(The Center Square) – An Ohio judge Monday removed a township’s fiscal officer for trying to invest $10 million in taxpayer funds in gold coins without approval from the township’s trustees.
The Miami Township fiscal officer, Robert Matthews, who was elected by voters, was dubbed “King Midas” by Ohio General Attorney Dave Yost in a news release.
“He overstepped his authority by a mile, playing King Midas with money that didn’t belong to him,” Yost said in a statement. “Miami Township deserves dependable elected officials who operate within the bounds of the law.”
A year ago, Matthews withdrew $9.7 million from one of the township’s investment accounts, Yost said. He planned to invest the funds in gold coins, which would have cost the township $380,000 in transactions and fees and $32,000 each year for storage. The bank alerted the township’s finance director, who blocked the transaction, Yost said.
Under Ohio law, township fiscal officers can only perform financial clerical work, Yost said. At least two trustees must approve spending of township funds in addition to the fiscal officer.
“Essentially, the duties of the fiscal officer are ministerial and administrative,” the judge in the case ruled Monday.
In addition, the township has a five-member investment oversight committee which sets guidelines on investments of the township’s money.
The guidelines specifically authorized investments such as government securities and certificates of deposits. Gold is not on the list of approved investments.
Matthews was “aware of terms of the Investment Policy since he was then a Trustee and approved its adoption,” the judge ruled.
Matthews claimed that $50 American Eagle 1 oz. gold coins were allowed under the policy as a “U.S. Treasury Obligations.”
The judge disagreed.
“The value of the coin is not based on its face value and backed by the full faith and credit of the U.S. government,” the judge wrote.
Its value is instead based on the market price of the gold.
“How else could you explain paying $3,000 for a $50 face value coin?” the judge asked in his ruling.
Instead, it was a “derivative investment,” which is clearly prohibited in the township investment policy, the judge said.
Earlier this year, the U.S. Supreme Court refused to hear an appeal by Miami Township over a $45 million civil judgment against a former township police detective for his part in the wrongful conviction of a man for rape. The man spent 20 years in prison before he was cleared.
The township claimed it had immunity from the civil judgement but, the Sixth U.S. Circuit Court of Appeals ruled against the city last year and the U.S. Supreme Court, without comment, refused to review the lower court decision.
