updated 5/28/2005 4:04:06 AM ET 2005-05-28T08:04:06

The director of Ohio’s workers’ compensation bureau resigned under pressure Friday over the disappearance of at least $10 million worth of rare coins that the agency had bought as an investment.

Gov. Bob Taft announced the departure of James Conrad, once hailed as state government’s “Mr. Fixit” for his ability to overhaul troubled agencies.

“I am outraged, I am angered, I am saddened, and I am sickened,” Taft said of the scandal.

The announcement came a day after it was learned that $10 million to $12 million of the state’s $55 million rare coin investment was believed to be missing — dramatically more than the previous estimate of $400,000.

State officials said they plan to sue the man hired to manage the coin investments, coin dealer Tom Noe, and seek criminal charges. Noe has resigned, and a judge has ordered possession of the remaining coins transferred to the state.

In a statement, Conrad said he would leave office next Friday because the furor was interfering with the agency’s job of helping employers and injured workers.

“The last thing I want to do is distract from the outstanding progress we have made together over the years,” he said.

Hedging investments
Ohio’s workers’ compensation bureau began buying and selling rare coins in the late 1990s as a way to hedge its investments in stocks and bonds. Coin dealers said they know of no other state that puts it money in rare coins or other collectibles, and warned that such investments can be risky.

The governor said neither Conrad nor any member of his staff told Taft about the state’s investment in coins, and he did not learn about it until he read it in The (Toledo) Blade last month. He said agency officials assured him at the time that the investment was profitable and safe.

At the bureau, Conrad had been credited with overhauling an agency that former Gov. George Voinovich once dubbed “the silent killer of jobs” because of the high premiums paid by Ohio employers. Taft had also tapped Conrad four years ago to oversee a team reviewing the state’s then-troubled human services department.

Before the new estimate on the number of missing coins, officials had said the state rare-coin investments had done better at times than the stock market, clearing a profit of nearly 40 percent, less Noe’s commission. Among the agency’s purchases were a 1792 silver piece worth about $2 million and gold coins minted in 1845 and 1855.

State officials said they do not know where Noe is, or exactly which coins are missing. A judge froze all of Noe’s assets Friday, and prosecutors said they asked his lawyers to surrender his passport.

Jud Scheaf, a law partner of the coin dealer’s attorney, said Noe was cooperating with the investigation.

Noe, 50, a leading GOP donor who operates a coin shop near Toledo, was hired by the bureau in 1998, the year before Taft took office. Democrats have alleged that he won the job in return for campaign contributions to Republicans, who control most of state government.

On Friday, the Democrats called on statewide officeholders to return any campaign contributions they received from Noe.

Bob Bennett, chairman of the state Republican party, said he would require ethical training for any candidate seeking GOP support.

The state said it plans to sell off its coin collection, which represents less than 1 percent of the bureau’s total $14 billion in investments.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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