John Curry to Paul Kostyu, March 31, 2008
Subject: Re: STRS spending abuse since 1995-Leone called it to our attention
The first major news media coverage of the STRS debacle was posted by the Cleveland Plain Dealer's Stephen Ohlemacher on the front page of the PD on June 8, 2003 entitled, "Teacher Pension Losses Don't Stop Spending." The majority of the misspending that this PD article details are from Dennis Leone's 13 page paper
presented to the Ohio STRS on May 16, 2003. I believe the first of your excellent series of STRS articles began after both of these dates.
Agreed that Dennis hadn't "discovered all the revelations" on this list but I think it is more than fair to say that the "majority" of the items listed below were discovered by Dr. Leone.
Once again, thank you for your excellent series of articles re. the Ohio STRS. May I suggest a follow-up article by you sometime this spring re. 5-years later and Dennis is still facing much of the mismanagement, misspending, and entitlement mentality by the majority of the STRS Board and its current Executive Director? If in doubt, you might want to contact Dennis about this.
From Paul Kostyu, March 31, 2008
Subject: RE: STRS spending abuse since 1995-Leone called it to our attention
I believe it would be a misrepresentation of the truth to say that Leone "discovered" all of the revelations on your list. It would be more accurate to say Dennis's initial investigation into STRS spending may have contributed to the other revelations. Maybe his discovered these revelations by reading news accounts -- primarily in the Cleveland Plain Dealer and Canton Repository. But everyone should know that the news media was largely responsible for first uncovering much of what is on your list. Teachers, retired or current, shouldn't be involved in revisitionist history.
Paul E. Kostyu
Statehouse Bureau Chief
50 W. Broad St., Suite 1325
Columbus, Ohio 43215
From Lenora Wood, March 30, 2008
Subject: FW: STRS spending abuse since 1995-Leone called it to our attention
COLLEAGUES -- AS PROMISED, AND LESS WE FORGET, HERE IS THE LIST OF ABUSES DENNIS LEONE FOUND IN 2005 AND BROUGHT TO OUR, AND THE MEDIA'S ATTENTION AND WHICH BROUGHT SWEEPING CHANGES IN OUR STRS ORGANIZATION AND SWEPT HIM INTO OFFICE ONTO THE STRS BOARD. IN DOING SO HE HAS HAD TO TAKE A LOT OF GUFF. AND IT LOOKS LIKE THINGS ARE GOING DOWN THE SAME OLD TRACK THAT OUR LAST DISGRACED LEADER WENT DOWN AND WHO FINALLY WENT OUT WITH A GOLDEN PARACHUTE THAT COST US SO MUCH OF OUR PENSION FUNDS. WE CANNOT ALLOW AGAIN THE HANDING OUT OF CREDIT CARDS AND TRAVEL TO EXOTIC LANDS (TO LOOK FOR POSSIBLE 'INVESTMENT'S) PAID FOR OUT OF OUR PENSION FUNDS. THE STRS BOARD HAS TO GET REAL AND REMEMBER THAT WE WORKED HARD FOR THE PENSION MONIES THAT THEY ARE SUPPOSED TO GUARD AND SPEND WISELY. WE HAVE ALREADY LOST SO MUCH: A POOR HEALTH CARE PLAN, NO EXTRA 13TH DECEMBER CHECK. SOME OF YOU YOUNGER RETIREES NEVER GOT THAT WELCOME CHECK. AND WITH INFLATION AND THE POOR ECONOMY, OUR PENSION CHECK: JUST WON'T COVER WHAT IT USED TO. OUR BOARD NEEDS TO GET LEAN AND CONSERVE EVERY DOLLAR WE HAVE FOR US: RETIREES AND FUTURE RETIREES. WE CANNOT HAVE ANOTHER CHIEF EXECUTIVE WHO THINKS HE ALONE CAN RUN THE SHOW. REMEMBER DYER? IT WAS HE WHO WROTE HIS OWN CONTRACT THAT ALLOWED HIM TO RETIRE IN COMFORT AND BUILD THAT HALF-MILLION DOLLAR HOUSE IN THE EAST. LET'S ALL SCREAM TO THE HIGH HEAVENS!!!!!
LEN AND CHUCK WOOD
John Curry to Bill Leibensperger, October 22, 2005
Subject: STRS spending abuse since 1995 -- Leone called it to our attention
Bill, after talking to Molly, I understand you believe that some of Dr. Leone's findings might have been exaggerated. Please correct me if that's not the case. Below is a list of items Dr. Leone has given as examples misspending and mismanagement at Ohio STRS. Would you please comment on any item or items below that you feel is not completely truthful and factual and/or any other items that you think Dennis might have not portrayed properly? This would be an excellent opportunity for you and the OEA to enlighten tens of thousands of STRS retirees who are still waiting for an explanation of why your OEA President Gary Allen said that Dr. Leone's "logic is hard to follow," and that "his motives are unclear." This may help us understand for once and for all. Now would be an excellent time to clear up any disagreements your organization may have with Leone's findings before your organization and my organization sit on the same side of the table to tell Ohio voters why increased contribution rates are necessary Thank you.
John Curry, a Proud CORE member
P.S. I would have asked you this in person this past Thursday at the STRS meeting, but I had to work (after my STRS retirement). I simply can't afford what many recent OEA member speakers to the STRS board in the September meeting portrayed to the Board as a CURRENTLY "affordable" health care insurance offering to my spouse and I by STRS.
The following represent a number of spending abuses discovered by Dennis Leone that occurred at STRS since 1995.
1. $94.2 million on the new STRS headquarters.
2. $869,235 on artwork, sculptures and polished stones for the new STRS building.
3. $818,000 on a child care services center for the children of STRS employees.
4. $500,000 per year to run the child care services center.
5. $426,000 on a fitness center in the STRS building.
6. $88,397 per year to provide food services for STRS employees.
7. $428,056 on 16 cars, vans, and SUV's.
8. STRS Board policy that permitted staff members to drive STRS vehicles for personal use, and the family members of said employees to drive said vehicles.
9. 52 American Express Credit Cards and 20 BG gas cards used Board members and STRS staff members.
10. Alcohol purchases occurred by staff members and Board members attending conferences -- using STRS credit cards.
11. $18,810 on "Discovery Park" gala event, including the purchase of disposable cameras for attendees.
12. $15,100 on new STRS building dedication, including alcohol and gifts for attendees, as well as airfare and lodging for out-of-town STRS visitors.
13. $4,100 on a private retirement party for an STRS Board member.
14. $5,594 on poinsettias to decorate STRS during the holiday season in 2002.
15. $1,000 dinners for 12 board members/staff members on 2 occasions, again with alcohol.
16. $7,116 for baseball tickets, concert tickets, movie rentals, and Kings Island tickets for STRS employees in the summer of 2003 for "team building."
17. $530,284 spent by Board on trips and meetings around the country in 2000, 2001, and 2002.
18. Multiple trips taken by Board members and staff to places like Honolulu, Palm Springs, Kiawah Island, and Anchorage. A planned trip to China in 1995 was cancelled after it was suggested that it would have the appearance of junketeering.
19. Frequent occurrences of at least 6 Board members going to the same meeting, sometimes twice a year, costing STRS over $9,000 each year.
20. $36,736 spent by a Board member Jack Chapman in a single year for trips all over the country.
21. $1,017 airplane ticket for a Board member that would have cost $258 if it had been purchased 30 days in advance of the conference.
22. $1 million cash payback per year to full-time STRS employees for 18 days of unused staff vacation days and unused sick leave.
23. Total administrative expenses at STRS increased 17.4% per year between 1996 and 2002.
24. Total STRS employees increased from 414 to 725 between 1996 and 2002.
25. A total of 1,035 employee bonus checks were issued to STRS staff in 2000, 2001 and 2002.
26. $24.4 million was awarded in bonus checks to employees between 1998 and 2003.
27. $3.2 million had to be paid by STRS to PERS because of bonuses alone since 1998 to satisfy that pension system's 13.31% annual employee contribution requirement. STRS employees are members of PERS.
28. 34 STRS employees in 2002 received bonus checks in excess of $40,000 (with 18 of those getting bonuses in excess of $70,000).
29. One STRS employee received bonus checks of $110,000 and $68,800 in 2001 on top his base salary of $164,000.
30. Over 150 STRS employees had base salaries over $100,000 in 2002, with 32 of those making over $155,000 -- topping the salaries of both the governor and the chief justice of the State Supreme Court.
31. A total of $39,251 was paid to the Perry Local School District by STRS in 2002 and 2003 for sub teacher costs for Board member Michael Billirakis (when he attended STRS meetings), even though he did not have a position in the school district. NEA pays Perry Local the dollar amount associated with the salary and benefits for Billirakis, enabling him to be listed as an employee.
32. Excess STRS furniture was sold to STRS employees in 2000 and 2001 for $27,703, and instead of this amount going back into the pension fund, it was given to charities.
33. The regular work week for STRS employees is 37 1/2 hours.
34. If an STRS employee adopts a child, the STRS Board awards a $5,000 cash gift to said employee.
35. Between 1999 and 2004, the STRS Board paid out $2.1 million in educational stipends for STRS employees to take college courses. This amount was double what the other 4 public pension systems in Ohio paid out combined over the same time period. STRS pays up to $7,000 per year (per employee) for undergraduate or graduate work.