Last May, newly elected treasurer Mark Rosenthal supported the audit he called for as a dissident back in 1999. Then, DC 37 was mired in a huge scandal of embezzlement and contract vote-rigging that snared dozens of convicted local officials. Rosenthal criticized fund administrators for awarding its prescription drug contract to a company employing the daughter and ex-wife of AFSCME president Gerald McEntee without taking any bids. After the complaints, pension officials sought bids, and one company bid $7.5 million less than the established company. That company, Natl. Prescription Administrators, lowered its bid by $7.5 million and was allowed to keep the contract. NPA has since been bought by Express Scripts.
Rosenthal told The New York Sun he disagreed with the decision to drop the audit, but refused further comment, simply saying, "I was overruled, what can I tell you."
Cong. Charles Norwood (R-GA), chairman of the House subcommittee on workforce protections, called the Council's decision "unacceptable." While declining comment on the audit issue, U.S. labor dept. spokeswoman Sue Hensley did say that DC 37 has a long history of filing their required financial disclosure forms late, usually by nine months.
Pension fund officials are also facing a four-yr.-old lawsuit by two
ex-employees, accusing Fund administrators of illegally diverting
money toward the union's political activities, paying for unnecessary trips
to Atlantic City, Las Vegas and Hawaii, and inflating the union's membership
figures to obtain overpayments from the city. But the Council's Assoc.
Dir., Oliver Gray, said that an audit by the union's own auditors and the
city comptroller, were enough to ensure that no mismanagement was taking
place. A union lawyer claimed that those allegations are no longer part
of the suit. [New York Sun 1/14/03, 1/17/03]
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