ISTA Responds to Settlement

ISTA Responds to Settlement


Indiana‘s largest teachers‘ union says it wants to move on from the scandal over an insurance trust that led to a $14 million dollar settlement deal with the state.

The Indiana State Teachers Union agreed to the settlement with Secretary of State Connie Lawson‘s office during talks last month.  The tentative deal was announced today and will likely be approved by a federal judge if the 27 school districts who lost 27 (m) million dollars that were paid into health plans also approve the settlement.

The state sued the ISTA and its parent, the National Education Association, in 2009.  The lawsuit said money paid into the health plans was shifted without the knowledge of the schools into the ISTA‘s long-term disability fund.  When the disability fund subsequently lost money, the state says the union placed much of the remaining health trust fund into high-risk investments in an effort to recoup their losses.  Warren Williams lost his job as ISTA executive director in part because of the trust and other financial problems with the union, and the NEA bailed out the ISTA months before the lawsuit was filed.

Secretary of State Connie Lawson referred to the insurance trust as a “Ponzi scheme,” unfortunate language according to ISTA spokesman Mark Shoup (SHOOP).  “It‘s not a good time to send verbal bric-a-back (sic) back and forth between the folks who came together to make this settlement happen,” said Shoup.

The settlement allows schools and perhaps teachers to recover just over half the money that was lost.  “We‘ve been transparent with that.  We‘ve been true to our word over the last four years,” said Shoup, even though the ISTA and NEA tried to have the lawsuit dismissed in 2010 and asked for a summary judgement in its favor last year.  The union‘s trustee overseeing the trust, Ed Sullivan, also offered school districts lump sum payments of 25 cents on the dollar lost in October 2009 – two months before the state‘s lawsuit – in an effort to quell claims against the union.

If the school districts agree to the settlement, the union has ten days to pay the state, which Shoup says will come from a settlement fund created from the ISTA‘s lawsuits against Williams and others who had a hand in the scheme.  “No ISTA or NEA dollars, dues dollars or otherwise, will be used for this settlement,” said Shoup.