Paul Kostyu: Resigned pension board member expected to plead guilty to conflict of interest

June 19, 2006

Copley News Service Via Thomson Dialog NewsEdge

By Paul Kostyu

COLUMBUS, Ohio - Another former board member of the Ohio's teacher pension system ensnared in a broad and ongoing ethics investigation will plead guilty today on three charges of violating state law.

Jack H. Chapman of Reynoldsburg, who resigned from the board in June 2004, agreed to plead guilty to three counts of conflict of interest for receiving things of value from 1998 to 2003. They included multiple tickets to Cleveland Indians and Cleveland Cavaliers games ($884), a golf outing in Washington state ($169) and a ticket to the Broadway show "Hairspray" ($225).

The charges, all misdemeanors, are similar to the three that former Canton City Schools teacher Hazel Sidaway was found guilty of in April. Chapman is expected to receive a similar sentence including community service and payment of fines, investigation costs and restitution. He also has promised to cooperate with investigators on related cases.

At least four other board members, Joseph I. Endry, of Westerville; Michael N. Billirakis, of Pickerington; Eugene E. Norris, of Columbus; and Deborah Scott, of Cincinnati, attended the Broadway show with Chapman and Sidaway. Billirakis has told investigators who his attorney is.

Prosecutors are expected to file more cases against current and former board members as well as staff who served with Sidaway and Chapman and who took advantage not only of the Broadway tickets but other gifts from Frank Russell Corp. and Salomon Smith Barney, now Citicorp. Both companies provided investment advice to the board and have cooperated with investigators.

The two-year statute of limitations for Chapman was to expire Wednesday. Prosecutors contacted Chapman and his Columbus attorney, H. Ritchey Hollenbaugh, last week, saying they would be willing to negotiate a plea deal.

Hollenbaugh said an agreement was reached Monday. Prosecutors were prepared to file more than three charges had a deal not been reached.

"There won't be any other charges against him," Hollenbaugh said.

Hollenbaugh was the attorney for Sidaway as well as Herbert L. Dyer, the former executive director of the State Teachers Retirement System, one of the largest retirement systems in the country. Dyer was convicted in September 2005 in a plea deal of one count of violating state ethics laws for not paying for golf - the same outing Chapman took.

David E. Freel, executive director of the Ohio Ethics Commission, said the total value of gifts Chapman received was "a couple thousand."

Paul Nick, the commission's chief counsel, said the continuing investigation doesn't appear to reveal "a high level of corruption" at STRS, but was "recklessness" by board members who "compromised their positions."

Freel said Chapman's case is not connected to the ongoing investigation into the Bureau of Workers' Compensation, though other officials have said there are links between that agency's troubled investments and those at the state's pension systems.

The ethics commission investigation of STRS began after media reports, including many by Copley Ohio Newspapers, raised questions about travel, bonuses, artwork and other items.

Reach Paul E. Kostyu at (614) 222-8901 or e-mail paul.kostyu@cantonrep.com.