Zurik: MERS chief's spending takes center stage at tense board meeting

Published: May. 22, 2015 at 12:27 AM CDT|Updated: May. 22, 2015 at 2:05 AM CDT
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BATON ROUGE, LA (WVUE) - A state retirement board has taken swift action, following a series of FOX 8 reports. The Municipal Employees Retirement System board discussed their executive director's questionable spending Thursday.

MERS executive director Bob Rust sat silent for more than an hour, often rocking in his chair as board members discussed his spending and his leadership.

"Most of these allegations are not about this board," said State Treasurer John Kennedy, a member of the board. "It's about our staff."

We showed how Rust traveled to the Gulf Coast on holiday weekends, including Easter, to plan a yearly educational conference. That conference, to train board members, cost $62,000 last year. We also showed pricey meals where the public paid for hundreds of dollars of alcohol.

"I'm not going to support sweeping this under the rug," Kennedy said.

Kennedy essentially took control of the meeting, questioning how Rust took sponsorship money from investment companies doing business with the system, and used that sponsorship money to pay for the alcohol and those trips.

"The law is very clear that you cannot take money from a private entity – especially one seeking to do business with you or one that is doing business with you - and use it as part of your public duties," Kennedy told the board.

Kennedy proposed taking the public credit card away from Rust, forcing him to answer questions about the allegations at a public meeting next month, and canceling the annual conference at the Grand Hotel in Point Clear, Alabama.

"They have to be hit head on, and our members need to know that we're on it, we're going to address it," Kennedy said. "If there's impropriety, we're going to deal with it. If there's not impropriety, we're going to explain it."

That proposal passed, along with a separate one by former Gretna Mayor Ronnie Harris to form a three-person board committee to also look into the allegations and best practices for the future.

"I want to be front and center," Harris told the board. "But I also want to be fair, and [to have] a thorough review made of all of the allegations, all of the records. Not only that - tell us how to do this job. Please, tell us how to do this job."

The board will hand over all of its information and findings to the state's legislative auditor. The auditor launched an investigation at the request of La. Representative Kevin Pearson, another board member, who said the board had to take action - including canceling that pricey conference.

"I think they realized that it really wasn't that important," Pearson told us. "I mean, you even heard from one board member who said that he dreaded going to it. So, quite an expense for something that may be questionable, as far as need."

But Kennedy wants answers from the executive director, who sat silent as some board members questioned his decisions and his expenditures, such as that Easter weekend trip to Alabama. Rust charged two rooms, both in his name. Rust says the trip was to plan that conference.

"I want our staff to come in and take every single one of the issues that FOX 8 raised, and I want them to address it," Kennedy told us. "I want the whole staff there… The $3,000-plus bill at the Grand Hotel over Easter weekend, I want to know who was there. There were two rooms – I want to know who was there. I want to see an itemized list. I want to know why they picked Easter weekend."

Kennedy said he even wants the names and phone numbers of whoever Rust met with to discuss conference planning. "Was the convention staff who plans conferences, were they working on Easter Sunday?" he asked. "Maybe they were. But I want to get the facts."

Those are all answers that Kennedy says he'll force Rust to give next month, in public.

Kennedy also wants an opinion of whether MERS money is private or public. Kennedy and the legislative auditor believe it's public money. Rust thinks it's private. If so, Kennedy thinks Rust then could be facing an ethics problem.