Secretary of Labor Hilda L. Solis Print This Page Print This Page  Decrease Text Size Increase Text Size Text Size  Email This Page E-mail This Page

Archived News Release — Caution: Information may be out of date.

U.S. DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

EBSA Press Release: New York Carpenters' Plans To Receive Over $50 Million [05/06/1997]

For more information call: (202) 219-8921

 
	 
Three employee benefit funds of the New York District
		Council of Carpenters will receive more than $50 million to reimburse them for
		improper transfers to the union's welfare fund, according to a consent judgment
		obtained by the U. S. Department of Labor.
 
	 
The judgment resolves a lawsuit filed by the Labor
		Department on July 2, 1996, against the trustees of the funds, alleging they
		violated the Employee Retirement Income Security Act (ERISA).
 
	 
"Sponsoring employers have no business dipping into
		retirement plans to subsidize improper expenses," said Labor Secretary Alexis
		M. Herman. "This consent judgment returns the money to where it belongs--to pay
		for the benefits of workers."
 
	 
As part of the judgment, fund trustees must institute
		procedures to assure that expenses are properly paid by the funds for vehicles,
		telephones and other expenses, ensure that records are maintained and that
		expenses are properly apportioned among the funds. Finally, the judgment
		stipulates that the pension fund shall execute leases with the District Council
		and its locals for space rented at 395 Hudson Street in New York City.
 
	 
The New York City District Council of Carpenters sponsors
		pension, annuity, vacation, welfare and apprenticeship plans under collective
		bargaining agreements with contributing employers. The plans cover more than
		23,000 members. Collectively, the funds had in excess of $1 billion in assets
		at the end of September 1993.
 
	 
In its lawsuit, the Labor Department alleged the trustees
		of the funds:
 
	 
     
		
  •  transferred more than $37.6 million from the pension, annuity and
		  vacation funds to the welfare fund;
    •  
		
  •  failed to collect money transferred to the welfare fund;
    •  
		
  •  paid the leases and insurance on luxury vehicles, including cellular
		  telephones, used by numerous employees of the funds without determining whether
		  such use was needed and the costs reasonable;
    •  
		
  •  failed to enter into leases and collect rent owed to the pension and
		  apprenticeship funds by the District Council, union locals and the other
		  funds;
    •  
		
  •  compensated employees Alan Burns and Dominick Lavacca without
		  monitoring services they provided to the funds and failed to obtain
		  reimbursement for services performed for the Council at plan expense.
    •  
	 
 
	 
Named in the department's lawsuit are former union trustees
		of the funds, some of whom were removed by the international of the AFL-CIO,
		current and former employer trustees of the funds, the District Council,
		Resilient Floorcoverers Local 2287 and United Brotherhood of Carpenters and
		Joiners of America Local 1456. The individual trustees named as defendants were
		Frederick W. Devine, John Abbatemarco, Charles Terjesen, Robert Cavanaugh,
		Julius Kleinstein, Paul J. O'Brien, Edmund Greco, Alvin M. Jaff, Richard
		Harding Jr., John A. Brunetti and Michael Crimi.
 
	 
The case resulted from an investigation by the New York
		Regional Office of the Pension and Welfare Benefits Administration. The
		judgment was entered on May 2 in federal district court in New York City.
 
	 

 
	 
Archived News Release — Caution: Information may be out of date.