Dennis Leone re: Mary Ann Cervantes' viewpoint and empowering the executive director; a history lesson some wish to forget

From Dennis Leone, January 18, 2008
Subject: RE: Cervantes Response:

I agree with the retiree response sent to me: "I found her response lacking in substance." D.L.

Dennis Leone to John Curry and Molly Janczyk, January 14, 2008
Subject: Re: Cervantes Response: Request Again: Ques. for STRS Board Members: 1/10/08

John and Molly: I take exception with Mary Ann's quotation below. Her comment -- "Certainly STRS's recent court case has cost this pension millions of dollars due to unfair labor practices" is a huge exaggeration. In the fall of 2005, non-investment staff members received one more bonus check after they sued to get it. Since the prior board eliminated the program mid year, instead of the end of the year, the court was prepared to award the non-investment staff one more, final bonus check. The judge felt there was an implied contract because the STRS employee handbook said they'd be eligible (upon approval of the executive director, who -- surprise -- approved the bonuses), and even though said employees had no individual contracts or union contract. The millions that were spent were due to the bonuses and the inappropriateness of the board legal counsel agreeing to also pay the employees' personal PERS contributions even though he did not have board approval to do so. This was the matter, to refresh your memory, when John Lazares and I begged the board NOT to approve the settlement agreement unless we had a document in hand. The board majority felt no document was needed, which meant that there was no way to prove anything when the board's legal counsel changed the final terms of the settlement agreement WITHOUT prior board approval. This whole thing was NOT so much a matter of the board engaging in an unfair labor practice (that seems Mary Ann's union-trained mind speaking again) as it was simply ignorance on the board's part for offering the non-investment staff bonuses in the first place, and also allowing the arrangement to be in the employee handbook -- giving the executive director the power to award them. History lesson. Some people want to forget.

Dennis Leone