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Former SEIU leader indicted (Read More…)

July 31, 2012

Not long ago, Tyrone Freeman was a rising young star in the national labor movement, already the head of California’s biggest union local and a force in Democratic politics from Los Angeles to Washington, D.C.

Freeman’s quick climb up the ranks of the powerful Service Employees International Union burnished his reputation as an effective advocate for the disadvantaged, a man who helped improve the lot of about 190,000 workers paid about $9 an hour to provide in-home care for the infirm.
On Tuesday, however, Freeman was indicted on federal charges of stealing from those workers to enrich himself, including by billing the union for costs from his Hawaii wedding.

The 15-count indictment secured by the U.S. attorney’s office in Los Angeles also alleges that Freeman violated tax laws and gave false information to a mortgage lender. If convicted on all counts, he could face maximum prison sentences in excess of 200 years.

The charges resulted from a nearly four-year investigation by the U.S. Labor Department, FBI and Internal Revenue Service that grew out of a series of reports in the Los Angeles Times on Freeman’s financial dealings as president of SEIU Local 6434. The resulting scandal spread through the 2-million-member SEIU and cost several other union officials their jobs.

Citing records and interviews, The Times reports showed that Freeman, 42, funneled hundreds of thousands of dollars of his union members’ hard-earned dues to his relatives and lavished similar sums on golf tournaments, expensive restaurants and a Beverly Hills cigar club.

Last month, his wife pleaded guilty to an income tax charge in connection with more than $540,000 she received in union consulting payments at Freeman’s direction.

Freeman has denied doing anything wrong.

Abel Salinas, the Labor Department’s special agent in charge in L.A., said the indictment of Freeman demonstrates the government’s “commitment to investigating allegations of labor racketeering in our nation’s unions.”

The SEIU ousted Freeman shortly after The Times disclosures and barred him from the union for life. In addition, it launched an internal inquiry whose findings were forwarded to the federal investigators.

The indictment largely focuses on an alleged scheme in which Freeman illegally directed Local 6434 funds to another organization he led, the California United Homecare Workers, to pad his salary by $2,500 a month.

He is similarly accused of stealing $17,000 from the local by pocketing funds he ordered paid to a union-affiliated nonprofit group devoted to providing housing for the poor.

At the time, Freeman’s total annual compensation was more than $200,000, making him one of the highest paid union leaders in the nation. He is charged with three tax counts for allegedly failing to report about $100,000 in income from 2006 through 2008.

According to the indictment, Freeman used his union credit card to cover more than $8,000 in expenses for his 2006 wedding in Honolulu. The count involving his mortgage alleges that he lied to Countrywide Bank by claiming the union paid his personal American Express bills and the leasing costs for his Land Rover.

U.S. attorney spokesman Thom Mrozek would not comment on whether Freeman could face more charges. Mrozek said the investigation was ongoing.
Sources close to the case said the indictment contains the most clear-cut allegations, but if Freeman is convicted, prosecutors could present at a sentencing hearing information about his use of other union funds.

Still pending in state court is a civil lawsuit the union filed against Freeman and his wife, Pilar Planells, that seeks to recover more than $1.1 million they allegedly pilfered. The money allegedly financed Freeman’s lifestyle of $175 glasses of cognac, $250 bottles of wine and a $3,400 trip to the NFL Pro Bowl.
The Times also reported that Freeman routinely ordered employees of a charity he ran to work on campaigns for political candidates—a practice barred by law—according to people who said they participated in such activities.

Freeman later denied to the Internal Revenue Service that the charity employees were required to do campaign work, said a person close to an IRS inquiry into the matter.

Because they are subsidized by taxpayers, charities are forbidden to take part in campaigns for public office, directly or indirectly. Violations can cost charities their tax exemptions and lead to other penalties.

Under Freeman, Local 6434 grew dramatically, largely because of a consolidation campaign spearheaded by SEIU’s then-president, Andy Stern, who had nurtured Freeman’s rise in the union. The local had 160,000 members during Freeman’s tenure—it now lists 180,000—and remains SEIU’s biggest California chapter, the second largest in the nation. It has more members than many international unions.

Freeman also represented 30,000 workers as president of the California United Homecare Workers.

Posted by Admin on 07/31 at 10:40 PM
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