Zurik: Rust resigns ahead of MERS hearing on questionable spending

Published: Jun. 19, 2015 at 1:54 AM CDT|Updated: Jun. 19, 2015 at 2:05 AM CDT
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BATON ROUGE, LA (WVUE) - The Municipal Employees Retirement System is looking for a new executive director. Bob Rust resigned from the job after a series of findings in our "Swiped" investigation.

Rust's spending was the focus of a special board meeting Thursday at the State Capitol.

"This is ridiculous," said State Treasurer John Kennedy, who sits on MERS' board of trustees.

Kennedy was describing an Easter weekend trip to Sandestin by Rust in 2012 – purportedly a four-day scouting trip to see if the system should move its yearly educational conference from Point Clear, Alabama to Sandestin, Florida.

"He advised the board that the distance was much further," said Warren Ponder, the system's attorney and acting director.

"You know why it took four days to reach that conclusion?" Kennedy asked, drawing laughter from some of the retirees and system clients monitoring the hearing.

"No, I do not," Ponder admitted.

When we searched the retirement system's records, they were incomplete - they had no receipt for the hotel. This may be why.

"I had Susita [Suire, MERS' administrative assistant] call and give them the room number and ask what kind of facility that was," Ponder told the board. "And it was a three-bed, three-bathroom house."

"How many people were there?" Kennedy asked.

"The number of people listed on the hotel receipt was five," Ponder responded, saying also that he doesn't know whether anyone else from MERS was with Rust.

Ponder said, on another Easter weekend planning trip to Point Clear, Rust rented two rooms for four nights each. It's not clear who was there on that trip, either.

"So it always required a trip?" Kennedy asked, referring to Rust's pre-conference planning trips.

"Yes sir," Suire said.

"Did it always require a trip over Easter Sunday? Easter weekend?" the treasurer asked.

"No sir," Ponder answered.

"He ever go on Christmas?" Kennedy asked.

"Sometimes he went on Memorial Day," Ponder acknowledged.

The board worked through a list of 21 items brought up in our investigations, questioning those trips and also pricey meals, such as a $3000 bill at Ruth's Chris steakhouse.

"We have no records that I could find of why that luncheon, that dinner took place," Ponder said, "nor who attended, nor what was discussed, nor why it was a business meeting for MERS."

We found out Thursday that Rust approved his own expenditures, and that the system had little back-up documentation on much of the spending. So we don't know why the system's educational fund paid $717 for alcohol at one Ruth's Chris dinner.

"What education was done with 500 dollars' worth of liquor?" Kennedy asked.

"I would doubt seriously that there was any real education at this dinner," Ponder told him.

The board says they will ask Rust to repay the system money.

"There were errors in judgment, there were mistakes made," said board member and former Gretna mayor Ronnie Harris. "This is a horrible situation and I am embarrassed by it."

The board has cut up its credit cards and has already tightened up its policies. Sources say, has Rust not resigned when he did, he may have been fired.

The legislative auditor is also investigating the questionable spending. That report is expected later this summer.

Rust wrote a resignation letter to the board. In that letter, he alleges many of the board members and their family members were at the pricey meals. None of the board members disputed that allegation.

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