Dean Dennis: Open letter to STRS Board: a case for mismanagement and the mandated every-10-years audit that hasn't happened in over 14 years

From Dean Dennis

March 11, 2021

Open Letter to STRS Trustees

Trustees,

John Damschroder's, "Panda article" certainly caught my attention. Here it is, if you haven't already read it. https://www.thenews-messenger.com/.../damschr.../6883736002/

You may have also seen a recent article in the Columbus Dispatch titled, Mismanagement or misunderstanding? The outside audit of Ohio's pension fund explained. I think there is a case for "mismanagement."

Below you will find some research on the Panda investment. I thought it was prudent to share; I hope you will find it of value.

http://www.orsc.org/Assets/Reports/816.pdf (see page 29, $345,000,000 to Panda Power)
https://www.institutionalinvestor.com/.../yield-hungry... (STRS Ohio is first pension system mentioned)
https://www.powermag.com/panda-power-funds-rolls-on-with.../ (risky investment)
https://www.utilitydive.com/.../panda-temple.../442582/ (Panda goes bankrupt)
https://www.dallasnews.com/.../panda-energys-backing.../ (on the way to bankruptcy Panda invests in wrestling/daughter)
https://www.strsoh.org/_pdfs/annual-reports/50-143-19.pdf (see actual page 59. We still carry Panda as an alternative investment and have done so since we first got involved)

Panda is only one of our 130-plus alternative investments. As retirees go more than half a decade without their promised COLA the question needs to be asked, how much money can trustees find in investments gone awry that likely have numerous hidden fees?

Trustees, let's diligently manage our outside auditors and guarantee to members they look at our alternative investments both painfully meticulously. We need to make sure all expenses and fees for every investment are accounted for.

Let's also diligently manage the STRS management regarding the forensic audit. The $75,000 members raised for this audit equates to less than one-millionth of our $80 billion investment portfolio. No one knows what the audit will find, perhaps nothing. However, when retirees are constantly told by STRS how great STRS is doing while they go year after year without a COLA, and as active teachers work longer and contribute more for less, I think you can understand why the forensic audit is a reality.

Additionally, realize that the outside state of Ohio, required fiduciary audit that is supposed to occur every 10 years has now gone more than 14 years without happening. This key piece of information wasn't highlighted by the Columbus Dispatch when they were explaining the outside audit to their readers. That said, please make sure that STRS management is transparent when it comes to all public information requests related to the forensic audit.

My best and thank you for the time you commit,

Dean Dennis