The National “Extortion” Association and the Insurance Racket

Editor’s Comment: Another lesson about the NEA

Condensed by Lu Haynes

In addition to the profits the National Education Association receives via dues, (about $750 million), and what they raise through their Political Action Committee,  (about $6.5 million in 1992), and what they save by not paying property taxes, (some $2 million a year), as well as other services that kick in in excess of $20 million a year, there looms the specter of something called “quiet profits,” which means selling life insurance to its members.

The Prudential Foundation, affiliated with the Prudential Insurance Co., donated a total of $300,000 to a National Education Association Foundation.  A clamor arose when, in Fairfax County, Virginia, a school board followed the advice of an NEA-influenced committee and changed their insurance coverage from Blue Cross to Prudential.

Some of the criticism voiced was that not only was the coverage not as good, it also cost more.   Some held the opinion that the NEA was returning a favor for the $300,000 donation by switching insurance providers.   The head man himself, Keith Geiger, President of the NEA, Jumped into the fray and opined, “NEA receives no money or other financial benefit—in the form of an exclusivity fee or otherwise—from the Prudential Insurance Co.”

Strange that Geiger should make such an emphatic, all-encompassing statement.  Because when checking with the feds it became evident the NEA has been filing disclosure statements showing that the teacher’s union IS receiving $10 MILLION a year for handling the life insurance.

So, despite President Leiger protestations, the NEA (through a convoluted, complicated system) handles Prudential life insurance for it’s members and does indeed receive a cut.   This kickback amounts to 30% of the premium that every teacher pays.   In addition, because the insurance dues system is based on what the average teacher earns, the NEA is extremely involved in making certain that teacher’s wages are, ah, acceptable.

The abuses of the NEA have not gone unnoticed by teachers.  They came together to form Educators against Forced Unionism.  A survey by the Michigan Education Association discovered the majority of union members themselves do not support the political & ideological agenda of their union hierarchy.”  Other results of the poll: 76% of the teachers and 60% of the union leaders complained that “the NEA never tells us how the dues money is being spent” and 64% teachers and 73% leaders displayed concern that “the NEA is mainly committed to union goals, not professional goals for education.”

Michigan has a monopoly of buyers when it comes to teachers union insurance and it is called the Michigan Education Special Services Association, or MESSA.  MESSA, under the banner of the Michigan Education Association, has a staff of over 200 people and takes in revenues of $370 million.

The Association (MESSA) sells health insurance to school districts, claiming they just want to “break even.”  The facts are that in a four year period they had an excess of $87 million.   Teachers apparently get taken on this deal (again!) because they are forced to pay more for their health insurance than state employees pay into the Michigan health plan.  One thousand dollars more, per person, as a matter of fact.  Just the threat of a strike can buy the union a lot of concessions so the additional cost is written into the contract and once again the taxpayer gets stuck with the bill.

If you’re wondering why Blue Cross & Blue Shield doesn’t take care of all the detail work that MESSA does, it’s obvious that you don’t have the makings of a decent crook.   If you did have a smidgen of larceny in your heart, you would immediately smell the sweet deal they have going here.  NEA pays an annual fee to MESSA of over a million dollars.  MESSA in turn buys items and services from MEDNA, the Michigan Education Data Network Association which is an entity under the headship of the Michigan Education Association and which is a business.  If you don’t quite follow that, just remember that all three agencies are so intertwined and intimidating that even school boards back off investigating the possibility that there are unlawful practices going on.

Teachers unions have increased their numbers and their influence.  Simultaneously, the cost of education has skyrocketed (someone has to pay Geiger’s salary of $214,000 and the salaries of all the other parasites) and we, the underwriters, grimly accept a plummeting learning curve.

Most teachers are dissatisfied with the system and seventy percent of the American people support the idea of allowing parents tax dollars (vouchers) so they can choose the school their children attend.  Many parents are already willing to pay double for their children’s education, which is one reason why the alternative school system is growing so phenomenally that it threatens to undercut the government school system.  While the idea of vouchers is a step in the right direction, the public must be cautioned that vouchers could be used to suppress private schools that are independent of government money.


Condensed by Lu Haynes of Kettle Falls WA.  Lu is the Liaison Officer for Grass Roots Of Washington (GROW).  Originally written by Peter Brimelow And Leslie Spencer for Forbes magazine
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