John Kasich's fundraising may be causing ethical concerns. | Getty Kasich donors could revive ‘cronyism concern’ Many of his super PAC's biggest donors have business ties to the governor

Some of the biggest donors to the super PAC supporting long-shot Republican presidential candidate John Kasich have relationships with the Ohio governor that have generated ethics complaints during his time in office.

The controversies have yet to follow Kasich to the national stage as he tries to gain momentum for a presidential bid that ranks him in a four-way tie for sixth place, with 4 percent, in the latest New York Times/CBS News national poll. Still, Kasich’s money network could create an opening for attacks in a primary season where leading contender Donald Trump routinely accuses his rivals of being bought.


“When you design something that is secretive, it raises the classic corporate-cronyism concern because you don’t know what they’re doing and how they’re doing it,” Matt Mayer, president of conservative research outfit Opportunity Ohio, said of a jobs program, JobsOhio, that led to some of the ethics issues.

Schottenstein Management Co., Kasich’s employer before he became governor, gave the super PAC $1 million, according to the most recent disclosure. The company didn't answer requests for comment. AVI Foodsystems and Richard L. Bowen & Associates, which each have had state contracts, donated $100,000 each. They also didn't return calls and emails seeking comment.

Coal mine operator Murray Energy contributed $250,000. In 2013, a former state environmental regulator accused the governor's office of bending to pressure from Murray to force him to resign. He later settled his complaint with the state for $40,000. (In a separate lawsuit, out-of-state employees accused Murray of making them donate to Ohio Republicans.) The company denied the allegations, and a spokesman said it doesn’t directly benefit from the donation but supports Kasich’s policies.

The super PAC, called New Day for America, received a combined $1.25 million from leaders of L Brands, Crown Equipment Corp., and Worthington Industries — companies that received benefits from an economic-development program Kasich chartered called JobsOhio. The companies didn't respond to requests for comment.

And $1.35 million came from family and associates of venture capitalist Mark Kvamme, who led Kasich’s jobs board before starting his own firm backed by The Ohio State University. Kvamme said he wasn't available for an interview in time for this story.

The Kasich campaign said there’s no evidence of wrongdoing.

“These were garden-variety, stereotypical charges that are leveled at a candidate in the context of an election,” said Rob Nichols, a spokesman for Kasich. “Since the election went away, those issues have evaporated.”

"It says a lot about him and the successes he's had as governor that the people who know him the very best are the people supporting him the most, knowing full well they won't get anything out of it," Nichols added. In his 2010 campaign, Kasich took more money from the oil and gas industry than any candidate in Ohio history, Nichols said, and in office he imposed new regulations and sought higher taxes on the industry.

New Day for America earned support because Kasich "has the strongest economic record of any candidate running," press secretary Connie Wehrkamp said. She said the super PAC doesn't coordinate with the campaign.

The super PAC received $500,000 apiece from John P. McConnell and Peter Karmanos, who served with Kasich on the board of Worthington Industries. The Columbus-based steel processor was the third-largest contributor to Kasich’s congressional campaigns, totaling $49,035. In 2001, the same year he left Washington, Kasich joined Worthington’s board, eventually earning as much as $176,334 a year, according to corporate filings.

When Kasich ran for governor in 2010, Worthington kicked in $13,300. Kasich resigned from the board before taking office, but continued to receive some deferred compensation until 2012. That year, JobsOhio recommended $619,000 in tax breaks for subsidiaries of Worthington Industries, an Associated Press investigation revealed. (A separate panel technically awarded the breaks, but it never refused to do so.)

An attorney for Kasich at the time said the governor had no role in the tax credits.

The state’s top ethics regulator declined to pursue the matter.

“We felt that we were dealing with the suggestion of impropriety and if there was no such impropriety, we shouldn’t leave anything hanging,” said Merom Brachman, chairman of the Ohio Ethics Commission. “We don’t do witch hunts.”

Brachman gave Kasich’s congressional campaign $600 in 1998, and his wife gave $5,000 toward Kasich’s 2014 reelection.

“It had this trajectory of ‘this is going to bring this guy down,’ and it didn’t,” said Daniel McElhatton, former communications director to Ed Fitzgerald, Kasich’s Democratic opponent in 2014. “It was a dog whistle for Democrats and folks on the left, but for average Ohioans it got to be such a complicated thing.”

Kasich touts JobsOhio as central to his economic record. “We privatized our economic development … and we have hired people that actually can talk to businesspeople,” he said Oct. 12 at the No Labels convention.

The first president of JobsOhio was Mark Kvamme. He lasted about a year, and before leaving reached out to The Ohio State University about investing in his new firm. The university — whose trustees are all appointed by the governor and whose president at the time, E. Gordon Gee, served on the JobsOhio board — put $50 million into the firm, despite top officials’ objections, documents obtained by the student newspaper revealed.

This past summer, Kvamme funneled $500,000 to the New Day Independent Media Committee, another group that supports Kasich, through a Montana shell company, the Center for Public Integrity found. And according to The Columbus Dispatch, Kvamme let Kasich use his private jet, at a cost to the Ohio Republican Party of $60,000.

Kvamme’s parents, E. Floyd and Jean Kvamme, each gave the New Day super PAC $100,000. Floyd’s business partner at Kleiner Perkins, Ted Schlein, gave $500,000. Douglas Leone, Kvamme’s former colleague at Sequoia Capital, and his wife each gave $250,000.