Ex-member asks court for override of removal

COLUMBUS — The attorney for ousted pension board member Wade Steen on Tuesday urged a three-judge state appeals panel to return him to the position from which Gov. Mike DeWine removed him nearly a year ago.

The 10th District Court of Appeals will decide whether the governor had the authority to remove and replace his financial expert on the State Teachers Retirement System in mid-term.

A court magistrate has already opined that the governor did not.

“The colloquialism at play in this case is that power corrupts and absolute power corrupts absolutely,” Mr. Steen’s Toledo attorney, Norman Abood, told Judges Kristin Boggs, David Leland, and Carly Edelstein.

“That is the truism that mandates protection of the teachers retirement system,” he said. “The legislature did not grant the governor such unbridled power to control the board. The constitution restrains it, and as the magistrate has so explicitly found, the court in this case has no basis to grant it.”

At the time he was removed, Mr. Steen, a certified public accountant, had more than a year left in his four-year term. The clock is ticking for a court ruling because the latest term to which he’d been appointed expires on Sept. 27.

Mr. Steen’s removal came amid a power struggle on the board in which he had allied himself with some retirees who have challenged the fund’s investment decisions, performance bonuses paid to in-house investment staff, and the suspension of annual cost-of-living adjustments in their benefits.

Then Republican Gov. John Kasich first appointed Mr. Steen to the board in 2016, and Mr. DeWine reappointed him four years later. But he then removed him with more than a year left in his third term and replaced him with G. Brent Bishop, a Columbus business consultant and, at the time, a University of Toledo trustee.

Mr. Bishop resigned his seat on the 11-member pension board and UT board on the same day last month. This occurred after 10th District Magistrate Thomas W. Scholl II recommended that Mr. Steen be returned to his pension board seat because there was no vacancy on the board at the time to which Mr. DeWine could name someone else. This time there was a vacancy, and the governor replaced Mr. Bishop with Brian Perera, an Upper Arlington consultant and former long-time legislative budget expert at the Ohio Statehouse

Columbus attorney Kevin Murch, representing Mr. Perera, argued that, under state law, Mr. Steen was never guaranteed a full four years and could be removed by the man who appointed him. His replacement, however, was entitled to complete what was left of that term.

“The due process ... comes into play when somebody’s being deprived of a property right ...,” he said. “[Mr. Steen] has no property right to hold that office for four years.”

While Mr. DeWine had questioned Mr. Steen’s board meeting attendance record, there was never a specific allegation of wrongdoing on the member’s part.

Judge Leland, a former state representative, noted that the law specifies a four-year term.

“So the original appointee can have the governor looking over his shoulder, but the subsequent doesn’t?” he told Mr. Murch. “That’s what you’re arguing.” Mr. Murch replied, “What I’m arguing is under the language of the statute the initial appointee can be removed. ... What it does, judge, is it just allows for stability, because it’s just a four-year term. If a change is made, that next person shall hold so you don’t have this constant revolving door again of appointees to that position.”

Mr. Abood said state legislators set out to protect the retirement benefits of teachers.

“But instead of seeking to protect that system from the whims and caprices of ever-changing political systems, [the defendant’s attorney] would have the court grant the governor unbridled power to control the gatekeepers of the retirement system in a way not authorized by the legislature,” he said.

STRS is one of the largest public employee pension funds in the nation. It had assets of about $91 billion as of June 30.

Contact Jim Provance at:

jprovance@theblade.com.