MEA agrees to pay $115,000 in processing fees for pandemic aid

Michigan's largest teachers union will pay a $115,000 court settlement to cover the costs of processing fees for a loan the organization got in 2020 from the federal pandemic Paycheck Protection Program, aid for which critics allege the union didn't qualify.

Officials with the Michigan Education Association announced Monday that a federal seal was lifted in a lawsuit filed against the union by the Mackinac Center for Public Policy in Midland, and the state's largest teachers union will pay $115,000 in processing fees. Other details of the settlement were not released, and the office of Grand Rapids U.S. Attorney Andrew Birge didn't immediately respond to a request for comment about the competing claims of the MEA and Mackinac Center.

MEA officials said in April 2020 the union applied for and received a Paycheck Protection Program loan. Based on the rules published by the federal government at the time, the MEA ― which represents about 120,000 teachers, education support professionals and higher-education employees throughout Michigan ― said it believed it was fully eligible for the PPP program, and its bank agreed, according to a union statement.

The MEA repaid the loan with interest totaling $6,461,876 in December 2020, the union said. A year after the repayment, the Mackinac Center filed a federal lawsuit in January 2022 in the Western District of Michigan U.S. District Court alleging the MEA knowingly violated the law in applying for the loan.

"The facts clearly do not back up those claims, which have more to do with the Mackinac Center’s political agenda than principles of truth or justice," the MEA stated in a news release, denying any wrongdoing.

The Paycheck Protection Program was launched as a response to the COVID-19 pandemic's impact on the workforce and provided small business with loans to keep their workers on payroll. 

The Mackinac Center for Public Policy filed a lawsuit under the federal False Claims Act to hold the union and its affiliate accountable by forcing them pay fines and fully reimburse taxpayers for their actions, Mackinac Center for Public Policy President Joseph G. Lehman said in a Monday new release.

Private businesses and some nonprofits were eligible for the loans, but 501(c)(5) and 501(c)(9) organizations such as the MEA were not, the Mackinac Center statement said.

"The Michigan Education Association applied for money intended for struggling businesses during the height of the pandemic,” Lehman said in the statement. "The union and (its insurance carrrier) MESSA obtained some of the largest PPP loans in the country. They took these funds, for which they were clearly ineligible, while shuttered restaurants, stores, other businesses and their workers struggled to stay afloat."

The Mackinac Center, a free market oriented research group, said the MEA and MESSA, its health insurance arm, will also pay the center $77,000 in attorneys fees and the federal government will award the center $23,000 for discovering the improper loans.

jchambers@detroitnews.com