Bloomberg News

Ohio County Sullied by Scandal Seeks Redemption in Ethics Pledge

March 03, 2013

Former Cuyahoga County Commissioner Jimmy Dimora

A file photo shows former Cuyahoga County Commissioner Jimmy Dimora, center, leaving the federal courthouse in Cleveland, during September 2010. Photographer: Tony Dejak/AP Photo

Mired in a scandal that saw its top officials charged with bribery, Ohio’s most populous county needed an image makeover. It turned to a new government -- and a 262-word pledge.

After nearly five years of investigation and prosecutions in Cuyahoga County, which encompasses Cleveland, 907 companies have signed the promise to uphold ethical standards and combat a culture of corruption. Voters also did their part, restructuring a government that critics said was inefficient and allowed back-room dealing.

The changes in Cuyahoga County, which grew with the steel industry and John D. Rockefeller’s Standard Oil and saw decline with the Rust Belt, have Ed FitzGerald, the first elected county executive, considering a run for governor next year. Civic leaders say while it’s too soon to render a final verdict, they are more confident about the region’s direction and an improving business climate.

“Our credibility as a community was tarnished,” said Chris Ronayne, 44, president of University Circle Inc., a nonprofit development corporation in Cleveland and a former city planner. “The business community and the populace generally knew that we had to change our image.”

The scandal began in July 2008, when dozens of federal agents raided homes and offices of public officials and businesses. Sixty-two people have been charged, with 47 sent to prison or awaiting sentencing, according to the U.S. Attorney’s Office in Cleveland.

Tiki Hut

The biggest targets were Jimmy Dimora, a heavy-set, Boss Tweed-like figure who was first elected a commissioner in 1998 and ran the county’s powerful Democratic Party, and Frank Russo, the longtime county auditor.

Dimora, 57, was sentenced to 28 years in July 2012 after he was convicted on 32 counts. He took more than $166,000 in bribes in the form of cash, home improvements -- including a fake palm tree and money for a back-yard tiki hut -- meals at high-end restaurants and services from prostitutes, prosecutors said. In return, he steered contracts and jobs to friends and interceded with judges on pending cases, according to federal authorities.

Russo, 63, received nearly 22 years in prison and was ordered to pay almost $7 million in restitution in 2010 after pleading guilty. He took $1.2 million in bribes to award more than $21.4 million in commercial real-estate contracts, authorities said.

Sin City

In 2008, a contractor bidding for work on the county’s new Juvenile Justice Center helped arrange a trip to Las Vegas for Dimora, Russo and others, giving the officials $6,000 for airfare and gambling and getting them suites at the Mirage, according to federal prosecutors.

The contractor, later sentenced to three years after pleading guilty to bribery, gave Dimora about $3,500 in gambling chips and escorted a prostitute to his suite in Las Vegas, authorities said.

Through prison spokesmen, both Dimora and Russo declined requests to be interviewed.

“There’s a sense of relief in the community that the corruption has been eliminated and those responsible for it were held accountable,” said George V. Voinovich, a former Cuyahoga official, Cleveland mayor, governor and U.S. senator. “The crooks are gone.”

Silent Crimes

Prosecutions weren’t enough because the culture had to change, said U.S. Attorney Steve Dettelbach. He worked with the Cleveland Clinic, the county’s largest employer, to create the Northeast Ohio Business Ethics Coalition in December 2010. Member companies pledged to maintain standards and conduct at least one training session for vendors.

“It wasn’t just the people who were doing wrong,” Dettelbach said by phone from Cleveland. “When you have a culture of shakedowns and scams at this level, there’s also a culture of silence where when somebody tries to shake you down, even if you don’t go along, you don’t say anything. Why? Because you’re under the impression this is the way things are done.”

The scandal prompted a campaign by a group including suburban mayors and business leaders to adopt a county charter approved with 66 percent of the vote in 2009.

Cuyahoga had been run by three commissioners who made both executive and legislative decisions. It was an anachronistic arrangement that traced back to medieval England, said David Abbott, executive director of the George Gund Foundation in Cleveland, and a former county administrator.

“The county was operating far too much as a kind of an old-boys network,” Abbott said by phone. “And that doesn’t give anybody confidence.”

Total Renovation

The new charter created a single executive with an elected council to provide checks and balances.

“We couldn’t keep doing business as usual,” Bruce Akers, the former Republican mayor of Pepper Pike, said in a telephone interview. “If we had any chance of saving this county, and for that matter, the region, we had to change this form of government.”

FitzGerald, 44, a Democrat elected county executive in 2010 and a former Federal Bureau of Investigation agent, said business leaders volunteered to help update or consolidate functions. The county has a net 589 fewer employees after more than 975 retired, quit or were fired in what he called an effort to dismantle a “political patronage machine.”

The county also used bonds to create a $100 million economic development fund to make low-interest loans to companies, and all 59 municipalities signed an agreement not to poach jobs and companies from one another, FitzGerald said.

Getting There

Cuyahoga’s unemployment rate was 6.6 percent in December, not adjusted for seasonal changes, down from 9.7 percent in February 2010 and matching the unadjusted jobless mark statewide in December, data show.

While manufacturing once dominated the county’s economy, educational services, health care and social assistance now is the leading industry, according to the U.S. Census Bureau. The largest employer besides the Cleveland Clinic is University Hospitals Health System.

“While there is still work to be done to enhance job creation, improve education, and develop a more efficient system of government, we have made considerable progress,” Alexander Cutler, chairman and chief executive at Eaton Corp. (ETN:US) in Cleveland, said by e-mail. He pushed for the charter and served on a transition committee that reviewed county operations.

Stuart Garson, a Cleveland lawyer who replaced Dimora as county Democratic Party chairman, said that the changes have lessened the chances for dysfunction.

“The potential for mischief is always there, but it’s so much more difficult now,” he said.

To contact the reporter on this story: Mark Niquette in Columbus at mniquette@bloomberg.net;

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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