Hawaii Boss Sues Former Union; Says He’s Not Liable for Debt

afscme-logoGary Rodrigues left a long legacy as director of the United Public Workers, a Hawaii affiliate of the American Federation of State, County and Municipal Employees.  A good portion of that legacy involved criminal activity, which is why for the past year he’s been residing in federal prison.  In the interim, some unrelated business has come back to haunt him.  And as befits his style, he’s fighting back.  On Tuesday, December 9, Rodrigues’ attorney, Eric Seitz, filed suit in state court alleging that his client’s former union, and not Rodrigues himself, is responsible for repaying an $850,000 debt incurred on an investment of a decade ago.  In a non-jury civil trial last February and March, U.S. District Judge David Ezra had ruled that Rodrigues was liable.  This case doesn’t involve criminal charges.  Yet it does shed additional light on the workings of a powerful and often corrupt public employees’ labor organization.   

 

Neither Rodrigues nor his daughter, Robin Rodrigues Sabatini, is a stranger to these pages.  Each was convicted by a Honolulu federal jury in 2002 on dozens of criminal charges in connection with the theft and laundering of nearly $400,000 in union funds.  In 2003 Judge Ezra sentenced each to prison terms of several years.  Rodrigues and Sabatini appealed, eventually all the way to the U.S. Supreme Court, which let stand the convictions. 

 

The new appeal revives financial ghosts of a different kind.  Back during 1998-99, a Rodrigues-managed union trust fund, Mutual Aid Trust, invested about $1.1 million in Best Rescue Systems, a company developing equipment and technology designed to rescue people trapped in multi-story buildings.  The investment didn’t pan out, and the firm eventually declared bankruptcy.  Rodrigues’ financial adviser, Albert Hewitt, pleaded guilty in 2005 to two counts of illegally accepting $55,000 in finders’ fees.  Rodrigues’ position is that in acting as a fiduciary of Mutual Aid Trust, he cannot be held personally liable for any judgments, which include $90,000 in legal and other fees as well as the original $850,000 debt.  He may be right, but having begun the second year of a five-year prison sentence for earlier offenses, he’s got a credibility problem.  (Honolulu Star-Bulletin News, 8/31/05; Honolulu Advertiser, 12/11/08; other sources).         

 

Ex-Treasurer in Ohio Indicted for Embezzlement, Records Fraud

Jack Hooks thinks he’s an innocent man.  He’s going to have a lot work convincing a judge or jury.  Hooks, formerly treasurer for a local of the Ohio Civil Service Employees Association, was indicted on December 17 in Cleveland federal court on one count of embezzling $15,192 and two counts of falsifying records of the AFSCME-affiliated (Local 11, Chapter 7010) union, which represents corrections officers at Mansfield Correctional Institution (“MANCI”).  He pleaded not guilty on January 12. 

 

Hooks, a resident of Mansfield, allegedly embezzled union funds during the period December 23, 2003-January 2, 2005.  The charges in particular accuse Hooks of writing a phony entry into the minutes of a June 29, 2004 meeting indicating passage of a motion to allocate $10,000 to an interest-bearing account at the treasurer’s discretion.  Court records reveal, however, that the board passed no such motion.  Hooks also reportedly made an entry in Chapter 7010 financial statements for the quarter ending June 20, 2004, falsely stating that the chapter already had $6,500 deposited in an interest-bearing CD.  The charges follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  (Mansfield News Journal, 1/14/09; OLMS, 1/9/09).