We have been tracking the developments in “Coingate” – the Ohio workers comp scandal that has sent shock waves through that state’s formidable Republican establishment. Millionaire coin dealer Thomas Noe was recently indicted for his central role in the affair. He is charged with 53 felony counts, including 11 theft, 11 money laundering, 22 forgery and 1 pattern of corruption. Once the darling of party officials noted for his generous campaign contributions, he is now a pariah, with party officials backing off as quickly as they can. As Ohio GOP Chairman Robert Bennet puts it, “Frankly, Tom Noe is irrelevant to us. He’ll have a long time in prison to think about his mistakes.” Unfortunately for Ohio Republicans, he has plenty of time prior to prison to think about his former friends.
No More Bordeaux for Noe
Reporter Joe Hallet of the Columbus Dispatch quotes from a speech Noe gave back in 1993 to the Young Entrepreneur’s Society of Toledo. Noe said, “To me, in business today, trust is what is it all about. It’s ethics and trust and if you have that, you will always succeed and if you don’t, you will fail sometime in the future.” While it’s one thing to have someone’s trust, what you do with that trust is something else altogether.
Hallett’s detailed profile of Noe, published back in May of last year, shows a man of humble origins, who built a reputable coin business through hard work. He dropped out of college to pursue the coin business. Noe told his parents back in 1973 that he would get his PhD “in the street.” He became very successful at coin-dealing and developed a taste for fine bordeaux. His connections led the state workers comp bureau to invest $50 million in rare coins. State officials were satisfied with the $15 million profit reported through 2004, although only $7.9 million had actually been paid.
For the state, it was all about trust. They assumed Noe was managing the funds appropriately. Had they bothered to look closely, they would have seen far-ranging and dubious investments including slum property in Toledo, autographed baseballs, presidential election buttons and paintings. Coins worth $400,000 simply disappeared and it now appears that as much as $13 million may have been misappropriated.
The “Street PhD” in Action
The ethical and trust failures that Noe talked about 13 years ago are now staring him in the face, as he is confronted with some very tough decisions. He has to navigate the choppy waters of the criminal justice system, with up to 170 years hanging over his head. He knows he can reduce his jail time by implicating powerful, well-placed individuals in the Republican party. This is very basic stuff, far below the world of fine wines and the higher-order values of trust and ethics. Now it’s simply a matter of survival. And this plays to Noe’s strengths. He’s still a wheeler-dealer at heart. His “street PhD” will come in handy in the next few months.
