Even the Union Can’t Afford to Do Business in Hawaii
The HSTA Member Benefits Corporation, a wholly-owned subsidiary of the Hawaii State Teachers Association, filed for bankruptcy, fired all of its employees, and is liquidating its assets to pay off creditors.
The corporation, like most other NEA affiliate member benefit companies, offers members access to health plans, insurance coverage, and discounted goods and services. These benefits are supplemental to those of the union itself, but they are a signficant selling point to attract and retain members.
The reason for the bankruptcy set off the Intercepts irony alert claxon:
“The HSTA said it had been in the process of winding down MBC when it discovered that the company significantly underreported the taxes it owed.
“The tax liabilities, including penalties and interest, exceeded the company’s overall assets, resulting in the bankruptcy filing, the HSTA said.”
How typical. Private corporations failing to pay their fair share of taxes to educate the kids.
March 3rd, 2009 at 14:23
Hi,
The union decided to dissolve MBC, however, my question is were they not at fault for this bankruptcy? As union members. should we not ask for an audit of HSTA? Please advise.
March 3rd, 2009 at 15:04
I think they should call for a full audit. From what I understand, the HSTA owned MBC, therefore how can they say they are not bankrupt? A portion certainly is. I would gather the members and demand action and an audit.
March 3rd, 2009 at 15:42
MBCs are for-profit entities, wholly owned and operated by the union, but separate for this very reason. If they go under, they don’t take the entire organization down with them.
The union appoints the MBC board of directors, however, so the lack of financial oversight and the tax problems are the real issues.