10/16/1996
by Bob Fitrakis
As former Sheriff Earl Smith sees it, “That guy in the other paper missed the whole point….I wasn’t obsessed with pornography, we had a health problem, an AIDS epidemic. And when we tried to close the bookstores we ran right into organized crime.”
Referring to a recent front-page article in a local weekly, Smith-who is once again facing off against Karnes for the sheriff’s post-says he doesn’t much care whether people watch triple X videos or read dirty magazines, but he hates the illegal “drugs and prostitution” and money laundering that seem to accompany the porn industry. Of course, the money laundering he loathes isn’t by organized crime, but by the campaign manager for now-Sheriff Jim Karnes’ 1992 campaign.
Greg Kostelac, a local attorney and then a member of the Ohio Elections Commission, claims for the record that he did nothing illegal. But the courts may decide that question. Kostelac apparently took porn money that can be tied directly to organized crime in Cleveland and gave it to the Franklin County Democratic Party. Here’s the rest of the story.
In 1990, then-Sheriff Smith busted an adult bookstore in New Rome. According to Smith, documents seized in the arrest linked local porn czar Mark Wolfe to Ruben Sternum, the mob’s guy in Cleveland: Wolfe had sent a $100,000 check to help post bond for Sternum.
Now comes the 1992 elections. Payback time for the big bad Wolfe. In the waning days of the hotly contested Smith-Karnes race, Wolfe, with the aid of his brother Tom and employee Mark Long, reportedly gave money to six trusted acquaintances: Daryl Castle, Herbert Rogers, Cynthia DeSantis, Joanna Demas, Walt Erwin, and William Joyner.
On October 26, Long, Castle, and Demas wrote $2,000 checks to the Franklin County Democratic Party; one day later Erwin, Joyner, Rogers and DeSantis also each wrote $2,000 checks to the Party. Clean, freshly scrubbed porn money.
The last-minute influx of the $14,000 into Dem coffers set off a heated battle over the money. Current Democratic Party Chair Denny White was running for county recorder that year and his campaign staffers wanted some of the money; Tom Erney and Rob Lidle lobbied hard for a cut for Denny. But to no avail. The Dems, under the leadership of Fran Ryan, “loaned” the Karnes campaign $8,000 on October 30.
Ryan supposedly put the remaining $6,000 into the coordinated campaign effort for all candidates. Kostelac says that $2,200 went into an ad buy at This Week newspapers. The ad was a letter from the Fraternal Order of Police attacking Smith and promoting Karnes.
Kostelac has admitted that the $8,000 loan was used to mass-reproduce copies of Marty Yant’s Columbus Alive! article “Tin Star Tyrants.” At the time, Kostelac was serving as Yant’s attorney in a federal bankruptcy case. On November 23, 1992, after Karnes’ narrow victory, the Franklin County Democratic Party paid him $6,000 for “expenses” reportedly for working on the campaigns of White, Linda Evans, Patrick O’Reilly and other Democrats.
The problem is, Kostelac may not have worked on these campaigns. When Linda Evans was asked what Kostelac did for her Clerk of Courts campaign in 1992, she replied, “Nothing.” White has also stated that Kostelac did not work for his campaign, but says that Kostelac may have had some “arrangement” with Ryan, who paid him. “I just don’t know. It was before my tenure as chair,” White said.
However, it’s an open secret that White staffers exploded when they found out about Kostelac’s expense check. This, in part, may have led to Ryan’s hasty resignation as party chair and White’s ascension. White says no; other party members say yes.
Smith claims that he asked White about the money laundering and White confirmed it, yet refuses to provide the documents “without a subpoena.” White says that Smith called him “over a year-and-a-half ago” and “while I’ve pledged to cooperate with any government agency investigating the party’s activities, I wasn’t going to let Earl Smith go fishing in the Democratic Party files.”
Wise decision. Seems Smith is out to catch the “big one.” And he’s got some questions he’d like answered. “Where did the $6,000 go? Was it income for Greg Kostelac? Was it reported to the IRS? Was it given to Marty Yant for writing the story?” Kostelac says no money went to Yant and everything else was perfectly legal.
Well not quite everything. Cindy DeSantis admits to “doing a favor” for her friend Mark Long, who provided $2,000 in “cash” to be laundered to the Democratic Party. Long, now deceased, had worked for Mark Wolfe. Dr. Joanna Demas admits that Mark Wolfe’s brother “Tom gave me the majority of the money…maybe I was naive.”
And perhaps so was Kostelac, who made the mistake of telling his new running buddy, Terry Casey of Republican Party fame, the naked truth about the porn cash.