Intercepts
A listening post monitoring public education and teachers’ unions.

“No one should be allowed to become a billionaire. Who can spend all of that money?”

- Diane Ravitch, speaking to
Seattle Times columnist Lynne K. Varner
(November 17 Seattle Times)

I’m sitting here with a stack of internal Broward Teachers Union documents. None of them mentions the reimbursement for political candidate contributions, which is the most problematic issue for the union right now, but many of them give clear indication that BTU was consistently spending much more than it was bringing in. In their petition to have president Pat Santeramo expelled, four BTU executive board members specifically noted their ignorance of the union’s deficit:

Presently, we are approximately at a 3.8 million dollar deficit. Mr. Santeramo claims to have only known about this deficit a short time before the Executive Board was informed, which was June, 2011. It is our contention that Mr. Santeramo knew several years ago, about a financial urgency. Mr. Santeramo did nothing but exacerbate the situation by spending thousands of dollars on the futures process and training at the Hard Rock every summer for the last several years, along with hiring several new employees from one to three years ago, making our financial picture even worse than it already is.

Leaving aside Santeramo’s culpability, it should have been obvious as early as two years ago that BTU was headed for serious financial trouble. Back in 2007, the union was running a mere $3,000 deficit over the last six months of the year. During the same period in 2009, that deficit had grown to more than $204,000.

In the 2009-10 fiscal year (July to June), BTU took in $9 million in total revenue. Unfortunately, $4.9 million had to be passed up the chain to its state and national affiliates. With $4.1 million left, BTU had expenses for “salaries, other compensation and employee benefits” for its 28-member staff totaling almost $3.4 million. It couldn’t operate on the remainder and ran up a deficit of more than $830,000. It was covered by drawing down 22 percent of the union’s cash reserves.

So by July 2010, the union was already living on the edge. The audit conducted by the American Federation of Teachers carries us through to June 2011, and reveals BTU deficit spending continued apace, running up an additional $710,000 in debt. The audit also cites insufficient safeguards, including checks made out to cash, and credit card expenses lacking documentation. Vacation and sick leave liabilities mounted. In 2009 these payouts totaled $72,000. By 2011 they had ballooned to $255,000.

Internal BTU documents show the executive board was briefed last June on the results of a 2010 audit conducted by Bellows and Associates. The details of the briefing are unavailable, though the board insisted that other possible cuts be examined before proceeding with the planned layoff of four field staffers. An amended budget was passed two weeks later, on a 16-9 vote.

The proposed layoffs did not sit well with the BTU staff union, which filed a grievance on the grounds “the contract has been violated since there is no validation of a financial emergency necessitating the layoff of the above members.” The board voted to deny the grievance.

It’s a failing that’s all too familiar, and certainly not unique to teachers’ unions. The numbers were bad, and progressively getting worse, and if anyone raised questions about it, they were reassured that everything was under control. Denial was so great that even as late as two months ago, BTU employees were not convinced the union had a financial emergency.

Even if it turns out that all of the actions at BTU headquarters were perfectly legal, it still demonstrates quite starkly that bad things that can happen when you spend more than you make – and then pretend it’s OK.

I thought about reporting on this yesterday, but decided to wait for the other shoe to drop. The AFT didn’t disappoint.

There are a lot of details and conflicting accounts of the situation, so I’ve tried to frame it chronologically.

In August, the American Federation of Teachers began an audit of the Broward Teachers Union’s (BTU) finances. Who at BTU asked for the audit is a matter of contention, but AFT uncovered several anomalies in the course of its two-month investigation.

Among them was the apparent reimbursement out of union dues for campaign contributions made by 26 ”employees, board members and their relatives.” This is, needless to say, illegal. The Broward State Attorney’s Office and the Florida Elections Commission were notified, and both agencies opened an official investigation.

Members of BTU’s executive board accused union president Pat Santeramo of not only being complicit in the reimbursement, but also covering up a $3.8 million budget shortfall and accepting salary overpayments. Santeramo retains support among some board members, leading to infighting over corrective measures.

Santeramo blamed the budget shortfall on the union’s decision to absorb dues hikes from the national and state affiliates, rather than pass them on to the members. He also cited “a four year battle with an anti-union superintendent and school district trying to destroy this local.”

BTU accepted AFT’s offer of an outside financial manager to straighten out the local’s money troubles. AFT pledged to underwrite the cost of the manager’s services. Santeramo also promised to establish a PAC regulation training program for union officers, which presumably would instruct them that giving people union dues to donate to politicians is not only wrong, but could send you to jail.

Four executive board members moved to have Santeramo expelled, and was able to have a vote scheduled for December 7. They wrote:

In conclusion, along with the board, our members will consider it disgraceful that a president, of a teachers’ union, was able to mismanage and misappropriate funds without the board’s knowledge, and still be allowed to stay in office.

Since Santeramo shows no inclination to resign, the chances for an internal power struggle on top of criminal investigations prompted AFT to appoint an administratorship over the local.

BTU is an affiliate of both NEA and AFT, through the merged state affiliate the Florida Education Association. But, as has been past practice, NEA has let AFT take the lead with its former locals, and the FEA continues to take a back seat. In this case, FEA claims it “has little authority to leverage investigations or audits.” But it did trot out its spokesman to recite:

“This is an allegation that’s [been] brought against one individual or a small group of individuals. That shouldn’t be viewed as a representation of unions. It’s important that teachers have a voice.”

Of course, the whole point of the brouhaha is that teachers didn’t have a voice in their own union, and that Santeramo is more than “an individual.” He is the head of one of the largest teacher union locals in the nation, and is an AFT vice president to boot. The four BTU board members took their responsibilities more seriously:

Unlike anyone in the State of Florida, Pat’s actions have put in jeopardy the entire union movement and everything unions stand for. The word of what he has done as the president of BTU has spread throughout the state. All those who know about what happened are waiting for the Executive Board to do their elected duty – what is best for all unions and the members. Our members must have confidence in their elected leaders if we are ever truly to move forward and have any kind of future. The decision is inevitable and the longer the Executive Board fails to take the action on behalf of the members, the more damage will be done to the BTU and potentially all unions.

Whatever Santeramo has done, he is actually the least reprehensible recent BTU president. He took over the position in 2001 after his predecessor was charged and plead guilty to attempting to entice a minor into a sex act and sending child pornography over the Internet. He was sentenced to 48 months in prison. And Santeramo’s actions are small potatoes when placed aside those of Pat Tornillo.

Maybe it’s something in the South Florida water.

I sincerely want to welcome to the edu-blogosphere John Wilson, former executive director of the National Education Association. Wilson has joined the stable of Education Week bloggers, and the publication has named his effort “John Wilson Unleashed.”

You are to be forgiven if your first question was, “Who was leashing him, and why?”

But I have high hopes for Wilson’s blog, because believe it or not it isn’t unusual for high-ranking union execs to suddenly become garrulous about formerly internal matters. In the past, I’ve noted speeches by state officers Robert Barkley and Jean Hayek, who issued some straight talk to their respective union delegates – both, coincidentally, delivered in a farewell speech. So there is reason to be optimistic that Wilson is “Free to Be Me,” as he titled his introductory post.

I don’t expect, however, that Wilson will become the Bizarro Ravitch. He still has some harsh words for union opponents:

Finally, I know more about the NEA than most of those who write commentaries based on folk lore, political diatribe, and sometimes just plain untruths. I always get a chuckle out of those who would write about the NEA and yet never bother to call, text, tweet, or email anyone at the NEA to confirm their facts or challenge their opinions. So often, they get it wrong.

That’s cool, John. I know you’re not talking about me.

Click here to read:

1) Another Staff Strike in the Cards for Oregon Education Association?

2) Last Week’s Intercepts

3) Scheduling Note

4) Quote of the Week

Mike Petrilli wants some direct action against the clout of the teachers’ unions, and thinks control of the school boards is the way to go:

Yes, school boards should drive a hard bargain with unions, but they don’t, because their members are so often elected with the support of those very same unions. As a result, the teachers end up negotiating with themselves. What Ohio legislators (and Wisconsin’s Scott Walker) were trying to do was to rein in the ability of school boards to give away the store. These efforts were about curbing local control run amuck. If school boards aren’t willing (or able) to play hardball, we’ll do it for them.

…So where do reformers go from here? One option is to be even more radical: To go after not just collective bargaining but school boards too. Make all of the key decisions at the state level. Negotiate with the teachers around a statewide approach to pay and benefits, the whole kit and caboodle.

…The other approach—call it the “no shortcuts” plan—is to roll up our sleeves and engage in the fight for political control of local school boards. Reformers are already doing this in places like Denver. It’s not easy, and previous efforts in cities such as Los Angeles were short-lived. The unions have innumerable ways to topple leaders who don’t hew to their demands. And to make an impact, we’d probably have to engage in hundreds of school districts around the country. That would require an operation that would make Michelle Rhee’s shop look puny.

Curbing collective bargain rights, promoting mayoral control, creating an alternative charter school system—all of these are efforts to deal with the fact of union-dominated school boards. They are still worth pursuing, in my view. But they are only part of the solution. If we want to win the fight for the more immediate future, we’re going to need to take on the unions directly, and take over the school boards. Shall we get started?

Option #1 sounds like Hawaii, and that will not solve your collective bargaining problem.

As for Option #2, winning school board elections over union-backed candidates is fine, but it doesn’t alter state laws, or the ability of the union to exclude competition for teacher representation, or the power to compel membership or payment from non-members.

These are labor issues, not education issues, so reformers are at a severe disadvantage in addressing them. It just seems to me to be a more efficient use of resources to tackle them at the state level.

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