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Stealing by stalling: dues transmittal delays can cover up theft

May 6, 2013 by

By Mike Antonucci –

WASHINGTON, D.C. – Over the past 10 years we have had a string of local teacher union officers committing major theft of dues money: Pat Tornillo in Miami, Barbara Bullock in Washington DC, Pat Santeramo in Broward County, and several others.

But these were presidents of large locals, with many members and big budgets. More recent crimes involve officers of small locals.

In Maryland, Denise Inez Owens was the treasurer of the 600-member Worcester County Teachers Association, but she still managed to steal more than $433,000. Last week we learned that Sally Jo Widmer, president of the 400-member Auburn Teachers Association in New York, made off with at least $808,000. This is only possible because of a bug in the dues transmittal system, which is a reasonably efficient method of passing dues up the chain so that parent unions get their share.

In most cases, school districts extract the entire amount of each member’s dues and send it to the local union each pay period. But the local isn’t required to immediately forward the state and national unions’ share. The NEA by-laws spell out the normal procedure:

A local shall transmit to a state affiliate and a state affiliate shall transmit to the Association at least forty (40) percent of the Association dues receivable for the year by March 15 and at least seventy (70) percent of the Association dues receivable for the year by June 1; the percentage shall be based upon the last membership count prior to January 15…

In short, even small locals have large sums deposited for several months before they have to transmit the funds to their state affiliates. It might even be easier for officers of small locals to commit fraud under these circumstances because there are fewer people to enforce safeguards and/or become whistleblowers.

An examination of the 2012 financial disclosure report for the New York State United Teachers (NYSUT) reveals the Auburn Teachers Association under Widmer was behind on its dues transmittal by $36,816 – $18,339 of which was overdue by more than 90 days. That’s not much cash in the overall scheme of things, but in a local of 400 members, it is a significant amount.

There are dozens of legitimate reasons for a local to fall behind on its dues obligations to the state and national affiliates, but the major cases of fraud noted above were almost always accompanied by late dues transmittals (see item#4 here, just prior to the raid on Tornillo’s office).

The handful of teachers’ unions subject to the Landrum-Griffin Act are required to report the status of their accounts receivable, which includes overdue dues transmittals from locals, but they are not required to itemize every single one. NYSUT, for example, was owed money by at least 39 locals in 2012, including more than $19.7 million by the United Federation of Teachers, the largest local in the nation, of which almost $6.9 million was more than 180 days overdue. The local at New York University owed $627,297, all of it more than 180 days overdue.

Smaller locals also had late dues transmittals. The Goshen Teachers Association owed $39,580, much of it 90 days late. The same was true of the East Williston Teachers Association, the Clarence Teachers Association, the Uniondale Teachers Association, and the Rockland Community College Federation of Teachers.

In other areas of the country, the Chicago Teachers Union was almost $2.3 million behind, “various” Michigan locals were a total of $257,473 behind, the Jefferson Federation of Teachers in Louisiana was almost $419,000 behind, and the West Virginia School Service Personnel Association was $225,515 behind. And of course, the United Teachers of Dade (UTD) still owes AFT more than $2.5 million, stemming from the Tornillo scandal. UTD also owed almost $1.5 million to the Florida Education Association.

NEA and its affiliates have some laggards. NEA national was short almost $2.2 million from Florida, $590,000 from Georgia, $557,000 from Alabama, and $1.7 million from the Wisconsin Education Association Council, probably due to sudden membership losses in that state. NEA wrote off an additional $196,000 in fiscal year 2011 dues that it was never able to collect from various state affiliates.

Among those state affiliates, there were more late dues transmittals from locals. In Illinois, Local Education Association of District 300 ($100K), Downers Grove Elementary Education Association ($95K) and District 21 Education Association ($77K) owed money. In Florida, the Big Bend/Central Panhandle Service Unit and the local in Escambia owed a combined $166K and were more than 180 days late.

The list goes on: the Montrose Education Association in Pennsylvania, the Northwest Local Education Association in Ohio, Port Huron and Ionia City education associations in Michigan, and the Minneapolis Federation of Teachers in Minnesota all owed money to their parent affiliates.

There is no way for an outsider to tell – and few ways for insiders – how the national and state unions ensure that dues reach their prescribed destinations, and whether delays are because of legitimate shortfalls and unforeseen circumstances.

The financial structure of the teachers’ unions makes it possible for wealthy affiliates to organize and subsidize poorer affiliates. Consequently, fraud and misappropriations can affect the bottom lines of all associated unions. It’s a rare crook who would steal from a local but leave the state and national funds untouched.

via Stealing by stalling: dues transmittal delays can cover up theft – :: Education Research, Reporting, Analysis and Commentary.

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