A line in a routine financial disclosure form reveals that American Electric Power is one of the big donors helping to fund Ohio’s private-development department — to the tune of $2 million.
The AEP filing with the federal Securities and Exchange Commission also divulges that JobsOhio, the private, nonprofit office set up by Gov. John Kasich to guide jobs and investment expansion in Ohio, has a little-known companion agency that serves as a clearinghouse for its funding.
How the $2 million donation, JobsOhio and its companion entity are all tied together is confusing. But their relationship sheds new light on Kasich’s JobsOhio — an entity hailed by some for its effectiveness in growing the state’s economy but that by design operates mostly in secrecy.
Shielded from public-records laws and enabled to keep its dealings with businesses private in a way the now-defunct Ohio Department of Development never could, JobsOhio secured commitments from companies to create or retain 70,000 jobs worth about $2.3 billion in annual payroll and $4.5 billion in capital in 2012, officials said.
JobsOhio did it despite missing out on the expected $100 million annually it would get from a lease of the state’s liquor profits. That remains on hold, and the public is in the dark about where most of JobsOhio’s operating money has come from.
In a September 2011 federal filing, AEP listed “a $2 million donation to the Ohio Business Development Coalition for JobsOhio.”
It’s the only known public disclosure of a donation to JobsOhio, but AEP’s donation didn’t go directly to JobsOhio. It went to the Ohio Business Development Coalition — a separate, nonprofit organization that changed its name within days of JobsOhio opening its doors in 2011.
The coalition’s new name is JobsOhio Beverage System, or JOBS. But it has nothing to do with serving drinks.
Established in 2004 under then-Gov. Bob Taft, the Ohio Business Development Coalition was set up as a private, nonprofit agency intended to assist the Department of Development with promoting the state for job creation — in some ways similar to what JobsOhio is set up to do now.
But Kasich and the Republican-controlled legislature formed JobsOhio in 2011 to replace the Department of Development as the state’s economic- development engine, not to supplement it. So the Business Development Coalition’s board voted to dissolve, two of its three paid employees went to JobsOhio, and the agency was formally renamed as the JobsOhio Beverage System.
“It just made sense not to have two different organizations trying to accomplish the same goal,” said Edward M. Burghard, longtime executive director for the Business Development Coalition, who did not transition over to JobsOhio.
Laura Jones, a spokeswoman for JobsOhio, said donations to JobsOhio go to JobsOhio Beverage System, and the Beverage System will be used to house the leased liquor profits from the state once the lease is complete.
When asked why JobsOhio wouldn’t simply accept all donations and later store the liquor-profits funding in-house, she said, “We believe it is a good business practice to maintain that function ... as a separate entity within JobsOhio.”
By keeping JobsOhio and JobsOhio Beverage System as separate, tax-exempt entities, both will be required to file disclosure forms with the Internal Revenue Service — which detail items such as how much money the agency takes in, how much it spends, what it spends its money on and how much its employees are paid. Additionally, state Auditor Dave Yost’s office will audit a yet-to-be-provided financial statement from JobsOhio.
JobsOhio has yet to file with the IRS for its first year of operation. It asked for an extension and has until Feb. 15. The last IRS filing from JobsOhio Beverage System, covering July 1, 2010, through June 30, 2011, shows total revenue of $3.17 million and expenditures of about $3.27 million, for a small operating loss. Most of the money came from the Department of Development, Burghard said, while the rest came from donors.
Burghard, who was paid about $240,000 as executive director for the development coalition, said utility companies and other large corporations with significant footprints in the area typically donate to state or regional development agencies, and “I wouldn’t expect it to be any different with JobsOhio.”
Melissa McHenry, a spokeswoman for AEP, confirmed the electric company’s donation when asked by the Dispatch, citing the company’s “commitment to supporting economic development” in the 11 states where it operates.
“Economic growth is good for business, so when the request came from JobsOhio, this was something we decided to do,” McHenry said.
After pulling out of the Ohio Chamber of Commerce in 2010 when the agency endorsed Kasich for governor against then-Gov. Ted Strickland, AEP has donated some money and opened its doors to support some Kasich causes and welcome some people close to him.