A congressional committee has opened an inquiry into a financial scandal enveloping the Service Employees International Union’s biggest California local because of six-figure payments made to firms owned by relatives of its president.
Rep. George Miller (D-Martinez), chairman of the House Education and Labor Committee, announced Thursday that the panel would examine the union’s spending practices, which were reported this month by The Times.
“Our committee takes these reported allegations seriously, and we plan to thoroughly review this matter,” Miller said in a statement.
A spokesman said Miller had no further comment.
The congressman, a close ally of House Speaker Nancy Pelosi, is known as a friend of organized labor, although he has clashed with unions on occasion. His 49-member committee has jurisdiction to investigate and hold hearings on a broad range of workplace matters, including the rights of union members.
Federal authorities had already launched a criminal investigation of the expenditures, according to people familiar with that probe. Among the agencies involved are two enforcement arms of the U.S. Labor Department as well as the U.S. attorney’s office, the sources said.
The Times has reported that small companies run by the wife and mother-in-law of the Los Angeles-based United Long-Term Care Workers president, Tyrone Freeman, received about $405,000 in 2006 and 2007 from the union and a charity that Freeman founded.
According to records and interviews, the local has paid $219,000 to a firm operated by a former union employee who is a close friend of Freeman and his wife, and $16,000 for “public relations” to a now-defunct minor league basketball team coached by Freeman’s brother-in-law.
The local also spent at least $300,000 last year on a Four Seasons Resorts golf tournament, a Beverly Hills cigar club, restaurants such as Morton’s steakhouse and a consulting contract with the William Morris Agency, the Hollywood talent shop, The Times has reported.
Freeman, who was paid $213,000 in salary and other compensation last year, stepped aside last week. He has denied any wrongdoing. Most of his local’s 160,000 members earn about $9 an hour caring for the elderly and infirm. Their dues finance the union’s operations.
The leader of SEIU’s largest Michigan chapter, Rickman Jackson, also has taken a leave of absence because of an internal union investigation into the Los Angeles local, where he has served as chief of staff.
The Times has reported that 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.
A spokeswoman for SEIU President Andy Stern said Thursday that the union would “fully cooperate” with the congressional inquiry.
“I can tell you that SEIU is deeply troubled by the allegations,” said spokeswoman Michelle Ringuette.
The SEIU has placed Freeman’s local in a trusteeship and has enlisted former California Atty. Gen. John Van de Kamp to conduct an internal review.Freeman is a longtime Stern protege, and the spending disclosures have been a stinging embarrassment for the SEIU leader, who is preparing to mobilize the union in support of Barack Obama’s presidential drive, labor experts say.
Peter Dreier, an Occidental College politics professor who studies unions, said the Miller inquiry could help head off any efforts by Republican presidential candidate John McCain’s campaign to tie the SEIU’s troubles to his Democratic rival.
“The Democrats would have a good response in saying, ‘We’re cleaning house,’ ” Dreier said.
“Miller wants to see a labor movement that can rebuild itself, and he won’t tolerate interference in getting to the bottom of this. . . . Corruption is an obstacle to having a strong labor movement.”
The SEIU contributed about $10,000 to Miller’s election campaign during the last annual reporting cycle, according to the Open Secrets website on political contributions.
It was not clear when the House committee might begin holding hearings, or whether members would interview Stern.
A source close to the SEIU has said that an aide to Stern was informed six years ago of allegations involving Freeman’s finances and personal relationships.
The aide, Steve Trossman, has told The Times that he did not talk to Freeman about the accusations and could not recall whether Stern was informed.
The source, who told of discussing the allegations with Trossman, said they included complaints that Freeman fathered a child with a staffer, Pilar Planells, who later became his wife.
Stern’s representatives have said that no “factual allegations” had been brought to his attention before The Times’ disclosures.