After I retired from MERS in April of 2004, I took a 3-week trip to Hawaii with wife Carol and then went back to work for MERS on contract. MERS abruptly terminated that contract at the end of August. In November 2004, I put up a website called Unknown MERS: Inside the "Champion of Industry". Its address was www.mersdirt.com. It contained lots of stories and documents I'd collected over my 8 years at MERS. I had all this stuff for 2 reasons. One was that I am in the habit of saving anything I write, along with most anything written to me. The other was that I had a CD burner on my PC at work which enabled me to copy all my files, bring them home, and transfer them to my home computer.
After I put up the website, I emailed most of MERS' customers to call their attention to it. I was able to do this because one of the files I had brought home was a list of the email addresses of the "payroll coordinators" for each municipality - a list I'd prepared for my boss so she could email them all of them as a group. Thereafter, I emailed them every time I added something significant to the website.
MERS threatened to sue, but didn't have a case. Later, I sued MERS when they denied a Freedom of Information request. I won. They paid my attorney fees and a $500 penalty. Added to their own attorney fees, it cost MERS just under $13,000.
I let my mersdirt.com domain registration expire at the end of August 2007. The stories that follow are from that website. Click on story title below to jump to story.
MERS moved into its current office building in April 2002. It was a big step up from the cramped quarters MERS had leased since its separation from the State of Michigan in 1996. The total cost of the new building was never made clear to MERS staff or to MERS member municipalities, but CEO Anne Wagner did tell staff that for accounting purposes, the property was being included in MERS' investments portfolio.
In response to my FOIA request, MERS has provided these figures (document):
Termination agreements made several years ago with 3 former MERS employees were furnished by MERS in June 2005 in response to my lawsuit. Links to copies of those agreements are in an article I wrote at that time.
A fourth agreement - in this case, a settlement - was furnished to me 12/16/05 in response to a new FOIA request. This one was for Shirley Roe, who was fired 8/23/04. Shirley's termination was different from the others. The other employees were asked to resign and their salaries were continued for 3-5 months. Shirley was given 2 weeks pay and fired, no reason given. Unlike the other 3 employees, Shirley got a lawyer. A settlement was reached July 20 in which MERS agreed to pay "a total gross amount equal to three (3) months of pay and the equivalent of two (2) months of Employee's COBRA contribution, which amounts to a total payment of $11,489.88."
Contract attorney Lisa Ward assisted in the negotiations and charged MERS $3312.50 for her services. A list of payments to Ms. Ward was provided by MERS.
In addition to the settlement agreement, MERS gave me a copy of a 10/13/04 letter to CEO Anne Wagner from Shirley's attorney.
*This title is an inside-MERS joke. Anne was always trying some trendy idea to improve MERS employees, and one of those was the book The Four Agreements by Don Miguel Ruiz, a Mexican author of New Age spiritualist and neoshamanistic texts. (Wikipedia) The four agreements are:
MERS' Bill for Failed FOIA Fight: $12,813.50
$6426 was for my attorney fees, $500 was the penalty required by the Act for improperly denying the request, and $5887 was what MERS paid contract attorney Lisa Ward for handling the lawsuit. See FOIA Lawsuit for a complete chronology of events, including a transcript of the September 14 hearing.
A list of payments to Lisa Ward for her work on the FOIA case and on a settlement with fired employee Shirley Roe was provided to me by MERS 12/16/05 in response to a FOIA request.
An official from one MERS municipality has told me of his concern that "MERS may be being administered not so much in accordance with the best interest of its members as it is to the specific economic benefit of its management staff and vendors." One questionable MERS expenditure has been for consulting services provided by Hardy Hasenfuss of New London International Consulting Services (website). In response to a Freedom of Information request, MERS provided me a list, by year, of all payments made to Mr. Hasenfuss in the years 2000-2004. There may be more payments for 2004, because the list was prepared before the end of the year (about 12/9/04). The totals are below. Click here to see the detail as provided by MERS.
Anne Wagner calls Hardy her "leadership coach", but he provides services to other staff as well. In the fall of 2002, Anne asked all staff to participate - on a voluntary basis - in a "behavior assessment" or "personality profile" process conducted by Hardy. This consisted of taking 2 short, self-administered online tests, then discussing the results over the phone with Hardy. Here is her memo. And there was this memo from Deb Peake.
Later that fall, Hardy conducted an all-day, in-house staff retreat. He also interviews prospective employees to make sure they will be a good fit at MERS. Hardy is located in New London, New Hampshire, so most of his coaching is by phone.
Before Hardy Hasenfuss, there was FranklinCovey (website). Stephen Covey is the author of the best-selling self-help book "The 7 Habits of Highly Effective People". His company conducts professional development training and sells the Franklin Planner. In response to a Freedom of Information request, MERS provided me a list, by year, of all payments for services and materials provided by the FranklinCovey company in the years 2000-2004. The totals are below. Click here to see the detail as provided by MERS.
In October 2000, the entire MERS office - about 30 people at that time - attended a 3-day session conducted by a Franklin-Covey trainer. We were taught to:
1. Be Proactive
I heard at the time that the training alone cost $1500 a person. Added to that was the lost time from work, the big meeting room at the Sheraton (a few blocks from the office), a nice buffet breakfast and lunch each day, a $30 coupon for dinner for each of 2 nights, a $50 Franklin Planner, and gifts each day (a bag, a desk clock, and a shirt - all with the MERS emblem on them). During the sessions, there was snack basket full of candy and gum, a first aid kit with Tylenol and BandAids (in case we got a paper cut), cookies, fruit, or brownies at break time, all the coffee and pop you could drink, and balloons around the room that had on them "Have a Great Day", "You're Special", "Best Wishes", and the smiley face. We were encouraged to stay at the hotel the first 2 nights at company expense, which seemed strange. I didn't take them up on it, but I heard from those who did that milk and cookies were delivered to their rooms at bedtime.
The above salaries were provided by MERS in response to Freedom of Information requests. MERS also gave me the budgeted salaries for these 4 years:
At its November 10, 2004 meeting, the MERS Board approved a 10% merit bonus for 2004 for CEO Anne Wagner (see OPEN SESSION on page 5 of the meeting minutes). That would increase the amount budgeted to $159,500. The Board also approved "an additional $5,000 for the purchase of a life insurance policy in recognition of her leadership and improvements that have been made to the system." These might explain why her 2005 earnings were less than her 2004 earnings.
For purposes of comparison, I've listed below the salaries of the 7 highest paid state employees. The figures are from a 4/15/06 story in the Lansing State Journal.
The following salary figures are from a Lansing State Journal story that appeared in December 2004. That article said that although Michigan is "only the nation's eighth-largest state,...its department directors are among the highest paid in the country." It also said that the Governor gives back 5% of her $177,000 salary.
In response to my lawsuit, MERS has given me copies of the termination agreements made with 3 former employees. Click the name below to view the agreement.
The agreements were sent to my attorney by MERS' contract attorney, Lisa Ward. In her cover letter, she says that "all relevant documents" are enclosed. I had also expected one for Shirley Roe, who was fired without warning or explanation at the end of August, 2004. Last I heard, Shirley had a lawyer and was negotiating with MERS.
To make sure that none of the requested agreements were overlooked, my attorney sent a letter offering to settle the lawsuit if MERS paid my attorney fees ($1456.20) and provided a signed statement from Anne Wagner that there were no other agreements. Lisa Ward replied 6/20/05 saying that although there were no termination agreements for Diane Anderson or Gale Larsen, "the situation with Ms. Roe has not yet been finalized."
So. Is there anything wrong with these terminations? Let's see:
If these terminations had really been voluntary, there would have been no need for payoffs. Nor would payoffs be required if proper procedure had been followed to establish that the employee had not performed satisfactorily. These employees were bullied into resigning and then paid not to put up a fight about it. It saved the CEO from having to justify her action, and it cost her nothing. It wasn't her money. The employees were paid off with public funds - money contributed by municipalities for payment of their employees' pensions.
And the MERS Board approved - assuming they knew about it. We do know that they unjustly denied me access to the termination agreements.
See FOIA Lawsuit for a complete chronology of events.
Anne Wagner has always claimed to want employees to submit suggestions, but some suggestions are apparently unwelcome, and I don’t know if it is because they come from me or because they involve policy or procedure. MERS has always had a suggestion box, and it has been the Employee Action Committee’s responsibility to consider the suggestions. On MERS’ internal website, the EAC has a page that includes a list of employee suggestions and their disposition. I was on the EAC in 2003, and early that year I submitted 3 suggestions:
I thought that making sure that suggestions got a
fair hearing would be a proper function of the EAC, but other members preferred
to refer them to the appropriate department for consideration, with no follow
up. In other words, the EAC’s responsibility ended with the referral. All but
one EAC member (besides me) held this peculiar opinion, leading me wonder if it
wasn’t orchestrated by Anne, who met regularly with the EAC chairman and
There was nothing further except Luke came to me
one day and said he didn’t think we wanted to do that – no reason given.
I made another suggestion when I applied for my pension and discovered that MERS didn't trust me to provide the account and routing numbers for direct deposit of my check. That suggestion was rejected informally by Finance Director Luke Huelskamp. He said that to minimize disruption in setting up the EFT transfer and/or making corrections, the EFT authorization form should not be changed. He said that there is more than one bank that has one account number for individuals and different digits at the end of the number, say, one for savings, another for checking, etc. The individual doesn't always know that or even question it. By speaking with a bank teller and the bank signing the form, the check should go to the correct account. He felt it was only a one-time thing for individuals to have to deal with.
So. The IRS trusts taxpayers to provide their account and routing numbers, but MERS does not. MERS' convenience overrides the customer's.
I created the MERS Intranet, MERS' internal website, long before we moved to the new building, and I was responsible for maintaining it until I retired in May 2004. On many occasions, I also served as the staff photographer. The Open House for MERS’ new building was June 11, 2002 and Ron Beaton told me Anne Wagner wanted me to take pictures. A professional photographer had been hired, but he was going to be there only from 3:00-6:00, and the Open House was from 3:00-8:00. Also, Anne wanted some “casual” pictures. So I took about 30 pictures. When I had them developed, I also got them put on a CD, and I gave the CD to Shelly McMahon so she could add them to the Photo Gallery page on the Intranet.
On June 24, Ron came to me and said that from now on, Anne did not want anything put on the Intranet without her approval. He said this came up because she didn’t want the pictures of Dorothy Stevens and Gordon Linsday, the former MERS executive directors, on the Intranet. Ron gave no further explanation. He said he had already had them removed.
We can only speculate about Anne’s motive. Did she want to be Executive Director for Life, and felt that the memory of past directors would detract from her magnificence? Keep in mind that the Intranet is seen only by MERS employees (and whatever consultants have access to our network). Maybe she didn’t realize this.
Here is the picture of Dorothy and here is Gordon, along with MERS actuary Alan Sonnanstine and board member Dennis Murphy.
I retired from MERS on May 1, 2004, and then came back to work on contract. I had been responsible for wage and service reporting since 1998, and they needed me to continue fixing report errors, providing customer support, and processing corrected reports until all municipalities were converted to ePASS, The 600 municipalities were divided into 12 groups. One group was to be converted each month starting in October, so the last of them would have been converted in September 2005. As it turned out, my last day of work was Thursday, August 19, 2003, but I didn't know it until Saturday, the 21st, when UPS delivered a letter to my home saying my contract had been terminated - no reason given.
I probably wore out my welcome. Contractors shouldn’t use the word “stupid” when questioning Management decisions. And while testing the new system, I had reported as “bugs” problems with ePASS that I knew were there by design – problems I’d pointed out a year earlier, before Compuware was kicked off the project. Compuware was the first contractor to take on the project, and they bungled it. GRS (Gabriel, Roeder and Smith), the same firm that provides actuarial services to MERS, took over the project and has done an outstanding job. But they had to work with the original MERS design, and I thought it had some serious problems. Here is my original summer 2003 list, less a few that I know were corrected. Others may have been fixed in the final ePASS version.
In a separate email exchange in July 2003, I expressed my misgivings about requiring the municipality to provide information from the Membership Application before they were allowed to include an employee on a payroll report:
Here is Deb Peake's response:
Here is Luke Huelskamp's response:
Sometime in August 2002, Anne Wagner asked me if I would be willing
to serve on a committee to plan an employee retreat to be held in October and
conducted by Hardy Hassenfus. The committee’s first meeting was on September 11.
Members were Anne, Mike Moquin, Kathy House, Jennifer Willis and I. Hardy was on
speakerphone. At one point in our discussion, Anne brought up the “Common
Viruses” survey that was done a few weeks earlier. She said only half of all
employees returned the form, and half of those picked “Kill the messenger” as
the top virus at MERS. She said she couldn’t understand why employees felt that
way. I suggested that we ask them, and Anne assigned Jennifer and I the task. We
would talk to staff and present our findings to the Committee at our next
meeting, in 2
The policy on payroll reporting deadlines and late penalties that were distributed in March 1999 always seemed a bit confusing to me. In a March 8, 2000 memo to Marian Frane (the Finance Director), I proposed some changes. She did not respond.
On July 12, 2001 Marian sent me this e-mail:
Apparently, when the municipality sent the report on the 20th, it was more than 15 days by the time they got the invoice and returned the payment.
Ordinarily I have no reason to discuss deadlines when I talk to customers, but a couple days before the 20th each month, I call everyone who has not yet sent their report. That was when I was telling them the deadline was the 20th, and that they could be fined $250 if they are late.
Later on July 12, Marian later asked if we were OK on this matter. I told her I had looked up “deadline” in the dictionary and found that its source was the prisons. A line was drawn around the prison yard, and if a prisoner crossed it, he was shot. “Deadline” implied consequences, and there were no consequences for being later than the 10th. But I agreed to follow her directive.
Later, I sent her this e-mail, with copies to Ron Beaton and Tama Allen (Ron and Tama have to pre-approve any of my correspondence with customers):
Marian responded to my e-mail as follows:
I did get permission soon after that to send this e-mail message to municipalities who were late with their report:
On August 9, Marian sent me this e-mail:
The issue came up again in an otherwise favorable annual performance review written by supervisor Ron Beaton in October 2001. This statement was included in the review:
Marian “resigned” on November 26 and the new Wage and Service Reporting Instructions manual was distributed at the end of December with the “current policy” on deadlines and penalties.
Sometime near the end of April 2001, I got a call from Alton Cousino of the Hillsdale Housing Commission. He had a complaint about the MERS Wage and Service Program, which he used to prepare the monthly wage and service report. Often when closing out of the program, he got a message saying the program had performed an “illegal operation” and would be shut down. I had always told customers to ignore it, that it did no harm. Al said he was just an amateur programmer, but he believed that it did do harm. Part of the program remained in memory until the PC is rebooted. We chatted some more about the program and after the call ended, I e-mailed him a document written about a year earlier by IBM consultant Dave Ceccoli. It was an analysis of the issues involved in converting the MERS Wage and Service Program to a later version of Microsoft Access. I thought Al, as a programmer, would be interested in what Dave had to say, and I wanted to hear what Al thought about Dave’s analysis. Dave was the author of the original MERS Wage and Service Program. A day or so later, Al replied by e-mail. In his memo, he incorporated Dave’s analysis and responded to it point by point.
The reason Dave had looked into converting the program is that we thought it was the solution to a problem that several municipalities had been having. Some municipalities who upgraded to later versions of Windows or Microsoft Office could no longer run the MERS Wage and Service program. Dickinson County Library was the first to report the problem, in August 1999, and by the time a solution was found, the list grew to about 24 municipalities. They either had to continue to use their old PCs or send the report on paper. Former IS directors Brian Smith and Chris Neff tried to solve the problem, as did programmer Peter Kong and I. When we could come up with no other answer, we assumed that the problem was that a program created in Access 2.0 would not run with later versions of either Windows or Office. So we bought the software for Access 2000 and attempted to convert the program. We got nowhere. Finally, sometime in 2000, we had Dave Ceccoli take a look at it, and the analysis I gave to Al Cousino was his report.
In the end, it turned out that there was another solution. On November 17, 2000, Therese Humphrey of Huron County Behavioral Health installed the program for the first time and ran into trouble. The symptoms she reported were the same as those experienced by the other 24 municipalities. I explained the situation, but encouraged her to re-install the program before we gave up. Later the same day she called back to say that she had gotten it to work. In the detail of the error message she was getting, she saw a reference to a file. In a book she happened to have, she looked up the file name and found that it had something to do with “graphics”, and this led her to the solution: She slowed the “hardware acceleration” in Windows. In the next few days, I called all the other municipalities who were having the problem. Adjusting the hardware acceleration fixed the problem for all of them.
On June 4, 2001 I sent Tama Allen, the new IS director hired in April, a memo with Al’s memo attached.
On June 6, when I went to my weekly conference with supervisor Ron Beaton, I was surprised to find Tama there also. Ron said that they and Anne were very disappointed that I had shared Dave’s notes with Mr. Cousino. I was being put on 30 days notice. At the end of 30 days, my responsibility for dealing with the monthly payroll reports submitted by municipalities could be taken away, and I would be writing procedures only. I got angry back and said that they were making an issue out of nothing. They might just as easily have commended me for getting some free advice. I said there appeared to be a pattern of harassment - first, the completely inaccurate performance review last January (see Performance Review), now this.
Ron later sent a memo to document our discussion. In our meeting, Ron had made clear that the “disciplinary action” referred to on page 2 of the memo was dismissal.
I was ready to fight back. I started a letter to the Board. I contacted an attorney and discussed a lawsuit. In the end, I took no action. I had Tama and Ron review e-mails before I sent them to municipalities. Jason Smith of Information Services requested documentation - which was already written - of the MERS Wage and Service program and my procedures for doing report corrections, and he began observing and taking notes on what I did to deal with rejected payroll reports. That went on for a couple of weeks. I did my best to stay out of trouble and no further “disciplinary action” was ever taken.
In his memo, one of the reasons Ron gave for the seriousness of my indiscretion was as follows:
MERS has modified our direction concerning update of the wage and service reporting process and as a result of receiving old information, [Mr. Cousino] has assumed facts that are no longer relevant.
This sensitivity to any questioning of our “direction” for the wage and service reporting process was seen as early as October 2000 in a memo to me from Chris Neff. Note that he says that Anne had decided that there was to be no further development, bug fixes or enhancements to the Wage and Service Program. This was in October 2000, and implementation of the new web-based system - ePASS - did not begin until October 2004.
The "current problem" he refers to in his third paragraph is the one finally solved by customer Therese Humphrey (see third paragraph above).
Chris “resigned” on February 22, 2001, and on March 6, I sent Anne a memo defending the MERS Wage and Service program. There was no response.
On January 19, 2001, I got a performance review from Ron Beaton, who had been my supervisor for only a few months. Before I moved to Ron’s Administrative Services Division, I worked for Chris Neff in Information Services. I think that Chris wanted me out of his department. One reason probably was that he needed someone with a stronger technical background, but I also think he didn’t like me. I don’t know why. I didn’t really fit in anywhere else, either, so Ron got stuck with me.
I was very upset by the review and quickly wrote a response. At that time, Ron was the personnel director for MERS. He, of all people, should have known how unprofessional his review was. He told me when he gave it to me that he didn’t really know much about what I did, so he had based it on what he was told by Chris Neff, Kathy House, and Anne Wagner.
One accusation in the review was particularly bizarre - the one in the supplement about “Changes to PeopleSoft”. Besides the fact that I had heard nothing of it before the review, the idea that I could change codes in PeopleSoft was ludicrous. I had no access to the inner workings of the PeopleSoft system. I could enter codes, but only from a list provided in a drop-down box. If any invalid codes were on that list, it would be the fault of our Information Systems department. Although I never did get an explanation, I believe the code in question was one I had entered to identify a correction to an error I had made doing a refund, and I did so on the advice of a staff member who normally did refunds.
The “Additional Comment” in the supplement probably were as a result of comments I made in July 2000 on the brand new MERS website. I printed off each web page, wrote my comments on them, and gave them to Ron with a note asking that he pass them on to Anne.
The next “annual review” occurred in October 2001. The “win-win agreement” referred to in the review was something Anne asked all of us to write about a month before the Covey training. Ron’s comment under “Monthly Payroll Reporting” about providing information to municipalities comes from my dispute with Marian about reporting deadlines (see Reporting Deadlines). But I do not know what Ron is referring to under “Attitude/Office Presence” when he speaks of my “negative attitude” and “negative verbal comments”. I suppose I should have asked. But the review was favorable enough to get me a $3500 merit bonus.
At an Administrative Service staff meeting in April, 2003, Lynda Pittman, who was in charge of Marketing, talked at length about the complaints she was getting from municipalities about calls to Member & Retiree Services. They'd been telling her that they were not allowed to talk to the staff person they asked for, and the staff they were directed to instead seldom were able to answer their questions. She said they'd been calling her in frustration.
I had heard other staff grumble about the "Call Center", so I took it upon myself to write up my perception of the problem. I then sent an email to one of the two Call Center staff members, attaching my write-up. I asked this person to read it and let me know if I was getting my facts straight. Shortly after that, Ron Beaton - my supervisor and the head of Administrative Service (at that time) - asked me to a meeting in the Board Room. Waiting for us there were executive director Anne Wagner, Member & Retiree Services director Kathy House, Kathy's deputy Deb Peake, and Lynda Pittman. Apparently the Call Center staff person I'd emailed took my little essay directly to her supervisor, Kathy House.
Anne said that the Call Center concept came out of a visit she and Kathy had made to CalPERS, the California Public Employees' Retirement System. It worked for CalPERS, so they thought it would work at MERS. (As of June 2004, CalPERS had 1,002,067 active and inactive members and 416,783 retirees. MERS has 37,000 active members, 4,000 deferred vested (inactive) members, and 8,000 retirees.)
Anne questioned my statement that the "Call Center seems to provide the worse possible service to customers" and I acknowledged the exaggeration.
Lynda Pittman spoke up to say that it was wrong for me to use her name in my essay without her permission. I did not defend myself, but I did not agree. She is a supervisor and she made the statements in a staff meeting. She had no right to think her statements would not be repeated. It was just an excuse to beat me up, which she was happy to do. I can't help but like Lynda, but there is nothing she would not do to please Management.
Deb Peake asked me who among the other staff had talked to me about problems with the Call Center. I declined to name anyone. She persisted; I refused.
I reminded those the meeting that it was MERS policy to encourage staff to question Management decisions. My essay was a step in the process of researching the Call Center situation.
I was not disciplined for criticizing the Call Center, but I did not pursue it. And to my knowledge, no one else has, either.
In her 11/5/04 "MERS Response to Unsolicited Email" message to municipalities (see MERS Threatens Legal Action), IS director Tama Allen accused me of being a "spammer" and advised municipalities to ask me to remove them from my email list. As of 3/8/05, 25 (of about 500) have done so. This message from Osceola County, was signed simply "HR", and a copy was sent to Tiffany DuBois at MERS:
And there was this one from Saginaw 911. A copy was addressed to MERS@mersofmich.com:
Here is some of the other email feedback I've received, re-printed here with permission of the sender:
I don't believe either of the contracts apply here, since I am no longer a MERS employee. Further, it is a stretch to claim that any part of either contract has been violated by my website or the fact that I sent emails to MERS customers. Email addresses of public agencies are public property and those agencies cannot prohibit the public from using them for legitimate reasons. Nevertheless, I have removed from my email list those that have specifically requested that I stop emailing them (see Feedback).
I have sent 2 emails so far. On 11/4/04, to announce this website, I emailed this message to the payroll contact at about 500 of the 600 MERS municipalities:
On 11/5/04, Tama Allen, the IS Director at MERS, sent this email to the municipalities:
On 11/18/04, I sent another email to the 500 municipalities:
On 12/3/04, I sent a letter to Mike Moquin with the following offer:
I've received no reply to my 12/3/04 letter.
On 12/14/04, my attorney, Jim Starr, sent a letter to Mike Moquin. He asked for copies of the 2 contracts and said this:
Mr. Starr later phoned Mike. Mike told him he had given his letter to private attorney Lisa Ward, who is handling the matter for MERS. (Apparently Mike and MERS' other staff attorney were too busy.) Mr. Starr called Ms. Ward and asked her to explain how the contracts were violated. She wouldn't (or couldn't) say. She replied formally in a 12/29/04 letter in which she was no more forthcoming than in the phone conversation.
So far, no legal action has been taken by MERS. I, on the other hand, have sued MERS for release of termination agreements signed by some former employees.