Court-appointed receiver Thomas Lennon was expected last week to send some $72 million to union pension funds and other clients of the failed Capital Consultants investment firm. Eventually, some $240 million in asset sales and legal settlements is expected to be returned to the investors, about 70 percent of the losses incurred with the Oregon-based firm’s collapse in 2000. The major union trusts involved in the recovery action include the Ore. Laborers-Employers Pension Plan, the 8th Dist. of the Intl. Bhd. of Elec. Workers which covers Colo., Idaho, and Utah, the United Assn. Local 290 Plumber, Steamfitter & Shipfitter Industrial Pension Plan in Portland, Ore., and the Office & Professional Employees Intl. Union Local 11, also in Portland.
In an April 4, 2002 lawsuit, the U.S. Dept. of Labor detailed how trustees of those union pension funds ignored warnings from outside investment advisers against placing too much of those funds in Capital‘s risky private placements, even when those investments were “drastically underperforming.” For a more detailed accounting of the union trustees’ reported failure to protect their pensions, go to http:/ /www. nlpc.org/olap/congress/020910a.htm. Six union officials have either been indicted or pled guilty to accepting gifts and favors from Capital executives in exchange for steering their unions’ pensions to Capital. [The Oregonian, 7/21/03]