-1.JPG)
American Idol 2012 finale
Rollover crash injures 2
News hounds (5/24/12)
Home > Blogs > Butler County News and Issues > Archives > 2009 > December
December 2009
County settles disputes on utilities, no-bid renovation work at jail
Closed door talks over disputed utility payments and millions of dollars of work done without competitive bids have led to a settlement between Butler County and the company that runs the county’s jails.
County commissioners approved this week a settlement agreement with the Hamilton-based agency Resolutions, Community Solutions.
Here is a copy of the settlement agreement:
(Click on the top right corner to enlarge)
Analysis:
The agreement covers several disputes that arose this year, which culminated in the sheriff closing the county’s minimum security jail and commissioners bidding out the job — worth roughly $6 million a year.
The agreement allows the county to break its contract with Resolutions, which the agency insists is enforceable until 2013. The county counters that the contract is void “due to lack of compliance with the requirements of Ohio law regarding competitive bidding.”
The contract stays in effect — paying the agency up to $13.41 per day for every prisoner housed on one of the county’s three jails — until the county hires someone to do the work. The agency provides all the services at the jail except security, which is provided by the sheriff’s office.
The county is reviewing bids received last week from several companies, including Resolutions.
Under the agreement, the county has to pay $127,944 to Resolutions for past utility payments, but gets to keep $180,000 the company originally billed for. Disagreement arose earlier this year over which party was required to pay for utilities at the minimum security jail.
Resolutions is also wiping out a $181,881 bill sent to the county for overseeing renovation of the county’s Court Street Jail.
Resolutions oversaw the $1.2 million renovation with no contract and little oversight. Jail inmates did much of the labor, but the agency paid for technical work and materials up-front, then billed the county for reimbursement. When this newspaper reported details of the deal earlier this year, county and agency officials either blamed each other or refused to comment on the lack of a contract.
The agreement also clears up which tools and equipment purchased for the jail belong to the county and which to Resolutions.
The attorney with the Millikin and Fitton law firm representing Resolutions declined to comment on the settlement.
Permalink | Comments (3) | Post your comment | Categories: Resolutions
Carpenter v. Nix - The ruling
The Ohio Elections Commission has decided against hearing a complaint filed against Butler County’s treasurer by the county clerk of courts, calling it an unusual case.
After talking to both parties, the Elections Commission ruled Dec. 16 that the complaint fell outside their jurisdiction. The alleged “false statements” were made in the Butler County Republican Party endorsement process, they said, not during an actual election for office.
Here is a copy of the Elections Commission’s ruling:
(Click on the top right corner to enlarge)
Analysis:
“This is the first time we’ve had anything like that occur,” said Elections Commission Executive Director Philip Richter.
Clerk of Courts Cindy Carpenter filed the complaint last month against Treasurer Nancy Nix. Carpenter alleged Nix made misleading statements about her campaign funds and qualifications for county commission in literature and speeches courting support of the county GOP.
Neither woman — nor incumbent Commissioner Gregory Jolivette or anyone else — won the party’s endorsement, setting the stage for a bitter May 2010 primary.
Nix stands by her statements.
“My record is one of being up front and truthful, and unfortunately, this isn’t always well received,” she said. “I continue to believe this was much ado about nothing and am glad the Elections Commission could see it for what it was, and that it has been put to rest.”
Carpenter argued that the case is indeed unique, because of the unique nature of Butler County politics. Whomever wins the party’s endorsement is more likely to win the primary, thus the general election in this GOP-controlled county, she said.
“We apparently have a virtual free-fo-all period of time early in the election campaign process in Ohio in which false materials can be freely disseminated and published, regardless of whether it’s reckless, misleading or false,” Carpenter said.
Carpenter said she’ll be asking the local party to adopt is own guidelines about what type of statements can be made in the endorsement process.
Permalink | Comments (3) | Post your comment |
County approves care facility union contract
Butler County commissioners approved a contract today, Dec. 21, with the union representing employees at the county care facility.
The two-year contract with The United Steelworkers, AFL-CIO includes no pay raises in 2010 and 2011 unless non-union employees get one. The union represents roughly 92 employees at the nursing home, including nurses aids, housekeepers and nutritional therapists.
The contract does increase the rate at which union workers accrue vacation time, though county officials said it only makes it on par with other employees.
“(Union representatives) were understanding at the bargaining table the tough decisions that have to be made,” said care facility Manager Chuck Demidovich, who explained that Medicaid has froze the rates paid to nursing homes for years.
Permalink | Comments (0) | Post your comment | Categories: County Commission
Butler County’s $85.3 M budget - An overview
“It’s been one heck of a year, 2009,” Butler County Commissioner Gregory Jolivette mused after commissioners approved a much-wrangled-over 2010 general fund budget Monday, Dec. 21.
The budget totals $85.3 million — down from $94.7 million in 2008 largely because of recession — and includes $2.6 million in cuts and a $900,000 dip into the county’s shrinking cash reserves.
Here is an overview of the 2010 budget in a presentation given to commissioners today by Office of Management and Budget Director Pete Landrum (Option 2.5 referenced in the presentation is the budget solution the county picked):
(Click on the top right corner to enlarge)
Analysis:
Commissioners heaped credit on county staff and other officeholders who came to the table with concessions, especially Sheriff Richard K. Jones. Jones, whose $23 million budget is the county’s largest, proposed $1 million in 11th hour cuts and promised $600,000 in prisoner-boarding revenue to close the gap.
This followed a period of uncertainty with Jones, local judges, the county prosecutor and others saying further budget cuts would endanger public safety. County officials say criminal justice accounts for 63.5 percent of the total budget.
“In the spirit of cooperation when everybody is pulling together and working toward the same goals, it makes it easier,” said Commission President Donald Dixon.
Management and Budget Director Pete Landrum said the budget makes assumptions: especially that 2009 will the rock bottom for the recession.
Of the options Landrum submitted to commissioners to shore up the budget, the one they picked was the “most optimistic” option, Landrum said, including $640,000 more in sales and property transfer taxes than earlier estimates.
But, he said, it still falls roughly $500,000 below 2009 ending levels.
“Further budget reductions will be required…by mid-year if the events do not occur as projected or alotted,” Landrum said in his presentation.
“Hopefully, 2010 will be a lot better than 2009,” said Jolivette.
Permalink | Comments (0) | Post your comment | Categories: County budget
Could taxable property values finally be correct?
A follow-up story with more details about the Butler County auditor’s off-year property value re-appraisal:
Middletown property owner George Kiniyalocts says on Thursday morning, Dec. 17, he got a call from a man trying to sell him a house on Auburn Street for $25,000.
He looked on the Butler County Auditor’s Office Web site, he said, and it was appraised for tax purposes at more than $50,000.
Kiniyalocts applauds the county auditor for taking the unusual step of appraising taxable property values in an off year — an effort Auditor Roger Reynolds announced was done this week.
This will save a lot of people money — especially those who didn’t have the know-how to contest their appraisal — Kiniyalocts said.
The reappraisal was sent to the state for tax calculation Thursday. It includes a 4.7 percent average property value drop countywide, including an 8.5 percent average drop in Middletown and 4.9 percent drop in Hamilton.
“I was pleased they buckled down and took the steps to try to make it right, but it’s awful hard to make it right in Middletown,” Kiniyalocts said. “I know that they’re trying to do the right thing and the right thing is probably going to cost them some money, so you got to give them credit for that.”
Reynolds said the new values will go out to the 80,000 homes affected by the reappraisal by the end of the month. They also will be reflected on tax bills set to go out in early February.
Like with any appraisal, property owners will have until the end of March to appeal the valuation.
But between last year’s state-mandated appraisal — which Reynolds said was flawed because property values were still in free-fall — this year’s voluntary reappraisal and the 4,800 appeals the county handled this year, Reynolds thinks the numbers are finally right.
“I feel comfortable with where we are on the numbers currently on the books,” he said. “I’m hopeful the economy recovers and we start seeing a little more equity in their homes.”
The next re-evaluation is scheduled for 2011, and Reynolds believes the work he did this year could bring the price of that process down 90 percent.
Permalink | Comments (0) | Post your comment | Categories: County Auditor
Jail bids could save county $1 million or more
Bids that came in this week for more than $6 million in services provided at Butler County’s jails appear to include substantial savings, according to county officials.
That’s what happens when work is put to bid that has long gone to the local nonprofit Resolutions, Community Solutions Inc. without a competitive bid, according to Commission President Donald Dixon.
Sheriff Richard K. Jones said it appears to justify his decision to close the county’s Resolutions jail this summer.
The bid documents are sizable — boxes and folders altogether the size of a high-backed couch — and will take time to review. But the food services portion of the bid alone appears to contain roughly $1 million in savings.
Resolutions offered to feed prisoners at the county’s jails for just over $2 million a year, compared to $1 million in bids submitted by two other vendors. The reason for this disparity is unclear, officials said, and will have to be reviewed before a choice is made. In other categories, Resolutions may be the lowest bidder.
Jones said exact numbers may not be crunched until the end of the month. “It looks like there’s going to be substantial savings in there,” he said.
“It’s certainly been a worthwhile venture, and couldn’t come at a better time with the budget situation we’re in,” Dixon said. “This is just the result of what happens when you go out for competitive bidding in the private sector.”
Dixon said this is further evidence that the county’s various offices need a centralized purchasing department, a concept there has been little political will to see through. “Everything needs to be bid out. Everything,” he said.
For years, Resolutions has provided all of the services at the county’s three jails except for security, which is provided by the sheriff’s office. Resolutions charged for all these services with a flat, per-prisoner rate. This netted the company $6.7 million in 2008 and $6.2 million this year. The bids break that out into five contracts.
The agency cut some of its services this year after Jones closed the Resolutions jail and terminated some education and substance abuse programs.
“I don’t see myself approving those programs this year,” he said.
Resolutions is also still embroiled in closed-door discussions with the county over utility bills switched into the county’s name allegedly without commission knowledge, and bills for work the agency did at the Court Street jail without a contract.
Permalink | Comments (6) | Post your comment | Categories: Resolutions
Local attorney may make Democratic bid for county commission
Press release I just received:
Hamilton Attorney Mark N. Hardig is taking the first step in what may lead to his candidacy for the Butler County Commission in 2010.
Today Hardig went to the Butler County Board of Elections to pull petitions to run as a Democratic candidate in that contest. “I am seriously exploring running for the County Commission,” Hardig said. “Butler County is crying out for new moral and financial leadership.”
“There is a cancer in Butler County government, and it is growing,” Hardig said. “It appears that our elected officials have lost their moral compass.”
“Not only is nepotism rampant,” Hardig explained, “but the bidding and awarding of contracts is fraught with illegality and conflict of interest.”
But Hardig believes that positive change is possible. “We can develop an ethics policy that is applicable to all county employees,” Hardig said. “That policy should address issues of nepotism, conflict of interest, and competitive bidding.”
A graduate of Elder High School and the University of Notre Dame, Hardig attended the Salmon P. Chase College of Law, where he served on its Law Review. He was a Law Clerk for two years at the 12th District Court of Appeals, in his last year clerking for the Honorable Richard Koehler.
Hardig and his wife of 26 years, Carrie, live in Ross Township. They have two daughters, Olivia and Cara, both of whom attended Stephen T. Badin High School.
Hardig is a member of the Board of Directors and Past President of Butler Behavioral Health Services, Inc., the largest provider of mental health services in Butler County.
In the 2006 and 2008 campaigns Hardig worked as Campaign Coordinator for Jack Zettler, candidate for Butler County Auditor.
Hardig said that his decision to run will be determined by the level of financial and campaign support he receives from the community. He plans to announce his decision by January 20.
Filing deadline for candidates is February 18. The primary election is May 4.
Permalink | Comments (4) | Post your comment | Categories: County Commission, Democratic Party
County mulls budget options after sheriff puts cuts on table
Commissioners met this morning to talk about Butler County’s budget crisis. Here is what came out of that:
Revised revenue estimates and last-minute concessions by other offices have given Butler County commissioners options in shoring up a $6.6 million budget deficit without a tax hike or political showdown.
That’s according to county Management and Budget Director Pete Landrum, who outlined options before commissioners this morning, Dec. 14.
Here is a copy of Landrum’s presentation:
(Click on the top right corner to enlarge)
Analysis:
Commissioners seemed most receptive to a plan that includes Sheriff Richard K. Jones slashing his budget roughly $1 million and raising his expected revenue for prisoner boarding by $600,000.
Landrum said the sheriff offered this willingly — despite previously refusing a roughly $2.5 million budget reduction, fearing impacts to public safety.
The county is also counting on bringing in roughly $200,000 more than expected this year, and taking in between $600,000 and $1.8 million more than original estimates next year.
Landrum said these are “conservative” estimates, and still leave next year’s revenues below this year’s.
Commission President Donald Dixon said he favors the plan that calls for the sheriff’s concessions, increased revenue estimates and skimming off roughly $900,000 from the county’s cash reserves.
“It keeps our cash balance at where we wanted it, and I think it also brings in all the officeholders and makes all the officeholders participants,” he said.
This amounts to a total budget reduction of nearly $2.6 million next year, leaving the county’s general fund — decreased due to poor sales tax and investment revenues — at $85.3 million.
Commissioners are scheduled to make a final decision and adopt a budget Monday, Dec. 21.
Permalink | Comments (4) | Post your comment | Categories: County budget
Auditor announces taxable property values to be lowered
Fellow reporter Dave Greber covered this news conference for me today:
It might only be enough to finance a Happy Meal or a weighty Christmas card, but residents across Butler County should see a decrease in property taxes on their tax bills next month, county Auditor Roger Reynolds said Monday morning, Dec. 14.
And, he said, amid a recession, every little bit helps.
A recently completed revaluation of the county’s 55 residential taxing districts found home process decreased by an average of 4.7 percent countywide, Reynolds said. That includes decreases found during the past year of between 1.5 percent to more than 10 percent in individual districts.
Reynolds pledged to complete the off-year revaluation last year because of what were perceived as false increases during the appraisal of 2008, which took into account previous years before the housing bubble burst.
Here is an overview of the auditor’s office findings:
(Click on the top right corner to enlarge)
…and…
Analysis:
“It’s an equalization of the county,” Reynolds said. “And we did it based on how the sales were shaping up.
“We’re talking about a few dollars, but I think that’s important still,” he added. “If I can get a few dollars back in (residents’) pockets, I think that’s important, instead of being overtaxed until we do the next revaluation.”
Collectively, Middletown saw the biggest decrease in home prices during the revaluation of nearly 8.5 percent, while the city of Oxford saw the smallest decrease of 2.16 percent.
Hamilton’s average property value decrease ranged from 4 percent in the 1st Ward to 8.7 percent in the 2nd Ward, for a citywide average of just less than 5 percent, the data shows.
Information gathered during the revaluation — a process completed during a time it was not mandated by the state — will be sent to the state tax commissioner in the coming weeks. The state will then determine the decrease in property taxes for individual residents and send the information back to the county. Reynolds said any changes should appear on the first of two 2010 tax bills, which are set to be delivered during the second week of January.
Reynolds also said each resident will receive a letter notifying them of the recent revaluation by the end of this month.
The amount residents would likely see on the first of two 2010 tax bills will depend on the percentage drop in their home value and the size of local levies — such as those for police, fire and school districts.
In Liberty Twp., for example, the amount of property tax decrease from an average drop of 2.9 percent in property values would likely be offset by the replacement levy residents.
Permalink | Comments (2) | Post your comment | Categories: County Auditor
Auditor, office manager sued by former employer
It appears Jim Oswald isn’t just Butler County Auditor Roger Reynolds’ new high-dollar office manager and former co-worker at another office.
He is also Reynolds’ co-defendant.
Oswald and Reynolds were named in a civil suit in Montgomery County Common Pleas Court filed Sept. 9.
The suit was by brought Jeff LaFave, owner of the Centerville-based company Summit Solutions Inc. at which both Reynolds and Oswald previously worked. It alleges they sabotaged the company’s operations in an attempt to strong-arm LaFave into selling them a portion of the company at a reduced price.
It seeks an order barring Oswald and Reynolds from interfering with LaFave selling the company to a third party.
The case was dismissed on Oct. 7 — one week after Reynolds hired Oswald as an office manager at the auditor’s office for $99,499 — because “pending negotiations will indefinitely stay further proceedings,” according to the judge’s order.
“I adamantly deny any of the claims (in the suit),” Reynolds said, adding that the company has since sold. “As far as I know, it’s a dead issue.”
LaFave could not be reached for comment.
Reynolds worked for Summit Solutions as finance director until earlier this year, according to the complaint. And Oswald worked as company president until the day of the complaint.
Here is a copy of the complaint filed in court (click on the link “ReynoldsSuit.pdf” to download it. I’m having technical problems with displaying it);
Suit says Reynolds’ performance crippled company
In a request for an injunction against Butler County Auditor Roger Reynolds and his newly hired office manager, their former employer alleges a scheme to force him to sell them the company at a “fire-sale price.”
Jeff LaFave, owner of Centerville-based Summit Solutions, Inc., filed the suit Sept. 9 in Montgomery County Common Pleas Court. It sought a restraining order keeping Reynolds and Jim Oswald from interfering in the sale of the business.
It was dismissed in October because of “pending negotiations,” and Reynolds said the issue is “dead.”
Among other things, LaFave’s filed complaint says he planned to terminate Reynolds because of his poor performance: “His handling of the company’s accounts receivables and payables …has placed Summit Solutions in a cash crisis that is forcing (LaFave) to sell a portion of his business.”
Reynolds “adamantly” disagrees with that account, as well as the suit’s other claims. He said he resigned — shortly after taking office, after working there since 2006 — because there were business decisions being made with which he didn’t agree.
With the company on the ropes financially, LaFave’s attorney says Oswald — working with Reynolds — offered to buy a portion of the company for $2.3 million on Sept. 3. It says he returned on Sept. 4 with an offer of $1.2 million.
At the same time, it says the two pressured the company’s lender and a potential buyer to force the deal. The complaint sought an injunction keeping them out of the way of any potential sale.
“If they are able to force a sale to them of the…business or otherwise hinder Summit Solutions efforts to resolve its current cash crisis, they will have completely succeeded in gaining a business they have desired at a fire-sale price that will leave Summit Solutions financially crippled,” the complaint says.
All of this, the complaint says, violated an employment and non-competition agreement consented to by both Reynolds and Oswald.
The suit was dismissed Oct. 7 on agreement by both parties.
Reynolds said the lawsuit has nothing to do with his decision to hire Oswald.
“Jim had left the company. I saw an opportunity to bring in a high-end professional. He was available,” Reynolds said.
Reynolds was criticized for hiring someone at such a high salary — without interviewing any other candidates — while the county faces a $6.6 million budget deficit.
He said the job is temporary — likely until the end of the year — to help restructure the office and draw up long-term strategic plans. Reynolds said he is still engaged in cutting costs and overhauling the auditor’s office after the long-time former auditor, Kay Rogers, resigned. She pled guilty to bank fraud last year.
“For every one position that I’ve hired, I’ve been able to eliminate four. And as a result that’s a million dollars in salary savings alone,” he said. “I realize some may criticize the approach I’ve taken, but they can’t criticize the results, which is a tremendous savings to the bottom line for the county and the taxpayers.”
Permalink | Comments (15) | Post your comment | Categories: County Auditor
Commissioners, other offices may find ‘common ground’ on budget crisis
Butler County officials are optimistic they can find a fix to the county’s budget woes not involving a tax hike or political showdown.
Commissioners are scheduled to meet Monday, Dec. 14, to discuss ways to bridge a projected $6.6 million deficit to the county’s recession-battered budget next year.
“It’s looking hopeful we will be able to resolve our budget issues,” said county Management and Budget Director Pete Landrum.
Landrum said he will give commissioners several options. On the extremes will be forcing mandatory across-the-board cuts that several officeholders said they can’t meet; and enacting a sales tax hike commissioners have said they oppose.
In the middle will be compromises that Landrum said are being worked out up to the deadline.
“I think we’re going to find some common ground, without raising taxes,” said Commission President Donald Dixon.
Proposed cuts were derailed largely by the sheriff, Board of Elections, county prosecutor and courts. They have the county’s largest budgets and cut less than requested — or in the Board of Elections case, increased their budget — warning of declining services to residents with further cuts.
This left the county roughly $5.3 million from its goal in recent budget discussions — with only three weeks left in the year.
Dixon has talked to several of officeholders and “they’re cooperating with us,” he said. “They’re trying to find a solution.”
Commissioners will be aided by revised revenue estimates, Landrum said. He said 2010 sales tax revenues will still be below this year’s, but recent numbers have shown a notable uptick.
“At the end of the day, I think we’re going to be successful,” Landrum said. “That will be only through much cooperation and much effort from all departments.”
Permalink | Comments (7) | Post your comment | Categories: County budget
Auditor to announce off-year property value changes
Press release from Butler County Auditor Roger Reynolds:
BUTLER COUNTY AUDITOR ROGER REYNOLDS TO ANNOUNCE COUNTY-WIDE PROPERTY VALUATION RESULTS
Project is complete; Data demonstrated need for unprecedented Butler revaluation
HAMILTON, OH - Butler County Auditor Roger Reynolds will release findings and comment on data pertaining to his earlier announced county property revaluation. The revaluation is completed.
A press conference will be held Monday, December 14th, at 10:30 a.m. in the Government Services Center, 325 High Street, Hamilton. The conference will be held in the Commission chambers on the second floor of the GSC.
On Oct. 28, Auditor Reynolds announced that he was taking an unprecedented step - a property revaluation for Butler County in a year not mandated for such a revaluation by the state of Ohio - to reflect the reality of property values during this economic downturn. The revaluation was done in-house and was county wide.
In 2008, Reynolds took office and inherited a nearly complete, state-mandated revaluation that was based on property sales and data from 2005, 2006 & 2007, when the economy was stronger and residential home prices were still at their peak. Even after eliminating 2005 sales, which were the highest numbers, Reynolds knew that the final data was not reflective of the current economy and vowed to conduct a revaluation. Because of state law Reynolds was not able to adjust the revaluation further, hence his taking the unique step of conducting his own revaluation.
Permalink | Comments (8) | Post your comment | Categories: County Auditor
Animal shelter to hold pet food pantry
Press release from Butler County Animal Friends Humane Society:
Subject: Pet Food Pantry for Butler County Residents
Why: We will be providing cat and dog food to those who live in Butler County and are having trouble feeding their pets through the holiday season. We want to help people and pets in need so they can continue to provide care and not have to turn their animal in to a local shelter.
When (day/s, month, year): December 19, 2009 from 2 PM - 4 PM while supplies last Where (street, city): Animal Friends Humane Society, 1820 Princeton Road. Hamilton, OH 45011
Times: 2 PM - 4 PM while supplies last
Details: Our doors will be open to anyone who lives in Butler County and is in need of dog or cat food this holiday season (please bring an ID showing your residence in Butler County). We will be portioning the food in 5 pound portions for cats and 10 pound portions for dogs. Please limit one portion of dog or cat food per household. Only available while supplies last. If interested in donating a bag of dog or cat food to this worthy cause, please drop off items at AFHS during our normal operating hours. All donations are tax-deductable.
Chairperson/s: Meg Stephenson Quote: “We are seeing more and more animals coming into the shelter due to people not being able to continue to provide for their pets. We want to help those people and pets in need. We are thrilled to be able to provide portions of pet food to the community. Pets are part of the family and we want to encourage people to work through these hard times and continue to provide a forever home to their pets. We hope this will help get them through the holiday and have a merry Christmas.”
Permalink | Comments (0) | Post your comment | Categories: Dog Warden
Sentencing for Dynus’ Smith delayed indefinitely
Sentencing for former Dynus Corp. president Jim Smith has been delayed “indefinitely,” according to records filed in U.S. District Court.
Smith was scheduled for sentencing Dec. 2 after pleading guilty to bank fraud in 2007 for his role in a scheme that led to the fiber optics firm Dynus taking out an illicit multimillion dollar loan in Butler County’s name. Smith was a key witness for federal prosecutors in the trial of former Dynus owner Orlando Carter, who was convicted in August of charges including bank fraud and is awaiting sentencing.
Smith testified that, at Carter’s urging, he forged documents and lied to officials to over-inflate his company’s profits and secure the loan without county approval.
Smith was granted an extension to his sentencing date after a request from his attorney that says Smith’s cooperation with the government is “continuing,” and that it would be unfair to sentence Smith before he is done cooperating.
In the meantime, Smith’s attorney is requesting that he no longer have to routinely check in with the court while out on bond.
The same FBI investigation that netted Smith led to guilty pleas on bank fraud charges from former county auditor Kay Rogers and former Dynus employee Karin Verbruggen. Verbruggen has been the only one sentenced.
Federal officials say the investigation into corruption in Butler County is ongoing. In October, former county commissioner Michael Fox was indicted on corruption charges for allegedly improperly receiving money from companies doing business with the county while he was commissioner.
Permalink | Comments (1) | Post your comment |
Supreme Court justices skeptical of ‘honest services’ law
Here is an update from the LA Times on the U.S. Supreme Court’s review today, Dec. 8, of the “honest services” statute, which is at the heart of the federal corruption charges against former Butler County commissioner Michael Fox:
The Supreme Court justices gave a highly skeptical hearing today to government lawyers defending the key anti-corruption law that makes it a crime to deprive an agency or employer of their “honest services.”
The justices took turns suggesting the law is too vague and open-ended and fails to spell out what is a crime.
Justice Antonin Scalia called the law a “mush.” It is like, he said, a law that says, “Every bad act is a crime.”
It gives prosecutors and judges a free hand to decide what constitutes a crime but fails to warn ordinary citizens, he said.
During two hours of argument, most of the other justices sounded the same theme. Justices Stephen G. Breyer and Chief Justice John G. Roberts Jr. suggested several times the law might be unconstitutional because it is so vague.
“A citizen is supposed to be able to understand the law,” Breyer said, yet it is unclear what this law brands a crime.
In recent years, prosecutors have used the law against “honest services fraud” as their favorite weapon against public corruption and, sometimes, corporate fraud. It allows them to win convictions for allegedly corrupt schemes even when they cannot prove a public official stole money or took a bribe.
But the Supreme Court justices signaled today they are inclined to either sharply scale back the law or strike it down entirely. If so, the court’s decision could upset or complicate a whole series of corruption cases, including the pending prosecution of former Illinois Gov. Rod Blagojevich for allegedly attempting to sell the Senate seat vacated by President Obama.
Defending the law, Deputy Solicitor General Michael R. Dreeben said it is crucial for prosecuting officials who use their public positions to scheme for their personal benefit. It would “devastate a core area of public corruption” law if the measure were thrown out, he said.
Dreeben argued the law can be used fairly and properly to go after officials who take bribes and kickbacks or who profit from an “undisclosed conflict of interest.”
In one of two cases heard today, he urged the justices to uphold the pending prosecution of a former Alaska legislator who voted in favor of a tax bill that would have helped an oil services firm after he had sought work with the firm. Dreeben said this scheme, if proven, deprived the people of Alaska of the honest services of their legislators.
But a lawyer for Bruce Weyhrauch, the former legislator, said Alaska does not require its part-time lawmakers to disclose such dealings. Weyhrauch was leaving the Legislature and looking for future work, although he did not go to work for the oil services firm, said Washington lawyer Donald Ayer.
He insisted it was wrong and unfair to prosecute someone for breaching a duty of disclosure, since he had no such duty under Alaska law.
The other case involved the one-time newspaper magnate Conrad Black, who was convicted and jailed for scheming to take $5.5 million as personal fees while he was the chief executive of Hollinger Inc., whose papers included the Chicago Sun-Times.
But the justices largely ignored the facts of Black’s case. Instead, they devoted the hour to debating whether the law against “honest services fraud” should be struck down or narrowed in some way.
Miguel Estrada, the lawyer for Black, agreed with Scalia the law is a “morass… . This statute cannot be saved,” he added.
It may be some time before the high court decides how to proceed. Early next year, the justices will hear a third case testing the honest services fraud law brought by former Enron chief executive Jeff Skilling.
The justices hinted today they will postpone a ruling on the issue until they have considered Skilling’s case, since his lawyers argued most directly that the entire law should be thrown out as too vague.
Such a decision would send the matter back to Congress, where lawmakers could seek to craft a more precise statute.
Permalink | Comments (1) | Post your comment | Categories: NORMAP
Sales tax hike could raise $10M — eventually
Butler County officials say an emergency quarter percent sales tax could raise $10 million — more than enough to fill a projected $6.6 million hole in the county’s recession battered budget.
But between logistics and politics, the concept has some problems.
For one, commissioners don’t like the idea. Two of three commissioners said last week they would consider it, but only as a last resort if budget cuts fall disastrously short.
It would take unanimous yeas to pass an emergency tax hike. But even in that case, it would take weeks to advertise and hold public hearings, and the resolution would have to be passed and sent to the tax commissioner 65 days prior to April 1.
“That would be almost next to impossible to do right now,” said county Finance Director Pete Landrum. “Not impossible, but nearly.”
If they missed that deadline, the soonest they could start collecting the tax would be July 1. “We wouldn’t see a dime of that until October,” Landrum said.
Commissioners or voters could then put the issue on the ballot, though the tax would be collected before the vote.
If only two commissioners voted for a tax hike — which, again, they said they don’t want to do — collection of the sales tax would be delayed until after the referendum, if there were one.
And voters don’t have much of an appetite for sales tax levies these days. Of the nine counties that went to voters with a sales tax levy in November, only two passed, according to an analysis by the County Commissioners Association of Ohio.
County commissioners can levy a sales tax of up to 1.5 percent, on top of the state’s 5.5 percent sales tax. Currently, Butler County collects only .75 percent.
With a combined sales tax of 6.25 percent, Butler County is one of four counties with the lowest sales tax rate in the state, according to the Ohio Department of Taxation.
Permalink | Comments (1) | Post your comment | Categories: County budget
Supreme Court ruling on corruption law could affect Fox trial
From today’s paper:
Longtime Butler County politician Michael Fox is in notorious company as he faces federal corruption charges of depriving the public of its right to “honest services.”
Namely, former Enron CEO Jeffrey Skilling, former Illinois Gov. Rod Blagojevich, former newspaper magnate Conrad Black, former Alaska state legislator Bruce Weyhrauch — all charged under the same statute.
And all their fates are tied to the outcome of the U.S. Supreme Court’s decision to review that statute next week, and consider whether the law under which they are charged is too broad.
Prosecutors say the statute is a powerful arrow in their quiver, allowing them to level charges with hefty sentences against someone who clearly did something wrong, but who doesn’t meet the threshold of bribery or graft.
But critics, including Justice Antonin Scalia, thinks it’s too vague.
In a lone dissent to the court declining to hear an honest services case last year, Scalia wrote the law “invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators and corporate CEOs who engage in any manner of unappealing or ethically questionable conduct.”
The defense team for Fox — a former state lawmaker, county commissioner and Children Services director — sought and received a delay in Fox’s trial last week, in part to let the Supreme Court’s decision play out.
The charges against Fox include four counts of mail fraud involving honest services. These are the most serious charges in the indictment, each carrying a sentence of up to 20 years.
Fox and co-defendant Robert C. Schuler are accused of improperly benefiting from a contract between Schuler’s company and the county when Fox was a county commissioner. Federal prosecutors allege that Schuler wired Fox $460,000 while his fiber-optics company NORMAP profited off a contract with the county. Both pleaded not guilty last month.
High Court’s decision on fine point of law could affect Michael Fox’s federal case
It’s only 28 words. A footnote, really. But it has the power to send to prison the heads of mega-corporations, state governors and possibly one of the most prominent politicians in Butler County.
And it will soon come under the review of the U.S. Supreme Court after long being criticized as too vague.
It’s a provision in federal law that makes it illegal “to deprive another of the intangible right of honest services.”
That’s what federal prosecutors say Michael Fox — former state lawmaker, county commissioner and children services director — did when he allegedly accepted money from business owners profiting off county contracts without properly reporting it.
This includes co-defendant Robert C. Schuler, a Columbus-area attorney and owner of the fiber optics firm NORMAP. Schuler allegedly wired then-commissioner Fox $460,000 while NORMAP profited off a contract with the county that Fox helped Schuler secure.
The Supreme Court is scheduled Tuesday, Dec. 8, to hear arguments in the cases of two other people accused of similar crimes: former newspaper magnate Conrad Black and former Alaska state legislator Bruce Weyhrauch. They will later hear the case of former Enron President Jeffrey Skilling.
Fox’s defense team was granted a delay until June of his trial in federal court, in part to allow the Supreme Court’s decision to play out.
“Court watchers are curious to find out whether the statute will be narrowed in some way or it may even be found unconstitutional as a whole,” said Aaron Herzig, a defense attorney for Fox with the Cincinnati-based firm Taft Stettinius and Hollister.
“We’re certainly interested in seeing what the outcome is as well, because it’s a linchpin of the government’s indictment against Mr. Fox,” Herzig said.
Justice Scalia: Law ‘simply not fair’
“I think that prosecutors need an adequate and fair law to be able to prosecute public officials who violate the duties of their office, and an honest services type law is important to be able to do that,” said Kathleen Brinkman, who was an assistant U.S. attorney in Cincinnati for 24 years.
“The Supreme Court is going to decide whether this law adequately protects the rights of public officials who are charged with such a crime,” added Brinkman, now a defense attorney with the firm Porter, Wright, Morris and Arthur.
One of the major questions, she said, is whether the law as written notifies public officials that their actions are criminal before they’re charged with it.
Brinkman said the statute has withstood challenges in the lower courts for years, but the fact that the high court is taking on these three cases, “could be read by some that there could be a majority on the court that’s antagonistic to this statute, but you never know until they render their opinions.”
Justice Antonin Scalia has urged the high court to review the law, saying it lacks specificity as to what level of self-interested dealing rises to a felony with a 20-year prison sentence. A mayor’s attempt to use his office to get a restaurant table without a reservation? A public employee’s recommendation of an incompetent friend for a public contract?
“Indeed, it would seemingly cover a salaried employee’s phoning in sick to go to a ball game,” Scalia wrote in a dissent to the court refusing to hear the issue last term. “It is simply not fair to prosecute someone for a crime that has not been defined until the judicial decision that sends him to jail.”
But without the statute, prosecutors wonder if some self-dealing executives and officials would have been brought to justice.
Prominent defendants
Fox and Schuler pleaded not guilty to an 11-count indictment charging them with conspiring to improperly benefit from a $2.75-million fiber optics contract with the county.
The indictment alleges they profited from the deal and failed to report the income properly. It also accuses Fox of not properly reporting income he was receiving from other companies doing business with the county, and accuses Schuler of lying to a grand jury.
Black, the former chairman and chief executive officer of the Hollinger International media company — then owner of the Chicago Sun-Times — was convicted in 2007 of fraud after he and other executives received $5.5 million from the company, claiming they were management fees.
Weyhrauch is charged with not disclosing that he was trying to get a job with the same oil field service company that would benefit from a bill he was pushing in the Alaska Legislature.
Skilling was convicted in 2006 on charges including conspiracy, fraud, insider trading and lying to auditors leading up to the 2001 collapse of Enron.
“What makes this interesting and significant are three very high profile cases, and each one of the defenses is a little different situation, so it will allow the Supreme Court to do a broad review,” Brinkman said.
Permalink | Comments (6) | Post your comment | Categories: NORMAP
Jewett to fill in at top county job
Butler County commissioners named an interim county administrator today, Dec. 3, who will take the county’s reins until they can find a permanent replacement.
The job goes to Bruce Jewett, who will also continue serving his role of director of Job and Family Services.
Jewett replaces Tim Williams, who announced in November that his last day would be Dec. 11.
Permalink | Comments (4) | Post your comment | Categories: County Commission
Fox trial delayed until June
Longtime Butler County politician Michael Fox’s corruption trial is scheduled to start June 1, after a delay approved by U.S. Judge Sandra Beckwith Wednesday, Dec. 2.
“The case is factually complex, and involves novel and unusual issues of law,” says Beckwith’s order.
Get a full rundown of the charges against Fox here.
Fox’s defense team asked for the extension in November, asking for time for the U.S. Supreme Court to rule on a case that may impact Fox’s trial. The trial was originally scheduled for Dec. 22.
Fox — former state lawmaker, county commissioner and Children Services director — and co-defendant Robert C. Schuler have pleaded not guilty to an eight-count indictment leveled last month.
They are charged with conspiring to improperly benefit from a $2.75 million fiber optics contract with the county.
Federal authorities say they found that Schuler, a Columbus-area attorney and owner of the fiber optics firm NORMAP, wired Fox $460,000 while his company profited off a contract with the county.
The indictment alleges they profited from the deal and failed to properly report the income. It also accuses Fox of not properly reporting income he was receiving from other companies doing business with the county, and accuses Schuler of lying to a grand jury.
Permalink | Comments (0) | Post your comment | Categories: NORMAP
Dillingham charged with passing bad checks - again
A one-time Butler County commission candidate and former Hamilton bar owner is in legal trouble again.
Rawnica Dillingham-Ruscigno was arrested Nov. 25 on charges of passing bad checks, according to Fairfield police records.
She faces two misdemeanor counts in Fairfield Municipal Court for allegedly writing fraudulent checks totaling $619.46 to Gordon Food Service in Fairfield.
The warrant request was filed in municipal court by the company on Nov. 2. They allege the bad checks were used to purchase goods on May 11 and May 15.
Dillingham-Ruscigno is scheduled for a hearing before Judge Joyce Campbell on Dec. 9.
This is Dillingham-Ruscigno’s third arrest on charges of passing bad checks. During her campaign for county commission culminating in a lost Republican primary last year, it was revealed she was arrested for passing bad checks in 1999 and 2000.
More recently, Dillingham-Ruscigno was arrested in February as owner of V’s Nightclub on charges of violating Hamilton’s adult entertainment ordinance for a risqué performance she allowed at the bar. She pleaded guilty in September to amended charges.
The bar, on Millville Avenue in Hamilton, has since changed its name back to Dottie’s Bar and Grille — its name before Dillingham-Ruscigno and her husband bought the business. The company’s social networking sites say it has reopened under the “original ownership.”
Permalink | Comments (10) | Post your comment | Categories: Crime and courts
Should sales tax hike be on table as county struggles with budget?
“Between a rock and a hard place.” “Catch-22.” “No win situation.”
These are the phrases Butler County Commissioner Gregory Jolivette used when asked whether the county was seriously considering raising sales tax to bolster its recession-battered budget.
The question came at a breakfast meeting with all local chambers of commerce this morning, Dec. 2. All three commissioners attended the event at Tori’s Station in Fairfield.
The answer: Two of three commissioners wouldn’t rule out a sales tax hike, but only as a last resort.
“I’m open for discussion on this issue, even though it could be very detrimental to my political future,” said Jolivette, who faces a tough re-election race next year.
“It would be irresponsible to say you definitely wouldn’t raise taxes,” said Commissioner Charles Furmon.
Commission President Donald Dixon disagreed, saying any increased revenues would “just get lost in a big, black hole,”
“Quite frankly, I think our spending has been out of control,” he said.
Jolivette and Furmon both argued that the county’s books have been well tended, and they were on the way to building massive reserves with one of the lowest sales taxes in the state until the bottom fell out because of recession.
They made it clear they prefer cuts as well, and would only consider a tax hike as opposed to declaring fiscal emergency and having the state take over the county’s books.
Facing a $6.6 million projected budget deficit next year, commissioners said the other alternatives aren’t very appealing: drastically reducing services, and — in Jolivette’s case — pushing for cuts to the sheriff, prosecutor and courts that could leave him open to criticisms of being soft on crime.
“I think (raising) the sales tax is one of the last things anyone wants to do,” Furmon said. “But it’s incumbent upon us to provide the services (and) if it has to be at the end of the day, I think we’ll have to look at it.”
With a sales tax of 6.25 percent, Butler County is tied with two other counties for having the lowest sales tax in the state. But Jolivette said this isn’t the economic boon it should be.
“Do we get credit for having the lowest sales tax rate?” he said. “They don’t think about that when they go to Cincinnati to shop, or up north where it’s 7 percent.”
Permalink | Comments (9) | Post your comment | Categories: County Commission, County budget
