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Alleged teacher union leader embezzlement in Mississippi sparks federal lawsuit

By: Sarah Ulmer - July 22, 2021

The American Federation of Teachers-Mississippi (AFT-MS) has accused their  national counterparts of covering up self dealing with local chapter.

The American Federation of Teachers-Mississippi chapter claims that the national AFT (affiliated with the AFL-CIO) helped cover up the questionable financial transactions of  funds by the Jackson Federation of Teachers (JFT) and JFT President Dr. Akemi Stout. They have taken their claims to court in a federal lawsuit.

According to an article written by Jackson Jambalaya, AFT-MS found that the JFT was having “cash-flow issues” in 2018 and 2019. Those years the state chapter said JFT did not make the required payments that come largely from member dues. The lawsuit also claims that Dr. Strout, head of JFT, attempted to move the headquarters to her home.

According to the complaint, when the state chapter attempted to investigate the situation they were denied access to JFT records and financial books. Subsequently, JFT refused to give any financial statements to the state chapter. Therefore, AFT-MS notified the national headquarters.

After reporting what the state chapter anticipated to be wrongdoing, AFT told them to “stand down until” they could complete an investigation. It was January of 2020 before an investigation concluded and the state chapter suspects it was only done because they hired a lawyer.

AFT sent the final report to AFT-MS in February 2020.

The AFT investigation found (as reported by Jackson Jambalaya): 

  • Dr. Stout gave herself a $7,498 increase to her 401k plan.
  • There were $2,352 in unexplained ATM cash withdrawals.
  • $3,659 in improper PayPal transactions.
  • $1,793 spent using the Cash app.
  • $2,252 spent on hotels, restaurants, and bars.
  • JFT paid Dr. Stout $60,516 in salary for 2018 but her salary was supposed to be $48,379.
  • Receipts and similar documents were often missing.
  • Dr. Stout spent $26,086 on computer repair expenses at Rod’s Repair & Maintenance Services from 2017 to 2019 even though JFT budgeted only $10,220 for such costs. The company does not appear in a Google search nor on the Secretary of State’s website.
  • JFT did not pay required per capita dues of $114,754 to AFT-MS.

After the report was released, the state chapter asked AFT to remove Dr. Strout at JFT and put the chapter directly under state control in order to rectify these financial errors. However, according to the AFT-MS lawsuit, the national chapter did not do so.

AFT Secretary-Treasurer denied the request stating that the financial crimes were not at a level to cause immediate threat. It was also said by AFT-MS that Johnson and Dr. Strout are close personal friends.

The lawsuit claims that JFT and AFT entered into and undisclosed agreement that allows JFT to repay the owed $114,754 in per capita dues directly to the national organization and bypassing the state chapter.  This agreement would allow JFT will pay $1,195 per month for 8 years with no penalty or interest. However, this sum contains AFT-MS dues.

AFT has also still allowed Stout to remain as JFT President.

With the above knowledge, AFT-MS, Geraldine Bender, State President, filed suit against the AFT, AFT President Randi Weingarten, Secretary/Treasurer Loretta Johnson, JFT and JFT President Dr. Akemi Stout. The case was filed in the U.S. District Court on April 9 claiming several counts of embezzlement, unjust enrichment and breach of fiduciary duty.

The counts are as follows:

Count I: Declaratory judgment on the validity of the agreement.  Neither AFT nor JFT can enter into an agreement on AFT-MS’s behalf.  The “secret agreement” should be declared null and void.

Count II:  Breach of fiduciary duty. The charter requires JFT to pay per capita dues to AFT-MS and AFT.  Dr. Stout had a fiduciary duty to JFT members.

Count III: Breach of fiduciary duty against Weingarten and Johnson.  They allegedly breached their duty to the AFT-MS membership.

Count IV: Breach of fiduciary duty by tortious interference of business by AFT.  AFT allegedly interfered with the affairs of AFT-MS and JFT’s obligations to the state chapter.

Count V: Unjust enrichment/Constructive trust. The embezzled dues are owed to AFT-MS, not AFT.  The American Federation of Teachers is helping itself to the states chapter’s dues due from Jackson.

Count VI: Embezzlement by JFT President Dr. Stout.

Count VII: Breach of fiduciary duty.  The defendants failed to appoint an administrator.

The lawsuit asks the Court to void the agreement, require JFT to pay the $114,754 in per capita dues with interest to AFT-MS, and award punitive damages for intentional financial misconduct as well as legal fees.

The case is assigned to U.S. District Judge Daniel Jordan, III.  The defendants have not yet responded to the lawsuit.

About the Author(s)
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Sarah Ulmer

Sarah is a Mississippi native, born and raised in Madison. She is a graduate of Mississippi State University, where she studied Communications, with an emphasis in Broadcasting and Journalism. Sarah’s experience spans multiple mediums, including extensive videography with both at home and overseas, broadcasting daily news, and hosting a live radio show. In 2017, Sarah became a member of the Capitol Press Corp in Mississippi and has faithfully covered the decisions being made by leaders on some of the most important issues facing our state. Email Sarah: