Voinovich Was Free and Easy With Public Money

George Voinovich was a very selective conservative. That made him also a very selective “moderate” Republican.

My experience with Voinovich tells me he used his ethnic background to represent wealth in the community and in the nation. He successfully portrayed himself as personally frugal and the image carried him a long way.

I once told an audience that Voinovich would never be Governor because people saw him as a Mayor, nothing more. I was obviously very wrong.

Voinovich campaigned often riding on a bicycle with his wife, Janet, alongside. It gave him the image he sought – a regular person just like you and me.

His political success showed that he was a shrewd politician.

He received only the most praiseworthy assessments by the news media. It was a key to his reputation of a humble servant of the people.

Even along with the announcement that he will retire, the Plain Dealer ran another article headlined: “$1 trillion recovery plan rattles Voinovich.”

It hit the theme once again of Voinovich as the careful guardian of public money. A custodian who could be trusted.

It’s very hard to ever find an uncomplimentary portrayal of Voinovich in the Plain Dealer, which after all sets the pattern of media appraisal of politicians and thus their reputation here.

Back as far as 1974 I looked at Voinovich’s contributors and found that he was the favorite of the wealthiest of Cleveland’s business community. At the time Voinovich had succeeded Ralph Perk as County Auditor.

His biggest contributors were the elite of the area. The Smith brothers – Kent, Kelvin and Vincent of Lubrizol – were big contributors. They owned some $115 million in Lubrizol stock at the time. Kent and Kelvin gave $1,000 contributions and Vincent $100 to Voinovich.

It was by chance that a young employee at the Auditor’s office inadvertently showed me Kelvin Smith’s 1972 filing of intangible personal taxes (since eliminated) of $92,000 with a tax of some $3,000. It was clear that Smith had far larger holdings.

That’s where it is so important for wealthy people to have a “friend” in high places.

I noted at that time also that other contributors to Voinovich got favorable treatment, not necessarily at Voinovich’s direction. The method is much more opaque. The politician supported by wealth doesn’t look for ways to make the rich pay their share. Indeed, their view takes an opposite gander.

For example, the late Maxine Levin (she of the Levin School of Urban Affairs at CSU), a Voinovich contributor, had the assessment of her home cut from $325,000 to $225,000 then sold the home to promoter Nick Mileti for $500,000. Similarly, contributor James D. Ireland of Cleveland Cliffs Iron, another wealthy Clevelander, then director also of First Union Realty, owner of the Union Commerce Building (now Huntington Bank building) enjoyed a $230,000 tax reduction on the building.

Older Cleveland watchers will recognize other major Voinovich contributors of the time: David Ingalls, George Herzog, H. Stuart Harrison, Raymond Armington, John Dwyer and John Sherwin.

These men were the cream of Cleveland’s former wealth.

I wrote at that time, “Voinovich is solidly a captive of corporate Cleveland. Willingly too.”

Voinovich was the perfect antidote to Dennis Kucinich for the business community in 1979.

Voinovich revealed his politically careful self at first, avoiding tax abatements and strongly backing Muny Light by continuing a historic anti-trust legal case against CEI, one pursued by Kucinich. Kucinich, though damaged and defeated, had invigorated an anti-corporate constituency in Cleveland. Voinovich was careful not to antagonize that constituency.

At least for a time.

However, it didn’t last too long.

By the mid-1980s Voinovich was preparing for a renewal of abatements for downtown offices and housing and even industrial sites. And under President Ronald Reagan Voinovich became a favorite for urban action grants, giving him huge grants that could be given to favorite corporate entities.

Halle’s was one of the first, a $7-million UDAG (Urban Development Action Grant) for Forest City Enterprises. It was sold by Voinovich’s executives as a deal that would earn the city profits. None ever came, unless your name was Voinovich.

One Voinovich brother got the contract as leasing agent; another a deal at Tower City. As an example of how profitable it could be, Victor Voinovich got $84,000 in commissions as the leasing agent for one Halle’s occupant - Climaco, Climaco, Seminatore & Leftkowitz, as it was known then. (If anyone wants a rundown - rich in detail - it’s available in Point of View, Vol. 19, # 16.)

Forest City got into the UDAG business full-time and came away with millions of dollars in free money. Voinovich fashioned most UDAGs at no interest with principal payable at the end of the loan, usually 20 years out. A sweeter, more profitable deal could not be made by any business. UDAGs were given to a number of Tower City projects, including the Ritz-Carleton, which also got 100 percent tax abatement.

Voinovich hired his old law firm, Calfee, Halter & Griswold, to bargain with Dick Jacobs on tax abatements. The result: a $110-million tax abatement for his Public Square development (now Key Center). In addition there were UDAGs of $10-million and $7-million for Jacobs. All sweet 20-year deals, including a garage beneath Mall A, on city property. (The Mall garage got tied up in a lawsuit. Voinovich hired his old law firm, Calfee-Halter at a cost of $443,000.

Oh, yes, the PD continued to label Voinovich a conservative and tight with the public’s money. No FBI investigations here.

Voinovich continue this liberal attitude with the city’s money by adding the same deal for another Public Square building complex – office structure and hotel – that was never consummated as the office market here deflated. However, Voinovich offered the same sugary deal of 20-year multi-million dollar UDAGs, no interest and tax abatements worth in the hundred million dollar range.

Jacobs brought the architectural model for the complex to the city in a black plastic bag and refused pleas from Council members for some give-back for the neighborhoods in exchange for the multi-million dollar gifts. He said no. They said yes. He walked away with the garbage bag and $100 million deal.

Finally, in likely the most lucrative gift to Jacobs, Voinovich (George Forbes, of course, was his partner in all these moves) allowed Jacobs into the deal for Chagrin Highlands. Jacobs now is the managing partner in the real estate deal on city land in various East Side suburbs. The land has been called by one assessor the richest developable land between New York City and Chicago. As Governor, Voinovich helped make the deal more lucrative with some $138 million in road improvements on I-271.

You might have noticed that Eaton Corp. recently elected to escape downtown Cleveland for the open spaces the city gave up in the Chagrin Road office area.

Voinovich, who personally can be a pleasing person, politically was just as much a shark as most politicians and more deadly because he was seen as a man of the people, not a politician.

One day I walked into the inner offices of his chief aide and saw what I shouldn’t see. He had his secretaries stuffing envelopes with Voinovich campaign material for a mailing.

I reported this chicanery. The result: Gates were put up so that no one could surprise Voinovich employees again. Benny Bonanno went to jail for using his office – more actively, I’d say but none the less as a campaign center.

No one else followed up on this because Voinovich’s rep was he was a clean politician, clean as they come.

Voinovich can retire with his rep intact. He can also avoid a defeat as Ohio changes from a very conservative state to one that desperately needs reform that goes beyond a fiscal responsibility that equates with corporate desires.