In the world of high-level office politics, a leave of absence set against the backdrop of scandal all too often is a prelude to resignation. That’s the way it played out at the Screen Actors Guild. On April 25, the union’s longtime Producers Pension and Health Plans (SAG-PPHP) CEO, Bruce Dow, resigned his position, effective April 30, in the face of a wrongful termination suit filed in California state court on March 22 by a former plan official, Craig Simmons. Dow, on disability leave since January, had announced his intent to retire in March. Simmons’ suit, which follows his complaint of last September with the U.S. Department of Labor, alleges Dow and loyalists embezzled millions of dollars in SAG benefits and then stonewalled probes. The plans’ interim head is its chief operating officer, Christopher Dowdell. Dow will remain as a consultant.
Union Corruption Update last December reported in detail on the evolving turmoil at SAG. Bruce Dow for nearly three decades played a central role in managing Screen Actors Guild pension and health plans, now worth a combined roughly $2.5 billion. Unfortunately, says Craig Simmons, he also stole from them. Simmons joined SAG-PPHP in July 2008 as a consultant and became a full-time employee that October. In January 2011, he was promoted to executive director of human resources, information technology and risk management. Dow forever will rue the day he hired him. Just two months later at a putative budget meeting Simmons was fired. SAG-PPHP alleged Simmons lacked competence and integrity, but Simmons asserted the real reason was his refusal to cover for criminal activity, which included embezzlement of between $5 million and $10 million in assets.
In March and again in August, Simmons contacted the SAG-PPHP board of trustees, each time receiving no response. In his August effort he reportedly wrote personalized letters to all three dozen board members. On September 14, he filed a complaint with the Department of Labor, requesting that the DOL conduct civil and criminal investigations into whether Dow and other PPHP officials had been looting benefits. Whether one sees Simmons as a whistleblower or a disgruntled ex-employee, he made some serious charges. The complaint, among other things, alleged: 1) Dow and SAG-PPHP Executive Director Michael Estrada used plan assets to buy stocks through insider information and diverted the profits to their own personal use; 2) Dow steered business toward, or paid unjustified compensation to, family members in violation of ERISA rules; 3) former SAG plan Chief Information Officer Nader Karimi set up contracts with several companies with whom PPHP had done business and then siphoned plan assets for his own use (Karimi by then had left his post and settled for an undisclosed sum); and 4) Dow told Simmons to block all outside investigations.
Simmons, for months having threatened to take legal action against SAG-PPHP, made good on his threats on March 22. He filed suit in Los Angeles Superior Court claiming he had been wrongfully terminated from his post and that his firing was retaliation by Dow for exposing Dow’s misappropriation of funds to SAG-PPHP board members Duncan Crabtree-Ireland and Leah French. The suit read: “Defendants’ acts, in retaliating against Plaintiff, were carried out by managerial or supervisorial employees, officers, trustees and directors of PPHP. These acts were committed, directed and/or ratified by Defendants, and each of them, with a conscious disregard for Plaintiff’s rights and with the intent to vex, injure and annoy.” Simmons is seeking an unspecified sum for damages and a jury trial, listing SAG-PPHP and several unnamed persons as defendants. And he’s hired Greg Smith, a prominent litigator with a long track record of winning large claims of fired public-sector employees, as his attorney.
Months before filing his civil suit Simmons had talked to federal law enforcement. In each of October, November and December, he testified under oath in Los Angeles to agents of the FBI, the IRS, the Securities & Exchange Commission, the Department of Justice and the Department of Labor. In an article dated March 15, 2012, Nikki Finke, a blogger for the industry tip sheet Deadline Hollywood, wrote:
My information is that the authorities were taking copious notes while Simmons spoke. Insiders also tell me that federal investigations are now ongoing into not just one embezzlement and cover-up inside the SAG P&H Plan but also another fraud and cover-up there which makes two scandals altogether. I understand the FBI asked Simmons not to go public about the probes and he has not spoken publicly about the whistleblowing…My understanding is that when Simmons went in to testify, the feds already had documents in their possession outlining what embezzlements and cover-ups may have taken place. However, I can also now confirm that federal investigators last week and this week arrived at SAG P&H offices in Southern California and in Massachusetts and carried out several dozen boxes of paperwork to unmarked cars waiting outside.
Finke also noted that a New England SAG member, James McIsaac, that very day had posted on Facebook, “My local pres just confirmed the FBI picked up some papers at the P&HP office.”
Dow, on leave since January, was supposed to be back on the job by mid-March. He instead pushed back the date of his return to March 22. And the rock-solid support that Dow initially had enjoyed among SAG-PPHP board members was fraying. Several members, averse to the growing publicity surrounding Simmons’ charges, reportedly called upon Dow to retire and remain as a consultant for about a year and a half. Dow, sensing the end was near, announced that month that he would step down permanently. On April 25, he made it official: He would retire effective April 30. A SAG statement read: “It is with regret that we accept our CEO Bruce Dow’s decision to resign from employment with the Plans. For the last 28 years, Bruce has been instrumental in assisting the Trustees in designing and managing many of the benefit programs actors enjoy today. His ideas and innovations over the years have produced substantial savings for the Plans and excellent benefits for Plan participants.”
A key subtext of Dow’s loss of support among trustees was the pending merger of the Screen Actors Guild and the American Federation of Television and Radio Artists (AFTRA), which, in fact, became a reality on March 30. Neither SAG President Ken Howard nor AFTRA President Roberta Reardon wanted this scandal hanging over them. The merger, in the works since 2008, passed with the support of more than 80 percent of the rank and file in each union. Ballots had been mailed out in late February. SAG members, unlike rank and file in AFTRA, failed to muster the needed 60 percent majority in previous merger votes in 1999 and 2003. The new union represents some 150,000 actors, announcers, dancers, disk jockeys, news editors, singers, voice-over artists, stuntmen and other performers in the film and broadcasting industries. That represents a lot of benefit funds to manage.
Screen Actors Guild Whistleblower Alleges $5-$10M Benefit Theft