Sources: SEIU's Dave Kieffer Is Axed -- Played Role in Tyrone Freeman Corruption Scandal

SEIU's Dave Kieffer

A top SEIU official who was involved in SEIU's cover-up of the Tyrone Freeman corruption scandal has been ousted from his job, according to two sources.

The official, David Kieffer, was removed from his position as the Executive Director of the SEIU California State Council, a lobbying group that spends tens of millions of dollars of SEIU members' money on political efforts.

The removal of Kieffer comes as a jury in a federal courtroom deliberates on whether to convict Freeman on more than a dozen felony counts, including embezzlement and theft of union assets. SEIU hasn't offered an explanation for Kieffer's removal. One source says it's a result of turf battles between SEIU-UHW's Dave Regan and other SEIU officials in the Golden State. They say Kieffer's firing will be publicly described as a "resignation."

How is Kieffer linked to the Freeman scandal?

Back in 2001, Kieffer was a high-level official inside SEIU's Washington, DC headquarters when a second SEIU official -- Jim Philliou -- discovered widespread corruption by Freeman. At the time, Philliou was responsible for reviewing and co-signing checks written by Freeman. That's how Phillou discovered that Freeman was funneling large amounts of money to his relatives through fake contracts.

Philliou then informed top SEIU officials such as Eliseo Medina, Tom Woodruff... and Dave Kieffer, according to Phillou's sworn testimony. Here's an excerpt from Philliou's testimony. (Here are 14 pages from Philliou’s testimony.)

Attorney:  Did you have conversations with anybody else who was working with SEIU International staff about those concerns?

Philliou:  David Kieffer, K-i-e-f-f-e-r.

Attorney:  When we talked earlier about your having given information to Sheila Velasco in 2001 -- April, May of 2001 concerning your discomfort about continuing to sign or cosign checks on the 6434 account, you also said that you spoke with Dave Kieffer.  In what month did you speak with Dave Kieffer?

Philliou:  I recall to be in the summer.

Attorney:  Summer 2001?

Philliou:  Correct.

And that’s not all. Kieffer was apparently involved in the cover-up that SEIU officials launched in 2001 to hide Freeman's embezzlement from SEIU's members and the public. According to Philliou, Kieffer spread reports about a so-called SEIU "audit" that concluded that Freeman was somehow "clean." Of course, we know that's impossible -- the precise acts of embezzlement that Philliou discovered in 2001 are the ones at the center of SEIU's corruption scandal. Here's more of Philliou's testimony about Kieffer and the cover-up:

Attorney:  Do you know whether that audit took place?

Philliou:  I don't know firsthand.

Attorney:  You don't know?

Philliou:  I don't have any firsthand knowledge.

Attorney:  Did anybody tell you the audit had been conducted?

Philliou:  David Kieffer.

Attorney:  And what, if anything, did Dave Kieffer say to you in response to your concerns when you first approached him about what was going on at 6434?

Philliou:  He told me later that there had been some type of audit and the expenditures were, quote, "questionable but legal," end quote.

SEIU's Rickman Jackson

As Tasty noted earlier, it’s unclear whether Kieffer was offed because of his links to the Freeman scandal. However, the timing of Kieffer’s firing raises interesting questions. If Freeman is convicted, will SEIU feel more responsibility to launch a full-scale investigation into all of the SEIU officials who aided and abetted Freeman for so many years?

For example, Freeman’s Chief of Staff -- Rickman Jackson -- was neck-deep in the corruption and even admitted to stealing more than $30,000 from SEIU’s members. Nonetheless, SEIU President Mary Kay Henry gave him a fatcat position inside the Purple Palace where he earns a six-figure salary. He's still on SEIU's payroll today.

And SEIU’s Steve Trossman reportedly played a pivotal role in SEIU’s cover-up operation by waging an effort to suppress any word of the scandal from leaking out to the public and law-enforcement authorities. At the time, Trossman served as the Director of Communications in SEIU's DC headquarters. In 2009, SEIU paid Trossman $120,000 in suspected “hush money” apparently disguised as “consulting fees” in federal records.

SEIU's Steve Trossman

Will SEIU attempt to actually clean its corruption-stained house? Or are SEIU’s top officials -- including SEIU’s President Mary Kay Henry, President Emeritus Andy Stern and Secretary-Treasurer Eliseo Medina -- so deeply involved in the corruption scandal that an investigation would jeopardize their jobs?

SEIU Corruption Trial: Federal Prosecutors Make Their Closing Arguments to the Jury in Case against Tyrone Freeman

Here’s the latest from the SEIU corruption trial that's taking place in a federal courthouse in Los Angeles.

A week ago, federal prosecutors rested their case after presenting multiple days of testimony to the jury. Next, it was time for SEIU’s Tyrone Freeman to make his case, and Freeman’s lawyers apparently presented only one day of testimony in Freeman’s defense. 

Then, on Wednesday, each side delivered their “closing arguments” to the jury, according to an article entitled “Ex-SEIU Top Dog Embezzled Dues for Travel, Jury Hears.” Here’s an excerpt from the article (see full text below):

During closing arguments Wednesday in the two-week criminal trial, Assistant U.S. Attorney Lawrence S. Middleton said Freeman “ran everything” in regard to the union and its funds.

“What this trial is about is who's minding the store,” Middleton said. “Because in his world, the defendant was the most powerful man on earth.”

Prosecutors claim that Freeman funneled to his relatives hundreds of thousands of dollars of union members' dues and money from a related charity. Freeman also allegedly billed the union for his wedding in Hawaii, violated federal tax laws and lied to a mortgage lender at Countrywide Financial Corp.

So who sat in the witness box during prosecutors’ case? Tasty doesn’t have a complete list, but here are some of the witnesses: 

• Katinka Walker (she testified that in August of 2006, Freeman was in Hawaii getting married to Pilar Planells)
• Alicia Carrera (the Finance Director for SEIU Local 6434)
• Nicole Ward (the Political Director at SEIU Local 6434. She helped Freeman get tickets to the Pro Bowl game in Hawaii.)
• Amelia Faulan (she became Freeman’s personal assistant after Freeman married his first personal assistant)
• Deidrea Sherman (an SEIU official who served as a trustee of SEIU Local 434B)
• Dereck Smith (the Chair of the Board of the Long Term Housing Corporation, which helped carry out one of Freeman’s embezzlement schemes. Smith also served as SEIU Local 6434’s Director of IT.)
• Desiree Burton (an executive at a not-for-profit that operates continuing care retirement communities)
• Carl Anthony Lee (the CEO of Dickerson Employee Benefits, which was involved in several of of Freeman’s schemes, including the multi-million-dollar TelaDoc scam that was foisted on SEIU’s low-wage members)
• Two employees from the University of Hawaii who testified that there’s no record of Freeman ever attending an “executive management class” at the university in August of 2006.

And who took the witness stand during Freeman’s case? Not clear. Curiously, the court has blocked access to the list of the defense team’s witnesses. Why? Good question.

In other trial news, Andy Stern’s name was batted around the federal courtroom this week. And a letter written by Stern, who’s SEIU’s President Emeritus, was presented to the jury. In the 2006 letter, Stern announces that he's personally appointing Freeman to his position atop a union of 160,000 SEIU members. Stern then reportedly stood by as Freeman robbed and plundered between $14-15 million from low-wage workers, according to sworn testimony from a top SEIU official.

Here’s an excerpt from Stern’s letter, which was presented to the jury on January 15th:

Dear Brother Freeman:

Consistent with my authority under Article XIV, Section 1 of the SEIU Constitution and Bylaws, I hereby establish SEIU United Long Term Care Workers Union, Local 6434. This local union shall have jurisdiction for long term care workers throughout the state of California as set forth in the June 2006 International Executive Board (IEB) decision on California local union jurisdiction.

In addition, I hereby name you as the Provisional President of the local union...

Here's the full letter:

   Letter from SEIU President Andy Stern to Tyrone Freeman appointing Freeman as president of SEIU Local 6434... by   tastysternburger

Again, it's super revealing that Stern made this appointment a full five years after he’d reportedly received reports about Freeman’s fraud, theft and corruption. Was Stern concerned that Freeman was literally stealing wheelbarrows of cash from the union's members? Nope.

The jury also heard testimony about the Purple Palace’s 2006 decision to create a “new jurisdictional structure for California’s long-term care workers,” which was personally backed by SEIU President Mary Kay Henry. This decision gave Freeman the responsibility for an additional 40,000-50,000 SEIU members… and importantly handed Freeman access to millions more dollars of workers’ dues payments.

Finally, here’s the article describing the closing arguments to the jury, which took place Wednesday:

Ex-SEIU Top Dog Embezzled Dues For Travel, Jury Hears

Law360, Los Angeles (January 23, 2013, 8:37 PM ET) -- Tyrone Ricky Freeman, former top official for the biggest Service Employees International Union branch in California, embezzled union members' dues by taking personal trips, including one to Hawaii, and committed other acts of fraud, a federal prosecutor told a California jury in closing arguments Wednesday.

Freeman was the president of Local 6434 of SEIU from 2000 to 2008 and is facing 14 criminal counts, including mail fraud, embezzlement of labor union assets, making false statements and subscribing to a false tax return. He was indicted in July.

During closing arguments Wednesday in the two-week criminal trial, Assistant U.S. Attorney Lawrence S. Middleton said Freeman “ran everything” in regard to the union and its funds.

“What this trial is about is who's minding the store,” Middleton said. “Because in his world, the defendant was the most powerful man on earth.”

Prosecutors claim that Freeman funneled to his relatives hundreds of thousands of dollars of union members' dues and money from a related charity. Freeman also allegedly billed the union for his wedding in Hawaii, violated federal tax laws and lied to a mortgage lender at Countrywide Financial Corp.

But Kelly B. Kramer of Mayer Brown LLP, one of Freeman's lawyers, told the jury that the case “screams reasonable doubt.”

“There's not remotely enough [evidence] here to conclude that Mr. Freeman embezzled union funds beyond a reasonable doubt,” Kramer said, adding that Freeman was entitled to an acquittal if he acted in good faith while spending the money as Local 6434 president.

“If Mr. Freeman had a good faith belief that he was entitled to the money, even if he wasn't, it is a complete defense,” Kramer said.

Kramer also told the jury that Freeman conducted business on his wedding trip, which cost $30,000.

Kramer accused federal agents investigating the case of “cherry-picking” facts and ignoring evidence of Freeman's innocence in order to convict him.

Local 6434 of SEIU, known as United Long Term Care Workers, had more than 160,000 members during Freeman's tenure as president, making it the largest in California and the second-largest in the nation.

Freeman was also the president of California United Homecare Workers, which had 30,000 members when he led it, according to the Los Angeles Times, whose reporting on Freeman's financial dealings spurred a federal criminal investigation.

Pilar Planells-Freeman, Tyrone Freeman's wife, pled guilty in July to a misdemeanor count of willful failure to file an income tax return. Planells-Freeman was sentenced to three years probation and ordered to pay more than $129,000 in back taxes to the Internal Revenue Service. The charge was connected to money she received in consultant payments from SEIU.

Freeman is represented by Kelly B. Kramer and William B. Michael Jr. of Mayer Brown LLP.

The case is USA v. Tyrone Ricky Freeman, case number 2:12-cr-00734, in U.S. District Court for the Central District of California.

--Editing by Lindsay Naylor.

 

Busted Again: NLRB Orders a Re-Run Election at Another California Hospital Due to SEIU-UHW’s Collusion with Boss

Several days ago, an NLRB Hearing Officer issued a 36-page decision that overturns SEIU-UHW’s narrow election victory at Seton Medical Center, a hospital just south of San Francisco, and orders a re-run election for the hospital’s 750 workers. The full decision is posted below.

The action is similar to one in 2011, when a judge overturned the results of the giant Kaiser election following serious lawbreaking by Kaiser Permanente and SEIU-UHW.

So what happened at Seton Medical Center?

Last March, SEIU-UHW eked out a six-vote victory in a hotly contested election in which workers sought to decertify SEIU-UHW and join NUHW.

During the election, the hospital’s execs threw their full weight behind SEIU-UHW, which has partnered with company execs to slash and burn workers’ wages and benefits. More on that below.  

After the election, the NLRB conducted a trial to investigate multiple allegations of violations committed by SEIU-UHW and management during the election. According to the 36-page decision, the Hearing Officer ultimately concluded that SEIU and the Boss violated five separate areas of labor law.

Here are some excerpts:

I have found that the Employer engaged in objectionable conduct by discriminating in favor of SEIU in the application of access, solicitation, distribution, and bulletin board policies at Seton Medical Center. (p. 33) 

Translation: Basically, the Boss gave SEIU-UHW the green light to do whatever the f*ck it wanted to try to win the election, while siccing its security guards on NUHW and its supporters. In one incident that's referenced in the decision, the manager of the hospital’s EVS Department allowed five SEIU organizers to conduct a “captive audience” meeting with EVS workers who were trapped in a departmental meeting run by their manager.

Here are additional excerpts:

On the basis of the foregoing evidence, I find that the Employer permitted SEIU representatives access to non-public areas of the hospital to engage in electioneering activity and that it did not permit NUHW representatives the same access rights. (p. 24)

It is clear, however, that the Employer discriminatorily applied such policies against NUHW regarding the solicitation of employees and the distribution of literature in the break rooms. (p. 30)

The Employer knowingly permitted SEIU to post campaign materials in the bulletin boards while not permitting NUHW to post campaign materials... (p. 32)

In fact, the Hearing Officer’s report describes how managers admitted to ripping down workers' pro-NUHW materials from bulletin boards in break rooms, while giving carte blanche to SEIU organizers to put up their materials.

So what motivated the Boss to give all of this "unlawful assistance" to SEIU-UHW?

Well, ever since Dave Regan parachuted into California, SEIU-UHW has given away hundreds of millions of dollars in concessions to both Seton Medical Center and its parent company, the Daughters of Charity Health System.

In fact, just two months after SEIU-UHW won the fraudulent election at Seton, Regan inked a deal with the company’s bosses to eliminate workers’ defined-benefit pension plan and replace it with a cheap 401(k) plan. Regan also slashed SEIU-UHW members’ health benefits, forcing them to pay more than $300 in monthly premiums for health coverage that previously was free to workers. And he doubled workers’ out-of-pocket costs for doctors visits and instituted an invasive Wellness Program.

And that’s not all… Regan then rammed these concessions down workers’ throats in another act of arrogant lawbreaking. Regan knew that workers didn’t support these massive cuts to their benefits, so he announced SEIU's contract ratification votes late on a Saturday night and began the voting just nine hours later... at 6:00am on a Sunday morning!

According to SEIU-UHW’s constitution, union officials must give the membership at least three days of advance notice before starting a ratification vote so workers can review the proposed agreement and discuss it among themselves. When workers demanded that Regan and SEIU President Mary Kay Henry stop Regan's unconstitutional vote, they refused. So workers filed formal charges against Regan and  Henry for violating their rights under SEIU’s own constitution.  

It’s quite a story... and one that highlights the multiple kinds of lawbreaking and collusion used by Regan and SEIU to sell out workers.

Finally, a well-earned congrats to the workers at Seton Medical Center for winning their fight for a fair election at the NLRB!

   NLRB's Decision to Overturn Election Results at Seton Medical Center due to Violations by SEIU-UHW and Empl... by   tastysternburger