Dennis Leone re: STRS $96.1 million BP stock loss

From Dennis Leone, July 6, 2010
Subject: Who loses? We do.

.......and no, no, no, STRS certainly does not need a policy (that I tried month after month to get over 4 years) that:

(1) Requires Steve Mitchell to immediately notify the board when a certain stock has suddenly gone south due to severe, abnormal, or extraordinary external circumstances;

(2) Permits the board to pull out of a stock immediately when severe, abnormal, or extraordinary circumstances cause a certain stock to suddenly go south, even if such a decision is contrary to the board's long-standing adopted policy.

No sir, Steve Mitchell certainly never wants the board to adopt such a policy (because he doesn't want the staff blamed for anything), and the board has naively believed that such is not needed because we are "in it for the long haul." How many examples do we need before something REALLY changes with our investment strategies?

I have the board minutes when Steve Mitchell advised the board to "hang in there" a few years ago because the stock market would soon rebound. He said this when we already had dropped $10 billion in assets, and then we dropped another $20 billion after he said it.

It didn't faze the board one bit, except that my colleagues on the board finally agreed (with initial resistance from Myers and other OEA reps on the board) to stop bonuses in years we lost money. Look-the-other-way ignorance on a grand scale, which is the OEA way and the ORTA way. Who loses? Retirees.

Dennis Leone

From a retiree, July 6, 2010

STRS has 2/3 of the BP investment of all Ohio Retirement Systems. BP now joins Lehman and Enron on the list of shame. We can not keep saying that this is only a small part of our investment portfolio. It is easy to be a Saturday Morning Quarterback, but -- may be some poor judgement to stay on the computer decision process with this stock. We all have 2nd guess holdings, but many bailed out of this stock at the first sign of trouble.

FYI, There are several legal actions against BP that they did not use proper safety --therefore, they are responsible as individuals for the loss.