Dennis Leone: OEA Credibility Factor of Zero

From Dennis Leone, December 13, 2009

I have stewed about what Bill Leibensperger and OEA are currently saying about STRS proposals, but for different reasons. Leibensperger is such a deception artist when he, along with OEA-backed STRS Board member Tim Myers, now talk about the justification for the STRS staff bonuses. Leibensperger and former OEA President Gary Allen also were deception artists in 2003 when OEA tried so hard to say that the wasteful spending by STRS Board members really wasn’t happening. Remember the millions of dollars that were wasted at STRS? Has everyone already forgotten that former STRS Executive Director Herb Dyer and FIVE OEA-backed board members – including former OEA President Michael Billirakis – were convicted in court for their misdeeds at STRS? When it comes to STRS matters, OEA has a credibility factor of zero. OEA had the chance to be a leader at STRS between 1993 and 2003, but it was more important for OEA to support the costly, ill-advised 35-year/88% plan and look the other way when it came to pension money being spent on booze, parties, and multiple trips to Honolulu. OEA knew what was happening. What now continues to get lost in this bonus discussion is:

1. The STRS Board made a conscious decision 50 years ago, and it was a good decision, to hire our own internal stock managers rather than “pay more” for external managers. In so doing, the Board also made a conscious decision to provide fabulous BASE salaries to these people (which averaged $156,000 for all STRS investment staff members last year) plus a package of spectacular fringe benefits that people on Wall Street have never seen in their lives. In addition, of course, these employees have qualified for annual bonus checks – many in excess of $100,000 – even when the stocks they were managing have lost money. (My initiative to change this in future years, which was first soundly rejected, was finally approved 6-3-1, with OEA leaders Ramser, Myers and Meuser not in support).

2. Please don’t tell me now that since it would cost more if we used external stock managers (as if it is some new surprise), that this -- somehow -- justifies STRS investment staff members getting bonus checks for “value added” (even when their stocks lose money). Excuse me but the “value added” is being paid for by the wonderful base salaries and fringe benefit package that these employees receive. The bonuses are NOT contractually required and the board is NOT obligated to pay them……..but they have because of the OEA-supported and teacher-driven love affair with the concept of “value-added.” (I guess the teacher who has 90% of her students failing the OAT deserves a bonus check – due to “value-added” – because another teacher in her school has 95% of her students failing the OAT..........tell THAT to the voters in your district.)

3. All of us can come up with our own personal examples of how we are “saving” money by not doing something in a different way. THIS is what the STRS Board naively continues to believe about awarding bonus checks. Because it would cost more to handle the stocks in a different way, then this justifies bonus checks, even though the conscious decision was made decades ago to do things the way we are with tremendous base salaries and wonderful fringe benefits for the STRS investment staff members. I guess my last school board owes me a bonus check because I was “saving” my district $100,000 per year by NOT recommending that an assistant supt be hired. I mean, after all, I had to do the work that the assistant supt would do (which is the same argument that is used by STRS internal stock managers when they say if they don’t manage the stocks, then somebody externally will have to do so ). I also guess my wife and I are “saving” ourselves thousands of dollars per year because we have not tried to sell our house in Chillicothe and foolishly attempted to buy a condo that we can’t afford in Florida. I mean, after all, we need to have a roof over our heads, right? I guess my wife and I should try to figure out a way to give ourselves a bonus since we are “saving” money by not doing something in a different way with respect to our living accommodations.

The above is completely over the heads of OEA and the STRS Board majority.

Dennis Leone
Former STRS Board Member (2005-2009)