STRS Flashback - 7 Years Ago - The Day the Governor Called Off the Inspector General!

From John Curry, June 27, 2010

“Is (Montgomery) going to audit herself?” Leone said. “How can they deal effectively with an issue on a board they serve.”

Canton Repository, June 27, 2003

Taft says no to probe of STRS by inspector

By PAUL E. KOSTYU Copley Columbus Bureau chief

COLUMBUS — Gov. Bob Taft shut down an investigation of the State Teachers Retirement System by vetoing budget language that would have allowed the Ohio inspector general to pry into the practices of pension fund boards.

The governor’s veto did not sit well with Sen. Kirk Schuring, R-Jackson Township, who had asked Inspector General Thomas Charles to investigate STRS in light of reports in the past three weeks about excessive spending on salaries, bonuses, artwork purchases and travel.

Charles, who had pushed to have the language inserted in the budget, was preparing to start an investigation Tuesday, when the budget goes into effect. Taft said the retirement systems already are subject to Ohio ethics laws and oversight by the Ohio Retirement Study Council.

But Schuring called those oversight functions “empty and hollow,” and suggested that the governor “better read the statute.”

Dennis Leone, who dug into the spending habits of the STRS board and its executive director, Herbert L. Dyer, was scheduled to meet with Charles next week to brief him on what the Chillicothe superintendent discovered. Charles began collecting information by attending a press conference Wednesday of lawmakers who have demanded Dyer’s resignation.

“I hope they don’t sweep this under the rug,” Leone said.

Charles said “officially” he stands by an earlier statement that his office “could provide needed oversight to the pension systems.” He would not comment further. Leone said Charles told him just days ago that he expected Taft to keep the oversight language in the budget bill.

Schuring said he may ask Ohio Auditor Betty Montgomery and Attorney General Jim Petro to conduct investigations of STRS. He also said he will consider legislation to give the retirement study council more power to control pension boards.

Leone said Montgomery and Petro may face conflicts of interest because both are members of the retirement board.

“Is (Montgomery) going to audit herself?” Leone said. “How can they deal effectively with an issue on a board they serve.”

Laura Ecklar, a spokeswoman for STRS, said the system did not lobby Taft to veto the budget language. She said STRS officials maintain there is legislative authority now “to look at everything that has to do with the pension plans.”

Taft said he would work with lawmakers to “provide additional, reasonable oversight and enforcement tools” to the council.

“I’m disappointed with the governor, given the current state of affairs at STRS,” Schuring said. “Considering the waste, fraud and abuse, the inspector general would have been perfectly suited to do an investigation.”