ISTA agrees to $14 million settlement over failed insurance programDecember 3rd, 2013 at 3:49 pm by Jim Shella under Jim Shella's Political Blog
The Indiana State Teachers Association has agreed to pay $14 million to settle a lawsuit filed by the Indiana Secretary of State.
That lawsuit accused the teachers union of committing securities fraud in a case where the victims were teachers and school districts.
The money will go to 27 school districts who took part in a health insurance program that went broke.
GOP Secretary of State Connie Lawson announced the settlement and took a swipe at ISTA at the same time.
“We knew that ISTA misappropriated and subsequently lost $27 million of school corporations money and teachers money,” she said.
It’s a case that led to a takeover of ISTA by the National Education Association in 2009 at a time when some disabled teachers feared losing disability payments.
“I just can’t understand why there’s been a mishandling of money,” said former teacher Shirley O’Neil at a 2009 news conference.
“I would probably lose my house and my car,” said former teacher Denny Dittrick
Now the teachers union is back on its feet with leaders saying that the $14 million in settlement money was recovered from those responsible.
“The people who gave us advice,” said Brenda Pike, executive director of ISTA, ‘insurance companies, banks, former employees.”
ISTA says the settlement clears it of any wrongdoing but that’s not the way the Secretary of State is selling it.
“What makes this case particularly disturbing,” said Secretary Lawson, “is how ISTA blatantly lied to the participating school corporations by sending them phony financial statements.”
Regardless, ISTA is now out of the insurance business.
The Washington Township school district is one of the bigger winners in the settlement. It will receive almost a million dollars.
A spokeswoman there declined comment.
Meantime, the Secretary of State’s office requested a criminal investigation of the ISTA insurance trust but the U.S. attorney declined the case.