September 18, 1999
Several officers in the Las Vegas local of the American Postal Workers Union are being asked to substantiate union expenditures totaling more than $165,000.
A preliminary examination by a Chicago auditing firm outlines numerous discrepancies in the financial records of Local 761, including questionable credit card charges by union officials for "what appears to be for personal purposes."
The local's vice president and its treasurer have resigned since a union member sought the audit earlier this year.
The apparent unwillingness of union leaders to cooperate in the investigation has frustrated both the outside auditor and a Las Vegas labor attorney who withdrew his representation of the 1,000-member local over the issue.
"Based on our preliminary examination of the documents of the union, we believe sufficient predication exists to conduct a thorough fraud examination of the union records," Craig Greene, a partner in Rome Associates LLP of Chicago, wrote in an Aug. 12 report to union members.
In addition to the credit card charges, the report found:
• A substantial number of missing documents and lack of cooperation in making financial records available for examination.
• Large checks written in whole amounts to union officials.
• Entries in disbursement account records that differ from the actual written check amounts.
• Large and unreasonable account variances from one year to the next.
These findings are based on about half of the documents requested by Rome Associates, the report said. The remainder of the documents, including bank statements, check stubs, credit card statements and required federal reports, were either missing, incomplete or not submitted
Union member Robert Trentino said he initially contacted Rome Associates in January about examining the union's finances, and was joined by fellow members Stephen Zarski and Felix Estrada in the push for an audit and the hiring of an attorney. In May, the membership voted to pay $3,000 for the examination of records from 1994 to 1998, Trentino said.
Shortly before the audit was scheduled to begin on Aug. 10, Local 791 Vice President Kaleen Williams, who according to the Chicago auditors' findings, had $42,820 in questionable charges during those years, resigned her post.
Treasurer Deborah Partida was found to have more than $103,000 in unaccountable charges, the auditors found, and was absent from a membership meeting Sept. 11 where a decision was made to strip her of her financial responsibilities. She quit her post this week.
Union President Billy Harrell said he's in the process of obtaining checks from his bank to show he's repaid his $9,100 in charges.
"I did nothing wrong," he said. "I offered to let them (union members) look at my carbon copies and at the letter I've written to the bank, and nobody would listen. They didn't want to look at them."
The union's financial records were to be given to attorney Richard Dreitzer, formerly with the law firm of Gugino & Schwartz, for examination by Rome Associates at his office.
However, Greene said he received several phone calls from Harrell in June informing him that union credit-card statements were missing and that he was trying to obtain copies from the issuers.
On Aug. 6, the union sent a letter to Dreitzer informing the attorney that a committee established by a vote of the membership had called off the scheduled Aug. 10 audit. The reasons given were Dreitzer's failure to deal with John Toth, a liaison of the audit committee, and that the background scope of the audit had not been given to the committee.
Sharon Robles, who replaced Williams as the union's vice president in July, said an audit is now being conducted by another firm, which she declined to name. At the Sept. 11 general membership meeting, the union announced that Layton Layton & Tobler LLP of Las Vegas had taken over the audit upon recommendation of the national union. Don Layton, one of the principals in the accounting firm, refused to discuss the audit.
However, Trentino said the membership was told by Toth that Layton had found even more discrepancies, and that the audit would not be completed until next year. He also said Layton was charging $30,000 for the audit.
"They're finally not denying that there's a problem," Trentino said. "They realized I wasn't the demon they thought I was."
Harrell, the local's president, said he was never given a chance to respond to the questions when they were first presented to him, and that when he was able to respond, he answered every inquiry.
For example, the auditors questioned a receipt from Office Depot in the City of Industry, Calif., and Harrell said that's because a delivery was charged through its origin, the City of Industry.
David Barnes, an investigator with the U.S. Department of Labor in San Francisco, would neither confirm nor deny that his agency is working on this case.
"We have heard from members in the union," Barnes said. "They're coming up on election of officers, so we don't want to influence those. There are a lot of political ramifications to this."
Nominations of officers for Local 761 are due in October, with an election set for November.
"This all has to do with the elections that are coming up in my mind," said Harrell, who has served as the union president since 1979.
Dreitzer said he was caught in a conflict of interest -- being paid for his services by a union that did not want him to carry out his job. In an Aug. 18 letter to Harrell, the attorney said it was clear that the union had "absolutely no interest in seeing the financial improprieties within Local 761 exposed or in any way rectified."
Furthermore, he laid into the union for "attempting to manipulate the will of Local 761" behind the audit committee, which consists of persons "who are ardent supporters of your administration and are committed to preservation of the status quo."
Also in his withdrawal letter, Dreitzer wrote, "Please know that regardless of your futile attempts to prevent the improprieties of your administration of Local 761 from emerging, facts do not lie. Questionable entries on bank records, credit card accounts, mortgages and other financial documents cannot cease to exist simply because you refuse to acknowledge them.
"In short, whether my representation is able to accomplish it or not, the truth will emerge in this matter. In the weeks and months ahead, when you lay awake at night terrified by the inevitable revelations of wrongdoing in this affair, please remember, the truth will emerge."
Copyright © Las Vegas Review-Journal
Questions or comments?