Blackwell Held Shares In Election-Machine Maker

Reported by: A.P.

Web produced by: Neil Relyea

Photographed by: 9News

4/3/2006

COLUMBUS, Ohio (AP) -- Secretary of State Kenneth Blackwell revealed Monday he accidentally invested in shares of voting-machine manufacturer Diebold Inc. last year, a period when he was sued by other manufacturers over contracts that Diebold was up for.

In a required ethics filing, Blackwell, who is seeking the Republican nomination for governor, said his investments are directed by an accountant and financial adviser without his knowledge or help, "similar to a blind trust."

He said a manager of his investments account at Credit Suisse First Boston bought 178 shares of Diebold stock at $53.67 per share in January 2005.

Blackwell said the manager did not follow instructions to avoid such investments.

He said 95 shares were later sold at a loss but he still held 83 shares until discovering them and liquidating them Monday, also at a loss.

He discovered them while reviewing his 2005 investments to prepare for Monday's filing with the Ohio Ethics Commission, a form required of all statewide candidates.

"While I was unaware of this stock in my portfolio, its mere presence may be viewed as a conflict and is therefore not acceptable," Blackwell said in a letter dated Monday included in his filing.

January 2005 also was the month Blackwell ordered that counties should use optical-scan voting machines rather than more expensive touch-screen systems.

The company predicted it would earn less money in 2005 because of Blackwell's decision.

That didn't stop Texas-based Hart Intercivic Inc. from suing, saying the order left two rivals, Diebold and Election Systems & Software, eligible for bidding.

Blackwell reversed his decision in April and announced a deal with Diebold of $2,700 per touch-screen machine.

That prompted a lawsuit from ES&S saying the decision eliminated the opportunity for counties to choose from more than one touch-screen vendor.

Blackwell has said the Diebold machines are the only electronic machines to meet federal and state standards under the Help America Vote Act of 2002.

Candidates use the annual ethics forms to disclose their debt, gifts, investments and travel.

What had been a mundane political duty took on new meaning last year after Gov. Bob Taft's failure to report several golf outings led to his no contest plea to ethics violations.

Taft's failure to report golf outings and other gifts he received as governor led to his no contest plea in August, becoming the first Ohio governor to face such charges in office. He was fined the maximum $4,000.

Anticipating criticism, Blackwell quickly released a copy of comments by Judith Grady, who oversees the secretary of state's compliance with the 2002 federal voting act.

In a May 9 statement given as part of the ES&S lawsuit, Grady said Blackwell was not involved with price negotiations with Diebold.

Bob Paduchik, a spokesman for Attorney General Jim Petro, Blackwell's rival in the GOP primary, called for further investigation "considering Ken Blackwell's history with Diebold."

Democrats weren't buying Blackwell's explanation. "If he can't manage to know what's in his checkbook, why would the people of Ohio want to trust this man with the state's checkbook?" said Brian Rothenberg, spokesman for the Ohio Democratic Party.

Petro made several out-of-town trips at taxpayer expense totaling $5,192 last year, according to his 2005 form filed Friday.

By contrast, he reported $3,546 in similar expenses last year.

All but two trips were to meetings of the National Association of Attorneys General.

The other two were to Washington to argue cases before the U.S. Supreme Court, said spokeswoman Kim Norris.

Blackwell also listed among other gifts the cost of a trip to Texas last August paid for by the Texas Restoration Project, a ministers' organization that opposes gay marriage.

Blackwell's campaign previously has acknowledged the flight aboard a plane owned by Pastor Rod Parsley, minister of a large nondenominational church in suburban Columbus.

A group of liberal ministers has filed an IRS complaint alleging that Parsley and a second conservative pastor have improperly promoted Blackwell over other candidates.

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