FBI investigating Stern in corruption probe
posted at 4:26 pm on September 28, 2010 by Ed Morrissey
When Andy Stern abruptly resigned his leadership post at the Service Employees International Union in April, speculation swirled about why he seemed in such a hurry to hit the exits. Some guessed that Barack Obama may have wanted to appoint Stern to a government post, perhaps even a spot in the federal judiciary, but Allahpundit smelled a brewing scandal. It seems that the FBI may agree:
The FBI and the U.S. Labor Department are investigating prominent labor leader Andy Stern in their probe of corruption at the Service Employees International Union, according to two people who have been interviewed by federal agents.
The two organized labor officials met with federal agents this summer to answer questions about a six-figure book contract that Stern landed in 2006 and his role in approving money to pay the salary of an SEIU leader in California who allegedly performed no work.
The scandal involving the book deal center on a contract Stern got from Simon & Schuster to write a political manifesto, A Country That Works, which sold thousands of copies … to union locals. Stern got a $175,000 advance for the book, which he kept himself, despite the fact that the union paid for fact-checkers, researchers, and promotion of the book. Stern insists that he received no royalties from sales to the union locals, and the locals publicly insist that they voluntarily purchased the books at their own expense. Authors can arrange for discounted sales of books by relinquishing their royalties from the sales, but considering that Stern got such a large advance and that union members were the obvious target market, one can understand why the FBI might get suspicious of the arrangements.
The second case looks even more curious. Stern and other officials approved payments to Alejandro Stephens for work that never got performed. Stephens lost his leadership position in a Los Angeles local when it merged with another SEIU unit, but got hired as a $75,000-per-year consultant to the union’s state council in the aftermath. The SEIU has no record of any work being done by Stephens, which looks like a violation of federal law prohibiting “no-work” union positions. Stephens, meanwhile, awaits trial on an indictment alleging that he stole $52,000 from a voter outreach program.
Obama hasn’t dodged the scandal by failing to appoint Stern to a prominent position, though, because Obama already appointed Stern to one: the deficit commission. Stern has a seat on the National Commission on Fiscal Responsibility and Reform, which ties Stern to Obama even more closely than the weekly visits of Stern to the White House do. Even if no criminal acts get alleged, how credible will the NCFRR’s recommendations for fiscal responsibility be when coming from a man who paid someone $75,000 per year and never bothered to see whether the consultant ever performed any work?
The Boss Emeritus has more — much more.