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By Laura A. Bischoff, Columbus Bureau Updated 8:39 AM Wednesday, August 18, 2010

COLUMBUS — Republican gubernatorial candidate John Kasich said he would put business executives and entrepreneurs in charge of Ohio’s economic development programs, including the $700 million Third Frontier bond package.

Kasich, a former congressman, FoxNews commentator and Lehman Brothers managing director, issued blistering criticism on Tuesday, Aug. 17, of the state Department of Development, which has been in charge of fostering business growth and retention in Ohio since Gov. Jim Rhodes created it more than 40 years ago.

The department is a bureaucratic “black hole” that fails to return phone calls, reach out to businesses or speak the language of entrepreneurs, Kasich said.

“The days of trying to connect with business leaders through bureaucrats are over,” Kasich said, while standing in the garage of Columbus-based Tarrier Steel Co.

Kasich is in a tight race this fall for governor against incumbent Democrat Ted Strickland.

Kasich proposed handing over job creation and economic development duties to JobsOhio, a not-for-profit corporation funded with public and private money. The governor would appoint senior business executives to a 12-member board of directors, who would then hire an experienced business leader as the chief executive. Final decisions on projects would be made by the governor, Kasich said.

It is the same model used in Michigan, which established the Michigan Economic Development Corp.Chris Ferruso, legislative director of the National Federation of Independent Business/Ohio, said, “It stands to reason that private sector business leaders would know best what it will take to attract more private sector businesses to our state. John Kasich is taking a fresh and creative approach to business and job growth in Ohio.”

Kasich and his running mate, state Auditor Mary Taylor, blamed Strickland and Lt. Gov. Lee Fisher, who served briefly as development director, for the loss of 380,000 jobs as well as the exodus of DHL from Wilmington and NCR Corp. from Dayton.

The Strickland campaign, however, quickly turned the blame back on Kasich. “Ohioans know that this economic recession started with economic greed on Wall Street and the bankruptcy of Wall Street investment firm Lehman Brothers, where Congressman Kasich worked for eight years,” Strickland campaign spokeswoman Lis Smith said. “Ohioans don’t need a fox guarding the hen house, they need a governor who will fight to grow jobs from the ground up by improving education, lowering taxes, and making Ohio more business-friendly.”

It is unclear whether the Ohio Constitution would allow assigning the state’s economic development work to a not-for-profit corporation.

When asked if the set up would be constitutional, House Minority Leader Bill Batchelder, a constitutional expert and former judge, said that would have to be explored.

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