Columbus Dispatch - Taft tried to steer BWC investment

Sunday, August 7, 2005

(Columbus Dispatch)Although Gov. Bob Taft insists he wasnít involved in Ohio Bureau of Workersí Compensation investments, he lobbied aggressively to put state money with one company ó Athersys Inc., a Cleveland biotechnology firm.

In early 2003, Taft made it clear, inside and outside the governorís office, that he wanted an investment deal with Athersys "done and done quickly."

James Conrad, former bureau administrator, said Athersys was "the only time (Taft) ever called on specific investments and, to my memory, it was the only time I saw the volatile Taft anger."

Conrad presumed Taft was so forceful because he had touted Athersys in his 2002 State of the State speech and he wanted to see the company thrive instead of bolting the state for Minnesota or North Carolina as threatened. At the time, the company was seeking $100 million from investors, in part to fund stem-cell research.

Investments with the state workersí compensation system have taken on much greater importance in recent months as investigators home in on bureau losses of about $300 million ó much of that total by politically connected firms.

Conrad included several updates about Athersys in his weekly reports to Taft, including an item on June 5, 2003, saying the bureau was "about ready to ink the deal" before learning that the company may be moving out of state. That put all work on the investment on hold, Conrad told Taft.

The stem-cell project eventually fell through and the bureau did not invest with Athersys.

But Taftís push for Athersys with the bureau was just one of several taken by his administration since at least 2001 to help the company, including asking the stateís five pension systems to consider investing.

Administration officials say they were just trying to keep a high-tech firm in Ohio. But Democrats argue that Taft lobbied for Athersys because its top officials contributed $10,500 to his 2002 gubernatorial re-election campaign and the company was an early partner with the governorís pet Third Frontier project.

"Thereís an endless list of companies that have pulled out of northeast Ohio," House Minority Leader Chris Redfern said. "If we had every business executive recognized that was threatening to pull out of the state, weíd have to have an addition to the (Statehouse) gallery."

According to the firmís Web site, Athersys is a biopharmaceutical company that develops and commercializes therapeutic products that treat significant and life-threatening diseases. The firm reported 74 employees last year in Cleveland.

Taftís direct advocacy for Athersys began Feb. 5, 2002, in his State of the State address when he unveiled the Third Frontier project and introduced Gil Van Bokkelen, Athersys president and chief executive officer.

"Let me tell you about the type of company we want to grow in Ohio," Taft said, pointing to the firmís two patents and 23 pending applications, and its staff of 130 with an average salary of $51,000.

The governor appointed Van Bokkelen to the Kent State University Board of Trustees in 2001.

Taft spokesman Mark Rickel said the governor acknowledges calling Conrad, but pitched Athersys because it was "a growing biotech company with a promising future in northeast Ohio."

"The state tried to do all it could to retain the company and let it grow," Rickel said. He noted that Taft, in the end, deferred to the bureauís judgment not to invest.

Redfern, a Democrat from Catawba Island, called Taftís lobbying "a clear case of pay to play."

"Itís important to remember that 90 days before the governorís involvement, he received the maximum contribution from top officials at Athersys," Redfern said.

"Thereís a direct correlation with money flowing into his campaign. Itís quite clear."

A spokeswoman for Athersys said the companyís executives were traveling last week and not available to comment.

ajohnson@dispatch.com

mniquette@dispatch.com

 

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