TOLEDO, Ohio — Money has always been the coin of the political realm, but the unfolding scandal over lost coins in Ohio — old nickels, dimes and gold pieces coveted by collectors and valued into the millions of dollars — is shaking the Republican Party to its grand old roots.

In what is predictably being labeled "Coingate," state and federal authorities have sicced their investigative dogs on the activities of Thomas Noe, a Toledo coin collector who chaired President Bush's 2004 re-election campaign in northwest Ohio and who, over the years, has been a veritable lawn sprinkler of campaign cash to major Republican candidates in the state.

Noe is in trouble because $12 million to $13 million in state money from the workers'-compensation fund is missing after being invested in rare-coin funds that Noe controls.

Authorities are pursuing criminal charges, and Noe, 50, the gregarious, bankrolling confidante of Ohio Republicans, is political poison. His former friends, including the governor, couldn't be running any faster to get away from him and the taint of scandal.

Gov. Bob Taft, U.S. Sen. Mike DeWine and three other statewide officeholders with gubernatorial ambitions, announced last week they are giving up about $60,000 they had received from Noe.

In Washington, the Republican National Committee (RNC) said Thursday it would donate to charities $6,000 that the Bush/Cheney campaign and the RNC received directly from Noe and his wife, Bernadette. The Bush campaign received more than $100,000 raised by Noe. RNC spokeswoman Tracey Schmitt said remaining contributions "appear to be completely appropriate."

Bush met with Noe last October to thank him and his wife for their fund-raising efforts. Bush narrowly won Ohio, whose 19 electoral votes enabled him to secure a second term.

In the meantime, a grand jury last week began investigating Bush-Cheney campaign contributions that had any connection to Noe.

Earlier, the director of Ohio's workers'-compensation bureau, James Conrad, resigned after authorities learned of the missing money. Conrad, once dubbed "Mr. Fixit" for his reputation of turning around troubled programs, said on May 27 he would voluntarily resign over the scandal. The bureau began investing in rare coins several years ago as a way to hedge its stock and bond holdings.

Potentially explosive

The perception of money for injured workers going to support politicians is potentially explosive for Ohio Republicans, who control nearly all major statewide offices and who cleared the way for an unusual $55 million state investment in Noe's rare-coin venture, starting in 1998.

Ohio Secretary of State Kenneth Blackwell, who is running for the GOP gubernatorial nomination next year, recently called on U.S. Attorney General Alberto Gonzales to investigate.

Noe "has done a great disservice to the people of Ohio by mismanaging our public resources and abusing our trust," Taft said in a joint statement with Ohio GOP chairman Robert Bennett. Bennett, with an eye toward next year's statewide election, said he will require any candidate seeking the party's support to undergo ethics training.

"I think it's a little late, and I don't know that politics and ethics necessarily walk hand-in-hand," said Monica Benoit, a state employee who, like many in Toledo, has been watching the political intrigue spill onto the pages of The Toledo Blade, which began reporting on the missing state money early this year.

Ohio is not immune from scandal. Former U.S. Rep. James Traficant, expelled from the U.S. House in 2002, is serving an eight-year sentence for a bribery conviction. Wayne Hays resigned from the U.S. House after an investigation into his employment of his alleged mistress. And President Warren Harding maintained a long affair with the wife of a friend as well as a woman 30 years his junior.

Coins — old coins that one would usually see only in collectors' shops or museums — give this scandal the patina of distinction. Investigators say 121 coins bought with state money are missing and may have been stolen in Colorado. Little is known about the coins, except for two — a $3 gold coin minted in 1855 and a $10 gold coin minted in 1845. What is known is that the politically connected Noe benefited from the decision by the Ohio Bureau of Workers' Compensation to invest state money in his coin funds.

"This is such a vibrant example of the culture of corruption in Columbus," said Democratic state Sen. Marc Dann, whose party has not won a statewide race in Ohio in more than a decade.

"The people in charge have become too comfortable with churning government benefits in exchange for campaign contributions," Dann said.

"This just stinks"

Two weeks ago, investigators removed thousands of collectible items, some of which were purchased with state money, from Noe's Toledo-area shop. Those items included a 1963 Christmas card signed by President John F. Kennedy, a 1790 water pitcher from Liverpool depicting George Washington, an autographed Mickey Mantle poster, a Marilyn Monroe print and an assortment of vintage comic books.

Other than telling investigators that he expects the shortfall in the investment will be between $12 million and $13 million, Noe is not talking publicly. William Wilkinson, one of Noe's attorneys, said Thursday his client has "not admitted any wrongdoing." Wilkinson said Noe had not been subpoenaed by the grand jury.

Even in politics-weary Ohio, the biggest battleground state in last year's presidential election, the coin scandal is attracting attention. Toledo television stations have, for the moment, forsaken their fascination with shootings and fires to first cover the almost daily development in the scandal.

"This just stinks. There's a bunch of people down there who think they're above the law," said Andrew Eklund, who operates a hotdog stand near the Toledo Police Department headquarters.

Opinion polls — conducted before the controversy gained footing — suggest Ohio voters are unhappy. Taft, the great-grandson of the former president and who was re-elected in a 2002 landslide, had a 35 percent approval rating in a recent Ohio Poll.

"This state has been the poster child for a troubled economy, and there's much more pessimism out there now than there has been in some time," said Eric Rademacher, co-director of the University of Cincinnati Institute for Policy Research.

And that is all the more reason for Republicans to fret over next year's statewide elections. The three Republican candidates for governor — Blackwell, State Auditor Betty Montgomery and Attorney General Jim Petro — had received more than $17,000 in contributions from Noe. They said they will either return the contributions or place the money into escrow accounts until it can be returned to the Bureau of Workers' Compensation.

Rademacher and other political analysts say it would be premature to forecast the fallout from the scandal.

Material from the Los Angeles Times is included in this report.