Saturday, January 14, 2006

A quote we must all remember.......

"Those who forget the past are destined to repeat it."

--Robert A. Heinlein

Flashback: Facts Regarding Spending Abuses at STRS Since 1995 [from Dennis Leone's investigative report on spending and management practices at STRS]

[From Dennis Leone's 2005 campaign material, when he ran for his current seat on the STRS Board]

The following represent a number of spending abuses discovered by Dennis Leone that occurred at STRS since 1995. The abuses occurred even though assets at STRS dropped $12 billion, retirees lost their 13th check, health insurance premiums for retirees significantly increased, active members of STRS saw their STRS contribution rate increased from 9.3% to 10.0%, and school districts were implementing budget reduction plans to make ends meet. STRS expenditures included:

1. $94.2 million on the new STRS headquarters.

2. $869,235 on artwork, sculptures and polished stones for the new STRS building.

3. $818,000 on a child care services center for the children of STRS employees.

4. $500,000 per year to run the child care services center.

5. $426,000 on a fitness center in the STRS building.

6. $88,397 per year to provide food services for STRS employees.

7. $428,056 on 16 cars, vans, and SUV's.

8. STRS Board policy that permitted staff members to drive STRS vehicles for personal use, and the family members of said employees to drive said vehicles.

9. 52 American Express Credit Cards and 20 BP gas cards used by Board members and STRS staff members.

10. Alcohol purchases occurred by staff members and Board members attending conferences -- using STRS credit cards.

11. $18,810 on "Discovery Park" gala event, including the purchase of disposable cameras for attendees.

12. $15,100 on new STRS building dedication, including alcohol and gifts for attendees, as well as airfare and lodging for out-of-town STRS visitors.

13. $4,100 on a private retirement party for an STRS Board member.

14. $5,594 on poinsettias to decorate STRS during the holiday season in 2002.

15. $1,000 dinners for 12 board members/staff members on 2 occasions, again with alcohol.

16. $7,116 for baseball tickets, concert tickets, movie rentals, and Kings Island tickets for STRS employees in the summer of 2003 for "team building."

17. $530,284 spent by Board on trips and meetings around the country in 2000, 2001, and 2002.

18. Multiple trips taken by Board members and staff to places like Honolulu, Palm Springs, Kiawah Island, and Anchorage. A planned trip to China in 1995 was cancelled after it was suggested that it would have the appearance of junketeering.

19. Frequent occurrences of at least 6 Board members going to the same meeting, sometimes twice a year, costing STRS over $9,000 each year.

20. $36,736 spent by a Board member Jack Chapman in a single year for trips all over the country.

21. $1,017 airplane ticket for a Board member that would have cost $258 if it had been purchased 30 days in advance of the conference.

22. $1 million cash payback per year to full-time STRS employees for 18 days of unused staff vacation days and unused sick leave.

23. Total administrative expenses at STRS increased 17.4% per year between 1996 and 2002.

24. Total STRS employees increased from 414 to 725 between 1996 and 2002.

25. A total of 1,035 employee bonus checks were issued to STRS staff in 2000, 2001 and 2002.

26. $24.4 million was awarded in bonus checks to employees between 1998 and 2003.

27. $3.2 million had to be paid by STRS to PERS because of bonuses alone since 1998 to satisfy that pension system's 13.31% annual employee contribution requirement. STRS employees are members of PERS.

28. 34 STRS employees in 2002 received bonus checks in excess of $40,000 (with 18 of those getting bonuses in excess of $70,000).

29. One STRS employee received bonus checks of $110,000 and $68,800 in 2001 on top his base salary of $164,000.

30. Over 150 STRS employees had base salaries over $100,000 in 2002, with 32 of those making over $155,000 -- topping the salaries of both the governor and the chief justice of the State Supreme Court.

31. A total of $39,251 was paid to the Perry Local School District by STRS in 2002 and 2003 for sub teacher costs for Board member Michael Billirakis (when he attended STRS meetings), even though he did not have a position in the school district. NEA pays Perry Local the dollar amount associated with the salary and benefits for Billirakis, enabling him to be listed as an employee.

32. Excess STRS furniture was sold to STRS employees in 2000 and 2001 for $27,703, and instead of this amount going back into the pension fund, it was given to charities.

33. The regular work week for STRS employees is 37 1/2 hours.

34. If an STRS employee adopts a child, the STRS Board awards a $5,000 cash gift to said employee.

35. Between 1999 and 2004, the STRS Board paid out $2.1 million in educational stipends for STRS employees to take college courses. This amount was double what the other 4 public pension systems in Ohio paid out combined over the same time period. STRS pays up to $7,000 per year (per employee) for undergraduate or graduate work.

Flashback: Changes at STRS Since Dennis Leone's Report of May 16, 2003

[From Dennis Leone's 2005 campaign material, when he ran for his current seat on the STRS Board]

1. The 52 credit cards and 39 gas cards held by staff and board members have been turned in.

2. All but a couple of the 16 cars, vans, and SUV's purchased by STRS have been sold.

3. The policy that permitted staff to use STRS cars for personal use has been dropped.

4. The STRS staff has been reduced by 100 employees and the administrative budget has been cut.

5. New policies prohibit the use of pension money for things like alcohol, parties, movie rentals, Kings Island, concerts, and baseball games, or for airfare, lodging, and gifts for out-of-town STRS visitors.

6. New policies require plane tickets to be purchased at least 30 days in advance in order to receive the cheapest rates.

7. New policies restrict how many professional meetings Board members can attend yearly, the number of Board members who can attend said professional meetings, and how much can be spent at said meetings.

8. The cost to run the STRS child care services center has been reduced from $500,000 per year to $100,000 per year. It is still promised to be cost neutral.

9. Cafeteria services in the STRS headquarters are now cost neutral.

10. Fees to use the STRS fitness center have been increased.

11. Bonus checks for non-investment staff have been eliminated -- affecting over 300 employees -- and bonus checks for investment staff will occur only if said employees earn money for STRS.

12. NEA paid back STRS the $39,251 that the Perry Local School District received from STRS for sub teacher costs for Michael Billirakis when he was attending STRS meetings.

13. STRS Executive Director Herb Dyer resigned to avoid being terminated, after 105 legislators called for his resignation.

14. Senate Bill 133, signed by the governor on June 16, 2004, put in place a number of oversight regulations. It also requires ethics training and travel policies for all Board members.

15. Senate Bill 133 added another retiree to the Board, removed State Auditor Betty Montgomery and State Attorney General Jim Petro, and added three investment specialists -- thereby stripping OEA of its majority control of the STRS Board.

16. Senate Bill 133 stipulates that the "big spender" Board members from 2000, 2001 and 2002 -- those who spent in excess of $10,000 per year of pension money on trips around the country -- may never again run for the Board or serve as an appointee to the Board. This affects Jack Chapman, Eugene Norris, Hazel Sidaway, Gloria Gaylord, and Debbie Scott. It deserves noting that Eugene Norris, a former OEA officer and Board president in 2004, was defeated in his re-election attempt immediately before Senate Bill 133 went into effect, by John Lazares -- Warren County ESC Superintendent.

17. Senate Bill 133 contains a disciplinary procedure that will authorize the State Attorney General -- in the event that Board members improperly spend pension money in the future -- to seek restitution, pursue civil charges against Board members, and cause their removal from the Board.

Lest we forget.......

Damon Asbury responds to Tom Curtis re: Consideration for members' ideas

From: Damon Asbury
To: Tom Curtis
Sent: Friday, January 13, 2006
Subject: RE: 122805 Curtis To Asbury, Nearly 2006 & Still No Consideration For Members Ideas

Dear Tom:

I wanted to take a few moments to respond to your e-mail sent to me on Dec. 28. For more than two years, you and I have had many discussions – in person, by mail and via e-mail. And I have certainly appreciated your input and respect your opinions. However, while I believe the system has made significant progress over these past many months, I would ascertain from your comments that you do not share this opinion.

I know that you are an avid reader of our newsletters and Web site and, of course, you are a frequent attendee at the board meetings. Consequently, I will not list all the changes that have been made through the collective efforts of the Retirement Board, the staff, the membership and the Ohio legislature, as these have been reported in the past. However, I would like to briefly share some “big picture” issues with you.

First, you mention in your letter that little has been done to restore the trust and confidence of STRS Ohio members. As was shared with the board during the November meeting, our most recent telephone survey of active and retired members would indicate otherwise. When asked to share their overall impressions of STRS Ohio, 87% of actives and 90% of retirees replied either “very favorable” or “somewhat favorable.” Of particular note was that 65% of retirees responded with a “very favorable” rating. Last year, these responses were 85% for actives and 84% for retirees, but in 2003, the percentage of actives and retirees recording these responses was only 68%. Further, when we asked members to respond to the statement, “STRS Ohio has earned members’ trust and confidence,” only 51% of our members responded “agree strongly” or “agree somewhat” in August 2003. However, in fall 2005, we saw those percentages jump to 77% for actives and 83% for retirees. Certainly, I would like these numbers to be higher, and we will continue to do what we can to make that happen. But, as you can see, we are making significant progress in restoring the trust and confidence of our members.

The next issue of the STRS Ohio newsletter will report these findings and other information from the research, as we want to keep the membership fully informed. In that newsletter article, you will also see that health care remains the No. 1 priority of both STRS Ohio active and retired members. I know that will come as no surprise to you, Tom, as you have also often shared your concerns about rising health care costs with board members and staff. As you know, this current Retirement Board and the Health Care Advocates for STRS, which includes representatives from such teacher groups as the OEA, OFT and ORTA, have been working to address this issue. The recent Health Care Member Education and Engagement Campaign we conducted jointly gave us the feedback we need from our members to pursue legislative action to create a dedicated revenue stream for health care. As we progress through the steps that are necessary to make this happen, we will continue to keep the membership informed.

As we look to the future of this system, the board and staff face significant issues. These include ensuring the solvency of the pension fund, continuing to protect the funds from “outsiders” as well as proponents of mandatory Social Security and defined contribution plans, and managing all the resources of this system — financial, capital and human— to maximize their benefit to the membership. These are major and complicated issues that will require the collective efforts of everyone to address them adequately.

I look forward to continuing to share the input we receive and the decisions that are made with you and all our members.


Damon Asbury
Executive Director

[See 12/29/05 post, Tom Curtis to Damon Asbury: Nearly 2006 and still no consideration for members' ideas; link follows]:

Article: The Pension Deep Freeze (the topic America fails to address)

"As a society, we have proved unwilling to deal in any comprehensive way with the looming retirement crisis that is likely to occur in the years when the baby boom generation leaves the workplace."

New York Times Editorial, January 14, 2006

In the past, the public dialogue about Corporate America's move away from traditional pensions for retirees centered on struggling industries - steel, airlines - that had dumped their pension obligations on the federal government. But the announcement last week that the financially healthy technology giant I.B.M. will freeze its pension system reiterates the message businesses are increasingly sending their employees: you're on your own.

By all accounts, I.B.M. has an excellent 401(k) plan as an alternative to pensions. The plan includes automatic company contributions to employee accounts, which means that even those workers who decide not to set aside any part of their own salaries will have something to fall back on. The company will also match employee contributions up to a level as high as 6 percent of an individual's pay, depending on when the person was hired.

Considering that most plans give no more than 50 cents on the dollar in matching donations, that's very generous by today's standards. But today's standards are the problem. Even a good 401(k) doesn't offer the safety of most old-fashioned pensions, which pay out a guaranteed set of benefits to retirees.

A safe retirement based on a 401(k) account requires decades of discipline, something many people don't have. A recent study by Hewitt Associates, the employee benefits research firm, found that 45 percent of workers cashed out their 401(k)'s when leaving a company, instead of leaving the money in the plan or rolling it over into a new one. And some workers cannot or do not participate in the retirement plans available to them.

As a society, we have proved unwilling to deal in any comprehensive way with the looming retirement crisis that is likely to occur in the years when the baby boom generation leaves the workplace. The deal between workers and businesses is breaking down, and there is nothing to take its place. It is incumbent on our elected leaders, along with business and labor leaders, to confront this issue now. Poor investment decisions or a market downturn as an employee is entering retirement and needs to draw on the funds can be the difference between a secure retirement and an old age spent in poverty.

Article: Pension Woes Go Public (Ohio mentioned)

January 14, 2006

(CBS) You've seen the headlines over and over – one private company after another cutting pensions, saying they can't afford the big payouts.

It's not just the private sector saying that anymore. Government employers are starting to say they can't meet their pension obligations either – not without some help from taxpayers – and it is a problem that is waiting to explode across the country, reports CBS News correspondent Trish Regan.

It's considered one of the most beautiful places in the country, but beneath San Diego's picture perfect surface lies a financial disaster.

"We're on the verge of bankruptcy. It's one of the things that I won't rule out," says Mayor Jerry Sanders.

Other communities across the country are just as vulnerable. For years, San Diego promised city employees generous retirement benefits, but didn't set aside enough money to cover the bill.

Now, its pension plan is a staggering $1.4 billion in the red. Former officials have been indicted for allegedly hiding that shortfall and pension costs are eating up the new mayor's budget.

Mayor Sanders says about one third of the city's general fund budget is now going to have to fund the pension.

"And what that means is that services have to be cut," the mayor says.

So, there's no money to replace aging water and sewer lines and the city is cutting staff.

"We've done all those things that you do when you start tightening your belt," Mayor Sanders says.

It's something more and more governments may have to consider: States are piling up pension debt, heading them towards a potential pension crisis.

Nationwide, state and local government pensions are under-funded by more than $450 billion. Twenty-eight states are less than 80 percent funded. Of those, Michigan and Massachusetts owe $15 billion, Ohio nearly $30 billion, and Illinois — the worst off of all — $39 billion.

"Legislators for years said, 'eh, we'll defer funding that pension liability off into the future,'" says Ralph Martire, who runs a nonpartisan tax policy center.

Martire says state and local governments promise hefty retirement benefits to their employees like teachers and firefighters as a way to compete with the private sector.

"They offered a decent pension… primarily to attract high quality people to public sector jobs. That was the deal made," he says.

But, on the funding side, Martire says the government did not keep its end of the deal.

States have to fund these plans, because by law, they cannot scale back on benefits already offered.

Who's going to pay for this?

"The short answer is," Martire says, "at some point, taxpayers are going to have to pay

Ethics Commission: Will STRS be on their minds and tongues?

Press Release
January 6, 2006

For more information, contact:
Ohio Ethics Commission
(614) 466-7090



The Ohio Ethics Commission will meet on Friday, January 13, 2006, at 10:00 a.m. in the 12th floor conference room at the offices of the Ohio Ethics Commission, 8 East Long Street, Columbus, Ohio.

The Advisory and Investigative Committees of the Commission will meet at 9:00 a.m., also in Commission offices. The Advisory Opinion Committee will review advisory opinion requests and discuss several opinion drafts. The Investigative Committee will discuss the Commission's investigative processes and review several pending investigations and investigation requests. The Advisory Committee meeting is open to the public; the Investigative Committee meeting is closed and confidential, under statutory provision.

The Commission meeting will begin at 10 a.m. with a Call to Order, followed by Executive session, which is statutorily closed to the public. During Executive Session, the Commission will hear a confidential report on complaints and pending investigations concerning alleged violations of the Ethics Law and related statutes, litigation and personnel matters. The Ethics Law prohibits the Commission from disclosing any information concerning pending investigative matters. Following Executive session, the Commission will return to open session to consider drafts of advisory opinions and review financial disclosure reports.

The Ohio Ethics Commission is an independent state agency that applies and administers the Ethics Law for state and local public officials and employees outside of the General Assembly and judiciary. The Commission was created 30 years ago upon the enactment of the Ohio Ethics Law in 1973.

Friday, January 13, 2006

Article: Maryland Sets a Health Cost for Wal-Mart

New York Times, Jan. 13, 2006

ANNAPOLIS, Md., Jan. 12 - The Maryland legislature passed a law Thursday that would require Wal-Mart Stores to increase spending on employee health insurance, a measure that is expected to be a model for other states.

The legislature's move, which overrode a veto by Gov. Robert L. Ehrlich, was a response to growing criticism that Wal-Mart, the nation's largest private employer, has skimped on benefits and shifted health costs to state governments.

The vote came after a furious lobbying battle by Wal-Mart and by labor and liberal groups, and is likely to encourage lawmakers in dozens of other states who are considering similar legislation.

Many state legislatures have looked to Maryland as a test case, as they face fast-rising Medicaid costs, and Wal-Mart's critics say that too many of its employees have been forced to turn to Medicaid.

Under the Maryland law, employers with 10,000 or more workers in the state must spend at least 8 percent of their payrolls on health insurance, or else pay the difference into a state Medicaid fund.

A Wal-Mart spokeswoman said the company was "weighing its options," including a lawsuit to challenge the law because it is close to that 8 percent threshold already.

It is unclear how much the new law will cost Wal-Mart in Maryland - or around the country, if similar laws are adopted, because Wal-Mart has not publicly divulged what it spends on health care.

But it was concerned enough about the bill to hire four firms to lobby the legislature intensely over the last two months, and contributed at least $4,000 to the re-election campaign of Governor Ehrlich.

A spokeswoman for Wal-Mart, Mia Masten, said that "everyone should have access to affordable health insurance, but this legislation does nothing to accomplish this goal."

"This is about partisan politics," she said, "and this is poor public policy driven by special-interest groups."

There are four employers in Maryland with more than 10,000 workers - among them, Johns Hopkins University, the grocery chain Giant Food and the military contractor Northrop Grumman, but only Wal-Mart falls below the 8 percent threshold on health care spending.

A Democratic lawmaker who sponsored the legislation, State Senator Gloria G. Lawlah , maintained: "This is not a Wal-Mart bill, it's a Medicaid bill." This bill says to the conglomerates, 'Don't dump the employees that you refuse to insure into our Medicaid systems.' "

Opponents said the law would open the door for broader state regulation of health care spending by private companies and would send the message that Maryland is antibusiness.

"The message is, 'Don't come here,' " said Senator E. J. Pipkin, a Republican. "This is an anti-jobs bill."

Several lawmakers said that in the end, the law would require Wal-Mart to spend only slightly more than it does now on health insurance. But with Wal-Mart refusing to disclose what it pays for health costs, it was unclear how much more it would be required to pay.

This is the second time that the Maryland legislature, which is dominated by Democrats, has passed the Wal-Mart bill. Governor Ehrlich vetoed it late last year, inviting a senior Wal-Mart executive to sit by his side as he did so.

Indeed, the bill is shaping up as an issue in the fall campaign, with Republicans and their business allies lining up against it, and Democrats and their labor union supporters backing it. Wal-Mart has 53 stores and employs about 17,000 people in Maryland.

Debate was particularly emotional among representatives from Maryland's Eastern Shore, where Wal-Mart recently announced plans to build a distribution center that would employ up to 1,000.

Wal-Mart executives have strongly suggested that they might build the center elsewhere if lawmakers passed the health care bill.

In a passionate speech in the State Senate, J. Lowell Stoltzfus, a Republican, warned that the bill "jeopardizes good employment for my people."

"It's going to hurt us very bad," he added,

The bill's passage underscored the success of the union campaign to turn Wal-Mart into a symbol of what is wrong in the American health care system.

Wal-Mart has come under severe criticism because it insures less than half its United States work force and because its employees routinely show up, in larger numbers than employees of other retailers, on state Medicaid rolls.

In response to the complaints, the company introduced a new health care plan late last year, with premiums as low as $11 a month.

Consumer advocates specializing in health care are hoping that the Maryland law will be the first of many.

"You're going to see similar legislation being introduced," said Ronald Pollack, executive director of Families USA, a nonprofit health advocacy organization, "and debated in at least three dozen more states, and at least some of those states will end up also requiring large employers to provide health care coverage."

Mr. Pollack suggested that he did not expect any groundswell of opposition from corporate America. Most companies, he said, provide insurance and know that the costs of medical treatment for uninsured people are reflected in their insurance premiums. Mr. Pollack said that, by his organization's calculations, the cost of such treatment drove up employer premiums by $922 a family last year. In 2006, he said, the added cost could reach $1,000 a family.

"Those employers should welcome the fact that the companies that do not offer coverage now will be forced to step up to the plate," he said.

State lawmakers here in Annapolis took repeated swipes at Wal-Mart during debate over the bill on Thursday. It appeared that the company's intensive lobbying campaign in Maryland, including advertisements arguing that the requirement would hurt small businesses, might have soured some lawmakers.

Senator Lawlah called the lobbying "horrendous" and adding, "I have never seen anything like it."

Frank D. Boston III, the chief lobbyist for Wal-Mart on the health care bill, stood in the main corridor of the Capitol building on Thursday wearing a look of resignation. Referring to unions in the state, he said, "They have a power we can't match, and we worked this bill extremely hard."

Class-Action Case in Pennsylvania

By Bloomberg News

A Pennsylvania judge granted class-action status yesterday to a lawsuit contending that Wal-Mart employees had been pressed to work through breaks and after hours.

The suit could include as many as 150,000 current or former employees in Pennsylvania who have worked at a Wal-Mart store or at the company's Sam's Club warehouse chain since March 1998, Michael Donovan, the lead plaintiff's lawyer, said.

The latest class-action filing against Wal-Mart came after a California jury last month awarded workers $172.3 million in another off-the-clock case.

Wal-Mart is appealing. The company settled a similar case in Colorado for $50 million.

Wal-Mart has given "every indication" that it will go to trial rather than settle, Mr. Donovan said. A Wal-Mart spokesman, Kevin Thornton, said the company was considering appealing the decision.

Claudia H. Deutsch contributed reporting from New York for this article.

OFT backs Strickland -- What about OEA? Maybe they want Petro, Montgomery or Blackwell!

Press Release, January 13, 2006

Ohio Federation of Teachers Endorses Strickland for Governor

Columbus, Ohio - The Ohio Federation of Teachers announced today their endorsement of Congressman Ted Strickland for Ohio governor.

"Ohio desperately needs new leadership to reverse the state's economic and educational decline. We believe Ted Strickland is the person who can lead Ohio to a brighter future that is based on a strong system of education," said OFT President Tom Mooney. "All paths to a stronger future run through creating an education system that offers every child every opportunity for an up-to-date education. The people leading our state in the last seven years don't get that."

"This great union represents some of the hardest working educators and educational professionals in Ohio today. I am grateful and humbled by the support given to me by the Ohio Federation of Teachers," Strickland said. "I look forward to working with the members of OFT and all educators and educational professionals in Ohio to revitalize our education system."

"I will be a law-abiding Governor and will make Ohio a law-abiding state by finally obeying the Ohio Supreme Court and funding our schools fully and fairly," Strickland said. "Working together, we can create an educational system in Ohio that will set the pace for rest of the nation."

The Ohio Federation of Teachers represents more than 20,000 members in 54 local unions across the state that include public education employees, higher education faculty and support staff, and public employees.

To date, labor unions representing more than 350,000 Ohio workers and retirees have announced their support of Strickland to be Ohio's next governor.

Other labor organizations that have endorsed Strickland include the American Federation of State, County and Municipal Employees (AFSCME); Ohio State Building and Construction Trades Council; Ohio State Council of Machinists; Western Reserve Building and Construction Trades Council; Ohio Laborers' District Council; Tri-County Building Trades Council; Ohio's United Mine Workers; Cleveland Building and Construction Trades Council; United Union of Roofers, Waterproofers and Allied Workers; International Union of Painters and Allied Trades (IUPAT); United Food and Commercial Workers (UFCW) Local 1099; Laborers Local 310 in Cleveland; Plumbers and Pipefitters Local 577; Shawnee District AFL-CIO Council; Plumbers and Pipefitters Local 168; Boilermakers Local Lodge 105; Boilermakers Local 154; and United Steelworkers Local 2L.

The delegates of the Cleveland AFL-CIO, Federation of Labor, have announced their unanimous support for Strickland, as well.

OPM investigators zero in on prescription drug fraud

Recent investigations into prescription drug providers for federal employees have uncovered illegal kickbacks, improper rebates and other cases of fraud.

The Office of Personnel Management Inspector General's semiannual report, which was transmitted to Congress in November and released on the agency's Web site Wednesday, focuses on prescription drug abuse in the Federal Employees Health Benefit program.

IG Patrick McFarland said in a letter to lawmakers that his office's investigations confirmed suspicions of "serious issues" within the FEHB pharmacy program.

"We are progressively increasing the level of effort and resources that we devote to pharmaceutical-related issues," McFarland said. "I can assure you that we will meet the challenges posed by illegal or improper practices."

One of the largest FEHB cases resulted in a $54.6 million settlement from AdvancePCS, a pharmacy benefit manager for some of the program's health plans. The settlement revolved around two alleged offenses. The IG claimed that AdvancePCS took money from pharmaceutical manufacturers in return for favorable treatment of its drugs in FEHB contracts. The government also alleged that the company illegally paid health insurance plans to ensure its selection as their pharmacy benefit manager.

Caremark Rx, which acquired AdvancePCS in March 2004, denied any wrongdoing and said it settled the claims to avoid the expense and hassle of litigation. The settlement did not include an admission of guilt.

The IG also uncovered $1.5 million in improper rebates to Group Health Inc., a New York area medical plan. GHI, the inspectors claimed, also was late in repaying another $5 million in rebates. The company did not respond to requests for comment.

The IG report noted that two FEHB physicians were found to have unethically prescribed painkillers. One, a Washington state psychiatrist, over-prescribed oxycodone and hydrocodone to patients so that he could keep some for himself. A Virginia doctor overly prescribed similar, highly addictive painkillers. Several of his patients died of overdoses, although it was not clear that his prescriptions were the source. Both physicians were debarred from practicing under the FEHB.

In an effort to step up its investigations into FEHB drug providers, McFarland said his group is in the process of auditing multiple firms that manage pharmacy benefits. The OPM IG also is investigating some cases involving drugs that are prescribed for uses other than their Food and Drug Administration-approved purpose.

Hmmmmm sounds like an STRS management style!

And this is supposed to be a joke?
From: Ryan Holderman, January 13, 2006
A Japanese company and an American company decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese won by a mile. The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat.
A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.
So American management hired a consulting company and paid them a large amount of money for a second opinion. They advised that too many people were steering the boat, while not enough people were rowing.
To prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the "Rowing Team Quality First Program", with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.
The next year the Japanese won by two miles. Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment.
The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was outsourced to India.
And that is the way it goes.

Geoffrey Meyers, Manor Care's Chief Financial Officer (and appointed STRS Board member), to Retire

TOLEDO, Ohio, Jan. 12 /PRNewswire-FirstCall/ -- Paul A. Ormond, chairman, president and chief executive officer of Manor Care, Inc. (NYSE: HCR), has announced that Geoffrey G. Meyers, executive vice president and chief financial officer of the company, will be retiring in May 2006.
Mr. Meyers has been in his current position since 1988 and with Manor Care and its predecessor companies for 39 years. As chief financial officer, he has been the senior executive with responsibility for all of Manor Care's financial and administrative functions.
"Geof Meyers has played a primary role in leading Manor Care to the position of strength it enjoys today, and all of our employees, patients and shareholders have benefited from his leadership," said Mr. Ormond. "After assuming his current position 18 years ago, Geof assembled and developed a strong and effective team of skilled managers in all of the key financial and administrative functions that were needed by our emerging health care businesses, and which have supported Manor Care's growth into a premier $3-1/2 billion health care provider. Under his guidance, Manor Care has maintained strong controls and support systems, as well as a solid investment grade balance sheet. I am grateful for his leadership, professional management, experience and wise counsel over the many years we have worked together." Mr. Meyers will be closely involved in identifying his successor, and helping to create a smooth leadership transition of his responsibilities over the next several months.
Mr. Meyers earned his MBA at The Ohio State University and an undergraduate degree from Northwestern University. From 1991 to 1998, Mr. Meyers was a member of the Board of Directors of the former Health Care & Retirement Corporation (HCR), a predecessor company. He is a member of the board of the State Teachers Retirement System of Ohio and chairman of Trust Company of Toledo, and is active in a number of community organizations in the Toledo area.
Manor Care, Inc., through its operating group HCR Manor Care, is a leading provider of short-term post-acute and long-term care. The company's nearly 60,000 employees provide high-quality care for patients and residents through a network of more than 500 skilled nursing centers, assisted living facilities, outpatient rehabilitation clinics, and hospice and home health care offices. Alliances and other ventures supply high-quality pharmaceutical products and management services for professional organizations. The company operates primarily under the respected Heartland, ManorCare and Arden Courts names. Manor Care is committed to being the preeminent care provider in the industry. Shares are traded on the New York Stock Exchange under the ticker symbol HCR.

Tom Curtis to Eileen Boles: Scheduled meetings at STRS

From: Eileen Boles
To: Tom Curtis
Sent: Friday, January 13, 2006
Subject: RE: 011206 Curtis to Boles & Baldwin, Questions About Scheduled Mtgs

Good morning Mr. Curtis. Buck is expected to present the impact of SB 190 during the report from the Finance Department... A discussion regarding phasing-in adverse benefit changes is expected during the report from the Member Benefits Department. Both reports are expected on Friday. (Before lunch IF all goes as planned!!)

The Retirement Board’s Planning Retreat will be held Feb. 1, 2 and 3 here in our offices (seventh floor). All of the Board’s meetings (including the retreat) are public session.... There will be ample visitor seating.... The public notice will be mailed around Jan. 25 with precise start times, etc.....

From: Thomas Curtis
Sent: Thursday, January 12, 2006
Subject: 011206 Curtis to Boles & Baldwin, Questions About Scheduled Mtgs

Hello Eileen & Joyce,

Would you kindly tell me which day and what time this month is the report to be given by Buck Consultants, concerning the effects of SB190 on the retirement system?

Could you also tell me if discussion concerning the possible "grandfathering" of retiree health care benefits has been re-scheduled for this month?

Finally, where will the planning retreat for the board be held in February? Are the meetings open to the public to attend? If not, why not?

Again, I will thank you in advance for your responses.

Take care,

Tom Curtis

Flashback: 1 year ago -- OEA Retirees sue OEA

If a union can do this to its own retirees, no one is safe."
Retirees challenge OEA for slashing benefits
Columbus Dispatch, Wednesday, January 12, 2005

In the past several months, the Ohio Education Association, a powerful education-employee labor union, took its place among the thugs of corporate America by illegally terminating health and prescription-drug benefits after age 65 for its retired employees. Those longtime benefits are vested and contractually guaranteed.

How can they do that? By just doing it and saying, "So, sue me." They’re banking on the fact that most retirees on fixed incomes cannot come up with the money to fight such a legal battle.

Every retiree, union member, legislator and education employee should be outraged. The association has sold memberships based on its support of education employee rights, all while treating its own retirees with ruthless disregard. An organization, the Coalition of Retired Employees of the Ohio Education Association, has been formed to fight the corporate deep pockets. The organization, whose Web site is, has been forced to sue the association, needlessly costing dues dollars and damaging its standing as the protector of employee benefits. Legislators and association members need to come to the forefront to help stop the elimination of retiree benefits. If a union can do this to its own retirees, no one is safe.


Coalition of Retired Employees president Circleville

Thursday, January 12, 2006

PUBLIC MEETING NOTICE (STRS Board meeting, Jan. 18 - 20)

From: Laura Donaldson, STRS
To: Molly Janczyk
Subject: Public Notice-January 20, 2006
Date: Thu, 12 Jan 2006

January 12, 2006


The State Teachers Retirement Board and Committee meetings currently scheduled at the STRS Ohio offices, 275 East Broad Street, Columbus, Ohio 43215, are as follows:

Wednesday, January 18, 2006

8:30 a.m. Disability Committee, Retirement Board Disability Adjudication Hearing and Final Average Salary Committee (Executive Session)

Thursday, January 19, 2006

9:00 a.m. Resumption of the Retirement Board Meeting *

Friday, January 20, 2006

9:00 a.m. Resumption of the Retirement Board Meeting *

The Retirement Board meeting will be followed by a meeting of the Audit Committee.

* The Retirement Board is expected to receive reports from the Human Resource Services Department and Investment Department on Thursday. The public participation portion of the Board's agenda is expected at 1 p.m. on Thursday. The Retirement Board meeting will resume at 9 a.m. on Friday, Jan 20, to receive reports from the Finance Department and Member Benefits Department (regarding pension benefits). The Audit Committee meeting will come to order directly after the Retirement Board meeting adjourns.

John Curry to Damon Asbury re: software for transcribing Board sessions into print for benefit of membership

From: John Curry
Sent: Wednesday, January 11, 2006 9:53 PM
Subject: latest tiff and recorded proceedings
I thought I'd drop you a line to ask if anything has transpired concerning the software that you related (in the letter below) which would transcribe the spoken word into print. This concept would aid all actives and retirees, but it would really aid those with hearing impairments to know what has transpired at board meetings. I don't think that the implementation of this concept would be cost prohibitive. This would enable STRS to be even more communicative and would be an excellent addition to the STRS website should Board meeting minutes appear as a download. Thank you.
From: Damon Asbury
Sent: Monday, August 01, 2005
Subject: RE: latest tiff and recorded proceedings

I think you are right on this. Actually, the sessions are taped but they are typically not of sufficient quality for distribution purposes. They are used primarily for purposes of transcribing the minutes of the meetings. I learned recently of a software that makes the transcription from tape. I plan to learn more about how this works. Copies of minutes can be made available upon request.
Thanks for your suggestion -- and humor -- in a somewhat controversial matter.

From: John Curry
Sent: Saturday, July 30, 2005
To: Asbury, Damon
Cc: John Lazares; Dennis Leone
Subject: latest tiff and recorded proceedings
Damon, might this latest tiff over who said what and who did what re. the compensation study be a good reason for all the STRS meetings- healthcare, staff benefits, etc. (minus executive sessions) to be recorded or transcribed and made available to the retirees (and others) of STRS so that, even though we can't be there, we can hear or see what has transpired? I'd love to be able to see my system in action from afar even though I now have to work to afford affordable health care insurance. I could even do it on my "off days." Surely recordings or downloadable transcripts could be made available at little or no cost. If it's in print, I am able to copy and upload a page "in a matter of minutes" with even my outdated amateur equipment purchased at my friendly local Wally World. I'm sure one of our employees in the media department could arrange a format for this exchange of information and openness in government that we all desire. Heck, this issue wouldn't even require a commissioned study by an outside contractor!
John, a Proud CORE member

Wednesday, January 11, 2006

John Curry: Sounds good, doesn't it? A gubernatorial mystery

From John Curry, Jan. 11, 2006

Wonder who issued these famous words?:

What are your political or personal strengths that make you the best candidate for the job? "Worked in private sector for more than 20 years and understand importance of sound management. In public office, have reduced spending and carried through on promised reforms."

Well, let's see! During his tenure on the STRS Board, this gentleman approved the following "sound management" and "reduced spending" practices at State Teachers Retirement System of Ohio:

1. Approved a 17.4% administrative expenses increase average (per year) for 6 years between 1996 and 2002

2. Approved a 75% increase in STRS staff over the same years.

3. Approved the awarding of 24.4 million dollars in bonuses and cash awards.

4. Approved 33 staff members to receive higher annual salaries than the Governor of Ohio and the Chief Justice of the Ohio Supreme Court.

5. Approved $4,100 retiree dollars for a private retirement party for retiring Board member, Hazel Sidaway.

6. Approved the spending of $18,810 retiree dollars for a dedication ceremony of a 94,2 million dollar palace for STRS employees.

7. Approved $818,000 retiree dollars for STRS employees' child care center in said building and the waste of $428,057 to run it during the first year of its operation.

8. Approved $530,284 for Board travel between 2000 and 2002. And the list goes on and on!



His "sound management" and "reduced spending" statements can be found in his resume which appeared in the Akron Beacon Journal thumbnail sketch below. Notice how he mentions charter schools? Could that have anything to do with campaign contributions to him from the White Hat charter schools magnate David Brennan?

Posted on Thu, Dec. 01, 2005 (Akron Beacon Journal)

Jim Petro

Age: 57.

Party: Republican.

Hometown: Brooklyn, Ohio.

Family: wife, Nancy; son, John; daughter, Cory.

Education: bachelor's degree, Denison University (1970); juris doctor, Case Western Reserve University School of Law (1973).

Political experience: 2003-present, Ohio attorney general; 1995-2003, Ohio auditor of state; 1991-95, Cuyahoga County commissioner; 1981-84 and 1987-90, member of Ohio House of Representatives; 1980, Rocky River law director; 1977-79, member of Rocky River City Council; 1976-77, Rocky River prosecutor; 1974, Cleveland assistant law director; 1973-74, Franklin County assistant prosecuting attorney; 1972-73, special assistant to U.S. Sen. William B. Saxbe; 1971-72, staff assistant to Cleveland Mayor Ralph J. Perk.

What are your top three priorities for the first year in office? Reforming taxes, including cutting personal income tax rates, reorganizing state government and making college more affordable while creating ``centers of excellence'' in university system with degrees linked to area job opportunities.

What should Ohio be doing for its young people that it is not doing today? Providing choices for primary and secondary education through charter schools and vouchers, expanding preschool opportunities and reducing the gap between property-wealthy and property-poor school districts.

What are your political or personal strengths that make you the best candidate for the job? Worked in private sector for more than 20 years and understand importance of sound management. In public office, have reduced spending and carried through on promised reforms.

If Jim Petro is allowed to manage the Ohio's government for over 11,000,000 Buckeyes like he managed the STRS of Ohio and the lives of over 100,000 STRS retirees, then maybe citizens of Ohio really deserve him.

by John Curry, a Proud CORE member

Molly Janczyk: Retirees: Make your voices heard with your organizations regarding STRS

From: Molly Janczyk
Sent: Wednesday, January 11, 2006
Subject: Retirees: Be heard with your organizations

Some RTA presidents and retirees are concerned about the findings for the law suit and wondered why options to the settlement had not be made by the board. These persons had no idea:

* That Leone made an alternative motion requesting that Dyer and the former Board members responsible for the approved misspending pay the costs associated with the settlement agreement.

* That Lazares and Leone argued against the Board taking a vote on November 2 without having a document in hand to read prior to voting. It turned out that this was a good thing as a provision had gotten into the agreement that the Board never agreed to when discussing.

* That Lazares and Leone publicly criticized fellow board members for not sharing the settlement contents with the news media. This is a public system and the public has a right to know. Lazares and Leone are taking this out of the back halls and giving membership knowledge when it does not include Exec. Session items. Sometimes dissension helps broaden horizons.

* That Lazares and Leone have voted no EVERY time there is an unclear motion to spend pension money asking for specific numbers and line items vs. the old blanket budget tactics.

* That Lazares and Leone have fought fellow board members to ensure that things are discussed publicly per memberships' wishes. We have beseeched this board to discuss in front of us and with us when appropriate.

* That Brown has tried to silence Leone and even prevent him from answering a STRS member's questions at a meeting.

*That Brown and Ramser object to some of Leone's motions and do not follow proper protocal nor seem to know what rules of chairing a board are all the time.

We hope that ORTA membership will request a detailed analysis of board meetings and provide information specific as to how their retiree board members do or do not represent them. Active votes and motions should be included as well when they affect retirees. Recently a speaker, representing OEA, I believe, said this was the best board meeting he'd ever attended due to the give and take of the NEW board. Others around me have been noting how well they think the new board is discussing and questioning unlike ever before when we sat and saw blanket approval.

Please ask ORTA to acknowledge Leone's role in questioning and protecting retiree rights. Ask them to report on Lazares, whom they backed for election in 2004 and Brown whom they backed in 2003.

I can assure you that you will be very interested in hearing these reports.

We now have 2 board members who are forcing the other board members to ALWAYS consider the plight of retirees with the actions considered.

Ask ORTA, OEA-R and other retiree organizations and RTA's to invite Lazares and Leone to meetings for sit down discussion on retiree concerns.

Retirees wish a collaborative effort so it is reasonable to request information from STRS Board Meetings pertaining to retirees be included in the ORTA Quarterly so retirees know what is being done and how board members are voting on pertinent issues on their behalf or what is not being done by particular board members. Regardless of how things may have been done in the past, this seems a responsible way to inform retirees.

PLEASE PASS TO RTA's and retirees.

Molly to Gov. Taft, legislators, state supt. and ORSC re: two STRS appointed Board members blatantly distancing themselves from membership

From: Molly Janczyk
Sent: Wednesday, January 11, 2006
Subject: Investment Appointees: Fisher and Meyers

Dear Governor, Representatives, ORSC:

I have watched the Investment Appointees for some time as I attend nearly every STRS Board Meeting. I am sorely disappointed in Fisher and Meyers. Meyers rarely speaks, asks a question or even seems involved. They both appear to be steeped in corporate thinking and seem to have little interest in membership.

I have personally overheard Fisher argue with a fellow board member, John Lazares, asking: "WHO DID IT AFFECT" when Lazares brought up issues of STRS not doing business with companies accused or convicted of violations. John kept saying to her, "Judith, it is the law." She kept emphatically arguing that she thinks in terms of gravity. "John, if a friend of mine gets a speeding violation, I don't stop being his friend." John kept saying, "It is the law, Judith and if you don't understand that, there is no more I can say."

It was clear to me, that Fisher is ok with violations if she deems them not serious. Lazares was following the ORC: 3307.15 fighting for STRS membership. Appointees to the board, Fisher and Meyers did not bother much with this and voted him down. I emailed Fisher but she blocks me so I had an STRS employee forward my email to her. No response as it usual. I am never answered by her. I can only assume it is because I do not agree with her thinking. But, should that be reason to be ignore as an STRS member?

Both Meyers and Fisher display corporate thinking in their voting in my opinion promoting old board concepts regarding themselves. STRS is a pension system, not a corporation, and we need appointees well versed in background of educators and their concerns. Their minds seem firmly set in private business style mentality and it was my understanding appointees should be focused on ORC:3307.15.

Please do not take my word for it but ask STRS membership what they desire and what they have seen. Come, unannounced to board meetings several times, when controversial issues are up for vote. Ask yourself if you were a teacher affected by these individuals, is this how you would want your representatives voting.

Looking forward to a response. I am sure these are reputable people. That is not the concern. We want board members who can see all sides of an issue, discuss with ALL other board members all sides and consider all views and not simply be already set to deliver. I have yet to see this displayed by these 2 appointees.

Molly Janczyk

Molly Janczyk to Susan Zelman re: her rep on STRS Board; he is ignoring the needs of the membership

From: Molly Janczyk
To: Susan Zelman
Sent: Wednesday, January 11, 2006
Subject: Dr. Puckett

Dear Dr. Zelman,

Steven Puckett is nonresponsive to members and displays the same closed minded decisions as he did during the old STRS era. He goes along with most votes and rarely questions anything. He is a poor example of the openmindedness of educators and I request a change of appointee. He does not question procedure when lack of it is clearly evidenced in order for all board members to be heard. Puckett has been on the board for far too long and the STRS board needs a fresh face with an ability to see all sides of an issue, enter discussion on issues and question when he witnesses improper actions of the Chair and Vice Chair before voting. The Chair and Vice Chair have seemingly violated board members rights, taken on decisions by himself when he had no rights to do so. Pucket has not acted on this and therefore not acted solely on behalf of membership: ORC:3307.15.

Molly Janczyk
CORE Retiree

Molly Janczyk to STRS Board: Why are there so many 9-2 votes?

From:Molly Janczyk
Sent: Wednesday, January 11, 2006
Subject: *Added: STRS Board: Frustration: STRS Election 2006

STRS Board:

I and others have witnessed too many 9-2 voting patterns on the STRS Board. It seems that Lazares and Leone are either :

1. wrong about everything or
2. an effort is going on to convince board members prior to voting or
3. board members are not knowledgeable enough about issues to know both sides and wish to get along as we have witnessed in the past.

We know that Lazares and Leone work only for membership with no outside influence. We fear board members are succumbing to influence instead of delving into issues and answering only to membership. *Since they are responsible for uncovering spending abuses at STRS and Leone presented factual reseach verified at truth, one would assume they must at some time bring some good motions to the STRS board. So, it is punishment for uncovering violations that is the problem and some on this board still old board minded influencing others or Leone and Lazares NEVER understand one issue and work for it on behalf of STRS membership according to ORC:3307.15. Yet, both these men were top vote getters in their elections and both are savvy in board experiences and money issues. Seems very questionable that only since they joined this board, they suddenly KNOW NOTHING!

I challenge any legislator, public employee, Governor, State Super. Zelman, media, ORSC to come and witness these embarrassing board meetings during which Leone and Lazares struggle to have both sides of issues heard and yet are ignore.

We are not suggesting all board members do not have good intent or do not study. But this is what happens when board members are elected without sufficient background to tackle issues for themselves and are so bogged down in reading and trying to understand issues. It is then easier to be influenced.

We are not suggesting that all must simply agree with Lazares and Leone but we DO know that they are not wrong on every issue and we DO know that they fight for membership.

We support those responsible for approving misspending paying restitution. WHO ELSE is responsible? This motion incurred ire from board members. WHY? If you misspend another's money on yourself, you should pay it back, not the system as a whole where money is the memberships' and should be carefully guarded for them.

When motions are made and it appears to me and others that Ramser and Brown try to continually shut down amended motions by Leone or Lazares, procedure is not followed. There actually appears to be ignorance of proper procedure and Damon has responded that Brown was NOT within his rights when we questioned one event and Chair Brown spoke for the entire board which was NOT with in his capability. It was an embarrassment.

There will be more on this issue and it was taken most seriously and not to be forgotten. Further movement is in order.

For 4 months, I and others have witnessed attempts by the Chair and Vice Chair to shut down other board members right to speak, to motion, to address membership when, if fact, nothing prohibited such. Again, this issue has been taken up by a CORE member witnessing degrading behavior and will surface soon. This member took it upon his/her self with no outside encouragement but be he/she was appalled at this lack of procedure. When the attorney was asked, they even did not know proper procedure. The board did not know. THIS IS WHO WE HAVE RUNNING THIS SYSTEM!

This is why we encourage background knowledge of board procedures and issues. We have been disappointed in the appearance of lack of consideration of both sides. While we do not expect other than board members to follow ORC:3307.15, we do expect a thorough consideration by every board member of both sides PRIOR TO VOTING.

We look forward to Brown's departure and hope that Ramser is unseated as well. We hope to elect new members to the board who have open minds and can consider all points of view with a complete knowledge of facts and understanding of all areas. It is too late when some are heard to say, Oh, I should have voted yes or no AFTER the vote. Either they are appeasing OR they had not come totally prepared.

We suggest that board members sit down in small groups PRIOR to voting to allow ALL options and sides to be heard in entirity. We suggest board members speak with their constituency TO HEAR THEIR VIEWS AND WANTS as board members have been sent by voters and should not rely totally on their own personal thoughts. We feel the majority of board members DO NOT speak with their constituency for imput for consideration.

This has been a very disappointing board with 2 Investment Appointees seemingly locked in the mentality of corporate behavior and 'the haves' in the world; 1 appointee by Zelman who should be replaced having been on this board too long and locked it seems in old behaviors; 2-3 board members seemingly steeped in old board methods and thinking; some board members smart and well intentioned but perhaps underknowledged.

This is my opinion based on first hand viewing and some others who have stated this position as well. I petition you to send your thoughts to board members, State Superintendent Zelman :
614-466-7578 (email on email addresses sent 1/06); those who appointed the investment members, etc.

WHY would ANY board member be shut down when THEY KNOW procedure BETTER THAN THE CHAIR! I have witnessed Lazares call for legal opinion and LAZARES WAS CORRECT; I have witnessed LEONE call for procedure when Brown or Ramser tried to shut him down AND LEONE was correct. SO ONE HAS TO ASK, WHAT BACKROOM TACTICS PREVAIL AT STRS.

This is my personal statement and I welcome any factual arguments which will stand up to legal and proper precedence.

The majority of this board continues to be prejudged in my view.

Hopefully 2006 and 2007 will bring fresh outlooks and open and knowledgeable minds.

Molly J.
Larry KehresMount Union Collge
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