Flashback: June 2003 Kostyu article: STRS laughs off criticism on spending (STRS spending and Hazel Sidaway)

by Paul E. Kostyu

Canton Repository, June 6, 2003

COLUMBUS — At the State Teachers Retirement System, money is no object.

There was money for expensive art. There was money for staff bonuses. There was money for travel.

It was money many thought was intended to pay for the retirement and health care of teachers who contributed to the fund over their decades of working in schools across Ohio. STRS had a reputation as being one of the best retirement funds in the country, with billions of dollars in assets.

But as the bottom dropped out of the investment market over the past three years, the STRS culture of spending continued unabated — even as it was losing $12.3 billion of those assets. For STRS, the booming ’90s never ended, at least in terms of spending. Its annual budget grew from $1.4 billion in 1993 to $3.23 billion in 2002.

While other investors were dumping Enron stock as the energy giant collapsed, STRS bought shares. While the economy nose-dived, STRS continued to pay millions of dollars in staff bonuses.

And while businesses and families cut back in travel, especially in the wake of the terrorist attacks on Sept. 11, 2001, STRS kept flying.

It’s “the board’s money,” STRS Executive Director Herbert Dyer said last week, to spend “as the board sees fit.”

The board expects to spend $177,009 in 2003 on travel-related expenses, though it budgeted $357,300. That’s consistent with what it spent in 2002 ($170,000), 2001 ($174,167), and 2000 ($186,116).

No one among STRS board members adopted the spending culture better than Canton City Schools teacher Hazel Sidaway of Plain Township, whose travel spending placed her thousands of dollars ahead of the next closest board member.

Over three years, Sidaway, who as been on the board 17 years, billed the system for $54,216.60 in expenses. They included:

• Airfare totaling $11,349.15, including $3,584.50 for nine trips in 2002; $4,495.50 for 10 trips in 2001; $3,269.15 for six trips in 2000.

• Trips to Honolulu, Las Vegas, Los Angeles, New York City, Florida (three times), Atlanta, Vermont, California (four times, including once to Palm Springs), Santa Fe, N.M., Portland and Tacoma, Wash. Data released by STRS does not always note where Sidaway traveled when she flew.

• Five trips to Boston (three in one year), for which airfare alone ranged from $214 to $1,019. Ohio law requires board members to fly coach.

• A six-night stay at an April 2001 meeting in Florida cost $1,212 in hotel expenses but just $84 in food. She had $55 in miscellaneous expenses, $189 for ground transportation and $750 for airfare.

• A two-night stay in Boston in March 2002 that cost $560.

• Two nights in Palm Springs, Calif., two months later, which cost $853.

Dyer defended Sidaway’s expenses saying in published reports that the travel was necessary because she had served as chairwoman and vice-chairwoman of the board over the three years in question.

But spending isn’t the only part of the STRS culture that Sidaway adopted.

She apparently followed Dyer’s persona, which Sen. Kirk Schuring, R-Jackson Township, described as “brash, arrogant and condescending.”

Sidaway did not respond to four phone calls for her comment. But in an e-mail response to an inquiry from Marianna Lijoi, a former employee in the Canton City and Plain Local schools, Sidaway wrote, “Why don’t you educate yourself before you put your ‘message’ out there? ... You don’t understand how to run a pension system.”

In a message last week, Sidaway said Lijoi, who now lives in Kent, “shows ignorance and lack of understanding” for questioning the spending by STRS.

“They were pretty nasty,” Lijoi said of several messages she has received. “I helped her get on the board. I used to work with her. I’m very distressed at what has happened.”

Susan E. Jacoby, who lives in Canton and retired after 30 years of teaching in the Plain Local Schools, also was a supporter of Sidaway.

“I told people to vote for Hazel,” Jacoby said.

She said she believes Sidaway and others on the STRS board are influenced by Dyer’s attitude about spending.

“My guess is that he’s corrupted that board,” she said. “It’s hard to believe that 40 percent of her travel was for going back and forth to Columbus.”

Sidaway quoted the 40 percent figure in one of her messages to Lijoi.

“You, my dear, are not the one who has been sitting on that board for 17 years and so therefore, it is not your decision to decide what education and oversight need to be done,” Sidaway wrote. “If you were an open-minded person who was not borrowing someone else’s gripe, you would have asked for a reasonable explanation instead of assuming that you knew everything you need to know to make a judgement (sic).”

Jacoby said when Lijoi asked a question at the February meeting of the STRS board, Dyer and Sidaway laughed and dismissed the question.

“I am really, really tired of reading the deroggatory (sic) comments about professionals who are doing the best job possible in an impossible environment,” Sidaway said in an e-mail message.

“Bonuses were paid to people who added value to our system by holding the line on the losses. The problem with education is that we don’t get paid bonuses because it is nearly impossible to determine who added the value and what value was added.”

“I am a teacher,” Sidaway said in a different e-mail message to Lijoi, “and what I am doing is for the benefit of teachers. I have acted in an honorable and trustworthy fashion and it (sic) you choose not to believe that so be it.”