AFSCME Puts Corrupt Hawaii Local in Trusteeship; Removes State Director

Hawaii’s United Public Workers has entered a new era. And it isn’t the kind its leaders were counting on. On May 1, Lee Saunders, president of the union’s parent organization, the American Federation of State, County and Municipal Employees, placed the local under trusteeship. The previous day, AFSCME trial officers had removed UPW Hawaii State Director Dayton Nakanelua and Fiscal & Membership Services Administrator Jeanne Endo from their posts. Back in mid-February, an AFSCME audit had concluded that officials of the 13,000-member UPW had been spending large sums for unauthorized purposes. “It is my responsibility to ensure that our union is run with transparency and integrity at every level – and to take action when an emergency exists,” said Saunders.

The Honolulu-based United Public Workers, also known as AFSCME Local 646, as Union Corruption Update noted a couple of weeks ago, has a history of corruption. Back in 2002, former president Gary Rodrigues, aided by his daughter, Robin Sabatini, were convicted in federal court on multiple federal mail fraud, embezzlement and other charges. Corruption apparently has lived on since. Based on a 2018 complaint filed by several members with the Hawaii Labor Relations Board, AFSCME headquarters in Washington, D.C. conducted a full internal audit of the Hawaii affiliate, examining policies, minutes, financial statements and accounting records for the period January 2017-July 2019. Released to the AFSCME executive board this February and then leaked to the Honolulu Star-Advertiser, the audit concluded that the union incurred unauthorized or at least suspicious expenses totaling more than $300,000. That figure did not include $5.6 million in legal fees. The audit concluded, “There does not appear to be meaningful oversight on how funds are spent or accounted for.”

The audit did not accuse anyone of breaking the law. But it did cite UPW State Director Dayton Nakanelua for union credit card misuse and other improprieties, such as his co-signing of a $165,605 check to a film company, Hawaii Production Associates, as a “50% first installment” for a UPW documentary; local President James Wataru refused to sign the check because he did not believe the payment was properly budgeted or authorized by the union’s state executive board. The board also criticized Endo for collecting reimbursements in the thousands of dollars for what were purchases on a personal credit card. Moreover, it reprimanded Wataru, UPW Secretary-Treasurer Gerald Aqui, and Nakanelua assistant Clifford Uwaine for unrelated violations.

National leaders knew they had to act. On April 30, the presiding AFSCME trial officers removed State Director Nakanelua and Fiscal/Administrative Services Administrator Endo from their respective offices. The following day, President Saunders announced that he was placing the union under a trusteeship, naming Oahu UPW chief Liz Ho as interim administrator. In an open letter to union members, Saunders wrote:

The emergency stems from an International Union audit and Trial Officer findings that UPW has suffered from deficient financial management, including the opportunity for serious abuse and misuse of member dues money. As a member of UPW, you have a right to transparency, and you should have faith that your dues money is being managed wisely. As president of AFSCME, I will not stand for anyone breaking this trust.

The United Public Workers is a powerful union in a state where unions are powerful and often corrupt. AFSCME headquarters did the right thing in removing certain UPW officials from office. Time will tell if the new regime will restore credibility.