Ted Cruz ad revisits a controversy from Kasich’s governorship of Ohio

Presidential candidate Ted Cruz’s campaign came out swinging directly at rival John Kasich for the first time in a TV ad. The attack ads are getting more direct, as the delegates in contention dwindle.

This ad presents a series of facts to suggest that Kasich, as governor of Ohio, orchestrated shady deals to benefit his friends and campaign funders.

"Right before John Kasich was governor, he collected $611,000 from a Fortune 500 corporation," the ad says. "After Kasich became governor, that same company received $619 grand in state tax breaks for job creation. But last year, the company laid off 100 Ohioans, even as its CEO cut a half-million-dollar check to Kasich’s super PAC. John Kasich, not for us."

To find out whether it’s fact or fiction, let’s take each allegation one at a time.

Kasich took money from a Fortune 500 company

According to news reports, in 2001 after leaving Congress, Kasich joined the board of directors of Worthington Industries, an Ohio steel processor and Fortune 500 company. Security and Exchange Commission filings show that Worthington board members were paid $45,000 per year as a retainer, and $1,500 per meeting attended. Worthington also reimbursed board members for travel expenses and other out-of-pocket costs.

The Canton Repository reported that Kasich quit the Worthington board upon winning the governor’s race in 2010, but was still owed deferred compensation from the board. Kasich received $611,000 total in deferred compensation from Worthington, and at least $103,000 of the total came after he had been sworn in as governor.

That same company received $619,000 in tax breaks after Kasich took office

In the first bill he signed as governor, Kasich made good on a campaign promise to attract investment to Ohio. He nixed the Ohio Department of Development and created a private, nonprofit corporation called JobsOhio, explaining that in order to lure companies to the state, government needed to "move at the speed of business."  

Kasich designed JobsOhio to be funded by a lease on state liquor profits. He declared it exempt from public records requirements and state audits. And he made board appointments for JobsOhio a responsibility of the governor.  

To drum up job creation, JobsOhio reviews potential opportunities to offer incentives such as tax breaks, and sends its recommendations to the Ohio Tax Credit Authority for final determination. The tax credit authority has a five-member board, and three of its appointees, including the chair, are Kasich’s.

An Associated Press investigation found that, less than a year after JobsOhio was created, it recommended a series of tax incentives totalling $619,000 for Worthington Industries’ subsidiaries, which the state tax credit board awarded.

Last year, the company laid off 100 Ohioans

In March 2015, Worthington announced it was cutting 555 jobs nationwide, which included 115 in Ohio. The company blamed the loss of these jobs --manufacturing cabs for large agricultural and mining equipment -- on industry-wide downturns.

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Worthington spokeswoman Cathy Lyttle told the Canton Repository that any incentives the company receives are only paid when the company delivers the jobs it promised. She said that pursuing tax incentives is standard business practice, and Worthington received $400,000 in tax breaks under the previous, Democratic regime of governor Ted Strickland.

Company’s CEO donates half-million to Kasich’s presidential bid

The Center for Responsive Politics confirms a $500,000 contribution from Worthington CEO John P. McConnell to the New Day 2016 PAC, via Internal Revenue Service records released November 30, 2015.

Several of Kasich's board appointees stepped up with campaign donations as well. OpenSecrets.org shows that the wife of ethics committee chairman Merom Brachman, Judith, gave the maximum donation to Kasich’s campaign, $2,700, in August 2015. John C. Boland, the chair of JobsOhio, donated the $2,700 max to Kasich in July 2015. JobsOhio board member Gary R. Heminger and his wife, Jane, each donated $2,700 to Kasich on the same day in October 2015. JobsOhio board member Lawrence J. Kidd and his wife, Cindy, each donated $2,700 to Kasich on the same day in August 2015.

All together now

Cruz’s attack ad parrots a complaint filed with the Ohio Ethics Commission by Kasich’s Democratic challenger in the 2014 election, Ed FitzGerald.

The ethics commission passed on investigating FitzGerald’s complaint. Chairman Brachman, who, like the other commissioners, was appointed by the governor, said that Kasich had provided enough information to conclusively rule out any conflict of interest. He added that actions by JobsOhio are not subject to the authority of the ethics commission.

Rob Nichols, Kasich’s spokesman, dismissed this Cruz ad as a "one-hit wonder" that only ran briefly in Wisconsin and is no longer airing.

The ad’s "four accurate, provable data points," aren’t in dispute, Nichols said. But he has a beef with the insinuation that any of the described actions were wrong, or even out of the ordinary.

"They didn’t say, ‘The governor’s corrupt,’ because that you could fact-check," Nichols said. "Everything there is 100 percent, entirely above-board, but when you say it with a snarly voice over scary music, people think it’s inappropriate."

Our ruling

Cruz’s attack ad links a series of headlines to suggest that as governor, Kasich rewarded his former business ties in exchange for political contributions.

The ad’s tone is ominous, but the text is factual. What isn’t explained is that everything in the ad has been the subject of prior complaints that did not provoke any regulatory action.

It’s been suggested that an overhaul of state rules might prevent similar situations from arising, and similar allegations from dogging Ohio leaders. But that’s a different ad, for another day.

We rate these claims Mostly True.