Members and Executive Board Act to Safeguard Local 802
Recording Vice-President's Report
Volume CVI, No. 7/8July, 2006
On Tuesday, June 13, more than 300 members attended a regular Local 802 membership meeting in a remarkable display of union democracy. Members stayed for nearly three hours — some standing during most of that time — to ensure that the democratic will of the membership was heard.
It was clear that the vast majority of those present view the financial improprieties of President David Lennon as a serious matter and voted for a bylaw to safeguard union funds.
Most members have been aware of the president’s misuse of the Local 802 American Express credit card, which has now prompted an inquiry by the Department of Labor and the United States Attorney’s Office (Manhattan).
On May 16, the Executive Board voted to engage attorney Paul Shechtman to represent Local 802 regarding this inquiry. Shechtman is a highly regarded criminal defense attorney with the firm Stillman, Friedman and Shechtman, P.C.
In the meantime, a review of the president’s 2005 expenses uncovered an additional problem. Expense reimbursements due to Local 802 from the AFM were missing.
On May 10, at a meeting that included myself, President Lennon, Financial Vice President Jay Blumenthal and 802 Counsel Harvey Mars, Lennon was asked if there were any reimbursement checks still due from the AFM for 2005. He said there were, adding that the AFM was “woefully late” in sending these payments.
The AFM was contacted and sent proof that the payments had been made. It turned out that in August and November of 2005, President Lennon had inappropriately taken and cashed two AFM reimbursement checks totaling $1,757.37.
On May 26, Shechtman, Mars and Blumenthal asked Lennon about the checks. Lennon admitted he had cashed the checks and promised to pay the money back, which he did by the end of the day.
On May 30, the matter was reported to the Executive Board. Before taking action, the board requested that Lennon answer in writing the following questions:
- Did you cash the expense checks in the amounts of $1,543.95 and $213.42?
- If so, how did the two checks come into your possession?
- If you cashed the two checks, what led you to believe you were entitled to the proceeds?
- If you cashed the two checks, did you ask anyone for authorization or clarification before doing so?
President Lennon reaffirmed that he had cashed the checks without anyone’s authorization, claiming he could not recall how the checks came into his possession. He speculated that he must have “mistakenly concluded” the reimbursements were for his own cash outlays and not for charges on the Local 802 credit card.
In reviewing President Lennon’s response, the Executive Board noted that the checks from the AFM were all for expenses on the Local 802 credit card. None were for cash outlays by Lennon. The expenses included airline tickets, hotel and phone bills. A majority of the board could find no acceptable explanation, nor documentary evidence to support the claim that cashing the checks and keeping the money was simply a mistake. To most, it rose to misconduct.
In discussing a remedy, board members considered several measures. These included taking away Lennon’s union credit card again, placing financial controls on his expenditures, a reprimand, filing charges and a request for his resignation.
The board unanimously agreed on the first two: his credit card was to be cancelled and a committee was established to recommend financial controls on his expenditures. The request for his resignation was then moved and passed by a vote of six to four. Those voting in favor of the request were myself, Jay Blumenthal, Maura Giannini, Mary Landolfi, Jay Schaffner and Bobby Shankin.
No one takes any pleasure in this action. It is a sad day for Local 802 that matters have come to this. However, all of us in positions of responsibility have an obligation to act in the organization’s best interest. If we concluded there was misconduct, in my judgment we had no alternative but to take the action we took. The overwhelming adoption of the bylaw relating to financial misconduct by the June 13 membership meeting demonstrated to me that the actions of the Executive Board accurately reflected the serious concerns of the members.
WHAT LIES AHEAD?
First of all, Local 802 intends to cooperate fully with the inquiry by the Department of Labor and the U.S. Attorney’s Office. They have been informed about the misappropriation of the two AFM reimbursement checks. We will make available any documents or records they request. Local 802 has nothing to hide. Attorney Shechtman has been in regular contact with the DOL and is apprising them of our proactive efforts to ensure that these problems are corrected.
Secondly, the Executive Board has asked legal counsel and our outside accountant to jointly review all of our financial procedure to ensure that they conform to DOL standards and offer the highest level of oversight and control.
Thirdly, we have to repair the divisions caused by events of the last several months, both internally and externally. We have to lower the volume of discourse with one another and attempt to look as objectively as possible at recent events. This is not about “politics.” This is about protecting the union’s resources.
As much as I may disagree with some board members and what I view as their failure to see the seriousness of the problem, I do not question their commitment to our union nor their belief that they are acting in its best interest.
We have to rebuild our relationships with the other entertainment unions, strained by events over the last several months. In early 2007 we will be negotiating a new Broadway agreement with the League. Our internal unity and those external relationships are critical to whatever our expectations are for those negotiations.
Lastly, this unfortunate series of events of the past several months will soon be behind us and this union’s proud record of accomplishments will continue unbroken because you, the members, will insist upon it. The June 13 membership meeting is proof of that. That level of member involvement is the best way to ensure that officers and staff are accountable and to ensure the level of unity and solidarity needed for the difficult negotiations ahead.
Local 802 is important to professional musicians across the U.S. and Canada. They and others are watching to see how we respond to these problems. With that in mind, we all have to be about the business of restoring the good name of our union and making sure that every one of our members continues to be proud to say they are a member of Local 802.