsel later made a few cameo appearances, mainly reminding members about their obligation to provide health insurance to their employees without providing any assistance whatsoever.

The Auditor finally agreed this year to audit OPEC-HC, first requesting $20,000, then $60,000 to pay for it out of the limited money remaining to pay millions in unpaid medical bills. Eventually, the Auditor agreed to pay for the long-overdue audit out of state funds. That audit still hasn’t started since there are few financial records to audit.   So far, the Auditor hasn’t agreed to pay an accountant to create the needed accounting records.

OPEC-HC members have paid thousands in legal fees and assessments for unpaid medical bills and hundreds of their employees have been harassed by collection agencies for unpaid bills. Members also face claims to repay the millions “loaned” by JHP to OPEC-HC. Meanwhile, the shark, Frank Harmon, who received millions in commissions and administrative fees  continues to swim freely.

How could Yost investigate a piddling $1,900 salary payment for a year and provide his assistant chief legal counsel as a special prosecutor to net a minnow, while ignoring a healthcare scandal costing 150+ Ohio public entities millions in scare resources and subjecting hundreds of public employees to collection agency harassment??? Maybe the shark’s generous contributions to Yost’s campaigns have something to do with it.

Frank Harmon isn’t the only shark that Yost has ignored. A Beacon investigation in 2010 documented widespread fraud in the Ohio Public Works Commission funded repaving of Buckeye Lake Village’s streets following installation of its water distribution system. We had extensive photographic evidence that the paving contractor, Chem-Cote, and the village’s engineer, M.E. Companies, were ignoring critical contract specifications. The existing surface was not swept clean before the new asphalt was applied; the contractor did not use a tack or bond coat to help the new asphalt adhere to the existing surface; and the village was short-changed some 30 – 40 percent on the thickness of the new asphalt. M.E. Companies was paid $75 per hour for inspection services and ignored it all.

Sadly, then Mayor Rick Baker and council members failed to enforce the contract specifications and paid Chem-Cote and M.E. every penny billed. Then Council President Charlene Hayden even asserted in writing that, “Chem-Cote did what they were asked to do and then some.”

This then frustrated writer had an opportunity at a March 2014, Baltimore Rotary Club meeting to have a private conversation with Yost who was then seeking reelection as State Auditor. After quickly outlining the nature and financial extent of the fraud, I asked Yost for help to make Buckeye Lake Village whole. His response was shocking – he wasn’t interested even to the extent of pawning me off to someone on his staff. He simply started walking away, ignoring my offers of photographic evidence. Two more sharks are still swimming.

Yost apparently prefers seining for minnows; they don’t make campaign contributions. Keep that in mind on November 6!

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