D.C. teachers group seized under allegations of misuse of dues

Union's parent takes over

suit filed against officers

March 01, 2003|By Stephanie Desmon | Stephanie Desmon,SUN STAFF

WASHINGTON -- The list is replete with the kind of excess typically reserved for the glitterati: a $57,000 Tiffany tea service for 24, a $20,000 custom-tailored mink coat, a $13,000 plasma television set, a $5,500 Baccarat crystal vase.

But these purchases and hundreds of others, authorities say, were made over the past six years by teachers -- officials with the 5,000-member Washington Teachers Union -- and paid for with union money. Authorities put the price tag at more than $5 million in unauthorized expenditures on everything from dry cleaning bills to wigs to pearls to paintings, with shopping sprees at stores such as Neiman Marcus, Bergdorf Goodman and Saks Fifth Avenue using the union's American Express cards.

The allegations have led the union's parent, the American Federation of Teachers, to seize control of the local -- an unprecedented move by the governing body.

And they have led to one guilty plea of conspiracy to launder money -- by Leroy Holmes, who worked as a personal chauffeur for union officials and was sent to cash large checks drawn on the WTU account sometimes several times a week. Other indictments are likely.

The AFT has filed a lawsuit against some of the top union officers, seeking restitution for teachers complaining that their dues were looted.

"They used their business credit cards for these obscene purchases that clearly had no connection to union business or the business of education," said Alex Wohl, spokesman for the AFT. "I don't know how you explain that other than greed and an utter lack of regard for the people you are elected to serve."

The scandal has even knocked on the door of Mayor Anthony A. Williams. One of those accused of lavish spending is Gwendolyn M. Hemphill, who served as co-chair of his troubled re-election campaign last year.

AFT officials first discovered something was wrong last summer when they got a phone call from a D.C. teacher. Teachers had received a special July paycheck covering a retroactive pay raise -- and $16.08 was supposed to be deducted for union dues. Instead, the union took $160 from each check.

Signs of suspicion

Checking into it, AFT officials found that Barbara Bullock, the local's president since 1994, had asked the city to make the larger deduction but she was telling AFT the mistake was the city's. She was told to just return the money to the members but appeared reluctant to do so.

That's when the AFT "got suspicious," Wohl said.

Around the same time, the local union had made several large payments of back dues to the national organization and the figures seemed to match perfectly. So AFT immediately sent its financial people over to start looking at the books, he said.

"We believe it's a blessing that it got stopped when it did," said Linda H. Moody, president of the Congress of D.C. Parents and Teachers, whose grandchildren attend the public schools there.

Within weeks, the AFT notified the U.S. attorney's office, which began investigating. The AFT hired a forensic auditor. In December, the FBI put out warrants to search the homes of Bullock, Hemphill, Holmes, Treasurer James O. Baxter II, Bullock's sister, Gwendolyn B. Clark, and Michael and Cheryl Martin, Hemphill's daughter and son-in-law -- and to seize many of the expensive items. Bullock alone could be responsible for $2 million in unauthorized and questionable purchases, documents show.

"Bullock, Hemphill and Baxter appear to have systematically diverted millions of dollars in WTU funds to themselves, family members, and others for personal benefit," according to the audit conducted for the AFT.

"We have determined that many of these items, including the clothing, fur coats, electronics, auto repairs, beauty aids, vacations, crystal, jewelry and other items, apparently were never even present at the WTU offices, and in some instances were delivered directly to the homes of the individuals," it continued.

The audit -- and a subsequent AFT lawsuit designed to recoup as much of what is missing as possible -- charges that Bullock, her assistant, Hemphill and others allegedly used union funds as their personal piggy bank. They also were said to have used corporate American Express cards to make extravagant purchases, documents state, even though the cards were to be used expressly for business expenses.

Checks were apparently forged; in some cases, the name of the intended payee -- Verizon or Blue Cross/Blue Shield, for example -- was crossed out and the name of a member of the staff was written in.

Holmes, court papers allege, would cash union checks and would give the money to Hemphill, who would then give him some to keep. His job entailed driving Bullock to union meetings and appointments, and he "drove Bullock to run personal errands, such as antiquing and clothes shopping at various shopping malls across the Washington, DC metropolitan area," the lawsuit states.

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