Indiana State Teachers Association Trust Fund Update

"No one receiving a check has missed a payment and because of this partnership, no one ever will," said ISTA President Nate Schnellenberger.

Rich Van Wyk: Eyewithness News June 8th,2009

It's an interesting story being reported but is it correct?

I believe it's correct to report "former ISTA president Nate Schnellenberger........" Ed Sullivan, NEA trustee is running the show these days and it's reported that his position is that there is no money. I don't think you can forgot that Mr. Schnellenberger was both the ISTA president and a director of the failed insurance trust.

Perhaps wthr.com incorrectly posted an old story and was quoting Mr. Schnellenberger before NEA put the local in trusteeship. We would hope that Mr. Schnellenberger, not Mr. Sullivan, is correct.

Good news: the story also reports that the thousands of teachers, covered by the health insurance arm of the trust, will continue to receive their health care benefits.

I have a personal observation. This story is almost a month old and seems to be little reported even in Indiana. My local newspaper, the Denver Post, has not covered it at all. The ISTA trust failure coupled with the Department of Labor Multi-employer Critical and Endangered Pension list (note: ISTA was not listed as critical or endangered) seems to be a problem could effect hundreds of thousands, perhaps millions, of Americans.

This is one tiny blog and we can see a problem. Is this just Chicken Little running around "The sky is falling" or a serious problem that needs to be addressed? Where is the news coverage? Where is the Obama administration and Secretary Solis? Is Congress too busy working on the misnamed Employee Free Choice Act to notice pensions are endangered? Most importantly, where is Big Labor?

It's a union and American problem - Address the problem!

Indiana Teachers Are Asking: HOW, WHO and WHY?.

It's a sad story and it's hard to feel anything but sympathy for the affected teachers in Indiana. I've traveled a bit and as a group, it's difficult to find a nicer, more honest and harder working people than those from the Midwest. Add to that, these are professional teachers and regardless of my disagreements with the way our kids are taught, I don't question the good intentions and dedication of the majority of teachers.

I'm not privy to many of the details of regarding the Indiana State Teachers Association (ISTA) Insurance Trust $60 or $70 million dollar shortage but regardless of how nice and well-intentioned the directors of ISTA were, they are still responsible for a catastrophe that will affect many people for many years. Sorry, you wanted the job and you were responsible. To the members: Sorry, we're all adults and you were the members. At some point, we have to say CAVEAT EMPTOR.

The HOW & WHY of the debacle are pretty simple: it's a lot of money and not everyone in the world believes in the old fashioned Midwest values of honesty and hard work. When you give you money to crooks, you lose it.

I have read nothing that would lead me to believe that anyone with ISTA was dishonest or did anything illegal; instead it seems to be their very values that betrayed them - there are people who will look you in the eye, shake your hand, give their word and stab you in the back! If you're too naive to understand that simple fact, shame on you.

The word I hear is that it's likely member dues will have to be raised in order to recover from the shortage. What the member chooses is an individual decision and it is a fact, the individual member will have little or no say for up to 18 months, the maximum length of time ISTA can remain in National Education Association (NEA) trusteeship. I have no doubt that in time, the union will recover and hopefully it will be no more that a (very) expensive lesson.

The WHO is a very sad story. I have no doubt that every ISTA official responsible was a dedicated educator who's biggest mistake was to trust someone else to take care of the members money and the members trusted their officials. The hard lesson learned is that EVERY MEMBER has an obligation to watch every penny and not sit back and leave the job to someone else. While we sympathize we must still acknowledge those responsible:

	Nathan Schnellenberger, President Jasper A high school science teacher from Forest Park Jr-Sr High School, Nate has been an Indiana public school teacher for 33 years. Before becoming ISTA President, he served as ISTA treasurer and as a member of the NEA Board of Directors. Nate and his wife Beth have two children.	317.263.3302 nschnellenberger(at)ista(hyphen)in(dot)org
	Teresa Meredith, Vice President Shelbyville A kindergarten teacher at Thomas A. Hendricks Elementary, Teresa has taught in Indiana's public schools for 18 years. She also serves as chair of the Indiana Foundation for the Improvement of Education (IFIE). Teresa and her husband Chris have four children.	317.263.3309 tmeredith(at)ista(hyphen)in(dot)org
	Kathy Parks, Treasurer Haubstadt A language arts teacher at Gibson Southern High School with 38 years in the classroom, Kathy has long been involved in ISTA. Before her election as ISTA treasurer, she served on the NEA Board of Directors. Currently she serves as chair of the NEA Women's Issues Committee.	317.263.3323 kparks(at)ista(hyphen)in(dot)org

There may even be an actual bad guy in a black hat. From the Indiana Economic Digest, May 26th, 2009:

ISTA trust lacked expertise

"But the lack of investment expertise on its board left the ISTA trust especially vulnerable to the volatile markets and the rapid-fire trades of the trust's broker, Morgan Stanley's David Karandos. During a nine-month stretch last year, Karandos made 4,000 trades involving the ISTA trust's investments."

It's a good read that I recommend for all union members

(& investors of any ilk). My opinion: Mr. Karandos is scum and it's time to revive an old Midwest tradition: tarred, feathered and run out of town on a rail!

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.