Trustees of the Nat'l Elec. Benefit Fund must pay more than $4.9 million to reimburse the fund under a consent order settling Dep't of Labor charges that they breached their fiduciary duties under ERISA by investing in a Fla.. real estate limited partnership. The two trustees, Jack Moore and John Grau, also agreed to pay a civil penalty of $555,000 under the consent order signed Oct. 16 by the U.S. Dist. Judge Deborah K. Chasanow (D. Md., Clinton). The order resulted from a suit filed in May 1999 by DOL's Pension & Welfare Benefits Admin., alleging that the trustees imprudently loaned pension plan assets to a corporation for certain real estate purchases linked to tainted Clinton family fundraiser and Democratic Nat'l Committee Chairman Terence McAuliffe.
Moore and Grau denied the allegations, but entered into the agreement with DOL after Williams ruled in July that DOL could proceed with its suit. U.S. Dist. Judge Alexander Williams, Jr. (D. Md., Clinton), denied the trustees' motion for summary judgment, rejecting their contention that they did not breach their fiduciary duties because the real estate transactions had beneficial results.