According to federal investigations, Ahmad engineered two schemes in the state treasurer’s office in 2009 and 2010:
— Re-write the investment strategy to churn up commissions and steer the work to Hampton Capital Management, which was run by his high school buddy Doug Hampton, and then take kickbacks from Hampton routed through two other co-conspirators.
— Conduct a pay-to-play operation that funneled bribe money to himself and co-conspirator M. Noure Alo and illegal political campaign donations to Boyce in exchange for steering a contract to handle billions of dollars in public pension money to Boston-based State Street Bank & Trust.
Ahmad, Alo, Hampton and a fourth conspirator are now serving sentences in federal prison. Boyce, who is now a state legislator running for Franklin County commissioner, has not been accused of wrong doing.
The report, released Friday, notes that some state treasury employees knew or should have known “that something was rotten.”
“…the lack of financial expertise meant that only a few employees had the understanding to see the signs of the crime. According to Ahmad, Boyce never understood the investment/trading activity in the office,” the report said.
Ahmad told BakerHostetler that Boyce attended a March 3, 2010 meeting at Alo’s law office with representatives from State Street Bank, Boyce’s political fundraiser Sara Guice, Alo and Ahmad. The group discussed how State Street wanted state business and “according to Ahmad, Boyce referred to the election, saying that ‘we are in the fight for our lives against a well-funded candidate’ and that he was looking for all the help he can get,” the report says.
Boyce initially denied attending the meeting, even though state emails show a club sandwich had been ordered for him. But Boyce told BakerHostetler that he showed up, had a snack and left after listening to some introductions. He denied Ahmad’s characterization of the meeting.
State Street Bank and the U.S. Securities and Exchange Commission entered a settlement deal last month where the bank paid a $12 million fine and admitted no wrong doing.
BakerHostetler recommended that the treasurer’s office implement controls, including requiring multiple approvals for wire transfers, hiring and retaining more employees with financial experience, require documentation of the “spread” or commission brokers and traders make on transactions. The report said one of the most startling documents uncovered among the 20,000 pages reviewed was an email from First Allied Securities, which worked with Hampton, that noted that Ahmad specifically said the spreads should not be disclosed.
“In Ahmad’s own words from his interview, if the spread is disclosed then ‘the corruption is over,’” the report said.
Laura Bischoff in our Columbus Bureau has been following this story for more than two years. Our team will continue to cover it as developments happen.
Here’s a look at some of our past coverage: