A Republican fundraiser was convicted on Monday of stealing from a state investment in rare coins, a scandal that helped sink Ohio's Republican Party on Election Day. Tom Noe, a coin dealer and campaign donor to Bush, was accused of stealing at least $2 million from the $50 million investment.
He was found guilty of 29 of the 40 counts against him, including theft, corrupt activity, money laundering, forgery and tampering with records.
The corrupt activity charge, the most serious one, carries a mandatory 10-year sentence because he was convicted on some of the other charges. He is to be sentenced on November 20.
The trial became an embarrassing scandal for Republicans in the weeks leading up to the state and national elections on November 7. Voters fed up with government corruption scandals broke the Republicans' 12-year domination state government in Ohio. They elected Democrats to the governor's office and three of four other key statewide offices. Voters also chose a Democrat over an incumbent Republican for a US Senate seat.
National Democratic leaders watched the trial because Ohio was a key state in President George W Bush's re-election in 2004 and is widely expected to play a key role in picking the next president in 2008.
The Ohio Bureau of Workers' Compensation gave Noe $25 million in 1998 to invest in rare coins, followed by another $25 million in 2001. At the same time, he began his rise to prominence in state politics.
Prosecutors accused Noe, 52, of spending money from the coin fund on his business, his home in the Florida Keys and other luxury items. They did not say whether he used the money to make campaign contributions to Republicans, including Bush.
Democrats say he got the investment money because of his political connections, and that the deal revealed a culture of corruption that developed with Republicans in charge of all of state government. Republicans say it was an isolated case. The scandal led to charges against about a dozen people, including Republican Governor Bob Taft. Investment operations were overhauled at the insurance fund for injured workers, and its administrator was forced out.
More than 50 witnesses testified for the prosecution in the three-week trial. Noe's former right-hand man testified that he borrowed rare coins and faked records with the approval of his boss to make inspectors think they belonged to the state. "I really believe Tom thought that we always could make up the money and always make it good," said Timothy LaPointe, a close friend of Noe's.
Noe used the state's money to pay off business loans and to prop up his personal coin business when sales were slow, other former employees testified.
Noe was considered a star of the Republican Party and for several years wined and dined associates, including some Taft aides, at a downtown Columbus steak house at events dubbed the "Noe Supper Club."
Once a member of state boards that oversee the Ohio Turnpike and Ohio's public universities, Noe was a top Republican fundraiser who gave more than $105,000 to Republicans including Bush and Governor Bob Taft in 2004.
He already faces more than two years in federal prison after pleading guilty earlier this year to improperly funneling $45,000 to Bush's re-election campaign.
During both trials, prosecutors did not bring up whether it was Noe's party political connections gave him access to the state's investment money or if any of the money he given to invest went to politicians. Federal prosecutors could have sought a stiffer penalty in the Bush case if they thought the state money had been used for political donations.
The investigation into Noe's coin investments led to separate ethics charges against Taft, who pleaded no contest last year to failing to report golf outings and other gifts.