Los Angeles Boss Probed for Fundraising, Spending; Resigns

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The Service Employees International Union under President Andrew Stern, as this publication has noted more than once, is committed to maximizing membership in its own ranks and in the labor movement as a whole.  Part of this ongoing campaign involves backing union-friendly political office-seekers.  But in Southern California this alliance has produced a downside:  bad publicity and a pair of investigations.  The focus of attention is SEIU Local 6434, also known as the United Long-Term Care Workers, and its embattled president, Tyrone Freeman.  On Thursday, August 21, Bernard Parks, a Democratic candidate for the Los Angeles County Board of Supervisors, demanded that his opponent, Mark Ridley-Thomas, also a Democrat, return more than $4.5 million raised by a union-led alliance whose driving force is Freeman.   

 

Tyrone Freeman, 38, has been a rising star this decade in the firmament of the Service Employees, now claiming at least two million members.  His local now has around 160,000 members, thanks to an aggressive organizing and consolidation strategy.  He also heads another union, the 30,000-member California United Homecare Workers, a joint affiliate of the SEIU and the American Federation of State, County and Municipal Employees (AFSCME).  Responsibility for a tenth of the entire SEIU membership didn’t come about by accident.  Andrew Stern has been behind Freeman all the way.  Last year, he even transferred key functions to Freeman and away from Sal Rosselli, who heads an SEIU California affiliate, the 140,000-member United Healthcare Workers-West, locked in mortal combat with Stern lately.  But Freeman’s career suddenly has hit a detour.  Indeed, his tenure as a union chieftain might be over.  SEIU headquarters in Washington, D.C. is conducting an investigation into whether Freeman and his allies illegally raised more than $5 million in political donations from Local 6434 members.  And the U.S. Department of Labor reportedly is conducting its own probe of certain patterns of spending and governance. 

 

The local’s political allies are hoping they don’t get burned.  One of them is Mark Ridley-Thomas.  He’s in a tight race against Bernard Parks for the heavily black 2nd District seat on the Los Angeles County Board, soon to be vacated by the retiring Yvonne Burke.  Parks, former Los Angeles city police chief and current city council member, lost to Ridley-Thomas, a California state senator, in the June primary by a 45%-40% margin, setting up a November runoff.  Union donations, Parks believes, have given his opponent an unfair advantage.  Parks declared:  “Mr. Ridley-Thomas, how do you feel about benefiting from the money of people who are hovering just above the poverty line?  Give the money back to the people who need it most.”  The union doesn’t think much of this allegation.  Steve Barkan, a political consultant to Ridley-Thomas, calls Parks’ request “silly.”  He adds that Parks received a donation of $500 from Freeman’s union during his successful 2007 city council re-election campaign.  What’s more, Barkan said, Parks during the present campaign has received donations from contractors with the Los Angeles County Metropolitan Transportation Authority on whose board he sits. 

 

Parks has been getting substantial help from the business community, most prominently retired Los Angeles Lakers basketball superstar Magic Johnson.  But the fact remains that Barkan’s client, Mark Ridley-Thomas, has been working some magic of his own through union fundraising that appears way out of proportion – and out of bounds.  Area labor organizations thus far have raised at least $4.5 million on his behalf, mainly through an independent expenditure committee, the Alliance for a Stronger Community.  Tyrone Freeman’s SEIU local is a key funding source in this alliance, having already contributed at least $468,000. 

 

Formally, the organization isn’t involved in campaign coordination with the candidate, and thus doesn’t have to adhere to a state $1,000-per-person contribution ceiling.  Moreover, because the union’s donations have been indirect, the candidate can’t be forced to give back any money. But that doesn’t make things right, say critics of the union.  What’s more, they add, SEIU Local 6434 has been generous outside the confines of the committee as well.  It has spent at least $35,000 on Ridley-Thomas campaign spots on KJLH-FM, a top-rated area black radio station.  It also shelled out $22,000 for full-page ads on the candidate’s behalf in the black newspaper, the Los Angeles Sentinel.  Back in January – even before the campaign began – the union took out a full-page ad in the Sentinel as a “salute” to Ridley-Thomas that was not listed officially as a campaign expense.  That’s called going the extra mile.

 

But in its victory-at-all-costs mentality, SEIU Local 6434 may be in violation of federal labor law.  In addition to the $4.5 million raised by the Alliance for a Stronger Community, Bernard Parks charges that the local has amassed a $5 million political war chest thanks to illegally-generated dues.  And the dues have come mainly from home health workers who hold jobs in private extended-care facilities under contract with the Los Angeles County Public Services Assistance Council.  The council, in fact, made the initial complaint.  Under its existing collective bargaining agreement, the union negotiates on behalf of workers, but at the same time must allow employees the right not to join provided they pay agency fees, typically set lower than union dues.  At least they were set lower.  Last year the union raised fees to the full member rate.  County officials consider the hike excessive and in violation of the contract.  Parks argues the move has everything to do with politics.  “Is it any coincidence,” he asked at a press conference, “that the charges began to be implemented in October (2007), the same month Ridley-Thomas announced his candidacy for county supervisor?” 

 

Such questions aren’t the only ones Tyrone Freeman has been facing these days.  Investigative reporter Paul Pringle of the Los Angeles Times indicated that SEIU Local 6434 and a related charity paid out slightly over $400,000 in contracts to firms controlled by Freeman’s wife, Pilar Planells, and her mother, Carmen Planells, during 2006-07.  His wife, 28, had been a union staff member until 2006, when she left to pursue a career as a video production assistant.  According to union financial reporting forms, Freeman’s local paid about $36,000 to her firm, Lotus Seven Productions, in 2006, upping that to $178,000 in 2007.  Additionally, a nonprofit organization founded by Freeman, the Homecare Workers Training Center, has given $100,000 a year to a day care service operated by Carmen Planells.  Expenditures also went to friends, most significantly, $219,000 to a small video firm run by Brian Cheatham, a former union employee.  While Freeman denied he and his wife were close to Cheatham, three former union employees, preferring to remain anonymous, stated otherwise.  The union also made an $82,000 payment to a Florida video firm whose owners claimed they never received.

 

Anonymity may be a good survival strategy at SEIU Local 6434.  Several union staff members have spoken of being pressured by Freeman’s lieutenants to sign a petition in support of him.  Some who initially refused wound up being transferred to positions far from their homes.  About 10 workers who balked had their union-paid cell phone service discontinued.  “It’s essentially a loyalty oath,” said one worker, who called the atmosphere “very tense…There’s a lot of intimidation.”  

 

Freeman loyalists may be enjoying the good life too much to take notice.  Like Service Employees Local 1199, the union’s East Coast equivalent, Local 6434 likes to throw parties.  Records show that the union in 2007 alone spent roughly $300,000 on events such as a golf tournament at the Four Seasons Resort, dinners at Morton’s steakhouse and other high-end restaurants, meetings at a Beverly Hills cigar lounge, and a consulting contract for the famed Hollywood talent firm, the William Morris Agency.  As regards the cigar lounge, there’s been a bit of creative stretching of the truth.  The union classified its expenses at the Grand Havana Room as “lodging,” according to its DOL financial reporting form, though its owners denied it had such facilities.  Undaunted, Tyrone Freeman brushes off suspicions that his union has been a hotbed of corruption or nepotism.  “Every expenditure has been in the context of fighting poverty,” he says, insisting union members have benefited from contracts to his wife and mother-in-law.  Perhaps a better anti-poverty strategy would have been to negotiate a contract that raises member wages from the current average of $9 an hour, which on an annualized basis adds up to far less than Freeman’s 2007 total income of $213,000.          

 

All of this has triggered a pair of investigations.  The U.S. Department of Labor, pursuant to longstanding policy, won’t affirm or deny the existence of a probe it allegedly is conducting of SEIU Local 6434, but various sources say DOL is on the case.  On top of that, the international union has launched its own investigation, and has asked Freeman to step aside for the time being.  On August 20, Freeman, through a written statement, announced he was taking a leave of absence.  Stern’s people aren’t taking any chances, especially given that the Labor Department may be looking over their shoulder.  “We are deeply concerned about these allegations,” said SEIU spokeswoman Michelle Ringuette.  “We are cooperating fully.  We will not tolerate in any leader actions that threaten the best interests of our members.” 

 

The Service Employees union has placed Local 6434 under temporary trusteeship.  Yet even now, Freeman loyalists in Los Angeles aren’t about to return any of the union’s political contributions to Mark Ridley-Thomas.  “Mr. (Bernard) Parks’ call certainly sounds like another effort to silence the voice of working people,” said local spokesperson Scott Mann.  Evidence suggests these working people never had much of a voice to begin with.  (Los Angeles Times, 8/9/08; 8/21/08; 8/22/08; 8/28/08; other sources).