Dennis Leone to Betty Montgomery: Complaint Regarding STRS Board Action on 8-18-06
To: Betty Montgomery
From: Dennis Leone
Date: August 20, 2006
Subject: Complaint Regarding STRS Board Action on 8-18-06
While we spoke in the past about the 13-page report I released on May 16, 2003, regarding the spending abuses of the State Teachers Retirement System (STRS) Board, I am not sure if you know that I was elected by retirees in 2005 to serve on the STRS Board. I have served on the Board for one year. I have three years of my four-year term remaining.
I write this email to ask for your help.
I objected strenuously during the STRS Board meeting on Friday, 8-18-06, about an expenditure that was authorized by the Board and STRS Executive Director Damon Asbury which I believe was in violation of ORC 3307.15. The ORC Section requires Board members to discharge their duties "solely in the interest of the participants (STRS members) and their beneficiaries for the exclusive purpose of providing benefits to the participants and defraying reasonable expenses of administering the system."
I was the sole Board member on 8-18-06 (Board member John Lazares was absent) to vote no on the executive director's monthly expenditure report. I stated publicly my reason for voting no, which was that the executive director and the Board had improperly agreed to pay three STRS staff members their personal, private attorney fees when they were subpoenaed for the ethics trial of former Board member Hazel Sidaway.
The facts are these:
1. These three staff members (Steven Ehlers, Mary Ellen Grant and Eileen Boles) were not charged, they were not indicted, and they were not being sued by anyone.
2. They did not approach either the STRS legal staff for the State Attorney General's legal staff (which statutorily represents STRS) for legal assistance on this matter.
3. The three staff members chose on their own to seek personal, private, outside legal assistance. They approached no one at STRS with an expectation that the pension fund would pay for their fees after the fact.
4. In executive session on Thursday, 8-17-06, STRS Executive Director sought Board support for the three payments (two of which, we learned, he had paid prior to the meeting). He stated that absent a Board consensus to the contrary, he would pay the legal fees. I objected, as did fellow Board member John Lazares (who WAS in attendance during the executive session on 8-17-06).
5. I did my best to explain to Mr. Asbury and the Board that during my 23-year career as a superintendent of schools in Ohio, I chose to pay for a additional liability umbrella on my home insurance policy to protect myself if someone came after me personally. If, for example, I were sued for terminating a staff member or expelling a student (which I was), then the school board was required to provide legal assistance because was I discharging my professional responsibilities.
6. Other current and former STRS employees were subpoenaed to testify in the Sidaway ethics trial. None asked for STRS to foot the bill for private, personal legal assistance.
7. Former Board member Hazel Sidaway asked the STRS Board to pay for her private, personal legal fees, and the Board said no.
8. I told the STRS Executive Director and my fellow Board members in public session on 8-18-06 that I felt paying for the legal fees of the three staff members was in violation of ORC 3307.15. I also told them I felt the Board was setting a dangerous precedent, and that other STRS staff members could be asking for the same reimbursement in the immediate future (since other ethics charges are forthcoming for former STRS Board members). In response to this second concern, my fellow Board members instructed Mr. Asbury to inform the STRS staff not to expect similar reimbursements in the future. This, in my mind, is an admission of guilt. If my fellow Board members believe it will be wrong to provide such reimbursements in the future, then it is wrong to do it NOW.
9. I am a retiree member of STRS. My daughter is an active teacher member of STRS. Please tell me how the payment of the private, personal legal fees of the three STRS employees is solely in our best interest or in the best interest of our beneficiaries -- pursuant to the expressed language in ORC 3307.15. Is it supposed to benefit us because it makes the three employees happy?
10. STRS Executive Director Damon Asbury told the Board on 8-17-06 that he could "undo" the payments to the three STRS staff members if the Board wanted him to do so. I bring this to your attention because you, as State Auditor, can cause this to happen. Just like you would tell me as a superintendent of schools that it would be wrong for me to spend taxpayer money in this fashion, you could/should tell the same thing to STRS. And to remind you -- STRS receives $2 billion dollars per year from Ohio taxpayers to help fund the pension system.
The decision to pay the private, personal legal fees of three STRS employees was improper. John Lazares and I tried to stop it in executive session on 8-17-06, then I tried again in public to stop it on 8-18-06 with a speech and a no vote on Mr. Asbury's monthly list of expenditures.
Please help.
Sincerely,
Dennis Leone
STRS Board Member
From: Dennis Leone
Date: August 20, 2006
Subject: Complaint Regarding STRS Board Action on 8-18-06
While we spoke in the past about the 13-page report I released on May 16, 2003, regarding the spending abuses of the State Teachers Retirement System (STRS) Board, I am not sure if you know that I was elected by retirees in 2005 to serve on the STRS Board. I have served on the Board for one year. I have three years of my four-year term remaining.
I write this email to ask for your help.
I objected strenuously during the STRS Board meeting on Friday, 8-18-06, about an expenditure that was authorized by the Board and STRS Executive Director Damon Asbury which I believe was in violation of ORC 3307.15. The ORC Section requires Board members to discharge their duties "solely in the interest of the participants (STRS members) and their beneficiaries for the exclusive purpose of providing benefits to the participants and defraying reasonable expenses of administering the system."
I was the sole Board member on 8-18-06 (Board member John Lazares was absent) to vote no on the executive director's monthly expenditure report. I stated publicly my reason for voting no, which was that the executive director and the Board had improperly agreed to pay three STRS staff members their personal, private attorney fees when they were subpoenaed for the ethics trial of former Board member Hazel Sidaway.
The facts are these:
1. These three staff members (Steven Ehlers, Mary Ellen Grant and Eileen Boles) were not charged, they were not indicted, and they were not being sued by anyone.
2. They did not approach either the STRS legal staff for the State Attorney General's legal staff (which statutorily represents STRS) for legal assistance on this matter.
3. The three staff members chose on their own to seek personal, private, outside legal assistance. They approached no one at STRS with an expectation that the pension fund would pay for their fees after the fact.
4. In executive session on Thursday, 8-17-06, STRS Executive Director sought Board support for the three payments (two of which, we learned, he had paid prior to the meeting). He stated that absent a Board consensus to the contrary, he would pay the legal fees. I objected, as did fellow Board member John Lazares (who WAS in attendance during the executive session on 8-17-06).
5. I did my best to explain to Mr. Asbury and the Board that during my 23-year career as a superintendent of schools in Ohio, I chose to pay for a additional liability umbrella on my home insurance policy to protect myself if someone came after me personally. If, for example, I were sued for terminating a staff member or expelling a student (which I was), then the school board was required to provide legal assistance because was I discharging my professional responsibilities.
6. Other current and former STRS employees were subpoenaed to testify in the Sidaway ethics trial. None asked for STRS to foot the bill for private, personal legal assistance.
7. Former Board member Hazel Sidaway asked the STRS Board to pay for her private, personal legal fees, and the Board said no.
8. I told the STRS Executive Director and my fellow Board members in public session on 8-18-06 that I felt paying for the legal fees of the three staff members was in violation of ORC 3307.15. I also told them I felt the Board was setting a dangerous precedent, and that other STRS staff members could be asking for the same reimbursement in the immediate future (since other ethics charges are forthcoming for former STRS Board members). In response to this second concern, my fellow Board members instructed Mr. Asbury to inform the STRS staff not to expect similar reimbursements in the future. This, in my mind, is an admission of guilt. If my fellow Board members believe it will be wrong to provide such reimbursements in the future, then it is wrong to do it NOW.
9. I am a retiree member of STRS. My daughter is an active teacher member of STRS. Please tell me how the payment of the private, personal legal fees of the three STRS employees is solely in our best interest or in the best interest of our beneficiaries -- pursuant to the expressed language in ORC 3307.15. Is it supposed to benefit us because it makes the three employees happy?
10. STRS Executive Director Damon Asbury told the Board on 8-17-06 that he could "undo" the payments to the three STRS staff members if the Board wanted him to do so. I bring this to your attention because you, as State Auditor, can cause this to happen. Just like you would tell me as a superintendent of schools that it would be wrong for me to spend taxpayer money in this fashion, you could/should tell the same thing to STRS. And to remind you -- STRS receives $2 billion dollars per year from Ohio taxpayers to help fund the pension system.
The decision to pay the private, personal legal fees of three STRS employees was improper. John Lazares and I tried to stop it in executive session on 8-17-06, then I tried again in public to stop it on 8-18-06 with a speech and a no vote on Mr. Asbury's monthly list of expenditures.
Please help.
Sincerely,
Dennis Leone
STRS Board Member
posted by Kathie Bracy at 6:14 PM
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