Jim N. Reed: A powerful message to actives who haven't voted yet -- A MUST READ for all

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Active Educators -- Don't Be April-Fooled

April 22, 2006

Those "active" educators who have not yet cast their ballots for the two STRS board member positions can still make choices that will make a crucial difference in our profession's retirement system. Those choices are named Dr. Thomas Hall and Mr. Mark Fredrick.

My name is Jim Reed and I have taught in the Liberty Union-Thurston Schools in Fairfield County for 41 years, the last eight as a part-timer. When I retired in 1998 I thought my retirement system would fulfill its promise to allow my family to have a secure and affordable retirement. I was wrong on several counts.

The 13th check disappeared, health care premiums skyrocketed and I then I learned of the unethical and illegal spending of millions of dollars of retirement contributions (yours and mine). There seems to be little doubt, according to a recent OEA survey, why "nearly 60 percent of those teachers eligible for retirement do not do so because of uncertainty about pressures about pensions and health care." There's a bit of irony here. Read on.

How did I learn of the abusive mishandling of our retirement funds? In 2003 Dr. Dennis Leone requested the STRS to open its public records. From those records he published a scathing exposé of the shameful fiscal mismanagement at STRS. The position paper proved worthy of several journalistic awards and was corroborated by several major newspaper investigations. The General Assembly concurred, new legislation resulted and the Executive Director was shown the door (behind this green door was a $600 thousand board-supported severance package) in August, 2003.

Recognizing the fiscal chaos at STRS the General Assembly attempted to clean house and provided legislation to permit the Inspector General to take a closer look. However, politics took priority. The state's Attorney General and Auditor held positions on the nine-member board at that time and the Governor used his line-item veto to halt any internal inspection of our bruised retirement system.

Unfortunately, Executive Director Dyer left many of his "entitlement-era" colleagues behind who continued to abuse our retirement fund. As Dr. Leone's "STRS Organizational Matters And Spending Practices" (May 2003) and "Restoring Faith, Trust, and Confidence in STRS" (August 2003) began to circulate board members and STRS officers and staffers became targets of some legal scrutiny.

The distance from unethical to illegal is sometimes not so far. Dyer was indicted and convicted of ethics charges. Long-time board member Hazel Sidaway was likewise convicted of ethics violations on April 14 [2006]. The "Canton Repository's Copley Columbus Bureau Chief Paul Kostyu suggested in an April 18 report that if five Dyer-regime board members "don't have an attorney, you haven't been paying attention." By some accounts there are as many as 95 indictments that could result from a closer inspection of former abuse inside STRS.

All of the above STRS officials have something in common. They came from OEA. During the era of the nine-member board (there are now eleven), five members came from the STRS's farm team, the OEA, who controlled the vote, It was during this time that the system failed 400,000 retirees.

How serious may these misbehaviors be? Perhaps the answer is in the attempt by two long-term STRS investment staffers who refused to testify in the Sidaway trial unless they were granted immunity from prosecution for any potential felony charges. Stay tuned.

Thanks to Dr. Leone and John Lazares the STRS board has discontinued being a unanimous rubber stamp for proposed policy. The watchdogs have arrived in the boardroom but they need assistance from qualified and enlightened members who are willing to legislate only from ORC 3307.15 that stipulates exactly what the duties of a board member are.

Dr. Thomas Hall is an economics professor at Miami University and Mr. Mark Fredrick teaches in the English department in the Cleveland Public Schools. Concerned Ohio Retired Educators (CORE) believes these two men have the credentials and principles to conduct business for the benefit of active and retired educators and their families.

Don't be fooled this April as a lock-step member of STRS. If you have not yet voted for the two board seats do yourself and the other 400,000 members justice and open up a couple of web sites and become STRS literate.

www.concernedohio.org and www.kathiebracy.blogspot.com will provide additional information that is critical to your active participation in your profession's retirement system.

Jim N. Reed

From Ralph Lloyd; Petro's proposal: Citizens' Amendment for Prosperity

April 22, 2006

Ralph L. Lloyd called this to my attention today from an article he read in the Cleveland Plain Dealer about Jim Petro's proposal on The Ohio Citizens' Amendment for Prosperity (CAP). I could not locate the article, but this item from the Bricker & Eckler website (below) explains it pretty well. http://www.bricker.com/LegalServices/industry/polsubdiv/cap.asp ~ KBB

The Ohio Citizens' Amendment for Prosperity

The Citizens' Amendment for Prosperity, supported by Ohio Attorney General Jim Petro, would amend the Ohio Constitution to limit permitted taxation to 5.5% of Ohio’s total personal income. Both chambers of the Ohio General Assembly must approve resolutions in order to place the proposal on the November 7, 2006 ballot. These resolutions were introduced in the House (HJR 12) and Senate (SJR 7) during the week of February 20 and are identical. The House Joint Resolution was introduced by Larry Wolpert (R-Hilliard) and the Senate Joint Resolution by Gary Cates (R-West Chester).

In order to reach the November 7, 2006 ballot the resolutions would require a three-fifths majority of each chamber. Ohio law requires any ballot initiative be filed with the Secretary of State not later than 90 days before an election. In the case of the November 7, 2006 ballot the filing with the Secretary of State is required by 4:00pm August 9, 2006.

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Questions & Answers About CAP

What is the “CAP"?
The CAP, or Citizen’s Amendment for Prosperity, is a fiscal restraint proposal developed by Ohio Attorney General Jim Petro. The CAP would limit annual taxes to 5.5% of the total business and personal income earned in Ohio and would require the state to contribute to the Rainy Day Fund when state revenues are strong.

Is the CAP being used by any other states?
The CAP proposal is similar to the Headlee Amendment in Michigan. While there are many similarities between the CAP and the Headlee Amendment, the CAP would restrict state tax revenue to 5.5%, whereas the Headlee Amendment restricts state tax revenue to 9.49%.

Does the CAP apply to local governments?
No. The CAP only limits the amount of revenue the State can collect. The CAP specifically exempts local government from the tax revenue limit.

Does the CAP impact state mandates?
Yes. The CAP would prohibit unfunded state mandates on political subdivisions, unless the State and the political subdivision agree to share the additional costs, or the political subdivision makes no claim for funding within two-years of the new requirement.

What is a political subdivision?
Under the CAP, a political subdivision is defined as any county, municipal corporation, or township; any education, library, or other general special district; or any other taxing district of the state that is directly supported by tax funds.

Are there any exceptions to the limit on taxes?
Yes. If the governor declares an emergency and the legislature votes by a three-fifths majority to support the governor, the limit may be exceeded during the duration of the emergency. The emergency must be declared prior to incurring any expenses under that emergency request.

What happens if the state has a surplus at the end of the fiscal year?
The CAP requires contributions to the state’s Rainy Day Fund. General tax revenue collected by the state exceeding 5.5% must be transferred to the Rainy Day Fund. Annual contributions to the rainy day fund are capped at 2.5% above the tax revenue limit and the Rainy Day Fund may never exceed 5% of the general revenue fund. Any amounts that exceed the annual contribution limit or the total limit on the Rainy Day Fund are rebated to taxpayers in the form of income tax credits.

Is it possible for the CAP to be on the November 2006 ballot as a constitutional amendment?
Yes. A constitutional amendment can be proposed by either chamber of the General Assembly and must be agreed to by three-fifths of each chamber. Resolutions to place the CAP on the ballot were introduced in both chambers by Rep. Larry Wolpert (R-Hilliard) and Sen. Gary Cates (R-West Chester). Upon agreement by both chambers, the proposed amendment must be entered on the journals and filed with the Secretary of State at least 90 days before the November 7, 2006 election. This means that any attempt to place the CAP on the November 2006 ballot as a constitutional amendment requires filing with the Secretary of State by August 9, 2006.

For more information, contact Bricker & Eckler attorney Sean Mentel

Some questions about the two witnesses (STRS employees Grant and Ehlers) who requested immunity

From John Curry, April 22, 2006

Molly, covering up or attempting to cover up evidence (as in the paper trail of Cleveland Indians ball tickets) IS A FELONY. Kostyu's recent Sidaway trial article stated:

"Something more troubling, however, became clear at Sidaway's trial. Based on her own testimony, former in-house STRS attorney Cynthia E. Hvizdos apparently gave Sidaway bad legal advice, and she may have helped cover up the violations once the ethics commission began its investigation.

"Cindy Hvizdos agreed to assist in purposely disguising the tickets," Nick said about her testimony. "She might be liable."

Prior to the trial, Hvizdos offered to help Sidaway, who didn't disclose that communication with her own attorney. He was caught off-guard and put at legal risk for failure to disclose the communication to prosecutors. Hvizdos retired because she has multiple sclerosis and apparently no longer practices law. So it's not likely she will face charges or sanctions."

Hazel even shocked her own attorney by this dirty laundry statement that came to light in the trial. If the prosecution doesn't run with this, then they aren't worth their salt. BUT - the Columbus City Prosecutor's office does not prosecute felonies, the Franklin County Prosecutor (or a visiting out-of-county prosecutor should there be a conflict of interest) does. You know, Ron O'Brien (Franklin County Prosecutor), the guy who was the beneficiary of a campaign fund raiser hosted FOR HIM in Cleveland BY none other than former STRS Board member Jim Petro earlier this year. Now, Ronnie wouldn't want to see egg on Jimmy's face, would he? John
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From Molly Janczyk, Friday, April 21, 2006

I think the attorneys felt it was a bigger deal being made than it was actually by the two and told them to answer. I don't know if there were any felonies to consider at all. The OEC never indicated felonies with STRS as with the OP&F which I think there were some.
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From Margaret Porter, Fri, 21 Apr 2006

Are the two or more employees who requested immunity from felonies going to be investigated? If not why not? Who else is involved and what don't we know? What is really going on, especially if they feel they are guilty of felonies? I whole heartedly agree with John Bos, I certainly have no respect or feel confident in the employees or the previous board members including the ones still on the board. Where were the honest whistle blowers or any one with ethics? Margaret

Mary Ellen Angeletti: Minutes of April 2006 CORE meeting

The CORE Advisory Board met at STRS on Thursday, April 20th, 2006 at 11:45. In attendance were Kathie Bracy, Chuck Chapman, Tom Curtis, Nancy Hamant, Nancy Boomhower, Dave Parshall, and Mary Ellen Angeletti. Mary Ellen served as scribe. Guests attending the meeting were Ann Hanning, Lou DiOrio, State Representative Bob Otterman, and Senator Marc Dann.

Dave Parshall reported on the CORE financial fund noting that our balance has declined due to the expenditures for the STRS election which included printing costs, reimbursements to members who did their own printing of election flyers, and reimbursement for gasoline for members who traveled to speak for the candidates. Not all of these bills have been sent in so the financial fund balance will continue to be reduced during the month of April and into May. He also noted that since Susan Myers resigned from the CORE Advisory Board quite some time ago, her name had to be removed from CORE's financial account, and this was just accomplished a few weeks ago. Chuck Angeletti has agreed to add his name to the account, and we will attempt to get Susan's key to the mailbox returned to us. If not, we will have to purchase another key. The expenditure of a new key was approved by members today.

Dave Parshall then reported concerning the CORE website noting that our contract with the web master has been renewed for another year at the cost of $300.00 the same as the last two years. The suggestion to now remove the attorneys' statement of CORE's legal right to access school buildings for the purpose of disseminating STRS election information which is on our website was delayed. Following discussion, members decided it would be wise to leave in on the web site for the time being. We agreed that we would save the legal opinions to use for other elections.

A discussion of the STRS election followed as members shared what worked well for them in disseminating flyers and promoting our two candidates. Effective practices mentioned were letters to the editor of newspapers, giving election flyers to a known teacher to pass out at his/her school, visiting a school's superintendent's office and asking the super to disseminate flyers, giving flyers to a retiree who was subbing in the school system to put in teachers' mailboxes, and disseminating flyers at any and all executive meetings and RTA meetings. It was agreed that the most difficult locations were the universities. They seem to have a mindset against any and all requests to pass out anything for any group or cause. It is labeled 'POLITICAL' when it is not. Even with several candidates from universities, these locations were not receptive or knowledgeable. Handouts of Kathie Bracy's ideas for future STRS Board election campaigns was discussed and will be kept for reference for future campaigns. Ryan Holderman suggested that we use Google Earth (http://earth.google.com) on our search engines to show particular regions, and we can ask for location of schools on these map requests.

A discussion of the Hazel Sidaway trial followed, and it was moved by Bev McCoy and seconded by Dave Parshall that CORE investigate the purchase (with a maximum cap of $200.00) of the transcript of this trial as well as the transcript of Herb Dyer's testimony and plea agreement. The motion was passed unanimously. We need to find out how long these transcripts are available to the public, the charge for obtaining them, and Dave Parshall volunteered to ask our attorney if CORE could make a public request for a free copy. He will report back to us. Some members wanted to know the reasons for obtaining these transcripts, and it was thought that all future trials or plea agreements would be based on the testimony of this first trial and first plea agreement so transcripts would be useful references for CORE.

Members were reminded that Betty Montgomery will be our guest at the May 18th CORE meeting at STRS beginning at 11:45.

Bob Jones introduced State Representative Bob Otterman who spoke briefly to our group. He stayed for the entire STRS Board meeting.

Tom Curtis introduced Senator Marc Dann who addressed our group. He is currently running for the State Attorney General on the Democratic ticket (www.dannforohio.com). You will remember that it was Sen. Dann who exposed Noe and the Coingate scandal at the Bureau of Workman's Compensation. He promises to crack down on all Ohio scandals including encouraging prosecution for any civil actions taken against STRS Board members and staff for felony offenses. As Attorney General, he promises to free up money, to give warnings of analysis of Ohio constitutionality to the Ohio Senate, the Ohio House of Representatives, and the Ohio Governor BEFORE they take steps which could get them into trouble.

He is opposed to House Bill 530 which is the new school funding issue which would shift more school funding toward the property owner. He filed a protest against this bill and told why he was against it. He said he would use the Writ of Mandamus action against excessive amounts of contracts. It was brought to his attention that STRS retirees are still waiting for our audit promised in S.B. 130. He mentioned that we should be checking to be certain that any settlements which STRS received through lawsuits against Medco or Enron have actually been deposited in our Health Care Stabilization fund at STRS. He is presently the ranking Democrat on the Senate Judiciary Committee and has helped to pass tough laws cracking down on meth and other drugs.

As AG, he promises to work with law enforcement to crack down on meth labs and drug rings that import meth from labs in other states and countries. He also promises to investigate price gouging and price fixing by gas stations, oil refiners, and natural gas distributors. As State Senator, he wrote S.B. 85 to protect families who are pinched by layoffs or health care catastrophes from being victimized by the new federal bankruptcy laws. He is all for combating Medicaid fraud and nursing home abuse as well as protecting seniors from consumer scams. "It's time for the Attorney General's Office to get as tough on white collar crime and corruption as it is on drug dealers."

It was suggested that CORE members make contact with Judge Carrie E. Glaeden, the presiding judge in the Hazel Sidaway trial and the person who will sentence Ms. Sidaway at noon on Friday, May 12th, 2006 , for the purpose of encouraging more than a slap on the hand. Judge Glaeden can be reached by email at glaeden@fcmcclerk.com. For snail mail communication with the judge, her address is: Judge Carrie E. Glaeden, Franklin County Municipal Court, General Division, 375 South High Street, Columbus, Ohio 43215, Courtroom 13A. This is also the location for the sentencing on May 12th.

There was also discussion of the STRS election process which is the same company hired to do the last election externally. Suggestions had been made by CORE members then that instead of a choice of snail mail voting, email voting, and telephone voting, that we have only one method which would lessen the possibility of voting irregularities. This issue was also brought up by OEA as they were quite upset with the last election. It was decided that this would be a good question for the next CORE/ Damon meeting.

The next CORE meeting will be held on Thursday, May 18th at 11:45 in the Sublett Room at STRS.

By Mary Ellen Angeletti

Warren County Teachers: Message for Judge Glaeden

The Honorable Carrie E. Glaeden

Franklin County Municipal Court

General Division, Courtroom 13A

375 South High Street

Columbus, OH 43215

April 21, 2006

Subject: Hazel Sidaway Penalty

Dear Judge Glaeden:

Warren County retired teachers have followed the trial of Hazel Sidaway for Ethics Charges as an STRS Board Member. Our teachers were astounded by the information that came forward during the trial. The evidence and testimony verified that an unbelievable climate of “entitlement” and greed prevailed at STRS.

Most astonishing, Hazel Sidaway, who swore under oath to protect teachers’ life long retirement savings managed by STRS, seems to have no remorse over her excessive spending of her colleagues’ savings.

Warren County teachers request that you fine Ms. Sidaway the maximum amount permitted under law for each of the two guilty findings. We request that the fines are paid to STRS. We request that you require Ms. Sidaway to do community service for the maximum required jail time for each of the two guilty findings. A suitable type of community service would be to have Ms. Sidaway spend one hour a day, five days a week for six months in nursing home for each of the two charges, assisting and providing companionship to any retired teachers who are living in the nursing home. Perhaps helping such teachers will help Hazel Sidaway understand whom she has hurt.

Warren County teachers and Ohio teachers have totally lost faith in STRS to protect our life long retirement savings and assets. We feel that a strong message must be sent to STRS that no one will ever permit such lavish spending of teachers’ life long retirement assets again.

Respectfully,

Nancy B. Hamant

WCRTA Legislative Chair

XC: Barbara Carvey, WCRTA President

Tom Curtis' speech to STRS Board 4/20/06: This board needs to review Dennis Leone's reports of 2003

April 20, 2006

Good afternoon board members, executive staff and guests. My name is Thomas Curtis. I am speaking today on my own behalf. I am an STRS disability retiree with 27 years of service.

The first time I spoke to the STRS board was June 2003. During my first 3-minute presentation, I requested that Herb Dyer, the executive director and each board member at that time resign, due to the unethical practices they had been part of for what appeared to be many years.

WOW! That seemed very radical at that time, but then few had seen the position paper Dr. Dennis Leone presented to the board on May 16^th, 2003, entitled “STRS Organizational matters and entitled, “Restoring Faith, Trust, and Spending Practices.” That paper is still a highly relevant document. Further, to this date, there are still many unresolved issues within it. This board should not permit this, if you claim to be meeting your fiduciary responsibility. But then, we have a current board member who publicly stated she does not find it even relevant to read his paper, which, in effect, leaves only ten board members who are truly qualified, from this standpoint, to deal effectively with serious issues that will affect STRS members for the rest of their lives. Isn’t that mind-boggling? Do I want this kind of mindset on the board, No way!

Today, I am requesting the immediate review and consideration by the entire board, not only of Dr. Leone’s original position paper, but also his second, follow-up paper of August 8^th, 2003, entitled, “Restoring Faith, trust, and Confidence in the STRS.” I do not expect this public request to be ignored again. I have requested such of each board member and the executive director prior to this date and yet have never received any response to such. This is unacceptable to me. I pledge that I will continue to make this request at each board meeting from this date forward until this request has been satisfied.

The facts revealed in Dr. Leone’s first paper greatly angered many STRS members upon learning that their retirement funds had been grossly misspent by the STRS fiduciaries, the very ones who were supposed to protect them! How could they do such a thing? What is more amazing to me is that all of them denied any doing anything wrong, and were themselves angered by the accusations made against them. Most have until this date continued to deny such wrongdoing, even when some have now been found guilty of such in court, and it is my hope all of the others will be closely scrutinized as well.

Most people asked themselves, WHY did this happen?! Were the employees not being paid well enough? NO, that is ABSOLUTELY not the case. The upper management and all key employees were and still are being lavished with benefits far and above what private and corporate people receive, though much of that payment has been and still is hidden from the public eye. This is not right and must be changed; I want value for my dollar.

Why should they be paid so handsomely, when the entire STRS membership is now suffering financially and will continue to do so, probably for the rest of their lives?

Please correct me if I am wrong here, but the employees’ ONLY job has always been to take the dedicated flow of income provided by the contributions from educators and their boards and invest it wisely according to the ORC 3307.15. What is so difficult about that?

Did these employees have to produce a product and market it to produce the income to provide for our retirement? NO! All they had to do was properly fund the benefits they promised us as we paid into the system, while we worked toward our retirement. Just think of the billions of dollars that have been paid into the STRS retirement system since 1920, yet we are not receiving what we were promised. Most of us have been robbed of what we were promised for our futures.

I do not have nearly the same benefits I retired with in 1998. That will only get worse as I live on. Yes, I am and always will be angry, despite what anyone else tells me. I worked for low wages throughout my career with the understanding from my union representatives that my pension and health care benefits for my spouse and myself were safe and would provide adequately for both of us for the rest of our lives. I trusted that to be the case. That was a lie, because the STRS has already reneged on what my wife and I were told by an STRS counselor when I retired. My health care costs for the two of us now total over one third of my total pension. That will soon get much worse in January 2007, according to what I have learned by attending these board meetings.

Have the employees that the membership entrusted their retirement funds with throughout their career provided us with what we were promised?

Let me ask each of your retirees in the audience a question being asked by Howie Mandel of his guests on a new popular TV show, DEAL OR NO DEAL.

In my opinion, the answer is rather simple. These otherwise good people allowed their own greed and warped thinking to validate the pervasive culture of entitlement that had apparently become common practice at the STRS. This sense of entitlement had completely permeated the upper management. Most likely, those employees and board members who disagreed with this thinking either came into line with it, or were ostracized and deemed uncooperative. These greedy people caused many honest employees to become just as tainted as they were. That is a shameful disgrace and these people should be removed from our employment.

Thank you for permitting me to express my concerns today.

John Bos speaks out: Sunshine Law, 'Hairspray,' damage control, ethics violations, spending controls and more

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Presentation

State Teachers Retirement System, Ohio

April 20^th, 2006

My name is John Bos, Elida, Ohio. I am a retiree with 31 years of service as a teacher and administrator. My father also paid into STRS starting in 1932 and our daughter is an active participant. I was also an adjunct professor teaching school administration courses for 9 years. I had 14 years of business experience after I retired.

I would like to commend the former member of the STRS Board that requested a jury trial regarding ethics charges. This trial has given the members of STRS a small peek into the workings of the STRS Board. Issues that are now very clear include:

The total lack of understanding regarding “The Sunshine Law” by board members, and by the legal adviser to STRS. The recent event of reaching Board conclusions over the telephone or Internet indicates that this problem still exists. Baker's School Law and Nexis-Lexus would be a good source for the staff and board to learn about “Sunshine Issues”.

Inadequate legal advice may have been given to the board members regarding Ohio Ethics guidelines and possible legal assistance to “cover up the evidence”.

Comments that "Hairspray" tickets were to be billed to STRS by a former board member further documents these issues. Comments that the discussion to plan this trip was observed by the Ohio Auditor and Attorney General Office adds even more concern to retirees. They will be judged in future elections.

The need for the current STRS Board to investigate why current employees requested immunity from an felonies relating to their role as a staff member at STRS.

The need for the Board to carefully review the employment status of staff members that may be guilty of violations.

I commend Dr. Asbury for writing the “Damage Control” newsletter to all retirees. Neither he nor I, however, can be assured that these actions did or did not impact any decisions.

Are we still doing business with the two companies that were involved in the unfortunate and regrettable events? Kim Alwater, Smith Barney spokesman said that they would make a statement after the trial was completed. No statement has been released. Perhaps they could make a contribution to the health care stabilization fund in the amount of the ethics violations.

STRS now takes its place in history with Watergate and Coingate. We now have Hairgate. Yet at the same time current board members do not want to learn about the historical events that led to today. No doubt you drove to the meeting in your new Yugo because of the great economy, but have not learned about its mechanical history and lack of available parts.

The question also remains why no one at STRS staff or board members stood up and said, “This behavior is wrong”. The abuse only stopped when the legislature, retirees, newspapers, and The Ohio Ethics Commission, and the courts became involved. Where were the internal auditors and the honest staff members that we trusted with our retirement funds? You have lost the confidence of many people.

It is very important that those of you on the current board take appropriate actions regarding the misconduct of ANY employee. It is the only way to insure that these events never happen again.

In conclusion, I would also ask you to genuinely listen to board members who are making recommendations regarding spending controls and additional oversight measures.

A forensic audit by an independent party would be money well spent to regain confidence.

When Mother Teresa was asked if she took pride in the work that she had done, she replied by saying, “I don't take pride in the work that I have done, but rather the reason that I have done this great work”. She was committed. As board members and staff, I hope and pray that you are committed to regain the pride that my father had for Ohio Education and the dedicated staff serving Ohio Schools.

This is what the tickets look like

Dennis Leone: Internal auditors tried to tell us; were likely ignored

From: Dennis Leone

To: Nancy Hamant

Sent: Monday, April 17, 2006

Subject: Re: [News] Message From the Executive Director

..........and one shocker I received, Nancy, not too long ago was gaining access to an internal memo written by one of the two internal auditors. This memo, written by Robert Vance, warned the Board about "abusive expenditures," about "deliberately vague receipts," about improper alcohol purchases, and about inappropriate meals for spouses on trips, etc. Vance wrote about what he called a "common theme" among Board members who supported the expenditures, which, he wrote, was "one of entitlement." He quoted one unnamed board member, who said: "I am Board member who works hard and for free........we deserve this."

Without a doubt, the internal auditors NOW are listened to when they issue such conclusions. They tried in years past, but, in my opinion, were ignored.

Did you see in Mary Ellen Angeletti's one report where Hazel said on the witness stand that she was joined for one Broadway show by the representatives on the Board from both the State Auditor and the State Attorney General. I will endeavor to find out if that is true. It is no wonder that Taft vetoed Fedor's bill giving power to the State Inspector General to investigate STRS and issue findings. He would have produced a report that would have been very, very embarrassing to Petro and Montgomery.

Dennis Leone

Paul Kostyu: Sidaway unlikely to be last charged

Canton Repository

April 18, 2006

By Paul Kostyu

COLUMBUS - If your name is Jack H. Chapman, Mike N. Billirakis, Eugene E. Norris, Deborah Scott or Joseph I. Endry, and if you served on the board of the State Teachers Retirement System, and you don’t have an attorney, you haven’t been paying attention.

If your name is Stephen Mitchell and you work at STRS as the deputy executive director for investments, you should be talking to an attorney, too. And there might be a few others at the pension fund who should consider getting legal advice.

A clear message came from the Franklin County Municipal Court last week. While Hazel A. Sidaway, a former Canton City Schools teacher, was on trial, prosecutors linked her to others on the STRS board and its culture of entitlement. The message: The Ohio Ethics Commission and prosecutors know about your shenanigans, and they’re coming after you, maybe as soon as next month.

Sidaway’s two convictions for violating state ethics law were a test of the strength of evidence in a more than two-year probe of corruption at the pension system. Offered a deal similar to that for former Executive Director Herb Dyer, who was convicted on one charge, Sidaway refused. She claimed she had done nothing wrong when accepting four tickets to a Cleveland Indians game and two tickets to a Broadway show.

She insisted they were meetings for conducting STRS business. The only people with her in the four box seats 10 rows back from the Indians’ dugout were her family. She and fellow board members attended the Broadway show “Hairspray.” She said they talked business before taking their front-row seats at the Tony-winning musical, during intermission and after the show. At least they didn’t give Ohioans a bad name by talking during the performance.

Perhaps the board should be charged with violating Ohio’s open meeting laws for conducting business without notifying the public. “They were not discussing matters appropriate for an executive session,” said Paul Nick, chief investigator for the commission. “Who knows what’s been going on?”

Something more troubling, however, became clear at Sidaway’s trial. Based on her own testimony, former in-house STRS attorney Cynthia E. Hvizdos apparently gave Sidaway bad legal advice, and she may have helped cover up the violations once the ethics commission began its investigation.

“Cindy Hvizdos agreed to assist in purposely disguising the tickets,” Nick said about her testimony. “She might be liable.”

Prior to the trial, Hvizdos offered to help Sidaway, who didn’t disclose that communication with her own attorney. He was caught off-guard and put at legal risk for failure to disclose the communication to prosecutors. Hvizdos retired because she has multiple sclerosis and apparently no longer practices law. So it’s not likely she will face charges or sanctions.

Sidaway’s ethics violations may not be the worst. One poorly kept STRS secret concerns a former board member who took his golf clubs on many, if not all, trips he made on behalf of STRS. I’ve always found it difficult to play golf at night. So does that mean this board member was playing hooky from meetings while he was swinging a club?

Sidaway was not convicted of illegally accepting meals at high-end Columbus restaurants. Those meetings, too, could have been attempts to avoid the state’s open meetings law because the board’s investment counselor was careful to take only three or four members at a time, not a quorum. If board members were so intent on holding meetings over food, they could have eaten in the STRS cafeteria.

Apparently, the food wasn’t good enough, and neither was the show.

Reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail: paul.kostyu@cantonrep.com

Nancy Hamant: STRS executives hiding heads in sand, hoping it will all go away

April 18, 2006

Subject: Message From the Executive Director

Unbelievable! The STRS Internal Auditor did forewarn the STRS Executive Officers about the "abusive expenditures". It certainly appears that STRS Executives had the information to stop the misspending and did not act on the information and have not been forthcoming in sharing information about the spending until forced to do so by either the Ohio Legislature, hard-hitting news articles or actions taking place in the courts.

In other words the STRS Executive Staff appears to be hiding its head in the sand, hoping all of this will go away!

Can anyone doubt that a FORENSIC AUDIT is not needed to clear up this continuing mess!

PLEASE READ DENNIS LEONE'S COMMENTS!

Nancy Hamant

Message from the Executive Director (STRS): Damon addresses Sidaway case and possible future charges against STRS individuals (a finger in the dike?)

From Damon Asbury

April 17, 2006

In June 2005, we shared with our membership -- through our Web site and e-mail news service -- that former State Teachers Retirement Board member Hazel Sidaway had been charged with six misdemeanor violations of state ethics laws. On Friday, April 14, 2006, Mrs. Sidaway was convicted of two misdemeanor ethics violations in Franklin County Municipal Court. She was found guilty of accepting two tickets to a Broadway show in 2003 and four Cleveland Indians tickets in 2001. Mrs. Sidaway served on the board from September 1986 through June 2003.

There may be charges filed against other board or staff members. As in the case of Mrs. Sidaway, due process will take its course. But what is most important for STRS Ohio members to know at this time is our unwavering commitment to maintaining the trust and confidence of our members and other system stakeholders. We have comprehensive policies, procedures and safeguards in place to ensure that both current and potential vendors and all associates know that any gifts, regardless of their value, are strictly prohibited. These include adoption of an ethics policy; ethics training for both board and staff members by Ohio Ethics Commission staff; annual filing of financial disclosure statements by all board members, the executive director and key staff with the Ohio Ethics Commission; a proactive stance with vendors communicating the prohibition of gifts of any kind or amount; and strict board and staff travel policies that clearly delineate expense parameters for food and lodging and limits on overall expenditures.

It is both unfortunate and regrettable that these past events occurred. However, there are no indications our members' pension funds were ever adversely impacted by these actions or that investment decisions were ever made as a result of a dinner, sporting tickets, etc.

Those of you who are frequent readers of our newsletters and e-mails, or frequent visitors to our Web site, know that we have endeavored to share all issues of importance with you, even those that are not easy to address. My staff and I have also spoken face-to-face with thousands of you during the past several years, to ensure the lines of communication between this system and its membership emphasize dialogue and the sharing of issues of concern to us all. We will continue to do so, as we believe this is the best way to ensure that your trust and confidence in your pension system is maintained.

Damon F. Asbury Executive Director
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Mike Hanke: No reason to travel; The STRS office is loaded with highly paid people who could have told them the STRS investments were tanking

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Canton Repository

April 17, 2006

STRS JUNKETS

Last week, at the trial of a former State Teachers Retirement System board member, a former STRS employee who helped plan out-of-town trips for the board described her research of “fancy restaurants that were exotic and unique” and jazz and blues clubs and who was playing; all of this done to pamper the board members on their “research trips.”

The person on trial was Hazel Sidaway of Plain Township, who had pleaded not guilty to charges of accepting and not disclosing gifts, a violation of state ethics laws, over a three-year span during her time on the board.

Regardless of the charges and the trial, the real problem was that the board took trips and partied at expensive restaurants, theaters and clubs. There wasn’t any reason for them to travel at all. The STRS office is loaded with highly paid people who could have told them the STRS investments were tanking. At least STRS would have saved the all-too-pricey travel expenses.

Hanke is general manager of The Repository. He can be reached by telephone at 330-580-8301, by e-mail – mike.hanke@cantonrep.com, or by writing 500 Market Ave. S, Canton, 44702

Nancy Hamant comments on executive director's message

April 17, 2006

Attached is a communique from Damon Asbury. I sincerely hope that all doors to corruption have been closed and Dr. Asbury is not just providing "damage control" to a very serious issue, which is that trust in the STRS staff and particularly those CEOs, CFO's, and staff lawyers has been and continues to be damaged to the extent that STRS staff are not trusted.

No educator believes that STRS Board members who swear an oath to protect STRS assets for its members, or STRS staff members who are under contract and as such are fully responsible for protecting STRS assets DO NOT have the power to stop or prevent the past excessive spending. In fact, it seems that such responsibility falls directly on the shoulders of the Chief Executive officer and the Chief Financial officer. What ever happened to Harry Truman's "the buck stops here"?

Also, Dr. Asbury has not addressed the fact that some Sidaway witnesses (STRS staff) expressed a need for immunity not only for misdemeanors but also for FELONIES! What occurred at STRS during the past "spend and travel" period that could possibly be a felony? If anything occurred, how swiftly will such behavior be dealt with and when will the STRS members be informed as to the STRS action taken to rectify any such past felonious behavior? Where have the STRS Internal Auditors been throughout the past period and now? It is my understanding that those special auditors are required to monitor STRS to assure that neither misdemeanors nor felonious activities are incurred by STRS staff or STRS Board members?

It is paramount, that the Ohio Ethics Commission continues to forge ahead with charges against those who have violated the trust of STRS members. Each case it appears will shed new light on what happened at STRS and will provide continued guidance to ensure that such misspending never, ever happens again.

Nancy Hamant

More criminals within the walls of STRS?

A comment:

Tom Curtis and others are right that the prosecutors in the Herb Dyer and Hazel Sidaway cases should press forward to bring many other violators of Ohio's ethics codes from our retirement system to trial, and thus bring some closure to retirees whose lives have been forever altered by the criminal actions of some past and present STRS Board and staff members.

To our detractors who have repeatedly accused us of dredging up the past: Why do I STILL read in the papers of the hunt for Nazi war criminals, 61 years after the fact?

Kathie Bracy

4/17/06

"Those who forget the past are destined to repeat it ." -- Robert A. Heinlein

Tom Curtis to Lara Baker: A big thanks

April 16, 2006

Hello Lara Baker, (Chief Legal Counsel)

I wish to congratulate you on being able to hold Ms. Sidaway responsible for two of the [original] seven counts against her. I am sure you were pressed to even get those two convictions, considering all of the excuses put forward to claim her harmless to her actions.

It is my hope that you and the criminal division will go forward with all of the remaining ethics indictments the OEC sent to your office.

Many of these people should also be facing criminal charges for failure of their fiduciary responsibility to the STRS membership. Fortunately for them, they full well know that we retirees do not have the financial backing to file such criminal charges. We have been told that would take one quarter to one-half million dollars to do. It does not seem right that people can waste our money as those at the STRS did for so many years and yet we have to find the money to hold them accountable for doing such.

Retirees are now paying the full bill for all of this misspending of our funds by those we entrusted with our retirement money. They wasted our funds and did not fund our health care stabilization fund properly, yet they are permitted to walk away barely unharmed financially. Whereas, many retirees are suffering financially right now and will for the rest of their lives.

I would think that after what you have learned from this trial, you can begin to understand why the STRS retirees are still so angry with past board members and many staff members. Their arrogance and feeling of entitlement went way beyond the norm and their abusive spending is inexcusable.

I could go on, but that would do little to help. I am sure from what you have learned, you can certainly get the big picture here.

In closing, I beg of you, please find the time to bring the remaining people into court and find for their guilt or innocence. Retirees need some closure concerning the huge misspending of our funds. We have had little notice until now. Thank you so much for doing your job and prosecuting those suspected of criminal activity. God bless you. May you have the strength and courage to continue your efforts concerning the STRS.

Sincerely,

Thomas Curtis,

STRS Retiree

CORE Advisory Committee Member

Plain Dealer finally reports on Sidaway trial

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Ex-official of teachers' fund convicted of ethics violations

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Sunday, April 16, 2006

Associated Press

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Columbus- A jury convicted a former member of the state teachers' pension board of two misdemeanor ethics violations on Friday but acquitted her of four other counts.

Hazel Sidaway, who represented active teachers on the board from 1986 to 2003, had been accused of accepting free meals, hotel stays and tickets to entertainment events.

Sidaway, 62, was found guilty in Franklin County Municipal Court of conflicts of interest for accepting two tickets to the Broadway show "Hairspray" and four Cleveland Indians tickets.

The theater tickets came from Tacoma, Wash.-based Russell Investment Group while Russell advised the agency on investments, and the baseball tickets were from Smith Barney, now a subsidiary of CitiGroup.

The jury acquitted the Canton resident of one conflict charge accusing her of accepting meals at Columbus restaurants and three counts of failing to report the gifts on annual ethics reports from 2001 to 2003. Sidaway was not sentenced but is likely to face a fine and probation.

Sidaway had testified that she learned long after the events that the consultants had paid for the tickets, and then reported them. She also said she relied on advice from the staff at the State Teachers Retirement System on dealing with investment consultants and filling out ethics reports.

Ohio law prohibits public employees from accepting items of value from contractors. Assistant City Prosecutor Lara Baker said gifts could influence board members when they decide which companies to hire.

The former executive director of the system was found guilty Sept. 1 of accepting golf outings and other gifts from Russell. Herb Dyer pleaded no contest to one charge of failing to report gifts to the Ohio Ethics Commission and was fined $1,000.

Dyer was forced to resign in August 2003 after criticism that the retirement fund spent millions of dollars on bonuses, artwork and travel while assets plunged.