Secretive and possibly illegal process was used to decide nearly 26,000 challenges to Cuyahoga County property values

Published: Sunday, August 22, 2010, 5:30 AM     Updated: Monday, August 23, 2010, 9:47 AM

Mark Puente, The Plain Dealer
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With Gabriel Baird

CLEVELAND, Ohio -- More than $400 million in property values was wiped from Cuyahoga County's tax rolls without a public hearing in front of boards of revision in a secretive process that may be illegal and does not happen in the state's other urban counties, The Plain Dealer has found.

A newspaper investigation of county records shows that of the 78,000 home and business owners who have formally challenged their tax assessments since March 2007, 17,500 -- including the county prosecutor and four members of the boards -- had their values lowered by one, two or three members of a board without a hearing.

An additional 8,400 taxpayers had their claims rejected without being given a chance to argue their cases.

Based on questions the newspaper raised about the process, three county officials who recently took control of the boards have asked County Prosecutor Bill Mason to determine whether the handling of the nearly 26,000 cases broke the law. The prosecutor plans to issue a decision soon.

In the urban counties of Franklin, Lucas and Summit, boards of revision make all decisions through public hearings. Hamilton County Auditor Dusty Rhodes, who has been in office since 1990, said closed-door decisions violate the law.

"We don't do that stuff," Rhodes said. "There is nothing in the law that would allow you to do that. That . . . sounds to me like something fishy."

Anyone who challenges the value of his property is supposed to get a hearing before one of the boards. But the nearly 26,000 cases uncovered by the newspaper were decided in a process called administrative review. In those cases, one to three board members made decisions without ever talking to taxpayers.

Mason and four board of revision members are among those who received assessment reductions by way of the secretive reviews, the newspaper found. Mason is the only elected county official to get an administrative review. And the paper file for one board member's review has inexplicably disappeared, leaving taxpayers with no way to know who signed off on the reduction.

The discoveries throw into question the fairness of that most fundamental of government duties, the collection of taxes to pay for services. Is everyone paying a fair share? Are the boards of revision cutting property values indiscriminately or fairly? Taxpayers may never know the answer.

Why officials resort to administrative review is unclear. Some county officials suggest they did it for speed, to clear a backlog of cases that delayed decisions for a year or more.

And if county officials decide to offer hearings to everyone who has been denied a reduction in assessments, the result could be a retroactive cut in the tax rolls. That could leave the county facing the financially crippling prospect of refunding millions of tax dollars paid since 2007.

Wayne Lambert, one of the taxpayers whose challenge to an assessment was rejected without a hearing, became furious after learning of the newspaper's findings. Lambert's Pepper Pike house was valued at $1.14 million at the time, but he argued it should be $895,000. The native Texan bashed the way things are done in Ohio, Cuyahoga County and Cleveland. He is not surprised at the newspaper's findings.

"It's the way things are done up here," he said. "It's mind-boggling that things are so screwed up here."

Lambert, like everyone whose appeal was rejected through administrative review, was sent a letter explaining they could appeal to get a full board of revision hearing.

Disclosure of the closed-door decisions follows a series of scandals to hit the boards of revision since June, when a board member was accused of surreptitiously shaving $31,000 from the value of a Mayfield Heights townhouse. Since then, The Plain Dealer has discovered that:

• Board member Tom Bush worked a part-time job for several years as a salesman for a radio station while on county time. He resigned a day after the newspaper questioned him about the conflict. The Sheriff's Office has since launched a criminal investigation.

• Other board members worked less than six hours a day, according to a newspaper analysis of county parking records. The findings prompted deputies to expand their criminal investigation to all board members.

• Board member Brian Day resigned this month after The Plain Dealer asked him about an Ohio attorney general's opinion that says elected municipal officials should not hear taxpayers' complaints. Day is a Parma councilman.

• Someone tried to destroy several hundred tax-related records that could be evidence in criminal investigations. Board officials found the original documents, some of which detailed reductions to home values, in two blue trash cans and called the sheriff.

PD fileCuyahoga County Prosecutor Bill Mason

Investigators seized the discarded records. They also carted away 11 white boxes containing more than 30,000 property tax-related records after learning that The Plain Dealer had reviewed the files as part of a probe into the boards of revision.

Sheriff's deputies turned over the records to the Ohio Bureau of Criminal Identification and Investigation for a wider probe of Auditor Frank Russo, whose office oversees the boards of revision.

Russo and county Commissioner Jimmy Dimora also are at the center of the biggest corruption investigation in the county's history. The federal inquiry, which became public two years ago with raids on the offices and homes of Russo and Dimora, have so far resulted in more than 30 officials and contractors pleading guilty to corruption-related crimes.

Among their many areas of interest, federal and state agents are looking at $21.4 million in contracts that Russo has awarded to V.A.S. Enterprises for commercial and industrial property assessments since 1998, when Russo became auditor.

The auditor and Dimora, however, have not been charged with crimes or identified by name in documents related to the investigations. They remain in office and maintain their innocence.

As the scandal mounted, The Plain Dealer learned earlier this summer about the closed-door decisions by boards of revision and obtained a database containing the records of more than 78,000 taxpayer challenges of property assessments since March 2007.

The database reveals that nearly 26,000 appeals were decided through administrative reviews. County officials reviewed the newspaper's analysis and confirmed the numbers.

"It's a very accurate reflection of the records in the system," co-administrator Marty Murphy said. "It's a very accurate number of records."

Another co-administrator agreed. "I cannot dispute any of your conclusions," Bruce Nimrick said. "Your analysis appears to be complete and accurate based upon the data you were provided."

Of the 8,400 taxpayers whose appeals were rejected without hearings, 2,000 fought back, successfully demanding hearings and winning cuts in their assessments, the records show.

Even when boards held public hearings, however, members rushed to clear cases. A county analysis released Friday shows board hearings typically lasted only six minutes, a fraction of the 20 to 40 minutes that officials said is needed to render fair decisions.

The nearly 26,000 administrative review cases since March 2007 should not be confused with cases in which taxpayers ask for informal reviews of their property values. The auditor's office reappraises all property every three years and comes up with tentative values. The office then notifies taxpayers of the values and gives them a period of time to ask for informal reviews. Once that period is over, values are set, and the only way to get them changed is through an appeal to a board of revision.

Political watchdog Catherine Turcer, who runs the Columbus-based Ohio Citizen Action, said taxpayers and school districts are being cheated out of money with the closed-door decisions by the boards of revision.

"We need to have trust and faith in the valuations," Turcer said. "You have to wonder if special favors are given out. It's horrifying to know that the hearings have been behind closed doors."

Why board members chose administrative reviews is not clear, but officials overseeing the office suggest one reason was expedience. The county has a backlog of thousands of taxpayer appeals, forcing some people to wait a year or more to get decisions. Nothing suggests the majority of taxpayers asked for special treatment.

Mason says he didn't. He received a $93,200 reduction on the assessment of his Seven Hills home. The prosecutor said he filed for a public hearing, following the same procedure available to all taxpayers, but never was called before a board. Instead, he said, he received a letter informing him of the reduction.

Michael Dembowski wanted to cut less than $5,000 off the $94,700 value of his Parma home, but he was rejected without a hearing. He said he should have been given a chance to make his case.

"It's worth even less now," he said. "I feel like I'm getting ripped off on my taxes."

Edward Whatley of University Heights is not surprised at anything done by Cuyahoga County government. The boards of revision rejected a 2008 complaint for his home.

"What do you expect from this government?" he asked. "We have to wonder if they are paying their fair share. This whole system needs to be fixed."