Monday, December 7, 2015

Lawsuit Spotlights $10 Million of SEIU-UHW Funds Given to Industry Execs

Dave Regan’s lawsuit against Duane Dauner (California Hospital Association) and Greg Adams (Kaiser Permanente) contains interesting details about just how closely SEIU-UHW was working with the CEOs atop California's hospital industry.

According to the lawsuit, Regan funneled $10 million of SEIU-UHW members' union dues into a bank account controlled by fatcat CEOs.

That is... until Regan's secret deal with the hospital bosses exploded in flames.

Now, Regan is suing the CEOs in hopes of recovering $7 million of the $10 million. Here's what SEIU-UHW says in its lawsuit filed Nov. 24 in Sacramento County Superior Court:
CHA and UHW committed to each other to fund CFC. In accordance with this commitment, CHA agreed to provide $80 million in funding to CFC, and UHW agreed to provide $20 million in funding. To date, CHA and UHW have contributed half of their funding obligations to CFC. CFC currently holds more than $7 million dollars of UHW contributions…   (p. 6)

What happened to the other $3 million?

Apparently, it’s already been spent. 

Regan and his CEO pals have reportedly been writing fat checks for consultants, lawyers, offices, trips, fancy meetings, and staff -- including the hiring of Peter Ragone as the Executive Director of Regan's now-defunct "partnership" organization. 
Peter Ragone: Exec Dir. of imploded partnership orgz'n

In total, $3 million of SEIU-UHW members' money has disappeared down the sewer like a prodigious purple bowel movement.

As far as the remaining $7 million, it’s currently frozen beyond SEIU-UHW's reach because, according to the terms of Regan's secret deal with the California Hospital Association, it can only be transferred with the consent of Duane Dauner, says the lawsuit.
CFC owns, possesses, and has a right to possess the funds within its bank account, including those lent to it by UHW. Defendants intentionally and in a gross abuse of their authority as Directors of CFC substantially interfered with CFC's property by terminating all operations of CFC by vetoing any proposed expenditures. (p. 18)

In other words, the $7 million is sequestered beyond SEIU-UHW's reach. "UHW has suffered and will continue to suffer substantial and irreparable harm," says the suit (p. 22).

Will SEIU-UHW members ever recover their $7 million? Good question.

And here's an even bigger question posed by observers: 

Why did SEIU-UHW's Executive Board ever authorize Regan to gamble upwards of $25 million of union members' dues on a hare-brained scheme that has exploded in flames and has landed SEIU-UHW in a desperate and expensive court battle?

Stay tuned!