City clears Koran of wrongdoing
By Jennifer Mitchell
Rocky River
Published July 26, 2006

City Law Director Andrew Bemer said an investigation shows that a recent business purchase by Kory Koran, the city’s economic development director, was above board, despite recent scuttlebutt.

Koran paid $150,000 in May for the 1,750-square-foot vacant Doruntina’s Deli on Lake Road. In 2004, the man who sold it to him, Hidajet Jasarevie, paid $400,000.

Kory Koran

A July 11 article published in the The Plain Dealer, “Official’s property purchase raises conflict issue: Rocky River mayor considers restrictions” brought the purchase to light and raised several questions regarding the ethics of such a transaction.

Mayor Pamela Bobst then asked Bemer to investigate whether the purchase was made within the confines of Ohio ethics law.

The law specifically says whether elected or appointed to office, or an employee, those involved in government cannot personally benefit from inside information gleaned through their position. The sale was listed on the publicly available city Web site under vacant properties listings, which is how Koran said he learned of it.

When Koran discovered the property, it was listed at $175,000, real estate records show.

As part of the investigation, Bemer got in touch with real estate agent Brian Kirk, with Remax Pro of Westlake. According to Bemer’s report, Kirk contacted City Hall first after reading the July 11 Plain Dealer article “as he did not believe it fairly reported the circumstances of the sale.”

Prior to Koran’s interest in the property, Kirk said he had another potential buyer, who was going to pay $150,000 for the property. Jasarevie, the former owner, was trying to “liquidate his holdings and return to Eastern Europe.”

The original bidder signed a contract for the property in February, but it was dissolved when he had difficulties securing financing. Soon after, Koran also offered $150,000.

Kirk told Bemer that “$150,000 was a fair and reasonable price.”

Bemer also spoke with the listing agent, Sead Dizdarevic, in the course of the investigation. Dizdarevic confirmed that Jasarevie had returned to Bosnia. He also said that Koran’s purchase price of $150,000 was reasonable and said he had provided much more information to the Plain Dealer on the purchase and “did not believe the article accurately reflected the information presented about the true nature of this transaction.”

Based on his talks with both real estate agents, Koran, and the person who signed the original purchase contract for $150,000, Bemer said, “I have no doubt that no improper actions were taken by Kory Koran concerning the purchase of this property.”

Bemer said the sale price reached by the seller and Koran was done at arms’ length and at a fair and reasonable price.

“I do not find that Mr. Koran used the position of his office as economic development director to gain a personal advantage in this transaction,” Bemer wrote. “This sale was considered a distressed sale as the seller was liquidating his holdings and returning to Europe.”

Bobst said she was happy that Bemer proceeded with the investigation so soon after her request.  On July 17, she and Bemer sent a memo on the state ethics policy to all employees, as well as a copy of the city’s newly adopted hiring policy.

Former Mayor William Knoble was prosecuted earlier this year for hiring his son and brother at the city-operated wastewater treatment plant.

The Cuyahoga County court ruled that the hirings were a violation of Ohio ethics law. As part of a plea deal, Knoble resigned from the office of mayor.

Bobst, appointed in Knoble’s stead, has worked with council on efforts to make the law clear to all city employees and appointed officials.

“I think Bemer did a review of the salient aspects of the transaction and arrived at the conclusion that there had not been any influence used,” Bobst said. “I feel very comfortable with his review.”