Flashback: The uproar at STRS; how it all started

.....and another year goes by without an IG investigation requested by a bi-partisan group of legislators

Another history lesson for newbies

From John Curry, March 5, 2006

As long as Bob Taft is Governor, more years will go by without an Inspector General's investigation of STRS. With a change in leadership of Ohio's Executive Branch, a renewed interest in the below bi-partisan request may not fall on deaf ears as it currently does. With the current corruption ridden pay-to-play mentality in Columbus, this issue has been put on the back burner with the heat turned off. No, I won't forget and neither will tens of thousands of STRS retirees. If the investigation comes up clean- Great! If the investigation doesn't come up clean, then justice will be served. Remember, it was also our Governor who discredited the initial investigative reports of the Toledo Blade's reporter Jim Drew when he blew the cover on the Noe/BWC scandal. John Curry (2006)

From: John Curry

Sent: Saturday, March 05, 2005

Subject: renewed interest for the State IG to investigate STRS

Below is a clip from the AAUP U. of C. chapter of Aug. 2003 which addresses Taft's veto of a bill that would have had the State Inspector General inspect the five state retirement systems. Would it be possible that members of CORE could contact these lawmakers and their bretheren requesting a reintroduction of this bill in light of the continuing disregard of ORC 3307.15? I know that many reading this are on a familiar basis with some of these Senators as well as other State Senators and Representatives. With renewed requests, in light of what has transpired over the past, we might just be able to see this badly needed investigation accomplished. John

"State Senator Teresa Fedor (D Toledo), with bipartisan co-sponsorship from Senators Schuring, Herington, Roberts, Fingerhut, Hagan, Carey, Dann, and Robert Gardner, introduced Senate Bill 104 which would give the State Inspector General independent power to investigate and issue findings against the five public retirement systems and the Ohio Retirement Study Council."

The entire text of the above article can be seen below. John

AAUP WORKS FOR YOU

A publication of the

University of Cincinnati Chapter, AAUP

Volume 10, Issue 22, August, 2003

STRS - RECENT DEVELOPMENTS

Since the recent announcement of changes in the health care provisions of the State Teachers Retirement System (STRS), there have been a number of developments related to the operation of STRS. While the retirement system appears to remain viable and sound, recent criticisms have questioned STRS operations and spending practices at a time when it has been forced to cut back on health benefits and to abandon its practice of issuing a 13th check each year to retirees.

The Cleveland Plain Dealer broke the story, reporting on bonuses paid to STRS staff while investment value was declining, on significant increases in hiring since 1998, on policies allowing STRS employees to cash in unused vacation annually, on subsidy of a day care center for employees’ children, on significant travel expenses incurred by STRS Board members, and on lavish spending on art for the renovated STRS building in Columbus. The Plain Dealer cited a report from Dennis Leone, superintendent of the Chillicothe school district, who submitted the report to the STRS Board on May 16 after making inquiries because he had heard rumors of the extravagant spending. Among other things, Leone reported that STRS spent $20 million on employee bonuses and payments for unused sick and vacation leave over a three-year period. He also reported spending of $869,235 for the office artwork and $530,284 for Board travel over a three-year period, including trips to Hawaii and Alaska. Meanwhile, from August 2000 to March 30, 2003, the value of STRS assets fell from $58.7 billion to $42.4 billion, a drop of 28%.

In response to the uproar, STRS began to take some corrective actions. Bonuses and incentive pay to staff were frozen and the Board began to review policy. The Board President chastised STRS Executive Director Herb Dyer for statements that he made to reporters and to a legislative committee regarding the criticism of STRS practices.

In late June, more than 100 state legislators signed a statement calling for Dyer to resign. Also, the Legislature included, in the state budget bill, a line that would have allowed the State Inspector General to investigate quasi-state agencies (such as STRS) when there were allegations of wrong-doing. Governor Taft then exercised his line item veto authority to remove that line from the bill. In response to Governor Taft’s veto, several things happened. In addition to a bipartisan effort to try to override the Governor’s veto, two new bills were introduced. State Senator Teresa Fedor (D Toledo), with bipartisan co-sponsorship from Senators Schuring, Herington, Roberts, Fingerhut, Hagan, Carey, Dann, and Robert Gardner, introduced Senate Bill 104 which would give the State Inspector General independent power to investigate and issue findings against the five public retirement systems and the Ohio Retirement Study Council. State Senator Kirk Schuring (R Canton) introduced Senate Bill 105 which would require Board members and employees of the five pension systems to file annual financial disclosure statements with the Ohio Ethics Commission. Also, State Attorney General Betty Montgomery, Senator Schuring and Representative Michelle Schneider (Cincinnati) announced that they would seek legislation requiring independent and regular performance reviews of the five public pension systems.

To keep the pressure for reform on STRS, and to voice dissatisfaction with what has happened, an effort is being made to get a good public (educator) turnout for the next STRS Board meeting which is scheduled for Friday, August 15th. A large group will be walking from the Statehouse in Columbus to the open STRS Board meeting which begins at 10:00 am in the STRS building. Educators from around the state are invited and encouraged to attend this rally.