NY DC 37 Says “Never Mind” about Pension Fund Audit

The new administrator for the $200 million pension fund of Dist. Council 37 says that a special audit ordered by the Council’s Exec. Dir., never existed. Lilian Roberts ordered the audit last May, after the previous pension dir. left after 24 years on the job. The affiliate of the Amer. Fedtn. of State, County & Municipal Employees (AFSCME) represents all 125,000 New York City employees.

Last May, newly elected treasurer Mark Rosenthal supported the audit he called for as a dissident back in 1999. Then, DC 37 was mired in a huge scandal of embezzlement and contract vote-rigging that snared dozens of convicted local officials. Rosenthal criticized fund administrators for awarding its prescription drug contract to a company employing the daughter and ex-wife of AFSCME president Gerald McEntee without taking any bids. After the complaints, pension officials sought bids, and one company bid $7.5 million less than the established company. That company, Natl. Prescription Administrators, lowered its bid by $7.5 million and was allowed to keep the contract. NPA has since been bought by Express Scripts.

Rosenthal told The New York Sun he disagreed with the decision to drop the audit, but refused further comment, simply saying, “I was overruled, what can I tell you.”

Cong. Charles Norwood (R-GA), chairman of the House subcommittee on workforce protections, called the Council’s decision “unacceptable.” While declining comment on the audit issue, U.S. labor dept. spokeswoman Sue Hensley did say that DC 37 has a long history of filing their required financial disclosure forms late, usually by nine months.

Pension fund officials are also facing a four-yr.-old lawsuit by two ex-employees, accusing Fund administrators of illegally  diverting money toward the union’s political activities, paying for unnecessary trips to Atlantic City, Las Vegas and Hawaii, and inflating the union’s membership figures to obtain overpayments from the city. But the Council’s Assoc. Dir., Oliver Gray, said that an audit by the union’s own auditors and the city comptroller, were enough to ensure that no mismanagement was taking place. A union lawyer claimed that those allegations are no longer part of the suit. [New York Sun  1/14/03, 1/17/03]