S. Ripley, Franklin Co. Getting ISTA Settlement Money
By Mike Perleberg
(Indianapolis, Ind.) – Indiana Secretary of State Connie Lawson has announced how money in a legal settlement with the state’s largest teachers union will be distributed to 27 school districts, including two in southeast Indiana.
The Indiana State Teachers Association and National Education Association agreed in August to pay $14 million to school districts that had enrolled in the union’s health insurance plan. The settlement stemmed from a 2009 lawsuit by the State Securities Commissioner alleging the ISTA sold unregistered securities in the form of participation in the association’s health insurance program.
The state has estimated the union lost $27 million invested with it.
Lawson says each district will only receive back about 50 cents on the dollar for the money invested with the ISTA. The secretary equated the handling of the investments to a Ponzi scheme.
“ISTA took money from one fund to pay claims and cover deficiencies of another, then issued falsified statements to clients to create the illusion of funds,” Lawson alleged.
Those school corporations included South Ripley Community Schools and Franklin County Community Schools. In the settlement, South Ripley will receive $248,902.12 while Franklin County receives $651,899.35.
“In the next ten days, school corporations will see a recovery four years in the making. Teachers and administrators alike can finally put this lawsuit behind them,” said Lawson.
But, the Indiana State Teachers Association took exception to Lawson’s statements made Tuesday, calling it a “misrepresentation.” The union said neither the ISTA nor NEA admitted any liability in this case and no members’ dues were used to fund this settlement.
“It is important to note that, contrary to what the Secretary of State’s press release might suggest, there never was any allegation in the lawsuit that any funds received from school districts had been used by ISTA or NEA for their own benefit,” said Teresa Meredith, ISTA president.
The ISTA said it is grateful that the lawsuit has been resolved on terms that are fair to the school employees involved.