State Treasurer John Kennedy urged the governing board overseeing the statewide Municipal Employees Retirement System to take swift and firm action addressing allegations that the agency’s director recklessly spent thousands of public dollars on meals and out-of-state trips.
Allegations targeting MERS Director Robert Rust surfaced this week with a WVUE report about potentially inappropriate expenditures.
The report found that Rust had frequently spent upwards of a $1,000 on meals expensed to the agency. The TV station reported that Rust spent $1,547 on Sept. 15, 2013, at Palace Cafe that included two bottles of wine, seven additional glasses of wine and 23 mixed drinks. The station did not report on how many dinners were covered by the expense.
The television report also found Rust spent $2,900 in 2012 at Ruth’s Chris Steakhouse in Baton Rouge, including $717 for drinks. The year before, the restaurant expense topped $3,000.
The report also found that in 2011, Rust was reimbursed for the cost of two trips to the beach described as planning excursions for a training conference.
The conference was located in Point Clear, Alabama. But Rust’s trips to plan the conference were in Sandestin, Florida, more than 100 miles away. He spent almost $3,000 for those two combined planning trips to the beach on hotels, rental cars and meals. These expenditures appeared on receipts for Rust’s public credit card.
“We can’t dodge this. We can’t sweep this under the rug,” Kennedy said Thursday at a MERS Board of Trustees meeting. “This is not going to go away. These are serious allegations.”
The MERS Board on Thursday voted to cancel the annual training conference this year and to cancel Rust’s public credit card.
The board also voted, at Kennedy’s urging, to hold a public meeting in roughly 10 days to provide answers for the more than 8,000 MERS members.
MERS is the retirement system for about 150 municipal government employers across the state. Locally, cities like Denham Springs, Baker, St. Francisville and Zachary use MERS to provide city employees retirement benefits.
Kennedy requested a board meeting, to be streamed online, where each of the allegations outlined in the news report would be addressed individually by staff members. Other board members expressed concern about rushing to judgment but ultimately agreed. The meeting time and location have yet to be announced.
The Legislative Auditor’s Office is already investigating the issue, the board said. That report, which is expected to be finished within seven weeks, should provide findings that determine whether or not there was wrongdoing. At issue is whether the funds are considered public dollars.
Rust, in a letter to the board, said those were not public funds. He said most of the money used for the purchases in the report were paid for by sponsorship fees associated with the educational conference. He stated that MERS assets, taxpayer dollars and MERS membership contributions were not used for these expenses.
Kennedy said he believes the funds are public dollars.
Kennedy is a non-voting member of the MERS board, but he typically sends a representative in his place to the meetings.
Some board members bristled at the state treasurer’s comments, which sometimes suggested they weren’t taking the allegations as seriously as he was.
“Please don’t usurp my authority as a board member who comes to every meeting,” Trustee Ronnie Harris said to Kennedy. Harris asked the board to hire an outside attorney to investigate the claims, but Kennedy dismissed the idea as trying to “sweep it under the rug.”
Harris later told Kennedy pointedly, “It’s good to see you here,” noting that the board has previously told his representatives to relay to him the important work they do at the board meetings.