claims that the Feds are investigating the union's pension fund and with a possible
to come down about possible mismanagement of the funds in trust. Looks like this investigation goes back several years alleging that the funds were jeopardized by unfair dealing with family friends and "executive schemes." (Whatever that means.) Apparently the funds have lost over a billion dollars of value in the economic turmoil of recent years.
KANSAS CITY, Mo. --
Federal authorities have launched a
criminal investigation into the
International Brotherhood of Boilermakers' pension and benefit plans,
McClatchy Newspapers has learned. The investigation began
after federal agencies received anonymous complaints about mismanagement
of the plans, according to court filings. The complaints included
allegations that family members of some trustees received bonuses from
companies that managed investments for the three funds, which total $8.5
billion. A grand jury investigation followed. The agencies
include two Department of Labor offices, one of which conducts
criminal labor racketeering investigations into employee benefit plans. "I can understand why the Department of Labor might think there's a
cause for concern," said Gus Fields, a former
attorney with the Internal
Revenue Service and a leading pension fund expert. "There could be an
issue here."
The court filings do not provide much detail on the issues and people the grand jury is investigating. But a recently settled lawsuit by a former official with the
Boilermakers funds made detailed claims about unorthodox investment
schemes and questionable ties between the funds and a trustee's
daughter. Indeed, The
Kansas City Star, a McClatchy
newspaper, has found that the daughter of a former trustee and union
executive works for a company that has been paid millions to manage
investments for the three Boilermakers funds. An
attorney whose firm represents the employee benefit plans said they are under
strict supervision by the Department of Labor. Trustees
"administer the fund in accordance with the trust documents and federal
laws," said Michael Stapp, of the law firm Blake and Uhlig. Stapp said
he was not aware of any grand jury investigation. A spokesman
for the U.S.
attorney for Kansas said he could not confirm the possible
existence of a federal investigation into the union's funds. But a
March 27 legal motion obtained by The Star asks a judge to enforce grand
jury subpoenas issued in the case.
The motion says the
Kansas City Regional Office of the Employee Benefits Security
Administration launched the investigation of the union's employee
benefit plans after receiving several anonymous complaints. The complaints alleged "waste and mismanagement" of the funds by
trustees, said the 23-page motion, which also included exhibits and
copies of subpoenas. The document said it also was alleged
that some of the investment managers for the Boilermakers employee
benefit plans "were hired because of familial relationships of the
trustees and the investments managers, as well as gifts provided to the
trustees from the investment companies." According to the
filing, the Employee Benefits Security Administration opened a joint
investigation with the U.S. Department of Labor's inspector general, who
has authority to conduct criminal investigations into employee benefit
plans. Spokesmen for the two federal offices said they could neither confirm nor deny any investigation. The three employee benefit plans are known together as the
Boilermakers National Funds. The plans: The Boilermakers National Health
and Welfare Fund; the Boilermaker-Blacksmith National Pension Trust;
and the Boilermakers National Annuity Trust.
The funds are
administered by trustees, some appointed by the Boilermakers and some by
employers who do business with the union. The investigation apparently goes back several years. One subpoena was issued in 2010 to the records custodian of the
Boilermakers funds seeking notes and minutes of meetings, the court
filing said. Two other subpoenas were issued to funds officials even
earlier - one in 2008 and another in 2009. One of those
officials subpoenaed later filed a lawsuit claiming that the funds were
jeopardized by executive schemes and cozy family relationships. Curtis G. Barnhill, former executive administrator of the
Boilermakers National Funds, filed the lawsuit in 2010 in U.S. District
Court, alleging that he was fired because he was cooperating with the
federal investigation. Barnhill, who was executive
administrator from July 1, 2005, through Nov. 15, 2008, alleged in the
lawsuit that his termination violated his rights under the whistleblower
law. He sued the funds, their new executive administrator and 11
current or former trustees.
According to the lawsuit, the
pension fund lost more than $1 billion in investments because of
worsening financial markets in the summer and fall of 2008. Boilermakers
International President Newton B. Jones told Barnhill and others that
Jones' re-election could be at risk because possible cuts in pension
benefits may be needed, the lawsuit alleged. Jones is not a trustee of the funds, but the union's trustees serve at his pleasure.
The lawsuit said Jones began taking actions "that were outside of
the normal and established investment procedures and policies of the
Pension Fund." In October 2008, the lawsuit alleged, Barnhill
told pension fund trustees that Jones' plan "appeared to be financially
and legally unsound," violated policies and involved a broker "of
questionable background." In another allegation, the lawsuit
claims that George Rogers, then a union vice president, appeared to
steer between $500 million and $1 billion worth of contracts to his
daughter's company. At the time, Rogers was a trustee on all three
employee benefit plans. At least one trustee resigned in
protest over what the trustee said was Rogers' improper influence in
giving contracts to his daughter's company, the suit said.
According to the lawsuit, Barnhill expressed his concerns about nepotism and Jones' investment practices to other trustees. In November 2008, the lawsuit alleged, Barnhill received a subpoena
ordering him to appear before a federal grand jury in
Kansas City, Kan. Barnhill told trustees that he planned to fully cooperate with
authorities. But two days before he was to appear, the lawsuit said,
Barnhill was fired. He was told he was being terminated because of an
alleged "romantic overture" to a female independent contractor working
in the office and an overly friendly comment to another, the lawsuit
said. The lawsuit said he was fired in order "to damage
Barnhill's credibility, to deter him from testifying fully and freely
before the grand jury, to separate him from his records which had been
subpoenaed, and to punish him for his stated intent to cooperate with a
federal grand jury investigation." The lawsuit said Barnhill cooperated with the federal investigation throughout much of 2009. The defendants denied Barnhill's allegations in court filings.
They acknowledged that some trustees were aware that Barnhill had
been subpoenaed as part of a federal investigation, but denied that they
did anything to try to prevent his testimony. They also
denied any unorthodox investment schemes, that Rogers steered contracts
to his daughter's company or that a trustee resigned in protest.
The actions by the funds officers were "at all times justified,"
according to their motion asking a judge to dismiss the lawsuit. Court records show that the lawsuit was settled and dismissed on March 15. Barnhill declined to comment on his lawsuit. Stapp, the union's general counsel, said, "The Boilermaker
organization views Mr. Barnhill's assertions as the product of a
self-serving imagination." In an interview, Rogers said he did nothing wrong. "Yes, my daughter works for an asset management company that
invests funds for the BNF," Rogers said. "Every time their name came up-
not by my doings, but by our consultant - I disclosed to the board, to
whatever committee was involved, that my daughter worked for that
company and I recused myself from all the voting and discussion. I was
gone, out of the room. "It's all in the minutes."
Rogers said he was a trustee of the funds from 1991 to 1999 and again from 2003 until the end of 2008.
But Fields, the pension attorney, said that Rogers' recusing himself may not matter in the big picture. "This pension system apparently knew about this relationship and they did engage her," he said. Although the lawsuit did not name Rogers' daughter or her company,
The Star found that the Boilermaker funds hired HGK Asset Management
Inc., where Rogers' daughter works. The daughter, B.K. Power, is vice president of sales and marketing at HGK, according to the company's website. Annual reports filed with the U.S. Department of Labor and the IRS
show that HGK was paid $8 million by the Boilermakers National Funds
from 2004 through 2010 to manage investments. Power formerly was married to another Boilermakers vice president. She has worked at HGK since August 2001 and is "responsible for
developing and managing client relationships," the company's website
says. Previously, Power was an internal auditor for the Boilermakers, her website bio says. Neither Power nor HGK responded to requests for comment.
Stapp said the funds are governed in strict accordance with
conflict of interest policies "and are constantly vetted to scrupulously
avoid any conflicts of interest." But Nathan Mehrens, a
former Labor Department
attorney who now is general counsel for
Americans for Limited Government, said the hiring of a firm where
Rogers' daughter was a key employee raises an important question: "Did this plan engage in this service because it was best for their
members, or did personal considerations play into that decision-making
process?"
(Thomas reports for The
Kansas City Star.)
Recent read in the Kansas City Star claims that the Feds are investigating the union's pension fund and with a possible criminal indictment to come down about possible mismanagement of the funds in trust. Looks like this investigation goes back several years alleging that the funds were jeopardized by unfair dealing with family friends and "executive schemes." (Whatever that means.) Apparently the funds have lost over a billion dollars of value in the economic turmoil of recent years.
Richard Cuchli, a Kansas City lawyer that was convicted of murdering his law partner in 2002, is a free man. In what was an obvious and blatant disregard for the criminal justice process, the prosecutors withheld exculpatory evidence and convicted Mr. Cuchli at an unfair trial. The Court of Appeals has upheld the decision to exclude all evidence that the prosecutor has forcing the DA's office to dismiss the charges.
Ok this has got to be one of the stupidest reasons to ever get fired. The Deputy should not have been doing crap like this to inmates, what a moron. That being said, it is about the funniest reason I have ever heard someone get fired for. Imagine this guys next job interview...
Looks like the Kansas City police are watching young drivers trying to emphasize the importance of wearing a safety belt. There may be a more useful way to expend police resources than by enforcing seat belt laws...
What happens when your the former Governor, a famous movie star, and an ex-body builder and you get pulled over speeding in your Mercedes? You get a warning. Arnold Schwarzenegger was allegedly speeding down the mean streets of Beverly Hills the other day and got pulled over by a motorcycle cop. I am sure the cop was surprised to look behind the wheel and see the Terminator looking back at him. If I were the policeman I would have asked him if he had seen John Conner.
