The Washington Times-Herald

Local News

December 6, 2013

Area school systems see settlement in lawsuit

A $14 million dollar settlement in a lawsuit between the Indiana State Teachers Association and the Secretary of State’s office will be putting money into some area school systems. The schools had invested in an ISTA health insurance plan that folded after it was mismanaged. In all 27 school systems lost money in the plan that collapsed four years ago. The settlement won’t recover all of the lost funds.

North Daviess is one of the school systems involved in the settlement. “We’re receiving 50 cents on the dollar,” said North Daviess Superintendent Bob Bell. “That’s a lot more than I ever thought we would receive.”

North Daviess at one time had one million dollars sunk into the ISTA health trust. “When it hit in ‘09 it really hurt us,” said Bell. “The good part is that we had pared that amount down to about half-million right before the problems surfaced.”

The North Daviess share of the settlement is $286,499.92. “It’s all signed off,” said Bell. “We should be getting the check next week.”

Some other school systems in the area will also be seeing those checks. Southwest Sullivan will receive more than one million dollars, Vincennes Community Schools $316,000, and Shoals $94,000. The largest payout of $3 million will go to the Crown Point School Corporation in northern Indiana.

Indiana Secretary of State Connie Lawson lauded the agreement, but ISTA Executive Director Brenda Pike panned the lawsuit. Pike claims the suit only delayed an agreement that had been reached years ago. “It’s politically motivated,” said Pike. “There is no missing the fact that next year is an election year.”

In making the announcement Lawson claimed the ISTA leadership at the time purposefully fooled investors as part of a scheme to funnel money to an under-funded long term disability plan. “What makes this case particularly disturbing is how ISTA blatantly lied to participating school corporations by sending them phony financial statements,” she said.

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