Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies (35 page)

• And a now-defunct minor league basketball team coached by Freeman’s brother-in-law received $16,000 for what the union described as public relations.
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Freeman’s local also paid nearly $106,000 to a company called “The Filming Inc.”—for which the
Times
could find no state incorporation record or IRS nonprofit listing, no business license, and no legitimate address—and another $106,000 to Hollywood talent agency William Morris for “advice and counsel” in such areas as media and “membership awareness.”
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Even more troubling, Freeman allegedly rigged his own election. In August 2008, the Labor Department began investigating charges from rank-and-file members that Freeman’s union local “made it nearly impossible for candidates not on his slate to qualify for the ballot, according to people familiar with the probe. The FBI and the U.S. Attorney’s office also opened investigations. Former employees of Freeman’s nonprofit charity also alleged that the Stern protégé forced them to work on campaigns of political candidates in violation of federal law.”
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Even more damning, a key union source told the
Times
that, contrary to the denials of union brass, SEIU’s top officials were warned of Freeman’s plundering six years before the paper blew the whistle:

In response to the July [2008] inquiries, [union spokesman Steve] Trossman had issued a statement on behalf of Stern that said the union had received no allegations about Freeman’s local. Freeman denied any wrongdoing.

The source, who said he was party to internal conversations about Freeman in 2002, told The Times last week: “The international knew that there were allegations of impropriety many years ago. This is not news to them.”
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On August 20, 2008, just days before Stern would join Democrats in toasting Barack Obama at the party convention in Denver, Stern’s protégé Tyrone Freeman stepped aside as head of Local 6434, and the chapter was placed in a temporary trusteeship. Stern’s office in Washington, D.C., released the announcement. “These allegations are of serious concern to all of us and we support Mr. Freeman’s decision to put the best interests of the members first,” Stern spokeswoman Michelle Ringuette wrote in an e-mail to the
Times
.
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But even as he relinquished his position, Freeman was apparently engaging in the strong-arm tactics he learned from Stern. Ten employees told the
Times
that they suffered retaliation after refusing to sign a petition supporting him as the scandal exploded. “Freeman’s lieutenants” at Local 6434 essentially pressured other members to sign a “loyalty oath,” one union member disclosed.
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After dragging its feet and being forced to act to quell public embarrassment over the
Times
investigations, SEIU finally announced formal charges against Freeman “for engaging in self-dealing and financial malpractice in violation of SEIU’s Constitution and Local bylaws.”
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In November, Stern threw his underling under the bus. Freeman, whom Stern had groomed in his own image, was banned for life from the SEIU and ordered to provide $1.1 million in restitution to the union. A sanctimonious Stern issued a statement lamenting Freeman’s downfall: “Today’s decision sends a clear message across our Union. . . . We are all accountable. Our members do some of the toughest jobs anywhere, and we will not tolerate any actions violating their trust or putting their interests at risk.”
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But rank-and-file members weren’t fooled or mollified. An insurgent group called S.M.A.R.T.—SEIU Member Activists for Reform Today—blasted the union leadership:

Freeman didn’t come from nowhere. He was appointed by Andy Stern—for the third time.... And there are many other locals where Stern has installed unaccountable appointees and, sometimes ignoring reports that they were out for personal gain.... So Stern’s message to us is clear—he cares more about expanding control for himself and an ever shrinking inner circle than he does about building real power for working people, creating solid organizations, coming through on SEIU’s political pledges for the fall, or even the perception of our union and our movement as real, democratic, valuable and clean. He will only act when there is no other option, and he will never apologize .
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As for Freeman, he glided into a new life as a Los Angeles sports agent—where he uses his criminal involvement in defrauding low-wage workers as a selling point. His shameless biography on the website of the SMWW Sports Agency touts his “tireless commitment to lead the struggle for livable wages, decent housing and health care for all.” Burnishing his scandal credentials, Freeman adds: “I believe my recent personal experience evolving from turmoil, can be a testimony shared in preparing any athlete for the trials and tribulations of being a star.”
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Ruthless Andy Stern taught Tyrone Freeman and his southern California peers all too well. Rickman Jackson, another Stern administration protégé and former chief of staff to Tyrone Freeman, headed Michigan’s largest SEIU chapter before being “reassigned” for three years to a staff organizing job, after the revelation of financial shenanigans tied back to L.A.’s Local 6434.
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While collecting a six-figure annual salary in Michigan, Jackson was drawing a second salary in California and accepted $33,500 in housing payments on a residence listed as the business address of Freeman’s bogus housing non-profit corporation.
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Another Stern administration protégé, Annelle Grajeda, rose to power after the SEIU president installed her as president of the 80,000-member Local 721 in Los Angeles. She ascended to positions on the union’s state council and international executive board. Like Freeman and Jackson, Grajeda had been voted onto Stern’s official administration slate at the SEIU convention in 2008.
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The
Times
published damning details of how Grajeda’s ex-boyfriend, SEIU official Alejandro Stephens, collected multiple salaries and consultant fees from the union while also pocketing a salary as a Los Angeles County health services employee. Grajeda had arranged for her ex-lover to get an eight-month leave of absence from the job. He was fired after he refused to return to work.
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Grajeda quit her California posts after catching public flak and found a new job—as special assistant to SEIU secretary-treasurer Anna Burger in Washington, D.C.! Her former chapter heralded the move up. Grajeda will now oversee efforts to “partner with the Obama administration” to secure more public funds for SEIU projects. What could go wrong?

Former SEIU 721 President Annelle Grajeda assumed her new role as special assistant to the International Secretary-Treasurer Anna Burger for the Public Sector Mar. 9.

According to a staff announcement from the International Union in Washington, D.C.: “With more than two decades of service, Annelle has played a critical role in winning strong contracts for tens of thousands of union members, preserving trauma centers in Los Angeles County, fighting for health care reform, defeating ballot initiatives in 2005 that challenged working families’ livelihoods and uniting more than 80,000 workers into SEIU 721 for greater strength and a stronger voice for public service providers. She brings this wealth of experience and talent to the national level in her new role.”

. . . The International’s announcement went on to state “While there has been no finding of wrongdoing on Annelle’s part, she has decided to change the capacity in which she serves the Union in order to take on the challenge of developing quality public services at a time when funding is threatened like never before.”

In her new role, Annelle will expand SEIU’s work in the public sector partnering with the Obama Administration to secure more funds for key infrastructure projects and core public services including care for the elderly, health care, education and social services.
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Tyrone Freeman, Rickman Jackson, and Annelle Grajeda were all groomed by Stern and personally appointed by him to the posts they exploited. But there’s no “three-strikes” policy in labor management. Like Obama, Stern has managed to pass the buck while pretending it stopped at his desk. Birds of a feather evade accountability together.

A SEA OF PURPLE PAYOFFS

The L.A. SEIU debacles were just one stinking layer of Stern’s rotten onion. Corruption isn’t an anomaly at the SEIU. It’s a contagion. Cronyism isn’t the exception. It’s the rule.
L.A. Times
reporter Paul Pringle relentlessly exposed additional cases of nepotism and back-scratching—worth millions of dollars in compulsory union dues—that benefitted the consulting businesses, political nonprofits, and individuals with family or personal ties to top SEIU officials in southern California and beyond:

• The SEIU and its political affiliate contributed $3 million to America Votes, an advocacy organization that was headed by Cecile Richards, wife of an aide to SEIU President Andy Stern, at the time the payments were made.

• Melissa Mullinax was an SEIU political director when the political consulting firm in which she held a 20-25 percent stake, The Edison Group, was paid more than $1 million, including expenses, by the union. In addition, the SEIU has spent about $41,000 on a graphic design company owned by Mullinax’s husband, Jason Abbott.

• The union paid about $520,000 to a consulting firm co-founded by Democratic Party and labor strategist Steve Rosenthal, the husband of another SEIU director, Eileen Kirlin. Rosenthal, a longtime friend of Stern, also headed America Coming Together, a get-out-the-vote nonprofit that received $23 million from the union.

• Pamela Kieffer, wife of a third union director, David Kieffer, has received about $70,000 in consulting fees and in separate payments from a firm that provided recruitment services to SEIU.

• In addition, the SEIU and an associated nonprofit paid roughly $210,000 in consulting fees over four years to Don Stillman, husband of the union’s outside legal counsel, Judith Scott. Stillman helped edit a 2006 book written by Stern, a publication that has generated controversy because of how the union president profited from it. Although she is not an SEIU staffer, Scott disclosed her husband’s relationship with the union on U.S. Labor Department disclosure forms filed by officers.
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A separate corruption case in the Bay Area uncovered another SEIU double-dipper, James Bryant, who used a nonprofit run out of his home to line his pockets and his family’s with extra union-funded income—while also collecting a salary as a government transit worker.

A Bay Area officer of the scandal-clouded Service Employees International Union has collected double salaries, one as a city transit worker and the other from a charity that receives much of its funding from the labor organization and corporate interests, records show.

In addition, the nonprofit paid more than $16,000 in rent for the officer’s home in 2007, the most recent year for which the charity’s tax return is available, according to his son, who is also on the charity’s payroll. James Bryant, who earned just under $68,000 as a transit station agent in 2007, received about $117,000 that year as president of the San Francisco chapter of the A. Philip Randolph Institute, according to the tax return and the city’s Municipal Transportation Agency. He was also paid or reimbursed about $10,000 as an executive board member for SEIU Local 1021, whose political committee he chairs, the union’s financial statements show.
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Bryant’s son received $62,000 from the “charity.” His wife is also an employee of SEIU Local 1021. Compulsory union dues directly and indirectly paid the Bryant family’s salary and rent with the help of the nonprofit, which was later decertified but continued to operate. The self-dealing scheme smelled as foul as the sea lion hangout at San Francisco Bay’s Pier 39. But the local cleared Bryant of any wrongdoing and vowed to “move forward on behalf of the working men and women of Northern California.”
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The union nicknamed the “Purple Ocean” is awash in purple payoffs and personal enrichment scams. Yet another high-ranking SEIU official was nabbed in February 2009 for bilking the union out of $9,000 for personal expenses. Adding salt to the wound: the officer, Byron Hobbs, who served as an executive vice president of the SEIU’s 90,000-member Illinois-Indiana healthcare local, had been assigned to serve as watchdog over a local in St. Louis that had been placed in trusteeship (basically a takeover of a local labor organization by its parent organization, which suspends the local chapter’s autonomy and installs an outside monitor).
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In other words, Hobbs stole from the local chapter he had been assigned to help clean up. A smug SEIU spokeswoman concluded that the case showed “the system works.”
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“The system,” however, has long enabled a den of union thieves to embezzle workers’ dues for political and personal gain. In 2006, former Los Angeles City Councilman Martin Ludlow was sentenced to five years’ probation and 2,000 hours of community service for his role in conspiring to scam SEIU Local 99, which represents nearly 40,000 public school teachers. Ludlow “admitted to improperly using union money to pay six people who were put on the union payroll but who actually worked on his City Council election campaign.... The money also covered the cost of a cell phone he used in the campaign. Nearly $37,000 was diverted to his 2003 election campaign to underwrite the phantom union employee scheme.”
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