Union Funds Angle Doomed Ludlow’s Post

If Martin Ludlow had received improper financial assistance from an ordinary individual or business as part of his 2003 City Council campaign, he likely would have faced a hefty fine under local law and a few rough stories in the newspaper.

Life would have pretty much gone on -- as it has for some other members of the council.

In 2002, for example, then-council President Alex Padilla was hit with a record $79,321 fine by the Los Angeles Ethics Commission for failing to abide by the city’s spending cap during his 1999 campaign and for accepting two donations over the $500 limit.

Padilla paid the fine and subsequently won a second term unopposed and was twice reelected as council president. He now is in the midst of a run for the state Senate.

Ludlow, however, is alleged to have received at least $53,000 of assistance illegally funneled through a union, putting him in the crosshairs of a federal law that oversees dues paid by members of organized labor.

Now he is being threatened with serious fines and a 10-year ban on holding public or union office. He could face jail. He announced his resignation Tuesday from what he has said is his dream job: the leadership of a politically powerful labor organization.

Ludlow has run afoul of a section of the United States Code titled “fiduciary responsibility of officers of labor organizations.”

In particular, according to sources, Ludlow was investigated by the federal government for conspiring to embezzle money, property or other assets from a labor organization.

The regulation of unions has long been the domain of the federal government. Such laws have their roots in the government’s attempt to protect the interests and money of rank-and-file union members while also keeping regulations of unions uniform from state to state.

Labor unions have complained that they are being singled out and constrained in a way that their natural opponents, the business community, are not. Such protests have only increased under President Bush, some legal scholars say.

“There is more scrutiny given to union expenditure of funds by the Department of Labor under the Bush administration,” said William Gould, a former chairman of the National Labor Relations Board and a professor emeritus at Stanford Law School. “There are new auditing requirements that have been imposed; there has been a great deal of litigation.”

The federal government, too, has resources that local officials don’t have.

“It’s night and day,” said Laurie Levenson, a Loyola Law School professor and former federal prosecutor. “They have everything from the FBI to the grand jury, and they can ramp up for a major investigation.”

It is possible, of course, that Ludlow may have found himself in just as much trouble with state and local officials if federal investigators had not gotten involved in his case.

But his union involvement invited questions. The foremost now is whether he was the feds’ target all along or merely a stepping stone on their way to another trophy.