President of public employees union implicated in missing money, spending investigation

The president of the Louisville chapter of the nation’s largest public service union is under investigation for possible forgery, embezzlement and theft. Documents recently shared with LEO by a union official offer a veritable map of missing money, forged checks, unexplained expenditures on the union dime and shoddy bookkeeping that all lead back to Sheila Wade, a Metro employee and president of the Local 2629 of the American Federation of State, County and Municipal Employees.

The union, which represents almost 700 Metro government employees, has been placed under the temporary control of AFSCME International, and Wade’s duties as president were suspended on June 8.
Further, the Local 2629 has been operating without a treasurer since March 2006 and without a vice president since August 2006. Since then, Wade — who as president was responsible for appointing replacements for those positions — has been in charge of the union’s finances.

An investigation conducted by AFSCME International over the past several months has revealed 94 forged checks, 30 additional checks payable to Wade for various reimbursements and unidentified expenditures, a running account at Thrifty Car Rental for which the union paid more than $8,000 in just over a year, and a check for $2,232.47 made out to cash from a bank account that is not meant to be used outside of paying the union’s parent organization. It is unclear whether the forged checks were used for unauthorized expenditures.
The total amount of money called into question by the investigation — which examined the local’s finances from February 2006 to May 2007 — is close to $150,000, all of which was paid to the union in membership dues. The Louisville Metro Police Public Integrity Unit also recently opened an investigation into the matter; because it is ongoing, the department had no comment.

Unions are famously tight-lipped about internal matters, and the Local 2629 is no different. Most members are unaware of the depth of the current investigations, and some only learned of a problem when the union fell under national control on June 8, according to a source inside the union who requested anonymity for fear of reprisal.

The Local 2629 is made up of a 10-member executive board that makes the business and negotiation decisions for its 451 dues-paying and 244 “fair share” members — those who pay a smaller fee, because their jobs fall under collective bargaining, but who don’t want full union membership. Current dues-paying members pay roughly $28 a month, while fair share members pay about $20. That adds up to more than $17,000 a month coming to the union in the form of dues.

The local union reports to Indianapolis-based Council 62, which covers all Indiana and Kentucky AFSCME groups. Of every dollar that comes into the Local 2629, roughly 10 percent stays local, 30 percent goes to the national organization and 60 percent goes to Council 62.

Louisville Metro government automatically withdraws union dues from its employees’ paychecks and, every pay period, writes two checks to the union: one for dues-paying members and the other for fair share members. The union must physically deposit both checks into a holding account called a Dues Trust Account, which is only supposed to be used to send money to Council 62 and the national body.

Early in a recent audit also conducted by AFSCME International, some $27,000 was found missing from the Dues account. The money later turned up — Wade had failed to deposit the checks from Metro government, according to a union source familiar with the investigation. This appears to be simple negligence, however, not theft.

Wade testified at a private judicial panel convened by AFSCME International at the Seelbach last Wednesday. According to a union source who was there but requested anonymity for fear of reprisal, Wade flatly denied all of the charges, saying she may be a bad bookkeeper but not a thief. She acknowledged the checks from Metro had been periodically misplaced, but said she’d have to see the forged checks before she could discuss them in more depth.

To write a check from the union’s account requires two signatures: president and vice president. The audit found 94 checks with both Wade’s signature and that of Keith Springer, the former vice president who resigned in August 2006.

In a phone interview Monday, Springer told LEO that he did not sign the 94 checks, and he said he filed a notarized statement to that effect with Council 62 and expects to file an affidavit with Metro police soon. The checks add up to $123,701.86, according to a union source. Springer confirmed that the figure is in that range.
“It was kind of shocking, it really was, because procedurally it’s just wrong,” Springer said of the forged checks.
David Warrick, executive director of Council 62, said in a phone interview Monday that about $2,000 to $3,000 is missing, not counting the forged checks. “There was some terrible bookkeeping, and like I said there is money that is not accounted for, and as far as we’re concerned, that is very serious.”

Warrick also said Local 2629 underreported the dues it was taking in to Council 62 — akin to skimming off the top.

There is also the matter of the rental cars. According to receipts shared with LEO by a union official, Wade signed for cars from Thrifty six times between February 2006 and May 2007. The total cost was $8,229.71. Wade, who does not own a car, sometimes kept a rental for two and three weeks at a time. She is a member of the Council 62 executive board, and sometimes travels to Indianapolis for meetings. However, on one occasion — when Wade had a car for 24 days — it returned with 723 miles; another, which she kept 21 days, returned with 1,067. A roundtrip drive to Indianapolis is less than 250 miles. Wade told the judicial panel the cars were all for Local 2629 business, according to a source who was there.

Springer did not lay the blame on Wade. He said he had every reason to trust her, based on past experiences. “I was comfortable with what went on while I was in office,” he said.

Springer also said that occasionally he signed a couple of checks in advance, simply to avoid a logistical hassle — his job at the department of public works often has him all over the city. He said those checks were used for things like paying the phone bill, and the union’s executive board always approved the expenditures. He also said that last Christmas, the union gave him and two former members recognition plaques and $600 checks as they left the union. Springer didn’t notice it at the time, but his name was forged on that check, too.

Reached by phone at her home Tuesday morning, Wade declined to comment extensively on the matter, saying the situation has been blown out of proportion. An associate planner at Metro planning and design services who earns $37,687 a year, according to public records, Wade said it is a matter of bad bookkeeping, not criminal activity.

Cathy German, the AFSCME auditor investigating Local 2629, told LEO on Monday that she would rather not comment, and referred questions to Gino Carbenia, the AFSCME administrator standing in at the Local 2629. He confirmed that Local 2629 is under the control of his organization, AFSCME International, pending the decision from last week’s judicial panel at the Seelbach. He wouldn’t comment on the specifics of the case until a decision is reached; that is expected later this week.

It is unclear now, if the police investigation finds Wade in the wrong, whether she will be prosecuted. Embezzlement or misappropriation of funds in a union is a federal crime that can lead to fines and jail time.

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