Ex-Officers Of Local 420 On Hook for $485G; Judge Rules Payments Violated Local's Constitution

By RICHARD STEIER

A Manhattan judge has ruled that three former officers of Hospital Workers Local 420 of District Council 37 must repay the local $485,000, counting interest, for unauthorized payments they received in the form of wage hikes, and expenses and other payments. Those payments were made between 1997 and 2002, the year all three lost re-election bids.

JAMES BUTLER: Big payouts still reverberate.

Two of the former officers, Executive Vice President Sarah Kennedy and Corresponding Secretary Aurora Santiago, had claimed they were entitled to the money as the result of collective-bargaining agreements, and that clauses in the local's constitution that would have prohibited some of the payments had been waived by former President James Butler.

Said He Was Framed

The third ex-officer, Treasurer Enrique Campbell, insisted all the payments were proper and that evidence proving that had been destroyed by Local 420's current president, Carmen Charles.

Those claims were all rejected by Manhattan Supreme Court Justice Karla Moskowitz, saying they had produced no evidence that the payments had been properly authorized.

CARMEN CHARLES: 'A loud and clear message.'

In her decision, she scoffed at the argument that Mr. Butler had waived the constitutional restrictions concerning some of the payments that led his three former colleagues to believe they would not be held liable for the money.

"Obviously, waiver requires more than relying on a union president, who may be in cahoots with the other officers, to grant those officers pay increases or other payments without proper authorization," Justice Moskowitz wrote. "Otherwise, there would be no limitations on any set of officers freely helping themselves to the union's money."

$138G in Interest

She ordered Mr. Campbell to repay more than $169,000 plus $67,938 in interest. Ms. Kennedy is liable for $114,849 in improper payments plus $45,876 in interest, and Ms. Santiago must repay $61,124 plus $24,416 in interest. She also ruled that Mr. Campbell as treasurer was responsible for repaying part of the assessments against his two female colleagues.

The ruling, which was finalized Oct. 30, came four years after Justice Moskowitz issued a default judgment totaling $1.6 million against Mr. Butler and the man who preceded Mr. Campbell as treasurer, Kendreth Smith. At that time, Mr. Butler, who died in 2005, told a reporter for this newspaper that he had no money other than what he received from Social Security and his union and city pensions. When he was unseated by Ms. Charles in 2002, his salary was $259,000, something she made a major issue of during the campaign. He had been president of Local 420 for 30 years.

She had been a Local 420 vice president, and Mr. Campbell, Ms. Kennedy and Ms. Santiago all argued in their defense that she had brought the charges after taking part in the board votes that authorized the payments.

Nothing to Support Claim

Justice Moskowitz noted in her decision, however, that aside from increases in salary and expense stipends at the end of 1997, "defendants show no attempt to obtain approval for these payments at any meeting of the executive board."

She also rejected Mr. Campbell's claim that Ms. Charles had destroyed evidence that would have established that the payments were legitimately approved, stating that she had "produced all the Executive Board meeting minutes and general membership meeting minutes for the period 1997 through 2002 that currently exist. There is nothing in these minutes indicating approval for the expenses and salary payments at issue in this case."

The judge also noted that while the three former officers claimed to have repaid any union credit-card charges for personal expenses, "they cannot prove this repayment ..."

Ms. Charles said of the ruling, "I would say it's bittersweet. I've always said James Butler was the person who inspired me, so it was ironic that we had to bring these charges against him and the other officers."

Had Offered Leniency

She said that she had offered to settle the case if Mr. Campbell, Ms. Kennedy and Ms. Santiago agreed to provide partial reimbursement that "was minimal compared to what it was they took."

Asked whether she believed any of the three former officers might seek to run in Local 420 elections that will be held next month, Ms. Charles replied, "I don't think that they'll be eligible." Because of member outrage over the misappropriated money, she added, "It would be foolish for either Sarah Kennedy or Aurora Santiago to run again." Mr. Campbell is currently living in Delaware.

The impact of the earlier judgment against Mr. Butler and Mr. Smith combined with the recent ruling, she said, is that, "I think we send a loud and clear message that the kind of abuses that took place cannot be tolerated."