Saturday, September 23, 2006
Molly Janczyk re: Individual HC insurance
Friday, September 22, 2006
John Curry: A request to all of us
Aristotle Hutras: firstname.lastname@example.org
Wal-Mart to Test Price Cuts on Generic Drugs: Article and News Analysis
Wal-Mart, the nation’s largest retailer, will test a program to sell generic prescription drugs to its workers and customers at sharply reduced prices, according to people briefed on the plans.
The giant discount chain, which has used its size to knock down the costs of toys, clothing and groceries, will sell generic versions of about 300 widely prescribed drugs for as low as $4 for a standard prescription, these people said, speaking on condition of anonymity because they were not authorized to disclose details of the new program. On average, generic drugs cost between $10 and $30 for a 30-day prescription.
The company, which is frequently criticized for its employee health benefits, is expected to announce the program today. A company spokeswoman declined comment.
Wal-Mart will test the lower prices first in the Tampa, Fla., area and, depending on consumer response, may expand the program around the state and the country, these people said.
The experiment appears to mark the first time that Wal-Mart has used its unrivaled influence in the American economy to lower the cost of health care for its customers.
In the past year, the company has introduced several programs to improve its benefits for workers, like extending insurance coverage to the children of part-time workers and starting a benefit plan with monthly premiums as low as $11.
Still, critics complain that at Wal-Mart health insurance is out of reach for many of its 1.3 million employees in the United States, forcing thousands of them to turn to state-sponsored programs or forgo health coverage altogether.
Several states even considered legislation that would force the chain to increase its spending on health care but only one such bill, in Maryland, became law. The law has since been struck down by a judge and its future is in doubt.
For Wal-Mart, the lower generic drug prices could blunt criticism of its health care coverage and prove a boon to business. Wal-Mart’s chief executive, H. Lee Scott Jr., has identified the chain’s pharmacy business as an area that needs improvement, and $4 generic drugs could turn the chain into a destination for those seeking the best prices on prescriptions.
It is unclear exactly how Wal-Mart obtained the lower prices. The chain has at times sold products like toys at a loss to entice consumers. But given its size it is possible the company has negotiated lower prices with health care providers and drug companies, industry experts said.
The new generic drug program is expected to be announced this morning at a Wal-Mart store in Florida, with senior company executives and elected leaders in attendance.
At first glance, Wal-Mart’s plan to sharply cut the cost of generic drugs, to $4, seems like a signal event in American health care. It could make scores of treatments affordable to the uninsured, reduce the burden on Medicaid and bring competitive pricing to the pharmacy industry.
Even company critics have praised the plan, conceding that it represents a case of the giant retailer using its size and ability to wring out costs to improve the lives of regular Americans.
But a close examination of the program, with details confirmed by the company yesterday, suggests that its impact could be blunted by several factors.
The plan, which is said to cover 300 drugs, includes only about 124 separate medicines in various dosages, like 12 versions of the popular antibiotic amoxicillin. It leaves out some popular drugs altogether, like the generic version of the cholesterol-lowering treatment Zocor.
And while uninsured people should benefit from the program, those with insurance may save only a dollar or so, making a trip to Wal-Mart not worth their while, analysts said. In Florida, where the program will have its debut, most people on Medicaid pay nothing and may have little incentive to shop around for cheaper prescription drugs.
“It is not as significant as it first seems, in our opinion,” said Joseph Agnese, an analyst at Standard & Poor’s, who expressed surprise at investors’ reaction to the Wal-Mart announcement, which sent shares of its competitors CVS and Walgreen down sharply yesterday.
As it has for dozens of consumer products, Wal-Mart reduced prices of generic prescription drugs by attacking the few remaining pockets of inefficiency in its operations. For example, it cut out third-party distributors that stood between the chain and drug manufacturers.
“There is a huge profit margin in the generics” for the middlemen like pharmacy benefit managers, the distributors and the pharmacies themselves, said Patricia Wilson of Associates & Wilson, a Rosemont, Pa., health care consulting firm. Wal-Mart appears to be taking some of those profits from the traditional middlemen to lower the prices it is charging for these generic drugs.
The company also introduced rapid, automated machines into its pharmacy distribution centers that had long relied on workers to fill orders. In doing so, Wal-Mart reduced the amount of time that costly drugs sat in warehouses, rather than on store shelves where they could create revenue. “It is not glamorous,” said Bill Simon, an executive vice president at Wal-Mart. “It’s pennies at a time.”
Wal-Mart said that by covering one-fifth of the generic drugs it prescribes at its more than 3,000 United States pharmacies, the new program would make it possible for thousands of people to buy drugs they either cannot afford or currently ration, sometimes by cutting pills in half, to cut costs.
Under the plan, which will begin in the Tampa, Fla., area — and the company says will eventually expand to the rest of the country beginning next year — the $4 fee charged by Wal-Mart will be paid by a combination of consumers, insurance companies and the federal government, depending on a person’s health coverage. On average, generic drugs are now sold at retail for $10 to $30 for a 30-day supply.
An insured customer will not pay more than $4, no matter what the co-payment is, the company said. Wal-Mart would bill the insurer for the difference if the co-payment was below $4. Customers whose co-payment is above $4 are unlikely to use insurance, but pay for the drug out of pocket. Where required, Medicaid users would still pay a small co-payment for a prescription drug, with the government billed the balance. In the past, Wal-Mart might have billed the government significantly more than $4 for a generic drug. “It’s a tremendous savings for state Medicaid,” said Mr. Simon, the Wal-Mart executive.
But Christa Calamas, secretary of the Florida Agency for Health Care Administration, said the state would probably save money only on those Medicaid consumers who already fill prescriptions at Wal-Mart. Since most Florida Medicaid users pay nothing for their prescriptions, they are likely to choose convenient pharmacy locations over lower prices, experts said.
Wal-Mart said it would not lose money on the low-cost generic drugs — and, in fact, several industry analysts predicted the company’s pharmacy business would benefit from the new plan. Unlike CVS or Walgreen, which rely on prescription sales for most of their revenues, Wal-Mart’s pharmacy business represents less than 10 percent of its total revenue and the company has identified it as an area that needs improvement.
By luring customers of all incomes into the store at least once a month to fill generic drug prescriptions, Wal-Mart could increase overall pharmacy and store sales, these analysts said.
Health care analysts were quick to point out that Wal-Mart has carefully chosen which drugs it will cover — 300 out of roughly 11,000 generic drugs available. Moreover, it is not offering some expensive drugs, like any of the cholesterol-lowering statins, at the $4 price. And some of the drugs covered, like generic ibuprofen, cost very little and may be currently available for less than $4. “They are not losing money on all these products,” said Ms. Wilson, the health care consultant.
But she praised Wal-Mart for bringing attention to the cost savings available from generic drugs, which are significantly less expensive than their branded counterparts. Wal-Mart could also introduce much greater competition to the marketplace by pushing the concept of discounts into what has traditionally been an inefficient market. “People will begin to compare prices,” she said.
Wal-Mart has come under fierce attack for its employee health benefits; critics contend the benefits are too costly, given the typical Wal-Mart worker’s wages, and frequently force employees to rely on state programs or forgo coverage altogether. With the lower generic drug prices, which apply to its workers as well as customers, the company appears to be trying to address those concerns.
Still, critics say this plan does little to confront the high costs of health care for the uninsured, including Wal-Mart employees, since they still face the expense of going to a doctor to get a prescription, for example. While the plan is a good first step, “it is clearly as much a public relations effort as a substantive change,” said Ron Pollack, the executive director of Families USA, a Washington consumer group that has often criticized Wal-Mart’s health care offerings.
Wal-Mart’s chief executive, H. Lee Scott Jr., said that “competition and market forces have been absent from our health care system, and that has hurt working families tremendously.” The company, he added, is “excited to take the lead in doing what we do best — driving costs out of the system — and passing those savings to our customers and associates,” as Wal-Mart refers to its employees.
Endorsements from OFT and OEA
Subject: FW: OFT endorsements "straight up"; OEA online
(June 10, 2006) Attorney General candidate Marc Dann is among 57 additional endorsements made by the Ohio Federation of Teachers June 10 for the fall general election. Dann is the Democratic candidate facing Republican Betty Montgomery. OFT also added William O'Neill to the list of endorsed candidates for the Ohio Supreme Court; Ben Espy was endorsed previously.
(District 23), Schuring (District 29) and John Boccieri (District 33).
(District 8), Barbara Boyd (District 9), Sandra Williams (District 11), Michael Foley/Bill Ritter (District 14), Tim DeGreeter (District 15), Marian Harris (District 19), Jim Hughes (District 22), Joyce Beatty
(District 27), Connie Pillich (District 28), Steve Driehaus (District
31), Dale Mallory (District 32), Tyrone Yates (District 33), Stephen Silver (District 34), Karen Adams (District 35), Guy Fogle (District 37), Carolyn Rice (District 38), Fred Strahorn (District 40), Vernon Sykes
(District 44), Robert Otterman (District 45), Mark Dansack (District 46), Edna Brown (District 48), John Johnson (District 50), Scott Oelslager
(District 51), William Healy (District 52), Matt Lundy (District 57), Ken Carano (District 59), Robert Hagan (District 60), Mark Okey (District
61), Sandra Harwood (District 65), Kathleen Chandler (District 68), Jay Goyal (District 73), Ben McCullough (District 74), Angie Byrne (District
75), Chris Redfern (District 80), Darrell Opfer (District 81), Shawn Allen (District 83), Connie Crockett (District 84), Raymond Pryor
(District 85), Bill Horne (District 86), Clyde Evans (District 87), Todd Book (District 89), Dan Dodd (District 91), John Domenick (District 95), Raymond Ku (District 98), George Distel (District 99).
An STRS thought to ponder
Mr. Hutras and the Ohio Retirement Study Council
K. Fluke and Bob Jones: No STRS honor awards for convicted Board Members
Want to go out and find reasonable health care insurance on the open market? - Good luck!
September 14, 2006
Individual health insurance — often touted as an alternative to employer-based group coverage — may be an option for the healthiest and wealthiest. But a study due out today suggests that the poor and sick need not apply.
The overwhelming majority — 89% — of working-age adults who shopped for health coverage in the individual market over the last three years were rejected for health reasons or found it too expensive, according to the study by the Commonwealth Fund, a private foundation that sponsors independent research on health and social issues.
Coverage was not affordable for 58% of the applicants, and 21% who had a medical condition were turned down, charged a higher premium or sold a policy that excluded the existing problem from coverage, the report said.
Individual insurance also is less affordable than employer-sponsored coverage, the study found. Two out of five people with individual coverage spent 5% or more of their income on premiums, compared with one out of seven people with employer coverage.
The study is the latest assessment of individual insurance, which is seen as an increasingly important form of coverage as employers drop health benefits for workers and their families because of the cost.
Most of the increase in the number of uninsured Americans — who now total, by some estimates, 46.6 million — was because of a decline in workplace coverage, said study author Sara Collins, an executive at the New York-based foundation.
"Although the individual market is a last resort for those shut out of employer-sponsored coverage, it is by no means a safe or secure haven for everyone," Collins said.
America's Health Insurance Plans, an industry group, took issue with the study and its methodology — a telephone survey of more than 4,000 consumers — saying their impressions were not as reliable as the trade organization's survey of insurance companies last year. The group also pointed out that its survey showed that 16 million people had individual health insurance and that the policies they purchased were more affordable than the Commonwealth report suggested and with richer benefits than employer-sponsored coverage.
"Many people shop all the time, but don't always buy," said Mohit Ghose, a spokesman for the industry group.
He said individual insurance "may not be for everyone, but, for a certain person, it's an important choice."
In California, the companies that dominate the individual health insurance market are under fire for revoking coverage after some policyholders become seriously ill.
Several lawsuits accuse Blue Cross of California and its rival Blue Shield of looking for any excuse to dump people with costly medical problems in an effort to escape their obligation to pay the bills.
State regulators are investigating the allegations. The companies have denied wrongdoing, saying the cancellations are usually because policyholders did not make full disclosure of prior health problems that would have made them ineligible for coverage.
Unlike group plans, which must accept everyone, individual plans can deny coverage based on preexisting conditions.
The Commonwealth study did not look at the revocation problem. But it did find that people with individual insurance coverage tended to have higher deductibles, along with high levels of dissatisfaction with their healthcare.
The report is based on findings from the Commonwealth Fund's latest biennial health insurance survey.
The study found that more than a third of adults with individual insurance had to spend $1,000 out of pocket each year before coverage kicked in. More than half of those with individual insurance pay at least $3,000 a year in premiums and about a third pay $6,000 or more.
People on such plans were more likely to report that they did not get needed healthcare or prescription drugs because of prohibitive out-of-pocket expenses.
One in five people with a high-deductible plan reported taking on credit card debt to pay medical bills, compared with 8% of those with lower deductibles.
From Shirlee Zerkel, September 20, 2006
Subject: Re: Want to go out and find reasonable health care insurance on the open market
John, Interesting article but that is no worse than STRS insurance. In fact it is even better! You may send this info out to the troops. Read the paragraph that says individual (private) insurance may run as much as $3,000 per year in premiums and have a deductible of $1,000. In 2006, This is what a 30 year service, non Medicare retiree did pay on the Medical Mutual Plus plan for self and spouse premiums - $7,788 PER YEAR with a $500 Deductible for each person. In 2006 a 30 year service, nonMedicare retiree did pay on the Medical Mutual Basic for self and spouse premiums-$4,608 PER YEAR with a $1500 Deductible for each person. That is far worse than on the open or private market. The ONLY plus is that STRS has to insure a member no matter with their physical condition. Shirlee
Shirlee Zerkel and Gary Russell: Questions concerning CareMark
I have two questions concerning the services of CareMark. First, a member ordered several medications by phone. Well over a week passed so the member called CareMark to inquire about the much needed medication. A CareMark employee told him that it had just been mailed out that day, and that CareMark's contract with STRS stated that they did not have to process orders until one week from the day the order was received. Is this true? And if so, why? Second, Under what tier does the drug, Flogard, fit, and why is CareMark so much higher on the price than retail pharmacies? CareMark charged $46 for 90 pills and a local pharmacy charged $16 for 60 pills. That member could buy 120 pills from the local pharm for $32 and well after this incident. CareMark's price is almost double in per pill cost. Yet your recent flyer about Health Care News states that even with the higher co-pays " STRS members still receive a cost savings when they receive their drugs through mail service." This is not a cost savings in my opinion. CareMark is a very large PBM; they should be able to get us the cheapest prices out there. Shirlee Zerkel ------- From Shirlee, Sept. 22, 2006:
I am sorry that I did not spell the prescribed medicine correctly. The correct name of the drug is Folgard 2.2. Quantity was for 90 pills. What tier is that medication on? I can not find it in the information from CareMark. I am asking why CareMark charged $46 for the 90 pills or about 51 cents per pill when we have inquired locally and retail pharms have the cost from $16 to $20 for 60 pills. Let's suppose that we use the $16 figure; that amounts to about 26 cents per pill. That is almost double what we are charged through CareMark.
I have two questions concerning the services of CareMark. First, a member ordered several medications by phone. Well over a week passed so the member called CareMark to inquire about the much needed medication. A CareMark employee told him that it had just been mailed out that day, and that CareMark's contract with STRS stated that they did not have to process orders until one week from the day the order was received. Is this true? And if so, why?
Second, Under what tier does the drug, Flogard, fit, and why is CareMark so much higher on the price than retail pharmacies? CareMark charged $46 for 90 pills and a local pharmacy charged $16 for 60 pills. That member could buy 120 pills from the local pharm for $32 and well after this incident. CareMark's price is almost double in per pill cost. Yet your recent flyer about Health Care News states that even with the higher co-pays " STRS members still receive a cost savings when they receive their drugs through mail service." This is not a cost savings in my opinion. CareMark is a very large PBM; they should be able to get us the cheapest prices out there.
------- From Shirlee, Sept. 22, 2006:
Fear of putting STRS in 'gray area' prompted Buser to leave its board
It was a Friday when Stephen Buser became aware of a potential conflict of interest related to his spot on the State Teachers Retirement System of Ohio's board.
The following Monday he handed in his resignation.
For Buser, a retired Ohio State University professor, it was a case of better safe than sorry.
"I don't want myself or the system to be in a gray area, ever," Buser said.
Buser, appointed to the board in January 2005 by the state Treasurer's Office as an investment expert, became aware of the potential conflict when informed by the system's lawyer that a firm he had previously consulted for had recently scheduled a sales call with the system.
According to the Treasurer's Office, Ohio rules maintain any company that once employed Buser cannot solicit the state for business while he is on the system's board, said spokesman Brian Cunningham.
Buser's resignation, effective Aug. 17, came amid increased scrutiny of the retirement system by the Ohio Ethics Commission.
That examination resulted in convictions of former STRS Executive Director Herb Dyer and two past board members for taking gifts from existing or potential vendors to the system. Dyer's conviction came last September and the board trustees were convicted in April and June of this year.
Those convictions in Franklin County Municipal Court, as well as a 2004 state law further regulating financial disclosures and ethics at the pension systems - which stemmed in part from dissatisfaction over how the State Teachers Retirement System had been run - led to a raised awareness of ethics issues at the pension systems, said Paul Nick, chief investigative attorney with the Ohio Ethics Commission.
The system has required ethics training for board and staff members for three years, said spokeswoman Laura Ecklar.
Buser said the heightened awareness and ethics training, prompted him to take potential conflicts of interest more seriously.
"Before I would have assumed something like this was acceptable as long as I recuse myself and not vote on it," he said.
But simply being on the board and having an association with a company that could do business with the system could lead to the impression of a conflict, Buser said.
"I don't think I would have appreciated that, or not as quickly," he said.
Board member Dennis Leone, a retired school superintendent from Chillicothe, said Buser's experience as an educator and investment expert made him a valuable contributor.
"He was one board member who, even if he disagreed with you, would consider other viewpoints," said Leone, who in 2003 helped spearhead Dyer's ouster and subsequent efforts to reform spending controls and policy at the system.
Leone joined the board in September 2005 but said he hasn't gotten along with all board members, including Judith Dunn Fisher.
She quit June 30, citing a dispute with a board member whom she did not identify.
In an Aug. 7 letter to state Treasurer Jennette B. Bradley, Buser stated he would return compensation he received from the firm that had solicited the system, in addition to resigning from the board. Buser would not identify the company.
Though the system has put in place measures to inform its board and staff of ethics requirements, it is under continued scrutiny from a task force investigating allegations of bribery at the Ohio Bureau of Workers' Compensation, which has widened its investigation to include the pension systems.
Buser said he's confident ethics procedures at the system are effective, he said.
"Even though there are still some investigations ... I'm not aware of any recent concerns," Buser said.
Employees and board members of the system are aware how stringent ethics oversight has become in the wake of the convictions at the teachers retirement system and the allegations swirling around the Bureau of Workers' Compensation, Buser said.
"Everyone is on notice and everyone is comfortable with that," he said.
Buser said his decision was his own.
"If I thought (the system) was really in bad shape in terms of investment, where someone really needed my assistance," he said, "I would undoubtedly try to stick it out through potential conflicts."
That would likely have meant going to the state Ethics Commission for assistance, he said.
"For me, I couldn't see the positives outweighing the negatives," Buser said.
Gov. Bob Taft's office will appoint Fisher's replacement, and Bradley's office is responsible for refilling Buser's vacant seat.
Business First: 4 from STRS convicted on ethics violations
Four former State Teachers Retirement System board members were convicted Tuesday of ethics law conflict-of-interest violations in Franklin County Municipal Court.
Charged with the misdemeanors were Eugene Norris, whose term on the board ended in August 2004, Deborah Scott and Joe Endry whose terms concluded August 2005; and Michael Billirakis, who resigned Sept. 15.
The violations stemmed from board members and their spouses accepting $275 in theater tickets from Frank Russell Corp./Russell Real Estate Advisors in 2003 for a Broadway performance. The board members were in New York on a tour of STRS's investment properties and an itinerary to the board members identified Russell was hosting the theater event.
Ohio ethics law prohibits public officials and employees from accepting goods or services of substantial value from people or organizations doing business with public organizations, seeking to do business them or that are regulated by public agencies. The Russell firm managed real estate investments for STRS.
Billirakis, Norris and Scott each were ordered to perform 60 hours of community service, pay fines of $250 and repay the cost of the tickets they accepted. Endry, who already repaid Frank Russell for the tickets he and his wife received, was ordered to perform 30 hours of community service and pay a $250 fine.
Three other STRS officials were earlier convicted on ethics charges. The Franklin County Prosecutor has indicated the recent convictions close the action against former STRS board members, but an investigation into the conduct of senior retirement system officials continues.
Thursday, September 21, 2006
Business First: Four ex-STRS Board members convicted of ethics violations
Business First of Columbus - September 20, 2006
Wednesday, September 20, 2006
Columbus Dispatch: Ex-pension board members sentenced for taking gifts
Four former members of the State Teachers Retirement System’s board pleaded no contest or guilty yesterday to accepting $275 tickets to the musical Hairspray in 2003.
Their attorneys said their clients didn’t know they were doing wrong when they attended the musical with tickets paid for by an investment company working for the board.
But Paul Nick, chief investigative attorney for the Ohio Ethics Commission, balked at that claim.
"How do you justify your entertainment to be paid for by STRS? " Nick asked. "It’s not as if it were a working lunch."
Former board member Michael Billirakis was charged with two counts of conflict of interest for accepting the Hairspray tickets from Frank Russell Corp./Russell Real Estate Advisors and tickets to a 2001 Cleveland Indians game from Salomon Smith Barney. Billirakis resigned Sept. 15, about two weeks after he was charged.
Former board members Joseph Endry, Eugene Norris and Deborah Scott each were charged with one count of conflict of interest for accepting the Hairspray tickets. All four were charged with failing to report to the Ohio Ethics Commission that they had received gifts worth $75 or more.
In plea agreements, Billirakis of Pickerington, Endry of Westerville and Scott of Cincinnati pleaded no contest to one ethics violation. Norris, of Ann Arbor, Mich., pleaded guilty to one ethics violation. All other ethics counts were dropped.
The ethics violations are first-degree misdemeanors punishable by fines as high as $1,000 or a six-month jail term.
In Franklin County Municipal Court yesterday, all four board members were fined $250, assigned 30 or 60 hours of community service, placed on probation for a year and required to make restitution to STRS if they hadn’t already. Attorney H. Ritchey Hollenbaugh, who represented Endry and Scott, said the prosecution was unfair to board members who "made an inadvertent mistake."
"It’s clearly overkill," he said.
In May 2003, the STRS board went on a trip to New York City to review real-estate investments with representatives from Frank Russell Corp. During the trip, the board members received itineraries that included the musical and stated that Russell was footing the bill for the tickets, Nick said.
"If they had paid their own way from the beginning, it wouldn’t have been an issue," he said.
The ethics commission and city prosecutors have been looking into claims that employees from the STRS volunteer board and paid staff received freebies from businesses they worked with. STRS manages a $60 billion pension system.
A former board member and the former executive director of the system already have been convicted of similar ethics violations.
And more people could be charged, said Lara Baker, an assistant city prosecutor.
Retired teacher Mary Angeletti said yesterday that she’s pleased by the scrutiny the STRS board has received.
"They have this attitude of entitlement," she said. "It was our money that was spent."
Cleveland Plain Dealer: 4 more convicted in pension case
Wednesday, September 20, 2006
Plain Dealer Bureau
That makes six former State Teachers Retirement System board members and its past executive director who have been convicted of ethics violations for, in part, accepting Broadway play tickets in 2003 while the group was in New York City on official business.
Michael Billirakis, former president of the Ohio Education Association, Joseph Endry, Eugene Norris and Deborah Scott agreed to plea deals that spared them jail time.
The four each pleaded no contest in Franklin County Municipal Court Tuesday to one count of conflict of interest in return for prosecutors dropping related charges for taking other gifts and falsifying financial disclosure statements required by the state.
Billirakis, Norris and Scott were given $250 fines, suspended jail sentences, one year probation, 60 hours of community service and ordered to pay $275 in restitution to the board. Endry's deal is similar, but contains 30 hours of community service and no restitution, because he later repaid the Frank Russell Investment Group for his tickets.
"I think it is clearly overkill," said attorney H. Ritchey Hollenbaugh, who represented Endry and Scott. "The system is unfair to people that make an innocent mistake.
"It's very clear they were given tickets as they entered the theater, and it wasn't until much later that they became aware that the tickets weren't paid for by the state teachers retirement system, but had been provided by a vendor," Hollenbaugh argued.
Columbus assistant prosecutor Lara Baker disagreed.
"There was an itinerary provided to each of the individual board members that specifically stated that Frank Russell was hosting," Baker said of the tickets to the musical "Hairspray."
David Freel, executive director of the Ohio Ethics Commission, which investigated the case and recommended criminal charges, said the board members had come to expect royal treatment, but as volunteers for a state board they should have known better.
"It is particularly suspect when you think that this is a retirement system of public money," Freel said. "Why would these members have ever thought public retirement system money could pay for their personal entertainment?"
Former board member Hazel Sidaway took her case to trial in April and lost. She was convicted of accepting the musical tickets and for taking tickets to a Cleveland Indians game in 2001 from another investment firm.
Former member Jack Chapman pleaded guilty to three misdemeanor charges in June for taking sports and theater tickets.
And former executive director Herb Dyer pleaded no contest last September to failing to report gifts he received and was fined. Dyer was forced out in 2003 following revelations of extravagant spending by the teachers retirement system.
To reach this Plain Dealer reporter: email@example.com, 1-800-228-8272
Paul Kostyu: Four more on STRS panel convicted of violating ethics
Wednesday, September 20, 2006
|By PAUL E. KOSTYU COPLEY COLUMBUS BUREAU CHIEF |
COLUMBUS Four more board members of the state’s teacher pension fund were found guilty of violating state ethics laws.
That brings to seven the number of officials who have been convicted.
The investigation of the board of the State Teachers Retirement System is officially over. But the investigation of current and former senior staff members continues, according to Lara N. Baker, the chief prosecutor in the sweeping ethics case.
On Tuesday, Michael N. Billirakis, Eugene E. Norris, Joseph I. Endry and Deborah Scott pleaded no contest or guilty to a single count of conflict of interest for accepting a gift — a $275 ticket to the Broadway show “Hairspray” — from a contractor doing business with the pension fund. All but Scott, who is from Cincinnati, are from central Ohio.
The four faced 10 total charges — four for Billirakis and two each for the others — but those were reduced in plea agreements.
The convictions came from an investigation begun in October 2003 by the Ohio Ethics Commission after media reports, including many by Copley Ohio Newspapers, raised questions about the pension fund.
All four got suspended jail sentences of 180 days, were placed on probation for one year and fined $250. Billirakis, Scott and Norris were ordered to make restitution and serve 60 hours of community service. Endry got 30 hours of community service because he made restitution before being charged.
Billirakis, a member of the executive committee of the National Education Association, broke down in tears as he stood before Franklin County Municipal Court Judge Scott D. VanDerKarr.
“I’m sorry I didn’t pay attention when I should have,” Billirakis said quietly.
Billirakis recently resigned from the retirement system board. The other three left the board when their terms expired.
Billirakis’ attorney, Terry K. Sherman, said his client’s plea was against his advice. He said he thought there were legal and factual deficiencies in the state’s case. He said Billirakis was ensnared by a trip he didn’t arrange, and he did not know that the tickets were paid by a client.
Ben Espy, the attorney for Norris, blamed retirement system administrators for his client’s legal problems. He said Norris accepted the ticket based on the advice given by the pension fund’s in-house counsel and “this is the fallout.”
“Hopefully, this unfortunate era has passed,” said H. Ritchey Hollenbaugh, the attorney for Endry, Scott and three other retirement system clients, including former Canton City Schools teacher Hazel Sidaway. Sidaway’s conviction in April after a two-day trial set the stage for the plea deals that followed.
Hollenbaugh said board members didn’t knowingly violate the law.
Not so, said David Freel, executive director of the commission. He said former retirement system board members spent thousands of dollars in questionable expenses. He said all received itineraries of the New York trip showing who hosted them at the Broadway show.
Reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail: firstname.lastname@example.org
Tuesday, September 19, 2006
Akron Beacon Journal: Former board members plead no contest to ethics violations
|Posted on Tue, Sep. 19, 2006|
Akron Beacon Journal
COLUMBUS, Ohio - Four former members of the state teachers' retirement board were sentenced Tuesday on a conflict of interest charge stemming from accepting tickets to a Broadway show from a company doing business with the agency.
The four had been charged with accepting $275 tickets for themselves and in some cases their spouses to "Hairspray," a musical in New York, during a May 2003 trip sponsored by the State Teachers Retirement System.
Board members Michael Billirakis, Eugene Norris, Joseph Endry and Deborah Scott entered no contest pleas in Franklin County Municipal Court.
Judge Scott VanDerKarr sentenced each to one year probation. He ordered Billirakis, Norris and Scott to perform 60 hours community service and to repay the cost of the tickets to the retirement fund.
VanDerKarr ordered Endry, who had already repaid the cost of the tickets for himself and his wife, to perform 30 hours of community service.
Investigators dropped a second charge of failing to report those gifts as required under state law.
The tickets were from the Frank Russell Corporation/Russell Real Estate Advisors, now the Russell Investment Group, according to the Ohio Ethics Commission, which brought the ethics charge.
Endry and Scott do not believe they did anything wrong but wanted to put the case behind them, said their Columbus attorney, Ritchey Hollenbaugh. He said the trip to New York was organized by staff members of the retirement system.
His clients "have no way of knowing who the ticket is from nor how much it costs, only that it is part of the evening that was put together with an itinerary from the staff in the board office," Hollenbaugh said.
Billirakis thought the show was part of the entire board-sponsored trip, said his attorney, Terry Sherman. He said his client pleaded no contest against his advice because he wanted to avoid a trial.
Messages seeking comment were left for Norris' attorney, Ben Espy.
A message was also left with the Russell Investment Group seeking comment. The company has said previously that it regularly hosts educational seminars and other activities for clients and Russell employees attend those functions with clients. The company says it's up to clients whether they attend those functions.
Investigators continue to look at the conduct of senior retirement fund officials, Ethics Commission investigator Paul Nick said.
In June, former board member Jack Chapman was convicted of accepting Cleveland Indians baseball tickets and other gifts from investment clients. Another former board member, elementary school teacher Hazel Sidaway, was convicted in May of similar ethics violations, and Herb Dyer, the retirement system's former executive director, was found guilty last fall of improperly accepting gifts.
The teachers' retirement system serves more than 439,000 active and retired educators with assets of about $59.6 billion.