Toledo union pair may face charges for strip club spending

9/12/2006

When the bill arrived for the $400 steakhouse dinner, the $60 hotel breakfast, and the $15,000 of fun at a strip club, Steven Thomas and Thomas Leonard chose to use their union credit cards to pay.

They may end up paying a much steeper price. Spending union money for personal enjoyment is a federal crime punishable by a maximum $10,000 fine and five years in prison.

An Aug. 31 internal report describes how a Toledo construction union subsidized the lifestyles of Mr. Thomas and Mr. Leonard, top officers for Laborers' Local 500, which has run operating deficits and lost 18 percent of its membership during the last five years.

Improper spending persisted after Mr. Thomas and Mr. Leonard voted to change the union's rules to outlaw nonbusiness expenses and after federal agents began an investigation by seizing Local 500's financial records.

The parent organization of Local 500, Laborers International Union of North America, filed disciplinary charges on July 26 against Mr. Leonard, the recording-secretary, for racketeering, embezzlement, and breach of fiduciary duty because of "expenditures at several gentlemen's clubs."

The parent organization will file similar charges against Mr. Thomas, the business manager, according to the report. It summarizes an Aug. 24 hearing that only members could attend after Local 500 volunteered to let its parent organization assume control of the union.

"It's sort of like a plea agreement," said Robert Luskin, an attorney for LIUNA.

The disciplinary charges could lead to Mr. Thomas and Mr. Leonard being kicked out of the union. Possible federal crimes can trigger the need for the parent organization to step in, Mr. Luskin said.

"But we've got different means and standards to prove," he said. "We have more relaxed rules of evidence, so that in certain circumstances hearsay testimony is permissible."

Mr. Thomas and Mr. Leonard were not available for comment. They retained their positions, but currently are suspended from union leadership.

The hearing illuminated some of the conduct that The Blade first revealed in March.

LIUNA initiated an audit of Local 500 in April that formed the backbone of the findings presented in the report.

Toledo Councilman Phil Copeland, who is responsible for approving the annual income statements of Local 500 as its secretary-treasurer, believes coverage of the inquiry cost him the Democratic nomination for Lucas County commissioner.

Reached at the Laborers' annual conference in Las Vegas, Mr. Copeland declined to say how Mr. Thomas, who is his cousin, and Mr. Leonard presented the strip club receipts to him.

But once the federal investigation started August, 2005, it appears both men knew they did something inappropriate.

On Nov. 1, 2005, Mr. Thomas and Mr. Leonard reimbursed Local 500 $10,602.30 and $4,386 for charges at a local strip club.

The Local 500 executive board changed the policies governing its credit card use on Dec. 6, 2005, forbidding entertainment expenditures. Mr. Thomas has claimed the change was unrelated to the investigation.

Within eight days of the new policy, Mr. Thomas and Mr. Leonard hosted a $400 credit card dinner for two other people at Morton's, the high-end steakhouse chain. No one discussed Local 500 during the meal.

Mr. Thomas later reimbursed Local 500 for half of the dinner, as he would for breakfast at the Hyatt Regency after an "Overnight Stay for Xmas Party." The $242.38 receipt included a $60 breakfast charge "for someone who was not involved in union business," the report states.

The report does not state where the meals occurred, nor which strip clubs received union money. Douglas Gow, the inspector general for LIUNA, declined to comment on these locations because of "additional charges."

Unmentioned in the report are the salaries Mr. Thomas and Mr. Leonard received. Local 500 paid Mr. Thomas $130,638 in 2004 and provided a Lincoln Navigator. Mr. Leonard got $97,583 that year.

In 2005, Local 500 eliminated $15 Christmas and Thanksgiving gifts to members because of a revenue shortfall. Mr. Thomas and Mr. Leonard's pay dipped to $128,458 and $96,760.

Disciplinary hearings will be set soon, said Peter Vaira, the independent hearing officer for LIUNA. The hearings are closed to the membership.

Blade politics writer Jim Tankersley contributed to this report.

Contact Joshua Boak at:

jboak@theblade.com

or 419-724-6728.