SEIU Puts Michigan Health Care Affiliate in Trusteeship, Probes Possible Fraud

Financial malpractice rarely goes out of season among a number of health care affiliates of the Service Employees International Union. On February 14, SEIU President Mary Kay Henry placed SEIU Healthcare Michigan under emergency trusteeship following allegations by an unnamed internal whistleblower that two of its top officials had abused the Detroit-based union’s loan and vacation policies. Henry removed union president Marge Robinson and replaced her with three trustees to manage day-to-day affairs. While no dollar figure on the missing funds is available, evidence suggests it is substantial. The union, as it was, had been bleeding membership after the enactment by the Michigan legislature of Right to Work legislation several years ago.

Marge Faville Robinson, a nurse by profession, had done well for herself heading SEIU Healthcare Michigan (HCMI). According to the annual financial data submitted to the U.S. Department of Labor, her union salary in 2015 was $209,889. Family members also fared well. HCMI paid Robinson’s daughter, Norma Kersting, $108,336 that year as the union’s director of representation, and a niece, Brenda Robinson, $110,679 as legal director. Her son, Josh Robinson, for a while also had been on the union payroll. And there were the perks, especially Marge Robinson’s free use of an SUV and a Detroit luxury apartment. The union’s capacity for generosity was enhanced in 2015 when it sold four of its properties for a combined $2.3 million. And that sum paled before the money the union saved in September 2014, when the Michigan Court of Appeals ruled that SEIU Healthcare Michigan did not have to return $34 million in dues collected from home health care workers as part of a Medicaid-funded program. That ruling was handed a few months after the U.S. Supreme Court had ruled in Harris v. Quinn that public-sector unions in Illinois could not forcibly extract dues from similarly-subsidized home health care workers.

Apparently, all this wasn’t enough. According to an SEIU Michigan Healthcare whistleblower, Robinson and other top union officials misrepresented claims related to loan and paid time off/earned vacation policies. Here is how SEIU headquarters described the situation:

After someone with knowledge of the local reported potential financial malpractice at Healthcare Michigan, representatives of the International union conducted a review of the local union’s books and records and found information indicating abuse of the local union’s loan and paid time off/earned vacation policy. Following this review, President Henry concluded that it was necessary to place the local into an emergency trusteeship to protect the union’s interests and to allow for a full investigation to determine all the facts.

According to MLive, an online news site for several Michigan newspapers, “An SEIU spokeswoman declined to comment on whether police were involved in the investigation.”

Inga Skippings, President Henry’s chief of staff, remarked in an interview with a Detroit television station that the union conducted a “pretty expansive investigation into what could have been going on here.” Following the whistleblower’s allegations, she said, “There was initial work done to suss out the credibility before we took the action we did.” Skippings is one of three trustees assigned to run the union; the other two are Tom Balanoff, president of SEIU Local 1 in Chicago, and Ed Burke, an SEIU consultant and former staff member.

What makes the misuse of SEIU Healthcare Michigan funds even more indefensible is the union’s dwindling ranks. Back in December 2012, as Union Corruption Update had reported, the Michigan legislature, at the recommendation of Republican Governor Rick Snyder, passed a pair of Right to Work laws, one applicable to the private sector and other to the public sector. These laws outlawed the union shop. No longer could a union insert “security clauses” into collective bargaining contracts requiring an employer to fire an employee who does not join or pay partial dues (“agency fees”) in lieu of joining. Union leaders, in and out of Michigan, ferociously opposed these measures. They knew that if workers had the option of not paying dues, many would exercise it. Such fears were born out in the case of HCMI. According the union’s LM-2 financial reports filed with the Labor Department, membership at the close of 2012 was 55,265, but dropped more than 80 percent to 10,913 just one year later. Yet despite the far smaller dues pot, union leaders continued to enjoy outsized compensation.

There is a backstory to this drama. And it involves a familiar figure: former Southern California Service Employees chieftain Tyrone Freeman. As Union Corruption Update noted in several articles, Freeman used his position as head of the powerful SEIU Local 6434 and various related nonprofit organizations to divert hundreds of thousands, if not over a million dollars in funds to himself, family and friends. Then-SEIU President Andrew Stern, after reviewing public allegations of corruption, removed him from office in September 2008 and placed the local under trusteeship. Several years later Freeman would be indicted on numerous embezzlement and fraud charges, and convicted by a Los Angeles federal jury. Freeman’s chief of staff for much of the time was Rickman Jackson, who moved to Michigan in 2007 to take the job of the then-new SEIU Healthcare Michigan. Soon after news of the Freeman scandal broke the next year, Jackson was forced out of office. The Stern probe had revealed that a nonprofit housing corporation founded by Freeman had operated out of the address of a Jackson-owned property. Jackson’s replacement at HCMI was none other than Marge Robinson. Trouble seems to follow this union.