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Tuesday, June 9, 2009

Indiana State Teachers Association Trust Fund

The once powerful Indiana State Teachers Association (ISTA) flew under the radar for a couple of weeks after "shortages" were discovered in the disabled teachers and health insurance trust fund. I believe The Chairman, ole blue eyes himself, once did a song with an apropos line "That's life, that's what all the people say. You're riding high in April, shot down in May

Our sincerest sympathies go out to the affected teachers. You deserved much better than this!

The union started to unravel around the 20th of May and the President, Nathan
Schnellenberger, ask the National Education Association (NEA), ISTA's parent union, to place trustees in charge. NEA agreed and Ed Sullivan, a long-time NEA boss is running the show in Indiana. Former president Schnellenger sent the following email to ISTA members:

ISTA Members,

As you may know, the ISTA Insurance Trust has recently experienced a number of severe difficulties. Additionally, like most organizations in this economic downturn, ISTA itself is experiencing some financial distress that must be addressed.

In a response to both of these situations, Saturday afternoon the ISTA Board of Directors met in a special session and unanimously agreed to ask NEA to institute a Trusteeship over ISTA. The purpose of this trusteeship is to assure ISTA’s current financial viability and continued long-term success.

In response, NEA agreed to appoint a trustee. His name is Edward Sullivan. Ed has had a distinguished career in the NEA family. Until his retirement last year, Ed served for 24 years as the Executive Director of the Massachusetts Education Association. I have met with Ed, and I am confident that he will provide sound leadership as we work to resolve the financial issues that confront us.

Ed will have complete authority over the operations of ISTA. As he explained it to me, his mission will be keeping the regular business operations of ISTA running smoothly while exploring various financial options for the ISTA and instituting whatever corrections are needed.

Your elected officers and the Board of Directors will give Ed full support and cooperation for the duration of the trusteeship and ask that you do the same.

Mike Antonucci, writing for the blog Intercept, broke the story on May 21st and reports that there were warning signs as early as 2006-2007 and that ISTA had already had a reported deficit of some $4.2 million prior to it's trust problems. It's an interesting read and has links to many of the union's financial documents, saving me the time and energy necessary to dig them out. If I may take the liberty - "Great work, Mike!"

The problems now being reported are catastrophic; the trust is bankrupt, with $86 million in liabilities and only $19 million in assets as reported June 8th by The National Review Online (NRO). The FBI, along with Indiana officials, has started an investigation and the NEA has promised full cooperation and disclosure.

The story is breaking as I write this and First Transit Employee Rights blog will report the facts as we learn them.

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