Lawson lauds $14M union insurance plan settlement

School districts across the state are set to receive $14 million under a settlement finalized Tuesday between the state's largest teachers union and the secretary of state's office.

Indiana Secretary of State Connie Lawson lauded the agreement, which would end a four-year legal battle with Indiana's largest teachers union. But the Indiana State Teachers Association accused the Republican official of playing politics as she heads into an election year.

The money will be split among the 27 school districts which had invested in the ISTA health insurance plan that collapsed in 2009. Lawson called settlement of the lawsuit, which was filed in 2009 by then-Secretary of State Todd Rokita, a win for schools. But Brenda Pike, the ISTA's executive director, said the schools would have had that money four years ago if Rokita had not stalled the delivery through a lawsuit.

The parties first agreed on the terms of the settlement in August and it took until now for each school district to approve the settlement. The state is now waiting on ISTA to deliver the money for distribution, which Pike said will happen soon.

Each school district would be left to decide how the money should be used. Crown Point School Corp. would get $3 million, Southwest School Corp. in Sullivan County is would get $1.3 million, Marion Community Schools would receive $1.1 million, and the other 24 schools would receive the remainder. Each school district would get roughly half of what it lost.

On Tuesday, Lawson repeated many of the allegations laid out in the lawsuit, claiming that ISTA leadership purposefully fooled investors as part of a scheme to funnel money to an underfunded 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," Lawson said.

If state officials were still unhappy with the settlement, they did not say it during the negotiations, Pike said. The state ended up paying $1.5 million to the Indianapolis law firm Frost Brown Todd for outside representation in the lawsuit, Lawson said.

"It's politically motivated; it's political rhetoric. There's no missing the fact that next year will be an election year," said Brenda Pike, ISTA's executive director. Lawson is running for a full term as secretary of state and will square off against an as-yet determined Democratic candidate.

Pike noted that the $14 million is an amount equal to what the union was able to recoup through its own settlements with investors and others they say caused the plan's collapse. ISTA would have returned the money to schools earlier but were blocked by the lawsuit, she said.

Some Indiana Republicans have said Democratic School Superintendent Glenda Ritz, who served on the ISTA board when the fund collapsed, should be held responsible for the lost money. But Lawson declined to comment on the issue.

The collapse of the union health insurance plan, and subsequent weakening of the teachers union, was a key factor in the decision by a handful of Republican powerbrokers to charge ahead with a sweeping education agenda in 2011.