School districts across Indiana are suing the embattled Indiana State Teachers Association Insurance Trust in an attempt to reclaim money lost as a result of alleged criminal mismanagement.

The Delphi Community School Corp. is helping lead a potential class action lawsuit against the Indiana State Teachers Association Insurance Trust. The trust, which provided health insurance to about 30 school districts, was taken over by its national parent organization earlier this year amid financial troubles. Delphi Superintendent Ralph Walker said his district had an estimated $500,000 in reserves with the insurance trust. That money would have been used to offset premiums for the corporation and the approximately 100 employees who were covered by the health insurance plan. The school district in Carroll County and at least one other in the state — Caston School Corp. in Fulton County — have already voted to pursue a potential lawsuit in hopes of reclaiming the reserve money. Walker expects as many as 10 to 15 districts could sign on to the class action suit. — JC Online

The financial and legal issues at the ISTA are expected to have political consequences that appear to have top Democrats nervous since the ISTA is the single largest contributor to House Democrat campaigns.  In what could be an attempt to curb his losses, Speaker Pat Bauer has proposed new restrictions on private sector fundraising.  Specifically he suggests restricting donations from the thousands of businesses that do work with the state and tend to support Republicans.

Since the FBI has taken up residence at the headquarters of the Indiana State Teachers Association, Bauer can’t count on the million-dollar ISTA allowance that he is paid annually to kill anything that looks like education reform.  He had to do something, so why not take a shot at business and claim it’s all about ethics reform?

Though the ISTA Insurance Trust is separate from the political action committee, it doesn’t look too good if the ISTA is writing six-figure checks to Democrats on one hand while they cut insurance benefits and raise premiums for teachers on the other.  Then, the ISTA has never been too concerned about the appearance of buying influence and screwing its members so don’t expect much to change.  But it is good to see that some some districts have had enough.