Probe Set On Carpenter Union Losses

Brotherhood of carpenters investigation will examine Madoff scheme ramifications

By ERIC ANDERSON 

ALBANY -- The $160 million that unionized carpenters in New York state lost to Bernard Madoff, and the way those losses were -- or weren't -- shared among the union's members, are the focus of hearings to be held at the end of the month in Albany.

The United Brotherhood of Carpenters and Joiners of America has scheduled hearings March 30 and 31 at the Crowne Plaza Hotel in downtown Albany to look into the management of union pension, annuity and health funds by the Empire State Regional Council.

Upstate union members may have been "discriminated against" in allocating losses from the Madoff investments, wrote Douglas J. McCarron, general president of the UBC, in a 10-page letter to Patrick B. Morin, executive secretary-treasurer of the Empire State Regional Council.

Copies of the letter were sent to various union officials and all union members affiliated with the Empire Council. (see below)

In one case, the loss of a $6.4 million investment with Madoff made by the Empire Welfare Fund was allocated entirely to the former participants in the Upstate Health Fund, even though it had been folded into the Empire Fund and dissolved two years earlier, McCarron wrote.

Upstate members saw their fund accounts dwindle; in one case, a member's health account was wiped out, and he had to pay a monthly premium of $1,060 to keep his health insurance, McCarron wrote.

A trustee from the former upstate funds may have been illegally barred from board meetings when Madoff issues were being discussed. Madoff had admitted operating a massive Ponzi scheme that cost investors billions of dollars and is now in prison.

And while the Empire Council had agreed to provide information about the allocation of Madoff losses, McCarron wrote, much of it hadn't yet been provided.

Morin didn't return a call for comment.

Monte Byers, chief of staff for the United Brotherhood of Carpenters, confirmed that the hearings are scheduled but declined to comment specifically about the allegations.

Union members' concerns about the health of their retirement and other funds were first described in a story Feb. 15, 2009, in the Times Union.

At that time, several members, including Charles Lezette and Rich Dorrough, said that Empire Council officials weren't sharing much information about the Madoff losses. They told them that their annuity fund was "temporarily on hold and we can't touch it," Dorrough recalled at the time.

Carpenters Local 370 in Albany has about 900 members in the Capital Region. Officials there declined to comment Friday afternoon and referred questions to Morin.

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