Dennis Leone: New Contract for Damon Asbury at STRS -- Board Meeting Update

From Dennis Leone, October 22, 2006

Subject: New Contract For Damon Asbury at STRS -- Board Meeting Update

FROM: Dennis Leone, STRS Retiree Board member

Some things occurred on Friday, October 20, 2006, at the STRS Board meeting, that may be of interest to you:

In the morning, a motion was made by Steve Puckett (for State Supt Susan Zelman), seconded by Mary Ann (Flannagan) Cervantes, that STRS Executive Director Damon Asbury receive a contract extension through June 30, 2008. Dr. Asbury's current contract expires in February of 2007.

I offered a substitute motion, seconded by John Lazares, to postpone action until the November 16 STRS Board meeting, for the following two reasons:

1. The contract was NOT on any published agenda for the meeting, which meant that some 400,000 STRS members had no clue the action would occur. (Can you imagine the flack a school board would receive if it gave a supt a new contract without the proposed action being on the agenda?)

2. Since Dr. Asbury recommended to the STRS Board that pension money be used to pay the personal legal fees of three STRS employees who were subpoenaed to testify in the ethics trial of convicted Board member Hazel Sidaway, I felt the Board should wait until we receive State Auditor Betty Montgomery's decision regarding the "appropriateness" of said expenditure.

My substitute motion failed 6-2, with Board members Puckett, Cervantes, Geoffrey Meyers, Mark Meuser, Conni Ramser, and Jeff Chapman voting no, and with Lazares and myself voting yes. (Board member Tom Johnson, Governor Taft's appointee, was absent.) The vote on the original Puckett motion (seconded by Cervantes) to grant a contract renewal to Dr. Asbury passed 6-2, with only Lazares and myself voting no.

Board members Puckett, Cervantes, and Chapman all said they felt the action was proper because the Board had been discussing the proposed contract extension in executive session for the past 2-3 months.

Three hours after the above action, a letter from Betty Montgomery was hand-delivered to each Board member. She wrote that while the use of pension money to pay the personal attorney fees of the three employees was technically legal (which we already knew), while she did not feel she could undo the decision (what else is new?), and while she understood the "anxiety" that often causes lay people to secure personal lawyers, she concluded:

"Let me say how deeply disappointed I was to learn that after all STRS has been through in the last several years, the Board would authorize payment for the legal fees.......when the employees failed to request Attorney General assistance at the time they received subpoenas. I do not understand why Dr. Asbury, having promised to change the way STRS does business, would approve these bills when the employees failed to make a prior request. If they had made the request, they would have learned that the Attorney General's office would have assisted them free of charge."

The above comments, which I read aloud prior to adjournment on October 20, did not faze my fellow board members (except John Lazares) one bit. Board member Ramser said the important thing about Montgomery's letter is that it confirmed the payments were within the scope of the Board's legal power. Board member Meyers publicly expressed his distaste over Montgomery's comments regarding the inappropriateness of the payment. He said he felt these comments were improper because she also wrote that she understood the "anxiety" the three employees must have been felt. (I fail to understand Meyers' logic on this at all.) I guess my fellow board members (except Lazares) feel that because such payments are within their scope of power, and because the three employees were feeling "anxiety," the payments were okay........even though they were inappropriate and even though pension money was used.

John Lazares and I also voted no -- on the 20th -- on the executive director's monthly expenditure report. I publicly stated that it was upsetting to learn, with all that has happened in the recent past, that pension money was still being used to buy Board members credit cards, pay for a Board member's home fax machine, and pay for personal long distance calls made by a Board member during a conference. Board member Ramser remarked that the credit card issue was now dead since Board members who had them recently turned them in. (This was likely, in my opinion, due to my complaints about them over the past three weeks, since staff credit cards were turned in long, long ago.)

I will propose a policy at the November 16 Board meeting to tighten the Board's travel policy in these areas and other areas that I honestly felt had already been corrected. I thought, for example, that we now required airplane tickets to be purchased at least 30 days in advance. We don't. Policy only states that the tickets be purchased as far in advance as possible. Policy also permits Board members to have lodging, paid by STRS, not only for the evening that conferences end (which I understand due to various factors), but the day AFTER a conference as well. This is ridiculous. I also will propose a policy stating that should a board member change his/her flight due to a personal desire, that he/she should pay the airline's ticket change fee, not STRS. I thought all of these issues had already been addressed.

One new policy WAS adopted, 6-2, at the STRS Board meeting on Friday, October 20, that I believe members will appreciate hearing. I made a motion, seconded by Lazares, that when the Board is asked to approve expenditures or vendor contracts in excess of $100,000, the STRS executive director will be required to present a contract summary to the Board prior to the action. (Dr. Asbury presented a draft form we felt was acceptable) I actually wanted a policy with a lower amount, but since that really didn't stand a chance of passing -- and since a similar motion I made in May failed 8-2 -- I am pleased that something passed. Voting yes, besides Lazares and myself, were Cervantes, Puckett, Ramser, and Chapman. Voting no were Meuser and Meyers. .

Something ironic occurred at the meeting on October 19-20, involving Board member Meyers -- who is the appointee for the Speaker of the House and the President of the Senate. On the 19th, when I asked Dr. Asbury a question about the Board's $315,000 contract with the Chicago employment agency named Ferguson, Meyers publicly said my question was a "waste of time." This was witnessed and heard by many retirees in the audience. But on the 20th, Meyers himself asked the staff several questions about the cost and contractual arrangement the Board has with a firm called Buck Consultants. After this occurred, I stated publicly: "Interesting, Geoff Meyers, that it was a waste of time yesterday when I asked questions about the Ferguson contract, but it's not a waste of time today when you are doing the same thing about another contract." Meyers did not respond, and nor did my fellow board members (excluding Lazares), who also were silent the day before when Meyers made his "waste of time" comment. This is quite disappointing in my book.

While Lazares and I voted no on the contract renewal for Dr. Asbury for a variety of reasons, I can say to the membership that the 16-month contract extension contains language that is managerially responsible and proper. I believe it will facilitate needed improvements in the future. I just disagree with the way this contract vote came about and with several things that have happened recently.

Dennis Leone

STRS Retiree Board Member