Oregon Boss Guilty of Racketeering in Pension Case

John D. Abbott, an ex-Laborers’ Int’l Union of N. Am. business manager in Portland, Or., pled guilty Feb. 26 to criminal charges of receiving payoffs from Jeffrey Grayson, owner of an investment company, Capital Consultants LLC, that managed a share of LIUNA’s pension funds. Allegedly, Capital misused union trust funds. Dep’t of Labor and others placed Capital in receivership last year. An estimated 75% of the $927 million under Capital’s management was union pension plans, including Taft-Hartley plans covering pension, health and welfare, and vacation benefits.

Civil suits have been filed by DOL, SEC, and union trusts against Capital. Members of some unions have filed actions against fund trustees. Further, federal agencies are investigating criminal charges against Grayson and others.

Abbott was business manager of the Or., S. Idaho & Wyo. Dist. Council of Laborers until he resigned in 1998. He was a trustee of a number of LIUNA funds. He pled guilty to accepting gratuities in cash and other consideration of $194,940 from Grayson in exchange for helping place pension funds with Capital. He pled guilty to racketeering charges under Title 18 U.S.C. § 1954. He also pled guilty to understating his 1997 income on his federal tax return by $76,560 in gratuities from Grayson.

Asst. U.S. Atty. Lance Caldwell said he had witnesses who could testify that prior to some of Abbott’s visits to Grayson, Capital employees would be sent to the bank with checks for large amounts of cash. The cash was delivered to Grayson’s office and placed in a basket in his wheelchair. When Abbott emerged from Grayson’s office, witnesses said they saw bulges in his pockets that appeared to be bundles of cash, Caldwell said.

Abbott agreed to cooperate with the federal probe of Grayson. In exchange, prosecutors agreed to reduce the severity of the charges. Prosecutors will recommend a 15-month sentence. The agreement also bans Abbott from working or consulting for a labor organization or employee benefits plan for at least 13 years. [BNA 3/1/01]