COLUMBUS, Ohio – Ohio Attorney General Mike DeWine's rival in the fall election said Tuesday that federal authorities should investigate DeWine's handling of lucrative collections contracts in the wake of a newspaper investigation.
DeWine's office challenged the factual basis for requesting any kind of U.S. Justice Department probe.
The statement by DeWine's opponent, David Pepper, followed a Dayton Daily News report over the weekend that found state bid documents were changed to favor a newly created collections firm founded by a DeWine political ally over more seasoned collections companies.
The ally, Pete Spitalieri, formed CELCO Ltd. in April 2012, two days before DeWine's office sought collections proposals for the upcoming fiscal year. DeWine's schedules showed multiple meetings with Spitalieri and a county Republican chairman, Summit County's Alex Arshinkoff, whose party donated more than $400,000 to DeWine's campaign since 2010.
"What you have here is a classic case study of a rigged bid process," said Pepper, a former Hamilton County commissioner from Cincinnati. The event featured a blown-up copy of one of the handwritten scoring sheets that the newspaper found to have figures crossed out or written over.
Those alterations gave CELCO the increased score it needed to edge out Columbus-based Value Recovery Group for the state work. The firm had 20 years' experience under five attorneys general of both political parties. Its CEO, Barry H. Fromm, told the paper they were "absolutely flabbergasted" to lose the work to the fledgling firm.
DeWine spokesman Dan Tierney said the office picked firms with a mixture of skills and geographic diversity. Public documents showed Spitalieri's firm acknowledged its lack of experience during the selection process, yet received very high scores. Tierney said his other businesses have done extensive work for the Ohio and other states in certain areas related to collections, though CELCO had not.
Tierney explained the altered scoring sheets as "personal notes of individual staff members."
Pepper, a former Hamilton County commissioner from Cincinnati, said he'd reform the process if elected so that a collections professional oversaw the process and so political giving would be prohibited during periods when contracts were being doled out.
"Cleaning this up is not rocket science, it's common sense," he said.
He argued that DeWine's selection of inexperienced firms over experienced ones has impacted taxpayers through a reduction in state debt collections — which fell from about $461 million in 2011, the year DeWine took office and began hiring collections firms, to $453 million in 2012 and $449 million in 2013. He dubbed the lost revenue "a DeWine corruption tax."
Tierney said those are the three highest annual totals for collections going back to 2006, noting that collections requests sent to the office by state agencies fell simultaneously.
"I don't see where anybody can look at those statistics and say the state's losing money," he said.
Spitalieri was also among donors to the charity Hands Together, which runs the Becky DeWine School in Haiti named for DeWine's late daughter, that The Associated Press recently reported had seen a spike in donations from lawyers, law firms and a lobbyist with business interests at DeWine's office.