New Developments in Growing DC Scandal

As federal agents continue their investigation, members of the Washington Teachers Union are asking how the WTU’s Exec. Bd. could have allowed three ex-officers to apparently steal over $5 million under the Board’s nose. And the Amer. Fedtn. of Teachers (AFT), which failed to get a required audit from the WTU for seven years, has now begun a process likely to conclude with their taking over the D.C. affiliate.

A panel of the AFT’s governing bd. held a hearing at its Wash., D.C. headquarters on Jan. 15, and is expected to vote on placing the WTU under “administratorship” this week. AFT rules require local affiliates to submit an audit of their finances every two years. But after taking over the WTU as its president in 1994, Barbara Bullock never provided one, despite repeated requests from the AFT. In fact, the WTU had failed to pay its monthly dues of $50,000 to the AFT since the fall of 2000. Yet, AFT officials never suspected wrongdoing, but simply assumed that Bullock was holding on to the money to collect extra interest.

On Jan. 16, the AFT released the results of its own internal audit, documenting at least $5 million in stolen WTU funds by eight WTU staffers, incl. Bullock, her frmr. asst., Gwendolyn Hemphill and ex-treasurer James Baxter. Ominously, the auditors said that with many union records missing, the amount stolen is likely to increase, “and this increase could be substantial.”

Bullock charged at least $1.8 million to the WTU’s American Express card for unauthorized expenses, incl. a host of luxury items, such as clothing, electronic equipment, antiques and paintings.

In violation of federal election law, Bullock also contributed $9,000 to the Dem. Natl. Cmte. and $2,000 to Hillary Clinton’s senate campaign in 2000. By charging those contributions to the WTU’s American Express card, Bullock violated the Fed. Elect. Campaign Act by making a contribution to a fed. candidate directly from the union, instead of its pol. action cmte. Bullock also wrote checks for her personal benefit of at least $381,000.

Hemphill allegedly stole at least $492,000 through unauthorized credit card charges and checks to pay for tens of thousands of dollars in artwork, antiques, clothing, electronic equipment, and jewelry.  Hemphill also engaged in a series of kickback schemes with other WTU staffers and relatives. According to an affidavit by FBI special agent Katherine Andrews, Hemphill funneled over $20,000 to a business owned in part by her son-in law, Michael Martin. Many of the payments failed to mention any services rendered. Bank records indicate that more than $10,000 from Martin’s business were then paid out to Hemphill. According to the AFT auditors, Bullock’s chauffeur. Leroy Holmes, received more than 200 checks totaling more than $1.2 million from Hemphill. He cashed the checks, then split much of it with Hemphill.

According to witnesses in the WTU office, treasurer Baxter only showed up only when he needed to “sign checks.” Yet, he stole at least $537,000 in credit card purchases and checks for “professional fees” and “professional services.” He used the union’s American Express card to pay dining and entertainment expenses, auto repairs, artwork and “pension payments.”

Meanwhile, FBI agents are now investigating Esther Hankerson, who worked alongside Bullock as general vice-pres. from 1994 until her appointment as interim-pres. in Oct. of last year. While union staffers, incl. Hankerson, regularly received financial statements showing that the WTU failed to deposit funds into the union’s pension plan for several years, Hankerson insists that she didn’t know of the pension shortfall. Hankerson supports an AFT takeover of the local union.

The U.S. Attny. for Wash., D.C. has yet to announce a formal indictment of Bullock, ex-treasurer James Baxter, and ex-asst. Gwendolyn Hemphill. [Washington Post  1/17/03, 1/15/03, 1/9/03: FBI 12/18/02]