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A Project of The Annenberg Public Policy Center

Mandel’s Deceptive Defense Against Sen. Brown

The campaign of Republican Senate candidate Josh Mandel of Ohio is fighting back against “negative ads” from Democratic Sen. Sherrod Brown with one of its very own. But it’s one that makes several inaccurate claims:

  • The ad claims that Brown “gave huge bonuses to executives.” That’s not true. Brown actually voted to ban bonuses to top executives at companies that received bank bailout funds, but that prohibition was removed in House-Senate negotiations before the final stimulus bill became law.
  • The ad also claims that Brown “sent billions of our tax dollars to foreign countries.” That’s not right, either. It’s true that foreign companies received billions in stimulus money intended to support the renewable energy industry. But it was the Energy Department and Treasury Department that were tasked with overseeing the grants program, not Brown. And the stimulus money often went to the American subsidiaries of those foreign companies.

Half of the 30-second ad, called “Change,” is spent attacking Brown, the incumbent Democratic senator. The other half is spent touting the record of Mandel, Ohio’s Republican treasurer.

A Bogus Bonus Claim

The Mandel ad claims that Brown “gave huge bonuses to executives.”

To support that claim, the ad cites a March 17, 2009, New York Times article that said the American International Group paid out $165 million in bonuses to 418 of its employees. But that article didn’t mention Brown having anything to do with the bonuses.

Additional backup provided by the campaign cites a Fox Business article from March 17, 2009, that said that the American Recovery and Reinvestment Act, also known as the stimulus, allowed firms like AIG, which had received funds through the Troubled Asset Relief Program, to give out executive bonuses that had been agreed on prior to the bill becoming law. That’s true, but as we’ve written before, the law “didn’t give out any bonuses — it just didn’t prevent as many of them as it could have.”

The Senate-passed version of the stimulus bill that Brown voted for would have forbidden any firm that had received funds from TARP from giving out bonuses to top executives. But the White House and the Treasury Department wanted softer language, citing practical and legal concerns. As a result, the final version of the bill was amended to only forbid bonuses that were obligated after Feb. 11, 2009.

Brown did vote for the final version of the stimulus bill, but it wasn’t actually a vote to give “huge bonuses to executives.” In fact, Brown sponsored legislation in February 2010 (which was not enacted) that would have placed a 50 percent tax on bonuses of more than $25,000 that were awarded to executives at firms that received TARP funds.

A Phony Foreign Attack

Mandel’s ad also claims that Brown “sent billions of our tax dollars to foreign countries.”

The ad cites a Sept. 9, 2010, article in the Washington Times that said the Department of Energy had acknowledged that “as much as 80 percent of some green programs, including $2.3 billion of manufacturing tax credits, went to foreign firms that employed workers primarily in countries including China, South Korea and Spain, rather than in the United States.” That story also referred to reporting done by Russ Choma, then of the American University’s Investigative Reporting Workshop. In February 2010, Choma wrote that more than 79 percent of the first $2.1 billion in stimulus grants to wind energy companies went to foreign firms. Choma provided updated figures later that year that showed that 54 percent of about $4.4 billion in stimulus grants for wind farms went to foreign developers.

But it’s highly misleading to claim that Brown “sent billions of our tax dollars to foreign countries.” While Brown voted for the stimulus act, he was not making the decisions on how the money would be spent. It was the Department of Energy and the Department of Treasury that were responsible for awarding the grants for energy programs. What the ad also doesn’t mention is that, in some instances, the money went to the American subsidiaries of the foreign firms.

In addition, after the Investigative Reporting Workshop released its report back in February 2010, Brown was actually one of the senators who called for the Obama administration to indefinitely suspend the program in order to make changes to the law so that stimulus funds went to “clean-energy projects that rely on materials manufactured in the United States and create the bulk of their jobs here at home, rather than overseas.”

Other Overblown Claims

The ad claims that Brown “cast the deciding vote on the government takeover of health care.” That, of course, is a reference to the Affordable Care Act, which became law in March 2010.

It’s true that Brown voted for the bill that would eventually become law. But, as we’ve said on numerous occasions, it is wrong to call it a “government takeover of health care.” The law does expand existing programs such as Medicaid. It also establishes new subsidies and imposes additional regulations on health insurance companies. But there was no actual “public option,” or government-sponsored health care plan, included in the final version of the law. It further builds on the current system of private insurance and creates more business for private insurance companies by requiring most individuals to obtain health insurance.

The ad then goes on to tout some of Mandel’s accomplishments as state treasurer, saying, for example, that he “earned the highest possible credit ratings as state treasurer.” That could give viewers the impression that Mandel improved the state’s credit ratings, but that is not the case. Under Mandel, the state’s STAR Ohio investment fund has maintained its “AAA” rating from Standard & Poor’s. But even the state treasurer’s office acknowledges that the fund has had that same rating since 1995.

About Those ‘Negative Ads’ from Brown

The ad from the Mandel campaign begins by referring to “negative ads” being run by the Brown campaign. “What is 37-year politician Sherrod Brown hiding with his negative ads?” the narrator asks.

The Brown campaign has released two attack ads of its own against Mandel. But those attacks have been factually accurate ones.

On May 10, the Brown campaign released the ad “Meetings,” accusing Mandel of missing several meetings of a state investment board that he chairs.

“January 26. State Treasurer Josh Mandel misses his 13th straight meeting of the investment board he chairs,” the narrator says. “He’s in D.C. raising money for his Senate campaign.” That’s true.

The Associated Press reported on Jan. 26 that Mandel missed a meeting of the Ohio Board of Deposit, which determines which banks hold state money, because he was attending a $500-a-plate breakfast fundraiser in Washington, D.C., for his Senate campaign. It was the 13th consecutive meeting that Mandel did not attend.

Mandel finally attended a board meeting on March 21. His office has said that Mandel sends other members of his staff  — usually his chief financial officer — to represent him at the meetings when he does not attend.

The Associated Press article said that sending a designee “has been common practice” among the state’s most recent treasurers, but that Mandel had been “unique for not attending a single meeting” before March.

Before the release of that ad, the Brown campaign launched another, called “How to Succeed,” on April 27, accusing Mandel of appointing his friends and political allies to well-paying posts in the treasurer’s office. That’s also true, according to local news reports.

“How to succeed in the state treasurer’s office without really being qualified?” the narrator asks. “Get to know Josh Mandel. ”

The Dayton Daily News reported on March 31 that Mandel “put qualified, experienced staff members in some top positions, but also hired six campaign workers whose average age is 26 and assigned them duties ranging from debt management to policy-advising to community outreach.”

Mandel chose 27-year-old Michael Lord, his former campaign manager and legislative aide, to be his new senior policy adviser; 26-year-old Joe Aquilino, his former campaign political director, to be the state’s new director of debt management; and 33-year-old Seth Metcalf, his former student government campaign manager at Ohio State University, to be his general counsel. The ad highlights the salaries of Lord, Aquilino and Metcalf, who made $100,000, $90,000 and $150,000, respectively, according to the Daily News report.

Prior to becoming state treasurer, Mandel had promised to “ensure that my staff is comprised of qualified financial professionals — rather than political cronies and friends — and that investment decisions are based on what is best for Ohioans.”

— D’Angelo Gore