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Recent Articles by David W. Martin

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Thanks a Lot, George

Continued from page 1

Published on January 14, 2004

Fischer quit after acknowledging that he socialized with and accepted gifts from contractors. He was convicted last summer on two criminal ethics charges.

Fischer had been appointed to the commission by then-Governor Voinovich. Before then, Fischer was state architect under Voinovich. The two men went back to Voinovich's first campaign for governor, when Fischer was the advance man.

As state architect, Fischer was in a position to select construction managers for various state projects. One such company, Banks Carbone Construction, won at least $3.7 million in no-bid state contracts. The Akron Beacon Journal revealed that much of the work came after the Banks and Carbone families contributed more than $10,000 to the governor's reelection effort. Banks Carbone also hired the governor's campaign treasurer as its accountant.

But in building an addition onto the exurban Columbus house of the fiancée of Voinovich's chief of staff, another Banks company, T.G. Banks & Associates, made a little too apparent its appreciation for the administration.

A county engineer later alleged that a work order was altered to conceal the fact that the fiancée had paid $98,000 less than the original estimate. Eventually, the governor's chief of staff, Paul Mifsud, pleaded guilty to obstructing official business and violating ethics laws. He served six months at a work-release prison facility. (Banks was also convicted on an ethics violation.) While serving Voinovich, Mifsud had also been accused of bribery, bid rigging, and illegally soliciting campaign contributions.

Mifsud became a consultant after returning to civilian life. He was one of many Statehouse pros hired by First Energy during its push for favorable terms of deregulation. He died in 2000 after being diagnosed with lung cancer.

Mifsud influences state politics even in death. Matthew McAuliffe, once Mifsud's personal assistant, was identified as Treasurer Joe Deters's point man in deciding which investments firms would handle the state's $358 million tobacco settlement. For Deters, the settlement money primed campaign contributions -- and possibly more. Two men associated with a Pennsylvania investment firm that received $42 million contributed to a political-action committee that gave $58,000 to the Hamilton County Republican Party and other entities supportive of the treasurer. Last week, a grand jury indicted Frank Gruttadauria, the swindling stockbroker, charging that he bribed people linked to Deters.


Bob Taft became governor in 1999. One of his first big ideas was to combine the Department of Human Services with the Bureau of Employment. The merging of agencies made sense, given the changes in federal law that required welfare recipients to look for work before their benefits ran out.

But no reorganization chart accounted for institutionalized depravity. For years, human-services directors had approached their jobs by throwing gobs of money at companies like Andersen Consulting and Bank One. In return, the state received what unwavering faith in the private sector usually brings: disappointment and a thin wallet.

Exhibit A: the Support Enforcement Tracking System (SETS).

A change in federal law put the state in charge of collecting and dispersing child-support payments, which had been a county responsibility. Soon after Ohio's system became operational in 2000, mothers started complaining that their checks were short.

Turns out the moms were right. The rechristened Department of Job and Family Services later admitted that its newfangled system improperly siphoned child support -- $13 million worth, it was determined later -- owed to families that had been on welfare. A 1996 law change said that families, not the state, should have first crack at recovered past-due child support. Family Services said it ignored the law and implemented the system in order to meet deadlines and avoid fines. "They punished the kids and saved the government, which is a little backwards," says Geraldine Jensen, a Toledo mother-turned-activist.

Remarkably, the state had paid about $300 million for the flawed system. Bank One thanked Ohio families for its unbid $50-million-a-year SETS contract by charging noncustomers a $3 check-cashing charge. (Criticized for the excessive fee, the bank later waived the charge.)

Another SETS supplier, American Management Systems (AMS), received $87 million in unbid contract work from Family Services, according to an investigation by the inspector general. An anonymous letter alleging contract-steering prompted the IG to look at the department. The report, completed in 2001, showed that Arnold Tompkins, Human Services Director under Voinovich, inked consulting deals with AMS and Andersen Consulting (now Accenture) after he left state service. The gigs paid Tompkins $10,000 monthly retainers.

As director, Tompkins had been good to both companies. In one instance, a contract-review committee said Andersen's $16 million bid was too high. Tompkins ignored the recommendation and approved the contract anyway. A former deputy director said that after another review meeting, Tompkins declared, "Hands down, Andersen was the best, and we are going with them."

But Andersen was hardly the best. For $60 million, the company developed an internet-based job-matching system, Ohio Works, so lacking in one important category -- usefulness -- that it had to be scrapped. In building Ohio Works, Andersen treated the state like a stolen ATM card. One Andersen consultant was paid $123,000 for working 492 hours in one month -- that's 16 hours a day for 31 days.

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