Federal officials are investigating whether a labor union led by Toledo City Councilman Phil Copeland, a Democrat running for Lucas County commissioner, allowed members to spend union funds for personal entertainment.
The U.S. Department of Labor probe into Laborers Local 500 bears the marks of a criminal investigation, not a routine audit.
It involves spending by Mr. Copeland, the union's secretary-treasurer; his cousin Steven Thomas, the local's business manager, and others, a union attorney said. Soon after federal agents confiscated union financial records last fall, Local 500 officers restricted credit card use and prohibited "entertainment expenditures" with union money.
Mr. Copeland said yesterday that Local 500 has cooperated fully since the investigation began in August. He expects investigators will find he did nothing wrong.
"I have nothing to hide," Mr. Copeland said. "I haven't misappropriated money. The Local is in good shape. Nothing is missing."
Federal labor law prohibits spending union dollars for personal use. Each offense is a felony punishable by a maximum $10,000 fine and five years in prison.
Labor department officials would neither confirm nor deny an investigation into Local 500, but Richard Greer, a spokesmanfor Laborers International Union of North America, confirmed the investigation is ongoing.
Mr. Copeland, Mr. Thomas, and their lawyer, Joseph Allotta, met with The Blade yesterday and identified several expenditures that have come under federal scrutiny, including a "large payment" to Mr. Copeland, which he said was deferred salary.
Investigators also are reviewing two members' rafting trips at union expense outside Nashville during a regional conference, along with some reimbursements from an Orlando, Fla., conference, the union officials said.
The officials declined to discuss other specifics, citing the ongoing nature of the investigation.
Mr. Thomas and Mr. Copeland are subjects of the investigation, Mr. Allotta confirmed.
Mr. Thomas said any alleged misspending comes back to union leadership. "Anything that goes on at Local 500, whether it's Phil or whether it's another individual, it casts whatever shadow on me."
Federal agents, including one whom Mr. Allotta identified as working for a "criminal division," have taken four years of financial records from the union's Ashland Avenue headquarters. Standard compliance audits typically examine one year of records, while criminal audits cover multiple years, said Fred Vaudrin, a labor department official based in Cleveland.
Union officers said they do not know the investigation's focus or if charges could result.
But in November, union leaders restricted the use of union credit cards and prohibited using Local 500 funds for entertainment, which Mr. Thomas has said included rafting trips and time spent at strip clubs. The new policy operates retroactively.
Some union members already have reimbursed Local 500 for prior improper spending, Mr. Allotta said.
Asked if union dollars had ever been used in strip clubs, Mr. Thomas replied, "I don't feel I can answer that with just a blanket yes or no."
He continued: "With our internal review, we have reached a point where certain expenditures - period - were deemed inappropriate. We shouldn't have used union funds for those expenditures."
Mr. Allotta said the process of responding to the government audit exposed loopholes in the union's regulations. He denied the policy changes were a reaction to the investigation's content.
Mr. Copeland addressed his own financial troubles during the course of two political races. At his commissioner campaign kickoff last month, Mr. Copeland announced that he had paid nearly $62,000 last year to settle unpaid state and federal tax bills linked to a failed business venture.
The Blade disclosed Mr. Copeland's outstanding taxes in October.
Local 500 supplies workers for construction projects such as roads, hospitals, and schools.
The investigation comes at a time when the union has lost members, run repeated deficits, and cut holiday gifts to workers - but also plans to start an apprenticeship program and build a center to house it.
"If you look at labor unions in the state of Ohio, they're probably one of the healthiest ones," said Dave O'Brien, the union's outside accountant.
"What they've done is invested in the future."
Union leadership runs in the Copeland family. Mr. Copeland's late uncle, Bill Copeland, was Local 500's business manager from 1971 to 1982, a Toledo city councilman, and eventually a Lucas County commissioner. The FBI investigated alleged payoffs during Bill Copeland's union tenure, but dropped the inquiry a year later without indictment.
Phil Copeland won election as secretary-treasurer in 1985 and finished first in last fall's at-large City Council race.
Mr. Thomas joined Local 500 in 1993 and succeeded his father, William Thomas, as business manager in 2002. He is set to earn a master's in business administration from the University of Toledo in December and serves on the county library board.
Local 500 paid Mr. Thomas and Mr. Copeland higher salaries than any other union officers in Toledo in 2004, according federal filings.
Mr. Thomas' salary, set by a membership vote, was $130,638 in 2004. Mr. Copeland's was $113,675, a 69 percent increase from 2000.
Mr. Thomas drives a union-provided Lincoln Navigator; Mr. Copeland, a union-provided Cadillac DeVille. Both of their expense accounts, which include gasoline purchases, exceeded $30,000 in 2004.
Union leaders eliminated Christmas and Thanksgiving gifts of $15 each for members and retirees last year, in what Mr. Copeland dubbed a cost-cutting move.
James Henderson, an 80-year-old retiree, called the gifts a modest but meaningful token of appreciation.
"If we can't get anything, I don't see why they should get cars and gas," Mr. Henderson said.
Mr. Copeland said few members question his dedication to the union. He started a pension program for retirees and has paid dues for "40 or 50" members who could not afford them, he said.
He said he did not take member-approved raises when "work was down" from November, 2002, to July, 2004, and instead took the money as a lump sum at the end of 2005 - a move Mr. Allotta said he explained to federal investigators when they questioned the payment to Mr. Copeland.
Mr. Copeland faces a May 2 primary in the county commissioner's race. His campaign has emphasized his work on behalf of Local 500 members as reason to elect him to the county commission.
"They've been putting their trust in me for 20 years, and I haven't let them down," Mr. Copeland said recently.
"And it will be the same way for the citizens of Lucas County."
Contact Joshua Boak at: email@example.com or 419-724-6728.