Chaos-Filled Day at Ohio Teachers’ Pension Board Leading to Even More Ethical Concerns

A chaotic Friday at the State Teachers Retirement System (STRS) led to the dismissal of Executive Director Bill Neville and marked the expected departure of board member Wade Steen. Tensions escalated as attempts to silence STRS staff were unsuccessful, and a newly acquired document has sparked renewed calls for a state investigation into potential ethical violations within the organization. Concerns about adherence to ethics laws have increased following these events.

Key Highlight:

The State Teachers Retirement System (STRS) is facing significant turmoil, including ongoing conflicts, two board resignations, and allegations of public corruption and fund mismanagement. In May, Ohio Attorney General Dave Yost filed a lawsuit seeking to remove two board members, Wade Steen and Chair Rudy Fichtenbaum, due to their involvement in a contract steering scheme benefiting investment firm QED. This situation has been extensively covered by OCJ/WEWS, which has reported on the unfolding controversy and provided a Q&A for further clarification.
QED, founded by former Deputy Treasurer Seth Metcalf and consultant Jonathan Tremmel in 2020, attempted to partner with the State Teachers Retirement System (STRS) despite lacking clients, experience, and necessary registrations. A 14-page memo alleges that board members Wade Steen and Rudy Fichtenbaum repeatedly pitched QED to STRS, violating their fiduciary duties by colluding with the firm. Ohio Attorney General Dave Yost’s lawsuit seeks their removal based on these breaches of care, loyalty, and trust.
The conflict at the State Teachers Retirement System (STRS) revolves around investment strategies: reformers advocate for switching to lower-cost index funds, while proponents of the status quo prefer actively managed funds, which are more expensive. Recent board elections have shifted the majority to reform-minded members. The reformers aim to reinstate cost-of-living adjustments (COLAs) for retirees, which were suspended for five years starting in 2017. They view the ongoing investigation as a tactic to undermine the choices of democratically elected officials regarding pension management.
The conflict within the State Teachers Retirement System (STRS) escalated quickly, with Ohio Attorney General Dave Yost launching an investigation on May 9 and filing a lawsuit by May 14, following a memo received by government officials. In August, Yost issued subpoenas related to the alleged corruption involving the investment firm QED. During a recent meeting marking the end of board member Wade Steen’s tumultuous term, retirees expressed their appreciation for his leadership, celebrating him with cakes and cards. Steen, who was appointed by Governor Mike DeWine, had become a prominent figure among reform advocates but faced significant controversy during his tenure.
After Governor Mike DeWine removed Wade Steen from the STRS board in 2023 due to concerns over his ties to QED, Steen successfully sued to regain his position in April 2024. Following whistleblower documents and a lawsuit from Ohio Attorney General Dave Yost highlighting potential corruption, a debate erupted among board members. Reform member Julie Sellers proposed a vote of no confidence against STRS staff, accusing them of dishonesty in targeting Steen. However, the proposal failed to achieve the necessary supermajority, indicating ongoing tensions within the board. Despite the setback, supporters believe the new board will continue Steen’s reform efforts as the legal issues unfold.
Rayfield, head of the Ohio Retirement for Teachers Association (ORTA), helped raise over $80,000 for Wade Steen’s legal fees to fight his removal by Governor DeWine. Concerns about ethical implications arose when Steen sent thank-you cards to pensioners who donated, potentially suggesting a conflict of interest since he represents a broad group of teachers. Steen maintains that he acted legally, despite accusations of impropriety. Meanwhile, Rayfield plans to support Chair Rudy Fichtenbaum in a similar legal battle. STRS staff have reported concerns about this legal fund to the state ethics commission, while Rayfield criticizes the former executive director, Bill Neville, who faced allegations during an investigation but had most claims deemed unsubstantiated. The board voted to move forward with an end-of-employment agreement for Neville.
With Wade Steen’s term ending, Governor DeWine needs to appoint a new STRS board member. However, there’s speculation that Steen may return as the next executive director, a move supported by some reformers. This potential appointment could escalate existing tensions within the board, but reformers believe that some chaos could be beneficial.

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