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Fera Letter To Spitzer

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It might be nice to put this letter in its context. It is posted on FERA's website, which also includes love letters to the notion of education tax credits, school vouchers, and charter schools. In short, it would be difficult to find a more anti-union presence on the web, unless Joel Frank runs a website that I don't know about!

 

The letter itself is, much like the LA Times article, riddled with one major inaccuracy (and maybe more, who knows?). From the letter:

 

According to the [LA Times] article, NYSUT accepts $3 million annually from a financial services firm in exchage for the union "encouraging its 525,000 members to invest in the annuity sold by the [firm]" without disclosing its financial interest in the arrangement.

 

Read that last part again: "...without disclosing its financial interest in the arrangement."

 

Mr. Carroll's letter is dated April 28, 2006. I'd be fascinated to hear how he construes prominent mention in the prospectus, as well as in at least a half-dozen disclaimers that I have seen on the NYSUT member benefits letterhead, as a failure to disclose the arrangement!

 

This might be a more interesting conversation to have if NYSUT's and ING's detractors would, at the very least, manage to stick to the facts, something they appear incapable of doing.

 

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I'm glad that this letter was written. I hope that Mr. Spitzer will take action .

 

 

What action do you want him to take? The primary charge of the letter--that NYSUT takes money from ING without full disclosure--is demonstrably false! How is Spitzer supposed to take the letter seriously?

 

Let me put it another way. Eliot Spitzer is the attorney general. His job is to investigate/prosecute criminal activity. Can ANYONE name a single law that has been broken here?

 

You guys are all barking up the wrong tree. If you want to effectuate change, have a law passed barring such arrangements. Or at least cite the law that has been broken.

 

Anyone?

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FT, I am not an attorney and neither are you, but Mr. Spitzer is, so he and his office are capable of determining if this can situation can be prosecuted in a criminal action. Additionally, the teachers who invested in this product may be able to pursue equity in a civil action.

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FT, I am not an attorney and neither are you, but Mr. Spitzer is, so he and his office are capable of determining if this can situation can be prosecuted in a criminal action. Additionally, the teachers who invested in this product may be able to pursue equity in a civil action.

 

 

It's true enough that neither of us is an attorney. It's equally true that, despite not being a lawyer, I can identify possible criminal activity in everyday life, given the facts of the situation...but here I can't, and from the lack of anyone's ability to cite even a single law that may have been broken, apparently neither can anyone else! And the teachers should get "equity"? Is "equity" the same as a refund for all fees paid by all teachers everywhere to any provider anywhere? Whoopee! Free financial services for everyone!

 

Whatever. Like I said before, I hope there IS an investigation, or a clear statement that none is required. If there is wrongdoing going on, obviously I would want to know about it. I just don't see the rationale for thinking so.

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Guest Sierra

It might be nice to put this letter in its context. It is posted on FERA's website, which also includes love letters to the notion of education tax credits, school vouchers, and charter schools. In short, it would be difficult to find a more anti-union presence on the web, unless Joel Frank runs a website that I don't know about!

 

The letter itself is, much like the LA Times article, riddled with one major inaccuracy (and maybe more, who knows?). From the letter:

 

According to the [LA Times] article, NYSUT accepts $3 million annually from a financial services firm in exchage for the union "encouraging its 525,000 members to invest in the annuity sold by the [firm]" without disclosing its financial interest in the arrangement.

 

Read that last part again: "...without disclosing its financial interest in the arrangement."

 

Mr. Carroll's letter is dated April 28, 2006. I'd be fascinated to hear how he construes prominent mention in the prospectus, as well as in at least a half-dozen disclaimers that I have seen on the NYSUT member benefits letterhead, as a failure to disclose the arrangement!

 

This might be a more interesting conversation to have if NYSUT's and ING's detractors would, at the very least, manage to stick to the facts, something they appear incapable of doing.

 

 

Yes, the FERA letter to Spitzer omits the fact that the payment of $3 million annually is disclosed to the investors. Again, just because it is disclosed does not make it proper.

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Guest Sierra

FT: You reference me as being anti-union. Well the New York City affiliate of the NYSUT, the United Federation of Teachers must also be anti-union because I am in total agreement with their decision to keep the Opportunity Plus/NYSUT variable annuity out of the New York City School System---the largest system in the country. This fact was in the FERA letter to Spitzer which you forgot to post. You also forgot to post that part of the letter which discloses to Spitzer that the NYSUT as EMPLOYER sponsors a no-load 401(k) plan for its employees.

 

Joel L. Frank

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Yes, the FERA letter to Spitzer omits the fact that the payment of $3 million annually is disclosed to the investors. Again, just because it is disclosed does not make it proper.

 

 

No, Joel. The FERA letter does NOT "omit" the fact that the payment is disclosed. The FERA letter completely misrepresents the fact that it is disclosed. Specifically, the letter says (and I'm quoting it here), "NYSUT accepts $3 million annually...without disclosing its financial interest in the arrangement." That's not an omission. It's a complete fabrication.

 

I wonder how nutty you would go if ING said in a press release that they had no M&E fee, then turned around and charged one. Would you call that an "omission," or a "complete and utter lie"?

 

 

FT: You reference me as being anti-union. Well the New York City affiliate of the NYSUT, the United Federation of Teachers must also be anti-union because I am in total agreement with their decision to keep the Opportunity Plus/NYSUT variable annuity out of the New York City School System---the largest system in the country. This fact was in the FERA letter to Spitzer which you forgot to post. You also forgot to post that part of the letter which discloses to Spitzer that the NYSUT as EMPLOYER sponsors a no-load 401(k) plan for its employees.

 

 

These are indeed important disclosures. Tell me, as Eliot Spitzer reads this laughable letter, what securities law should he have in mind as he contemplates his investigation? What law is NYSUT breaking by allowing the UFT to operate as an independent local, just like all their other locals, in determining their own vendor list? What law is NYSUT breaking by having a 401(k) provider that is different from the endorsed 403(b) provider?

 

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FT, I am not an attorney and neither are you, but Mr. Spitzer is, so he and his office are capable of determining if this can situation can be prosecuted in a criminal action. Additionally, the teachers who invested in this product may be able to pursue equity in a civil action.It's true enough that neither of us is an attorney. It's equally true that, despite not being a lawyer, I can identify possible criminal activity in everyday life, given the facts of the situation...but here I can't, and from the lack of anyone's ability to cite even a single law that may have been broken, apparently neither can anyone else

 

 

FT.........As an accomplished, educated person who not only is a teacher but know French fluently and perceives himself as being an excellent investor as a result of the support that you receive from your SALES advisor who you consider an expert in the field of finance ( in spite of the extra drag on your investment return due to higher expenses from the product that you own), I'm sure that you would be open to having an expert(s) in the field of law look into this situation to determine if there is criminal activity or civil recourse.

Edited by ira

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Here's a nutty legal concept - Fiduciary Responsibility. Perhaps the crime is that NYSUT has breached their fiduciary responsibility it has to its members to look after THEIR best interest and not line their own pockets.

 

I am glad that NYSUT discloses the money they are getting (assuming it is all disclosed), however they fail to disclose that they could have recieved a better deal by doing things differently. I bet the subject of the Wisconsin Education Assocation Trust never comes up on those pesky NYSUT letterheads....

 

NEA is guilty of non-disclosure (it isn't anywhere in any prospectus, website, and nobody will give you exact dollar figures) of 403(b) kickbacks - but they are also guilty of the same thing NYSUT is - and that is not working in their members best interest.

 

I think the unions may start to see things differently as the leadership is barraged by its members about how they are currently doing things.

 

I am no attorney either, but I can spot a breach of fiduciary responsibility when I see it.

 

ScottyD

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Right on Scotty,

As I said in another post, the deal in NY may be legal, but it isn't ethical. Educators can be very "pesky" when their trust has been breached by the very organization that is suppose to look out for their best interests.

 

Ira and Sierra,

I think we should argue the ethical goal rather than the possible legal goal against the NYSUT. Until an attorney comes on and explains the situation, we simply don't know. Remember we are talking about very powerful self interests and their articulate opportunists who will steadfastly defend this unethical plan under the legal guise. They are petrified. The approved vendors here in LA are scared and they should be because they will have to work a little harder now, but they are all on legal standing. I have always said that the relationship of vendors to unions and districts are all perfectly legal, but unethical and disgusting. There is not one word on any of the Union websites about the articles that I know of. They don’t know what to say because the unions have never made direct statements to members about these plans, the vendors did all the of talking. Just my opinion.

 

In the end, we have to continue to work hard too. Most participating educators simply don't know YET that any deal is not in their best interests. We know there are better deals, but the unions controlled by officers that still don’t know yet who elected by members who don’t know yet. We still have a ways to go in educating the officers and the members on the costs of these plans and the constant drain on their savings over many years. We are making headway here at my union UTLA, with our treasurer from the start has said that he wants to learn. HE IS LEARING!

Steve

 

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FT.........As an accomplished, educated person who not only is a teacher but know French fluently and perceives himself as being an excellent investor as a result of the support that you receive from your SALES advisor who you consider an expert in the field of finance ( in spite of the extra drag on your investment return due to higher expenses from the product that you own), I'm sure that you would be open to having an expert(s) in the field of law look into this situation to determine if there is criminal activity or civil recourse.

 

 

I certainly am open to that, as I said before. I just don't see what would be causing Spitzer to take this particular letter seriously, given that its primary point is completely false, and everything else contained therein appears to be completely legal. But as you say, that's a call for an attorney to make, not me.

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Guest Sierra

FT: You reference FERA and me as being anti-union; yet the latimes is pro-union and they published the article. You need a dose of the : "logical thinking"

 

Joel

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