Opposition to county monies going into Rocket Ventures?

The Lucas County Commissioners voted yesterday to give $125,000 to the Lucas County Improvement Corporation. The LCIC is supposed to then give the money to Rocket Ventures, a venture capital fund. Commissioner Ben Konop abstained, saying he didn't have enough information. (background here)

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.

DeeDee Liedel

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.

Lucas County buying into a venture fund?

Lucas County Commissioners have an expenditure on their agenda today to take $125,000 out of the Economic Development Fund and give it to the Lucas County Improvement Corporation so they can give it to Rocket Ventures, a venture capital fund run by the Regional Growth Partnership.

Venture capital funds are not considered 'safe' investments for public funds and are not one of the authorized vehicles for county investments. Perhaps that's why they want to funnel the money through the LCIC. But, according to news coverage of the proposal, it appears that the Commissioners, not the LCIC, will be getting the vote in the venture capital fund and will be getting any profits from the investments.

So, whether they funnel the money through the LCIC or not, this is a county investment and is intended as such.

So how can they do this when it's not authorized by the Ohio Revised Code?

And why would the RGP want to interject politics into their venture capital fund? Because that's exactly what will happen if you let local politicians participate in the funding decisions. Already Comm. Tina Skeldon-Wozniak is asking how companies are selected for funding. Knowing local politicians, they will insist upon all kinds of irrelevant criteria (green policies, living wages, etc...) when it comes to disbursing funds, as they've done in the past. And other members of the group may be intimidated by the appearance of power such politicians possess. It's happened before, so I see no reason to expect anything different with this decision-making group.

I'm a big fan of Rocket Ventures, as I believe it's a needed and well-managed fund that is contributing to the success of local entrepreneurs. I do not want it 'tainted' by local politicians who are too used to providing funds as a means of controlling decisions. And our local politicians have certainly not demonstrated any level of expertise when it comes to economic development, so I do not trust their 'decisions' when it comes to allocating any of the venture capital.