IG Report: Dann Used Position To Indulge Himself, Family & Friends

COLUMBUS, Ohio -- Ohio Inspector General Tom Charles’ office released a report on former Attorney General Marc Dann Monday.

NBC 4's Patrick Preston took an immediate look and offered a BOTTOMLINE report.

The IG's report detailed the office's six-month investigation of Dann and offered recommendations.

Ohio's Inspector General recommended independent oversight over the Attorney General's office after a six-month investigation found Dann used his position to indulge himself, his family and his friends.

The report indicated Dann used campaign contributions to pay everyday living expenses, including more than $30,000 in food and beverage purchases and $40,000 for security at his Youngstown-area home.

It went on to say Dann misused state resources, squandered tens of thousands of dollars by issuing expensive Blackberrys to staff and hired people unqualified for their positions based solely on their friendship and loyalty to Dann.

By phone Monday, Dann denied all of the report's claims, saying his actions were entirely lawful and also accused Charles of having a clear bias.

INSPECTOR GENERAL REPORT: Click here to read the IG's report on former Attorney General Marc Dann.

"This office was built for disaster," Charles said. "You wouldn't for a moment stand to work in an office with all the vulgarity and all the goings on and it went on way, way too long."

The report said, "Dann hired into his office a coterie of young women who were dubbed 'The Dannettes.'"

The report also found Dann wasted thousands of dollars by taking a state-owned aircraft for convenience sake.

"The Dann administration used poor administrative judgment and in many cases, showed blatant disregard for the use of public tax dollars," said state Auditor Mary Taylor.

The report said after Dann's election in 2006, Dann incorporated the Marc Dann OAG Transition Corporation, an unregulated nonprofit business, and took in nearly $200,000 in undisclosed donations from a variety of sources.

According to the report, "(Dann) used money donated by campaign contributors as a personal honey pot -- an account that he used to pay his everyday living expenses." This included food, beverages and a home security system. Some of the spending came from undocumented donations given to the non-profit OAG transition account Dann set up.

Monday, less than $9,000 remained in the account.

Among the payoffs:
-$12,000 to Feisty Dishes, a dinnerware sales firm controlled by Alyssa Lenhoff, Dann's wife.
-$9,955 to Lenhoff, deposited in the Danns' personal bank account.
-$5,000 to Anthony Gutierrez for unspecified "consulting" services.
-$9,500 to Progressive Solutions Group, operated by Leo Jennings.

"While these expenditures are not considered illegal, they were misused," Taylor said.

The payments were not publicly disclosed or regulated and the records were obtained by subpoena, Preston reported.

"I do think that we need to look real serious at campaign finance and transition accounts and how somebody in a powerful position can raise that kind of money and spend it," Charles said.

According to the IG's office, Dann may have resigned, but he could still face charges.

Some findings were referred to the Ohio Ethics Commission and the Ohio Elections Commission for possible charges.

In on case, the report suggests Dann's bond be used to recover some of the alleged misused funds, but that bond is only $5,000.

NBC 4 also learned that the alleged violations of campaign finance laws could be misdemeanors. It's an area where the inspector general said the law might need to be changed.

Dann could face serious prosecution from the IRS if the funds from his campaign fund are treated as income and if he failed to report those funds as such.

The IRS said the could not comment on the case or whether there is an investigation.

"I intend to speak out about the unfairness of this particular campaign and about the facts of my term in office," Dann said. "The IG's report is filled with innuendo instead of fact. It's filled with implication instead of legal analysis."

The Ohio Attorney General's office released this statement Monday afternoon:

"The Ohio Attorney General’s office is pleased that the Ohio Inspector General has completed his comprehensive investigation into events and activities stemming from the last administration. The Inspector General’s exhaustive report offers both guidance and closure to this office and to the state of Ohio.

As the Inspector General’s office began its investigation, Attorney General Nancy H. Rogers initiated a thorough review of office practices and policies, benchmarking them against those of other successful organizations. The office enlisted the generous aid and counsel of a bi-partisan, multi-disciplinary advisory committee consisting of accomplished, seasoned professionals and community leaders. Those efforts culminated in a September report from the advisory committee, followed by a final, supplemental report in December.

We are well into the next chapter of this office, dedicated to serving Ohio and helping to meet the challenges facing the state."

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