All across America, Wall Street is grabbing money meant for public workers.
"One of the most garish early experiments in “alternative investments” came in Ohio in the late 1990s, after the Republican-controlled state assembly passed a law loosening restrictions on what kinds of things state funds could invest in. Sometime later, an investigation by the Toledo Blade revealed that the Ohio Bureau of Workers’ Compensation had bought into rare-coin funds run by a GOP fundraiser named Thomas Noe. Through Noe, Ohio put $50 million into coins and “other collectibles” – including Beanie Babies." - Matt Taibbi, Rolling Stone
Have you ever wondered why Ohio's pensions are permitted to invest taxpayer money in private equity investments even though it is difficult, if not impossible, for Ohio's pensions to audit those investments, as required by ORC 3307.15?
Did you know that prior to 1996, there was a list of permitted investments for Ohio's pensions?
Then came S.B. 82.
Senate Bill (S.B.) 82 was introduced on February 16, 1995, and was initially designed to create a health care fund for each of the five major state retirement systems.
S.B. 82 underwent significant changes when it went to the Senate Education and Retirement Committee.
The most notable change was the expansion of the authority of the retirement systems to make investments, and the removal of the list of types of investments in which the systems were allowed by law to make.
On March 27, 1996, the Senate voted to pass S.B. 82. The bill then proceeded to the House Health, Retirement, and Aging Committee on April 11, 1996. While the bill was in the House committee, Terrence Gasper, as chief financial officer of the Ohio Bureau of Workers’ Compensation, testified in favor of the bill’s provisions eliminating the list of authorized investments and retaining the “prudent person” language.
The finalized version of the legislation was signed by former Governor Voinovich on December 6, 1996, expanding the investment authority of the five state retirement systems, the Bureau of Workers' Compensation, and the Ohio Tuition Trust Authority by abolishing the current "legal list" of permissible investments and adopting the "prudent person" rule.
Here is ORSC's 1996 analysis of S.B 82: https://drive.google.com/file/d/11VgdSgkENPjNlxkFMHUheq38EBciASCJ/view?usp=sharing
Here is the detailed list of permitted investments in the version of R.C. 3307.15 effective prior to March 7, 1997. https://orsc.org/Assets/Bills/3307.15_1994_10_11_HB197.pdf
In comparison, the version of R.C. 3307.15 effective on and after March 7, 1997 deletes the majority of those restrictions, as can be seen here: https://orsc.org/Assets/Bills/3307.15_1997_03_07_SB82.pdf
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