Ohio

Former State Development Director Faces Ethics Questions

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Former Ohio Development Services Agency (DSA) director Jim Leftwich, who was laid off from a new DSA role and resigned from the state’s Third Frontier Advisory Board in early October, must now answer to the Ohio Ethics Commission for a potential conflict of interest. Leftwich allegedly wielded the power of his state positions for personal gain through a private start-up consulting business.

While working for DSA and serving on the Third Frontier board, Leftwich and his firm Viance Partners were also assisting Wright State University with research commercialization efforts, the Dayton Daily News reported. Leftwich did not disclose his contract with Wright State, which pays $20,000 per month. A commercialization model developed by Leftwich and university officials grants Viance Partners a 25 percent stake in any businesses launched from the university’s research.

Leftwich was appointed by Governor John Kasich to the Third Frontier board in August 2012, after he had signed a second consulting contract with the university.

“I believe and maintain that I have adhered to and operated within the policies and procedures existing at WSU and the State of Ohio,” Leftwich told Dayton Business Journal in response to the ethics investigation.

In Wright State e-mails obtained by the Dayton Daily News, Leftwich wrote that the board to which he had just been appointed “can bring 100K into the university to prep each technology for the market and an additional 100K for each start-up to take it to market.”

According to Ohio Ethics Commission executive director Paul Nick, state employees are permitted to consult for other public agencies so long as they disclose their relationships and file the proper forms with their employer and the ethics commission.

Leftwich was appointed to DSA – formerly the Ohio Department of Development – in early 2011 as a replacement for Mark Kvamme, only to leave several months later when Kasich put Kvamme in charge of JobsOhio, the governor’s signature public-private partnership.

Kvamme stepped down from his position as president of JobsOhio this November. Media Trackers has previously reported that JobsOhio faces legal challenges of its own, with liberal lobbying group ProgressOhio alleging Governor Kasich’s approach to job creation is unconstitutional.

In mid-2011, Leftwich was rehired at DSA as an adviser on aerospace issues at the recommendation of Kasich policy chief Wayne Struble. Leftwich worked to build partnerships with companies pursuing development of unmanned aerial vehicles (UAVs) in the Dayton area.

DSA spokeswoman Katie Sabatino told the Dayton Daily News it was an oversight that Leftwich had been classified as an employee instead of a consultant, which led to his departure from DSA in October 2012.

“Neither department leadership nor Mr. Leftwich realized the error, and when we did, we mutually agreed to end his employment, since his work was concluding and to eliminate even the appearance of a conflict with any of his other clients,” Sabatino said.

She added, “After it was discovered, this error was also brought to the attention of the Ohio Ethics Commission. Unfortunately the department employees who oversaw this are no longer with the department or they would likely face disciplinary actions.”

In July 2012, Wright State University lawyer Gwen Mattison noted that Leftwich’s “double-employment” initially raised concerns about “some regulatory or oversight issue regarding [Leftwich’s] role/involvement.” The new contract between Leftwich and Wright State was approved days later.