Legal News

With or Without Dann, Ohio?s Subprime Work Likely to Continue

By Dan Slater

As John Wayne once said, ‘Life is getting up one more time than you’ve been knocked down.’ — Ohio AG Marc Dann in press release acknowledging an affair with a member of his staff

I go forward with the belief, as others have said, that as human beings, our greatest glory consists not in never falling, but in rising every time we fall. — former NY Governor, Eliot Spitzer, in resignation speech following allegations of an affair with a prostitute

Amid the stand-off between Ohio AG Marc Dann — who on Friday admitted to a “romantic relationship” with a member of his staff — and Democratic leaders such as Governor Ted Strickland, who are calling for his Dann’s head, others are curious about the future of Dann’s crusade to right alleged Wall Street wrongdoing related to subprime mortgages. Click here for a story from the WSJ’s Aaron Lucchetti.

Despite a letter that Strickland & Co. sent to Dann, arguing that he’s lost “even the most remote hope” of continuing to serve effectively as AG, Dann, 46, told his staff yesterday that he was optimistic about plans to stay in office despite an impeachment threat. “I think that there is a great chance that we can continue to do great work for the people of the state.”

Lucchetti writes that, yes, Ohio’s crackdown on Wall Street’s role in the subprime crisis and the role ratings firms is likely to continue, with or without Dann. Any drop-off in speed or intensity could allow other states to take a stronger leadership role. “We have a completely separate investigation,” said Connecticut AG Richard Blumenthal, whose office has subpoenaed more than 20 financial firms. Federal regulators and law-enforcement agencies also are pursuing leads about wrongdoing in the home-purchase process that may have contributed to artificial price inflation.

Dann’s extramarital relationship came to light amid an investigation into sexual harassment in his office that ended in the resignation or termination of three of Dann’s senior aides. In a report produced from the investigation, an alleged victim of the harassment, Cindy Stankowski, said that when one of Dann’s aides took her to Dann’s apartment after a night of drinking, Dann’s scheduler, the woman alleged to have engaged in the affair with Dann, walked into the apartment without knocking in “sweatpants and a T-shirt.” Dann, who is married with children, has declined to identify the subordinate with whom he was romantically involved.

Photo: State of Ohio Attorney General’s Web site

Full post as published by Law Blog - WSJ.com on May 06, 2008 (boomark / email).