Saturday, February 03, 2018

Tom Curtis to Stark County RTA: A History Lesson About Attempted Reform At STRS

February 3, 2018

Dear Educators, 

The following is a brief history lesson for those of you who are currently calling for large meetings, regarding the loss of STRS benefits. Obviously, many BR's [Benefit Recipients] want to know why this happened and what can be done, if anything, to have some of our benefits reinstated.  

After you read the following, ask yourself, "where was I when attempts to bring about spending reform at STRS were being made in the early to mid 2000's and why was I not concerned then?" 

During the bull market in the 90's, STRS made and spent huge sums of money on capital improvements. STRS bought a large portion of surrounding real estate adjacent to the existing building, completed a total renovation of the exiting building, added many features like a free day care center for employees' children, built a large parking garage for employees and visitors and made many large expenditures for art work and sculptures. In my opinion, the size of the STRS building far exceeds the space needed to operate our pension system and is a drain on our retirement monies. Herb Dyer never considered STRS deposits to be our money, but his money. 

In 2001, STRS lost 12.3 billion dollars, due to the 2001 stock market crash. After that loss, STRS spending practices continued unabated, business as usual. This appeared to be grossly inappropriate to those who paid attention to the business and spending practices at STRS. The STRS staff continued to grow to an all time high of 545 employees and they were still advertising for more employees. 

In 2002, this prompted Dr. Dennis Leone, a superintendent from Chillicothe, to travel to STRS and conduct his own audit of the spending practices of the STRS Board and Executive Staff. Another superintendent, John Lazares, accompanied him at times. They sifted through the budgets of recent years and found what they thought were flagrant examples of misspending and mismanagement of retirees' funds. Dr. Leone found that the Board sanctioned all of the misspending and mismanagement by unanimously passing every motion that came to a vote in the prior 3 years. 

Dr. Leone prepared a sixteen-page document, listing all of the expenditures he found to be unwarranted. He presented it to the STRS Board at a monthly Board meeting in 2003. The Board failed to acknowledge or embrace his findings, even though he presented it to the Board at 2-3 subsequent Board meetings. 

During Dr. Leone's final presentation to the Board, Damon Asbury, Assistant Executive Director at the time, advised the Executive Director, Herb Dyer that he needed to acknowledge Dr. Leone's findings.  

About that same time, Dr. Leone's document found its way to an investigative reporter form the Cleveland Plain Dealer, Stephen Ohlemacher, who then went to STRS and did his own research. He found that not only were all of Dr. Leone's findings of misspending and mismanagement accurate, he even identified four more such practices. Ohlemacher then presented his findings in a lengthy exposé published June 8, 2003 in the Cleveland Plain Dealer.  Following that eye-opening article, over 100 other articles appeared in numerous newspapers throughout the state over the course of 2-3 years, most notably from investigative journalist Paul Kostyu in our own Canton Repository. 

At that time, the STRS Board was comprised of 9 Board members. Five of those Board members held strong ties to the OEA, one of whom was the immediate past president of the OEA. Those 5 Board members controlled all voting by the Board. The one retired Board member at that time, told me it was made clear to the others on the Board that all motions passed would be unanimous. 

When Dr. Leone's document was made public, the OEA immediately began discrediting his findings. The then OEA President sent out a notice to all OEA local presidents advising them to disregard Dr. Leone's findings as rubbish. Numerous STRS retirees contacted the OEA to question the posture the OEA had taken on those findings. To my knowledge, all correspondence was ignored. OEA's position on the reported abuses seemed earth shattering to those who had been following Dr. Leone's findings and wanted answers for the mismanagement and misspending he brought to light. The OEA accepted no accountability for any of the misspending and mismanagement, yet the OEA had financed and promoted each of those 5 Board members' election to the Board. 

In 2003, a small group of retired Plain Local teachers followed Dr. Leone's lead and started a movement to attempt to bring about reform at STRS.That initial group organized a rally that was held in front of the Statehouse in Columbus on the same day of the STRS monthly Board meeting.  

That rally brought together 400-600 STRS benefit recipients. The rally organizers made a presentation about Dr. Leone's findings and then called for a march on STRS to attend the STRS board meeting and demand answers to his findings. Numerous educators spoke to the Board that day, but no response was provided. Educators spoke at Board meetings monthly, but never received any response from Board members. They obviously felt that they were beyond accountability. 

Herb Dyer, then the Executive Director of STRS, was livid with the fact that all of these people flowed into "his" Board Meeting and into adjacent rooms. His attitude was that we had no business being there and that we should go home and let STRS move on with business as usual. He said STRS was financially stable and benefit recipients had no business questioning his financial accountability. Obviously, we now know that was untrue. 

After that Board meeting and for several years thereafter, many of those educators continued to be watchdogs and attended every Board meeting. Those dedicated retirees, who came from all over the state, banded together and formed an organization known as CORE, Concerned Ohio Retired Educators.  

The OEA, STRS and ORTA quickly dubbed CORE members as merely "disgruntled retirees". Because those organizations belittled and discredited us, the majority of the 200-300 hundred thousand educators belonging to STRS never knew about the abuses regarding the flagrant misuse of retirees' funds and the efforts of those educators who were attempting to bring those abuses to the light of day. Thousands of Ohio educators did not even know about the over 100 newspaper articles exposing those abuses. 

CORE was responsible for getting the necessary petitions signed to place John Lazares and Dr. Dennis Leone on upcoming election ballots. Lazares was voted onto the Board first and Dr. Leone the following year, unseating two long time OEA-sanctioned board members. The OEA made sure that would never happen again by forbidding anyone but OEA-approved persons to place anything in teachers' mailboxes in the hundreds of school districts all over Ohio. No STRS Board member has since been elected to the Board that was not backed and supported by the OEA.

It should be noted that CORE received absolutely no support  from ORTA, even though ORTA's Executive Director attended all of CORE's monthly meetings. ORTA would not take a stand on the election of either of CORE's candidates, nor did any representative of ORTA ever address the STRS Board when up to 20 educators questioned Board actions at nearly every Board meeting.  

Dr. Leone, with the support of CORE was able to bring about a change in the composition of the STRS Board through legislation. A second retiree seat was added where there was only one before, and 2 other seats were to be filled with people having business and investment backgrounds. The OEA no longer had a majority vote of the Board. 

In the end, STRS retired Board members Dr. Dennis Leone and John Lazares, along with CORE, were able to bring about numerous reforms. Some have remained, but for the most part, after Leone and Lazares left the Board, STRS went back to business as usual. 

Since 2006, STRS has continued to tell the membership through newsletters and others means of communication that STRS was on track with meeting the State 30-year mandate concerning the unfunded liabilty. That 30-year unfunded liability is still a long way off from being met.  

The huge changes that were made about 3-5 years ago were to have fixed the problem. A problem cannot be fixed when the people who are the cause of the problem, ignore the problem. STRS has used bogus numbers in figuring the unfunded liability, since that time. STRS is finally admitting that those numbers were not realistic and that the unfunded liability is much greater then anticipated. Anyone who truly knows how that is figured, knows the truth.  

Now that the STRS Board voted and removed all of our additional benefits, thus leaving us with a stagnant pension payment, the STRS membership has finally taken notice. 

What is sad is that those whistle-blowers, Dennis Leone, John Lazares, CORE members and the press were ignored by roughly 90% of the STRS membership back in the early 2000's. CORE tried desperately to bring to light the future consequences of the misspending and mismanagement by the STRS Board and the Executive Officers. CORE could see the large picture. The OEA, STRS and ORTA continued to tell educators everything was just fine and that STRS was financially very stable. That was not true then and is possibly not true today. The Board cannot remove any more  benefits, for they are all gone, so what happens now? 

CORE members predicted that all benefit recipients would likely lose all of their additional benefits, beyond our guaranteed pension in the future, but only a very small minority listened.  

As a life member of SCRTA, I tried to make the SCRTA leadership aware of the future consequences. I could not believe the amount of resistance I faced. The leadership did not like me sticking my nose into "their" association. I was again told I was just a disgruntled retiree by the present and past presidents of that time.  

I asked the president if Dr. Leone would be permitted to address SCRTA to inform them of the situation at STRS. I was told the speaking agenda had already been determined for that year and could not be changed. Every effort I made to bring the information concerning all of the mismanagement and misspending that had taken place at STRS to the membership was thwarted by the leadership of that time. 
At one meeting, I attempted to hand out information for a person who was running for an active seat on the Board, but was not supported by the OEA. The past president put his hands on me and ran me out of the church hallway after the meeting. He told me, a lifetime member, that I could not pass that out to "his members." I was verbally threatened and asked to leave the church hallway. Because that man placed hands on me, I filed a complaint with ORTA, but my complaint was ignored. Why, because all of his board members said they saw what took place and "lied", saying that did not happen. 

I have never returned to a SCRTA meeting since that time. I further relinquished my lifetime membership with ORTA, because I wanted no part of an organization that knew what had taken place at STRS, but made no attempts to bring the problem to light.  

It is my sincere hope that all of you who are now getting involved and concerned about why we have lost all of our extra benefits, find some solace in your efforts. STRS is all about politics.  Do you really think that is going to change? 

Sincere regards,
Thomas Curtis
1998 Plain Local Retiree
CORE organizer
SCRTA life member
ORTA life member (relinquished membership)
Larry KehresMount Union Collge
Division III
web page counter
Vermont Teddy Bear Company