United Bhd. of Carpenters boss Douglas J. McCarron, who placed the N.Y. Dist. Council of Carpenters into trusteeship in 1996, has filed an unusual civil lawsuit against former trustees of the union’s benefit funds. The federal lawsuit, filed in Manhattan in Nov., accuses ex-union bosses and contractors of saddling the pension and welfare funds with huge debts to score political gains.
Ex-district council boss, Frederick Devine, who was found guilty in 1998 of stealing from one of the union’s benefit funds, hiked pension and welfare benefits to ensure his 1994 election as president, the suit says. The move left the pension fund with a $500 million liability, the suit claims. The moves required the approval of seven employer trustees accused in benefit-funds speak of “failing to discharge their fiduciary duties” to make sure the funds were healthy.
The suit also alleges that Devine’s predecessor, Paschal McGuinness, spent $120 million of the funds’ money to buy and renovate the union’s palatial headquarters, despite an appraisal showing the building would be worth no more than $73 million. The suit asserts that there was no way national union officials could know about the building’s huge cost until it won access to the records last year. One problem there, however: The Daily News ran a full-page story about the millions squandered on “Paschal’s Palace” in May 1992. [Daily News 11/29/99]