Teacher’s Global Reach: A Small-Town Educator Now Wields Power in World Financial Centers As CalSTRS’ Chairwoman

By Gilbert Chan, The Sacramento Bee, Calif.

Jun. 24–Twenty or so fifth-graders shake off the afternoon fidgets as Dana Dillon quizzes them on supply and demand — a little lesson from a teacher who also happens to steer one of the richest investment funds in the world.

“I am the only one who has access to tomatoes. Everyone wants one,” she sang out, hovering near an overhead projector. “In a free market economy, what kind of price am I going to get?”

“A lot,” the classroom shouts back, unfettered by the knowledge that “Ms. Dillon” also drills some of the brightest minds on Wall Street as chairwoman of the California State Teachers’ Retirement System.

Even those who knew Dillon when, like her pupils, she played in the shadow of Mount Shasta express awe at the power she now wields in financial marketplaces from New York to Hong Kong.

Dillon’s mom, Mary Ann, recalled an old college friend calling her after reading a story this spring about the $171.5 billion CalSTRS pension fund in the San Francisco Chronicle.

“Is that your Dana?” the friend asked. “When I told him (yes), he said, ‘Wow.’ He thought it was a big deal.”

In the coming year, Dillon will guide the CalSTRS board through a maze of knotty issues — beefing up the fund’s campaign financing rules to root out potential pay-to-play conflicts, devising a strategy to fund retiree health care and shepherding legislation to bridge a $19.6 billion long-term pension shortfall.

It will be up to her to secure votes in a politically charged Legislature and drive consensus on a politically diverse 12-member board that includes the state treasurer, controller, superintendent of public instruction and six others appointed by Gov. Arnold Schwarzenegger.

Back home, Dillon’s friends and colleagues send their assurances to the nearly 800,000 members of CalSTRS and to state, national and world influence peddlers that their Dana is up to the tasks awaiting her.

“People can walk into a room and know who she is. She has the ability to be the expert,” said Mike Green, a Lindsay high school teacher and longtime teachers union colleague.

Dillon’s name is quickly becoming recognized around the Capitol and in the investment and pension fund community.

“This is an important position. It has the authority to do a lot of things,” said James Hawley, co-director of the Elfenworks Center for the Study of Fiduciary Capitalism at St. Mary’s College in Moraga. “It’s got to be a challenge for a schoolroom teacher.”

In the past four years, union and pension fund duties increasingly have cut into classroom time, forcing Dillon to work with substitutes and grade papers on the road, often between board meetings.

After team-teaching the past two years, she will take a one-year leave from the classroom this fall, a “break” that some colleagues wonder how she’ll survive. Dillon will miss out on the friendly banter with students before and after class, swapping jokes and exchanging hugs with them at recess.

“She definitely misses the kids,” longtime friend Deb Wilson said. “This is going to be a real turning point year for her.”

Since April, Dillon’s already jam-packed itinerary shifted into high gear with her election as chairwoman of the nation’s second-largest public pension fund and as a director of the politically potent California Teachers Association.

In two months, the Siskiyou County teacher has logged some 8,000 miles traveling the state in her 1995 Nissan Maxima, representing 295,000 CTA members and members of CalSTRS, a leading U.S. institutional shareholder activist.

“If there is one way to describe Dana, it is busy, independent and curious. She’s honest,” her mother said. “She is in no way superficial.”

Born Aug. 18, 1957, in Yreka near the California-Oregon border, Dillon is the oldest of three children of James L. and Mary Ann Dillon.

The father, a native New Yorker, traveled West to play football for legendary University of California coach Lynn “Pappy” Waldorf in 1952 and 1953. He was a former feed mill owner who served 26 years as Yreka city manager. Her mother taught English at Yreka High School.

In a city of fewer than 7,000 residents, Dillon grew up as a “very typical small town youth,” her mother said. She rode horses, spent summers traveling to swim meets in southern Oregon and Siskiyou County and taking family vacations. She has a sister, Laurie Marie Walker, a seventh-grade teacher in Rio Linda, and a brother, James L. Dillon Jr., a supermarket manager in Klamath Falls, Ore.

Her high school years were a slice of “That ’70s Show.” She worked on the homecoming committee, participated on the drill team, served as a student government officer and worked at the local burger shop and swimming pool.

“She was just one of those fixtures with cheery optimism. Dana gleans from both her parents that leadership is a natural (trait),” said Timothy Avery, a former high school classmate who heads the Yreka-based Scott Valley Bank.

After high school, Dillon attended California State University, Sacramento, for two years but never felt comfortable at a large college.

She returned to Yreka, working various retail and office jobs for two years before transferring to Chico State and earning a bachelor’s degree in liberal studies in 1981. She received her teaching credential a year later.

In 1983, she joined Weed Elementary School, a kindergarten to eighth-grade program. Through the years, she has taught classes at the junior high and elementary grade level, and managed the library at the 350-student school.

“She has a pretty good success rate with at-risk students,” said Weed Elementary Principal Kathleen Emerson. “She has really high expectations for her students.”

Her path to the pension board began only four years into her job. A colleague asked the fresh-faced teacher to be his alternate for a regional CTA election.

The candidate had upset a group of Mount Shasta teachers and, in response, they mounted a write-in campaign for Dillon.

“I remember the phone call we got,” Mary Ann Dillon recalled. “She felt terrible. She didn’t dream she would be elected. ‘What should I do?’ ” her daughter asked her parents. “We said ‘Dana, you’re it.’ “

As a favor to her colleague, Dillon agreed to serve on the teachers union state retirement committee — a rare choice for a teacher in her late 20s. Since then, she has risen through the CTA ranks and served as a director of the National Education Association. Her experience on the union’s retirement panel helped earn her statewide election to the CalSTRS board in 2003.

While some have urged her to test her skills at big city schools, Dillon has stayed put.

“I’m a small-town girl. It would be difficult for me to move away from the mountains,” Dillon said.

Wilson said Dillon prefers the outdoor lifestyle: white-water rafting on the Klamath River, fishing and houseboating on Shasta Lake or swimming in Lake Siskiyou.

She’s comfortable spending quiet dinners with friends, visiting with her family or staying home reading children’s books or historical novels. Her adventurous streak has taken her to Russia and the Louisiana Bayou.

Her “ultimate dream is to live on a ranch,” Wilson said.

Children, however, remain her passion. Outside class, Dillon has devoted summers managing the local swimming pools and teaching swim lessons, helped the Weed Friends of the Library apply for nonprofit status and coached the junior high cheerleading squad and track, volleyball and basketball teams.

Reflecting at her own accomplishments, Dillon advises students to be curious, take risks and pursue their passions. During a commencement address at Weed High School a few years ago, she urged her former students to “go big and live large.”

“She adds a lot of spirit,” said Bev Roberts, a 17-year teacher at Weed. “We miss her when she’s gone.”

Linda Zeahozian, whose daughter had Dillon as a teacher, recalled one of Dillon’s discipline tactics: Asking students to drop to the floor and give the class push-ups. She’ll keep students after class but give them a ride home.

“There’s nothing typical about Dana. She loves kids. The kids respond to that energy,” said Zeahozian, a steering committee member of the Weed Friends of the Library.

Weed Elementary Principal Emerson, though, offers a word to the wise in political and financial circles: “Students will tell you she is strict.”

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