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Last Updated: Aug 10, 2008 - 9:25:10 AM |
California's largest union local and a related charity have paid
hundreds of thousands of dollars to firms owned by the wife and
mother-in-law of the labor organization's president, documents and
interviews show.
The Los Angeles-based union, which represents low-wage caregivers, also
spent nearly $300,000 last year on a Four Seasons Resorts golf
tournament, a Beverly Hills cigar club, restaurants such as Morton's
steakhouse and a consulting contract with the William Morris Agency,
the Hollywood talent shop, records show.
In addition, the union paid six figures to a video firm whose
principals include a former union employee. And a now-defunct minor
league basketball team coached by the president's brother-in-law
received $16,000 for what the union described as public relations,
according to the union's U.S. Labor Department filings and interviews.
Most of the 160,000 people represented by the union, a local chapter of
the nation's fastest-growing labor organization, the Service
International Employees Union, earn $9 an hour or slightly more tending
to the infirm and disabled in private homes under taxpayer-funded
programs. The workers, whose dues fill the local's coffers, often are
described as "the poor caring for the poor." In its Labor Department
filings, the local, headed by Tyrone Freeman, has reported more
liabilities than assets for each of the last three years.
Freeman, who leads the United Long-Term Care Workers, said he and his
union have done nothing wrong. "Every expenditure has been in the
context of fighting poverty," he said.
A rising star in labor circles, Freeman, 38, said the union's members
have benefited from the money spent on the video production and
day-care companies that his wife and mother-in-law operate at their
homes, because of what he termed the high quality of the services.
The union and the charity have paid those firms at least $405,700 since
January 2006, not counting any outlays this year.
Nelson Lichtenstein, director of UC Santa Barbara's Center for the
Study of Work, Labor and Democracy, said the local's spending recalls
the excesses of organized labor's past.
"It's very important for unions not to do this kind of thing," he said.
"Union leadership is a public trust -- all the more so when the people
being represented are among the lowest-paid in America."
Based on documents filed with the Labor Department and Internal Revenue
Service, the Guidestar nonprofit database, business records submitted
to several state and local agencies and numerous interviews, a Times
investigation has also found that:
* Payments to the company owned by Freeman's wife were among the
local's largest single expenses last year. Payments by the charity, the
Homecare Workers Training Center, to his mother-in-law's firm
represented more than 10% of the nonprofit's total annual expenditures.
* A housing corporation that Freeman helped found as a nonprofit has
not been granted the IRS tax-exempt status it sought and was suspended
from doing business in California. It also has claimed on its website
to have a "strong relationship" with the prominent California Community
Foundation, which says it has no such relationship.
* The union spent at least $123,000 more on the fund-raising tournament
at the Four Seasons Resort in Carlsbad than it received in
reimbursements, according to Labor Department filings and interviews.
Freeman said the event made money for the charity. The union's
expenditures included $100,000 in payments to entities associated with
former professional football star Eric Dickerson, which have been
suspended from doing business in California. The payments were listed
as donations to nonprofits, not as fund-raising expenses.
* The local's nearly $10,000 tab at the Grand Havana Room, a cigar
lounge known for its celebrity clientele and invitation-only
memberships, was for "lodging," according to the union's annual
financial report. A Grand Havana spokeswoman said the club does not
provide accommodations. Freeman declined to characterize the
expenditure, and after The Times inquired about it, he said he had
refunded it.
Freeman's local has grown dramatically in recent years, largely because
of a consolidation campaign spearheaded by Andy Stern, president of the
2-million-member SEIU. The local is SEIU's biggest California chapter,
the second biggest in the nation -- and it is bigger than many
international unions. Freeman also represents 30,000 workers as
president of an affiliate, California United Homecare Workers.
Stern, among the most influential labor leaders in America, has
denounced excessive pay and perks for union officials.
He and his spokesman would not answer questions about Freeman, who
ranks among the country's better-paid local labor chiefs, receiving
$213,000 in salary and other compensation in 2007.
In an e-mail, Stern spokesman Steve Trossman said: "As far as I can
determine, the International Union has not received allegations
concerning [Freeman's local]. If the International Union receives
allegations about a local that warrant further action, we have internal
union procedures for handling them."
Video production
Freeman's wife, Pilar Planells, 28, was a union staff member until
2006, earning more than $50,000 as an executive assistant. She left the
local to pursue an entertainment industry career, according to another
former employee. That year, Freeman's local paid roughly $36,000 to
Planells' firm, Lotus Seven Productions. In 2007, the local paid the
company about $178,000, annual financial reports filed with the Labor
Department show.
Labor Department officials said they have no record that Freeman
filed a 2006 disclosure form that requires union officers to reveal
payments to entities in which a spouse has an interest.
The officials said Freeman filed the 2007 form more than four months
after the deadline, on July 17, about a week after The Times raised
questions about the payments to Lotus Seven.
He also did not identify his wife on the financial reports as the owner
of the firm.
Freeman said Lotus Seven has produced 10 videos that promote the
local's work and have been shown on lease-access cable channels. He
said that the company won the contract through a competitive bidding
process and that his wife did not personally profit from the payments
to her company.
"She only gets reimbursements," Freeman said. "She does not profit at
all."
Freeman said Lotus Seven had other paying clients, but he declined to
provide their names or respond to questions about whether the firm
received more payments from the union this year.
Pilar Planells, who also uses the stage name Pilar Sharai, declined to
be interviewed. In a letter to The Times, she said of the video
contract: "Any money that was left over after paying staff and expenses
went back into the company."
Los Angeles city officials said Lotus Seven does not have a business
license for the couple's Studio City address. No other address for the
firm could be found, nor could a phone listing.
Freeman said that a union committee solicited bids before awarding the
contract. The local did not respond to questions about the bidding
process.
"At one time it was on our website, I do remember that," Freeman said
of efforts to advertise for bids. "And then that was it, I mean, and
the word goes out. . . . I stayed away from it."
Two losing bidders for the video contract, Freeman said, were Grand
Ma's Watching Productions, whose incorporation papers list former union
employee Brian Cheatham as chief financial officer, and The Filming Inc.
The two entities still received money from the union, according to the
local's Labor Department reports.
Last year, the local paid about $147,000 to Grand Ma's Watching for
other video work, Freeman said. It paid the company about $72,000 in
2006 for consulting. Calls to Grand Ma's Watching, which produces music
and awards show videos, were not returned.
The Filming was paid nearly $106,000 by the union, but Freeman said he
had no information about the entity or the work it performed.
"I would suggest you track them down," he said.
The union's financial report forms describe $82,000 of the payments to
The Filming as a contribution to a nonprofit organization; the other
$23,650 was reported as advertising and promotional expenses for the
golf tournament.
No state incorporation record or IRS nonprofit listing for The Filming
could be found, and the Los Angeles address given for it on the union's
financial report could not be located. L.A. city officials said no
business license has been issued for a company of that name at such an
address.
Day-care contract
Carmen Planells, Freeman's mother-in-law, provides day care at her Los
Angeles home. Her business had been receiving more than $90,000
annually for the past several years from the training center that
Freeman founded as a separate nonprofit and chairs, according to IRS
filings and interviews. Freeman's wife and brother-in-law, Hernando
Planells Jr., are listed in state documents as officers in the
mother-in-law's business.
Freeman said the day-care contract was awarded to Carmen Planells
several years before his 2006 marriage to her daughter. The state birth
registry shows that Freeman and Pilar Planells are the parents of a
daughter born in 2001.
Asked about the day-care payments, Freeman responded, "She wasn't my
mother-in-law when she got the contract."
Freeman said the day care was available to anyone who applied for it
and that he did not use it. He added that his mother-in-law has been
providing the service since 2000. IRS records show that the training
center began reporting itemized payments for day care -- initially
about $92,000 -- in 2002.
In a telephone interview, Carmen Planells said she still had the
day-care contract. "Is there something wrong with that?" she said,
before declining to answer more questions.
After The Times inquired about the contract, Freeman said the training
center's board would review it.
Hernando Planells Jr., listed in state records as one of three
officers of the day-care service, was also coach of the Hollywood Fame,
a former American Basketball Assn. franchise, according to the team's
general manager, Carl Williams. The team received $16,000 from
Freeman's local in 2006, the union's financial report shows.
Freeman did not respond to questions about the payment, and Hernando
Planells Jr. could not be reached.
Another sports undertaking was the Four Seasons golf tournament last
year, which Freeman said netted $80,000 to $100,000 for the training
center and the housing group. The Long-Term Care Housing Corp. is a
separate entity from the local, but its "primary goal" is to help union
members obtain affordable housing, according to its website.
The local's financial report shows that it spent $418,000 on the event,
not counting about $7,000 in unspecified lodging costs at the Four
Seasons. That was at least $123,000 more than the local received in
return. Some reimbursements may still be outstanding, Freeman said.
Lichtenstein said the tournament spending was troubling under any
circumstances.
"I don't care if they're making money or not," he said. "It's
disconnected from the world of the people they're representing. No
one's playing golf who's a home healthcare worker."
The local's costs for the tournament included a combined $100,000 in
payments to two entities associated with Dickerson, the former Los
Angeles Rams running back and a co-host of the golfing fund-raiser.
Another NFL Hall of Famer and tournament host, Jackie Slater, was paid
$30,000 in consulting fees.
Freeman said the gridiron greats helped raise much more money than the
sum paid to the Dickerson entities and Slater. Dickerson "only got a
portion of what he raised," Freeman said. "If he didn't raise it, he
wouldn't have got it."
Dickerson did not respond to interview requests.
In a brief phone interview, Slater said a former teammate had asked him
several years ago to "help the workers" by hosting the tournament.
The union money that went to the Eric Dickerson Foundation and
"Dickerson Sports" was recorded on the local's financial report as
contributions to nonprofits, not as fund-raising expenses for the
tournament.
The state Franchise Tax Board has suspended Dickerson Sports from doing
business for failing to file a statement of corporate officers in 1999,
a spokesman said.
The tax board has also suspended the Dickerson foundation for failing
to file numerous tax returns, the spokesman, John Barrett, added.
Dickerson Properties has been suspended for not submitting tax returns
or a corporate statement of officers, Barrett said. All the suspensions
remain in force.
In addition, the tax board suspended Long Term Care Housing Corp.'s
right to do business because it had not filed tax returns since Freeman
founded it in 2004.
After the Times inquired about the suspensions, a law firm for the
housing entity said in a memo that tax-exempt status had been "delayed"
because the IRS had made a "routine" request for additional
information. The memo did not say when the request was made.
The memo said the housing organization has filed its tax returns. As a
result, the Franchise Tax Board lifted the suspension Thursday, a
spokeswoman said.
On its website, the corporation says it has "a strong relationship with
the California Community Foundation, and they are currently building 13
new homes" in Lancaster. It said the foundation was "helping us
purchase land."
"No one here has ever heard of the group," said California Community
spokeswoman Namju Cho. She said the foundation asked the corporation to
remove the statement from the website, and the corporation did so this
week.
The site lists a Bell Gardens address for the corporation. County
property records show that the address is that of a home owned by
Freeman's former chief of staff, Rickman Jackson, who now heads a local
in Michigan. He did not return phone calls.
Freeman said he did not know if the housing organization paid Rickman
for use of his residence.
All of the local's expenses were justified, Freeman said, including
$41,500 last year at three restaurants. The union had tabs of $12,500
at Morton's in Burbank. The restaurant bills were for meetings of the
local's executive board and "large numbers of workers," he said.
William Morris, which represents people in the entertainment
industry and provides consulting services to companies, received
$106,000 from the union last year.
Freeman and his representatives said the contract was for public
relations and advancing the union's political agenda.
In an e-mail, a William Morris spokesman said the agency provided the
union with strategic analysis and "advice and counsel" in such areas as
media and "membership awareness."
Neither Freeman nor the William Morris spokesman, Christian Muirhead,
would offer specific examples of the agency's services to the union.
Freeman said the contract had nothing to do with his wife's
entertainment industry work.
Source:Ocnus.net 2008
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