CINCINNATI — Almost exactly two years ago, Cincinnati City Council voted to ban campaign donations from developers who had business currently before council.
The reform was meant to restore public trust after a “culture of corruption,” haunted City Hall. The FBI arrested three council members in 2020 on bribery schemes for trading votes on development deals for cash, a private plane trip to Miami, or campaign donations.
"It is a substantive reform. It is the first reform of its kind that we've seen here in generations,” then council member Steve Goodin said before the Oct. 27, 2021 vote.
But that new rule didn’t apply to the one of the biggest business deals in Cincinnati’s history that happened in this election cycle.
Voters decided on Tuesday to sell the Cincinnati Southern Railway for $1.6 billion to Norfolk Southern Corp. and use the money to improve aging infrastructure such as fire houses and recreation centers.
The WCPO 9 I-Team has been following the money on Issue 22 since Mayor Aftab Pureval first denied, and then admitted, that his campaign treasurer Jens Sutmoller ran the campaign in favor of the railway sale. The sell the railway campaign also shared the same media strategist as Friends of Aftab Pureval.
Next the I-Team examined why the $4.25 million that Northern Southern donated to the railway sale campaign, as of Oct. 24, apparently did not violate the new anti-corruption ordinance at City Hall. The railway was the only contributor.
The stakes seemed huge in August when City Council voted to place the railroad sale on the November ballot. Councilman Scotty Johnson called it a “generational decision.”
“This is the most important vote and decision that you will make as council members,” Pureval said at an August 2 council meeting.
But it wasn’t enough to trigger the historic rule that City Council passed in 2021, to ensure that projects were selected on merit, not money.
University of Cincinnati political science professor David Niven said the “Yes on 22” ballot issue reveals a blind spot in rules that were written to keep developers from writing a check and having undue influence.
“In that sense it is a different equation. But the reality is that issue campaigns can be very important, they can be very consequential,” Niven said. “We probably have undervalued how important it is to put rules in place to keep those as above board as possible.”
The 2021 rule bans the mayor and city council from accepting campaign donations from people who have “a financial interest in city business,” if that business requires a vote by city council to move forward.
Pureval urged council to support the sale of Cincinnati Southern Railway: “I don’t like Norfolk Southern any more than you do. But if you want nothing to do with Norfolk Southern, then we have to sell.”
Thirteen days before that vote, on July 21, Norfolk Southern donated $2 million to fund the Build Cincinnati’s Future campaign promoting the railway sale. It added a $1.5 million contribution 12 days later on Aug. 15.
When WCPO questioned whether Pureval personally benefited from that television exposure he replied, “Being on TV is of course a benefit to all politicians. But that is not the, um, that is not why I’m doing this.”
Commercials promoting the railway sale stopped featuring Pureval three weeks ago, after a WCPO 9 I-Team investigation found connections between campaigns for the sale and Pureval's re-election.
A city spokesman said the 2021 rule passed by council with much fanfare, didn’t apply to Norfolk Southern’s contributions because the vote was ministerial only.
“The Cincinnati Southern Railway Board voted to sell this asset and established the date to submit that sale to the electorate … The city council lacked legal authority to formally approve or deny it,” said city spokesperson Mollie Lair.
Issue campaigns can sometimes fall between the cracks of these rules, Niven said, because you can’t bribe an issue.
“You can’t improperly influence Issue 22. It doesn’t matter much money you give it, you can’t change its mind,” Niven said. "It’s an issue. It happens or it doesn’t happen. Whereas a candidate obviously can be influenced by campaign contributions and that’s really the purpose of having campaign finance rules in the first place.”
Rail critic Todd Zinser asked the Ohio Elections Commission to determine if Norfolk Southern made an improper contribution by paying for ads starring the mayor. The commission will review Zinser’s complaint at its Dec. 14 meeting, said Christopher Hughes, administrative assistant.
“If you were designing campaign finance rules knowing that this kind of question would come up in the future, you would absolutely say ‘well we can’t have the entity that wants this passed and will benefit from it in massive economic ways, we can’t have them funding the campaign exclusively,’” Niven said. “There’s something wrong with that. And of course, there is no entity that makes the same profit if it fails to fund the other side.’”
The city answered several I-Team questions via email about the enforcement of its 2021 rule banning campaign contributions from people with business deals pending at City Hall.
Here are excerpts from that conversation between I-Team reporter Dan Monk and city spokesperson Mollie Lair:
I-Team questions:
I’d like to know if Norfolk Southern has ever appeared on the “city business list” or the “temporary prohibition list,” both of which are required to be maintained by the city so the public can view which “financially interested persons” have business before city council.
Under the city’s regulations for this program, sales of city property worth at least $200,000 are required to be on the city business list if “project-specific city council approval is required for administration to proceed.”
I don’t see a specific exclusion for actions of the Cincinnati Southern Railway board in city regulations. Can you tell me why the $1.6 billion sale, which required a vote of council to place before voters and is yet to be finalized, is not considered city business?
City response:
Norfolk Southern is not listed on either the City Business List [cincinnati-oh.gov] or the Temporary Prohibition List [cincinnati-oh.gov].
As you indicated in your email, those lists indicate the “Financially Interested Persons” that have business before City Council. The City Business List Procedures, Rules & Regs further indicate that “requests or applications do not constitute City Business if no project-specific City Council approval is required for the City Administration to proceed.”
The sale of the railroad to Norfolk Southern is unique in that regard. The Cincinnati Southern Railway Board retains ownership of this asset for the benefit of the City. The Cincinnati Southern Railway Board voted to sell this asset and established the date to submit that sale to the electorate.
To be clear, the City Council only performed the ministerial function of certifying the Cincinnati Southern Railway Board’s resolution. The City Council lacked legal authority to formally approve or deny it. This situation reflects the structural separation between the assets controlled by City Council and the assets controlled by the Cincinnati Southern Railway Board. In summary, the voters of Cincinnati will decide whether to approve the Board’s proposed sale.
I-Team questions:
Can you tell me who made the determination that council’s vote was ‘ministerial’ only? The word does not appear in the ordinance or the rules drafted by administration. If that’s a conclusion reached in a legal opinion (or any other city document), can you please provide a copy?
City Response:
The State legislature prescribed the entire sale process in House Bill 23 (codified as R.C. 746.02 [codes.ohio.gov]). It gives City Council a very limited role.
Part (B)(1) says, "[t]he legislative authority of the municipal corporation, upon receiving a copy of the resolution, shall certify the resolution to the board of elections not less than ninety days before the date of the election specified in the resolution."
We chose the word "ministerial" to answer your question. This process is akin to the "ministerial" role [wvxu.org] that City Council performs for citizen led referendums, like Issue 24.
