The leaders of the International Brotherhood of Boilermakers had a feeling the tab for renovation work at their Kansas City, Kansas funds office ran on the high side – way high. Four years earlier they’d sued the wife of the one of the people they’d suspected of embezzlement. Now the federal government wants to know why a rehab job cost around twice what it should have. Early this month Vernon Keith Reed and Richard Michael Taylor were charged in federal court on nine counts each of conspiracy and theft of pension and welfare funds. The IBB, with more than 100,000 members in the U.S. and Canada, is hoping it can recover the funds.
Reed, 62, from 1983 until his ouster in 2001, had served as executive administrator for the union’s three benefit funds. U.S. Attorney Eric Melgren said Reed conspired to allow Taylor to overcharge for the renovation work during 1999 to 2001; Taylor in turn diverted the excess sums to Super Clean, a janitorial service operated by Reed’s wife, Alice Rose. Taylor, 59, a close friend of Reed, owned four companies – Deramus Street Properties, Brothers Mechanical Corporation, International Fabricators and Erectors, Inc., and Woodley-Griggs Boiler Repair. Back in 2002 the union sued Reed in a personal bankruptcy action, alleging it had lost $1.8 million through embezzlement. Reed ultimately paid about $800,000 more to Taylor than the actual value of the renovation work, prosecutors noted. Last September a federal grand jury indicted Christopher Scott Wagner for obstructing an investigation into project cost overruns. The U.S. Department of Labor’s Office of Inspector General, Office of Labor-Management Standards, and Employee Benefits Security Administration each participated in the investigation. (Kansas City Star, 6/3/06; OLMS, 6/13/06).