Nonprofit received $800k in tax benefits

Widener backed legislation that helped group he founded.


State Sen. Chris Widener backed actions in the Ohio General Assembly that eventually resulted in a benefit of more than $800,000 to a struggling Springfield-based nonprofit that he helped found, a Dayton Daily News investigation shows.

The investigation reveals new information about the size of the benefits received by the nonprofit co-founded in 2002 by Widener, who holds the second highest leadership post in the Ohio Senate.

The Springfield Republican was in the Ohio House in March 2008 when he backed Senate changes to House Bill 160, which helped the Ohio Equine and Agricultural Association get out from under $413,877 in taxes and penalties levied against the Champions Center at the Clark County Fairgrounds.

Then, in the spring of 2009, Widener inserted an amendment into a state budget bill that allowed Clark County to levy a bed tax. Ohio Equine eventually received $412,890 in revenue from the tax.

Widener, who voted in favor of both House Bill 160 and the 2009 budget bill, maintained close ties to Ohio Equine at least until legislative action began on the budget bill.

He denied wrongdoing, saying in a written statement: “I’ve spent my entire career maintaining the highest standards of ethical conduct. And legislative action I have taken has been guided by those principles, and interpretations of Ohio Ethics laws I have received from the Legislative Inspector General.”

Widener did not answer questions about whether he specifically asked for guidance from Legislative Inspector General Tony Bledsoe in advance of the vote on House Bill 160, which eventually led to the nonprofit receiving a tax exemption. Bledsoe is prohibited by law from disclosing information about advice sought by or given to lawmakers.

Widener was a main catalyst for the Champions Center, which was seen as a tourism draw for horse shows and other events at the fairgrounds. In addition to co-founding the nonprofit that built and runs the expo center, Widener’s architectural firm designed the 146,000-square-foot facility and managed its construction, charging 5.7 percent of the building costs, according to Widener.

Widener was also one of seven community leaders who personally backed a $4 million construction loan with Security National Bank and Trust. As guarantors, he and the others agreed to make good on the loan payments if Ohio Equine could not do so.

Widener served on the Ohio Equine board from 2004 until 2010, according to the nonprofit’s filings with the Internal Revenue Service. The newspaper investigation found Widener did not disclose the loan guarantee or board membership on any of his annual financial disclosure statements filed with the Joint Legislative Ethics Commission during that period.

Although it has not been determined if Widener violated state ethics law, Franklin County Prosecutor Ron O’Brien said he has discussed the issue with Bledsoe.

“I just don’t want to comment on any of the details,” O’Brien said.

Financial problems

Ohio Equine ran into financial problems just a few years after the opening of the Champions Center, state and federal tax documents show.

“The equine center is one of the largest tourism draws in Clark County. It has a positive economic impact,” said state Rep. Ross McGregor, R-Springfield. “But it has been poorly run, in my opinion. They have struggled almost since day one to run this place efficiently… It is either going to make it on its own or not.”

The tax obligations added greatly to the financial woes.

In November 2003, Ohio Equine signed a 99-year lease with Clark County for 17 acres at the county fairgrounds. The lease requires Ohio Equine to pay all taxes.

The nonprofit filed for a tax exemption with the state, but the application was dismissed in July 2006 because state law at the time only allowed property owners to apply.

House Bill 160 provided a remedy, though it appears Widener had no involvement in its drafting. The legislation initially dealt with trust taxes, but the Senate added a provision allowing land contract holders, long-term leaseholders and others to apply.

The proposal to include leaseholders came from the state Department of Taxation, which was under then-Gov. Ted Strickland, a Democrat. Former deputy tax commissioner Carol Mahaffey said she did not discuss the legislation with Widener nor did she know it would eventually benefit him.

“We did not do the legislation for (Ohio Equine). A lot of times you draft legislation and you don’t now who it’s going to help,” she said.

Widener voted for the bill, which passed the House unanimously on March 11, 2008.

After House Bill 160 took effect that June, Ohio Equine made another run at asking for a tax exemption. In June 2011, the Ohio Department of Taxation granted the exemption and forgave the tax bill for 2007 to 2010, which totaled $413,877. Ohio Equine is making payments on the $375,880 in taxes incurred from 2004 to 2006.

Widener said the bill didn’t give Ohio Equine special treatment.

“HB 160 allowed OEAA (Ohio Equine and Agricultural Association) and all other nonprofits in Ohio to file for a real estate tax exemption, which OEAA did three years after passage of the bill,” he wrote in response to the newspaper’s questions. “And if the bill had aided OEAA as the reporter suggests, then they wouldn’t owe nearly $400,000 in taxes.”

Widener had a more direct hand in the bed tax. In April 2009 the Greater Springfield Chamber of Commerce asked Widener and McGregor for legislation that would allow the county to create a convention facilities authority that could levy a hotel bed tax to finance a number of tourism-related organizations.

At the time, Widener was on the board of directors for Ohio Equine, which stood to benefit from a bed tax. He resigned from the board on May 1, 2009, a month before legislative action on the state budget bill, which included the Widener-introduced amendment paving the way for the lodgings tax.

The ‘newspaper test’

Ben Rose, a Republican who served in the legislature and is a former chairman of the Ohio Ethics Commission, declined to speak specifically about Widener or any potential ethics violations. But Rose said he advises lawmakers to take what he calls the “newspaper test” when encountering ethical quandaries.

“There are two things that you need to do to save yourself lawyer fees and one of them is ask ‘Do I want to read about it in the newspaper?’” he said. “Ethics law doesn’t cover every indiscretion in the world. The easiest way to solve that problem of ‘Oh, hey man I would not like to read a story about me doing this,’ well, is don’t do it. Find an alternative way to accomplish your end and usually there are five or six different alternative ways. Pick the easy one where there are no questions.”

Rose also declined to address matters involving Widener’s filings before the Joint Legislative Ethics Commission. But he said disclosure is a major underpinning of Ohio ethics law because it gives the public information and lays out an evidence track for enforcers of the ethics statutes.

“Non-disclosure,” he said, “is a criminal offense.”

 

Non-disclosure of required items in recent years has led to criminal charges and convictions for political figures including former Gov. Bob Taft and his chief of staff Brian Hicks, former Ohio attorney general Marc Dann and former state lawmaker Clayton Luckie.

Rose said the ethics bar is constantly changing.

“Some of this stuff is pretty subjective and what was perfectly ethical 10 years ago may or may not be ethical today,” he said. “A smart person always understands that the bar is always rising and you have got to be very, very careful not to operate on yesterday’s standards.”


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