National Union Seizes State Offices

Carpenters leaders alleged wrongdoing by downstate officials 

By ERIC ANDERSON BUSINESS EDITOR

ALBANY -- A statewide union representing hundreds of Capital Region carpenters has been taken over by the national union in the wake of heavy investment losses in the Bernard Madoff Ponzi scheme.

The takeover came less than a month after closed-door hearings in Albany into alleged improprieties at the Empire State Regional Council of Carpenters.

The United Brotherhood of Carpenters and Joiners of America has imposed "supervision" of the Empire State Council and put Frank G. Spencer, vice president for the Eastern District, in charge.

Spencer did not return a call for comment Wednesday.

At the end of March, the national union conducted hearings into the way $160 million in losses that unionized carpenters suffered were allocated among the union locals.

The downstate management of the union may have "discriminated against" the upstate locals in allocating those losses, according to Douglas J. McCarron, UBC president, in a letter to the Empire Council's executive secretary and treasurer, Patrick B. Morin.

Upstate members saw health accounts wiped out and pension and annuity funds drained.
One member had to pay a monthly premium of $1,060 to keep his health insurance, McCarron wrote. McCarron didn't return a call Wednesday for comment.

Among the locals affected by the Madoff losses was Carpenters Local 370 in Albany, which has about 900 members in the Capital Region. It had money in several employee benefit plans that invested with Madoff.

A consultant to the investment manager of the benefit funds, Ivy Asset management, on Tuesday was sued by New York Attorney General Andrew Cuomo, who accused it of deliberately misleading clients about Madoff so it could collect millions of dollars in fees.

"These defendants violated their basic responsibility as investment advisers by putting their own financial interests ahead of their clients," Cuomo said. "They shamelessly profited off of their own clients' impending misfortune and we are holding them accountable for their actions."

An Ivy spokesman said the firm had told its clients it had questions about Madoff and had recommended they reduce their exposure.

Also on Tuesday, Spencer, who will oversee the Empire Council, called a mandatory staff meeting at the Council's office in Hawthorne.

At the meeting, Spencer said Morin, the Empire secretary and treasurer, had been removed, and that all labor trustees of the Empire funds had been relieved of their duties.

The UBC is also auditing the Empire Council's financial records and, in a switch from past practice, fund documents, minutes and financial records would all be accessible to union members, Spencer told them.