Newly Obtained Information Shows that Ousted Union Leaders Plotted and Covered Up Wrongdoing

Memos show that attorney hired by former SEIU local leader Sal Rosselli told top Rosselli lieutenant that diverting $3 million in dues and other activities were improper but UHW leaders did so anyway
OAKLAND – Ousted union President Sal Rosselli and his top lieutenant John Borsos were advised by an attorney that some of their actions while in office were improper and illegal, but they took these actions anyway and then followed the lawyer’s advice on how to cover them up, according to new information obtained by SEIU-UHW. Rosselli is now the president of a newly formed organization called NUHW, and Borsos remains his top lieutenant.
View the letter »
Watch this video: Members Demand Ousted Leaders “Come Clean!”


The new information was included in a letter delivered today to Congressional leaders and members of the California Congressional delegation. These actions show why the National Labor Relations Board should not be pressured into closing its investigations into unfair labor practice charges against Rosselli, Borsos, and the other officials while new facts are still coming to light.
SEIU-UHW was placed in trusteeship and Rosselli and the other leaders were removed from office in January for among other things, improperly diverting $3 million in members’ dues money to a bogus non-profit organization, moving $500,000 of members’ money into an outside attorney’s account, and violating democratic union procedures designed to protect members. They have never challenged the legality of the trusteeship.
“We now know why Rosselli, Borsos, and the other ousted officials have refused for over a year to turn over documents they were obligated to provide to SEIU, because they show so clearly that they willfully violated their responsibilities to SEIU-UHW members while in office,” said Dave Regan, SEIU-UHW trustee. “We believe this is just a small slice of the information that Rosselli and his lieutenants have been hiding and that as more information comes to light, we will learn more about the full scope of their wrong-doing.”
In a memo from Feb. 8, 2008 while Rosselli and the others were still officers in SEIU-UHW, the union’s attorney, Arthur Fox, advised that using the bogus non-profit to move money off the SEIU-UHW books for their political use was illegal. But, Fox advised, if they “played dumb” they might well be able to get away with it, and if the IRS discovered the activity, they could just say, “Woops, Sorry, We Screwed Up.” The former UHW leaders took Fox’s advice, and vehemently denied any wrong-doing when the bogus fund came to light.

Fox wrote in the e-mail to John Borsos:

“Another possible scenario would be for you to “play dumb” … put your money in the (c)(3) where it would be very difficult for SEIU to get its hands on it, and use it as you see fit and hope the IRS never catches up to you. And, even when IRS launches an investigation, it takes many months for it to conclude it. By then, who knows…… As long as no contributions to your Fund were claimed as deductions on tax returns, the IRS should not be terribly upset. You would just say, “Woops, Sorry, We Screwed Up. I guess we should have called ourselves a (c)(4) or (5) in the first instance.” (Ellipses in original).”

“When I first read these emails and other documents, I was angry. It made me sick to my stomach to read how our leaders were misleading us as they were failing to help us, said Laureen Fowler, who works for Kaiser Permanente in Roseville. “It shows just how we members were kept in the dark about what was really going on.”
Since the trusteeship was imposed it has also been learned that other Rosselli lieutenants, while still in charge of SEIU-UHW, terminated contract extensions with nursing home employers and deliberately failed to negotiate contract renewals with those employers, leaving members vulnerable and without the protection of a contract, so they could come back later and decertify the units if they were expelled from SEIU. These actions had serious consequences for SEIU-UHW members. Collective bargaining relationships have been destabilized, and contract rights have been put at risk.
What’s more, they removed or destroyed many paper and electronic files concerning grievances that made it impossible or difficult to pursue those cases and protect members’ rights in the workplace.
Another recently obtained e-mail from Fox shows that both Borsos and Rosselli were advised in March 2008 on how they could misappropriate SEIU-UHW documents and hide the wrongdoing to create plausible deniability were they to testify under oath. The former officials took this advice as well.

Fox wrote in the e-mail to Rosselli and Borsos:

“In fact, you may want to download a significant volume of materials in your data base from your computer servers, including a membership list, etc., into a “foreign” computer or server where you will be able to collect the info at some future point in time. Ideally, this new electronic depository would be one over which you do not have immediate or absolute control. Or, preferably, knowledge. Sooner or later SEIU will probably put you and your close associates under oath and ask questions whose answers you can honestly say you do not possess. CAVEAT. Use your best judgment on this. Stern might at some future time accuse you of violating some SEIU privacy/confidentiality duty … or even theft of union property, by virtue of your “stealing” info from UHW.”

Still another recently obtained document establishes that Rosselli and Borsos were advised on how to cynically use members to cover up their activities by engaging in covert, rather than “overt[],” activities; and by “laundering” transactions through front groups that would appear to be funded by rank-and-file members:

Fox wrote in a memo to Rosselli and Borsos:

“As a consequence, it would be wise for UHW and its officers to proceed cautiously so as not to appear, overtly, to be attempting to subvert the SEIU IEB’s jurisdictional mandates. Rather, to the extent the UHW may wish to resist implementation of any particular mandate it should probably “lay low” and simply provide information and advice, and perhaps well-concealed assistance, to members who are, themselves, anxious to resist those directives for their own reasons. Ideally, such assistance should be “laundered” through an intermediary.”

Download the letter »
See all the documents related to the SEIU-UHW trusteeship decision, including former Secretary of Labor Ray Marshall’s opnion: http://www.seiu.org/a/ourunion/trusteeship-documents.php
SEIU-UHW represents more than 150,000 healthcare workers across California and our members provide first-rate care to millions of Californians. We are a proud affiliate of the 2 million-member Service Employees International Union (SEIU). Learn more at www.SEIU-UHW.org.

# # # # # # #
FOR IMMEDIATE RELEASE: July 9, 2009
Contact: Pete Janhunen, 510/502-2457, pjanhunen@seiu-uhw.org

SOURCE: SEIU-UHW

Comments are closed.