According to the Securities & Exchange Commission, the pension manager for Int’l Bhd. of Electrical Workers Local 99 in Providence, R.I., is responsible for “the biggest unauthorized diversion of funds” in New England in the last decade. Todd LaScola, the co-owner of CPA Network Advisors and owner of CPI Investment Management, has been accused of diverting at least $6 million from brokerage accounts of CPA to repay IBEW. LaScola reportedly invested $6.4 million from the pension fund in ultra-speculative promissory notes sold by a Chicago real estate developer, RBG Management Services. After the investment collapsed, he diverted money from customer accounts without permission to cover the loss. Allegedly, IBEW demanded an immediate return of the $6.4 million and after IBEW got its money back, it fired LaScola. No criminal charges or civil sanctions have been filed, but LaScola is still under investigation and his firms have been closed. [A.P. 3/15/99]
California Bosses Attempt to Blackmail Hotel
On Mar. 16, the San Mateo (Cal.) Marriott released a transcript of a hotel voice mail recording of union bosses plotting to lure the hotel into a public relations embarrassment on the eve of city council hearings to approve a hotel addition. Marriott blasted the unions’ unethical tactics of blackmailing Marriott into signing a union agreement by threatening to block the addition by bringing political pressure on the city council. According to Greg Casserly, executive vice president of Tarsadia Hotels, which owns San Mateo Marriott, the conversation was recorded accidentally when Hotel Employees & Restaurant Employees Int’l Union Local 340 president Harry Young failed to hang up after leaving a voice mail message for Casserly. The voice mail continued to record Young’s conversation with other union bosses. On the recording, the bosses divulged a plot to ask Rep. Tom Lantos (D-Cal.) to invite Casserly to a union meeting in the hopes that Casserly wouldn’t attend, thereby creating a public relations embarrassment for the union to exploit.