But this may not be the final word on the issue. Sylvania Township Trustee DeeDee Liedel has raised legal questions about the transaction. Here is her email to Rob Robinson, the chairman of the LCIC:
Rob – I have looked into the possibility of Sylvania Township ‘investing’ in Rocket Ventures via the LCIC as was brought up by Pete Gerken at the board meeting earlier this week. What I have found out concerns me greatly when it comes to the role of the LCIC and its member entities.
Point blank, townships are not allowed to make an investment in a venture capital fund. We are restricted to ‘safe’ investments, so that the taxpayers’ money is not put at risk. Further review of the rules regarding townships and CICs indicate that townships are allowed to make financial contributions to CICs to help defray administrative expenses, but we are not allowed to give additional monies.
Basically, Pete’s suggestion that the township’s use the LCIC to side-step our restrictions on ‘safe’ investments is not allowed under the Ohio Revised Code. This attempt to invest in a venture capital fund by way of the LCIC is illegal and will not be supported by me.
I have also talked to several people regarding the county’s ability to make such an investment. Per my conversations, the county is under similar restrictions regarding their investments and therefore a direct investment in Rocket Ventures would not be allowed under the ORC. Sidestepping those laws by using the LCIC is, in my opinion, highly suspect as well.
It is my opinion that the LCIC should not be used to by-pass the laws established for the safekeeping of taxpayer funds. If our member entities cannot directly make this investment, we should not allow the LCIC to be used as a middleman. In basic criminal law, the middleman is often just as guilty of a crime as the primary characters.
We have enough bad press and people questioning our activities and productivity. We certainly don’t need to bring in to question whether or not we are acting with regard to the law. I am opposed to the LCIC making an investment in Rocket Ventures on behalf of member entities. If member entities have the ability to make the investment (or believe they have the ability to make the investment) they should do so directly and not drag the LCIC into this issue.
Sylvania Township Trustee
The LCIC executive committee (which meets July 15) can refuse to accept the funds if the contribution and pass-through are not in compliance with the law. I think Trustee Liedel makes a good point: if the county can legally make such an investment, let them do so directly.