Flashback; July 1, 2005: Inquiry of STRS may go further
All of that could have become public long ago, one critic said, if Gov. Bob Taft hadn’t derailed a state inspector general’s investigation two years ago.
Sidaway, who retired as a Canton City Schools teacher and STRS board member two years ago, is charged with accepting “thousands of dollars” in meals, drinks, lodging and entertainment from September 1998 to June 2003 from companies that handled the teachers pension fund’s investments. She also is accused of failing to report those gifts, filing false ethics statements and lying about the gifts to investigators.
Sidaway denies she did anything wrong.
She retired from the pension board on June 30, 2003. Had she gotten through Thursday, Sidaway may have avoided criminal charges, because that’s when the two-year statute of limitations would have run out on the seven misdemeanor charges.
Instead, she is due to appear in Franklin County Municipal Court in Columbus on Aug. 2 at 9 a.m.
Among the alleged gifts were two tickets worth $550 to a Broadway show, four tickets to a Cleveland Indians game valued at $120, and three meals at high-end Columbus restaurants valued at $240.
Sidaway didn’t see the show alone. Board members who served with Sidaway included Jack H. Chapman of Reynoldsburg, Michael N. Billirakis of Pickerington, Joseph I. Endry of Westerville, Eugene E. Norris of Columbus and Deborah Scott of Cincinnati. All attended “Hairspray” in New York with Sidaway in May 2003.
Sidaway’s tickets, the criminal charges say, came from Frank Russell Investment Group.
The investment group has overseen the pension system’s investments since 1991, according to STRS spokeswoman Laura Ecklar.
It and Smith Barney, which has been a broker for the pension system for more than 20 years, are named in the complaints against Sidaway and could face charges, though a financial settlement is more likely, according to Paul Nick, chief investigating counsel for the Ohio Ethics Commission.
Kim Atwater, a spokesman for Smith Barney, said the company is “cooperating fully with the authorities.” She said it will wait for the investigation to conclude to see “what they’re saying about us and the other firm.”
Frank Russell Investment Group did not return a call for comment.
“We didn’t do anything wrong” with the New York trip, insisted Endry, one of the other board members. “It was perfectly legitimate.”
Endry, whose term on the board ends Aug. 31, said then-Executive Director Herbert Dyer and Chapman, who was then the board’s chairman, said the tickets for the show were paid for by the pension system, not the investment group.
“STRS was supposed to be billed,” he said.
Endry said he has not been notified about whether he faces charges. He said he had a “casual conversation” with ethics commission investigators months ago.
Nick said “more than a few” other pension board members and staff are being investigated. Charges are expected by mid-July, according to Lara N. Baker, Columbus’ chief prosecutor, though she would not say who may be charged.
While the charges against Sidaway are misdemeanors, Baker said she is reviewing a report from the ethics commission to see if felony charges need to be referred to the Franklin County prosecutor.
Dennis Leone, the former Chillicothe superintendent who first raised questions about STRS spending practices, said he feels vindicated by the charges, which “provide substantiation for what I researched.”
Leone, who joins the pension board on Sept. 1, said he hopes to see restitution, and criticized the time it took for charges to be filed.
“This would have come out years ago,” he said, had Gov. Taft not vetoed efforts by lawmakers to allow Inspector General Thomas Charles to investigate the pension system.
Charles had made preparations to do so, but at the time the governor and his supporters said a Charles-led effort would set a precedent for investigations of the administration in the future.
Should he be charged, Endry said, he hopes the attorney general’s office would represent him because his actions were taken “in the line of duty.”
Ecklar said it is more likely Sidaway and anyone else facing charges will have to hire their own attorneys.
“This is an individual issue,” she said, and does not represent problems “systemic to STRS. There is no favoritism to specific vendors.”
Three members of the pension fund’s board represent State Superintendent Susan Tave Zelman, Auditor Betty D. Montgomery and Attorney General James M. Petro.
Jen Detwiler, spokesperson for Montgomery, said there is no indication that her representative, Mary Beth Foley, will be swept up in the investigation.
“Auditor Montgomery always has insisted that her representative meet the highest level of ethical standards,” she said. “We’re confident she kept within those standards.”
Zelman has scheduled a meeting with her representative, Steven Puckett, according to spokesman J.C. Benton.
Chapman, Billirakis, Norris and Scott could not be reached for comment Thursday. Petro’s office did not return a call for comment.
Dyer lost his job as head of the pension fund after media reports, including many by Copley Ohio Newspapers, raised questions about spending on travel, employee bonuses, artwork and other items. The spending came at a time when the system’s investment portfolio plummeted and health-care costs for members increased.
State Sen. Kirk Schuring, R-Jackson Township, was one of the lawmakers who pushed for changes at the pension system to improve accountability. He also advocated that the inspector general be allowed to investigate. He said an audit of the system’s overall management, policies and investments is due in the fall.
“Maybe this took so long because of the exhaustive effort of the ethics commission, and it had a lot to uncover,” he said.
You can reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail: paul.kostyu@cantonrep.com
posted by Kathie Bracy at 9:11 PM
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