Maryland County Teachers Union Probed for Missing Funds

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NEA logoIf an embezzler returns money to its proper owner, that doesn't erase the fact of the embezzlement. Authorities in Worcester County, Maryland have been operating on that principle since late January, when they initiated a probe of the temporary disappearance of more than $100,000 belonging to the Worcester County Teachers Association (WCTA). Evidence points to a former union treasurer, Denise Tull, as the most likely culprit. While Tull hasn't been charged with any offense, prosecutors believe an allegation of "misappropriated funds" contained in the association's 2011 tax filing will reveal the truth. "We have a potential crime that has gone unreported, at least to law enforcement," said Worcester County State's Attorney Beau Oglesby at the time. "There's going to be a complete and thorough investigation." 

Worcester County occupies the easternmost area of Maryland. Its main community, Ocean City, in recent decades has become a huge summer draw for mid-Atlantic region beachgoers. But with a year-round population now exceeding 50,000, many of them children, the county has a large school system. And at least one of its employees is ethically-challenged insofar as that person's union activity is concerned. The Worcester County Teachers Association, an affiliate of the Maryland State Education Association (MSEA), and indirectly, the National Education Association (NEA), in an IRS tax return dated March 13, 2011, documented $111,589 in "misappropriated funds." The association noted that this amount was pending verification via audit by a bonding company. The union's previous tax return had been filed in August 2008, and reflected finances of the 2005-06 school year.

An incongruity was lurking, enough of one anyway, notes the nonprofit monitoring group Guidestar, for the IRS last October to revoke WCTA's tax-exempt status for failing to file a Form 990 for three consecutive years. Included in the 2011 tax return was an undated, unsigned letter that read: "Due to circumstances beyond the control of the present officers, on behalf of the organization, I respectfully request any proposed penalties be waived." The letter stated Denise Tull had resigned as union treasurer on March 31, 2009, and that prior to that, she had asserted all tax filings were current. The problem was that they weren't. "However, the officers learned not only had the returns not been filed, but a substantial amount of money was embezzled (over $100,000)," the letter noted. "An investigation has begun and the bonding company took all the records. The current treasurer only recently obtained some of the bank statements in order to prepare this return." For an organization with reported revenue in 2008 of $227,200, this was a substantial sum.

Neither Tull, a teacher in the Worcester County school system since 1988, nor her union successor, Sylvia Barrios, has been available for comment. But the current WCTA president, history teacher Helen Schoffstall, has. Back in January she defended her organization. "All of our accounts have full restitution, and there are no claims pending against any of our association officers," she said. Asserting the association has repaid all back taxes, she added: "Apparently, when we found out we had not filed for three consecutive years, there had been some kind of a clerical error. We secured a firm to help us file those. When the firm faxed those forms to the IRS, the third year - the third page - didn't go through. By the time the IRS notified us that they had not received that one, of course, they dropped our tax-exempt status." The union president during Tull's departure, now-retired math teacher Terry Springle, likewise stated Tull "was never charged with anything." Yet significantly, when asked if "misappropriated" funds were repaid, he replied: "Yes. Maybe I wasn't supposed to tell you that." Is this a smoking gun? The State's Attorney is trying to find out.