$300G OT Payout a Page From Old Corruption Playbook

Local 372 Challengers Want DA To Probe Francois's Dubious Spending


The Chief Leader

By CRYSTAL LEWIS

May 14, 2021



MONEY OVER MEMBERS: Paul Brathwaite (second from right) and Anthony Gordon (far left), challengers in the upcoming election for District Council 37's Local 372 who were recently permitted to review the union's finances by a State Supreme Court Judge, alleged that Shaun Francois, who has been president of the union since 2014, has improperly received $296,000 in overtime payments. To the far right is their attorney, Arthur Schwartz.

The Chief-Leader/Michel Friang


The challengers in the election for District Council 37's Local 372, who were granted access to

the local's financial records by a State Supreme Court Justice, have called on the Manhattan

District Attorney's office to prosecute President Shaun Francois for allegedly misusing union

funds.


The dissidents reported that the court-ordered audit showed that Mr. Francois received $296,015 in improper overtime payments in addition to his salary, which was listed at $221,579 in 2018, according to the local's tax records.


In Middle of Voting


Labor lawyer Arthur Schwartz, who is representing challengers Paul Brathwaite and Anthony

Gordon, submitted a letter to the Manhattan DA detailing the alleged improprieties. Mr.

Braithwaite and Mr. Gordon are running for president and executive vice-president in the union's

election, which is ongoing, with ballots due back by June 7.


The union represents 23,000 non-pedagogical school staff, many of whom were among the

lowest-paid among city employees.


Last September, Mr. Schwartz filed a lawsuit calling on the local to release its financial records

ahead of the election. In March, Manhattan Supreme Court Justice Louis Nock granted that

request, and the challengers spent eight days looking over the data.


A review of the union's check ledgers, payroll ledgers, and credit-card invoices between August

2014-when Mr. Francois took over as head of the local-and this year showed that Executive

Vice President Donald Nesbit was allegedly overpaid $111, 166, while Irma Canales, the local's

former business manager, reportedly made $187,425 in overtime.


'Charlie Hughes Territory'


"This is where it gets into Charlie Hughes territory. There's nothing in their Constitution, nothing in any document that says that the president of the union gets overtime," Mr. Schwartz said.

He was referring to Local 372's 30-year president, who in 1998 was arrested for embezzling $3

million-over $2 million from members' dues and the rest from DC 37-and eventually was

sentenced to three years in prison.


When concerns about Mr. Hughes's spending were raised, DC 37's international union, the

American Federation of State, County and Municipal Employees, audited the local and

determined that it was $10 million in debt. AFSCME found that Mr. Hughes had received $1.6

million in improper payments for overtime and other union-related expenses he was not entitled

to, and had been reimbursed for $329,000 in personal charges made on his union credit card.

Mr. Schwartz, who was part of the effort to root out corruption at DC 37 in the late 1990s,

believed that Mr. Francois was repeating that sordid history.


'Comp Time Not Allowed'


"I know that their salary manual-because I wrote it-doesn't provide comp time for the officers,"

said Mr. Schwartz, who worked as the local's attorney until 2017. "If it's against the Constitution, it's a crime, and it's exactly the kind of stuff that Hughes did."


The local's lawyer, Roger Archibald, declined to comment on whether the union allowed officers to be paid for overtime. District Council 37 referred an inquiry into the matter to the local.

In a statement on behalf of Mr. Francois's administration, Mr. Nesbit wrote that the allegations,

including the reported overpayments, "are without merit and are categorically false."

"It is election time at the Local and unfortunately the opposition is peddling a cacophony of

falsehoods," he stated.


The local highlighted achievements made under Mr. Francois, including the creation of a Level II

School Crossing Guard position, securing $11 million for year-round health benefits for School

Crossing Guards, and providing personal protective equipment for School Lunch Workers who

worked throughout the pandemic.


'Massive Theft'


Mr. Brathwaite alleged that Mr. Francois had committed "massive theft and unlawful self promotion."

The review of Local 372's finances also found that between summer 2014 and last year, the

union reportedly spent $356,197 on scholarship functions-but only gave out $125,500 in

scholarships. And over that period, the local has spent $1,646,000 on office supplies, according

to Mr. Schwartz and his clients.


"What kind of office are we running?" Mr. Gordon asked, questioning what that money was spent on.


The challengers also alleged that the local did not report $212,000 in taxable transfers to its

political action fund to the IRS.


The union's assets declined from $15,207,943 in 2015 to $10,069,757 in 2018, according to its

financial filings. The challengers opposed the local's decision in late 2019 to purchase a condo

for office space at 20 West 33rd St., which cost $9,289,821. The union took out a mortgage of $5 million.


Fiscally Imprudent?


"It's totally imprudent to take 50 percent of your treasury and spend it on real estate-it violates

the prudence rules AFSCME makes unions function by," Mr. Schwartz said.

The probe determined that so far, the local has spent $875,000 renovating the new office space.

Other reported expenses included $1.3 million in travel and $1 million on events, including hotel

stays.


As part of their lawsuit, the dissidents claimed that Mr. Francois, Secretary-Treasurer David Keye and the local's three trustees had "breached their fiduciary duties to Local 372" by overspending union funds. The lawsuit is still pending.

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