JobsOhio President and Chief Investment Officer John Minor Jr. announced the refund in tandem with answering Auditor Dave Yost's subpoena for access to the private side of the nonprofit's books. JobsOhio, state legislative leaders and the Kasich administration argue the records aren't public.
"The Auditor's assertion that he can audit any private company, nonprofit, or charity that receives public funds will scare off new job creators and cripple economic development in our state," Minor said. "The General Assembly recognized the need for a private-sector approach to economic development when it created JobsOhio, but if there's still any confusion then we believe it should be resolved immediately."
Ohio House Speaker William Batchelder, a Medina Republican, said settling the dispute with Yost may require legal action.
He said the language "couldn't be any clearer" that JobsOhio is a private corporation not subject to standard state audits. Batchelder called Yost's statements on the issue wrong and "downright frightening."
"I'm just totally blown away by this," Batchelder said. "I presume that if he is upheld then we are going to have difficulty having JobsOhio operate."
Yost spokeswoman Carrie Bartunek said documents subpoenaed March 6 after JobsOhio failed to volunteer them were hand-delivered around 10 a.m. Tuesday. She said Yost doesn't intend to release any of the materials until his audit is complete.
JobsOhio was created in 2011 after being spearheaded by Kasich to replace the bureaucracy at the former Ohio Department of Development and "move at the speed of business." JobsOhio received $1 million in taxpayer dollars to start and recently offered $1.5 billion in bonds backed by its long-term rights to Ohio's liquor business.
Kasich spokesman Rob Nichols blasted Yost, Kasich's fellow Republican, for hobbling the pace of JobsOhio's work.
"The auditor's attempt to re-write the law to make JobsOhio a slow, bureaucratic public body again will kill JobsOhio and itsjob creation efforts," Nichols said.
Yost didn't appear Tuesday before reporters gathered at his office, instead issuing a statement.
"Gov. John Kasich and I share a love for this great state and a passion to see a vibrant private sector creating jobs," the statement said. "JobsOhio has already achieved great success in bringing jobs to our state, and I expect that momentum to continue."
Betty Montgomery, a former state auditor and attorney general, told The Associated Press on Tuesday that she believes Yost is overreaching — and has told him as much.
"Never has a General Assembly had a legislative intent to have the Auditor of State capable of auditing the private funds of private nonprofits or private companies," said Montgomery, a Republican who held statewide office from 1995 to 2007.
Yost cites state law that says the auditor "may audit the accounts of private institutions, associations, boards, and corporations receiving public money for their use and may require of them annual reports in such form as the auditor of state prescribes."
Brian Rothenberg, executive director of the liberal policy group ProgressOhio, said he suspects JobsOhio is returning its initial $1 million grant to make its books fully private and avoid future scrutiny. ProgressOhio and two Democratic state lawmakers have a pending lawsuit challenging the constitutionality of JobsOhio's funding structure.
"They're using proceeds of public money to pay back public money that the governor himself said should be audited and subject to audit," Rothenberg said. "This is a real-world example of why JobsOhio is unconstitutional because the mix of public and private money is way too cozy and reeks of partisanship."
Democratic lawmakers are angry that the state turned over about $5 million formerly overseen by the Ohio Business Development Commission to JobsOhio without legislative approval. They've welcomed Yost's audit and on Tuesday faulted the administration for blocking access to JobsOhio documents.
"Gov. Kasich got caught with his hand in the cookie jar... (and now) wants to shroud JobsOhio in even more secrecy and take away the public's right to see how billions in taxpayer dollars from the sale of liquor proceeds are spent," said Rep. John Carney, a Columbus Democrat. "The governor's push to cover up JobsOhio's finances will only result in the public getting ripped off in the future."
Nichols said the administration supports public review of JobsOhio's public funds. He also noted an independent audit of its private funds was conducted by KPMG and publically released.