Ex-GOP County Chief Opens Books
- Lynn Hulsey, Dayton Daily News, July 28, 2004

DAYTON | State Sen. Jeff Jacobson was paid $448,196 in salary, bonuses and interest by the Montgomery County Republican Party during his 13 years as party chairman, and all of the money came from confidential operating accounts, Jacobson, R-Butler Twp., said on Tuesday.

In a six-page letter to the Senate Republican Caucus, Jacobson outlined payments from the operating fund to him, consultants including Jim Nathanson of Dayton, and Statehouse staff members. The letter comes as investigators from Ohio Secretary of State J. Kenneth Blackwell's office prepare to review subpoenaed operating accounts at local GOP headquarters on Friday.

"I have come to recognize, albeit belatedly, that while it may have been legal to spend operating money without full disclosure, it certainly raises the question of whether the Party had something to hide," Jacobson said in his letter. "The answer is no."

Dennis Lieberman, Montgomery County Democratic chairman, scoffed at Jacobson's disclosures and again called for him to follow the practice of the local Democratic Party - full disclosure of those accounts.

"If they have nothing to hide, they'll show us the expenditures, not write self-serving memoranda," Lieberman said.

Jacobson dropped his bid for the Senate presidency this month after disclosures that Jacobson had paid Nathanson from the operating fund, and that Nathanson had hired two controversial consultants to promote Jacobson's bid for the Senate's top job. The consultants, Brett Buerck and Kyle Sisk, hired with Jacobson's approval, also are linked to federal and state investigations involving political fund-raising.

The spending raised questions about the possible improper use of local operating funds, which are intended for general operations, such as staff, rent and telephones and some grassroots work. Parties do not have to disclose operating fund donors and expenditures.

Jacobson and Karl Schneider, Columbus-based legal counsel for the party, both said the party spent the money properly.

"I'm confident that when (Blackwell) looks at the files he will find no violations, legal or ethical," Jacobson said.

Buerck and Sisk were advising Jacobson on possible Senate bids by House members who would be in a position to support or oppose Jacobson's presidency next year if they were elected to the Senate.

While operating funds cannot be used to directly fund a campaign, Jacobson said the law does not address its use to help a legislator advance his career.

At the same time, Jacobson said that this week he will propose reforms that make the law more clear. He also said he still had the votes to become Senate president when his use of the consultants became public, but dropped out for the good of the party.

"I decided to not make the group responsible for my errors," Jacobson said.

Nathanson had long done consulting work for the party and Jacobson said he'd promised over the years to pay him, but did not do so until the end of Jacobson's tenure in December. Then Nathanson was paid $76,400 for work done between 2000 and 2003.

Jacobson said Nathanson helped David Vore in his successful race for county sheriff, and provided advice to other campaigns and candidates.

Nathanson has said he hired Buerck and Sisk last summer, and they helped him with a number of his clients, as well as promoting Jacobson for Senate president. He said Tuesday they were hired well before he received the payment from the local party.

Nathanson, who cut ties with the two in May, has said the money he paid them was not a pass-through from the money he received from the party.

Jacobson and current county GOP Chairman John J. White refuse to make public all of the party's operating account information. White, who is not taking a salary from the party, declined to comment on Jacobson's letter.

Lieberman said he was shocked how much Jacobson was paid. Lieberman said he does not take a salary nor does he know of other county party chairmen who do.

Jason Mauk, spokesman for the Ohio Republican Party, said it's rare for county chairman to be paid, but a "handful" of large urban county party leaders do receive compensation.

Jacobson contends the party got its money's worth, noting that he took over a party in disarray and with few local Republicans holding elective office in 1991. He said he worked full-time to unify the party, pay off $40,000 in debt, raise money and win elections.

When he stepped down in December, the party controlled far more local elected offices, had raised $4.7 million between 1993 and 2003 and had a surplus of $200,000, he said.

"When you look at what I was paid, it was not a great deal of money," said Jacobson, noting that he reported his party earnings annually on his mandatorylegislative financial disclosure forms.

Jacobson's earnings work out to an average of about $35,000 annually, although the payments varied widely from year to year. Jacobson said he deferred payment when the party couldn't afford it and, in some years, earned bonuses based on fund-raising goals.

His 1993 contract called for him to be paid a base of $20,000 per year and up to $10,000 more if fund-raising targets were met. The contract was amended in 2000 to pay him $30,000 and 5 percent of all funds raised by the party above $200,000.

At one point, the party conducted special fund-raising to catch up on deferred salary and interest due to Jacobson, and he received a final payout of $24,277 in interest on deferred salary when he left in December.

Party leaders who approved the deal did not realize how lucrative the bonuses would be, said former central committee chairman Dave Landon, who is now an opponent of Jacobson's after helping lead the Reform '04 effort.

Landon is critical of the secrecy surrounding the operating account, which he said Jacobson controlled.

Other payments from the operating fund disclosed by Jacobson include:

• $39,000 to a company owned by fund-raiser Eric Burchard to raise money from local donors in 2003.

• $14,500 in 2003 at the request of state Rep. John Husted, R-Kettering, to Citizens for Conservative Values, which promoted charter schools.

• $13,000 in stipends to five members of Jacobson's legislative staff for party-related work they did, not on state time.

• Less than $20,000 to Chris Kershner, a legislative staff member for Husted, who worked for the party while on leave from Husted.

• About $7,000 to two other former House staff members.

• An undisclosed amount to fund-raiser Andrew Theodore in 1997.

- Lynn Hulsey