Posted on 05/22/2003 6:43:43 AM PDT by ijcr
The United Teachers of Dade has failed to pay $300,000 for thousands of members' supplemental insurance coverage, further evidence of a financial crisis that has leaders considering selling their new showcase headquarters.
New union managers say they do not know where the insurance money went, and a former union officer said it was used to cover payroll and other expenses.
Both the insurance company and national union officials promised the teachers' coverage would be protected, but the revelation fuels concerns over who was protecting the educators' money at the 14,000-member UTD.
The discovery comes three weeks after FBI agents raided union headquarters to determine if longtime UTD chief Pat Tornillo, 77, used teachers' dues to subsidize world travel, designer clothes purchases, posh hotel stays and other luxuries.
As federal overseers from the American Federation of Teachers continue unraveling the UTD's financial knots, the new administration is considering whether to sell the 2-year-old, $20 million Biscayne Boulevard headquarters.
``Do we sell it? Do we lease it? We don't want to sell it as a fire sale, but we have to do the fiduciary responsible thing, said Mark Richard, appointed by AFT to oversee the UTD during its financial crisis and the federal probe of Tornillo.
The insurance question centers around roughly $300,000 that UTD owes to Public Employee Services Company (PESCO), a Tallahassee-based supplemental insurance broker that provides coverage to 4,500 union members. Most of those policies are short-term disability and term-life coverage, which teachers buy on top of their district insurance.
DEDUCTIONS
Like the standard health insurance held by almost all district employees, premiums for PESCO policies are deducted from a teacher's paycheck. The district pays carriers directly for the standard policies, but the PESCO coverage is paid through UTD because it is a union benefit available only to members.
The district sent checks for about $150,000 every two weeks, made out to UTD Trust. That money was transferred to PESCO within a few weeks.
But PESCO has not received payment from the April 18 or May 2 pay periods, said PESCO spokesman Ron Sachs.
'PESCO has a very strong track record of making sure members' benefits are not interrupted, but clearly those premiums must be received,'' Sachs said.
The checks from April 18 and May 2, both payable to ''U.T.D. Trust,'' were deposited to accounts at two different Miami banks -- one at Bank of America that was labeled as an operating account and a second at Eagle National Bank.
Both were used for general union expenses, said David Albaum, the union's former in-house financial consultant. He said the union routed the insurance money to those accounts because it was cash-strapped and needed to pay its staffers and other bills.
''They were robbing Peter to pay Paul,'' said Albaum, who added that he took his concerns to district school administrators several weeks ago.
Sachs said future payments are likely to go from the school district directly to PESCO.
Officials from AFT have been auditing the UTD books, but said they have not yet even determined how many accounts the union had or how many banks it used.
``We've got tables full of paper here and we're trying to figure everything out, said Mike Benner, AFT's general manager, who was at UTD's headquarters Wednesday. ``No teacher is going to lose any of their benefits.''
`THINGS ARE IN CHAOS'
Said Richard: ``Things are in chaos. I don't think we're going to have a clue for weeks or months how many accounts there are or where the money went.
Over the last three months, UTD has been reeling from a series of crises.
When banks began calling in millions of dollars in loans in late April, the precarious finances became embarrassingly public. The FBI raid came around the same time, and the union asked AFT to temporarily take control.
Tornillo went on paid leave immediately after the April 29 raid and stopped receiving his salary earlier this week.
''If we find there was some mishandling, we'll get that handled,'' Benner said. ``We're going to straighten it out.
Always check carefully anything called a "Union Benefit." It generally means something funded by the company and paid to the union or funded by a union dues checkoff. The benefit, usually an insurance benefit, is purchased from a reputable insurance company through a broker, usually a relative of the union head. There would be a very high "reserve," paid as part of the regular premium. When the "experience" for a period drives a "rebate" of a portion of the reserve, the rebate becomes free cash.
Of course, some insurance that the unions carry is just plain theft. We has seen very little in the media about the union looting of ULLico. It is another Enron but since it involves Sweeney and other union officials, the newspaper and media unions won't allow it to be publicised. In fact, it is outrageous that the usually reliable media has made such a big deal out of this minor adminstrative issue in Miami.
What in the world does a union need a 20 million dollar HQ building for?
Ridiculous.
???... ''U.T.D. Trust,'' were deposited to accounts at two different Miami banks -- one at Bank of America that was labeled as an operating account and a second at Eagle National Bank...robbing Peter to pay Paul...$20 million Biscayne Boulevard headquarters...used teachers' dues to subsidize world travel, designer clothes purchases, posh hotel stays and other luxuries.
Kiting comes to mind, fraud, bogus bank accounts, out and out embezzlement...if there was some mishandling? Who is Benner...fox watching the hen house?
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