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Investigation of spending by care workers' union is sought
Advocates for low-wage caregivers called on authorities Monday to investigate the spending practices of a Los Angeles union and a related charity that have paid hundreds of thousands of dollars to firms owned by the wife and mother-in-law of the labor organization's leader.
"This is very serious," County Supervisor Zev Yaroslavsky, whose 1990s legislation allowed the union to organize home-care workers here, said of the financial transactions disclosed by The Times.
"The authorities responsible for policing these kinds of things ought to review these allegations, and if there is any merit to it, delve into it and get to the bottom of it," he said.
Most of the 160,000 people represented by the United Long-Term Care Workers, the largest union local in California, earn $9 per hour or slightly more tending to the elderly and infirm in their residences, under taxpayer-funded programs. Others work in nursing homes.
Patricia L. McGinnis, executive director of the California Advocates for Nursing Home Reform, said the union president, Tyrone Freeman, should be removed from office until any government probe of the union's spending is complete.
"I don't see how these expenditures can be justified," she said. "It's shocking."
U.S. Department of Labor spokesman Loren Smith declined to say whether the agencywould launch an inquiry, but added that its enforcement arm has "the ability to investigate based on almost any source of information, including media reports."
The Times reported Saturday that the union and charity had paid at least $405,700 since 2006 -- not counting any outlays this year -- to the firms owned by relatives of Freeman, who is chairman of the nonprofit's board.
In addition, the union last year spent nearly $300,000 on a Four Seasons Resorts golf tournament, a Beverly Hills cigar club, restaurants such as Morton's and a consulting contract with the William Morris Agency, the Hollywood talent shop, records show.
The union paid a combined $219,000 in 2006 and 2007 to a video firm whose principals include a former employee of the local, according to Labor Department filings and interviews. And a now-defunct minor league basketball team that Freeman's brother-in-law coached received $16,000 for what the union described as public relations.
The local paid about $106,000 to a firm called the Filming, for which no incorporation record, business license, address or telephone listing could be found.
Freeman, who is also president of a 30,000-worker affiliate of the long-term-care union, has denied any wrongdoing. He said the money spent on his wife's video company and mother-in-law's day-care firm benefited his members because of what he termed the high quality of the services.
A Freeman spokesman did not respond to questions Monday. On the union's website, Freeman said the Times story was "an attack on me and our union" and contained "vast misrepresentations," which he did not specify. He said all the expenditures detailed by The Times were approved by the union's board and that the local welcomed an audit by the SEIU.
The SEIU's Washington, D.C., headquarters said it was sending a team to review the local's books.
"We'll take a look at things and see where we go from there," said Steve Trossman, spokesman for SEIU President Andy Stern. He would not elaborate, and Stern has declined to be interviewed.
Freeman has been a rising star under Stern, who is among the nation's most influential labor leaders. In 2006, Stern appointed Freeman to head the L.A. local after it had been expanded through a consolidation of several chapters. Freeman had been president of one. Under a pending consolidation proposal, his local would pick up 65,000 more workers from a Bay Area chapter.
On Monday, Los Angeles County Federation of Labor officials also would not speak about Freeman's local. "It would be unfair of us to comment on this matter since we are unaware and have not been involved with the internal decisions made by that organization," federation spokeswoman Mary Gutierrez said in an e-mail.
The Times reported Saturday that the payments to the company owned by Freeman's wife, Pilar Planells, were among the local's largest single expenses last year, at about $178,000. Planells has said she did not personally profit.
Payments by the charity, the Homecare Workers Training Center, to the firm owned by Freeman's mother-in-law, Carmen Planells, represented more than 10% of the nonprofit's total annual expenditures.
Also, a housing corporation that Freeman helped found four years ago as a nonprofit has not been granted the IRS tax-exempt status it sought. It had said on its website that it had a "strong relationship" with the California Community Foundation, which told The Times it hadn't heard of the group.
Meanwhile, the union spent at least $123,000 more on the fundraising tournament at the Four Seasons Resort in Carlsbad than it received in reimbursements, according to records 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. Those entities have been suspended from doing business in California. Dickerson did not respond to interview requests.
The local's nearly $10,000 tab at the Grand Havana Room, a cigar lounge known for its celebrity clientele, was for "lodging," according to the union's annual financial report. A Grand Havana spokeswoman said the club does not provide accommodations.
Freeman, who received about $213,000 in salary and other compensation last year, declined to characterize the cigar expenditure. After The Times inquired about it, he said he had refunded it.