Debate Over Corruption in Ohio Teacher Retirement Board

In Columbus, Ohio, there’s a significant discussion happening among educators, politicians, and pension fund officials following a judge’s recent decision to oust the current board president due to allegations of corruption.

Franklin County Civil Court Judge Karen Held Phipps ruled that Rudy Fichtenbaum, Chair of the State Teachers Retirement System (STRS) Board, should be removed from his position immediately. Legal representatives for Fichtenbaum and former board member Wade Steen described him as a “hero” for retirees, asserting that the ruling will prevent him from serving on the board in the future.

The controversy revolves around Steen’s connections with Fichtenbaum and QED Technologies, a startup investment firm led by former Ohio deputy finance ministers Seth Metcalfe and Jonathan Tremmel.

Judge Held Phipps noted that the evidence indicated Steen and Fichtenbaum acted in the interest of undisclosed parties, specifically QED and its leaders. She emphasized that they have seriously undermined public trust in STRS, suggesting it would take a considerable amount of time to rebuild that confidence.

“At best, Steen and Fichtenbaum were following Metcalf and Tremmel’s instructions; at worst, they were simply their puppets,” she wrote in her decision.

In May 2024, the Governor received an anonymous whistleblower memo, raising concerns about potential public corruption within STRS. The memo alleged that Metcalf and Tremmel had sought STRS’s cooperation to facilitate a staggering $65 billion deal. It further detailed how Steen and Fichtenbaum promoted QED’s interests directly within STRS, which eventually prompted a whistleblower to alert state authorities.

Following this, Attorney General Dave Yost filed a lawsuit to remove Steen and Fichtenbaum, accusing them of engaging in a “scheme” that could benefit them personally. A memo from STRS officials implicated the two in bids related to QED, which led to further investigations.

Melissa Cropper, educator and president of the Ohio Federation of Teachers, pointed out that during Fichtenbaum’s tenure, the pension fund’s performance improved. However, she expressed concern over his indefinite removal, suggesting it weakens the voice advocating for teachers’ interests. Cropper emphasized the importance of the judicial process in determining what constitutes ethical behavior.

Steen, while denying the judge’s claims, argued that he relied on QED for unbiased information not available from STRS staff, asserting they were protecting teachers’ interests.

Concerns about the board’s integrity have been echoed by politicians on both sides and the Ohio Education Association (OEA). State Treasurer Robert Sprague emphasized the board’s responsibility to safeguard pensions while also supporting the judge’s ruling, which he viewed as a necessary step to ensure transparency and accountability.

As the board composition stands uncertain, an appeals court has paused a new state law that reduces the number of educators on school boards. This law was introduced in response to the recent controversy, proposing a dramatic shift in how educators are represented on the board of STRS.

Cropper criticized these changes, voicing her apprehension about their potential implications for the representation of educators. “If there are issues of corruption, it often involves those who are elected or appointed,” she said, adding that decisions made at the legislative level can disproportionately impact educators.

Meanwhile, the board changes proposed by state Rep. Adam Byrd underscore the demand for accountability from Fichtenbaum and Steen. Byrd praised the court’s ruling, emphasizing the need for enhanced oversight within STRS.

Although these changes to board composition have yet to be implemented, the current board continues to focus on governance and maintaining retirement benefits for Ohio’s public educators.

Steen is currently contemplating an appeal, prompting discussions around the financing of the court case by the Ohio Teacher Retirement Association.

While Metcalf and Tremmel have not faced legal repercussions, Metcalf appears to be pursuing new ventures in the tech industry.

In his statement, Steen expressed disappointment with the court’s decision, arguing that he had always aimed to advocate for Ohio’s educators and maintain their legal benefits. He contemplates the implications of the ruling, particularly regarding members seeking external expertise.