Privatization of Economic Development Stirs Controversy in Ohio

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July 11, 2011; Source: Bloomberg Businessweek | With joblessness hovering around 9 percent in the U.S. job growth is never far from our minds. Ohio Gov. John Kasich has decided to kick start his new economic development engine with a nonprofit job-creation board called JobsOhio. But the creation of the board has not been without controversy.

One board member, Mark Kvamme, has come under special scrutiny. His board appointment is his third administration job in six months. He most recently resigned from an interim post as job-creation director. Gov. Kasich initially appointed Kvamme as his development director, a Cabinet position, but was forced to remove him from the job amid legal questions regarding his California residency. The board picked him Monday as JobsOhio's chief investment officer.

This is one of several legal and legislative challenges that have faced JobsOhio “as the Kasich administration has sought to partially privatize the state's economic development functions,” according to the Associated Press.

Challengers filed suit over the creation of the board, claiming it violated seven sections of the Ohio Constitution. The litigation challenged the law championed by Kasich, a Republican, and signed Feb. 18 that “creates and lays out responsibilities for a line-up of a business executives chaired by the governor,” according to the AP.

State legislators also closed an apparent loophole in the JobsOhio bill that could have allowed panel members to take job-seeking trips paid for by corporations without having to report them to the public. According to the AP, before the loophole was closed “panel members could have excluded plane rides, dinners and hotel rooms that companies may offer to panelists as they seek to bring jobs to Ohio.”

If warning bells aren’t ringing yet, the JobsOhio legislation also broadly exempts the board from public records, open meetings, ethics, and collective bargaining law.

For his part, Gov. Kasich, is still high on JobsOhio. "This is great. We're off to a very, very good start," he said after formalizing the appointments. "They'll run it like any other board.” Now we can rest easy.—Aaron Lester

  • don viejo

    While many nonprofit leaders might disagree, I have alaways believed the best way to manage a private, nonprofit organization is to look like a private but act like a public. The Ohio model appears to have turned tis upside down by looking like a public but acting like a private, particularly when it comes to transparency.