Monday, August 05, 2013

Hey, Governor Kasich, why aren't you bragging about this?

From John Curry, August 5, 2013
This just in: Ohio scores low on government integrity
A new study ranks Ohio 40th on openness of state and local governments
I doubt you’ll be shocked to learn that Ohio isn’t a national model of openness, accountability, and ethics in its state and local governments.
But really — Number 40?
A new year-long study by the Better Government Association, a nonpartisan watchdog group, ranks Ohio 40th among the states on its “integrity index.” The BGA bases its ratings on the effectiveness of each state’s sunshine laws in four areas: Open meetings, open records, whistle-blower protection, and official conflicts of interest.
Ohioans can take some comfort in the fact that Michigan scored even worse — a dreadful 48th. But this is serious, and disturbing, business.
The BGA formed in 1923 to fight public corruption in Al Capone’s Chicago. Ever since, the group has worked to help citizens across the country hold their elected officials accountable and gain access to the workings of government.
Many politicians, in Ohio and elsewhere, are as allergic to such concepts as Capone was to paying taxes. But Emily Miller, the BGA’s policy and government affairs coordinator, observes that transparency is essential to combating political corruption.
“Government exists only because taxpayers pay for it to exist,” Ms. Miller told me. “You deserve to know how your money is being spent — that’s a basic democratic right. And a normal person shouldn’t have to jump through hoops to exercise that right.”
In Ohio, the hoops are formidable. Our state does especially badly, the BGA study says, at protecting whistle-blowers — government employees who seek to expose mismanagement, fraud, and waste where they work. Ms. Miller notes that in Ohio, a would-be whistle-blower generally must report misbehavior first to a supervisor. What if the boss is committing the abuse?
Ohio law doesn’t require governments to advise employees of their rights when they blow the whistle. A whistle-blower must go to court to challenge an employer’s retaliation; there is no administrative remedy. And while state law imposes penalties on workers who falsely accuse public employers of retaliation, it doesn’t provide explicit penalties for an employer who retaliates.
‘Pretty bad’
“It’s really pretty bad,” Ms. Miller says. “Whistle-blowers face circumstances that can ruin their lives. If there aren’t adequate protections, bad things won’t get reported.”
Ohio’s open-meetings law fares almost as dismally on the BGA index. The law says governments must provide “reasonable” notice of a public meeting, but doesn’t define that. They don’t have to let you record a meeting. Rules are especially loose for “special” meetings where business can get rushed through.
Ms. Miller adds that meeting notices don’t even have to include an agenda. “If people don’t know what’s going to be talked about,” she says, “all the notice in the world isn’t worth much.”
The state’s open-records law is somewhat better, but still mediocre. Governments must act on requests for public records within a “reasonable” time — but again, it isn’t defined. They can provide records electronically, but only if that’s “feasible.”
There is no explicit appeals process, much less an expedited one, when requests are denied. Ohio Attorney General Mike DeWine has a system to mediate records disputes, but it’s voluntary and limited. Otherwise, a citizen has to take the government to court.
Finally, the study gives Ohio low marks on its law governing official conflicts of interest. The law requires state-level elected officials and political candidates to file financial disclosure forms (Michigan requires no disclosure).
But the Ohio law does not require all forms to be posted online, where access is easier. Ms. Miller notes that the content of the forms is “not that detailed” — it does not include data about spouses’ financial holdings, for example.
Secret agents
Obstacles to government accountability and responsiveness abound in Ohio. Toledo Mayor Mike Bell continues to resist a court order to give The Blade the Police Department’s map of gang territories in the city. The mayor has been equally opaque about such matters as sources of foreign investment in the city and his own official travels.
A new state law makes it easier for local governments in Ohio to meet secretly to cut “economic development” deals with private interests. JobsOhio, the private corporation that effectively replaced the state Department of Development, spends lots of public money with little accountability.
Politicians routinely portray challenges to their secret conduct of public business as special pleading by news media, rather than a fundamental right of taxpayers. Ohio governments that are struggling financially to provide essential services can’t be expected to spend time or money copying records for citizens, they argue.
Wrong, the BGA says. “It’s times like these when people need to know more than ever how their money is being spent,” Ms. Miller says. “Those expenses should be baked into the cake.”
Official efforts at concealment are often abetted by self-appointed media scolds who can have undisclosed agendas of their own. They assert that outlets such as The Blade have no right to complain about government secrecy until we disclose our own processes.
Publish a list of your executives’ salaries and other internal documents, and let us join your newsroom discussions and editorial board meetings, they say; only then can you credibly shine your spotlight on government.
That argument is bogus. But I’ve got a dog in the fight, so don’t take it from me. Let Ms. Miller explain:
“Newspapers are private entities,” she says. “Somebody doesn’t have to buy a newspaper; you choose to consume media. You don’t choose to consume government — you pay for it.
“The press and the public are one and the same,” she adds. “The press isn’t making some huge profit off of this. It’s fulfilling its duty to inform the public about what government is doing. Newspapers have to pick up where government leaves off, because no state is doing particularly well on [transparency], and I don’t think that things are getting better.”
When Gov. John Kasich describes our state’s recovery from the Great Recession, he likes to use the phrase “Ohio miracle.” But on the issue of government accountability, another term comes to mind: Ohio’s disgrace.
David Kushma is editor of The Blade. Contact him at: or on Twitter @dkushma1

Sunday, August 04, 2013

STRS you didn't see this one from a few months ago!

From John Curry, August 3, 2013

Losing billions, Ohio pension system pays millions in bonuses

March 19, 2013
You have the wrong job.
The Cincinnati Enquirer reported yesterday that the State Teachers Retirement System has “paid out $38.6 million in bonuses to its roughly 80-member investment staff” since 2005.
By comparison, the larger Ohio Public Employees Retirement System has paid $10.7 million, not including 2012.
“Millions of dollars went to employees even when the system’s portfolio did poorly,” the newspaper reported, but the Enquirer didn’t explain just how poorly the fund has been performing.
Between July 1, 2007 and July 1, 2012, STRS lost almost $7.2 billion, going from $66.7 billion to $59.5 billion.
That’s a five-year return of negative 10.7 percent. Most of that was due to the market collapse of 2008, but even the four-year bull run since then hasn’t been enough to restore the losses. As bad as the market has performed, STRS has been worse – a full seven points below the Dow Jones Industrial Average for the five years.
Worse, STRS’ liabilities have been increasing relentlessly in the meantime, going from $81.1 billion to $106.3 billion. That means that an unfunded debt of $14.5 billion has metastasized into a $46.8 billion cancer.
And that’s using STRS’ own numbers. The debt would be nine figures if it were calculated with the same rules that companies use.
STRS’ funding ratio has slipped to a nearly hopeless 56 percent. It’s legally required to get on a 30-year path to full solvency, but hasn’t met that requirement since 2009. Last year, the Legislature cut benefits over the next 30 years by 36 percent, while increasing teacher contributions from 10 to 14 percent, and even that wasn’t enough to get the fund back on the 30-year track.
In the last fiscal year, the assets under STRS’ management grew by just $1.3 billion, while liabilities increased by $7.5 billion. That’s the situation fund managers will be in year after year, as they try to hit targeted returns of $8 billion, $9 billion, or $10 billion a year, with capital of just $60 billion. The only way to do that is by taking on dangerous levels of risk.
Or, the fund managers could turn from that temptation and embrace their own mediocrity (as in, 2.2 percent returns in FY2012). The Enquirer found that fund managers “received bonuses in fiscal 2012 as high as 77.6 percent of their salaries. In other years, employees earned as much as 125 percent of their salaries. Assistant Director of Investment Mary Ellen Grant, for example, received $512,842 in salary and bonus in 2011 as the top earner in the department.”
— Jon Cassidy

Response from STRS:
Larry KehresMount Union Collge
Division III
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Vermont Teddy Bear Company