DC 37 Exec. Director Accused of Nepotism in Contract

The executive board of District Council 37 in New York City, on April 21, ordered a reconsideration of a union contract awarded to the nephew of DC 37’s executive director Lillian Roberts.  Three days later, the nephew, Ivan Smith, gave up the contract in which his law firm — Vladeck, Waldman, Elias & Engelhard — would represent the council’s employee benefits fund. 

Roberts was elected to head the huge NYC affiliate of the Amer. Fedtn. of State, County & Municipal Employees (AFSCME) in Feb. 2002.  Roberts replaced the disgraced Stanley Hill, who presided over a board in which more than half the directors were convicted of various crimes and the council’s assets plummeted by more than 80%.

Officials with the benefit fund’s three-member board, incl. Roberts, awarded the $180,000 contract late last year to the law firm where Roberts’ nephew was a partner.  Roberts did not deny the allegation, but argued that nephews are not considered family members under the union’s ethics guidline.  However, an ethics officer appointed during a trusteeship by the union’s Washington, DC HQ, Barbara Deinhardt, noted that Smith had lived with Roberts, and that she had paid his college bills.  One of the original dissenters against the corrupt DC 37 hierarchy in the 1990s, Mark Rosenthal, now the council’s treasurer, supported Deinhardt, the ethics officer.

This is not the first time that Roberts has been under suspicion of influence peddling.  She had been a frmr. associate director of DC 37 when she joined an HMO called Total Health Systems in 1987.  During an insurance enrollment period in early 1988, Roberts admitted that Total Health paid about $40,000 to about 150 city workers, incl. local union bosses, while they recruited new members for Total Health.  The payments were made despite a city guideline prohibiting any payments of city workers for promotional activities.  The NY Dept. of Investigation, however, found no violation of NY penal law. [Newsday, 4/22/03: New York Times, 4/25/03]