COLUMBUS, Ohio — Both the whistleblower and the startup investment firm she accused of corruption testified during the trial regarding the alleged scandal inside the retired teachers' pension fund board.
Franklin County Court of Common Pleas Judge Karen Held Phipps is set to decide whether or not she should remove State Teachers Retirement System (STRS) board chair Rudy Fichtenbaum from his position, and if he and former board member Wade Steen should be banned from ever returning to public pensions.
The scandal centers 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.
This case began with a whistleblower letter sent to government officials in May of 2024. That month, the governor received a 14-page 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 — despite having no clients and no track record — tried to convince STRS members to partner with them and provide them with $65 billion.
For more of an in-depth recap, please click here.
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.
Soon after, 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. 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.
The AG states that they should be punished because they broke their fiduciary duties of care, loyalty and trust when "colluding" with QED.
RELATED: Key witnesses testify in Ohio retired teachers' pension fund corruption case
STRS Chief Legal Counsel Stacey Wideman testified on the stand, confirming that she and another colleague wrote the whistleblower letter.
Wideman, who has worked at the pension fund for more than a decade, started drafting her concerns years ago, she said.
"Our intention over the course of this, starting in 2021, was to document these unusual kinds of unprecedented things that were occurring at STRS that caused us to believe that the teachers' money could be at risk," Wideman said.
Metcalf took the stand, explaining how he got involved with QED after believing that STRS was not being honest with the investment reports and subsequently, bonuses to staff.
"I was concerned that STRS investment mismanagement had resulted in a decrease in benefits to Ohio teachers," Metcalf said.
The state said that Metcalf worked behind the scenes to try to secure a $65 billion deal.
For more of an in-depth recap, please click here.
Wideman pointed out concerns that Steen and Fichtenbaum were too close to Metcalf.
Communications obtained via a records request of a court filing reveal that QED associates consistently told then-board member Steen what questions to ask, gave him documents to propose, and pushed him to follow its plan.
"I am writing content as though I am Mr. Steen," Metcalf said during cross-examination.
To read what the texts said, CLICK HERE.
RELATED: Ohio pension leaders accused of corruption face state in first day of trial
The defense said getting advice isn't a crime, but the state asked if getting advice meant sharing confidential documents with Metcalf.
"Staff often stamp things confidential that I did not believe was confidential," Steen said.
When asked by the judge if he ever confirmed it wasn't confidential, Steen said no.
But with Steen already off the board, his team argues that this case is meaningless. But for Wideman, it isn't.
Fichtenbaum told us in mid-2024 that he would be open to still considering a deal with QED.
"I don't think we were really, ever even given a fair shot at trying to articulate and explain why we thought this was something that was worthwhile looking into," Fichtenbaum said about QED in 2024.
"Are you still considering QED?" I asked him.
"I don't know at this point," he responded. "I think that the idea that they had about earning fees is not a bad idea."
"But would you choose QED?" I asked again.
"I think that — would it be worth having somebody vetting that idea and looking at it?" he responded, shrugging. "I think we should always be looking for ways to try and make money with and take less risk for the pension."
As we have continued the dozens of reports on the topic, our investigation in September 2024 revealed that STRS was, once again, moving to hire a firm that allegedly lacked experience and personal ties to the board leaders, according to senior staff.
After our report, the board chose not to move forward with the firm that has been the subject of my investigations.
Wideman said her intent in sending the letter was to ask for help investigating why QED was "still lingering at STRS years after failing due diligence."
Each side is drafting its written closing arguments, and the judge will rule in the next couple of months.
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