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Published in Print: January 30, 2002, as News in Brief: A National Roundup

News in Brief: A National Roundup

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Teacher Pension Funds Tally Enron Investment Losses

A state district court judge in Texas, responding to a request by the Houston Federation of Teachers and others, has ordered the accounting firm Arthur Andersen, the auditor for the embattled Enron Corp., not to destroy any more documents.

A state district court judge in Texas, responding to a request by the Houston Federation of Teachers and others, has ordered the accounting firm Arthur Andersen, the auditor for the embattled Enron Corp., not to destroy any more documents.

The 5,700-member federation, whose members' pension fund had invested in Enron stock, joined a lawsuit filed in November by employees and stockholders of the bankrupt Houston-based company who are seeking to recoup their losses. Judge Caroline Baker granted the order Jan. 18.

Arthur Andersen has come under fire for having its employees shred Enron-related documents shortly before the energy-trading company's financial collapse and for accounting practices that apparently helped mask Enron's true condition.

Teachers in Texas pay into a pension fund at the Teacher Retirement System, which then invests the money. The retirement system has lost $35.7 million on its Enron investments since 1994. But system spokesman Howard Goldman said that represented less than four-hundredths of 1 percent of the $80 billion pension fund. The losses, he said, "had no material effect" on the fund's value.

Enron's failure has rippled into education retirement funds in other states as well. Pennsylvania's state pension fund for retired school employees lost at least $30 million in Enron stock, The Philadelphia Inquirer reported. New Jersey's fund lost $60 million, according to the newspaper.

In most cases, fund managers have said that the losses would have no effect on employees, because pensions are guaranteed or because other investments have made up for the Enron losses.

—Catherine Gewertz

Mo. Accreditation Review Team Visits Kansas City District

A review team from the Missouri education department visited the Kansas City school district last week to evaluate its prospects for regaining accreditation.

After multiple school visits and interviews, the team will prepare a report on the district and deliver it to the state board of education, which will consider this spring whether to restore the district's accreditation, state education department spokesman Jim Morris said.

If the board does not decide to restore accreditation, the state will take over the district June 30, Mr. Morris said.

The 34,000-student district lost its accreditation in May 2000 after failing to meet state performance indicators. It was given two years to improve or face a takeover. Officials have said that the district has made sufficient improvements, and that it is likely to qualify for reaccreditation.

—Catherine Gewertz

Iowa District Had Legal Right To Fire Teacher, Judge Rules

An Iowa school board acted legally when it fired an elementary school teacher for her involvement in a party that preceded the deaths of four high school students, a judge has ruled.

Carol Walthart, the teacher, claimed in a lawsuit that the board of the 650-student Edgewood-Colesburg district in eastern Iowa had violated her right to due process when it fired her on a 5-0 vote in November. The board said that she had acted unprofessionally in allowing students, including her son, to use her farm for a Sept. 30 party at which they consumed alcohol.

Four students died in an alcohol-related car accident on their way home from the party.

In his Jan. 16 ruling, District Judge George Stigler disagreed with the contention by Ms. Walthart's lawyer that the board should not have permitted its lawyer to participate freely in the deliberations that led to the firing.

Ms. Walthart, who could not be reached for comment, is expected to appeal her firing to an adjudicator.

—Bess Keller

Ohio Mother Ordered to Repay Tuition For Illegal Enrollment

A 30- year-old mother in East Cleveland, Ohio, must repay the Euclid, Ohio, school district just over $18,000 for illegally enrolling three of her children, a municipal court judge has ruled.

That's how much it cost the school system to educate her 7-, 8-, and 10-year-old children for a year, according to Patrick Newkirk, the 6,200-student district's compliance officer. He said the district catches about 100 illegally enrolled students each year.

Judge Deborah LeBarron, in handing down her ruling Jan. 18, also fined Ms. Morris $150 and ordered a 15-day suspended jail sentence. The mother had faced a $1,000 fine and six-month jail term. In addition, Ms. Morris, who pleaded no contest to record falsification, must perform 40 hours of community service, obtain her high school General Educational Development certificate, and take parenting classes.

She falsely used her mother's address as her own when enrolling her children in Euclid schools, Mr. Newkirk said.

But her lawyer, Charles W. Fonda, blamed Cuyahoga County's department of children and family services. The agency in 1998 placed the children under the care of Brenda Morris, Ms. Morris' mother, the lawyer said. He maintained that department officials had failed to notify the Morrises that the agency was handing back custody of the children to their mother.

—Rhea R. Borja

Minority Residents Decry Plan To End Busing

Students in Pasadena, Calif., would get more shut-eye under a proposal that would eliminate long bus rides to school, a vestige of a decades-old desegregation plan. But critics argue the change would divide the community along racial lines.

Officials of the 23,500-student district are considering redrawing attendance zones to ensure children attend neighborhood schools, said district spokesman Erik Nasarenko. Some students now ride 45 minutes across town to attend classes, he said.

The proposed change, which the school board is scheduled to vote on next month, would benefit both children and their parents, Mr. Nasarenko said, because many parents cannot participate in school life for lack of transportation or the time to make the trek.

Superintendent Percy Clark Jr. has called the current system "dated." But opponents of the plan argue that changing the system would result in racial stratification.

—Julie Blair

W.Va. Principal's Pet Terrier Attacks Student at School

A West Virginia 7th grader needed nearly 30 stitches in her lip after being attacked recently by her principal's dog at school.

The 1-year-old terrier, Nipper, who had accompanied Principal David Tidquist to Sissonville Middle School several times a week, was popular with students before the Jan. 15 attack. Students would sign up to walk the dog at lunchtime.

James Withrow, the general counsel for the 29,000-student Kanawha school district, said the dog was asleep in Mr. Tidquist's office when the girl bent over to pet the animal. The dog apparently was startled and attacked her.

—John Gehring

Bus Driver Faces Kidnapping Charges

Thirteen private school children were returned to Oley, Pa., early last friday morning after being taken by a school bus driver, who was armed with loaded semi-automatic rifle, on an unauthorized six-hour trip to Landover Hills, Md.

The 63-year old bus driver, Otto L. Nuss Jr., has been charged in federal court with kidnapping. Mr Nuss told Prince George's County, Md., police officers that he was planning to take the children on a field trip to Washington on Jan. 24, but got lost on the way.

Mr. Nuss, a school driver for a private bus company that serves the Oley Valley public school district, was supposed to transport the children from Oley Valley High School to the Berks Christian School in Exeter Township, Pa., according to the FBI. Instead, FBI officials say, he took them to Maryland.

The children, whose ages range from 7 to 15, were unharmed.

—Michelle Galley

Vol. 21, Issue 20, Page 4

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