By Jim Siegel
Enquirer Columbus Bureau
COLUMBUS - Two top associates of state Treasurer Joseph Deters pleaded guilty Tuesday to misdemeanor charges involving campaign fund raising.
The guilty pleas of former Deters chief-of-staff Matthew Borges and former fund-raiser Eric Sagun conclude a year-long investigation by a grand jury in Cuyahoga County that threatened Deters' ambitions to run for attorney general in 2006.
Deters, a former Hamilton County prosecutor and county Republican Party chairman, testified before the grand jury in June and will not face criminal charges, said Thomas Sammon, special Cuyahoga County prosecutor assigned to investigate the case.
Borges, 32, of Columbus pleaded guilty to one count of improper use of public office, a misdemeanor, and was fined $1,000 by Cuyahoga County Common Pleas Judge Eileen Gallagher. Court documents said he gave preferential treatment to certain brokers who made contributions to Deters' re-election campaign.
Sagun, 35, of Columbus pleaded guilty to one count of election law violations and was fined $5,000.
Court documents said he solicited a $50,000 donation from Cleveland broker Frank Gruttadauria in December 2001 for the Hamilton County Republican Party when the two intended the money to benefit Deters' re-election campaign.
At the time, Sagun was raising money for Deters and the Hamilton County Republican Party.
Gruttadauria is in prison for bilking his clients out of $125 million.
He has admitted masking the donation to Deters by running it through the county party's operating fund - a secret account that can accept unlimited, undisclosed donations.
He also admitted to repaying clients and employees $7,000 for donations they made to Deters' campaign.
A statement from Borges' attorneys called the plea agreement "an uneventful conclusion to a 14-month fishing expedition."
They said Borges pleaded guilty to avoid a costly and lengthy trial that would have eventually proved his innocence.
"The notion that our client was ever engaged in bribery or 'pay-to-play' is absurd," the statement said.
Sammon, who worked out the plea agreements, said if Borges is so convinced of his innocence, he should vacate his plea and go to trial.
"He pled guilty and is admitting to the charges," he said. "How is he now saying he only did this for convenience sake?"
SG Cowen Corp. and Lehman Brothers Inc. hired Gruttadauria, and from 1999 to 2001 they did a combined $5.9 billion in investment trades with Deters' office.
"If one reads what (Borges) admitted doing, he used the power of his office to gain favorable treatment for vendors that did business with the office," Sammon said.
"To me, that's a very serious offense."
An attorney for Sagun did not return messages seeking comment.
Deters issued a one-sentence statement.
"I feel badly for Matt and Eric, but I understand why they wanted to bring this matter to an end," Deters said.
Deters has said he expected to be exonerated and predicted that the matter would not affect his chances to become attorney general.
But a Democratic Party official said the court action "has to be damaging" to Deters' hopes of winning statewide office.
"For a man who has aspirations of being attorney general, he should not have been either tolerant or ignorant of the illegal activity of two men who worked so closely with him for many years," said Dan Trevas, spokesman for the Ohio Democratic Party.
Sammon said Deters' actions did not warrant criminal charges.
"I am allowing for the fact that there were times when Matthew Borges' conduct was not as supervised as it perhaps ought to have been," Sammon said.
Ohio Republican Party Chairman Robert Bennett noted that after 14 months, "the best they could come up with are a couple of misdemeanors."
"The treasurer has been vindicated, and the baseless allegations thrown at him throughout the course of this investigation have been proven false," he said.
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