Former state treasurer silent on federal probe

Charming and likable, Ahmad put forth ways to save taxpayers money — and make Boyce look good in the process. And Ahmad’s resume was impressive: degrees from both Columbia and Harvard and real-world finance experience as an investment banker.

Boyce liked him so much that he promoted Ahmad to serve as both CFO and deputy treasurer just six weeks after Boyce moved into his ninth-floor office in the Rhodes Tower.

Looking back now, Boyce says he is “stunned” by what Ahmad is accused of doing right under Boyce’s nose.

Ahmad is scheduled to go on trial next month in U.S. District Court in Columbus on charges of bribery, money laundering, wire fraud and other felonies.

At the same time Boyce was trusting Ahmad with key decisions, Ahmad was emailing with Doug Hampton, a high school buddy who had served as Ahmad’s personal financial adviser since 1996. Hampton wanted in on state broker business.

“Let me know about that RFP (request for proposal) process,” Hampton wrote in an email to Ahmad in February 2009.

By June 2009, Ahmad put Hampton Capital Management on the approved broker list, setting up Hampton to make $3.2 million in commissions off the state trades. Federal prosecutors say it marked the beginning of a kickback scheme involving Ahmad, Hampton, immigration attorney M. Noure Alo and business owner Joseph Chiavaroli. All told, Hampton paid $523,000 in bribes, the federal indictment says.

Hampton and Chiavaroli pleaded guilty and pledged to cooperate in the case against Ahmad and his friend Alo. Ahmad and Alo have pleaded not guilty.

In the wake of the Ahmad case, attention has also fallen on Boyce, who is now a state representative. His adversaries are asking Boyce what he knew and when he knew it.

Ohio Republican Party Chairman Matt Borges, who years ago served as chief of staff in the treasurer’s office, has held no less than three press calls to shine attention on Boyce, Ahmad and the Democrats.

“Unfortunately, we’ve heard nothing from Rep. Boyce, we’ve heard nothing from the Ohio Democratic Party, we’ve heard nothing from House Democrats,” said Borges, who was convicted of an ethics violation for his role in a pay-to-play scandal in the treasurer’s office.

Boyce refuses to speak on the record, saying he expects to be called as a witness in the case. Privately, though, he seems both baffled and personally injured by the scrutiny.

Boyce is not implicated in the case and he is not accused of any wrongdoing. But Borges and others are questioning Boyce’s judgment.

Current Treasurer Josh Mandel and his team recently released a two-page redacted memo that indicates Boyce at least knew by the end of his term that the Federal Bureau of Investigation had opened an investigation.

Boyce’s general counsel Theresa L. Carter sent the memo to Mandel’s general counsel Seth Metcalf on Jan. 10, 2011 – the day Mandel was sworn-in as state treasurer.

In the memo, Carter said:

  • On Nov. 16, 2010, she learned of an FBI investigation into the circumstances of a custodial bank contract awarded by the Boyce administration to Boston-based State Street Bank. (Earlier during the Boyce administration, the Dayton Daily News detailed how Alo, who had no prior lobbying experience, had been hired by State Street Bank as its lobbyist. Alo’s wife worked as Ahmad’s secretary and Alo attended law school with Ahmad’s wife.)
  • On Dec. 10, Carter was told a federal subpoena was coming.
  • On Jan. 4, 2011, a comprehensive subpoena was delivered. Carter was instructed that it was highly confidential and public disclosure of the subpoena or investigation could bring penalties.

In a telephone interview with the Daily News, Carter said it was Boyce who first told her of the FBI investigation.

“As I recall, in November, Kevin advised those of us involved with the State Street contract that the FBI might call us and that we should cooperate. He did not want us to be alarmed if the FBI were to call,” Carter said.

Carter said she doesn’t remember any further discussion with Boyce about the investigation or showing Boyce the subpoena when it arrived shortly before the change in administrations. Carter’s recollections run contrary to the Ohio GOP’s assertion that Boyce knew that Ahmad was a target of the investigation.

Boyce’s spokeswoman Antoinette Wilson said, “He did not see the subpoena. It was not shown to him.”

Furthermore, Wilson said, Boyce was under the impression that the FBI was conducting “an informal inquiry” — not a full blown investigation.

The FBI approached the treasurer’s office for records six months after the Daily News stories that questioned why State Street Bank hired Alo.

Boyce did not conduct a thorough internal review to find out: Why did State Street Bank hire Alo? How and why was Walaa Waeda hired in late December 2009 as Ahmad’s secretary?

The custodial bank contract is not part of the federal criminal case but Ahmad and Alo allegedly played a role in both the State Street Bank deal and the Hampton Capital Management work.

After Boyce lost the election, he landed a job with Rice Financial Products, a New York-based firm that specializes in municipal bond work. Ahmad went on to become comptroller of the city of Chicago under Democrat Rahm Emanuel’s new administration.

Boyce didn’t tell Emanuel’s team or Rice Financial that the FBI was investigating his administration. In February 2011, Rice Financial hired Boyce into a $100,000-a-year-plus job even though Boyce didn’t pass the municipal securities exam until August, according to public documents. Instead, Boyce agreed to cover the city of Chicago for Rice Financial — a move that put him in professional contact with Ahmad.

And Boyce provided a glowing comment for an Emanuel administration press release on April 20 announcing the finance team, including Ahmad. (Boyce didn’t write a full letter of recommendation, Chicago city records show.)

It is unclear how much weight Boyce’s endorsement carried when the Emanuel team decided to hire Ahmad. The comment came 19 days after two former federal prosecutors assigned to vet Ahmad brushed aside questions about the Ohio bank contract and told the Emanuel transition team they saw no impediment to hiring him.

After Ahmad’s indictment in August, Emanuel told reporter in Chicago the feds didn’t give him a heads up about the investigation but officials in Ohio gave Ahmad a stamp of approval.

“I appreciate that you think I should have known … . (But), the head of Key Bank, the head of the Treasurer’s office in Ohio gave him a clean bill of health and a thumbs-up,” Emanuel told the Chicago Sun-Times.

In May 2012, Boyce left Rice Financial when he was appointed to the Ohio House to fill a seat left vacant by the conviction and imprisonment of state representative Carlton Weddington.

When asked if Boyce told his fellow House Democrats about the FBI probe during the appointment process, a spokesman for the Democratic caucus said, “It never came up.”

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