By DEBRA PRESSEY

March 26, 1998

Copyright 1998 The News-Gazette

URBANA - Months after Gene Johnson resigned as longtime business manager of Laborers' Local 703 in Urbana, the union was paying him, paying for his vacations in Florida and the tires on his cars, an investigation by the union's international organization found.

He collected fat checks under the title "consultant" and retained use of the union's credit cards, says the Laborers' International Union of North America in a petition filed Tuesday to seize control of the Urbana local.

The Laborers' General Executive Board is asking an independent hearing officer to impose a temporary trusteeship on Local 703, so it can take over and correct what it describes as unchecked fraud on the part of some local executive board members and other "financial malpractice."

A hearing is expected to be held in about 30 days in the Champaign-Urbana area.

The international organization says it is also seeking to restore a democratic process at Local 703, which represents about 750 laborers mostly in the construction trades.

Local 703's last election of officers in May 1996 was overturned by a hearing officer within the International in November of that year, but the local has yet to conduct a new election as ordered.

Among current officers are Johnson's son, Jamie Johnson, who succeeded him as business manager before the election.

Attempts to reach Jamie Johnson, Gene Johnson, other union officials and Local 703's Urbana attorney Robert Kurth were unsuccessful Wednesday.

Gene Johnson resigned as business manager of Local 703 in August 1995, after lining up a contract with the local's executive board to continue receiving his full salary and benefits while helping his son take over, the International says.

"The true reason and effect of the arrangement was to allow both Gene Johnson and Jamie Johnson to receive full business manager salaries and benefits, and to install Jamie Johnson as the incumbent business manager prior to the May 1996 elections," the International's petition states.

While Gene Johnson resigned from the position of business manager in August 1995, he did not retire from the local until June 1, 1996.

Upon his retirement, the arrangement Gene Johnson had with Local 703's executive board called for him to be paid $25,000 a year - plus be reimbursed for income taxes on that money.

During the nine months after his resignation, the local executive board approved payments to Gene Johnson of more than $100,000 - while paying full salary and benefits to his son, the petition says.

The petition also identifies "other financial malpractice," such as ignoring a directive from the International and continuing to reimburse officer expenses "without requiring proper documentation or justification of the expenses in question."

Specifically, the petition accuses three principal Local 703 officers - Jamie Johnson, President Dennis Gleason and Secretary-Treasurer Jim Felkner Jr. - of mismanaging and misappropriating funds for their "personal benefit."

Johnson and Gleason "sought and received reimbursement for family outings by falsely claiming in expense reports that meals were for union business. Gleason also submitted, and was reimbursed on the basis of receipts that were doctored to inflate the amount allegedly paid," the petition states.

It also accuses Felkner of seeking and receiving reimbursement for "regular lunches with his wife, as well as meals with friends and relatives that had no union purpose."

The petition also charges Local 703 with failure to live within its budget.

During the first six months of last year, it ran up a $17,800 deficit.

The International's petition also charges that officers of Local 703 engaged in a deliberate effort to thwart a fair union election in May 1996.

Just before the elections, Gene Johnson wrote a letter to union members urging them to vote for the incumbents and accusing opponents of such things as alcohol abuse, sexual misconduct and causing the death of another union member.

Further, the incumbents' supporters engaged in acts of intimidation toward challengers and their supporters, the petition states.

In throwing out the 1996 election and ordering a new one, an independent hearing officer concluded "officers of Local 703 had engaged in a conscious and deliberate effort, sustained over a period of at least six months, to prevent free and democratic processes to operate," the International's petition states.

The Laborers' General Executive Board's petition to take control of Local 703 is part of a sweeping anti-corruption campaign initiated by the International in 1995, when it signed an oversight agreement with the Justice Department to clean its own house.

Laborers' International spokesman David Roscow says the process has been successful to date. There have been about 450 investigations and 21 trusteeships and supervisions imposed at various locals.

"This is a process to make this union better for its members, to make it the cleanest, most democratic union for its members," Roscow said.

The hearing to impose a trusteeship on Local 703 will be held in about 30 days, said Robert Luskin, the General Executive Board attorney in Washington.

Luskin says there have been more than two dozen petitions for trusteeship filed within the union. Each time his office presented a case for trusteeship, he said, either the local leadership stepped down voluntarily or was ordered to step down by the independent hearing officer.

The decision of the hearing officer is final within the union, but Local 703 leaders could seek to have a trusteeship overturned in federal court.

Typically, a hearing officer has appointed a trustee to take the place of all elected officers of the local for up to 18 months, Luskin said. After that period, the union holds new elections "and they go on about their life," Luskin said.

Luskin said he knows of no disciplinary actions or criminal charges filed against Local 703 officers named in the petition.

Here are some of the accusations the General Executive Board of the Laborers' International Union of North America has made against Laborers' Local 703 of Urbana in its petition to seize control of the local and clean house.

None of the Local 703 officers nor the local's attorney could be reached for comment

--Johnsons double dip: Former Local 703 business manager Gene Johnson resigned in August 1995 but secured a consulting contract to help his son, Jamie Johnson, take over his job.

The arrangement allowed both Johnsons to be paid full-time business manager salaries and benefits while installing the younger Johnson as the incumbent before May 1996 union elections. The executive board paid Gene Johnson more than $100,000 during the first nine months after his resignation.

--Trips at local's expense: During the same nine months, Gene Johnson continued to have access to Local 703 credit cards and, with executive board approval, used them to finance vacation travel in Florida. The board also approved payment of more than $1,600 for tires for his personal cars.

--No work required: At his retirement in June 1996, Gene Johnson's consulting contract also guaranteed him $25,000 a year plus payment of his income taxes on that money. No specific duties were listed.

-- Paid beyond contract: From June 1996 to November 1997, the Local 703 executive board paid Johnson $3,000 a month - substantially more than the $25,000 annual salary specified in the contract.

-- Only audit stops payments: In January 1997, Gene Johnson and his son informed the union's inspector general that the consulting contract had been modified to reflect a payment of about $72 an hour, not to exceed 39 hours a month. Gene Johnson's payments continued at $3,000 a month, ceasing in November 1997 when it was learned an audit would be conducted.

-- Inspector misled: Before the audit, Gene Johnson tried to mislead the inspector general by faxing backdated letters describing work he'd done for Local 703. The letters were created after the work was allegedly done and didn't indicate the hours worked.

-- Election tampering: Before the May 1996 union election, Gene Johnson sent letters at union expense to union members, urging them to support incumbents and accusing opponents of gross personal misconduct. Supporters of incumbents engaged in acts of intimidation toward opponents and their supporters.

-- No new election, despite order: Local 703 has, to date, failed to conduct a new election ordered by an independent hearing officer in November 1996.

-- Living outside budget: The local has failed to live within its budget, and ran up a $17,800 deficit in the first six months of last year.

-- Misappropriation of local money: Three officers of Local 703 'have mismanaged and misappropriated funds for their personal benefit.'

Among the specific allegations are that Secretary-Treasurer Jim Felkner Jr. sought and received reimbursement for meals with his wife, friends and relatives that had no union purpose;

Jamie Johnson and President Dennis Gleason sought and received reimbursement for family outings by 'falsely claiming in expense reports that meals were for union business;

Gleason 'also submitted and was reimbursed on the basis of receipts that were doctored to inflate the amount allegedly paid.'

-- Misappropriation of local money: Three officers of Local 703 'have mismanaged and misappropriated funds for their personal benefit.'

Among the specific allegations are that Secretary-Treasurer Jim Felkner Jr. sought and received reimbursement for meals with his wife, friends and relatives that had no union purpose;

Jamie Johnson and President Dennis Gleason sought and received reimbursement for family outings by 'falsely claiming in expense reports that meals were for union business';

Gleason 'also submitted and was reimbursed on the basis of receipts that were doctored to inflate the amount allegedly paid.'