More Legal Problems Plague the Service Employees International Union

09/30/10

Today's announcement revealed at least two officials with the union met with investigators on multiple occasions this year. The SEIU, which has more than 2.2 million members, has been the target of several investigations over the past few years. Tyrone Freeman, who was the head of one of California's largest union chapters, was fired in 2008 for misappropriation of funds. He was ordered to repay the money, but no criminal charges were ever brought against him. Stern may not be so fortunate, even though he resigned recently. His reasons were that he wished to have more personal time. He remains on President Obama's deficit commission and is often seen at White House dinners. He is also a research specialist at Georgetown University.

Simon & Schuster, a New York publishing house, paid Stern a $175,000 book advance, which Stern pocketed. He then bought thousands of copies of the book using union money, according to the FBI. Further, he ordered the union to shoulder the costs associated with promoting the book and fact checking it prior to its publication. Investigators believe the advance should have covered those costs. One union spokesperson said the union used its own discretion and the decision to purchase copies of the book was in no way influenced by Stern. The publishing company has said Stern received no royalties from those copies purchased by the union. The total amount Stern received for penning A Country that Works has not been released by either Stern or Simon & Schuster.

Stern is also being investigated for approving a salary for a past Los Angeles county union leader who was fired after it was discovered he embezzled more than $50,000. Alejandro Stephens has since been sentenced to four months in jail, three months monitored supervision upon his release and has been ordered to repay approximately $52,000 he stole from his chapter. The FBI believes Stephens accepted money from Stern after his termination and now it wants to know why.

Some believe these charges were strategically timed by federal investigators to coincide with the upcoming elections, which the union is tapped to spend more than $44 million in an effort to keep certain Democrats in place.

Ironically, Stern serves as the chairman for the Center for Community and Corporate Ethics. CBS News once referred to him as ''the most important labor boss in America''.

The SEIU released a statement via spokesperson Michelle Ringuette:

Today, there are media reports based on the allegations of two anonymous union officials that claim Andy Stern is under investigation by the FBI in relation to Alejandro Stephens and the publication of A Country That Works. To our knowledge, this is flat out false.''

The FBI confirmed its investigation.

For now, Stern's lawyer is saying he is cooperating fully with authorities on any level and reiterates he's done nothing illegal or unethical.