Editorial: UPW leaders must explain spending

The United Public Workers in Hawaii’s motto is “Our Union, Our Family.” In a website welcome to newcomers, UPW State Director Dayton Nakanelua said: “We live by our motto … and if you are part of our community, you are part of our family and our history.”

In the aftermath of a scalding audit conducted by UPW’s parent union, the national labor organization American Federation of State, County and Municipal Employees (AFSCME), Nakanelua is due for a serious sit-down with his local family — some 13,000 members, including public- and private-sector hospital employees, corrections officers and blue-­collar nonsupervisory employees with the state and counties.

With good reason, the audit — an analysis of UPW internal financial records, from January 2017 to July 2019 — sounded alarms over record-keeping and spending by some top UPW staff in Hawaii, citing tens of thousands of dollars in union funds spent on restaurants, airfare and other costs without proper supporting documentation.

Members owe it to themselves and the state’s taxpayers to take a hard look at whether their best interest is being served by the union’s leadership. Also, they should hold UPW’s staff and governing board responsible for needed follow-through on AFSCME’s recommended corrective steps.

Settling for the status quo — as sketched by the audit — undermines the union’s credibility.

Over the course of the months reviewed in the report, Nakanelua spent nearly $293,000 on airfare and nearly $26,660 on meals. That breaks down to about $325 on airfare and $30 on meals every single day for 30 months — all on the union’s dime.

Among the report’s recommendations on the eyebrow-raising airfare expenses: opt for “tele-conferencing or other mediums to reduce the costs” tied to attending meetings. That sounds pragmatic, and appears to be a long overdue practice.

Regarding the meals, the AFSCME pointed out: “Many charges for meals, which were reported on expense reports were either not supported by a receipt, did not document attendees and union business purpose, or both.” That’s concerning, of course, as it has the stench of self-serving practices on the members’ dime.

Among other flagged concerns: UPW’s spending of more than $5.6 million in union dues on legal fees from 2017 to mid-2019, which the report described as “exceedingly high.” What’s more, the record-keeping was not at the ready.

Most of the legal fees — nearly $4.5 million — went to a single firm. But when auditors asked for documentation, “there were no retainer agreements on file nor signed contracts that detail their rate and the type of services they perform” for the local union, according to the audit. Further, the report said a set of union officials initially failed to provide supporting documentation for thousands of dollars in expenses but later submitted it for many of the costs. However, some of the late-arriving documentation was deemed unacceptable by the auditors.

The upshot was that auditors said it was not possible to determine whether a total of upwards of $34,000 was for legitimate union business. Given the report’s evidence of weak oversight and accounting, AFSCME rightly pointed out that “the opportunity for abuse or misuse of union funds exists as a result.”

The report makes no mention of criminal wrongdoing. Even so, UPW membership should insist upon accountability.

Founded in the mid-1940s, UPW’s history has had its ups and downs. One dark period was in 2002, when a state director, Gary Rodrigues, was convicted on 101 felony counts including embezzling union money, money laundering and health care fraud. Rodrigues served more than four years in federal prison and paid $378,000 in restitution to the union.

Moving forward, UPW’s Hawaii family should strive to avoid the possibility of regrettable history-repeating.