After this week, local electioneers face a new political axiom: Death sentences trump mudslinging news conferences. Just ask City Council candidate Kevin Faulconer.
On leave from his job as a PR strategist to run for the District 2 seat being vacated by term-limited Byron Wear, Faulconer couldn't have picked a worse time to hold court at City Hall Monday afternoon, when the bizarre Westerfield death-penalty verdict came down. Faulconer had scheduled-but, with no TV cameras there, promptly postponed-the press conference to lay out allegations that the city's largest employee union had funneled through its international arm in Washington, D.C., nearly $18,000 to the political coffers of his opponent, Michael Zucchet.
Faulconer hints that money was illegally siphoned off from overly high health-benefit premiums paid by members of the American Federation of State, County and Municipal Employees (AFSCME) Local 127. At his side stood one union member who commented, “I think it's really peculiar.”
In a council race already festooned with some pretty harsh rhetoric, the allegations are expected only to raise the temperature during a whopping 14 debates between the two in October alone prior to the November general election.
Since early June, the City Attorney's office has been investigating a portion of the allegations, based on a May 31 letter from attorneys representing Local 127's former insurance broker, Doyle, George & Co. In the letter, the broker claims that the local union-which represents about 2,500 blue-collar city workers-had overcharged for years for members' health benefits and didn't tell city officials about it. The insurance firm claimed the amount came to between $7,000 and $8,000 a month and “stays with the union.”
For 2001, that money allegedly totaled about $90,000, the broker's attorney claimed in the letter. “The same approximate percentage amount has been added to the true insurance rates for at least nine years,” it continues. “It is estimated that the amount of such unauthorized, undisclosed and unregulated amounts exceed $1,000,000 in the aggregate over that time period.”
Road apples, said Ed Lehman, Local 127's business representative. Lehman points out the city's own Risk Management Department looked into the allegations and found the administrative overcharge to be, in essence, a standard industry practice. Lehman also said Local 127 only began offering full medical plans after 1995.
While the letter claims the city characterized the difference as “insubstantial,” the city's benefit manager, Valerie VanDeweghe, said otherwise. “I would not have made such a characterization, but I would certainly not be surprised” at the disparity,” she said. “I did not, however, describe it as insubstantial.”
Said Lehman: “That's the way all unions operate, and it still doesn't cover the cost of administering the health benefits.” He said Doyle, George & Co. were terminated as the union's insurance broker July 31 “because they weren't providing services that they had promised. These folks just weren't there and weren't responding to members' concerns, and the city knows that.”
Lehman also called on the city to audit the union's finances “at any time.” Meanwhile, the administrative fee has been reduced to about $3,000 a month, with union dues picking up the slack, he said.
“Obviously,” he added, “we are very disappointed that, having lost the contract, they are now striking back at us by making these accusations and that Kevin Faulconer would be trying to make political hay out of it. The international union oversees a totally separate fund. The line that he's trying to draw just isn't there.”
He also wonders how Faulconer obtained the May 31 letter, which was sent to the city attorney and copied to the City Council, mayor and city manager. Wear and Mayor Dick Murphy have endorsed Faulconer, and Wear's office was the only recipient to inquire about the investigation for months, several sources confirmed. Faulconer declined to reveal his City Hall source.
Undaunted by whiffs of political collusion, Faulconer prefers talking about sections of AFSCME's own International Constitution, which basically lays out the percentage of local union dues that are to be earmarked for the mothership organization. State records show a $6,900 contribution from the international union to Zucchet's campaign on Feb. 19 for phone-banking, bringing the calendar year total for such offerings to $17,715.
“Look, there's a million dollars that's missing,” he said. “I want to make sure that none of the missing money has found its way into my opponent's campaign.” Along with the city attorney, Faulconer has also asked District Attorney Paul Pfingst to hop on board the investigation.
Elmer Heap, the deputy city attorney reviewing the May 31 allegations, said the political angle to the investigation is new. “Our office has never been looking at that piece. That was just thrown in,” Heap said. “Frankly, we haven't seen anything in our investigation that would indicate that Local 127 set up a fund that these premiums are going into and thus using for political purposes. We haven't seen that.”
Meanwhile, Zucchet, Faulconer's opponent and himself the legislative director of the city's firefighter union, sees this as the continuing saga of the public-relations simpletons enamored with labels in political campaigns.
“It's union boy versus developer boy,” Zucchet lamented. “These are serious enough allegations to do a full investigation, and I support the city attorney doing that.”
On the charge of political shenanigans, Zucchet is less diplomatic: “For Kevin, it's just another excuse to hold a press conference and throw some shit on the wall and see what sticks.”
Or, at least trying to hold a press conference. Though not dead sure, Faulconer said he may try again later this week.