Judge Allows DOL’s McAuliffe Suit to Proceed

U.S. Dist. Judge Alexander Williams, Jr., (D. Md., Clinton) allowed the Dep’t of Labor to proceed with its suit June 15 alleging that trustees of the Nat’l Elec. Benefit Fund, which is linked to the Int’l Bhd. of Elec. Workers, breached their ERISA fiduciary duties by investing in Am. Capitol Group I Assets LP, a Fla. real estate firm, tied to Democratic Nat’l Committee chairman Terence R. McAuliffe and his wife. In 1999, DOL sued trustees Jack Moore and John Grau alleging imprudent real estate deals.

Williams denied the defendants’ motion for summary judgment rejecting their argument that they didn’t breach their duties because the deals had beneficiary results. Williams said, while “[m]uch of the Defendants’ brief is devoted to heralding the beneficial results”, this is not the correct legal standard. “Moreover,” Williams added, “it is unclear what was the basis for Moore’s belief that [Am. Capitol] was ‘doing well.'” He found that genuine issues of material fact exist as to whether NEBF’s investment in Am. Capitol was a prudent investment. He noted that NEBF had not obtained an independent appraisal of the fair market value of Am. Capitol. He also found that genuine issues of material fact existed on whether NEBF had suffered losses as a result of the Am. Capitol investment.

The case is currently scheduled to go trial Oct. 30, 2001. DOL was represented by Joan M. Roller, Myrna A. Butkovitz, and Richard T. Buchanan. Moore and Grau were represented by James M. Kefauver of Shulman, Rogers, Gandal, Pordy & Ecker, Rockville, Md. [BNA 7/12/01; Chao v. Moore, No. AW99-1283 (D. Md. 6/15/01)]

Tennessee Boss Faces Theft Trial
An ex-union boss, his wife, and his secretary, who are accused of stealing more than $16,800 from the Int’l Bhd. of Elec. Workers Local 429 in Nashville, are set to go on trial Aug. 14. A May 11 federal indictment charges ex-financial secretary Robert M. Emery, Sr., and secretary Terri J. Myatt  with union embezzlement. Emery’s wife, Patricia A., is accused of aiding and abetting union embezzlement.

The indictment accuses Emery of stealing $5,693 for himself and $5,340 for his wife and helping Myatt steal $5,818 from union coffers. The thefts allegedly occurred June 1996 to July 1998. The indictment does not state how the funds were taken or for what they were used. Emery was voted out as the local’s financial secretary in 1998. [Tennessean 7/10/01]