(AP) The director of Ohio’s workers compensation bureau is resigning amid a growing scandal over millions of dollars missing from a rare-coin investment fund, Gov. Bob Taft said Friday.
Neither workers comp Administrator James Conrad nor any member of his staff told the governor about the state’s investment in coins, Taft said. When questions were raised in April, agency officials told Taft the investment was profitable and safe.
State officials had said Thursday they plan to sue coin dealer Tom Noe and seek criminal charges after his attorney told them that about $10 million of the state’s $55 million investment in rare coins is missing.
A consultant had originally alerted the bureau a few months ago that coins worth an estimated $400,000 had vanished.
“I am outraged, angered, saddened, sickened by what we learned yesterday from Mr. Noe’s attorney,” Taft said at a news conference. But in response to reporters’ questions, Taft declined to say whether Conrad had been ousted, saying only that the departure was by mutual agreement.
The bureau hired Noe in 1998, the year before Taft took office, to invest in coins as a way to hedge its investments in stocks and bonds. While Noe is a respected coin expert, Democrats have alleged that he was awarded the state’s business in return for campaign contributions to Republicans, who control most of state government.
Noe has turned down requests for interviews.
In a statement, Conrad said he was stepping down because the issue was getting in the way of the bureau’s mission to serve injured workers and employers.
“The last thing I want to do is distract from the outstanding progress we have made together over the years,” Conrad said.
Taft said he believes Conrad, who will resign next Friday, understands the investment was a mistake and that he is responsible as agency administrator. The governor said he also takes responsibility for the situation.
Coin dealers say they know of no other state that has invested in rare coins. Among the purchases by the Ohio fund were a 1792 silver piece worth about $2 million and gold coins minted in 1845 and 1855.
Before the new estimate on the number of missing coins was disclosed, officials had said the state at times did better than the stock market, clearing a profit of nearly 40 percent, less Noe’s commission.
Questions about the investment surfaced in April when The Blade newspaper of Toledo found that the two 1800s-era gold coins had disappeared. Noe said they were sent to a Colorado coin dealer but got lost in the mail in 2003.
The newspaper then reported that 119 other coins were missing. Noe said he thought the coins had been stolen by the Colorado dealer, whom he hired to assist with the fund. Colorado authorities are investigating.