Alleged Theft From D.C. Union Yields Probe
Federal law-enforcement officials, investigating allegations of the theft of $2 million from the Washington Teachers' Union, have seized thousands of dollars' worth of designer clothing, artwork, and electronics from the homes of three former union officials and their relatives.
Agents from the Federal Bureau of Investigation searched the homes of former President Barbara A. Bullock; her assistant, Gwendolyn M. Hemphill; and former Treasurer James O. Baxter II, among others. The December searches followed a tip from the American Federation of Teachers, the District of Columbia union's parent organization, which first spotted financial irregularities in July.
According to an FBI affidavit filed here, there is "probable cause" to believe that the three officials embezzled money, committed tax, mail, and wire fraud, and laundered money. No charges had been filed as of last week.
Ms. Bullock's driver, Leroy Holmes, and Michael Martin, Ms. Bullock's stylist and the son-in-law of Ms. Hemphill, were also involved, the court document states. It says the seized goods are believed to have been purchased with $2 million stolen from the local union.
The alleged offenses began in 1995, the year that Ms. Bullock was elected, and continued through the fall of 2002, the search warrant states. At that time, Ms. Bullock and Ms. Hemphill resigned at the urging of the AFT. Mr. Baxter was asked to follow suit, but he did not resign, said Alex Wohl, a spokesman for the AFT. He has since been relieved of his duties, he said.
'Betrayal of Trust'
"I am incensed over the idea that this could have happened," said Esther S. Hankerson, the interim president of the 5,000-member Washington Teachers' Union and a colleague of Ms. Bullock's for more than 20 years. "Our members are shocked, disbelieving, angry."
Neither Ms. Bullock, Ms. Hemphill, nor their lawyers returned phone calls for comment. Mr. Baxter, Mr. Holmes, and Mr. Martin could not be reached for comment.
Edward J. McElroy, the secretary-treasurer of the AFT, said he was "outraged to learn of the alleged abuses."
"The job of an elected union official is one that has at its core a relationship grounded in trust," Mr. McElroy said in a statement. "Any betrayal of that trust is offensive both to the members of that union and to the leadership that has been elected to serve those members—as well as to the goals the union is striving to achieve each day."
Ms. Bullock allegedly siphoned $1 million from the union while in office, the search warrant states. The report said she spent $500,000 on custom-made clothing, $57,000 on a 288- piece Tiffany sterling-silver set, $17,000 on furs, and $50,000 for the services of Mr. Martin, who acted as a consultant for Ms. Bullock's wardrobe, hair, and home, among other expenditures.
Ms. Hemphill and Mr. Baxter also allegedly spent "thousands of dollars" on nightclubs, restaurants, and artwork, as well as on other accouterments for themselves, the search warrant states.
The officials charged personal expenses to union-paid credit cards, wrote union checks to themselves, and wrote checks to others who then returned the money to them, court documents state. Moreover, the documents maintain, the union officials tried to conceal their actions by enlisting the services of an accountant who prepared "false and misleading" tax returns and financial reports.
Ms. Hankerson, the interim union president, said she had had no reason to question the former president's shopping habits. It seemed reasonable, Ms. Hankerson said, that Ms. Bullock, who lived in a one-bedroom apartment, did not own a car, and had never married or had children, could afford stylish clothes and other such purchases.
The former officials were able to cover their tracks, the affidavit states, because the purchases were made outside union headquarters and never reported to other union officials, the government, or the AFT, which requires local affiliates to conduct biennial audits.
The AFT has been waiting for an audit from the Washington union since 1995, Mr. Wohl said. "We pushed and prodded, and we got all sorts of excuses, some of which were legitimate," he said.
Last summer, the AFT began an internal probe when union members noted that too much had been deducted by the WTU from one paycheck to cover union dues. Each pay period, the local organization deducts $16 from every member's check for that purpose, but in that case, a decimal was misplaced and $160 was withdrawn.
Only part of the money has been repaid to union members, Ms. Hankerson noted.
"We are doing everything humanly possible to return as much as we can," she said, but said that the union did not currently have enough money to reimburse everyone.
Meanwhile, at least two lawsuits have been filed against the Washington Teachers' Union and the AFT.
The New York City-based American Express Co. is suing for unpaid credit card bills. The union owes the company more than $92,000 for purchases and about $14,000 in interest, court documents state.
A second lawsuit alleges that union members were defrauded by Ms. Bullock, Ms. Hemphill, and Mr. Baxter, and that the AFT was negligent in its responsibility to oversee the affiliate, said Nathan A. Saunders, a history teacher at Anacostia Senior High School in Washington, who made the claims.
"We're going to try to re-establish the integrity of the union," Mr. Saunders said. It should be "the primary voice for children and teachers."
Vol. 22, Issue 16, Page 3Published in Print: January 8, 2003, as Alleged Theft From D.C. Union Yields Probe