Magistrate Orders Ohio Teacher Pension To Release Investment Documents--Finally

For over 3 years, the Ohio Pension has fought hard to keep its dealings with Wall Street hidden from public scrutiny.

Sunshine is long overdue at highly secretive $90 billion State Teachers Retirement System of Ohio.

In 2021, I was retained by the Ohio Retired Teachers Assocation to conduct a forensic investigation of the State Teachers Retirement System of Ohio—the pension system ORTA’s members rely upon for their retirement security. In connection with my investigation, on February 19, 2021, I filed a request pursuant to Ohio law for an opportunity to inspect or obtain copies of public records related to the pension’s investment managers, investment consultants, performance compliance auditor, investment cost monitor, financial auditor, and custodians, as well as board and staff.

Over 3 years ago, my journey to inspect the pension’s records began.

The overwhelming majority of the most critical disclosure information I requested was summarily denied. That is, STRS simply permitted the investment firms involved to unilaterally determine whether the information I sought on behalf of stakeholders had to be disclosed under Ohio law. Not surprising, most firms granted the opportunity to oppose public scrutiny of their financial dealings with STRS, chose to do so. Most disturbing, not a single prospectus or offering document required to be provided to all investors under our nation’s securities laws was provided to me in response to my public records request. As a result of the extensive denials of important public records requests, it was impossible for STRS stakeholders to evaluate the investment strategies, performance, fees, risks, and conflicts of interest related to the pension’s investment portfolio.

Accordingly, on May 21, 2021, I filed a complaint for writ mandamus with the Supreme Court of Ohio seeking certain STRS public records I had been denied.

As I noted in my investigative findings:

This lack of cooperation by STRS is all-the-more surprising given that STRS is well-aware that this forensic review of the pension was commissioned, as well as paid for, by tens of thousands of participants, with the stated objective of improving management and oversight of the pension. Pension fiduciaries solely concerned with the best interests of participants and beneficiaries should welcome, not oppose, a free independent review by nationally recognized experts in pensions. Further, given the profound fiduciary breaches and disclosure concerns stakeholders (and even STRS’s own commissioned experts) have long raised, it is clear STRS could benefit from an independent review by experts—this time not of its own choosing.

And now for the good news……

Just yesterday the magistrate assigned the case found:

Siedle has established a clear legal right to the production of public records sought in the first investment managers request and the first Panda Investments request. STRS was under a clear legal duty to comply with these public records requests. Accordingly, it is the decision and recommendation of the magistrate that this court issue a writ of mandamus ordering STRS to comply with Siedle's first investment managers request in the February 19, 2021 letter.

Now that the magistrate has confirmed that I (and the public) has a “clear legal right” to the pension investment contracts, I trust that STRS Ohio will comply with its “clear legal duty” to provide them. The time has come for its members and taxpayers to see what the pension has been hiding for so many years.

I look forward to learning the secrets STRS Ohio has fought so hard for so long to keep from the public.

Further, these documents will confirm whether the alternative funds STRS Ohio has invested in are plagued with the same industry abuses that were identified in my High Cost of Secrecy report, as well as whether the pension may be able to recover any monies pilfered— funds that could be used to pay benefits promised.

Finally, public scrutiny of these heretofore “Top Secret” documents will reveal whether the “Special Audit of STRS conducted by Ohio Auditor Keith Faber in 2021 was thorough. Faber did not review these contracts for his report, and his staff candidly admitted to me that—even if they had the documents—they lacked the expertise to do so. (When I offered to review any such contracts for his staff, they never responded.) Therefore his so-called “audit” failed to address any concerns regarding fraud related to these investments.