LA Times: Ex-SEIU local exec convicted of stealing from low-income members
February 5th, 2013
Paul Pringle and Hailey Branson-Potts, Los Angeles Times
A onetime rising star in national labor circles who headed California’s biggest union local was convicted Monday on federal charges that he stole tens of thousands of dollars from his low-income members.
Tyrone Freeman, who represented about 190,000 homecare workers as a leader of the Service Employees International Union, was found guilty on 14 counts after a 10-day trial in Los Angeles.
Jurors deliberated two and a half days before returning their verdict. The trial followed a nearly four-year investigation triggered by a series of Times reports on Freeman’s financial practices.
“This was a case about abuse and betrayal,” U.S. Atty. André Birotte Jr. said in a statement after the verdict. “Freeman abused his position as leader of the SEIU, and he betrayed the hardworking people whose interests he was supposed to represent.”
Freeman, 43, faces a maximum of more than 180 years in prison when he returns to court for sentencing in April. His attorneys declined to comment.
Monday’s verdict marks the end of a steep fall from grace for a man groomed for a major role in the SEIU, the 2-million-member labor juggernaut that is a dominant force in worker organizing campaigns and Democratic elections from coast to coast.
As president of SEIU Local 6434 and an affiliated chapter of homecare workers, Freeman carried significant clout in Los Angeles, Sacramento and Washington, D.C., because he commanded deep sources of campaign money and foot soldiers.
In August, he was indicted on charges of embezzling from his statewide local of mostly $9-an-hour workers and using some of the stolen money to cover costs from his Hawaiian wedding. Other charges were mail fraud, violation of tax laws and giving false information to a mortgage lender.
His wife, Pilar Planells, had earlier pleaded guilty to a tax charge in connection with more than $540,000 she received in consulting payments from the L.A.-based local while Freeman was in charge.
The government’s case against Freeman centered on an alleged scheme in which he was accused of boosting his salary by illegally directing Local 6434 money to the affiliated organization he led, California United Homecare Workers. He was charged with similarly defrauding a union-funded nonprofit group devoted to building homes for low-wage workers.
At the time, Freeman’s annual compensation was about $200,000, making him one of the higher-paid union leaders in the nation. The tax counts he was convicted on involved his failure to report about $63,000 in income from 2006 and 2007. Prosecutors dropped another tax charge initially brought in the indictment.
The investigation was conducted by the U.S. Department of Labor, FBI and Internal Revenue Service. It began after The Times reported in August 2008 that Freeman funneled hundreds of thousands of dollars of his members’ dues, and money from a related charity, to his relatives. He also spent freely on a Four Seasons Resort golf tournament, expensive restaurants and a Beverly Hills cigar club.
The scandal quickly cost Freeman his job and rippled through the SEIU, leading to the ouster of several other California officials as well as the president of the union’s biggest Michigan local.
The Freeman case also helped widened a division within SEIU’s California ranks. Officials of a local headquartered in the Bay Area broke away from the parent union and formed a rival organization after resisting a merger that they said would have placed their members under Freeman’s control.
“When union bosses get all the power and they’re not accountable to their members, it leads to the corruption that is spelled out today in the conviction of Tyrone Freeman,” said Sal Rosselli, president of the rival group, the National Union of Healthcare Workers.
The verdict was cheered by Local 6434 members such as Raquel Toribio, 69, a Monterey County homecare worker paid to look after her son, who has Down syndrome. “I’m very happy to hear Freeman’s going to pay for what he stole,” she said. “It has been a long time.”
A spokesman for the local, Scott Mann, said the Freeman case “is a part of the history of the union, but it’s not a part of its present. This union has successfully moved on.”
Mann said Local 6434 has grown since Freeman’s departure, to 180,000 members from 160,000 in 2008. The affiliate had about 30,000 members under Freeman.
In addition to the salary diversion, the jury found that Freeman had the union pay more than $8,000 in expenses for his 2006 wedding. He also was convicted of lying to Countrywide Bank by claiming that the union paid his personal American Express bills and the leasing costs for his Land Rover.
“Mr. Freeman occupied a position of public trust, and he violated that trust by enriching himself at the cost of California’s workers,” said Assistant U.S. Atty. Elisa Fernandez, a prosecutor in the case.