COLUMBUS, Ohio — Educators, politicians and retired teachers' pension fund staff are debating how to move forward after a judge removed the current board chair for corruption.
Franklin County Court of Common Pleas Judge Karen Held Phipps decided that State Teachers Retirement System (STRS) board chair Rudy Fichtenbaum should be immediately removed from his position. He and former board member Wade Steen, whose attorney called him a 'hero' to retirees, will never be allowed to be on the board again, the decision states.
The scandal centered on Steen and Fichtenbaum and their relationship with startup investment firm QED Technologies, run by former Ohio Deputy Treasurer Seth Metcalf and Jonathan (JD) Tremmel.
"In the end, the evidence presented in this case showed that Steen and Fichtenbaum were essentially acting as agents for their undisclosed principals: QED, Metcalf, and Tremmel," Held Phipps wrote in her decision.
Steen and Fichtenbaum caused the public confidence in STRS to "suffer greatly," and will take an "untold amount of time to erase," the judge continued.
"At best, Steen and Fichtenbaum followed the directions of Metcalf and Tremmel and, at worst, were mere puppets of Metcalf and Tremmel," the judge wrote.
Click here to read more in-depth about her decision.
RELATED: Judge removes retired teachers' pension fund leaders from board after corruption trial
How we got here
In May of 2024, the governor received a 14-page anonymous whistleblower memo alleging a massive public corruption scheme brewing and moving quickly within STRS. In 2020, Metcalf and Tremmel set their eyes on STRS, according to the document.
The documents claim that they tried to convince STRS members to partner with them and provide them with $65 billion.
Steen and Fichtenbaum had allegedly been bidding continuously, pitching QED's direct documents to board members and proclaiming the company's talking points to other staff.
All of this failed, and finally, a whistleblower reached out to state officials.
Days later, Yost filed a lawsuit to remove Steen and Fichtenbaum from the board, stating they were participating in a contract-steering "scheme" that could benefit them. Attorney General Dave Yost started the investigation after the memo, now known as being prepared by STRS employees, alleged that Steen and Fichtenbaum had been bidding on QED.
For more of an in-depth recap, please click here.
Reactions
"The STRS pension fund has actually improved over the past five years, all while Rudy has been on the board," educator and Ohio Federation of Teachers' Melissa Cropper said.
Cropper has watched the pension fund be plagued by allegations of corrupt activity over the past several years, and now, the board makeup is in limbo.
"People did elect Rudy Fichtenbaum because they believed that Rudy was fighting for them, and I believe that Rudy is fighting for them," Cropper said.
But Fichtenbaum is indefinitely off the board, and the teachers have one less voice to fight for their priorities, Cropper said.
"It's up to a judge to decide whether the methods he used were correct or incorrect," she added when I asked if it was unfair to remove him.
Fichtenbaum didn't respond to the comment, but Steen did.
"The court’s assertion that I acted as an 'agent' for QED is patently false. I was never an agent of QED. I turned to QED for accurate analysis and independent information that was not being provided by STRS staff," Steen said, in part.
During the trial, the defense argued that the men were just trying to get better returns for teachers.
Politicians on each side of the aisle, and the Ohio Education Association (OEA), have been warning about Steen and Fichtenbaum's behavior.
"That board has to make sure that those pensions are there for people when they retire and that they're doing their job," state Treasurer Robert Sprague said.
Sprague agreed with the judge, who ruled that the men betrayed their responsibility to be loyal to the teachers and instead worked “secretly” to “steer” money to the firm.
"I'm glad that they didn't let it go haywire, and I think it could have if the scheme had been able to materialize," Sprague, who gets an appointee on the board, continued.
Cropper points out that the plan was never able to happen because of checks and balances, which shows the system is fine as it is.
"We have court systems in place, and there's a mechanism for fighting back on that court system also," Cropper said.
OEA President Jeff Wensing wants to focus on the future as Fichtenbaum leaves the board.
"With Judge Phipps’ ruling, the Ohio Education Association hopes all stakeholders can move forward together with confidence in the STRS system in a way that supports the security and sustainability of the pensions our members rely on when their time in the classroom comes to an end," he said in a statement.
Although OEA and OFT have been split when it comes to the STRS controversy, each group is worried about what comes next for the board makeup.
An appellate court upheld a temporary block on a new state law that would have eliminated the majority of educators on the board. Due to the above controversy on the board, lawmakers passed a bill in the summer that changed how educators are heard.
It changed the makeup of the board from seven elected teachers—five contributing and two retired—to three elected after seats are phased out over several years. Two of the educator seats will be for actives and only one retiree seat.
RELATED: Ohio educators to remain on STRS as court upholds temporary block on board changes
"They made drastic changes to the composition of the retirement board, and those changes are completely unnecessary," Cropper said. "I fear that they're gonna use us as validation for why they do that."
She wants to remind politicians that if there was something corrupt going on — it came from one elected and one appointed member of the board.
"It can happen either way," Cropper continued. "And I would say that our members are much more fearful of decisions of the legislature than they are of decisions made by the people that they chose to serve them."
RELATED: Ohio's public schools end 2025 feeling bruised. The governor doesn't see it that way.
The board changes were proposed by state Rep. Adam Bird (R-New Richmond), who has been adamant about holding Fichtenbaum and Steen accountable.
“I commend today’s judicial action, which upholds important protections for the State Teachers Retirement System and safeguards the benefits of both current and future retirees. This decision affirms the necessity of the legislature’s efforts in the recent state budget to strengthen oversight and provide greater accountability within the system. As chair of the Ohio Retirement Study Council, an STRS retiree and an elected official committed to protecting taxpayer dollars, I view this ruling as a significant victory for transparency, fiscal responsibility, and the long-term stability of the retirement system,” Bird said.
Since none of the board changes have gone into effect yet, that means that educators still have a majority voice.
STRS Board Vice Chair Pat Davidson will be acting chair and will be able to call meetings. The next scheduled date is in March. The board will need to solicit nominations to replace Fichtenbaum.
"We’ve received the court’s decision issued earlier today. The State Teachers Retirement Board will continue its focus on good governance and the important work of providing retirement benefits to Ohio’s public educators," STRS said in a statement.
Steen is considering an appeal. If he ends up going through with it, his legal payments have to change. For the Held Phipps trial, they used funds from the lobbying group Ohio Retirement for Teachers Association (ORTA).
The Ohio Ethics Commission, after a complaint, has now determined that to be against ethics laws.
RELATED: No charges filed against retired teachers' pension fund leaders after ethics complaint
Metcalf and Tremmel do not face any disciplinary action, as they were not on trial, nor are they public officials. It seems Metcalf has moved on, though.
According to Ohio Tech News, he has joined a new startup called OH.io, which seems to be a coalition of entrepreneurs who want to bring AI businesses to Ohio in order to make a tech hub.
Steen's full statement
"Yesterday’s court decision comes as a shock and a deep disappointment. I am not an attorney but after sitting through five days of testimony and then reading the court’s decision it was almost as if it were two different trials.
Throughout my tenure on the STRS Board, my sole focus was to serve as a voice for the dedicated educators of Ohio. My primary objective has always been the restoration of the COLA—a benefit I believe was statutorily promised to our retirees. The court’s assertion that I acted as an 'agent' for QED is patently false. I was never an agent of QED. I turned to QED for accurate analysis and independent information that was not being provided by STRS staff. This ruling sets a dangerous precedent by effectively barring board members from seeking outside expertise to verify internal data.
If being 'disruptive' and 'relentless' in the pursuit of better benefits for teachers is the accusation, I take full responsibility. I will never stop advocating for Ohio’s educators. I am currently reviewing the 27-page decision and exploring all legal options, including an appeal."
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