This story has been floating around for a while, but it's just now hit the NYT. A Republican fundraiser in Ohio somehow convinced the state's Workers' Compensation Fund to invest $50 million bucks in rare coins, and now some $13 million has gone missing. Putting aside the guy's innocence or guilt for a moment, what in the world was the manager of that fund thinking? As a fiduciary, your job is to ensure the funds in your control are safe and hopefully increasing. Why in the name of Warren Buffett would you invest in a hard asset like coins, which don't earn a dime (sorry) until or unless they're sold? The claim is the coins were bought as a hedge against the vicissitudes of stock and bond ownership. Excuse me? You don't diversify into a non-income producing asset when your funds' income is needed to pay out claims.
"I just can't imagine collectible rare coins being used as an investment," said Gregory Krohm, executive director of a trade association for government agencies that administer workers' compensation programs. "It's hard to make a market for them."
Thank you, Mr. Krohm.
When the six (so far) audits and investigations are complete this may destroy or at least severely damage the Ohio Republican party. After the kind of election they ran in November 2004, that's an outcome devoutly to be wished for.
Posted by Linkmeister at May 28, 2005 12:01 AMI've got a rather nice coin collection I'd be willing to sell to the Ohio GOP for a few million bucks. It isn't worth that much, but I'm not going to tell them that.
Posted by: NTodd at May 28, 2005 02:55 AMMaybe the guy in charge of the WCF was also serving as the chair of the 2004 Ohio elections. Makes sense doesn't it?
Posted by: karan at May 28, 2005 08:23 AMNot in charge, Karan, but Mr. Blackwell (Ken, Sec'y of State, not the fashion arbiter) is on the periphery somehow according to the story.
Posted by: Linkmeister at May 28, 2005 08:32 AM