The Hawaii Attorney General’s office has begun an inquiry into the International Brotherhood of Electrical Workers Local 1260 after the parent union started its own investigation into the local organization’s finances.
The international union is looking into allegations that Brian Ahakuelo, head of Local 1260, used union money to pay personal expenses over the past three years.
The Attorney General’s office this week visited the downtown headquarters of Local 1260 and has been in talks with the IBEW’s legal team in Washington, D.C., according to a source close to the investigation who asked not to be identified.
“The AG said they have opened a case after all the stories broke. Their visit was more that they want to make sure records are preserved and there’s no files being deleted,” the source said.
James Walther, deputy attorney general, said he couldn’t confirm or deny whether there is a pending investigation. Ahakuelo did not return calls for comment.
“It’s most likely the criminal division,” said Honolulu attorney Myles Breiner, who is not connected to the case. “If it turns out there is self-dealing and gross nepotism, that could affect the local because the government could get involved and take over running the union. The last thing the union wants is to have the federal government delve into its finances.”
On May 6 the international union placed Local 1260 in emergency trusteeship over concerns of financial mismanagement. Ahakuelo and 18 staff members were placed on paid leave during its investigation. The international union scheduled a hearing for May 23 to decide how long the trusteeship will last.
The parent union added new allegations this week to the list it has been investigating since May 6. The claims include selling and purchasing real estate without the approval of the international president. Ahakuelo sold a South Beretania Street union hall in 2014 and recently purchased a $689,000 beach house in Kekaha on Kauai.
The international office also is looking into whether Ahakuelo increased the local union contribution to the pension fund for himself and all Local 1260 employees without authorization from the parent union. In addition, his wife, Marilyn, redeemed cash-back merchandise rewards totaling $1,826 from a union credit card account and spent the money in Las Vegas, according to IBEW records.
In recent years Ahakuelo was criticized by subordinates for hiring relatives.
Ahakuelo earned $201,712 in 2015, while his wife, who is director of community services for Local 1260, was paid $105,119, according to the union’s most recent financial report filed with the U.S. Department of Labor. Their son Brandon received $143,274 while daughter-in-law Neiani, executive assistant, earned $77,656. Ahakuelo’s sister-in-law, Jennifer Estencion, senior executive assistant, had a salary of $101,855, the filing shows. The international union added to its list an allegation that Ahakuelo hired a fifth relative, son-in-law Eric Falkner, in March as a training coordinator/organizer for $125,000 a year, to work full-time from a home office in Las Vegas.
The international started noticing red flags after the sale of the union building in 2014 and when Ahakuelo raised dues in 2015, the source said.
The initial claims listed by the international union concerned alleged spending violations by Ahakuelo from 2014 to 2016, ranging from paying for family trips to Las Vegas, to covering the legal fees of son Brandon in a criminal case involving unauthorized entry into a motor vehicle. Another involved Ahakuelo paying off a $24,000 bank loan for a truck initially owned by wife Marilyn.
Ahakuelo, 55, said last week he has secured legal counsel and is considering action against the IBEW’s Washington, D.C.-based international union, which he said made the false allegations against him.
“We cannot have people who are coming in from the mainland … and going ahead making these false allegations and putting someone on trial without due process,” Ahakuelo said last week. “Due process to them is to take you out of the office, fool around with your records and then make false allegations of what you have done, which has been nothing wrong.”
Local 1260 represents more than 3,200 electrical workers, including Hawaiian Electric Co. and TV station employees. IBEW named Harold Dias, a former state AFL-CIO president, as trustee of Local 1260 during the investigation.
Other Hawaii labor union leaders have made headlines in recent years for similar charges.
Gary Rodrigues, the former state director of the United Public Workers, was convicted in 2002 of 101 criminal charges that included conspiracy, theft and embezzling union money and served more than four years in prison. Tony Rutledge, former head of the Unity House labor organization, was facing multiple criminal charges in 2005 that included tax fraud and conspiracy, though the majority of those were ultimately dismissed.
“There’s large sums of money that are held by unions and pension funds and frequently you hear allegations of misuse or abuse of those funds by union management,” said Breiner, who was involved in the Rutledge case. “It’s not uncommon. It’s part and parcel of what happens when you have unions that control large pension funds.”