Stop ODOD Abuse
Post details: Breaking News: ODOD presented false jobs report to 2004 Ohio Legislature - touted Leader jobs for which it had rejected funding the same day
The Ohio Department of Development (ODOD) is a state agency with unlimited legal funds to harass small businesses at its whim. Small businesses cannot afford to fight the unjust actions of a state agency; so their petty bureaucrats operate without accountability. We encourage you to share your opinions and experiences, and help us stop ODOD's unjust legal actions against Leader, who mistakenly believed ODOD was sincere about wanting to assist small business.Breaking News: ODOD presented false jobs report to 2004 Ohio Legislature - touted Leader jobs for which it had rejected funding the same day
By Michael T. McKibben, Chairman & Founder, Leader Technologies
COLUMBUS (February 10, 2009) - An important revelation has just surfaced that likely explains ODOD's legal attacks on Leader Technologies, a high technology company it once courted. ODOD essentially practiced a "bait and switch" when in 2003 it encouraged Leader to apply for $5.2 million in "Innovation Ohio" financing, elicited job creation projections (esp. see pages 4 and 5 of this link), puffed their 2004 jobs report to the Ohio Legislature with those numbers, then declined to provide the funds, aborted three separate good faith settlement agreements, and are now trying to sue Leader out of business to hide their misrepresentation to the Ohio legislature and their many lies to Leader.
On April 30, 2004, Bruce Johnson, then Director of the Ohio Department of Development, presented a 107-page job creation/retention report for 2003 to the Ohio Legislature. Page 27 of his report touted state assistance for Leader Technologies to create "153" jobs.*
Bruce Johnson's ODOD legislative report (likely prepared by the same bureaucrats who are attacking Leader now) included the three minor elements of the State-approved Leader application (May 23, 2003 - see ODOD Columbus Dispatch & Business First press announcements in the footnotes), but not the fourth major Innovation Ohio element - the raison d'etre for the whole effort. Two of the elements reported were non-cash credits on prospective future activities associated with new jobs, namely JCTC at $1,572,151 and OITP at $80,000. "JCTC" stands for "Job Creation Tax Credit" and "OITP" stands for "Ohio Investment in Training program". The third element in the report was a "412 Business Development Grant" for $250,000 which are the only actual funds Leader ever received. Glaringly absent from the report is the "Innovation Ohio Revolving Loan Fund" which was the basis for the 153 jobs in Leader's application. The proverbial rug was pulled out from under the feet of the Leader application. What happened to Innovation Ohio? Keep reading.
The Day ODOD misrepresented Leader's job projections to the Ohio Legislature
In response to a press inquiry today, Leader pulled the Innovation Ohio rejection letter from its files, and found what is believed to be the smoking gun: ODOD rejected Leader's application for Innovation Ohio funds on April 30, 2003, the same day Bruce Johnson told the Legislature that Leader would create these jobs regardless.
Innocent mistake? Typo? Or, misrepresentation? Judging from ODOD's relentless legal attacks since then, we believe they have had one goal: shut Leader up or shut us down by burying us in legal fees. Nobody can fight a state government in court. The irony here is that until this discovery of the smoking gun today, we had no idea why we had fallen out of favor, or why ODOD was acting so illogically.
What Leader could never understand was why ODOD did not just simply reset the number of jobs proportional to the funds actually provided. However, what they have done is unconscionable. They attacked Leader - a business that they courted with their programs. They circulated a story that Leader had promised to create 153 jobs with just the $250,000 grant, which is erroneous. Our application was for $5.2 million. These accusations have circulated since 2004, but we could never determine their source.
Now the clouds part and the picture is clear. ODOD misrepresented to the 2004 Ohio Legislature the nature of its financing commitment to Leader. ODOD included jobs figures in its report that it had no intention of funding.
When petty bureaucrats are not held accountable, we lose.
Please stand with us. Otherwise, these arbitrary actions by unelected, unaccountable bureaucrats could be directed at you next. Leader's shareholders, personnel and customers have been greatly harmed by an ODOD agency purportedly dedicated to "business development".
* Leader's $5.2 million Innovation Ohio application projected 159 jobs, not 153. However, somewhere along the way the number "153" started getting used by state officials inexplicably. However, the difference is not material to this matter. It is still a lot of jobs and certainly more than can be created with a meager $250,000 equipment grant.
Read here how ODOD touted Leader's 153 jobs in May 2003. The politicians got all the political mileage they wanted without ever providing the funds they promised. These articles were the result of the ODOD public relations machine:
Columbus Business First, May 23, 2003. Leader Technologies wins tax credit, plans 153 jobs
The Columbus Dispatch, May 23, 2003. Software maker Leader gets tax credit
Comments:
I understand your concerns. Back in 2001 when I was Regional Vice President for Dr. Pepper/7up Bottling Company, Columbus, Ohio, we applied to the Ohio Department of Development for JCTC (Job Creation Tax Credits), tax abatements and related "business development" incentives on buildings and new equipment.
After receving approval from ODOD I found out after leaving the company that my successor had to hire legal representation to fight the State of Ohio to give us the credits they had committed to.
Keep the faith. Right always wins!
Mike Strall
02/11/09 @ 13:33 With good thoughts-
Lori
02/11/09 @ 19:01 We have requested a meeting with Lt. Governor Lee Fisher several times over the last several months. His ODOD staff have refused to set it up. So far no official at the ODOD has been willing to meet to resolve the differences. They hide behind attorneys' rules of engagement; which is a pretty clever trick by the way. Sue somebody, then use the lawsuit as an excuse for not being able to speak to anyone except the target's attorney (thus driving up their legal fees) and preventing the business people from negotiating. Who wins? Only the attorneys. The ODOD has cost us a fortune in legal fees under these attorneys rules... and we still have no resolution.
Worse. We sent a detailed public records request which they refused to respond to, saying they had already supplied the information to us, which was totally untrue. (We learned several days ago that a member of the media sent a similar request for jobs records and got the excuse that the records were hard to find because their records were in a mess.) If ODOD is so unorganized, then why do we give that department our tax monies to manage?
Yesterday, Magistrate Skeens asked that we resolve this difference outside the courts, which is what we have been attempting to do for years. Therefore, we again asked for a meeting with ODOD officials. We have as yet not received a reply to this request for a meeting from either Mark Barbash, Chief Economic Development Officer, or Candace Jones, the ODOD staff attorney who has been appointed as point person for the resolution. Ms. Jones was involved in aborted earlier settlement discussions which were agreed and then never completed by ODOD. This new settlement will be the sixth (yes 6th) attempt. Perhaps it will "take" this time. Our file is now one foot high. Perhaps their undisclosed performance metric is the height of the file. If so, we may have reached our bureaucratic zenith. We'll see.
Sincerely,
--Mike
02/11/09 @ 19:31 When everyone is "baffled" as to why this matter has not been resolved, one must conclude that there is a possibility that someone has taken some illegal, improper, or mistaken actions which they don't want disclosed.
A newly elected Ohio Attorney General may be able to help - he should not be tainted by the previous administration's actions at least. Suggest you also take the matter to the Ohio Inspector General. That person should begin with ODOD, obviously, and then come to you in an investigation.
On the basis of your reporting so far, you must have the documentation assembled which he can copy.
02/12/09 @ 05:49 Leave a comment: