In August 2010, then-candidate John Kasich announced his plan to privatize the Ohio Department of Development, calling the government agency a “black hole” that failed to even return phone calls.
“The days of trying to connect with business leaders through bureaucrats are over,” Kasich said during a campaign appearance at a Columbus steel company.
But JobsOhio, the private economic development nonprofit Kasich created in 2011 to replace the Department of Development, is staffed mostly by former ODOD employees and other ex-government workers. Nearly all of those workers also received large raises to leave the public sector, a Dayton Daily News analysis found.
In all, 19 of JobsOhio’s 22 full-time employees are former state workers, including seven people who worked for ODOD in 2010 or earlier. All but two of the 19 received raises of at least 15 percent above their state salaries.
Seven of the 19 former state employees joined state government in 2011, Kasich’s first year in office. This group included three people with extensive business-related backgrounds: President/CIO John Minor, a former investment banker; managing director David Mustine, a former energy company executive; and managing director Mark Patton, whose experience includes working in marketing and sales for companies such as Apple, Kodak and Procter & Gamble.
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JobsOhio staff also includes two Kasich campaign staffers: Mindy McLaughlin, a former campaign scheduler who now works as manager of direct foreign investment for JobsOhio; and former campaign compliance director Thomas Seward, now a JobsOhio project manager.
‘Liberated from the bureaucracy’
Officials with Kasich’s office and JobsOhio said the non-profit is different from the government agency it replaced from the top-down, even if its staff is comprised of mostly former government employees.
“We hired over people from development who brought great knowledge,” said spokeswoman Laura Jones, who received a $20,000 raise to join JobsOhio after a decade in marketing and communications with the Ohio Department of Natural Resources. “We’ve cultivated and grown those skills here with leadership.”
Kasich spokesman Rob Nichols said, “These people were liberated from the bureaucracy.” “He said JobsOhio has brought in commitments for about 75,000 new and retained jobs, and that Ohio’s economy overall has created 120,400 jobs since Kasich took office.*
JobsOhio works better than the department it replaced for two main reasons, Jones said.
One: it is structured differently, and has a singular mission of business development, she said, while ODOD was weighed down by different divisions that had nothing to do with job creation.
And two: JobsOhio is quicker to respond to the needs of businesses, partially because it’s not restrained by ethics laws that restrict state employees from accepting or paying for meals, or from traveling to off-site meetings, Jones said.
“I think (JobsOhio) brought flexibility to help cultivate an environment to interact and have relationships with businesses,” Jones said.
She acknowledged the raises but said JobsOhio employees work long hours and don’t get the state benefits they received in their old jobs. “We took the risk and gave up a lot to come to what is essentially a start-up company,” she said.
Brian Rothenberg, executive director of ProgressOhio, a liberal advocacy group that is suing Kasich over JobsOhio, said staffing the non-profit with mostly former state employees undermines Kasich’s rationale for creating the nonprofit.
“This confirms what people thought all along… (JobsOhio) was a ploy to take the Department of Development and privatize it to shield it from public scrutiny,” Rothenberg said. “The whole ruse is that the governor was complaining about the people he ended up hiring.”
Although initially funded by tax dollars, JobsOhio is exempt from public records laws and required to disclose only what is required under the legislation that created it.
That makes learning about its inner workings difficult. For example, JobsOhio has to disclose its employees’ titles and salaries but — according to its interpretation of the law — not their names. When asked, JobsOhio declined to state what the salaries and benefits are for certain individuals.
It is clear even with the limited amount of information made public that most former state employees got sizable raises — averaging around 20 percent — to work for JobsOhio.
Kristi Tanner made the full-year equivalent of $133,000 in her previous job at ODOD, and now makes at least $166,270 as the managing director for JobsOhio. (An actual salary amount couldn’t be determined).
Kristina Clouse had a base salary of $86,700 in her final year at ODOD, where she was a regional workforce director and assistant director of strategic business investment. At JobsOhio, she is paid $117,500 a year as project management director.
Sheena Metzger made $51,700 as a program administrator at ODOD. Her new job, site selection manager at JobsOhio, has a salary of $74,700.
McLaughlin and Seward, the former Kasich campaign workers, also received pay increases. McLaughlin, who worked in the governor’s office for nine months before switching jobs, had her pay jump from $70,000 to $87,500.
Seward, a former compliance director for the Kasich campaign, made the equivalent of $65,000 annually at the ODOD as “budget special projects coordinator” for six months before receiving at least $81,250 at JobsOhio. Like Tanner, Seward’s actual pay couldn’t be determined by the amount of records available.
Jones said two years McLaughlin spent working for the U.S. State Department and her two additional years working in the White House before joining Kasich’s campaign qualified her to promote Ohio to foreign companies, primarily in Japan and Germany. “She brought with her a good skill set to allow her to grow in that position,” Jones said.
Meanwhile, Seward’s connections in southwest Ohio have helped JobsOhio connect with companies in that area, Jones said.
JobsOhio has attracted its share of controversy since 2011.
Critics say a lack of transparency creates the potential for corruption and makes it difficult for the public to evaluate its operations. Last month, after negotiations with the non-profit broke down, Ohio Auditor Dave Yost issued a subpoena for JobsOhio’s financial records, including at least $6.9 million in secret private donations, so that he could conduct an audit.
JobsOhio reluctantly turned the records over while maintaining Yost, a Republican, overstepped his authority in seeking access to anything other than the $8.4 million in state grants and fees the nonprofit had received.
Jeff Hoagland, president of the Dayton Development Coalition, a private economic development non-profit, said in a March interview he opposed Yost’s attempt to inspect JobsOhio’s books.
“All I keep hearing is the public sector needs to act more like private industry. I think this is an example where the state is trying to act like private industry and focus on economic development. But then it’s being told potentially told, I need you to act more like a public (agency), which I think slows things down,” Hoagland said.
Moving forward, the nonprofit will get its funding — an expected $100 million a year or more — from the sale of bonds backed by profits from the state’s monopoly on liquor sales.
Jones said the money will allow JobsOhio to begin awarding its own grants and loans for economic development projects, and fund a state program that pays for the cleanup and redevelopment of commercial and industrial sites.
It is not clear how open the nonprofit’s records will remain to government scrutiny. Yost maintains he has authority to audit JobsOhio’s books because the liquor proceeds are a public resource. Minor, JobsOhio’s president, has asked the legislature to act to limit Yost’s authority.
Yost said in a March letter to Ohio legislators that JobsOhio needs to remain under his watch.
“While there have been no indications of misdealing, the potential for self-dealing or other mischief exists sometime in the future,” he said. “This office’s audit will help protect against the real possibility of human failings.”
*This sentence was revised as a clarification on May 15, 2013.