A federal lawsuit filed by a high-ranking Washington Teachers Union official over embezzled teacher dues has been settled in a deal joining the union and its parent organization in efforts to recoup millions of dollars.
The settlement ends a legal dispute that began in 2002 when WTU Vice President Nathan Saunders, then a teacher, filed a federal lawsuit against several former WTU officials, the American Federation of Teachers (AFT) and a local bank.
The suit accused the defendants of violating labor laws and the Racketeer Influenced and Corrupt Organizations Act.
It coincided with a criminal corruption probe that led to the conviction of former WTU President Barbara A. Bullock for her role in the scandal. Two other former WTU leaders were convicted last summer.
The civil lawsuit filed by Mr. Saunders stated that the union’s board of directors failed to detect the pilfering of dues by Bullock and other executives between 1995 and 2002.
The settlement was approved last week by U.S. District Court Judge Emmet G. Sullivan.
According to the settlement, WTU and AFT will “jointly pursue the recovery of money from those who embezzled and absconded with millions of dollars … and entities that aided and abetted or facilitated the embezzlement of funds. …”
Mr. Saunders was a teacher at Anacostia High School in the District when he filed the lawsuit. He was elected the union’s vice president earlier this year.
Mr. Saunders said yesterday the lawsuit was significant because it forces national and international labor unions to take a more active role in the operations of local chapters when accusations of financial malfeasance arise.
“It requires all the national and international unions to pay more attention to what goes on with their local unions and how they handled their members,” he said.
Mr. Saunders said the settlement also eases relations between the AFT and WTU.
“It created a practical problem in being a local union executive and advocating on behalf of members, in that it makes it difficult to elevate the membership’s issues while all of this is going on,” he said.
The settlement agreement calls for the union and the AFT to prosecute legal claims against several former union officials, board of directors members and a local bank.
In his lawsuit, Mr. Saunders also sued Independence Federal Savings Bank, where the union executives did their banking. The bank has denied any wrongdoing and has said it cooperated in the federal probe.
“This clears the pathway for more substantial discussions on resolution,” A. Scott Bolden, an attorney for the bank, said yesterday.
Any of the funds that are recovered will go to the WTU’s treasury, with the AFT also paying some of the legal expenses for the union, according to the settlement.
Mr. Saunders said he did not receive any compensation as a result of his involvement in the lawsuit.
The settlement also outlines a repayment plan, in which the union will reimburse the AFT $466,638 in delinquent teacher dues resulting from the embezzlement. The union will pay the AFT $10,000 a month over the next four years.