Democrats push for answers on JobsOhio funding

Ann Sanner, Associated Press

COLUMBUS, Ohio (AP) -- Two Democrats said Thursday they plan to ask a state legislative committee to force leaders of the job creation nonprofit JobsOhio to appear before the panel to address questions over its financing.

State Reps. John Carney and Denise Driehaus told reporters they will call for a vote by the House Finance and Appropriations Committee to subpoena the entity to speak publicly about how it has used millions of dollars.

"These are public dollars, this is a public-private partnership, and we want you to come in and testify," Driehaus said.

Republican Gov. John Kasich and the Legislature created JobsOhio to attract jobs to the state and keep them. Economic development duties from a state government department, now called the Development Services Agency, were shifted to the private nonprofit, which is not subject to the same oversight.

Democrats have criticized JobsOhio since its creation in 2011 for its lack of transparency. And JobsOhio's ability as a private entity to manage taxpayer dollars under Ohio's Constitution is the subject of an ongoing legal challenge joined by liberal and conservative groups.

But questions over JobsOhio's funding have mounted after the state's Republican auditor issued a subpoena last week seeking access to its private financial books.

Auditor Dave Yost has given JobsOhio Chief Financial Officer Kevin Giangola until Tuesday to produce the records after JobsOhio declined to volunteer them. He has asked for financial statements, spending and revenue ledgers, salary and benefits payments and other documents — or an explanation for withholding them.

Yost says he has the right to audit the public and private funds flowing through the public-private partnership, though the administration and Republican leaders who control the Legislature think otherwise.

Yost has said he wants to make sure JobsOhio's money "is working for the people of Ohio — creating jobs and growing this economy for our families."

He says there's no confusion over his authority to audit JobsOhio, which recently went to market with a $1.5 billion bond offering backed by proceeds from its rights to the state's liquor business for the next 25 years.

JobsOhio spokeswoman Laura Jones said the entity welcomes the auditor's review of its public funds.

"We recognize having him review all public funds that DSA (the Development Services Agency) has provided to JobsOhio is appropriate, and we look forward to working with him in that effort," Jones said.

Asked whether JobsOhio had produced the records Yost requested, she said, "We're in ongoing discussions with the auditor about the process."

Legislators, including Driehaus, have visited JobsOhio to discuss economic development and other issues. Driehaus said the visits weren't related to the nonprofit's budget but economic development strategies and spending on an advertisement campaign.

"I have different questions now," she said. "And they won't come now. And it's not just me; it's a matter of procedure."

She said she had expected that the entity would testify during the budget process on "how the money is being spent, where it came from — just like everybody else does — and kind of give an accounting of what's going on."

The Democrats' move for a subpoena likely won't go far.

Last week, Democrats on the budget-writing committee asked JobsOhio to appear before the development subcommittee to answer questions about the entity's finances and financial records.

The chairman of the subcommittee said neither he nor House Speaker William Batchelder feels it's necessary for JobsOhio to testify.

JobsOhio was required to submit an independent audit to the state Development Services Agency by the end of last year. That audit showed the entity raised almost $7 million in contributions, though it isn't required to disclose who gave it money or provided in-kind services. The agency also received millions of dollars in state grants.

The Kasich administration has said the Development Services Agency has turned over to Yost all JobsOhio documents related to public dollars.

The agency's outgoing director, Christiane Schmenk, had asked Yost to audit the public funds as soon as possible, as the agency seeks to close out its grant relationships with JobsOhio and JobsOhio Beverage System, or JOBS, which is the renamed Ohio Business Development Coalition and issuer of the bonds.

The JobsOhio grant was $1 million; the coalition grant was about $5 million.

Kasich on Thursday formally announced that Schmenk, who has led the development agency since July 2011, is leaving to pursue an outside position. She'll be replaced by David Goodman, who will leave his post as director of the Department of Commerce for the new Cabinet position effective Monday.

Carney said her departure "seems curious" because of the timing of the audit.

"The whole thing seems odd to me," he said.

Kasich spokesman Rob Nichols has said Schmenk's move has been in the works for months.