Essential California: California wants to change your toothpaste

3rd California union leader gives up post

Los Angeles Times Staff Writer

The Service Employees International Union's top California officer has taken a leave of absence, and her former boyfriend has been ordered to return tens of thousands of dollars he received from the state council and Los Angeles local that she heads.

Annelle Grajeda is the third major SEIU leader to step aside following reports in The Times about the union's financial practices. The SEIU acknowledged Saturday that Grajeda was on leave as president of the L.A. local and the union's state council, and as an executive vice president of the national organization, because of allegations that she was improperly involved in the payments.

The union did not provide any details of Grajeda's purported role in the payment to the former boyfriend, Alejandro Stephens. The SEIU said it has demanded that Stephens, who was a longtime president of the Los Angeles chapter before it merged with several others, return the money.

An internal complaint filed Aug. 14 also accuses Stephens of remaining on the Los Angeles County payroll while drawing a salary from the union. Attempts to reach Stephens were unsuccessful.

Grajeda said Saturday that she was "very confident" the inquiry would conclude that she did nothing wrong. She said she could not discuss specifics. The inquiry is separate from a federal criminal investigation and congressional probe of another SEIU local in Los Angeles, which were prompted by a Times report earlier this month.

"Our serious concerns about these charges have been greatly elevated by the recently published article," states the complaint, brought by two members of Grajeda's local, which represents thousands of county employees including social workers, nurses and clerks. "We have grave concerns that this type of betrayal of public trust and malfeasance may be happening in our local union."

The SEIU is the nation's fastest-growing union, with 2 million members in North America and more than 700,000 in California. Grajeda's local has 77,000 members. She has been a close aide to its president, Andy Stern. The state council oversees the union's lobbying efforts in Sacramento and its get-out-the-vote drives.

In 2007, Stephens was paid nearly $14,000 by the Los Angeles office in "disbursements for official business" and $75,000 in consulting fees by the state council, according to the union's financial filings with the U.S. Labor Department.

As an SEIU executive board member, he also received more than $104,000 in salary and disbursements last year from the union's headquarters in Washington, D.C., records show. The filings indicate that the national office reimbursed the state council for the $75,000.

SEIU spokeswoman Michelle Ringuette said the $75,000 was part of a severance deal with Stephens when he was removed as local president because of the consolidation.

She said he violated the agreement by receiving money from the local and remaining on the county payroll as an employee. It was not known whether he received similar payments this year. In addition to the union payments, the complaint calls on the SEIU to investigate a nonprofit that is affiliated with the local and headed by Stephens. The most recently available tax records show that it has devoted only about 9% of its expenditures to its charitable programs.

In a letter to Ron Tanner and Arturo Diaz, the two local members who filed the complaint, SEIU's national office asked for more specific information. It also said the complaint about the charity was referred to the nonprofit's board.

Donna Meredith, the charity's vice chairwoman, said it was established after the 1994 Northridge quake to provide aid to union members affected by such disasters. She said it spent less than $15,000 on program services in 2006, the last year for which Internal Revenue Service reports are available, because it needed to build a reserve for future payments. "We have to keep putting funds into that," she said.

The nonprofit spent about $81,000 in 2006 on fundraising expenses, more than half its total outlays. Meredith said costs for the charity's fundraiser -- a 5K and 10K run -- were higher than expected. She defended Stephens' stewardship of the charity and his work for the union, labeling the complaints against him sour grapes by Tanner and Diaz. "He is doing what he is supposed to do," Meredith said of Stephens. "They are just unhappy with him because he is in charge."

Diaz denied that he and Tanner harbor any grudge against Stephens. "I think he's totally taken advantage of the membership," said Diaz, a county computer programmer.

Tanner, a county retiree who still belongs to the union, said Meredith's comment reflected "pure loyalty to Alejandro Stephens, whether he's wrong or right."

Previous Times reports have focused on the SEIU's largest California chapter, the United Long-Term Care Workers. The head of that local, Tyrone Freeman, has stepped aside because of the resulting investigations into its finances.

His former chief of state, Rickman Jackson, who is now president of SEIU's biggest Michigan chapter, also has taken a leave because of the probe.

The Times has reported that small companies run by Freeman's wife and mother-in-law got about $405,000 in 2006 and 2007 from the union and a charity he founded, among other expenditures. Freeman has denied any wrongdoing.

A housing corporation Freeman helped found used the address of a Bell Gardens home that property records show is owned by Jackson. Union and housing corporation officials have declined to say whether Jackson was paid for any use of his residence. Jackson has said in e-mails that he would have no comment on the matter.

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