Attorney General OKs withholding millions from educators

September 10, 2017

By Bill Britt
Alabama Political Reporter

Quietly under cover of so-called attorney-client privilege, educators are being denied millions of dollars, and the state’s Open Meetings Act is in jeopardy.

The Alabama Education Association recently celebrated winning a lawsuit alleging the Retirement System of Alabama’s PEEHIP Board met illegally to improperly raise state employees’ health insurance rates – PEEHIP is short for Public Education Employees’ Health Insurance Plan, which provides health coverage to education workers.

Montgomery County Judge Johnny Hardwick’s ruling means around $60 million must be returned to education workers immediately.

A majority of PEEHIP Board members do not want to challenge Judge Hardwick’s decision by appealing the case. However, Leura Canary, chief legal counsel for the Retirement Systems of Alabama is threatening board members who openly express their willingness to drop the case. She is joined by Attorney General Steve Marshall and Gov. Kay Ivey’s “chief” legal counsel to withhold educators’ money hoping to reverse Judge Hardwick’s ruling before a “friendly” appellate court.

According to those close to the situation, Canary sent “threatening,” emails to Board members warning them not to interfere with her plans to appeal. Marshall assured Canary she had sole discretion on such legal matters and that, as a deputy attorney general, has his full backing to move forward with the appeal despite the wishes of the PEEHIP Board.

(Mrs. Canary is the wife of Billy Canary, the embattled CEO of the Business Council of Alabama.)

Speaking on background, a high ranking public official said, “Steve Marshall says Leura has the ability to intercede, and that even PEEHIP can’t say a word about it on litigation.” The member further stated, “Steve [Marshall] is essentially, if this sticks, going to single-handedly undermine and probably bring down the entire Open Meeting Act.”

Ivey’s legal counsel, Bryan Taylor, is refusing to turn over public documents, keeping the public and especially educators from discovering Marshall and Canary’s intentions.

In 2016, the Board voted to increase educators’ insurance premiums by $80 a month. Overall, the increase doubled the average monthly premium for individuals from $15 to $30. The change also increased the average family premium — not including the spouse — increased $30 from $177 to $207. as previously reported by Chip Brownlee for APR.

Judge rules in favor of AEA in PEEHIP lawsuit, striking down health insurance rate hike

On April 27, 2016, the PEEHIP Board held two meetings. One was held at 1 p.m., which was open to the public as required by the Open Meetings Act, and another was held earlier at 9 a.m., where the rate increases were decided on contrary to state statute.

Judge Hardwick found the 9 a.m. meeting violated the state’s Open Meetings Act, and therefore the premium increase was illegally enacted.

Several Board members say they don’t understand why Canary and Marshall are superseding their authority. But as explained in the letter from Marshall’s man, the attorney general has power over all state litigation.

A letter copied to all board members believed to be the result of Canary’s consolation with Marshall reads in part, “The PEEHIP board does not have the legal authority to direct the positions taken on issues in litigation involving a state entity. That authority rests solely with lawyers who represent the State of Alabama and is accomplished through the actions of Deputy Attorneys General appointed to handle the case. This is the reason the PEEHIP board does not vote on litigation matters.”

“If that’s the case, then essentially, the attorney general, who’s political, could force every single state agency to be at their mercy,” said a source close to the case. “Even if it’s not in the agency’s best interest, the attorney general can overrule them. That’s crazy.”

Speculation holds that Canary may have hoodwinked Marshall, or that he is so desperate to win the attorney general’s race he is cozying up to Canary to encourage her husband to support his candidacy. Others suppose Marshall, a former Democrat appointed to district attorney by former Gov. Don Siegelman, is polishing his Republican credentials by targeting the AEA, a popular whipping-boy among the state’s GOP leadership.

Board members tell APR they want to drop the case and return the funds to the educators, however, they can’t find relief due to Marshall, and Canary’s interference.

Billy Canary, along with former Gov. Bob Riley and former House Speaker and convicted felon Mike Hubbard, waged war on the AEA until the once powerful association was beaten into submission. Meanwhile, BCA’s competing education organization has pushed legislation that has allowed Riley’s SGO to divert millions from education under the controversial Accountability Act.

As one attorney advised APR, the board should call a meeting and vote to overturn the original decision. “They should immediately stop the money from going into escrow, and stop collecting it. In the same meeting, the board should vote to draft a resolution to Steve Marshall that they believe that – that the Open Meetings Act was violated, and ask him to allow them to drop the appeal and refund the money.”

For now, Marshall, Canary and Taylor stand in the way of the Board’s actions, and by doing so, deprive thousands of individuals who work in education millions in repayment.

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