Thursday, June 16, 2016
OKLAHOMA CITY – Governor Mary Fallin today said the Tobacco Settlement Endowment Trust’s (TSET) failure to file necessary hiring paperwork for a new, highly-paid chief executive position would violate the spirit of an executive order that she issued in February 2015.
The executive order prohibits new hires, employee raises or bonuses unless an exception is approved by the statewide elected official who directs and manages the agency or the appropriate Cabinet secretary. The agency so far has not submitted the paperwork for the new $250,000 position of chief executive officer. TSET has submitted required paperwork for other positions in the past.
“This agency needs to play by the same rules it has been playing under until it decided to create a new top-level position with such a high salary,” said Fallin. “At the bare minimum, TSET needs to submit the same paperwork for this position as it has for many others.
“This salary sends the wrong message when our state is facing a difficult economic and budget climate. These are public trust funds, and the public will lose trust in this important agency if this salary takes effect.”
Fallin said she has directed Health and Human Services Secretary Terry Cline to deny the proposed salary. The most recent state study on agency director salaries recommended a maximum salary of $143,714 for the leader of TSET. State law enacted by the Legislature and Fallin in 2013 requires agencies and their governing boards to set chief executive salaries within the range recommended in the director salary reports.
TSET’s board of directors last week voted to offer Patrice Douglas the newly created post of chief executive officer.
“Patrice Douglas was a fine public servant who I expect would be a wonderful asset to TSET, but the board has to understand the concern about this salary,” the governor said. “The board never consulted me about this decision. If I had been, I would have strongly advised each of them to set a more appropriate salary.”
TSET is overseen by two boards that manage programs and its $1 billion in tobacco settlement money. Only the interest is spent on smoking cessation and other health-related issues.
The agency’s current executive director is paid $120,000 a year and will stay with TSET, which has 22 employees. By comparison, the state’s seven public pension systems employ approximately 150 workers overseeing combined assets in excess of $26 billion. No employee or director of a pension system makes more than $144,000 annually.
Oklahoma voters in 2000 approved a constitutional amendment that created the Tobacco Settlement Endowment Fund to invest payments from the 1998 Master Settlement Agreement. TSET programs and grants are funded by the earnings from the endowment fund.
A board of directors oversees the state agency’s employees and programs. A separate investment board manages investments.
The seven-member board of directors is appointed by several elected officials: the attorney general; state treasurer; speaker of the House of Representatives; state superintendent of public instruction; state auditor and inspector; president pro tempore of the Senate; and the governor.