Friday, September 11, 2020

U.S. Launches Probe Into Pension Payments to Firefighters Union Leaders

FBI and others issue subpoenas to International Association of Fire Fighters

By Brody MullinsTed Mann and Aruna Viswanatha
Sept. 3, 2020 9:00 am ET

WASHINGTON—Federal authorities have launched a criminal investigation into pension distributions made to two top executives of the International Association of Fire Fighters while they were still employed by the union, according to people familiar with the matter.
The Federal Bureau of Investigation, the U.S. attorney’s office in Washington and the Labor Department issued subpoenas on Friday to the Washington-based union and its former treasurer.
Authorities are seeking to determine whether Harold Schaitberger, the longtime firefighters union president violated the law by taking more than $1 million in distributions from his staff pension while still employed by the union, the people said. They said authorities are also examining a similar pension arrangement with the union’s former treasurer, Thomas Miller.
A statement from the firefighters union said it is cooperating with the government’s requests for documents.
“The IAFF strongly reaffirms that it did not engage in any wrongdoing,” the statement said. “The documents requested relate to issues that were approved by the elected IAFF Executive Board over the past 20 years under the guidance of pension actuaries and legal counsel.”
Late Wednesday, Mr. Schaitberger sent an email to union board members saying the union did nothing wrong and blamed the investigation on people who are trying to undermine the union.
Mr. Miller didn’t respond to a request for comment.
Mr. Schaitberger is a longtime confidant of presidential candidate Joe Biden, the former vice president, and U.S. senator. Under Mr. Schaitberger’s leadership, the IAFF was one of the first major unions to endorse Mr. Biden in the Democratic primary.
In June, The Wall Street Journal reported that Mr. Schaitberger had been accused by the union’s current treasurer of prematurely collecting more than $1 million from the union pension fund.

Mr. Schaitberger declined to comment for that story but sent an email to the union’s board saying the Journal’s reporting was based on “unfounded accusations.”
The email said the issues were internal matters that were being reviewed by the board.
The subpoenas seek pension documents from the union dating back to 2000, as well as records regarding the union’s financial transactions with Messrs. Schaitberger and Miller, according to people familiar with the matter.
The government also demanded union records related to a 2018 review of the union by the accounting firm BDO USA LLP, which found that the union lacked the financial controls to prevent fraud, these people said.
The union’s board discussed the subpoenas on a conference call after the union was informed of the federal investigation, according to a person briefed on what was discussed on the call.
Included on the call was Mr. Miller, who has retired from the union, and representatives from Ullico Inc., the union-affiliated insurer that provides fiduciary liability insurance to the officers overseeing the firefighters’ pension plans, this person said.
The investigation comes five months after the union’s current treasurer, Edward Kelly, issued a 100-page report to the union’s board accusing Mr. Schaitberger of a range of financial improprieties.
A few months later, former union official Eric Lamar sent a letter to the FBI requesting an investigation based on the treasurer’s allegations and other information, according to a copy of the letter reviewed by the Journal.

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