Steve Foreman, known as “The Fixer,” fell ill Friday, he informed OCJ/WEWS.
The tip was obtained in the form of a now-archived video meeting that proves Ohio Attorney General Dave Yost’s claim that board members were promoting a $65 billion partnership with an investment company that lacked “legitimacy.” There is shortage.
Short
Ohio’s Environmental Explainer Resignation Machine (STRS) board is composed of eleven individuals. There are 5 elected contributing lecturers and two elected retired lecturers. The Governor will get a chance to nominate an investment expert. The Area President and the Senate President have to collectively appoint a professional. The Treasurer and Director of the Training and Staff Section each get the right to nominate one professional.
There is debate over how STRs will invest cash while being an actively controlled budget flow tool as opposed to index investing. Energetic budget accumulation strives to outperform the market, hire additional advisors and generally deliver additional value. Index budgets work with the accumulation market, are noticeable as more passive, and are usually much lower priced.
In short, while “reformers” want to move into index investing, generation “status quo” people want to actively manage budgets.
Some retired lecturers, known as reformers, are looking to get their money back, saying they believe the STRS board mismanaged their $94 billion pension investments.
STRS lost $5.3 billion in 2022 alone. In 2023, the $27 million invested in the failed Silicon Valley Locker was lost. In addition to these, cost of housing changes (COLAs) have been suspended for more than 150,000 retired Ohio lecturers for five years in 2017.
In 2012, the limit for qualifying resignation letter was increased from 30 years to 35 years. Ultimately, this was revised to 34. Subsequently, the board approved a bonus of $10 million for its team of employees.
Reformers are also emphasizing transparency.
The Ohio Resignation Study Council posted a report that combined STRS with alternative statewide national pension plans from 1999-2022. During this all-day period, the average annual STRS return was 6.85%, the Ohio Society Worker Resignation Machine (OPERS) yield was 6.14%, Ohio’s College Workers Resignation Machine (SERS) return was 6.52%, the Ohio Police and Hart Pension CapitalTreasury ( OP&F) used to be 6.76% and Freeway Patrol Resignation System (HPRS) used to be 5.88%.
The STRS team of staff has identified this information on various occasions, when they say the investment is not failing as critics say.
“STRS Ohio’s investment advisor, Callen, shared that STRS Ohio’s total fund returns outperformed its benchmark and public funds tracked by Callen for three, five and 10-year periods ending June 30, 2023. Ranked in the top 10% of funds.” STRS spokesman Dan Minich noted.
In May, Legal Professionals General Dave Yost filed a lawsuit to remove two individuals from STRS, saying they were participating in a guaranteed guidance “scheme” that would give them immediate profits. Yost began investigating subsequent documents prepared by STRS staff, which alleged that Wade Stein and Chairman Rudy Fichtenbaum were bidding for the private funding team QED Systematic Answers.
QED was started by former Deputy Treasurer Seth Metcalf and Jonathan (JD) Tremel. Metcalf served in multiple positions under Josh Mandel, including general counsel. In 2020, they prepared their optic on STRS, according to a principled 14-page memorandum.
The documents claim that he – despite negative customers and negative inspection reports – tried to convince STRS individuals to partner with him.
They could not instigate the board members, largely due to their lack of experience and the fact that QED was not registered as a broker-dealer or investment fiduciary. The boys also did not have the technology to “facilitate the strategy,” the documents said.
Subsequently, the QED was analyzed by Cliffwater, the board’s outdoor guide. The corporate highly urged them not to practice or value their ventures.
The bid has reportedly been organized by Stein and Fichtenbaum, who typically present QED direct documents to bring individuals on board and announce company speaking issues to the alternative team of employees.
The AG says the pair must be got rid of because they impair their fiduciary duties of support, continuity and consideration while “colluding” with QED.
2021 assembly
Again in November of 2021, board members proposed an unheard of idea.
“This involves partnering STRS with QED,” Fichtenbaum noted.
OCJ/WEWS has obtained a video recording of a now archived STRS assembly, which shows individuals Fichtenbaum, Stein and former member Bob Stein proposing to change their investment tools to work with funding company QED.
Fichtenbaum said, “Full implementation of this agreement could generate more than $4 billion per year for STRS, which is more than employee and employer contributions combined.”
This was very bad for almost every alternate in the meeting.
Former board member Rita Walters said, “I wouldn’t even invest my money in this,” adding that the idea sounded like a Ponzi scheme. “Why would I invest that kind of money out of Ohio State teachers?”
According to Yost’s lawsuit, board members want to give QED $65 billion so they can supposedly repair COLA.
“The mention of $65 billion is clearly inaccurate,” Stein said at a board meeting in May. “This was never proposed by me, was never proposed by any other board member.”
Stein felt so strongly about this that in a court filing on June 20, according to Yost, he denied that he and Fichtenbaum had ever proposed that STRS invest $65 billion in QED.
However the 2021 recording does not show this.
“We will make $65 billion of our inventory available to implement this strategy,” Fichtenbaum said.
These two were not one-offs. The reformers were forced to settle for $65 billion on various occasions as others and the STRS staff group appeared baffled by the proposal.
“If you want to make $4 billion, $65 billion is the right number,” Fichtenbaum said.
Reformers have repeatedly said that $65 billion must be clawed back.
“We wouldn’t invest the entire $65 billion with one manager,” Matt Worley, a prominent funding executive at STRS, said with a laugh. “That would be madness.”
Fichtenbaum was obviously not happy with all the questions and interruptions.
“I don’t feel that I am being treated fairly and am just being given the opportunity to give a presentation,” he said. “If you don’t want to make $4 billion, or if you don’t think it will work, that’s fine.”
Reformers made the assumption that STRS activists would not seek a ban citing QED.
“You’re choosing one thing here,” Stein said.
“That’s why my focus is on QED. That’s why I’m focusing on this issue, because I’m hearing more discussion about the entity we will engage with, as opposed to the strategy we will implement,” Worley noted.
That being said, the $65 billion was not the only factor proposed by reformers.
“I think I only said $65 billion for total implementation, but it could start at $250 million,” Fichtenbaum said.
It was not presented as “all or nothing”, he added.
“What has been presented is that, yes, if you want to make $4 billion a year, we have to commit $65 billion… By the way, that doesn’t mean giving them $65 billion. This means access to inventory,” he said. “You’re not writing someone a check for $65 billion, that would be crazy.”
Andrew Neville, the lead director who recently stepped down from the job, requested Fichtenbaum to clarify this.
“However, do I understand the strategy, that we will essentially sell $65 billion of our assets and buy Treasuries? Is this the first step of the strategy? Or do I misunderstand the initial concept as well?” Neville requested.
“Yes,” Fichtenbaum said, confirming that Neville understood as he should.
It’s a startup looking for investment, board member Claudia Harrington said, simplifying the situation for existing individuals.
Reformers argued that this entire presentation was not honest, because they were not being taken seriously.
feedback
Case Western Conservatory College business law mentor Eric Chafee says the reformers’ solutions are questionable and understands why the AG is investigating.
“QED has an unproven track record,” Chafee said. “It is not clear why these board members are really focusing on this particular unit and why they are doing so so strongly.”
And by Friday, the board was ready to pursue whatever policy it wanted — until a surprise exodus changed that dynamic.
Reformer Steve Foreman effectively set up his escape at Friday’s meeting. He said he was not able to give an interview about why he decided to fall ill, but would do so soon.
His reasoning in his escape e-mail was stated as “retirement”. He said in the note that it was “an honor” to work with and understand the reformers.
This is the e-mail he provided to Fichtenbaum:
“It has been a unique honor to serve Ohio’s teachers. I am overwhelmed by their confidence in choosing me. Additionally, I will always consider working with you, Wade, Liz, Pat and Julie the pinnacle of the experiences that spanned my career. I play it close to the vest, I believe that helping one person may not change the world, but it can change the world for that one person. It drives everything I do. I sincerely believe that each of you has proved by your steadfast service and actions that you all exemplify this principle. It has been an honor to know you all.”
Foreman did not answer questions about whether the escape had anything to do with the chaos across the board.
With this ancient imbalance, and in general, Chaffee thinks there may be something else going on.
“It makes you wonder what’s really going on here,” he said.
Chafee said it’s possible that both the STRS board and QED’s status quo are terrible decisions – all coming at the expense of former teachers.
Currently, there are two vacancies – the foreman’s seat and the seat of past president Dale Worth. Worth resigned after the reformers stripped him of the chair.
Worthy’s term expires this summer, so an election was scheduled to find his successor. Reformer Michelle Flanigan is set to finish her playground in a few months.
Foreman’s seat is not up for re-election until August 2026, so the board will want to start looking at a package for his replacement.
One of his last actions on the board was to vote not to give STRS employees a raise, which teachers applauded.
To invite questions or provide feedback regarding STRS, please fill out the form below or email (email protected) with the subject sequence “STRS Comment”.
Practice WEWS On Statehouse Reporter Morgan Trow Twitter And American Plan,
This article first appeared on News5Cleveland.com and is published in Ohio Capital Magazine under a content-sharing promise. Unlike alternative OCJ articles, this alternative is not available for remote publication through information retailers because it is owned by WEWS in Cleveland.
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