The U.S. Dep’t of Labor’s ERISA suit against two trustees of the Nat’l Elec. Benefit Fund charging improper dealings between NEBF and top Clinton-fundraiser Terry McAuliffe is scheduled to have a settlement conference on Sept. 7, according to a June 27 letter from U.S. Magistrate Judge Charles B. Day to the parties. This follows two failed settlement meetings in Jan. and Apr. 1999 before the suit was filed.
Among the May 1999’s suit allegations was that NEBF trustee John Grau and ex-trustee Jack F. Moore imprudently lent over $6 million in pension assets. NEBF is operated jointly by the Int’l Bhd. of Elec. Workers, from which Moore retired as secretary in 1997, and the Nat’l Elec. Contractors Ass’n. The alleged scam involved a questionable $6 million loan in 1992 to a McAuliffe firm. The loan was in default from 1992-97, and DOL says NEBF should have known the loan couldn’t be repaid in full with interest. DOL seeks the trustees to reimburse the fund for losses, plus interest.
According to the most recent court documents, the discovery phase of the suit is nearly complete. But there is a lot of back-and-forth about two document requests from DOL. The first is: “[a]ll monthly transaction and valuation reports and quarterly and annual performance reports pertaining to the assets and investments of [NEBF] that relate to the period from [Oct.] 1, 1997 to the present.” The second requests NEBF’s IRS Form 5500s since 1998. According court documents submitted by the defendants’ attorney, James M. Kefauver, DOL missed a deadline and is attempting to get “a second bite at the apple” in its pursuit of these records. [Herman v. Moore, CA# AW99-1283 (D. Md.)]