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1) IRS Auditing
California Teachers Association.
Multiple sources within the California Teachers Association and the National
Education Association inform EIA that the California Teachers Association is
undergoing a comprehensive audit by the Internal Revenue Service.
EIA has received no
evidence to corroborate rumors that other NEA state affiliates are also
being audited. CTA did not respond to requests for comment. NEA did respond
with “We have not been apprised of any such audit, and we assume it is the
normal, random audit that organizations and individuals routinely undergo.”
Since the IRS never
comments on audits or possible audits, there is no way to tell for certain
(even for NEA and CTA) whether this audit is normal and random, or whether
it was inspired by a tip, or even by the complaints filed in 2000 by the
Landmark Legal Foundation. If, however, other affiliates are being audited,
it would be reasonable to assume that the IRS was not being random.
The California Teachers
Association collected in excess of $145 million in dues last year.
2) AFT Auditors Say
$5 Million Missing from DC Teachers Union.
The American Federation of Teachers filed a racketeering lawsuit against
former Washington Teachers Union (WTU) President Barbara Bullock and others
in what the union now claims was an illegal diversion of at least $5 million
in members’ dues. In support of its suit, AFT released the report of the
forensic investigators it hired to follow the WTU money trail.
The Washington Post
also reported that the AFT has begun the process of establishing an
“administratorship” over WTU, which would place AFT in control of the local
union’s day-to-day operations. At the same time, a rank-and-file proposal to
dissolve the WTU executive board will be issued at the next board meeting on
January 27. The Post editorial page called the new estimate of
misappropriation “breathtaking” and asked the question on everyone’s mind:
“How could such an allegedly massive misappropriation of union funds occur
over such a long period of time and under the noses of so many people,
including the union’s board of directors, the union’s members and the
American Federation of Teachers, which is the parent organization?”
The AFT audit revealed
details unmentioned even in the FBI affidavit:
* The $144 per member
dues overcharge last summer – the event that led to the unraveling of the
conspiracy – was an attempt by Bullock to pay off the delinquent AFT
national dues WTU owed for at least two years. AFT reported receiving
payment of the delinquent dues by July 2002. This also explains why Bullock
proposed that the members apply the overcharge to future dues, rather than
simply reimburse them… the money has already been sent to AFT.
* Interim WTU President
Esther Hankerson’s name was apparently forged on several questionable
checks. Hankerson says the bank notified her about one of these and she
confronted Bullock (though she told the bank to honor the check). She says
Bullock admitted to the deed and said she would reimburse the money, but
Hankerson took no further action.
* The AFT audit
suggests Bullock and Company may have had a confederate at the bank at which
many of the checks were cashed, since scores of them had the names of
legitimate payees crossed out and the name of Bullock’s chauffeur written
in, yet the bank cashed each one without incident.
* Leroy Holmes,
Bullock’s chauffeur, believed his salary to be $105,000, though this amount
was greater than that received by any other WTU employee, except for
Bullock.
* The auditors
confirmed the obvious. The union’s LM-2 report to the U.S. Department of
Labor “does not accurately depict the true nature and amount of the
transactions that we discovered during our investigation.” Also, the
accountant who helped prepare and file the report did so knowing they “were
not accurate and, at a minimum, were grossly misleading.” The auditors could
locate only one LM-2, though they are supposed to be filed annually.
* Two political
contributions were made with WTU dues, a violation of federal law. One, of
$9,000, went the Democratic National Committee, the other, of $2,000, went
to Hillary Clinton’s 2000 election campaign. Both returned the money when
informed of its origin by AFT.
AFT believes the WTU
scandal to be an aberration, and it may well be. There may not be other
local AFT officials with $13,000 plasma TVs and Tiffany silverware. But the
lack of oversight, whistleblowing, accountability, or even routine
reporting, displayed by union officials, staff, staff unions, and elected
representatives over a six-year period cannot be dismissed as an aberration.
It too often is standard operating procedure, making cases like that of WTU
not only predictable, but likely.
3) Unions to Face
Increased Federal Regulation.
Unions across America are about to learn why it is that many conservatives
and libertarians constantly call for smaller government: regulatory
compliance can be hell on your operations. The U.S. Department of Labor
released for public comment its newest version of Form LM-2, Labor
Organization Annual Report. The current version requires unions with any
members working in the private sector to report their incomes and
expenditures in broad categories, and list the salaries and expenses of
their officers and employees.
The new version not
only requires a greater itemization of expenditures, but also a breakdown of
membership numbers by active, associate and retired status, along with the
number of agency fee payers in the organization. But unions will squawk the
loudest over the new requirement to list the percentage of time each union
officer and employee worked on contract negotiation, organizing,
administration, political activities, and lobbying.
NEA and AFT national
offices will have to fill out the new form, but most state affiliates are
not subject to the reporting requirements because they represent public
employees only. Neither NEA nor AFT have issued a statement about the LM-2
requirements, though any written comments to the Labor Department will
become public record and available through the Freedom of Information Act.
For those interested in seeing the new form and instructions for themselves,
they are available on the Internet as an Adobe Acrobat file at:
http://a257.g.akamaitech.net/7/257/2422/28dec20010800/edocket.access.gpo.gov/2002/pdf/02-32445.pdf
4) San Francisco
Anti-War Resolution Watered Down; “Day of Discussion” May Not Be.
The San Francisco Board of Education unanimously passed a series of
resolutions concerning a possible war with Iraq. Though the resolutions were
more moderate in tone than their original versions, the actual events they
presage promise to be anything but the even-handed “day of public discussion
on war” which they announce.
The Oakland school
district, whose school board had approved a similar resolution, held its
teach-in last Tuesday. Organizers called the event “a timely exercise in
critical thinking,” even though they claimed to be unable to find speakers
who didn’t support their anti-war agenda. The San Francisco resolution
states that the “day of discussion,” which is to take place within the next
two months, is necessary because “it is essential that the people and
students of San Francisco be well-informed of the root causes of war and the
consequences of military action by their government.”
EIA was unable to
confirm stories that a Baghdad Board of Education resolution to examine “the
root causes of war and the consequences of military action by its
government” was literally buried when board members were placed six feet
closer to actual roots.
5) District
Consolidation Picks Up Steam in Arkansas.
Arkansas Gov. Mike Huckabee announced his plan to restructure the state’s
public education system, consolidating its 310 school districts into no more
than 116. Huckabee’s plan is being justified as a response to a state
Supreme Court decision placing responsibility for an adequate education on
the state’s shoulders, rather than those of local school boards.
The proposal was met
with immediate opposition, primarily by teachers, administrators and parents
in the state’s small rural districts, who believe the plan will devastate
their communities. Huckabee admitted the consolidations “will be painful for
many in our state,” but said they were necessary in order to better manage a
state schools budget that is estimated to almost double under the court’s
order.
Consolidation makes
sense from a business standpoint – and indeed the Arkansas business
community enthusiastically supports the Huckabee plan – but economies of
scale in public education tend to be accompanied by an increasing diversion
of resources to secondary or support functions, often culminating in fewer
resources being devoted to instruction, the school district’s primary
mission (ref. EIA’s 1999 report Mission Creep: How Large School Districts
Lose Sight of the Objective – Student Learning, hyperlink on the Reports
page of the EIA website).
If fewer, larger school
districts were the keys to economic efficiency and high student achievement,
New York City and Los Angeles would be the models for the nation. In a state
like Arkansas, where district headquarters might be hundreds of miles away
from individual schools, the isolation of parents will be that much worse.
Note.
“Code-Crackers,” my article on ciphers and intelligence in the Civil War,
was published in a special edition by Primedia, in a magazine entitled
Spies and Secret Missions: A History of American Espionage. The other
articles included in the edition are also well worth your time. The magazine
is available on bookstore newsstands everywhere.
6) Quote of the
Week #1. “It’s a new day for the
union. We will work to restore to members the rights, benefits and trust
that have been lost under the present administration.” – Barbara A. Bullock,
in a speech to members upon assuming the presidency of the Washington
Teachers Union on July 12, 1994.
Quote of the Week
#2. “The children are the ones
who have suffered. The money that should have been put into the classroom,
for supplies and equipment, was spent for salaries.” – Barbara A. Bullock,
calling for the prosecution of D.C. Public Schools Superintendent Franklin
L. Smith for overspending the district budget. (February 21, 1997
Washington Post)
Quote of the
Week #3.
“What is also clear is that the Federal government’s failure to fund what it
promised has saddled the District with a debt it can never overcome and
caused our members to question whether or not there will be a pension system
when they reach retirement age.” – James O. Baxter II, in his role as
treasurer of the Washington Teachers Union, testifying before the House
Committee on Government Reform and Oversight Civil Service Subcommittee, on
the D.C. retirement system. Baxter is implicated the WTU scandal, which
included the nonpayment of pension contributions for employees and retirees
of WTU. (Federal Document Clearing House, April 29, 1997) |
