"What if Tom Noe were Ted Strickland's friend?" is a welcome post and a very interesting perspective by An Occasional Thinker. An Occasional Thinker is a Statehouse Insider who likes the budgetary process about as much as having the flu for 90 days. He is a guest columnist at:
http://www.kylesisk.typepad.com/
What if Tom Noe weren’t in jail? Instead imagine he was holding court with Strickland and his staff in... let’s say the Statehouse Cafeteria. Hey, they make a great Sloppy Joe and Morton's just isn’t the Governor’s style.
Just over three years ago the Tom Noe/Governor Taft "Coingate" scandal was born. For those of you whom might have been sharing a cave back then with Osama, Tom Noe was a narcissistic coin dealer entrusted to invest $50 million of the State’s Bureau of Worker’s Compensation (BWC) funds in rare coins. Noe used portions of the $50m as his personal piggy bank, dipping into it to the sum of $13.5 million to fund an eccentric lifestyle. Noe first gained attention for funneling campaign donations to President Bush’s 2004 Campaign through numerous conduits - some lobbyists and former staffers of Taft’s.
Noe’s goal to become a Bush “Pioneer” (raise $100,000 for the campaign) was a pricey one, as the ensuing investigation into his fundraising scheme and the handling of the BWC investment landed him in prison and netted 20 other convictions, including one against Governor Taft.
Few disputed whether Noe got what he deserved. And NO ONE but Bob Taft and Noe (for about a month) called the BWC’s investment ‘wise’. What may surprise you is they were both right. In fact, Noe’s BWC coin investment does not seem like such a terrible idea three years later. With the value of most 401k’s plummeting by nearly half, we all would love to be sitting on a ten percent capital gain.
That’s right, when the state finished divesting itself of the Noe $50 million coin investment, few in the media reported that the state actually netted $55 million, or ten percent. Add the $13.5 million Noe illegally spent and you get about a 38 percent profit. Further, had the state hung on to the Noe investment and sold it when demand was highest, like in the current recession, the investment may have yielded even more. Consider this recent news:
- After Lehman Brothers collapsed, Blanchard and Co. Inc., one of the largest precious metals retailer in the country, reported breaking company sales records. They sold more gold in 60 days after the collapse than it had in the preceding 3 years combined. Price of gold ended up +5% last year, and it peaked at almost $1000 an ounce
- Demand for gold and silver coins has had a spillover effect of causing demand for rare coins. Blanchard and Co. also reported they had their best two months in history for sales of rare coins
- A February 17, 2009 BBC report called investment at gold and coin fairs “the new investment clubs”. “People are collecting gold and silver coins at the moment for investment purposes because of current economic conditions”
- ‘Bullion and Business’ reports demand for gold and silver has been unprecedented
- Reuters stated “world mints report soaring demand”. Sales for the one-ounce American eagle gold bullion were 710,000 in 2008, up from 140,000 the year before. French mint sales rose about 50 percent, and the Royal Canadian mint reportedly is quadrupling production to keep up with sales.
Imagine if Ohio posted a ten-percent gain on investments in this recession - Governor Strickland becomes a hero for his brilliant investment; Noe is allowed to legally keep let’s say $13.5 million as an appreciation for the administration of the state’s investment; He becomes Strickland’s biggest fundraiser and Strickland his biggest cheerleader; OBM could solve their new SKOOL funding mess and the $7 billion budget deficit with more Noe investments; and finally Noe gets Federal stimulus dollars and expands the same investment strategies to other states.
Ironically, Tom Noe gave it all up to donate $100k to President Bush for the right to be called a ‘pioneer’. He was already a pioneer of sorts by successfully turning a hobby into a business, an opportunity many of us would kill for. Heck, if he had to be greedy, he should have just not paid his taxes, then he may even have had a chance to be Obama’s Treasury Secretary.
Ah! What could have been if Tom and Ted had been friends… Sloppy Joes for everyone?
