The director of the Municipal Employee Retirement System was put on administrative leave Friday after the agency’s board learned that he had taken public records home and possibly altered a receipt related to an investigation into his spending habits.
Thousands of dollars of questionable expenditures for meals and out-of-state trips by MERS Director Robert Rust are being reviewed by the Louisiana Legislative Auditor’s Office and by the system’s own governing board.
The MERS board appointed general counsel Warren Ponder as acting director of the agency while the investigation continues.
State Treasurer John Kennedy, who sits on the board, said there will be a public meeting, streamed online for the thousands of municipal retirement system members, during which Rust and staff will be asked to answer specific questions about allegations of misspending public dollars at fancy restaurants and hotels. The meeting is scheduled for 2 p.m. on June 18, with the location to be determined. But Kennedy said if Rust doesn’t show up to face the music, he will be ready to move to permanently remove him from his position.
The allegations against Rust first appeared in a WVUE report in May. He could not be reached for comment on Friday.
In a previous letter to board members, Rust said most of the spending described in the report did not come from MERS assets, taxpayers dollars or MERS membership contributions. Instead, it came from “sponsorship fees paid by investment companies or service providers,” he wrote.
The report found that Rust had frequently spent upward 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 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.
Ponder said in an interview after the Friday meeting that he discovered a receipt from one of the hotel stays that appeared to be altered.
“There were two documents that were purported to be the same document that were different,” Ponder said. “I brought those documents to law enforcement.”
Kennedy called the discovery “disturbing.” He also said he was frustrated to learn that Rust was taking public records home with him.
“It’s highly unusual for documents to be removed from the office which belong to the system and the retirees,” he said.
Kennedy said it has been “like trying to pull teeth” to get answers from Rust to this point about the allegations.
“I have not received all the documents I’ve asked for, and it may be because some of those documents don’t exist,” Kennedy said, “which raises even bigger questions.”
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.
Follow Rebekah Allen on Twitter @rebekahallen.