Feds: Russo set up fake opponent in 2006 auditor's race

If and when the feds indict Frank Russo in the county corruption investigation, how many charges will they levy against him? How many different ways of allegedly corrupting a government can one investigation uncover?

Yesterday's single, five-page charge describes a simple scheme: Russo sets up a puppet opponent to run against him in the 2006 election, then hires him. That's on top of charges that depict Russo as taking $1.2 million in cash kickbacks, selling jobs for cash, bribing J. Kevin Kelley with a raise to drop out of the 2003 Parma mayor's race, nudging contracts toward buddies who paid for him to party in Vegas, and shopping for free granite for his house in exchange for lowering a businessman's property valuations.

I'll let the U.S. Attorney's filing tell the rigged-election story directly, except I'm substituting Russo for the code name PO2. Nothing except the feds' rule of not naming uncharged people keeps anyone from identifying Russo at this point: it's a matter of record that this latest defendant, Joseph Gallucci, ran against Russo as the 2006 Republican candidate for Cuyahoga County auditor and dropped out before the general election.

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Gallucci approached Kelley about obtaining a job with the County in order to secure health insurance benefits. Kelley, Gallucci and others discussed Gallucci giving [Russo] cash or another thing of value in exchange for Gallucci receiving a County job.

In or around the second half of 2005, [Russo], a County official, and Kelley discussed [Russo]'s re-election campaign for the November 2006 election cycle. [Russo] and Kelley discussed [Russo]'s desire to identify and support a candidate from the opposing political party who would not run an aggressive campaign against [Russo]. ... Kelley suggested to Gallucci that instead of giving [Russo] cash of the thing of value previously discussed, Gallucci, a member of the opposing political party, could run against [Russo] in the County election.

Gallucci agreed to run an ineffective campaign against [Russo], understanding that in return, Gallucci would receive a job in the Auditor's Office after the November 2006 election at a salary of approximately $50,000 a year. As agreed, Gallucci did run, but didn not campaign actively and spent approximately only a few hundred dollars on the campaign...

In or around May 2006, Gallucci complained that he needed to withdraw from the political race and find employment. [Russo] and others encouraged Gallucci to stay in the race long enough to preclude the opposing political party from entering a replacement candidate. [Russo] offered to subsidize income until Gallucci began employment with the County.

In or about June 2006, Kelley, at [Russo]'s request, introduced Gallucci to BE15 and BE16 [relatives who work for a managed care organization in Cleveland]. BE15 and BE16, through Business 22, paid Gallucci $2,000 per month for five months, beginning on or about July 7, 2006. While the payments were purportedly for consulting, Gallucci performed no work for Business 22.

[Russo] asked Gallucci to withdraw from the race after the filing deadline had passed for the opposing political party to substitute another candidate for Gallucci. On or about October 2, 2006, Gallucci withdrew from the race. On or about November 29, 2006, [Russo] caused Gallucci to be hired in the Auditor's Office at a salary of approximately $67,849.86 per year in return for Gallucci withdrawing from the race after the deadline had passed for the opposing political party to substitute another candidate for Gallucci.

Strickland, Senate Republicans reach budget deal

Gov. Ted Strickland just announced a budget deal that protects schools, libraries and social services from cuts to fill an $851 million funding gap. Sounds like the legislature gets to go home for the holidays after all. Strickland had threatened to call them back into session on Christmas Day if necessary to get a deal on the 2010 budget.

Instead, as state Democrats hoped, a planned cut in the income tax will be delayed.

The few Senate Republicans who were willing to hold off on the tax cut wanted, in exchange, to reform the state's century-old construction laws. Democrats were loath to do that. In a compromise, a pilot project to test construction reforms will allow three public universities to build projects under new rules.

The $851 million budget hole has needed filling since the state Supreme Court struck down the governor's plan for slot machines. This week, Senate Republicans pushed Strickland to make the cuts in the non-education parts of the state budget. Strickland refused, saying those other parts of the budget, such as social services, had already been slashed this summer. He claimed he'd have no choice but to cut education if the tax cut wasn't suspended.

For more background, here's the Columbus Dispatch's story from overnight, which anticipated the deal.

Here's the press release:
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Strickland Statement on Bipartisan
Education Budget Compromise

Columbus, OH – Ohio Governor Ted Strickland today issued the following statement after achieving a bipartisan agreement on H.B. 318 with House Speaker Armond Budish, Senate President Bill Harris and Senate Minority Leader Capri Cafaro:

“Across the country, some states have chosen to slash education budgets in an attempt to make it through the recession. Here in Ohio, investing in education is the cornerstone of our plan to rebuild Ohio’s economy from the ground up. We have again overcome political differences to achieve a bipartisan agreement to balance the budget and protect our schools from devastating cuts.

“This compromise will avoid thousands of teacher layoffs, school building closures and the elimination of athletic programs in our schools. And we can now refocus our efforts on competing for federal Race to the Top resources that, along with our education reform plan, will improve our students’ ability to compete with students anywhere in the world.

“Nearly three months ago, a state Supreme Court decision opened an $851 million hole in education funding. We were faced with three options to fill the budget hole. One option was to raise taxes. A second option was to cut $851 million budgeted for Ohio schools. A third option was to freeze state income tax rates at the 2008 level, postponing the final 4.2 percent reduction while leaving in place the rate cuts made to date.

“I deeply appreciate the business and education communities, as well as libraries and human service organizations, for their vocal support of the common sense solution to temporarily postpone the last phase of income tax reductions. Ohio families and businesses will continue to receive a $1.8 billion tax cut this fiscal year because of the broad-based tax reforms we shepherded through the most difficult economic environment in 80 years.

“This compromise also advances several important initiatives. After we brought construction reform to the forefront, it will be undertaken in a demonstration capacity at three University System of Ohio institutions. We are also meeting our commitment to ensure needed mental health services continue to support Ohio’s most vulnerable citizens.

“With bipartisan cooperation, we are making steady progress toward a new, more competitive Ohio.”


Framework of the Bipartisan Compromise

Temporary Postponement of Tax Rate Reduction to Protect Ohio Schools
The legislature will postpone the last part of the scheduled income tax reduction by freezing income tax rates so they remain exactly the same as last year. Ohio taxpayers will continue to pay a tax rate 16.8 percent less than in 2004. Ohio’s schools will receive approximately $844 million in resources for the biennium.

Construction Reform Demonstration Projects
The Chancellor of the Board of Regents will establish criteria to determine three capital projects at University System of Ohio institutions to utilize alternative construction management methods, to serve as a demonstration of construction reform.

All-Day Kindergarten
All-day kindergarten remains a requirement for every Ohio school district beginning in the 2010-11 school year. To support districts that may have fiscal or other challenges to successfully implement all-day kindergarten next year, a new requirement in law will permit districts to request and receive a waiver, but only if a resolution from the local School Board of the district provides a justification for a delay.

Evidence suggests all-day kindergarten benefits students, especially the most vulnerable and at-risk. In a recent Ohio Department of Education survey of Ohio’s school districts, only 150 respondents indicated that they would request a waiver to delay implementing all-day kindergarten.

Potential Additional Resources for Non-public, Chartered Schools
Non-public, chartered schools may benefit, up to FY 2009 spending levels, from lapses in the state budget. While the lapses may come from anywhere in the budget, the transfers to non-public schools cannot total more than the amounts lapsed in the GRF line items of the Ohio Department of Education’s budget.

Corrections from HB 1:

Mental Health Services Fix
The compromise will correct a legislative drafting error from HB 1, ensuring that $14.7 million in mental health funds are directed to the correct fund for community mental health services.

The Ohio State Employment Relations Board
In HB 1, the Ohio State Employment Relations Board (SERB) and the Personnel Board of Review (PBR) merged backroom offices without adequate funds to successfully complete the merger. The compromise will provide $2 million to SERB from the state administrative fund at the Ohio Department of Job and Family Services.

Lakewood mayor FitzGerald announces run for county executive

Lakewood's mayor, Ed FitzGerald, has announced he's running to be the first Cuyahoga County executive.

FitzGerald is the first Democrat to officially declare he's in the race, though more are sure to come. On the Republican side, state Rep. Matt Dolan (son of the Indians owner) told Lake County's News-Herald he intends to run a mere four days after Issue 6 passed.

FitzGerald has been mayor of Cleveland's second-largest suburb for two years and a Lakewood councilman before that. He's also a former FBI agent, a bit of biography that should help him run as a reform candidate eager to clean house in the wake of the Dimora-Russo investigation. In a mailing to county Democrats announcing his candidacy, he promises to "root out the corruption once and for all." He also talks up economic development, the top goal in the new county charter.

FitzGerald opposed Issue 6, which created the future government he wants to lead. He stumped for the rival Issue 5 on the debate circuit this fall. That means he'll have stiff competition for the role of reformer-candidate. Some Issue 6 supporters want to use the 5 vs. 6 debate as a litmus test for the county executive job and support only a candidate from their camp.

You can read more on FitzGerald's campaign website and on Ohio Daily Blog, where (as far as I can tell) Anthony Fossaceca broke the news of FitzGerald's campaign announcement yesterday.

A stubborn question: Will county reform benefit minorities?

You may think this debate is over. Or that it's old news, the complaints of the defeated.

But the question of whether Cuyahoga County's new charter will benefit black residents is not going away. That's clear from the debate about the Call & Post's angry attacks on Nina Turner, and from the public forum this month about opportunities for young black leaders in the new system, which devolved into complaints about Issue 6 instead.

Yes, most political conversation in town has moved on since Issue 6's two-to-one victory Nov. 3. We're turning to new, forward-looking questions, like what kind of leader we want as the first county executive. But the debate about black participation in the new government is going to come back in the September and November 2010 elections and when the new leaders are seated in 2011.

It also came up earlier this month on WCPN's The Sound of Ideas, when several guests were talking about the Call & Post attack on Turner, and former Plain Dealer columnist Afi-Odelia Scruggs called in. She claimed host Dan Moulthrop and the guests were reacting to spot news, not the deeper issue. On the air, Scruggs challenged several specific media outlets and reporters -- including me -- to do stories on why there was such "deep antipathy" in the black community toward Issue 6.

My first reaction was to challenge Scruggs' entire premise. Black voters don't dislike Issue 6.

Voting returns in black communities -- Cleveland's black-majority wards, mostly black cities such as East Cleveland and Warrensville Heights -- almost all show narrow majorities for the new county charter.

Interestingly, those communities also gave narrow majorities to Issue 5, the competing reform measure that lost. So black voters appear to have split evenly between 6 and 5, while a few cast a double-yes vote. Though the few precincts anywhere in the county that went against 6 were in black neighborhoods, the voting returns prove there's no single "black" position on reform and suggest that the new government has majority support in the black community.

But if I rewrite Scruggs' question to ask why there was such deep opposition to the new charter among established black political leaders, then we're getting somewhere. Sen. Turner was almost the only black elected official to support 6. (Earl Williams, a Shaker Heights councilman, is the only other one I know of.) Cleveland's activist black ministers, a powerful political force, opposed 6 as well. Dismissing the opponents as out of touch is easy, but doesn't really answer the question.

On WCPN, Scruggs suggested black antipathy toward 6 had to do with the "struggle for political power African-Americans have gone through," and the fear that African-Americans' "power base is so tenuous that county restructuring would destroy the power [we've] fought for."

However, not all of the black leaders who opposed 6 did so for race-conscious reasons. For instance, county commissioner Peter Lawson Jones, who led the argument against 6, offered race-neutral arguments that white and black officials on the pro-5 side embraced.

Gary Norton, East Cleveland's mayor-elect, opposed 6 for reasons similar to Jones': concern that the charter wasn't drafted in public, fear that the county executive would be too powerful and the county council too weak.

"What I never understood about the opposition to Issue 6 was why folks said it would diminish African-American power," Norton said when I posed Scruggs' question to him. Cuyahoga County's old government structure has been around for 200 years, and only four black officials were ever elected under it, he pointed out. Norton says arguments about black political power came up because "folks were trying to spook people." He's not sure why.

Still, Norton tried to summarize others' arguments. "Some of the racial angst might be, African-Americans might never get that seat with tremendous power. They'd get the rubber-stamp seats." (Cuyahoga County is 29 percent black, so black county executive candidates could face an uphill battle.) Cleveland, a black-majority city, now controls many of the region's assets, Norton adds. "Perhaps there's fear of competition between the county executive and mayor."

By contrast, Cleveland city councilman Zack Reed reacted to Scruggs' question this way: "There’s nothing in Issue 6 that benefits black folks. There’s nothing there!"

Reed says he's concerned that the business community's push for the new charter, which names economic development as the new government's top priority, will mean less spending on social services. "If we take those moneys away from social services to do what they call economic development, then the social fabric and the safety net that’s already fragile now will collapse," he says. I could call that a race-neutral argument, except that the need for social services is often strongest in black neighborhoods such as Reed's ward.

Reed is also worried that the new government may not offer minorities as much opportunity as the current one.

"What the county was becoming was a minor-league system for minorities to move up [to become] political, social, and corporate leaders in this city," he says. He points to Norton and new county land bank head Dennis Roberts, who both worked under Jones, as well as deputy county administrator Lee Trotter and former procurement and diversity director Adrian Maldonado, now a construction contractor.

"That whole system just got collapsed," Reed says. The new government may not be as open to minorities, he fears, depending on who the county executive chooses for his or her cabinet. "If those individuals who make up the cabinet have no association with or are unsympathetic to minority community ... then the issues that face the minority community are going to be lost."

That leads Reed to offer a thought that's deeply unfashionable in December 2009: praise for Jones, Jimmy Dimora and Tim Hagan.

"All three were sympathetic to issues that faced the minority community," he says (talking in the past tense about the lame-duck commissioners). "All had a relationship with the minority community." Though they all lived in the suburbs, "they still looked out for the city." He fears the new county council, elected by districts, could engage in parochial and competitive thinking instead.

But Reed's praise for Dimora and Hagan cuts both ways: It turns the focus back to the county executive, who will also be elected countywide, as the commissioners were. So the candidates for the top job will all need to court the support of black voters, a quarter of the electorate.

That's why this issue isn't dead, and why Issue 6 opponents, who seem obstinate and vanquished today, will become relevant again in the new year. How will the new government benefit black residents? is a legitimate question every county executive candidate will have to confront on the campaign trail -- and a question the winner will have to address on the new government's first day.

Brown helps forge Senate Democrats' health care deal

Sherrod Brown is one of five liberal Democrats who helped craft the U.S. Senate's latest health care deal, which would allow people age 55 to 64 to buy into Medicare. This New York Times analysis (registration required) says a lot about Brown's new role as negotiator.

Brown is one of the Senate liberals who fought hard to create a "public option," a government-run health care plan for the uninsured. But several moderate Democrats don't like the public option, and these days it takes 60 votes to pass anything in the Senate. So Brown became part of the "Team of 10," the five liberals and five moderates who met to try to forge a compromise all Senate Democrats can vote for.

The new deal would only create a public option as a fallback if other health care reforms fail to meet a goal of insuring a certain number of people. But the Team of 10 also propose a new idea: letting people buy into Medicare starting at age 55. That would advance the liberals' goals of insuring more people and creating more not-for-profit competition with private insurers.

"To satisfy the liberal Democrats, including Sherrod Brown of Ohio," the NYT story adds, "the agreement calls for the creation of a new menu of national insurance plans, modeled after those offered to more than eight million federal workers, including members of Congress, and their dependents."

Sounds like one of Brown's ideas caught on. He refuses to accept congressional health-care benefits, as a protest against the number of uninsured people in the country. Last week he signed onto a Republican dare, agreeing with them that if Congress creates a public option, all congresspeople should have to use it for their health-care coverage. Now the Team of 10 has jumped on the idea that congressional health care and new health care plans for the uninsured should look the same.

The deal still has to get 60 votes. Then, senators will have to negotiate with the House, which passed a different bill. But it's interesting to watch how Ohio's Democratic senator is wielding influence on the year's biggest issue.

Update, 12/15: Looks like Joe Lieberman, the stubborn independent and former Democrat, refuses to be the 60th vote for expanding Medicare. Senate liberals may be stuck with no replacement for the public option. They could still try to get Olympia Snowe, the Maine Republican, to go for the public option as a backup -- or "trigger," as the buzzword goes. But it looks like the president wants to make a deal with Lieberman instead.

Feagler this weekend: the cartoon, Medical Mart, CSU, Afghanistan

I'm a guest on this weekend's edition of Feagler & Friends.

Host Dick Feagler, Joan Mazzolini of the Plain Dealer, Harry Boomer of 19 Action News, and I talk about the Call & Post cartoon, the Medical Mart, new Cleveland State University president Ronald Berkman, and President Obama's escalation of U.S. involvement in Afghanistan.

The show airs tonight at 8:30 and Sunday at 11:30 a.m.