Michigan Teamster Local Probed; Placed Under Trusteeship

teamsters-logoAl Sprague collected two incomes. Unfortunately, one of them may have been under false pretenses. Late in January the International Brotherhood of Teamsters determined that Sprague, president-business agent of Teamsters Local 164, received unemployment benefits while drawing an income from the Jackson, Mich. union. Apparently, he’s not the only official at the local with ethical problems. To safeguard assets, Teamsters General President James P. Hoffa put the local under trusteeship. “Following the assignment of a Personal Representative to investigate allegations of impropriety regarding the financial administration of Local 164, I have received a report that confirms the Local Union is not being operated in a manner consistent with the requirements of the International Constitution and federal law,” Hoffa wrote in a letter to local officers and members.

Teamsters Local 164, which represents several dozen workers at three scrap metal operations in Michigan, has leadership issues. Its president and business agent, Al Sprague, allegedly drew unemployment benefits from the State of Michigan starting in or slightly after March 2012 even while collecting a salary as the union business agent. Were that not enough, local secretary-treasurer William Bernard may have had his hand in the union till. Bernard had claimed $150,000 in unused back vacation pay, yet somehow the local had only $39,000 on hand. The international union investigated the situation and concluded that a change of the guard was needed. In his letter, dated January 30, Hoffa wrote:

Based on credible reports, I have found that Brother Bernard has not performed the duties as Secretary-Treasurer as set forth in the By-Laws, other than attending Executive Board and membership meetings. He has not drawn a salary for serving as the Local’s officer, but has received weekly payments from his accrued vacation fund. The Local Union has failed to disclose this outstanding financial obligation to the members or even the Local’s trustees.

As for Sprague, Hoffa concluded: “The President of the Local, Alan D. Sprague, has served as a Business Agent but has applied for, and received, unemployment compensation from the State of Michigan.” In all, Hoffa listed six problem areas. As an emergency measure, he appointed two persons, Greg Nowak and Kevin Moore, to serve as temporary co-trustees of the local.

Sprague, at least, is protesting his innocence. He stated that a lawsuit against the local is what triggered its funding shortfall, which in turn induced its executive board to lay him off. It was only after being laid off, he explained, that he applied for unemployment benefits. “I went off unemployment, and I continued not to receive a paycheck,” Sprague said. “I never filed for an extension.” Teamster headquarters and the State of Michigan have yet to determine whether his acts constituted fraud.