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Purchase prices of state-owned coins are public

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NEWS MEDIA UPDATE   ·   OHIO   ·   Freedom of Information   ·   July 18, 2005

NEWS MEDIA UPDATE   ·   OHIO   ·   Freedom of Information   ·   July 18, 2005

Purchase prices of state-owned coins are public

  • The state Bureau of Workers’ Compensation must reveal the prices of rare coins it bought using public funds, the Ohio Supreme Court ruled last week.

July 18, 2005  ·   The Ohio Bureau of Workers’ Compensation must reveal specific prices it paid for rare coins bought as an investment with $50 million in public money, the state Supreme Court ruled 5-2 Wednesday.

Ordering the information released, Justice Alice Robie Resnick wrote for the majority that two limited-liability corporations created by the bureau to invest in rare coins on its behalf are public offices and therefore must release records under the state Public Records Act. The coin companies “owe their very existence to” public bureau money, Resnick wrote.

She also refused to call the prices protected trade secrets because the state did not present sufficient evidence that it did all it could to keep the prices secret.

Justice Paul Pfeifer wrote a separate concurrence discrediting the bureau’s argument that divulging the prices it paid for the coins would decrease their value in the marketplace. “How much the bureau paid for the coins is irrelevant to how much they can be sold for,” Pfeifer said. “The market is the market. . . . The eventual selloff will not be akin to a garage sale where someone sells a Rembrandt for five dollars. The state will know what it is selling and what it is worth.”

Judge Thomas J. Grady wrote in the dissent that the court should have invited the bureau to present more evidence on its trade secret argument, despite the fact that “the bureau’s assertion may have the facial appeal of a dead mackerel in the moonlight.”

In 1998 and 2001, the bureau incorporated Capital Coins I and Capital Coins II, respectively, to invest in rare coins on its behalf. By buying low and selling high, the bureau’s then-administrator James Conrad hoped to turn a profit for the State Insurance Fund.

During the seven years of the venture’s existence, the bureau spent about $50 million of public money on the purchase of coins.

The (Toledo) Blade discovered that nearly 119 coins from Ohio’s publicly owned collection — valued in the millions — had since gone missing.

Earlier this year, the bureau refused to release to the newspaper transactional records disclosing the purchase and sale prices of its coins, arguing that the prices were housed by private corporations and not in a public office as required by state open records law. It also argued that they were trade secrets whose revelation would compromise the state’s ability to recoup its investment. The Blade sued in Ohio Supreme Court in March.

Conrad left office in June over what many journalists dubbed “Coingate,” and state officials announced that they would sue Capital Coins I and II’s primary coin dealer, Tom Noe, and press criminal charges against him.

Five Republican Ohio Supreme Court Justices recused themselves from the case because Noe had given them $23,000 in campaign contributions, The (Cleveland) Plain Dealer reported in May. Intermediate appellate judges were rotated into those justices’ seats.

The Editor and Publisher Web site reported in May that coin dealers “knew of no other state that has invested in rare coins” as a moneymaking scheme.

(Ex rel. Toledo Blade Company v. Ohio Bureau of Workers’ Compensation; Media Counsel: Frederick Byers ; Columbus, Ohio)RL

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