The missing records, he wrote, included some that were subpoenaed in the last week of the Boyce administration. “This shredding likely occurred in violation” of state public records laws, he told investigators.
Records released this month to the Dayton Daily News portray a web of conflicts, connections and actions that federal authorities are using to prosecute one of the largest public bribery cases in Ohio history. The records were released by Mandel’s office to the newspaper in response to a public records request.
The trial of Ahmad and his co-defendant, attorney and lobbyist Noure Alo, was scheduled to start Monday, but a change in defense attorneys delayed the start. The men are charged with conspiracy, wire fraud, bribery, money laundering, money laundering conspiracy and making false statements.
A turn in the investigation
Originally, authorities had focused on the awarding of a contract to the Boston-based State Street Bank and Ahmad’s relationship with Alo, who had personal ties to Ahmad and served as a lobbyist for the bank.
But with the data supplied by the Mandel team, the investigation took a turn. Over the course of nearly two years, the Mandel administration handed over more than 22 compact disks, two bankers boxes and two large binders containing more than 100,000 of pages of treasurer’s office records that included emails and calendars, personnel files, phone records, transaction summaries, trading tickets and more.
Records obtained by the newspaper show that investigators in December 2011 began examining Ahmad and Alo’s ties to two other men: Doug Hampton of Canton-based Hampton Capital Management and Joseph Chiavaroli, owner of Going Green Landscaping. Authorities say the four men ran a kickback scheme where Ahmad put Hampton on the state treasurer’s approved broker-dealer list, steered work to him and took $523,000 in payments — laundered through Alo’s law firm and Chiavaroli’s landscaping business. In August 2013, Chiavaroli and Hampton pleaded guilty and agreed to cooperate with federal investigators, while Ahmad and Alo pleaded not guilty.
Boyce, now a state representative from Columbus, has not been implicated in any of the charges. No new trial date has been set for Ahmad and Alo.
The Ivy League-educated Ahmad joined the treasurer’s office as chief financial officer under Democrat Richard Cordray in May 2008 and stayed on when Boyce was appointed in January 2009.
The same month that Boyce was sworn in, Ahmad moved to line up a Bloomberg account that allowed him to personally make trades on behalf of the state — an unprecedented scenario for someone in his position, according to a Metcalf memo to the FBI.
Ahmad arranged to add Hampton to the state’s approved broker-dealer list, even though Hampton had little public sector experience and failed to fully respond to the treasurer’s office questions on the proposal application. Hampton, who graduated high school with Ahmad in 1992, had served as Ahmad’s personal financial adviser since 1996, documents show.
Hampton started executing trades for the state on Oct. 2, 2009, and Ahmad started ordering trades a week later, often through Hampton.
Between October 9, 2009, and April 29, 2010, Ahmad was listed as the trader for 144 of 160 trades executed through Hampton. Ahmad abruptly stopped trading under his own name, right around the time that the Dayton Daily News and other media outlets began asking questions about Ahmad’s relationship with Alo, whose wife worked as Ahmad’s secretary.
Hampton received the highest volume of work among the state-approved brokers with the treasurer’s office.
Hampton, who made $3.2 million off the state work, paid out $523,000 in kickbacks, starting in December 2009, according to the federal indictment. That same month Ahmad authored a confidential investment strategy for the state treasurer’s office that called for multiple daily trades and named seven core traders, including Hampton.
The trading volume under the Boyce administration climbed “significantly” compared to Cordray’s two years in the office and Mandel’s first year, Metcalf told federal authorities. The volume spiked even though the state’s portfolio had shrunk during the economic downturn, he wrote.
The Boyce administration hired Alo’s wife, Walaa Waeda, through back channels instead of the usual well-documented, public process, the records show. Waeda, whose previous job had been part-time at a gym, lobbied to be trained on the Bloomberg platform and may have executed trades under Ahmad’s login, the Mandel administration told the FBI. As she left the treasurer’s office at the end of Boyce’s term, she touted her Bloomberg experience on her resume, which Mandel officials said “raises the question of the extent to which she was involved in performing investment activities.”
Metcalf also reported to the FBI his suspicions about campaign contributions made by Hampton to Cordray and the Ohio Democratic Party.
Hampton gave $11,000 to the Cordray campaign and $5,000 to the Ohio Democratic Party, according to a Metcalf memo. The donations were a big leap for Hampton whose previous biggest give was $1,000, he wrote.
Boyce spokeswoman Antoinette Wilson responded in a written statement: “All of the contributions in question have been public record since the day they were filed over three years ago. The 2010 elections contributions were received and correctly reported within the confines of the campaign finance laws.”
The fundraiser for Cordray could not be reached for comment.
Ohio Democratic Party spokesman Jerid Kurtz scoffed at the allegations made by the Mandel administration, which has been cooperating with the FBI on a separate investigation into $100,000 in campaign contributions made to Mandel’s U.S. Senate campaign by Canton-area businessman Ben Suarez.
A federal indictment claims that Suarez and his chief financial officer at Suarez Corporation Industries lined up straw donors to funnel money illegally into Mandel’s campaign as well as the campaign for U.S. Rep. Jim Renacci, R-Wadsworth.
Suarez pleading not guilty to federal charges of campaign finance violations, obstruction of justice and witness tampering. He is accused of withholding records from federal investigators. His trial is scheduled to begin June 2, 2014.
“It’s no surprise that after one of Josh Mandel’s donors was indicted for funneling more than $100,000 in illegal donations to his Senate campaign, the treasurer is pointing fingers at others,” Kurtz said. ‘The only correspondence from Mandel’s office we’re interested in reading are the documents that were withheld from a federal grand jury.”