Jun 30, 2016

WTU Headquarters On The Auction Block: Union Prez Liz Davis Doesn't Pay Property Tax!

June 30th is the last official day of WTU Prez Davis' constitutional term. Malcolm Barnes explores this unfortunate scandal in the article below. What remains ahead is anybody's guess especially with Davis obstructing WTU elections from moving forward. Ballots are due by July 8. If you didn't receive one- please email JWRIGHT@WTULOCAL6.NET  It's imperative that you vote. Peterson slate is #1 on the ballot...Candi Peterson

By Malcolm Lewis Barnes

The Washington Teachers’ Union (WTU) Pennsylvania Avenue headquarters building owes over $24,000 in unpaid back real estate taxes and is on the Monday, July 18th Tax Sale schedule, which could result in the forced sale of the building at worst, and the union being hit with thousands of dollars of legal fees to fight off a tax lien sale.

A current Real Property Tax Property summary of Square 1019S, Lot 0040 reveals that the WTU has a total of $46,648.35 in unpaid taxes over the period from 2013 to the first half of tax year 2016. During President Liz Davis tenure and Treasurer Diane Terrell, the WTU racked up over $10,000 in penalties and interest in every year but 2014, and as recently as the first half 2016 bill for $19,199.93 the union incurred $1,919.93 or ten percent in penalties and an additional $863.90 in interest charges.
The $24,365.55 that caused the WTU to be placed on the Tax Sale list was the result of 2013 through 2015 delinquent taxes that the union failed to pay during the first two-and-a-half years of President Davis’ three year term. Ironically President Davis is the incumbent candidate for reelection under the “Responsible Leadership Team: Integrity, Experience & Experience” and this level of financial malfeasance and neglect is likely to result in an immediate investigation of why the union did not require the real estate taxes to be escrowed after a series of multi-million dollar loans were acquired from M&T Bank and Amalgamated Bank of Chicago.

In the opinion of former WTU General Counsel Johnnie Landon, who served under George Parker until 2010 and was later dismissed by former WTU President Nathan Saunders, "The former Presidents' of WTU should have never executed loan documents without it first undergoing a legal sufficiency review. Whoever was advising them at the time of the building acquisition as a bare minimum should have set up an escrow account."

As the former general counsel under WTU President George Parker, attorney Landon has history with the WTU’s plans to purchase a property and was assigned to investigate the acquisition of an inexpensive building on South Capitol Street. But the acquisition was never considered because, “Nathan Saunders came in barnstorming and ended up buying the Pennsylvania Avenue building after he defeated Parker. But AFT deserves some responsibility. They should have looked at the equity side of the acquisition and realized it was a bad deal”, said Landon.

Efforts to contact WTU President Liz Davis and Treasurer Diane Terrell went unanswered. But the WTU General Vice President and presidential 2016 candidate for WTU Presidency that is slated to start in July of 2016, was available and did respond to this shocking news.

"Unfortunately due to President Davis' lack of transparency, the WTU Executive Board was not made aware that the union headquarters was on the tax lien sale list. Davis has not demonstrated responsible union leadership and has become a spendthrift focusing on lavish events at the Kellogg Center, buying gift cards and trinkets instead of ensuring that the bills are paid. This is a travesty that union members have been mislead about the status of WTU’s finances. Our members deserve greater transparency and more accountable leadership."

Several other WTU Executive Board members were equally upset at the news of the union’s financial distress including Anitra Parker, a teacher at Hardy Middle School. “I am saddened and appalled about the discovery of this information. As an executive board member, it is clear that there never was and never will be accountability, collaboration, or transparency under the leadership of Liz Davis. If this is the responsible leadership that she is referring to, I don't want any parts of it. If she can't pay WTU bills, how can anyone have faith in her negotiating a contract with DCPS!” said Ms. Parker.

WTU President Liz Davis recently issued a ‘Report on WTU Finances’ that claims the union is “experiencing significant financial growth and progress”. But a closer look at how Davis arrived at that conclusion reveals a deceptive use of statistics and faulty assumptions about how the union poured millions of dollars into their historic Pennsylvania Avenue headquarters and is now trying to claim enormous cost overruns and renovation expenses as an asset.

In December of 2011 under the leadership of former President Nathan Saunders the Washington Teachers’ Union paid $2.5 million for three small townhouses in the 1200 block of Pennsylvania Avenue SE. The union planned to complete renovations on the 100 year old property started by the former non-profit association owners in 2002 and be ready to occupy the building by the spring of 2013.

Those plans quickly went south when the expected one year renovation more than tripled in costs as major foundation and cost overruns by out-going President Saunders got out of hand as he tried to hold onto power in the face of a 2013 re-election campaign.

In 2013, newly elected President Davis was forced to beg the American Federation of Teachers’ (AFT), WTU’s parent organization for a financial bailout as the original $3 million construction loan was converted to a permanent mortgage note, and an additional $500,000 loan from the mortgage holder was needed in mid-2014 to clean up the contractor liens and professional fees and an additional $1.5 million loan from Amalgamated Bank of Chicago to occupy the building later that year.

If Davis has put the union into such fine financial condition, why is there an outstanding tax bill of $46,648.35 and why has the union been consistently hit with annual penalties and interest of over $10,000 for unpaid real estate taxes every year under her financial stewardship?

So the WTU against the advice of their former Executive Board paid $2.5 million for a 100 year old Money Pit, poured an additional $2.5 million in renovation loans for a building that is currently assessed by the District’s Office of Tax &; Revenue at $2,327,190 and then uses voodoo economics to tell its members that it’s really worth $2 million more on paper.

Time and the Tax Sale will ultimately tell the story of the Davis administration’s disastrous tale of financial mismanagement and neglect!

© 2016 Malcolm Lewis Barnes

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