COMMENTARY

DEMOCRATS PIN HOPES ON FANNING THE FLAMES OF DETERS' TROUBLE

Monday, April 8, 2002 EDITORIAL & COMMENT   07A By Lee Leonard Dispatch Statehouse Reporter

Like Boy Scouts trying to start a fire by directing the sun's rays through a magnifying glass onto wood shavings, Ohio Democrats are trying to turn a campaign fund- raising misadventure involving state Treasurer Joseph T. Deters into a conflagration that will engulf the entire Republican ticket this fall. Or at least the top of it.

The Democrats are emboldened by memories of a scandal 32 years ago that brought down most of the Republican statewide ticket and paved the way for Democratic domination of state government that didn't end until 1991.

There are similarities and differences between L'affaire Deters and the so-called Crofters scandal of 1970. More about that later.

Deters, a former chairman of the Hamilton County Republican Party, is on the hook because individuals who did business with the treasurer's office also made several large contributions to the county party, and the county party -- at Deters' request -- plowed money into Deters' campaign coffers.

Because of a loophole in the state's campaign-finance law, individuals can get around the $2,500 limit on giving to a candidate's campaign by donating to a political party. Linking them with the candidate also is more difficult to trace. And state law bans those getting unbid contracts from giving campaign contributions to the officeholder.

The rub here is that these individuals or their companies were benefiting from their financial relationship with the state. Doing business with the treasurer's office is especially sensitive. After all, the treasury is the receptacle for the government's money. Financial institutions compete intensely for the right to invest that money and make more.

No illegalities have been determined in the treasurer's fund raising, and the jury is still out on whether there is a conflict of interest when a state official who also raises money as a county political party chairman does business with the donors. The issue becomes even stickier if the donors are violating the spirit of the campaign-finance law by laundering money through a county party.

Democrats are frothing at the mouth trying to establish a pattern of misbehavior that they say is characterized by one-party rule. They point to Gov. Bob Taft, who in 1999 used the Governor's Residence and his football box seat at Ohio Stadium as exclusive premiums to entice large contributions to the Ohio Republican Party. Then they point out that Attorney General Betty D. Montgomery, Auditor Jim Petro and Secretary of State J. Kenneth Blackwell, Republicans all, did nothing about it.

Rewind 32 years. Republicans who had controlled the Statehouse in the 1960s came apart following the scandal in which the office of state Treasurer John D. Herbert over- invested in unsecured short-term loans to private companies that later defaulted. The loans were arranged by GOP political cronies for exorbitant finder's fees. The state lost $14 million, but years later recovered that amount plus another $1 million.

Herbert, who was then running for attorney general, received a campaign contribution from the political cronies involved. Also receiving donations were Robin T. Turner, the GOP candidate for treasurer, and Auditor Roger Cloud, running for governor.

Herbert and Cloud returned the donations but Turner spent and reported his. The Ohio Republican Party disowned Herbert and Turner and tried to force them off the ticket. They stayed on and lost.

Cloud was defeated by Democrat John J. Gilligan, partly because of the scandal but partly because he was a lackluster candidate and voters felt it was time for a change after eight years of Republican Gov. James A. Rhodes.

The key to Republican misfortunes was the narrow loss by Roger W. Tracy Jr. to Democrat Joseph T. Ferguson in the auditor's race -- a loss that gave Democrats control of the Apportionment Board and enabled them to draw legislative districts putting them in power for the rest of the decade.

This is the type of chain reaction that gives the Democrats hope that history will repeat itself with the latest incident coming out of the treasurer's office.

The intrigue is there. Treasurer's office. Campaign fund-raising. One-party domination.

On the other hand, the state has lost no money and the Republican Party is not going to abandon its ticket.

The Democrats' hope is late and it is thin. Republicans have well-funded, experienced campaigners as their state officeholders, although some will say they've not had a good test yet. The Democratic campaign machine is running on about one cylinder.

But the full effects of the 1970 treasury scandal did not surface until the month of May. There's still time, and the Democratic message for the rest of the year is likely to be that under one-party government, there's nobody to watch the watchdog.

Lee Leonard covers the Statehouse for The Dispatch.

lleonard@dispatch.com