Ohio STRS has long brazenly misled Ohioans regarding its investments, as well as legal fundamentals.
“Index funds do not provide diversification;” “performance fees paid to money managers are not fees,” and “STRS is regulated similarly to federal, or ERISA, pensions” are some of the most preposterous statements I have heard in my 40-year career. Opposing public record requests — i.e., full disclosure of all relevant facts, while leaking “anonymous,” incomplete, or misinformation to media and others, has allowed the notorious culture of corruption to thrive. It’s no secret that secrecy is the modus operandi at STRS.
In a recent interview with the Associated Press, Hoover stated that communications she and others at STRS had with Minnesota pension officials earlier this year (reported in The Blade) regarding a proposed forensic audit of Minnesota’s pensions to be conducted by me were not part of an effort to undermine investigations in that state. Rather, the communications were “par for the course and normal protocol.” “Pretty typical,” said Hoover.
Yet when I submitted identical public records requests for any such communications to STRS and the Minnesota teacher pension, STRS refused to give me anything. Seems somebody at STRS felt they had something to hide — something not-so-typical perhaps. Minnesota, on the other hand, released dozens of incriminating documents — including communications with Hoover and others at STRS.
The documents revealed that in March, Jay Stoffel, the executive director of the Teacher Retirement Association of Minnesota, blasted out a panicked email entitled “An Important Matter” to all trustees of the TRA Board and staff, as well as to state legislators and officials, including the offices of governor, attorney general and legislative auditor.
The “seriously risky” situation Stoffel was warning about was a proposed forensic investigation into potential mismanagement or wrongdoing at Minnesota’s pensions, commissioned by educators who were participants — similar to a damning STRS Ohio investigation I had previously undertaken.
Spurred by Minnesota officials, industry allies (the National Council on Teacher Retirement and National Conference of Public Employee Retirement Systems) hastily reached out to pension officials at STRS and nationally, including in California, New York, and Rhode Island. A Zoom meeting was held to address the growing threat of greater participant-initiated investigations. This “movement,” as they called it, that could undermine confidence in public pensions by exposing mismanagement and malfeasance, had to be stopped. The participants — for whose exclusive benefit the pensions are supposed to be managed — were the hostile enemy.
If Hoover is right and these dire communications were “par for the course,” “normal protocol,” and “pretty typical” at STRS and our nation’s public pensions, we live in a very scary world indeed.
Edward Siedle is an attorney whose investigations of financial fraud have earned $78 million in federal whistleblower awards.
Edward Siedle December 6, 2024
