Columbus Board of Education member David Dobos said it appears that developers back candidates such as Habash because they support the idea of abatements.

"A large part of it is the large money trying to protect the status quo," he said.

When the city approves tax abatements, Dobos said, it is often releasing companies from paying money that otherwise would go to the school district. He and other school board members routinely have opposed city tax breaks, including those for the Nationwide Arena, Easton developments and Brewery District housing.

Big donors, Dobos said, are helping candidates who support tax abatements inside the district and development outside the district, often without consulting the school board. That has been true, he said, of Coleman's Democratic administration and of the administration of Republican Mayor Greg Lashutka.

"We certainly don't wield political power," he said of the school board's attempts to derail abatements. "That has been very frustrating, especially when you look at the huge dollars that the council and the mayor raised. Where does that money come from? Largely, it's coming from developers. To take that one step further, it's the same folks that are making big developments outside our school district."

The League of Women Voters' Peg Rosenfield agreed that developers and business donors seem to back officials who see tax abatements as good public policy. If Coleman and other city officials opposed tax breaks, she said, they likely would see little of the development money that supports their campaigns.

"You don't give money to people you actively disagree with," she said.

Some tax abatements are sought by people or companies that have not made substantive campaign contributions.

In September, the City Council approved an abatement expected to save Buckeye Steel $4 million over 10 years in return for $27.5 million in investment and 397 new jobs. The Dispatch found just one small donation -- $15 to Councilwoman Jennette Bradley from a company executive.

"We needed to save jobs on the South Side and keep jobs in the city," Coleman said.

Among the requests from people who have contributed, one came from Moody Nolan Architects, which received a tax break worth $369,000 over eight years on a new company headquarters on Spruce Street near the Arena District. Chief Executive Curtis Moody promised 30 jobs by 2002.

Moody, a longtime Coleman supporter, gave the mayoral candidate $6,000 in 1999.

His company has received more than $1.4 million in contracts to design city buildings, but Moody said his donations have nothing to do with the tax abatement or with the design work he does for the city.

"The truth is, we're a very honest organization, and ethical," he said last summer as his company's request reached the City Council. "We pride ourselves as being aboveboard."

Coleman said the abatement went through the normal channels and received no special attention.

Mark Barbash, the mayor's development director, said he and his employees do not know who has or hasn't given to the mayor's campaign. Requests for tax abatements flow through a standardized system, he said, to ensure that no one receives special treatment.

"Our general philosophy is that the more transparent the process is, the better," Barbash said. "It needs to be consistent with other projects. It's important that every project be looked at in exactly the same way."

Clearly, city tax breaks help developers, many of whom are campaign donors, fill commercial real-estate projects. And the general philosophy of Coleman, his predecessor, Greg Lashutka, and the City Council is that tax abatements are a necessary part of an economic-development plan. As long as other communities offer abatements, they say, Columbus also must do so to grow and attract jobs.

In July 2000, the Coleman administration proposed, and the Columbus City Council approved, a tax abatement worth $1.5 million for an expansion of Bisys Inc.'s headquarters at Easton.

The developer of the project was Georgetown Co. of New York, a partner in the development of Easton and New Albany with Leslie H. Wexner, founder of The Limited.

Wexner, his wife, Abigail, as well as Limited executives and The Limited's political-action committee donated at least $97,000 to the campaigns of Coleman, Lashutka, and every council member (except the short-termed Frederick L. Ransier III) from 1998 through 2000, records show.

A Limited spokesman did not return calls seeking comment.

Georgetown executives donated at least $10,500 to Coleman in 1999 and 2000.

Company President Marshall Rose said there is no connection between the donations and any help the city has given Easton and New Albany projects.

"These are standard tax abatements that have gone on for the past 10 years," Rose said. "It's a process the city does."

Development and new jobs at Easton have been good for the city, he said, resulting in jobs and increased income-tax revenue.

"It's a simple thing of good government," Rose said of Georgetown's support for Coleman. "We try to sponsor people who we think will be good for the city.

"When the tide goes up, all the boats rise," he said.

Bisys, which provides customer service, accounting and technical support for banks and investment firms, promised to add 500 jobs with the project and expand its headquarters by 79,000 square feet. The company has added 58 jobs since it received the abatement, according the the Columbus Department of Development, and has until 2005 to hire the rest of the workers.

Another large developer, Pizzuti Co., has received two recent abatements that have helped build and fill the company's business parks near Rickenbacker Airport. In 1998, the company's Optical Village development received an abatement worth more than $1 million over 10 years. A Pizzuti tenant, Petsmart, in 2000 received an abatement worth $998,244 over seven years.

Records show that from 1998 through 2000, Ron Pizzuti and his wife donated $27,000, including $15,000 to Coleman and $11,500 to Habash.

The administration and the council say they have kept watch on the Pizzuti projects. The Petsmart abatement was scaled back to an expected tax savings of $948,583 over five years from $998,244 over seven years.

That means the abatement went from a savings of $142,606 a year for seven years to $189,716 a year for five years, giving more of the tax savings earlier in the abatement period. That was after the administration learned the company had created just 50 of the 190 jobs it had promised at the site.

When Pizzuti announced that the size of the Optical Village project would be cut in half, the tax break was reduced 10 percent -- to an expected savings of $900,204 over 10 years from $1.02 million over 10 years.

Beyond traditional commercial developments, Coleman has signaled a willingness to consider abatements for non-traditional projects.

In one of his last acts as City Council president in December 1999, Coleman voted for a tax abatement worth $2.15 million through 2011 on Brewers Yard, an Arshot Development project which includes offices, retail stores and apartments just south of Downtown. The abatement was the first for a residential project in city history.

William Schottenstein, president of Arshot Development, and three of his family members donated a total of $20,000 to Coleman in 1999. There were no apparent donations from Capital Square Ltd., a subsidiary of The Dispatch Printing Co., which is a partner with Arshot in the development.

In October, Coleman announced a policy to grant residential tax abatements Downtown and in some distressed neighborhoods

Related Article:  Stealing Money From Kids

A foot in the door

Columbus has few rules regarding campaign finances.

Sunday, December 9, 2001

Doug Caruso

Dispatch City Hall Reporter

Access at City Hall: Day 1 of a two-day series

In 1998, 1999 and 2000, most campaign donations to the Columbus mayor and City Council members came from people doing business with the city, a Dispatch review shows. Politicians and donors say there is no impropriety, but some acknowledge that money buys access.

On his way to raising and spending $2.5 million to win Columbus' most expensive mayor's race, Michael B. Coleman declared in 1999 that the city's campaign-finance rules had to change.

Nearly two years later, though, Coleman and members of the City Council continue to accept hundreds of thousands of dollars in campaign donations -- much of it from developers, businesses, lawyers and unions that benefit from city actions.

While federal and state officials debate campaign-finance reform, Columbus city candidates gather campaign cash in a system that, like those in many other cities, has far fewer reporting requirements and limitations:

·  Donation limits are standard at the state and federal levels, but Columbus has no limits. It is not unheard of for a donor to give $10,000 or more to a candidate in a single check. (Coleman received 21 such donations in 1999 and 2000.) Ohio limits individual donations to $2,500 per election cycle; federal rules limit individual donations to $1,000 per election cycle.

·  City campaign-finance reports are filed on paper and kept in a filing cabinet at the Franklin County Board of Elections. Both Ohio and federal reports are now available on the Internet to anyone with a computer and a modem.

·  City donors are not required to identify their occupation or employer, a requirement in state and federal campaign reporting. Without that information, residents have only a name and an address to decipher a donor's potential interest.

"You've just described the ingredients of an invisible insider game that can be taking place at City Hall," said Larry Makinson, senior fellow at the Center for Responsive Politics, a nonpartisan group in Washington that supports campaign-finance reform.

"It's a closed game. The public is not only on the outside but in the dark. People are going to take advantage."

To try to quantify that advantage, The Dispatch examined nearly 8,000 political donations made during 1998, 1999 and 2000 to members of the Columbus City Council and to mayors Coleman and Greg Lashutka.

From January 1998 to the end of 2000, council members and the two mayors accepted nearly $4.2 million in campaign donations -- including $2.7 million that went to Coleman's mayoral campaign.

'An investment'

Catherine Turcer, a Clintonville resident who works on the reform of municipal campaign-finance laws for Ohio Citizen Action, said big donors contribute in the hope that city policies will go their way.

"You're making an investment or a contribution with the hope of a package," she said. "It's not like bribery. You want pro-business ordinances or pro-business decisions."

Coleman said any implication that political donations sway policy in his administration offends him.

"That concept is insulting to me personally and is based in untruths," he said. "Any issue I am faced with, I deal with on the merits of the issue, bottom line. Any implication otherwise is make-believe."

Turcer said the mayor is being thin-skinned.

"It's too bad he's offended," she said, "but these are legitimate questions."

City Council President Matt Habash -- who finished a distant second in fund raising during the three years with a total of $417,000 -- said he knows that many people believe that donors give money to obtain something in return from government.

"It doesn't happen," he said. "I don't know how to convince anyone of that, but it doesn't happen."

Habash said he favors requiring candidates to disclose their contributions.

Even though he was not required to do so, he filed campaign-finance reports this year because his campaign committee gave money to Democratic incumbents running for the council.

"Put it out there," he said. "People can make their own decision."

Big checks

The Coleman and Habash campaigns both say they are proud that they enjoy a wide spectrum of support with many small donations from average people.

Still, individual donations of less than $500 accounted for just $623,000. That means 85 percent of the money came from people who wrote checks for $500 or more.

The big donors include developers who need city permission to build homes, malls and office parks. They include lawyers who represent those developers. They include businesses looking for tax breaks or city contracts worth millions. And they include unions that want city policies to support labor.

The Dispatch found that more than $1.1 million in donations over the three years could be traced to development interests -- easily the largest single block of money spent on Columbus political campaigns. The figure includes large donations from companies such as The Limited and Nationwide, which deal with city officials on development of Easton and the Arena District, respectively.

Some donors see campaign cash as an investment toward access to city leaders.

Lobbyist Richard Hillis, a Republican who once worked for former Mayor Dana G. Rinehart, donated $27,000 to Coleman, a Democrat, through a political action committee Hillis runs. Large donors to that committee include executives from Dominion Homes and BBS Corp., an engineering firm that receives millions in unbid city contracts.

Hillis said he is supporting a Democrat because "I frankly believe that Michael Coleman will be mayor of this city as long as he wants to be. I'm not an idiot."

The candidates say they need all that money to get their messages to voters in increasingly expensive TV ads.

Growing influence

The dollar figures have skyrocketed, but the basics of the system have been in place since television became important to political campaigns, former City Councilman M.D. Portman said.

Portman served eight terms at City Hall, from 1966 to 1996, and served in the administration of Mayor M.E. "Jack" Sensenbrenner in the 1950s.

In his self-published memoirs, written shortly after he left office, the 87-year-old recalls how Sensenbrenner raised $575 in 1953 to buy TV commercials and win the mayor's office. He raised most of the money from West Side friends and business leaders.

But as the price of television time has gone up, Portman said in a recent interview, so has the influence of big-money donors who can help a candidate reach voters.

"You have to raise money to get your name out," he said. "Where do you get the money? You and I know where you get it, so you've got to be careful."

Some donors, Portman said, are civic leaders interested only in seeing good candidates elected.

"There are other people who court favor," he said. "They're currying favor, no question about it."

And sometimes the candidates can't help responding, said Makinson of the Center for Responsive Politics.

"I seriously feel for some of these candidates," he said. "They get in to do something good, but once you get into an environment where your survival depends on fund raising, it's hard not to get trapped."

'Out of control'

Nobody says they like the system -- not the politicians who raise the money, not the businesspeople who give the money, not the people who sometimes feel crushed when a big donor's interest conflicts with theirs.

Even as Coleman was raising $2.5 million in 1999, his campaign spokesman, Fred Yates, said: "This is getting out of control. Soon after this is over, we've got to look at campaign-finance reform. It's got to hit the table in the next year."

In conversations at the time, Coleman made similar comments. In a recent interview, he said he plans to take up the issue before his term ends in 2003.

"I said I'd look at that," he said, "and it's something I fully intend to look at."

Contributor Paul Coppel, president for land acquisition and chief counsel for M/I Schottenstein Homes, said he wouldn't mind if campaign donations were outlawed tomorrow.

"It'd be OK with us if someone passed a federal law and said the government will pay for campaigns," he said. "I don't like it. I've got kids to educate. But you've got to think long-term. If these people don't get elected and others do, my business could suffer. The candidates have an expectation that you're going to be there."

Coppel and other M/I executives gave more than $56,000 over the three years -- nearly all of it to Coleman. Coppel personally gave Coleman $7,050, campaign-finance records show.

In the meantime, the company won council votes on controversial zoning questions, including a development near the Pickerington Ponds Wetlands Wildlife Refuge.

Coleman, a former law partner of M/I executive Robert Schottenstein, was the City Council president when the zoning came up for a vote, and he abstained. A citizen referendum eventually forced the council to rescind the decision.

Money's power

In 1999, the City Council removed some Far West Side land from an Environmental Conservation District so M/I Homes could build houses there.

Marty Anders, a real-estate agent, lives across Spindler Road from the development. She and her neighbors bought houses nearby believing that the chunk of woods was protected, she said, and they unsuccessfully fought the move to end protection.

Anders was not surprised to learn that M/I executives have been major donors to Coleman.

"What's the old saying? Money talks," she said. "That's why I don't believe anybody. They can change things, and nobody knows about it until it is too late."

Ty Marsh, Coleman's chief of staff, acknowledged perceptions that campaign money drives public policy. But officials in Coleman's administration have no idea, he said, whether someone seeking city action has given money to the mayor's campaign.

"There is absolutely no connection between one and the other," Marsh said. "That is the standard he set when he came in here."

Beyond a pledge to look at the issue, Coleman offered no details on how campaign financing in Columbus should change.

Marsh said discussions likely would begin with disclosure rules.

"Disclosure is the key premise," Marsh said. "That's the foundation you start from: How do you do it? Are there better ways to do it?"

Others say disclosure isn't enough and that limits or public financing of campaigns is the answer.

"A train wreck's a train wreck, whether you can see it or not," said Turcer, campaign-finance director for Ohio Citizen Action.

The nonpartisan group supported a campaign-finance-reform initiative passed in Cincinnati last month that, beginning with the 2003 election, calls for stricter reporting, donation limits and some public financing of campaigns.

Stalled reform

Columbus also took a recent crack at reform.

In 1994, voters overwhelmingly approved a city-charter amendment that gives the council the authority to enact campaign-finance laws.

In 1995, a panel convened by then-City Council President John P. Kennedy suggested nine changes, none of which has been enacted in the six years since. The most significant would:

·  Require contributors to disclose the names of their employers if they give a candidate $200 or more.

·  Force candidates to report the total donations from contributors who give more than one check.

·  Limit contributions to city auditor, city attorney and City Council candidates to $1,000 per donor. The panel couldn't agree on limits for the mayoral candidates.

·  Limit donations from political action committees to between $1,000 and $5,000.

·  Block candidates and their campaign committees from giving contributions to other municipal candidates.

Peg Rosenfield, who lobbies the General Assembly for tighter campaign-finance rules on behalf of the League of Women Voters, served on the committee that made the recommendations. A majority of the nine members supported the recommendations, she said, but the council balked at them because the support was not unanimous.

"They were looking for this committee to get them off the hook," she said. "They could say, 'This is what the committee told us to do, and that's why we're doing it,' and they didn't get that. If they'd have taken it up at council, they'd have had a brouhaha."

As a result, she said, Columbus is operating under campaign-finance rules that make state and federal laws look good.

Access at City Hall: A matter of giving and receiving

Dozens of campaign donors are also city vendors

Sunday, December 9, 2001

Doug Caruso

Dispatch City Hall Reporter

As Columbus Mayor Michael B. Coleman delivered a speech at the Athletic Club of Columbus in September, city Utilities Director John Doutt dined at a table sponsored by Burgess & Niple Engineering.

Over the $17-a-plate lunch, company executives had the opportunity to listen to the mayor while chatting with two top officials in his administration, Doutt and Cheryl Roberto, the deputy director of utilities and a key Coleman adviser.

"It was their mayor's speech, and we just thought they might like to see it," Burgess & Niple Chief Executive Francis C. Smith said of the invitation.

Partners in the firm, which was paid $3.5 million in unbid engineering contracts through the city's department of utilities in 2000, donated at least $9,600 in 1999 and 2000 to Coleman's campaign fund.

The firm's partners give money to candidates, Smith said, to encourage good government. Smith said he has never thought about whether his firm's political donations gain Burgess & Niple better access to city officials, much less extra consideration when the company is up for a contract.

"They return calls when I call them," he said, "but, then, I'm the chairman and CEO of one of the largest engineering firms in the city, too."

At that Sept. 26 speech, other Coleman administration officials lunched at the table of Evans, Mechwart, Hambleton & Tilton, an engineering firm that received $1.5 million in unbid contracts from the city last year. EMH&T executives donated at least $6,000 to Coleman in 1999 and 2000, campaign-finance records show.

Both companies are among dozens of city vendors that receive millions in contracts and support the campaigns of the mayor and City Council members with thousands of dollars in campaign contributions.

Doutt said he sees no problem in having lunch with people from a firm that works closely with the city.

"It's just a courtesy," he said.

Both Doutt and Roberto said they don't know whether engineers donate to the mayor. Even if he did know, Doutt said, it wouldn't matter because qualifications, not political donations, matter when a contract is at stake.

Although most city contracts are awarded based on sealed bids, which emphasize the lowest cost, the process for professional-services contracts with engineers, architects and construction managers is more subjective. Panels of city employees evaluate proposals to determine the best, not necessarily the least expensive.

Coleman said donors have no greater access to his administration than anyone else and are not receiving special consideration for city business.

Anyone, he said, can meet with him or his administrators.

"I am about as accessible as a human being could possibly be -- to everybody," he said. "I take great pride in being visible and accessible to the city of Columbus."

But not everybody has the kind of access in evidence at the Metropolitan Club luncheon, held at the Athletic Club on E. Broad Street.

As Coleman addressed Metropolitan Club members and guests, the Coleman campaign's chief fund-raiser, Melissa Barnhart, accompanied a BBS Corp. executive, Edward O. Vance, to the event and introduced him to city officials. Like Burgess & Niple and EMH&T, BBS Corp. does engineering worth millions for the city.

In 1999 and 2000, campaign-finance records show, Vance and other BBS executives donated at least $3,000 to the Coleman campaign. Vance also was among BBS executives who donated $11,400 to a lobbyist's political action committee, which gave Coleman $27,000 in 1999 and 2000.

The Coleman administration paid BBS $1.8 million from unbid engineering contracts in 2000.

Vance declined to comment, and Barnhart did not return repeated telephone calls seeking comment.

Catherine Turcer, campaign-finance director for Ohio Citizen Action, a nonpartisan group that promotes campaign-finance reform, said donations from city contractors don't necessarily mean the companies are paying to play.

"But it doesn't pass the smell test," she said. "It looks really shady. That's the problem -- it looks that way. We don't really know."

The September speech isn't the only place donors such as BBS Corp. obtain access. In August 2000, BBS, The Limited and Columbus engineering firm DLZ Corp. sponsored glitzy receptions for Coleman each night at the Democratic National Convention in Los Angeles.

Linking donations to the companies is not always easy in Columbus' relatively unregulated campaign-finance reporting system. In BBS' case, some of the company's money likely reached Coleman and council members through a third-party political action committee run by lobbyist Richard Hillis.

The company made donations to Hillis' PAC, and the PAC made donations to the city officials.

Hillis said his PAC's records are easy to find in state databases, but the contributions show up on city reports as coming from "Government Policy Group/MERIT PAC," with no indication who the PAC represents.

Hillis said he wants the PAC to be among the top givers to Columbus officials.

"If I get the PAC into the top 10 or 12, I'm pretty comfortable that I'm going to be very respected from the standpoint of someone that I want to talk to," he said. "I just really believe that you have to get into that level before you're a serious player."

Others give often and in small amounts that aren't likely to be noticed, especially because donors are not required to list their employer or occupation on city campaign-finance reports.

The $9,600 that Burgess & Niple executives gave to Coleman -- and nearly $1,500 spread among City Council President Matt Habash and other council members -- came in 70 donations ranging from $50 to $400 from 10 Burgess & Niple engineers and executives.

The money is only that from executives The Dispatch identified through a list on the company's Web site. Burgess & Niple has 18 partners, some of them out of state, Smith said.

Reporting of campaign donations at the municipal level is generally poor, said Larry Makinson, senior fellow at the Center for Responsive Politics, a nonpartisan group that supports campaign-finance reform.

"There's an irony here that the best reporting is at the federal level, and the agencies people pay the most attention to are the local governments," he said. "The closer you go to the local level, the more blatant the quid pro quos are. There's less scrutiny, and everyone knows each other."

Coleman is not the first Columbus mayor to take money from firms that do business with the city.

Both Coleman and then-Mayor Greg Lashutka received thousands of dollars in 1999 from the same engineering firms.

BBS donated at least $1,725 to the outgoing mayor in 1998 and 1999. EMH&T donated at least $3,300 to Lashutka. Burgess & Niple executives gave the Lashutka campaign at least $2,850. All continued to donate well into 1999, when it was clear the Republican mayor was not running for re-election.

Lashutka said donors may seek access, but that doesn't mean they receive everything they want.

"Some have gotten contracts; some don't," he said. "There are those who do believe in good government and do believe it's part of how they have the opportunity to otherwise meet with public officials."