THE BURNED OVER DISTRICT

The Toledo Blade brings out the latest fun details in Ohios' continuing Coin-Gate scandal, including the beginning of the scapegoating.

The investment scandal at the Ohio Bureau of Workers’ Compensation escalated yesterday as Gov. Bob Taft purged one of his high-ranking employees for keeping him out of the loop about a $215 million loss in the months leading to the presidential election.

Yesterday was James Samuel’s final day in the governor’s office, said Mark Rickel, Mr. Taft’s press secretary.

Mr. Samuel, who in July, 2003, joined the governor’s office as an executive assistant for business and industry after working eight years for the bureau, is being demoted to a post in the taxation department. He’ll work on tax amnesty programs, with his salary trimmed from $80,000 to $76,000, Mr. Rickel said.

Oh! The cruelty of it all!

As Mr. Taft demoted Mr. Samuel, bureau officials confirmed that one of its investment analysts served as director of events for the Bush-Cheney re-election campaign last year in Ohio.

Jeremy Jackson, the bureau’s press secretary, said he believed that the employee, John Scharer, began working for the bureau early last year, resigned, and then was rehired by the bureau in January.

“It is our understanding that his activity was with the Bush-Cheney campaign when he was not an employee with the Ohio Bureau of Workers’ Compensation,” Mr. Jackson said.

Mr. Jackson said he did not know if the bureau — which has denied that politics played any role in its decision to invest in Mr. Noe’s Capital Coin funds or in the hiring of other fund managers who have contributed to GOP officeholders, including President Bush — had any rules pertaining to political activity by employees.

And out in San Diego we learn that the FBI has become interested in CunningScam.

The FBI has opened an inquiry into Rep. Randy "Duke" Cunningham's 2003 sale of his Del Mar house to a defense contractor, who later sold it at a $700,000 loss, a Justice Department official said yesterday.

The action comes amid fresh signs of unusual personal ties between Cunningham and the defense contractor, who named a 42-foot yacht after the Rancho Santa Fe Republican and turned it over to him to use while in Washington.

The Justice Department official, who spoke on the condition that he not be identified because of the inquiry's preliminary nature, would not comment about its scope. However, the head of the FBI office in San Diego had reflected the agency's curiosity a day earlier.

"We are very interested in what has been reported to date, and we welcome more information," Dan Dzwilewski, special agent in charge of the FBI's San Diego office, said Wednesday. "Public corruption matters represent one of the highest priorities of the FBI."

Cunningham has portrayed the house deal as "aboveboard," although ethics experts and real estate professionals have said the procedures used in the transaction and its result – an apparent $700,000 windfall to Cunningham – raise serious questions.

Cunningham denied that he is a particularly good friend of MZM owner Mitchell Wade, saying last week, "No more than I am with (Qualcomm founder) Irwin Jacobs or (Titan Corp. founder) Gene Ray or any of the other CEOs."

However, Cunningham has been living aboard a 42-foot yacht at the Capital Yacht Club along the banks of the Potomac River. Wade owns the yacht, named the Duke-Stir, according to U.S. Coast Guard records. The name appears to be a play on Cunningham's nickname.

Cunningham previously lived in the same slip aboard a 65-foot yacht called the Kelly C. Coast Guard records list Cunningham as the owner of the Kelly C.

In 1998, when Cunningham was living aboard the Kelly C, he used his position on the defense appropriations subcommittee, which oversees the District of Columbia's budget, to earmark $3 million to refurbish the waterfront where the yacht was docked.

Randy really needed some lessons on keeping "stuff" at arms length.