The head of California's largest union local has stepped aside in the wake of Times reports that the organization and a related charity paid hundreds of thousands of dollars to firms owned by his wife and mother-in-law.
Tyrone Freeman, president of a Service Employees International Union chapter in Los Angeles, said in a written statement late Wednesday that he was taking a leave of absence and that the local would be placed in a temporary trusteeship.
"In order to ensure that any investigation of the allegations is fair and free from any question of interference or influence, I am taking a leave of absence effective immediately for the duration of the investigation," the statement said. "I believe these steps will allow our union to continue to serve the best interests of our membership during this time."
The statement was released by the Washington, D.C., office of SEIU President Andy Stern, who nurtured Freeman's career as the 160,000-member local grew dramatically in recent years, largely through consolidations.
"These allegations are of serious concern to all of us and we support Mr. Freeman's decision to put the best interests of the members first," Stern spokeswoman Michelle Ringuette said in an e-mail.
In addition to the payments to his relatives' firms, Freeman's local, the United Long-Term Care Workers, spent nearly $300,000 last year on a Four Seasons Resort golf tournament, restaurants such as a Morton's steakhouse, a Beverly Hills cigar club and the William Morris Agency, the Hollywood talent firm, The Times reported earlier this month.
Altogether, the payments to Freeman and the home-based companies operated by his relatives, and to a former union employee totaled more than $1 million in 2006 and 2007, records and interviews show. That includes Freeman's salary and other union compensation. The workers whose dues fill the union's coffers make about $9 an hour caring for the infirm and disabled.
Freeman, who is also president of a 30,000-member affiliate, California United Homecare Workers, has denied any wrongdoing. He could not be reached for comment Wednesday.
His departure comes as several union staff members told of being pressured by Freeman's lieutenants to sign a petition in support of him. Some of those who initially refused were transferred to positions far from their homes, according to three staffers who asked not to be identified because they feared reprisals.
About 10 workers who balked at signing the petition had their union-provided cellphone service discontinued, the staffers said.
The petition cited recent "attacks" on Freeman and the local and said, "Let it be clear that we . . . proudly and firmly stand with President Freeman and the work of our local," according to a copy the staffers provided.
"It's essentially a loyalty oath," said one of the workers. He said the atmosphere at the union has been "very tense. . . . There's a lot of intimidation."
A Freeman spokesman did not return a phone call and e-mail message seeking comment.
The Times earlier reported that the union has paid $219,000 to a small video firm run by Brian Cheatham, a former employee. Freeman denied in an interview that Cheatham was a close friend of his wife, Pilar Planells.
But three former union employees said in interviews this week that Cheatham and Planells did have a close relationship, and that Cheatham is close to Freeman as well. They said Cheatham is pictured as a member of Freeman's wedding party on the website of a Hawaiian nuptials service, www.pacificaisles.com.
The former employees asked not to be named because they feared retaliation. Cheatham did not return a phone call and e-mail message seeking comment. Written questions submitted to Freeman through a spokesman were not answered.
Meanwhile, the chief executive officer of a Florida-based company said in an interview Wednesday that it has no record of receiving $82,000 that the union reported in U.S. Labor Department filings.
The financial reports describe the $82,000 paid to The Filming Inc. as a contribution to a nonprofit organization. The union also reported paying $23,650 to the firm for work on the golf tournament.
The local's financial statements said The Filming is based in Los Angeles, but it is located in Palm Coast, Fla. Tracey Hicks, the chief executive officer, said the company did receive payment for a video crew, but not the $82,000.
"We have no record of that," she said. "I would know, because we're a small company."
In an earlier interview, Freeman said he knew nothing about The Filming. "I suggest you track them down," he said.
The SEIU national office has said it is conducting an audit of the local as a result of The Times' reports. At the same time, the U.S. Labor Department is investigating complaints that the election of Freeman and his slate of officers was conducted in a way that made it nearly impossible for challengers to quality for the ballot, people familiar with the probe say.
Labor Department officials have declined to confirm that the election inquiry is underway, or to say whether they are investigating the union's spending practices.
Another Stern spokesman, Steve Trossman, has said the SEIU had received no allegations of financial irregularities by Freeman until The Times raised questions about the local's finances last month. But a source close to the union has said that Trossman was informed six years ago of some concerns about Freeman's spending habits and his having fathered a child with Planells, who was then a union staffer.
Trossman has said he remembers little about those reports, including whether he had alerted Stern to them.
Freeman has said the golf tournament netted $80,000 to $100,000 for both a charity he founded, the Homecare Workers Training Center, and a second nonprofit he helped launch, The Long-Term Care Housing Corp.
The local's financial reports show that it spent $418,000 on the tournament, or at least $123,000 more than it received in reimbursements -- not counting about $7,000 in unspecified lodging costs at the Four Seasons.
Freeman has said some reimbursements may be outstanding, more than a year after the tournament was held.
Last year, the local paid his wife's company, Lotus Seven Productions, about $178,000, the financial reports show. The firm received roughly $36,000 the year before.
Labor Department officials said that only after The Times raised questions about the payments to Lotus Seven did Freeman file disclosure forms that require union officers to reveal payments to entities in which a spouse has an interest.
Freeman has said Lotus Seven has produced 10 videos that promote the local's work and have been shown on lease-access cable channels. He and his wife have said that she did not personally profit from the payments to her company.
The Homecare Workers Training Center has paid nearly $100,000 a year to a day-care service operated by Planells' mother, Carmen Planells. The training center began itemizing the payments on its Internal Revenue Service reports in 2002, the year after Freeman and Pilar Planells had a daughter together, records show.
Freeman has defended the arrangement with Carmen Planells, saying her firm provides high-quality day care. His wife and brother-in-law, Hernando Planells Jr., are listed on state incorporation papers as officers in the company.
Under the trusteeship, the union's national office will take control of the local's finances and appoint an interim president, said Stern spokeswoman Ringuette, who added that she had no other details.Copyright © 2014, Los Angeles Times