Paying a Price Over ‘Coingate’

Times Staff Writer

Not that long ago, Tom Noe was a regular and welcome figure in political circles throughout the state.

For years, the rare-coin dealer and collector and his wife, Bernadette, had contributed to and helped raise tens of thousands of dollars for GOP candidates.

Noe gave campaign contributions to five of Ohio’s seven Supreme Court justices and to President Bush’s reelection campaign. He gave money to newly elected California Gov. Arnold Schwarzenegger in the spring of 2004.

Now, Noe is at the center of a political and financial scandal revolving around an unorthodox $55.4-million fund for the state’s workers’ compensation bureau that involved the buying and selling of rare coins.


Last month, authorities learned that at least $12 million of the state’s investment for injured workers was missing. Two gold coins, worth about $300,000, had somehow been lost in the mail.

The director of the state bureau voluntarily quit. A judge has ordered the return to Ohio of coins stored in four other states and has frozen the Noes’ assets.

And as state officials prepare to file criminal and civil charges against Noe, 50, the GOP is stampeding away from the former Lucas County GOP chairman. Dozens of Republicans -- including Bush, Schwarzenegger and Ohio Gov. Robert A. Taft -- are returning more than $100,000 in donations.

Because campaign laws prevent the politicians from giving the money directly back to Ohio, they have been writing checks to a slew of Ohio charities. Some are sending checks to organizations that help injured workers; others are opting to give to hospitals.

State authorities, prompted by what has been dubbed “Coingate,” are examining what other investments the embattled workers’ compensation bureau has made. Last week, the bureau said that it had lost $215 million in a high-risk hedge fund.

The fund, of which Noe had no part, is run by a Pittsburgh management group and is listed as having a Bermuda address.

The Democratic Party -- which hasn’t held the governor’s office or any of Ohio’s nonjudicial offices for at least a decade -- is jumping on the scandal as a chance to take back control.

If the party succeeds, some members hope that might lead to a Democratic presidential candidate winning Ohio in the 2008 election -- and perhaps help the party win back the White House. Bush took Ohio by about 118,000 votes, a win that helped seal his reelection.


An estimated two-thirds of Ohio voters described themselves as independent in the primary election. Voters, however, don’t register by party in Ohio.

“I can now go into any bowling alley or barber shop and mention Tom Noe’s name and have everyone understand what corruption in our state means,” said Ohio Sen. Marc Dann, a Democrat from suburban Youngstown who has been outspoken against the GOP. “People understand when money is stolen, and they understand the connections to the Republican Party. The GOP might try to give back the money, but they’re still tainted.”


Noe’s political connections can be traced to his love of collecting, friends say.


As a boy in Bowling Green, Ohio, he began collecting coins and reading magazines on the history of ancient currency. As a teen, he persuaded his father to drive him around the state so he could gaze at gold bullion and silver ingots.

He attended Bowling Green State University for two quarters, then quit to develop his own coin dealership. Over the years, the gregarious businessman grew Vintage Coins & Collectibles into a multimillion-dollar enterprise.

He also became involved in numerous charities, raising funds for Catholic groups and hospitals, and started attending local and state political functions. He was later appointed to several high-profile boards, including Bowling Green State, the Ohio Turnpike Commission and the Ohio Board of Regents.

Those connections turned out in force for his birthday roast in August, which read like a Who’s Who of Ohio Republican politics.


Taft was there to rib Noe. Atty. Gen. Jim Petro also attended, as did several top officials in the state party, numerous state legislators and dozens of Noe’s fellow volunteers who helped run Bush’s reelection campaign.

Over plates of baked chicken, say those who attended the function, there was jovial talk about Noe’s penchant for good wine, his constantly ringing cellphone and his financial generosity.

They left with a memento: a Noe bobblehead doll.

But now the party feels betrayed, says Douglas G. Haynam, central committee chairman for the Lucas County GOP. “No one wants to believe that Tom is a thief,” he said.



When Noe pitched state officials who managed the bureau’s investment portfolio with the idea of buying and selling coins in 1998, it was unusual enough to get their attention. The holdings included a 16th century silver piece worth about $2 million, as well as gold and silver coins from the U.S. and overseas.

“The thinking was this wasn’t that much money compared to the overall portfolio, which was about $18 billion at the time,” said Jeremy Jackson, a spokesman for the Bureau of Workers’ Compensation.

Currency collectors said that publicly held funds usually shunned such investment strategies because they were considered too risky.


“There clearly are profits to be made -- otherwise, there wouldn’t be an industry,” said Todd Imhof, a director at the trade group Industry Council for Tangible Assets. “But I can’t think of a publicly funded group that’s invested in coins like Ohio did.”

The state’s inspector general began looking into the investment after the Toledo Blade newspaper published an article in April about the state’s investment in Noe’s fund and the two gold coins lost in the mail.

Initially, Noe’s allies in the GOP raced to his defense.

Taft, whom the Noes have reportedly given more than $20,000 in campaign donations over the years, said the fund had been a savvy business move and had netted the state $15 million in profit.


“He’s making money for the state,” Taft told the Blade in April. “What’s the problem?”

But in May, investigators found that as many as 121 coins were missing from storage and inventory facilities in Colorado, Florida, Pennsylvania, Delaware and Ohio.

The governor’s support vanished, and the GOP’s rush to distance itself from Noe began.

“Mr. Noe has done a great disservice to the people of Ohio by mismanaging our public resources and abusing our trust,” Taft said in a statement.


Investigators say they have seized nearly everything at Noe’s Vintage Coins & Collectibles shop. The one-story brick building, with a connected two-story warehouse, is situated in an industrial park in the Toledo suburb of Maumee.

A sign tacked on the front door reads, “Closed for inventory, we apologize for any inconvenience this may have caused you.” Inside the darkened office, the glass display cases now hold only descriptor cards for the objects that once sat there: the George W. Bush Jelly Bean Jar ($35) and White House Portfolio ($85).


More than a dozen Ohio officials -- including the three GOP candidates running for governor -- have said they are returning money contributed by Noe.


Initially, Schwarzenegger had planned to keep the $10,000 his fundraisers received from Noe in 2004.

“The allegations about Mr. Noe became public a year after we accepted his contribution.... [W]e had no reason at the time to question his contribution and have no intention of refunding the money,” Martin R. Wilson, who oversees the governor’s fundraising, said in a statement earlier this month.

The governor, however, has since changed his mind and has reportedly ordered that the money be returned.

Bush said he had returned $4,000 in campaign contributions received from Noe and his wife.


In addition to the money the two donated as individuals, Noe directed Bush’s reelection campaign in northwest Ohio. He was designated a Bush campaign “pioneer,” a distinction reserved for those who helped raise between $100,000 and $250,000.

“This was certainly a unique situation that raises some very serious allegations, and we thought it was the right thing to do to return the contributions that he had made to the campaign,” White House Press Secretary Scott McClellan told reporters in Crawford, Texas, earlier this month.

But McClellan said the president did not intend to give back the more than $100,000 in other contributions that Noe helped raise in his capacity as a Bush campaign coordinator in Ohio.

McClellan said those contributions were “from other individuals.”


Some of the money came from a luncheon fundraiser for the Bush-Cheney presidential campaign held at a hotel in downtown Columbus in the fall of 2003. Bush spoke at the $2,000-a-plate function. Noe sponsored at least one table.

The FBI is investigating allegations that Noe violated federal campaign financing laws at the fundraiser -- as well as at other functions -- by giving money to people who then donated it to Bush’s reelection.

A federal grand jury has been convened in Toledo to look into the matter.



Times staff writer Warren Vieth in Texas contributed to this report.