AFT audit charges $5 million embezzled

An independent audit of the Washington Teachers Union by its parent organization revealed that $5 million had been misappropriated, exceeding an earlier estimate of $2 million.
“The massive misappropriation of union funds and the betrayal of the members that are outlined in our audit are reprehensible and sickening,” American Federation of Teachers (AFT) President Sandra Feldman said in a statement. “The individuals responsible must be held accountable, and the AFT will do everything in its power to see that these funds are returned to the WTU and its members.”
To that end, the AFT yesterday filed suit in U.S. District Court against former union President Barbara A. Bullock, former Treasurer James O. Baxter and Gwendolyn M. Hemphill, former assistant to Miss Bullock.
It says the three, along with five associates, “in their positions as union officers, agents, representatives and employees, or through their relationships with union officers, agents, representatives and employees, aided and abetted, participated in, and used the union as part of their conspiracy to embezzle and convert funds of the union.”
According to the lawsuit, the audit has thus far identified more than $1.8 million in unauthorized personal charges that Miss Bullock made to the union’s American Express card since 1995. She also issued checks for her own benefit that totaled more than $381,000, it said. Miss Bullock also was responsible for more than $1.5 million in union checks issued with the intention of laundering, the suit says.
Mrs. Hemphill’s unauthorized personal American Express charges exceeded $311,000, and she wrote another unauthorized $181,000 in union checks, the suit says.
Mr. Baxter’s unauthorized personal American Express charges exceeded $267,000, and he wrote himself $270,000 more in unauthorized union checks, the suit says.
“Checks issued on the Washington Teachers Union’s accounts were prepared by Hemphill, signed by Baxter and issued with the knowledge of, and in many cases, at the direction of Bullock,” the lawsuit states.
The lawsuit asks for compensatory damages for the misappropriated funds, plus interest, as well as all expenses and costs incurred by the union in defending itself from creditors seeking payment for purchases made by the union members accused, along with legal fees.
The interim president of the union, Esther Hankerson, also “fully endorsed” a plan for the AFT to take over the troubled 5,000-member local.
“The Washington Teachers Union has suffered significant damage and continues to face many difficulties as a result of the misappropriation of significant union resources by three individuals,” Mrs. Hankerson said in a statement. “It is crucial that these problems be addressed in ways that most effectively serve our members, and I believe the best way to accomplish that is for the American Federation of Teachers to place the WTU under an administratorship.”
The AFT began an investigation in July, after it was notified by a union member of an overcharge of union dues. The investigation resulted in a “significant number of irregular and questionable transactions” and led to the independent audit.
No criminal charges have been filed, but the FBI, the Internal Revenue Service and other federal agencies are investigating Miss Bullock, Mrs. Hemphill and Mr. Baxter. The three were named in a federal affidavit last month that was used to search their homes and those of others.
The FBI searched the homes and businesses of the three in December and seized paintings, electronic equipment including a 50-inch plasma flat-screen television from Mrs. Hemphill’s home numerous fur coats belonging to Miss Bullock and artwork from the Ramee Art Gallery in Mr. Baxter’s home.
Also listed among items seized by federal agents were a $5,500 Baccarat vase, handbags ranging in price from $690 to $2,200, a $6,800 Buccellati silver ice bucket with swan heads on each side, $20,000 worth of wigs purchased from Orreon Styles and 288 pieces of silver, including 24 place settings mailed to Miss Bullock’s home.
Court documents indicate that the three were writing union checks to family members and others to be cashed and then using the money to purchase the goods.
Miss Bullock and Mrs. Hemphill resigned from the union in September under pressure from the board. Mr. Baxter was suspended.
Mayor Anthony A Williams said that he is unaware of any illicit activity by Miss Bullock, a friend of Mr. Williams, or Mrs. Hemphill, who served as co-chairman of his re-election campaign.