Zurik: MERS chief allegedly falsified receipt sent to FOX 8

Published: Jun. 9, 2015 at 1:27 AM CDT|Updated: Jun. 9, 2015 at 5:51 AM CDT
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NEW ORLEANS (WVUE) - FOX 8 has obtained a hotel bill that shows the head of a state retirement system may have whited out his son's name to prevent us from seeing that public funds were used to pay for the room. It's the latest development in our "Swiped" investigation.

"There are allegations on the table that the money's being wasted," says State Treasurer John Kennedy. "There are allegations on the table that documents may have been changed to hide that wasteful spending."

We can best show you that change by comparing two copies of the same hotel bill – one allegedly altered by the executive director of the Municipal Employees Retirement System, or MERS.

"Some of the documents have been altered," Kennedy tells us.

In March, we asked that executive director, Bob Rust, provide all receipts related to MERS' annual educational conference at the Grand Hotel in Point Clear, Alabama. He gave us a stack of bills that we felt were incomplete, so we asked for the records again.

Rust told us it would take some time to get those records together. And one month later, he provided more documentation, including the hotel bill: $1,800 for one room at the Grand Hotel. The name provided on it was simply his last name, "Rust."

We already had an invoice that showed Bob Rust had his own room. So we wanted to know who stayed in the second one. Rust would never answer that question.

A few months later, MERS got the original receipt from the Grand Hotel.

Here's what Rust provided to us; notice only the last name, "Rust," on the bill.

And here's the original, with the name "Cameron Rust" on the hotel bill. That's Bob Rust's 22-year-old son.

MERS' general counsel, Warren Ponder, told the board Friday Rust removed his son's first name from the records provided to us.

"I went to that document that we got directly from the Grand and compared it to a document we had on a flash drive that we had sent to Lee Zurik," Ponder told the board. "I look at that and it quite frankly frightened me. And I didn't want it in just my possession, I wanted it in the hands of someone else."

"If it turns out to be true, it will be very disturbing," Kennedy warns.

Rust has been placed on paid administrative leave.

"The allegation has been made by our in-house counsel, our general counsel," the treasurer says. "And you can clearly see from the two records, there's a change, there's a discrepancy. There's a difference. I want to know why there's a difference. If a change was made, I want to know who made the change. I want to know what the change was."

We now know MERS money was used to pay for the hotel room of Rust's son, $1,800.

"This is about the integrity of the system," Kennedy says. "I want to find out what happened."

Legal experts say Rust may have broken the law, either by violating the public records law by not providing us with the actual hotel bill or by altering a public record, which is a criminal offense punishable by up to five years in prison.

Kennedy says Rust must appear at a public meeting scheduled for next Thursday to answer a series of questions, including why he removed his son's name from this document handed over to FOX 8 News.

"These are real expenditures of retiree money," Kennedy tells us. "If someone spends a lot of this money wining and dining themselves – again, I don't know that that happened but it appears to be the case - that's less money that we have to fund the retirees' retirement."

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