OMNICARE MOVE'S ARCHITECT SUBJECT OF ETHICS COMPLAINT

by Michael Monks

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The man who helped negotiate Omnicare's departure from government-subsidized office space in Covington to government-subsidized office space in Cincinnati now faces an ethics complaint over other matters. Four Democratic state representatives in Ohio want the Ohio Ethics Commission to examine whether venture capitalist Mark Kvamme has a conflict of interest between his public and private business dealings.

The Cleveland Plain Dealer reports:

The group alleges that Kvamme remains a partner with Sequoia Capital, a venture capital firm with a stake in a China-based software company called VanceInfo. VanceInfo's clients include IBM and Microsoft, which have operations in Ohio, said Foley. ... The lawmakers questioned whether Kvamme is striking deals to enrich himself or help Ohio, or both.

Additionally:

The lawmakers also questioned Kvamme's ties to a California country club that has filed for bankruptcy. Kvamme and former Lehman Brothers CEO Richard Fuld have guaranteed millions of dollars in loans to Malibu Associates, which owns the Malibu Country Club. But Foley said Kvamme failed to list the country club on his financial disclosure forms as a company he is running or has investments in.

And the Cincinnati Business Courier reports:

“On one hand, he has an interest in seeing that VanceInfo grows by absorbing work that might otherwise be done in North America, including Ohio,” said the letter. “On the other hand, he has a duty under the law to promote job creation and economic development in Ohio.”

Kvwamme declined to comment about specific allegations in the ethics complaint but implied they were politically motivated in this statement: "Since taking office the Kasich Administration has executed 154 economic development projects that have created more than 10,000 jobs and retained more than 20,000 jobs. In addition, these projects have created $400 million in new payroll, retained $1.3 billion in payroll and generated $1.5 billion in new capital investments.

It is unclear whether Omnicare's 500 Covington jobs is included in the "jobs creation" spin, since no jobs were actually created under the move, but simply redistributed. The loss of Omnicare in addition to the possible loss of its RiverCenter Boulevard neighbor, The Nielsen Company, may be as much as a $1.5 million loss of payroll tax revenue for the City of Covington. The original press release from Ohio Governor John Kasich's office announcing Omnicare's departure from its government-subsidized office space in Covington to its new goverment-subsidized office space in Cincinnati said:

Omnicare was Mark Kvamme's first meeting with a company outside of Ohio. The jobs-creation guru in Ohio Gov. John Kasich’s administration met with Figueroa in late January. At that meeting, (Omnicare CEO John) Figueroa said he wanted Omnicare to become a Fortune 200 company and we want to do it in Ohio, Kvamme said.

Kvamme's role in Kasich's administration is different than originally intended. Kasich had appointed Kvamme as Ohio's director of development, but because Kvamme does not even live in Ohio, Kasich was forced to create a new entity called JobsOhio which Kvamme leads, according to this report.