PUBLIC EMPLOYEES FEDERATION AFL. CIO. REPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC#2015-001_ ‘Conrad Davis Rand} Diartonio Diane ZauiusREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-004 a TT AND DECISION OF THE ETHICS HEARING PANEL, Outline: ‘This is the final report and decision of the Ethics Hearing Panel (‘The Panel”) for ERCH#2015-001 (Jones vs. Kent, Garcia, Brown, Johnson, and Kellman), which summarizes the investigation and findings of the Pane! and the judgment and penalties proposed.REPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-001 ea TS Part 1: Summary 1. The Hearing Pane] met in exeoutive session six times by personal appearance on the following dates: February 17, 2016; Apr! 13 — 14, 2016, April 20, 2016, May 37,2616 and August 4, 2016. No minutes were required, All meetings were held at PEF Headquarters, with ‘the exception of the May 17" and August 4" meetings, which were held in executive session at the Desmond Hotel and Conference Center, Schenectady, New Yori. Part 2: Membership 2, During the hearing/deliberation periods the membership of the Hearing Panel remained the same. The members were: Randi DiAntonio - Executive Board seat 285, OPWDD; Diane Jaulus- Executive Board seat 050, DOCCS; Terry Lefer ~ Executive Board seat 300, OPWDD; ‘William Osta - Exeoutive Board seat - 220, Workers Comp Board and Conrad Davis, Chair Executive Board seat 470, Tax & Finance, Part 3: Main Activities 3. The Panel heard testimonies from the grievant, Mr, Jones and respondents Kent, Garcia, ‘Kellman. Ms. Kellman represented Mr. Brown and Mr. Johuson, Witnesses were called by the gievant and separately by tite Panel, No witnesses were called by the respondents, who elected ot to exercise their right to do so. 4, Witnesses: Blizabeth Falco, Mental Health Scott Ray, Department of Labor ‘Don Morgenstern, Chair, PEF Ethics Committee Valevie O°Dell, Director of Finance, PEF. ‘Lise King, Chief Counsel, PEF The ese, BRC#2015-00i was refesred to The Panel by PEF Exeoutive Board to hear ali charges, reach o decision on the validity of each chaege, and render appropriate judgment pursuant to PEF Code of Bthies.REPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-001 TE 6. Grievant Kevin Jones testimony alleges that the respondents named in ERC#2015-001, were derelict in ‘their duties and stood in multiple violations of the PEF Constitution and Code of Ethics. His allegations stemmed from discovery of misuse of Division 225 monies by former Council Leader Debbie Lee. Those allegations were previously reviewed by PEF Ethics Committee and reported to the Bxecutive Board on December 1, 2015. 7. Constitutional violations alleged: Asticle 11, section H ~ Strengthening and safeguarding this union by every means so that itmay carry out its purposes, objectives and obligations; Article XU, section K ~ When acting in their official capacity alt officials of PEF shall act only in the best interest of PEF and its members. Asticle XXL, section K — Conducting his/her PEF activities with honesty and integrity 8. Code of Ethics violations alleged: (©) All members shall conduct themselves in a manner that is conducive to faimess and fair play working only in the good and welfare of the membership. (10) No elected official shall engage in corrupt or unethical practices by taking money, books, records or other property belonging to PEF or its divisions. The unauthorized destruction; alteration; or mutilation of records, vouchers, o receipts will constitute a violation of this code. (11) No officer or member shal! abridge the rules and procedures adopted by the PEF Convention ot Executive Board, nor violate an oath of office. (12) No member shall engage in corrupt practices or racketeering. A, Testimonies: Format: Pursuant to PEF Code of Ethics, # 7-10, the grievant and respondents were allowed a minimum of 15-minutes each to testify. When necessary, the Panel extended the time for all parties. Each member of the Panel was allowed # minimum of 5 minutes to question the grievant, respondents, and witnesses independently. after each episode of testimony. Special Note: cused himself from al! ‘witness for the grievant, Mi of PEF Bthice Commi Committee activities related tc Mg. Sharon DeSilva, e memibe Mr. Don Morgens bearing. He wiREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-001 b. ‘The Hearing Panel requested and received opinion from PEF Counsel on relevant sections of the Code of Conduct; Counsel's writisn opinion was considered and guided the Panel's deliberations, 9. Grievant, Jones testimony: ‘Mr, Jones appeared and offered testimony. He called four witnesses, Falco, Ray, Morgenstem, and O°Dell, Mr. Jones also submitted written testimony, exhibits A-7”. Mr. Jones testimony remained consistent with the writter testimonies provided in previous hearings connected with the case. He questioned all the witnesses who appeared and was allowed to cross-examine each respondent. 10, Respondent, Kent testimony: ‘Ms. Kent appeared and offered testimony. She did not exercise her right to call witnesses. Ms. Kent asked the Hearing Panel to disregard her witness list which wes provided at the beginning of the hearing. She was permitted to cross-examine each witness and the grievant, ‘Mr. Jones alleges that Ms. Kent violated her constitutional responsibilities ~ Article Tl, Sec. Hi Article XX, Sec. K and Code of Bthics 5, 16, 17 and12. Particular allegations are that: 1. Ms. Kent willfully disregarded complaints from aggrieved members of Division 235. The Council petitioned her directly on several oveasions to intervene in e serious matter that undermined the financial viability, order and tranquility of their Division, It was further argued that she was derelict in her duties by not proactively taking prescribes steps to safeguaré PEF reputation, and its resources. 2. Obstructed and delayed the timely investigation of multiple violations of PEF Code of Ethics stemming from misappropriation of funds at Division 235, thereby preventing the due course of justice. ‘Regarding allogation 1 above, the Pane! heard testimony from Mz. Jones, Ms. Valerie Dell, PEF Director of Finance, and Mis. Elizabeth Faico, wino was a shop steward at Division 235. Supporting documents were submitted including affidavits from Ms. Falco, emails from Ms. O’Dell and letters from Division,235 Council. ‘Mr. Jones, Ms. Valerie O'Dell, and Ms, Blizabeth Faloo, provided oral ond written testimony that PEF Headquarters was informed of possible financial improprieties at Division 235 as early as 2015 [exhibit 4}. Mr. Jonee and Ms. Falco testified thee Director of Finance O°Dell was approached by members of Division 235 Couneil and the Region © is about Ms. Debbie Lec questionable expenditures of Division monies, in March, 2012, when sonerete evidence was shared with Ms. ODel!REPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-001 ET Garcia regularly shared information of allegations about Debbic 5.c¢"s questionable expenditure of Division 235 monies with her. Both Ms. O"Dell and Falco testified that Teresa Mayer-Gamboli informed Ms, O’Dell and Ms. Kent at the 2012 Convention held in Syracuse, of possible misuse of Division 235 member's money (exhibit 2). Ms. Kent provided no evidence thal, as President, she acted with urgency or the required duty of care and loyatty (Appendix II). She produced no evidence of directives to any person prescribed by rules or procedure, including the Secretary-Treaswrer, Trustees, or Chair of the ethies Comittee, to cause a thorough investigation of these serious allegations. For example, on November 10, 2013, Ms. O'Dell, wrote to Division 235 Council informing them that they would have to perform a local audit before their request for intervention from PEF Headquarters would be considered; { have discussed with Sccratary Garcia your request to have Division 235 audited by PEF HO. The fisst step is for the Division to put together an Audit committee and audit the 2012-13 fiscal years for the division.” ‘This was eight months after President Kent and Secretary Garcia were informed in March 2013, that there were possibie significant acts of malfeasance at Division 235 (G’Dell’s e-mail, exhibit 4) and months after the Division 235 WORKS trial balanee was extracted on September 9, 2013 by the Finance Department at PEF(exhibit 2). The trial balance showed significant expenditures at vendors for amounts and frequencies that are normally inconsistent with a Division’s financial ansactions. The Hearing Pane} believes probable cause for action existed then. Debbie Lee's Qussinabie rnsasions. Api = Seplemier 2013, (Ea 2 Between April 1 and September, Ms. Lee made 1 unauthorized purchases at stores not normal for a Division's purchases, See table!. Both Ms. Kent and Mr, Garcia testified that PEF é : : : i i policy required the Division to complete their [FiveGuys uit oe to the Trustees oe Neither | Briendly’s Ieo Cream _ & respondent provide PEF policy support their (Bowes 8B testimony. (Mt. yy Liquor Store a j (Ofites Depot 16 | Ms. Kent estified that the Trustees were allowed to Orange Supermarket 7 review Division 235 records in 2014, only after the Division had concluded its own audit, because this was the required sequence, According to documents submitted by witnesses, the lis! of fies | the Trustees reviewed was readily availa —— Marcl, 2013. Ms. Kent showed no’plausible need — to wait for ioeal audit. top & Shop / hopRite ai Spent in | mths Phe Test ed to reviewing faliowing key document: RCHIOIS- OD agREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-061 ® Annual Report of Division Audit Committee submitted by Division 225 for FYE 2012/2013. Print out of all Division 235 purchase card transactions on WORKS for fiseal 2012-2013. Division 235 Constitution PEF Forming of a Division Rules PEF Division Financial Policy PEF Power Point presentation on purchase card List of Division 235 Counci! Members during fisoal year 2012-2013. ‘The Trustees did not testify to interviewing Ms. Debbie Lee, former treasurers, members, Division 235 Council or examined cancelied checks for appropriate signatures or interview PEP Accounting Clerks or the Director of Accounting or the Secretary - Treasurer. The authority to io s0 is vested in their offies, As President, Mo. Kent owed c fiduciary duty to PEF members to safeguard its resouroes, its reputation, and to be transpurent in all its affairs. During her testimony, Ms. Kent provided no evidence that she met with the Trustees prior to or after their report, Testimonies throughout the hearing showed that evidence of possible malfeasance was available to Mr. Garcia and Ms. Kent in September 2013. PEF directive to Division 235 to do its own audit was not mutually exclusive. Additional, immediate stops were required of the President, Trustees, and Seoretary/treasurex. Urgent steps could have prevented further unauthorized expenditure, Ms. Kent's inaction wes further evidenced in many emails from members of Division 235. On November 14, 2013, Division 235 Council wrote to Ms, Kent reporting disarray among Council members and general dysfunction of the Division. The letter specifically requested guidance on filing ethics charges against their Councit Leader, Debbie Lee, before PEF Ethics Committee. ‘The letter was copied to each Trustee. One year after D.235 Council wrote directly to Ms. Kent, ‘she neither responded to their letters nor reported the alleged misconduct to the Ethios Committee. Ms. Kent gave no testimony as to why the President of PEF ignored « Division ‘Council for more than a year, On November 29, 2014, Division 235 Council wrote to Ms. Kent. again: “We have been awaiting your response to our letter delivered on 11/18/13 via ovemight mail. The letter outlined our division's budgetary issues; asked for your assistance; and included a request for an outside independent audit... “Ploase lenow: that we are ready to look to outside authorities to deal with our issues since we have not heard from you" Testimonies of the Trustees, Secretary-Treasurer, and Division 235 members throughout this teport, showed that Ms. Kent was aware of the Trustees findings of miscondnet by Ms. Lee ‘April 22 Trusteee Report). She did nos cause the repor: to be shared with PEF members st Division 235. They repeatedly requested copies aud hac ¢ right to be fully informed (Article CK! ~ Bilt of Rights for PEF Members, B, J, and IO). Mi. Kent did not provisied any testimony ‘that she filed ethles charges, as the responsibility of the President office demanded. ‘The repost was provided to Division 225 seven mont Secretary. Treasurer Garcia renceuscrmete _ ret tent renege ERGE2O2S.005, PageREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-001 Ms, Kent testified that she was guided by adherence to the Labor Laws, and needed to protect, Debbie Lee’s rights. She was asked by the pane! whether she had formally sought guidance and advice fiom Counsel. Other then the December 20, 2014 email from General Counsel Lisa King, responding to Vice President Spence concerns, no documentation was produced in this regard. Further, Ms. Kent did not support her claims that she was guided by Counsel during her cross- examination of Ms, Lisa King, who appeared as e witness for the Hearing Panel. Ms. King frequently invoked attorney-client privileges or out-rightly refused to answer questions posed oy Ms. Kent during cross-examination. Ms. Kent questions would have shed light on the course of event. Ms. Kent did not waive her rights to have Counsel disclosed what transpired during the Debbie Lee fiasco. Ms. King frequently invoked attomey-client privileges on the witness stand, in response to every member of the Hearing Panel questions, Regarding allegation #2, Mr. Morgenstern appeared and testified that he was approached by Ms. Kent at a union retreat in May of 2014 and was asked to delay the hearing of ethics charges filed by Division 235 members, including Grievant Falco. Ms. Falco testified that she feared that the statute of limitation on embezzlement would soon expire, because multiple letters sent to Ms. Kent requesting intervention were ignored for more than a year (ERC 2014-004}. Ms, Kent testified that her request to deloy the ethios hearing was not intended to interfere with the process or abridge PEF policies. Mr. Morgenstem testified that he was of the opinion that President Kent vas resistive to any action being taken against Ms. Lee. An e-mail submitted by the respondent, dated December 16, 2013, (exhibit 14) inforined the recipients that Mr. Morgenstern and Spence were aware of possibie embezzlement at Division 235, and urged referral for criminal prosecution. Ms. Kent and Mr. Garcia testified that they sought guidance from Counsel on whether to engage law enforcement. ‘An email from Lisa King dated December 20, 2013, argued that “the fiduciary duty of the officers of a union, when it has been determined that money has been misappropriate, is to take all steps to get the money back.” Ms. Kent testified that her actions were guided by Counsel's advice. However, there were no testimonies or evidence that Ms. Kent acted in accordance with hor constitutional obligations. She did not report her findings of substantial misconduct to the Bthics Committee, She did not testify to initiating any correspondence or conference with PEF legal, seeking advice or guidance during the entire process, from March 2013. She did not respond to Division 235 Council many letters urging ethics review. In fact, the Trustees report of April 22, 2014 detailed sufficient misconduct to warrant immediate referral to the Bthies Commnittes. Written and oral testimonies presented throughout the hearing suggested that PEF Bthios Committee was scheduled to hear “Falco vs. Lee,” only because @ frustrated member of Division 5 Council filed ethics charges. Ms. Falco testified that she filed the report for two reusans: the ethos charges was about to be not acknowledge Division 225 many requests, or filed ethics Falco felt that she would be complicit with # criminal act based on the ced about Debbie Lees malfeasance, and needed to disclose what ahe inew statute of limitation on embezzlement and the time for filing expired and Presiden charges herself. Ms,REPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-001 RR ‘itis reasonable to conclude that President Kent's eetione were intended to obstruct the Bthios Chair. She was fully aware thet an ethics hearing is a due process procedure that would not violate Ms. Lee's legal rights to due process. Rather, it would bring transparency te the whole matier. ‘When the body of evidence and testimonies heard before the Hearing Panel are taken in totality, and the weighed against the fiduciary duties of President: the duties of care, loyalty and obedience; the Constitutional obligations; the Code of Bthics and the exereise of good judgment, are carefully considered, it can only be concluded that Ms. Susan Kent, breach trust of PEP metnbers and failed to uphold the constitution, show’ fidelity to policies and failed tc adhere to the codes of ethics. All reasonable conclusions are that she: 1, failed to strengthen and safeguard this union by every means so-that it may cary out its purposes, objectives and obligations (Article U, section H}; and 2, failed to act only in the best interest of PEF and its members when acting in her official capacity as President (Article XXUL, seotion K); and 3. failed to conduct her PEF activities with honesty and integrity (Article XXII, section K)sand 4, failed to conduct herself in a manner that is conducive to faimess and fair play working only in the good and welfare of the membership (Code of Bthies (5)); and 5, abridged the rutes and procedures adopted by the PEF Convention or Executive Board, and violated her oath of office (Code of Bthios (13). 12. Respondent, Garcia testimony: Mr. Garcia appeared in person and offered testimony and documentary evidence. He did not exercise his right to call witnesses. He was permitted to cross-examine cach witness and the grievant, Mr. Jones. ‘The Panet heard testimony that in 2012, Beverly Williams resigned es Division 235 Treasurer and Teresa Mayer-Gamboli became Division Treasurer. From the very start of her position as Division treasurer, Meyer-Gamboli began to express concems about Debbie Lee’s failure to document her use of the Purchase Card (Falco Affidavit), She first raised concer that Debbie Lee was not providing her with receipts in discussions with PEF Central in ot about fuly 2012 ‘alco Affidavit, O'Dell testimony). Vai O”Del! informed Kent and Garcis of this (O7Dell iestimeny). ‘At the 2012 PEF Convention in Syracuse, Teresa Mayer-Gamboli (Division 235 Treasures) and then Assistant Council Leader Mike Barna brought their concems to PEF Director of Accounting Vai O'Dell, who spoice 16 Debbie Lee, and who then promised to provide receipts for each purchase. Val O°Dell then informed President Susan Kent and Secrewry/Treasurer Carlos Garcia about this. (Val O'Dell e-mail jexhibli 4], (Palco Affidavit & Appellant's Be.REPORT AND DECISION OF THE ETHI HEARING PANEL - ERC-2015-001 In the March 2013, Gamboli and Divisions Accounts Clerk, Delores Coleman stated that Debbie Lee continued to make questionable purchases, and was not providing the itemized receipts os she had previously promised, Later that month, at an Executive Board meeting, Vai O°Dell was approached by Janette Clark, who voiced concems about the embezzlement/misuse of Division funds. O'Dell promptly informed Kent and Garcia, However, they took no action. (Vel O’Dell testimony, Appellant's (Exhibit. A) In Avgust 2013, in response to an earlier request, Gamboli informed O'Dell that she felt that fonds were being appropriated for personal ust. O”Dell and Gamboli discussed concerns about purchases of dog food, pond stones, and CDs. (Appellant's Bx. A) Just prior to the 2013 PEF Convention, Division 235 held its regular steward elections, and met to elect officers. After Debbie Lee was elected, Gamboli distributed a copy of the Division's ledger. Ms, Falco testified that after reviewing the document, it became clear to everyone there that Debbie Lee was converting the Division treasury for her own personal use. Falco further testified that at the subsequent 2013 PEF Convention, Santhosh Thomas, Assistant ‘Counsel Leader for Division 235, accepted the purchase card from Debbie Lee following a Division Finances workshop hosted by Val O"Dell. The workshop was attended by the entire Division 235 Council. (Testimony of Falco, Thomas, & O”Dell; Appellant’s Ex. A). O'Dell also spoke to Gamboli, whe showed O'Dell the binder in which she kept vouchers and receipts for Division expenditures. There were no receipts in the binder since 2012, “Afier speaking to Kent and Garcia, O”Deli gave Debbie Lee until Friday, October 4", to provide vouchers and receipts for ali the purchases she had made, Besed upon this conversation, O”Dell left the Convention believing that the next step would be for the Trustees to go down to Rockiand Psych end conduct an audit. (Testimony of Val O”Dell, Appellant's Exs, A & EB) On Thursday, October 3, 2013, the Division Councii met and resolved the requests that PEF conduct an audit of the Division’s accounts, On Monday, October 7", Division 235 Secretary ‘Vera Hill sent a letier to O’Dell and Garcia requesting an audit of their Division. (Appellant's x), Alered that this request was in the mil Delle aailed Seeretry/Teasurer Gusa it, and their expectation that she, rather than would conduct the audit of Division 235 (Testimony ‘The Penel heard testimony that 1 request by e-mail on October 10", before he could inves , O'Dell responded to the verbal sion had to perform an Annus! Audit gate th Seoretary/Treasurer Garcia specifically directed SanthoshREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-002 nS ‘Tho Panel heard testimony that Thomas met with Trustes Ken Johnson at « Region 9 retreat in the Fall of 2013, They discussed the issue, and Jokneon initially agreed with request that the ‘Trustees perform an audit, Some hours iater, Johnson saw Thomes and informed hisn thar the Division bed te do an audit first. Johnson wes then present at a dispute between Thomas and Garvie wherein Garcia insisted that the Trustees could not do an audit unti] the Division’s audit committee first performs its own, (Thomas Affidavit, Testimony of Ken Johnson.) On November 14, 2013, November 29, 2013 and December 6, 2013 the Division sent certified letters to President Kent, along with e-mails to Carios Garcia and Vel O°Dell, requesting guidance on howto handle these mounting division money concems. Copies of each of the lattors were sent to the three Trustees, but the ‘Trustees failed to take any action. No response to ‘these cettified letters was ever issued by Kent or Garcia. (Falco Testimony & Affidavit, Appellant's Ex. G.) On December 16", PEP Vice-President Wayne Spence sent an e-mail to Geroia indicating that he ‘was aware of the Debbie Lee matter, Spence Stated: At the recent region 11 leadership retreat in Nanuet, NY, about a month ago, Don. ‘Morgenstem, the PEF ethics chair shared with me some troubling information. He stated to me that he was recently made aware of a local PEF leader in region 9 who by the documents he saw appearsd to have committed malfeasance against PEF to the tune of over 5 thousands dollar. He sted that he met with you and gave you the information and recommend that law enforcement be contacted as he felt that this is something that was ‘out of the scope of the ethics committee to handie. ‘Vice President Spence’s email recommended the matter be referred to law enforcement, and copied President Kent and the three Trustees, (Appellant's Bx. 8) ‘The Panel heard testimony that the matter was not referred to law enforcement despite the running of the statute of limitations. This was apparently upon the advice of counsel, Lise King (Testimony of Garcia). ‘Ultimately an audit committee was assembied and in early 2014, the 2012-2013 Division audit was completed and was followed e month iter by an audit of the first ix months of the 2013-2034 fiscal year. The Audit Committee discovered gross misappropriation of Division funds (Thomas & Falco Affidavits, testimony of Falco & 0’Deli, ‘Appellant's Ex. H). Both: audits indicated the absence of supportive meeting minutes for the indicated purchases, missing or mutijated itemized receipts for the majority of the iarger supermarket or drug store purchases, and incomplete vouchers, or vouciters mismatched to the purchases, among otter ion audit committees (Faleo Affidavit, Faica & O°Dell testimony, Appellant's Bx. EL}. ‘The Hearing Panel observed that notwithstanding the obvious ack o: aforementioned expenditnres f.c., no meeti any monitoring or review of what the Bank of Americs ledzer provided) and the fact that most af these questionable expenditures seemed inappropriate for division business on their faos, al were approved by the BEF Central or AMGavil) whic would astensibly be the RCRA I5.00% ineREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-001 TLE responsibility of Secretary/Treasurer Garcia. It should be noted that the audit commitiee conducted only a partial audit, stating in Paragraph thirty (30) of the Addendum to their audit: ‘This is just s{hi}ort list of items found questionable, Computer items show up as purchased from Staples, Best Buy or Radio Shack, but no inowledge of the existence of a PEF division computer. Numerous smaller 'dinner-type' purchases or food purchased with ‘vague association to a ‘nurses meeting’ or such, but no names or signed attendance records atiached to voucher. Many purchases of ‘gift cards’ with similar lack of recipients or division ‘meeting minutes approving suck; some indicate Shell Gift card (gasoline?). Cash advances for Costco purchase did not match total of Cosice purchase (cash advances were more than total purchase). Many division vouchers de not match purpose indicated in PEF provided General Ledger. Many receipts were missing, ‘The paragraph referred to above would suggest that the matter was tipe for the local prosecutor's office, however; again, no referral was made. instead, the audit committee recommended that 2 much more comprehensive audit be done thet looked af each and every transaction. The shor! list of itemized transactions provided as examples of the types of questionable transactions found added up to $2,412.77. (Testimony of Val O'Dell; Appellant's Exs. A & H -- paragraph 30.) The Audit Report was completed on February 4, 2013. just prior to the expiration of the time period in which to file a complaint, Liz Paleo filed an ethies complaint on April 3, 2013. (Falco ‘Testimony, Appellant's Ex. K) This complaint was slated to be heard at the next PEF Ethics Committee meeting. These meetings were held during the course of PEF Executive Board meetings, The next one was scheduled for May 13-14, 2014. (Jones Complaint.) ‘The Panel heard testimony that sometime after the 2022-13 annual audits were completed, the ‘Trustees were tasked by the Secretary/Treasurer to conduct an audit of Division 235's expenses for the same time period (Testimony of Brown, Johnson, and Kellman). Although the audit ‘committee recommended.conducting a much more comprehensive audit that looked at each and every transaction, the Trustees’ audit failed to even supplement the partial audit conducted by the audit committee and, instead, actually reduced the amount of questionable expenses acknowledged in the Division’s audit committees’ report. The Panel observed that despite the fact that the transactions addressed by the. audit committee (Paragraph 30 above be merely examples of the different types of questionable transactions found, the Trustees failed to add a single questionable transaction in their subsequent audit, (Testimony of Val O"Del Appeliani’s Ex. 3.) It appears to the Hearing Panel that the Trustees, never visited Division 2: fo examine the actual financial system operating there but merely “audited” the “partial” audit conducted by the audit committee and reduced the emount of questionable monies expended Ultimately, the Trustees Audit of the 2012-13 fiscal year, dated April 22, 2084, found only $2,000 in questionable expenses, (Testimony of Val O'Dell; Appeliant’s Bxs. A & J.) Notwithstanding the fact that tte Trustes are constitutionally charged with documenting sad ry activities of this Federation they perceive as not being fie membership, the Trustees, instead, reported directly and exclusively to ‘reasurer Garcia, who shared the report with iis. Lee exclusively. The report was not initially ebared with the Stewards the Division membership, or the PEF membership af testimony of Val QO’ Dell}, T é Secretary! Treasurer esmenmeesREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-061 appeared to be obstructing the constitutionally mandated process of allowing the Trustecs to report directly to the membership. Their independence is vital as a check against precisely what ocourred hare, an overreaching Secretary/Treasurer wihho not only delayed the process but, more importantly, directed it, When members of the Heating Panel asiced! Mr. Garcis about his stated policy that the division should perform: its own audit before an independent, forensic audit could be peniormed, Garcie ‘testified thet he sought guidance from the legal department (Attorney Lise King) and was told to have the Division do an eudit first. This porported advice seems unreasonable given the soope of the malfeasance at Division 235. Mr. Garcia did not substantiate this claim by documentary proof (e.g., emails, memos, eto.}, witnesses” testimony or sworn affidavits. ‘More importantly, the Hearing Pane! observed that when Attomey King testified, Mr. Garcia did not ask her to affirm the fact that it was the legal department that authored the notion that the Division should conduct an audit its own audit frst. It should be noted that although Ms. King invoked the attomey-client privilege, Kent and Garcia, the particular clients from which the privilege emanates, never attempted to waive the privilege for purposes of allowing Attomey King’s testimony, especially on the purported advice to have the division perform an audit first Since the clients, Kent and Garcie, and not the attomey, hold the privilege, they ield the ultimate authority to assert it or waive it, and elected not to do so, ‘One further point on the guidance Sectetary/Treasurer Garcia purportedly received from PEF ‘Counsel. It remains bewildering that a competent attomey failed te safeguard the statute of limitations regarding a criminal prosecution that would not have cost the union any monies. This should be investigated further to determine whetler there was any rational basis for doing so other than to obstruct justice. The oaly affirmative acts performed by Secretary/Treasurer Garcig, ‘who was aliegedly counseled by Atiomey King, resulted im deiaying prosecution and/or resolution of the Lee matter until the statute of limitations regarding embezzlement ultimately passed. In terms of omission, Garcia failed to apprise the membership of the financial scandal surrounding Division 235. The obvious dsiay in resolving the debacle at Division 235 and the failure to alert the membership to this, “imegularity,” amounts to an obstruction of justice. At minimum, it amounts te 2 dereliction of duty, nameiy, the duty to: {allssure that monies appropriated by the Convention or the Executive Board be actually disbursed and employed for the intended puposes, making report of any inregularities to the membership: (PEF Constitution, p. 4; underscored for emphasis). ‘The Hewting Panel received testimony that on April 29°. one week after the completion of the ‘Trustees? 2012-13 Audit, Garcia sent a letier to Hiebbie Lee. Attached to the letter wns a list of the questionable expenses found by the Trustees. Garcia stated in hic letter: A list of these charges is stiached. Please rentit payment for these charges by May 12, 2014. If you believe that there are charges for whieh you are ahie to provide a response to the conoams raised in the Appendix { docnment, please subi! that dosamentation slong. with payment for the remaitiR ‘T AND DECISION OF THE ETHICS HEARING PANEL Had Debbie Lee paid these approximately $2,000.00 in questionabie expenses, the inquiry would have ended, (Testimony of Val O°Dell & Carlos Garcia; Appellant's Exs, J & N.) hearing Panel heard testimony that four days iater, at the Region 8 Retreat held May 3-5, Kent and Gercia approached PEF Ethics Chair, Don Morgenstern, and badgered him for ive minutes, asking him to delay hearing the Debbie Lee ethies case until the August E- - fused. Morgenstern also testified that such a request bad never been made to him by a PEF official in his three decades as PEF Ethics Chair. (Jones Complaint, Morgenstern testimony.) ‘The Hearing Panel observed from testimony that the matter of Debbie Lee’s questionabie expenses continued through Spring, Summer, and well into the Fall. The Trustees made no inquiries into the status of the matter, and did not report on the matter in their annual report to the PEF Convention. However, Val O”Dell used this time to work on an audit of het own, and had continuing conversations with Debbie Lee concerning documentation of her many expenses. Sometime prior to the Hearing Pane! meeting in November 2014 to address the serious violations found by the PEF Ethics Committee, Val O’Dell completed her audit. The audit totaled approximately $15, 000 to $17,000. (Testimony of Val O'Dell.) ‘The Hearing Pane! heard testimony that O’Dell then sat down with Kent and Garcia to discuss hher audit. Kent wanted the audit down to $5,000. O°Dell amended her audit to give Debbie Lee credit for all the restaurant bills and produced the two audits that were released under Carlos Garoia’s signature dated October 21, 2014. The 2012-13 audit now totaled $3,434.88 and the Apsil 2013 ~ September audit now totaled $1,671.37, for a total underpayment of $5,016.25, rather than the $15,000 -$17,000 in O°Del!’s original audit. (Testimony of Val O'Dell, Appeliant’s Bx. Q.) “The Hearing Panel observed that Ms. O”Dell’s professional training and practice is in accounting and finance. Neither Ms. Kent nor Mr, Garcia holds accounting credentials. Therefore, it was unclear why they would direct Ms. O"Delt to reduce her audit findings by approximately 310,000, “Testimony showed that two weeks later, the Hearing Panel appointed by Kent, met and found that the $5,016.25 in underpayments were due and owing, but that “the degree of negligence in record keeping for the details of the funds spent did not meet the legal definition of misappropriation. of funds” (Appellant's Ex. X.}. In weighing the evidence and testimony before this Pane! one special fact was noted, none of the suds conducted by the audit committe (partial audit questioning $2,412 ‘Dell ($17,000 reduced to $5,016.25) appeared by questionable desREPORT AND DECISION OF THE ETHICS HEARING PANEL 2015-60: 1. failed to strengthen and safeguard this union by every means so that it may carry out its purposes, objectives and obligations (Article U, section H); and 2, faiied to act only in the best interest of PEF and its members wher: acting in his official capacity es Scoretary/Treasurer (Article XXT, seation E); and 3, failed to conduct his PEF activities with honesty and integrity (Article SUL, section Ks and 4. falied to conduct himself in a manner that is conducive to fairness and fair play working only in the good and welfare of the membership (Code of Ethics (5)}; and 5. abridged the raies and procedures adopted by the PEF Convention ar Exeoutive Board, and violated his oath of office (Code of Ethies (1)); and 6, engaged in corrupt practices by sheltering Ms. Lee from criminal prosecution and substantially diminishing the amount of questionabie transactions she was guilty of (Code of Ethics (12)). 12. Trustees Respondent, Trustee Kenneth Johnson — renresented by respondent Kellman. In regards to the charges against the Trustees, the hearing pane) heard testimony from Ms. Keliman, Mr. jones, Ms. Valerie O'Dell, PEF Director of Finance, and Ms. Elizabeth Falco, 2 duly elected shop steward at D.235, In addition, the following supporting documentation was submitted: affidavits fom ‘Trustees Johnson, Brown and Kellman; affidavits from Ms. Palco and Mr, Thomas, emails from Mis. O*Dell with a timeline of events, various emalis, copy of ethics charge and letters ftom D.235 Counci members ‘Mr. Johnson appeared in person at the February ‘17th hearing and subsequently appointed Ms. Keiiman to represent him at all future hearing dates, He did not exercise his right to call witnesses. Mr. Johnson was-permitied to cross-examine witness and Ms. Keliman exercised that function on his-behalf subsequentiy. Mr. Johnson submitted written affidavit, which stated “the Trustees were made aware of Division 235 purchase card activities in the latter part of 2013", This is corroborated by Mr, ‘Thomas’ affidavit and the 2/17/56, and the testimony of Donald Morgenstern, who stated that sometime in November 2013, ne and then Vies President Spence approached former Secretary- ‘Treasurer Garcia and Trustee Johnson at e regional retreat to show them a financial ledger with questionabic expenditures. They directly expressed their concerns about possible malfeasance within Division 235 by its’ Council Leader. ‘Trustee Johnson's written affidavit also stated “We (the Trustees} immediately set out to da our own investigation and realized that the divisional done (ina mamber of years), idit had io be completed ding” tinting an independent audit until the man teetified thai the Trostees wore advised ofREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-001 eT former Secretary-Treasurer Garcia and Director of Finance, Valerie O”Dell and that this was part of the PEF Divisions policy. The hearing pane! review of the PEF policy referenced in testimony revealed that the policy does not definitively state that e divisional audit must be done before Trustees can audit the division’s record. in fact, the policy does not explicitly mention, address or prohibit the Trustees in any way at all. The policy further states that the Seoresary- ‘Treasurer and Divisions Committee have the authority to adopt rules; procedures and forins necessary to implement the policy. An email from former long term Trustee Gail Noble (submitied as Petitioners’ Exhibit V) dated 3/13/15 stated that “never did Ken or Ariea (past President and Secretary-Treasurer) tell us not to review or audit a division until the division did it themselves. This just gives them a chance to hide things that might not have been legitimate expenses. If something is suspected, you want to do the audit, not them”, She further stated “Carios or Trustees should have stepped in once the concerns were raised”. Ms, Falco's written affidavit, entered into evidence as Exhibit 3 in Mr. Jones’ Ethios Grievance Petition, indicated that despite numerous requested by stewards in the affected Division, Secretary-Treasurer Garcia insisted an outside audit by the Trustees or his office could not occur ‘until they appointed an internal Audit Commitice and did their own review. She testified that the Division did eventually compiete an andit review in January 2014 and shortly thereafter, the ‘Trustees were directed by the Secretary Treasure that they could begin their own review. The ‘Trustees prepared e written report, dated 4/22/15 (Petitioner Exhibit J) which made numerous recommendations about the divisions financial procedures and estimated over $2000.00 in ‘questionable charges. ‘The Trustees also recommended that the Secretary-Treasurers office further investigate those expenditures. Ms, Falco testified that she wes unclear how the Trustees came to their conclusions since they never visited the facility to review records nor did they contact stewards on the Division 235 Council. Mr. Johnson’s notarized affidavit also stated that after the Trustees completed their audit, they furnished the report directly to former Secretary-Treasurer Garcia as the official “keeper of PEF records”, The Trustees left it to the Secretary- Treasurers’ to determine when and whom to release this report to, upon conclusion of his investigation. Ms. O'Dell testified that she received emails from Division 235 Council member, Sershen Henry on several occasions (Apri! 29", 2014, June 18", 2014 and September 16" and 232016) requesting updates and copies of the Trustee Report. Ms. Falco also testified that in spite of repeated email requests to the former Secretary-Treasurer, a copy of the Trustee's audit report vas not released to the division untit November 2014, six months after it was compieted. The ‘Trusice audit findings were not sent or presented to the Executive Board until the December 2014 m joard directed an AFT audit for fiscal years 2007-2014. The outside hibit R) by Director the amount of questionable runsel Lian King testified against Ms. Lee to recoup monREPORT AND DECISION OF THE ETHICS HEARING PANBL - ERC-2018-001 Respondent, Trustee Kellman testimony: Ms, Kellman appeared in person end offered testimony. She also submitted a written notwrized affidavit in response to the Ethics Grievance, dated March 2 2015. This affidavit wes identical in content to the submission by Trustee Johnson (as deseribed above). Ms. Keliman did not exercise her right to call witnesses. Ms. Kellman opened her testimony stating her full time job is as on actuary and in addition to being 2 Trustee she also funetions us the EAP Coordinator for PEF. She. explained her profeesional credentials and stated that prios te 2012 she did not bave previous experiente in the union. She testified that in her roie as a Trustee, her primary function was to make recommendations and oversight. She testified that she is attentive to detail and that she and the other Trustees go above and beyond. Ms. Kellman testified that Trustee Johnson first became aware of concems about misappropriation of funds for Division 235 at a Regional Retreat in the Fall of 2013. She corroborated that Council Leader Thomas had approached Trustee Johnson te request that they perform an audit. Keliman testified that initially Trustee Jolson was very responsive and agreed that the Trustees should go in and audit but he subsequently advised Couneil Leader ‘Thomas that the Trustees were not able to conduct an Audit until Division 235 first did its own audit report. She testified that this was per policy according what they were told by the Scoretary-Treasurer and Director of Finance ©”Del). An audit report by Division 235 was eventually done and signed on Feb, 4 2014. At that point a ‘request for the Trustees to Audit was initiated by the Secretary-Treasurer. Mis. Kellman stated all three Trustees reviewed the divisional audit and records for 2012/2013. ‘Ms. Kellman said they went through every receipt line by line for each submission. ‘They noted that there was no record of Council mectings, a budget made up by no input fom Couneil, only the leader and no receipts for 4/1/2022-7/26/2012. They also noted missing records of cash purchases and lack of documentation, They issued a report on 4/22/16 (Petitioners Exhibit J) ‘which identified four specific areas of concer and offered recommendations for each, This report was submitted directly and solely te the Secretary-Treasurer for him to determine what should be done with it. ‘Ms. Kellman testified that in addition t the report that she / Trustees recommended the Seoretary- Treasurer takes further action, as PEF daes not have a policy tm handle fraucnient cases. On Ape 29", 2015 the Trustses report was released to Debbie Lee by than Secretary Garcia Gxbibit 21), This report was not released to the affzeted Cow 235. They had requested e copy several times. After x second divisional audit was submited in June. 29%4, the Trustees reconvened an uciditional review and made more recommendations (Bxaibit 20). The Trustees submitted these ‘ndings and onggestions in the Secretary. Treasurer. action to repodt findings te fhe membership Page 27TA iD DECISION OF THE ETHICS HEARING PANEL - ERC- Respond tee Brown — represented by respondent Kellmat Ronald Brown was a PEF Trustee from Aug 2012-2015. ‘Mr, Brown appeared in person at the February 17" hearing. He also submitted a written, notarized affidavit in response to the Ethics Grievance, dated March 2, 2015. This affidavit was identical in content to those submitted by Trustees Johnson and Kellman (refer to #12 for detailed description). ‘Mz, Brown appointed Ms. Kellman to represent him at all future hearing dates and did not appear on other dates or exercise his right to call witnesses, Mr, Brown along with the other Trustees became aware of possible malfeasance in Division 235 by its’ Council leader in November 2013. It was not until April 22, 2015 that he and the two other Trustees completed their report after compicting an audit of Division 235. The Trustees found no record of any Council meetings during the fiscal year and no record of financial decisions made by the Council. The budget was made up by the Council leader Debbie Lee only. There were either incomplete or ne vouchers for expenses and finally monies that were spent were not adequately substantiated. In article VIII of the PEF constitution “Trustees” have a duty to document and report fo the membership any activities of this federation they perceive as not being in the interest of the membership. Mr, Brown did not carry out his constitutional duty and only reported his findings to the Secretary/Treasurer Garcis, B, Constitutional Authority: 13. Duties of PEF Trustees Article VIII of the PEF Constitution states, “The Trustees Shall: A. Periodically review the fiscal records no less than semi-annually, in cooperation wi Secretary-Treasurer and @ Certified Public Accountant B. Document and submit to the membership any activities of the Federation they peresive as not being in the interest of the merabership C. Attend all Executive Board Meetings and have the right to address that body. plicable PEF Policies ‘Trustee Policy; Divisions Policy Findings of the Hearing Panel asad on the evidence presented within th aifed so fulfili their oath of office and perfor the above: situ: nto the memib divisional financial concerns. port, the hearing pene! finds that the Trastees ‘heir constitutional duties when they chose not te ssitip for almost » full year after becoming aveREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC: 015-001 _ SRS “The Hearing Panel found the alieged violations are of an extremely serious magnitude and pose grave consequence for the union and its’ membership. The beering pane! found all three Trustees collectively and independently maintained a passive role and failed to take any type of assertive actions independent of the direction given by the Secreiary-Treasurer, ‘The Trustees delayed their initial investigation and audit review, for over five months, besed on wiat the hearing Panel found io be misguided assertion that the Division's policy gave them no other option. While the policy does state that divisions must conduct annual audits; it ir no way asserts that until the division completes one, Trustees” are prohibited or restricted in any way fiom investigating or otherwise performing their constitutional duties. Pursuant to PEF policy on Trustees, if Trustees believe that there is a matter that is not in the best interest of the membership they may have access to any records and meetings at the statewid regional and divisional levels (Appendix I! Duty of care). The poliey also states they are required fo report io the membership matters which may not be in the best interest of the membership. In this oase, the Trustees reported their findings directiy to the Searetary-Treasurer and allowed him to determine whether or when it could be reported to the membership. The Trustees compromised and violated their constitutional responsibilities when they allowed the Secretary- ‘Treasurer to direct their level of involvement and action. As a result of their decisions, the ‘Trustee investigation was uot initiated until several months after allegations were brought to their attention. Additionally the Trustess audit report dated Aprit 22, 2014 was not shared with the affected Division Council/membership or Executive Board until November 26, 2014 after sepeated written requests by the Division Council officers. E, Applicable PEF Code of Bthies 5. All members shell conduct themseives in e manner that is conducive to fairness and fair play working only for the good and welfare of the membership 11. Ne officer or member shall abridge the rules and procedures adopied by the PBF convention or Executive Board, nor violate an oath of office. BR. Findings of the Ethics Hearing Fane! Based cn the evidence presented above the Hearing Pane! fnes reached the following conclusion: ‘The Bthies Hearing Panel, having received and considered testimonies and evidence from the grievant, Kevin Jones; the Respondents, Brown, Garcia, Johnston, Kellman and Kent, and deposed of witnesses, deliberated and voted unanimousiy to sustain the charges against Brown, Garcia, Joimston, Keliman and Kent as follows:REPORT AND DECISION OF THE iCS HEARING PANEL ST 3, Failure to conduct himself in a manner that is conducive to faimess and fair play working only in the good and welfare of the membership (Code of Bthies (5)); and 4, Abridged the rates and procedures adopted by the PEF Convention or Executive Board, and violated his oath of office (Code of Bthies (11)) ‘We additionally find Carlos Garcia as follows: 5, Failure to conduct his PEF activities with honesty and integrity (Article XXU, section K}; and 6. Engaged in corrupt practices by sheltering Ms. Lee from criminal prosecution and substantially diminishing the amount of questionable transactions she was guilty of (Code of Ethies (12)). G. Judgment of the Ethies Hearing Pane! (ERC 2615-001) Discipline: Pursuant to part “F” of PEF Code of Conduct, the Hearing Panel unanimously voted to impose discipline for each respondent as follows: Maureen Kellman: Part F (a), Requirement that the guilty party to conform to the Constinution and Code of Bihics of the Public Employees Federation. Part F (c), Letter of reprimand be issued against Ms. Kellman. Ronald Brown Part F (2), Requirement that the guilty party conform to the Constitution and Code of Ethics of the Public Employees Federation. Pari F (c), Letter of reprimand be issued against Mr. Brown, enneth John Part F (a), Requirement that the guilty party conform to the Constitution and Code of| the Public Employees Federation. Part F (c), Letter of reprimand be issued against Mr. Johnston, ty conform to the Constitution and Code o! 8. Kent,REPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC. ‘The Hearing Pane! imposes deprivation of PEF privileges on Susan Kent as follows: ‘Revocation of the right to participate in the internal affairs of the union, such as running foe eny union office, serving on any PEF committees, iocel or statewide, voting in union elections o> participating in the union’s intemal processes for supporting political candidates, or represent any PEF member or jurisdiction before the annual PEF convention, or any union affiliated conventions, for a period of (4) four years commencing from the date of this report. Carlos Garei Part F (a), Requirement that the guilty party conform to the Constitution and Code of Ethics of the Public Employees Federation, Part F (o), Lotter of reprimand be issued against Mr, Garcie, Part F (d), Deprivation of PEF privileges. ‘The Hearing Pane! imposes deprivation of PEF privileges on Carlos Garcia as fotlows: Revocation of the right to participate in the internal affkire of the union, such as running for any union office, serving on any PEF committess, local or statewide, voting in union elections or participating in the union’s intemal processes for supporting political candidates, or represent any PEF member or jurisdiction before the annual PEF convention, or any union affiliated conventions, for a petio¢ of (5) five years commencing from the date of this report. PageREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-001 _ Appendix 1 PEF Constitutional Duties 14, Duties of PEF President 1. Be the chief executive officer of PEF and shali serve full- time. it shall be her duty to administer all the affairs of PEF and to execute policies of the organization as determined by the Convention and Executive Board; . Preside at all meetings of the Conventions, the Executive BOARD AND Special Meetings; . Act as chief spokesperson of PEF; 4, Head deiegations and represent PEF at conventions of organizations with which itis affiliated; Establish and assign regular duties to each Vice President with notification to the Executive Board; 6. Appoint and establish the functions and duties of all committees with notification to the Executive Board; Call reguiar and special meetings of the Executive Board; 8. Call annual meetings of the Convention; meeting of the Convention upen written petidion of two-thirds (2/3) of the total members of the Annual Convention delegates or by two-thirds (2/3) of the Executive Board; nd whe, if at the tne of appointment were reguiar mem! ynin pertaining thereto: such appoiuimenis shallREPORT AND DECISION OF THE ETHICS HEARING PANEL - ERC-2015-004 12, Set and impiement policy for this union between’ Executive Board meetings subject to the subsequent review of the exeoutive Board; 13. Be an ex-officio member of all standing and special commitives or designate his/her representative to same; 14, Call and conduct membership meetin, 15, Together with the Secretary-Treasurer or his /her designee, sign all checks and vouchers; 16. Designate a signatory, with notification (o the Executive Board, wo sign checks and ‘voucher in his/her absence; 17. Submit to the appropriate membership for ratification the complete text of any collective bargaining agrecment between PEF and an employer, after such agreement has been approved by the Executive Board under Article VILD.13 of this Constitution: 18, Fulfill such other duties as her office requires and as are consistent with this Constitetion and the Special Rules of Order. 15, Duties of PEF Seeretary-Tressurer 1, Assume the duties of the President in hie/her absence; 2, Reep accurate account of all receipts and disbursements and of all monies, securities and property owned by PEF: 3, Conduct official comesponsience and be responsible for the seal and official papers; 4, Give timely notice and publish an agenda of all meetings and conventions as required by this Constitution and the Special Rules of Order; 4, Maintain financial end membership records and report to the President and Executive Board et regular meetings; 6. Prepare an annual line-item program budget for consideration by the Executive Board: 7. Frevide membership accessibility co financial and membership records; the Executive Board Shall adopt reasonable pracedures for thie proosss thnt shell not abridge this membership rigkt nor induy burden the Secretary-Treamure: 6, Misi 2 full raport of all matiers relative tc his/her office at exch Convention: mod, and provide for the bonding of the President, 1D. 15. and any other individual proposed hy the Secretary. ¢. Be covered by an: approprinis ce as provided! i. AsticieREPORT AND DECISION OF THE ‘Treasurer and approved by the Executive Board. The cost of any such bonds shall be at PEF expense; 10. Receive, collect and deposit all monies dus this organization; 11. Contract with an independent Certified Public Accounting firm to oversee and conduct 2 certified annual audit of all the financial transactions of PEF, and to publish the official yearly audit in the PEF union newspaper to be sent to ali PEF members; 12. Together with the President, or his/her designee, sign all heels and vouchers for the withdrawal and disbursement of funds belonging to this organization, The Secretary-Treasurer may also designate a signatory, with notification to the Executive Board, to sign all checks and vouchers in his/her absence; 13, Maintain at PEF headquarters a membership roster, including as far as practical, specific rosters of departments, title groups, and other governance and service area membership groups; updates of these rosters shall be made in a timely manner as the information becomes available; 14, Ascure that monies appropriated by the Convention or the Executive Board be actually disbursed and employed for the intended purposes, making report of any irregularities to the membership; 15, Assist the Trustees in the discharge of their duties; 16, Be a member of the delegation and represent PEF at conventions of organizations with which itis affiliated; 17, Be empowered to execute all secretarial fimotions of this union not specifically delegated.PANEL - ERC-20: ETHICS HEAR| Appendix Legal Duties of Officers in Nonprofit Organizations Duty of Loyalty ‘The duty of loyalty means that while acting in the capacity of « Trustee oz manager of ‘nonprofit, the person ought to be motivated not by personal, business, or private interest, ‘but what is good for the organization. The use of the assets or goodwill of the organization to promote a private interest at the expense of the nonprofit is an example of disloyalty. Duty of Care The duty of care requires Trustees of nonprofits to act in a manner of someone wino truly cares, This means the meetings must be attended, the Trustees should be informed and take appropriate action, and the decisions must be prudent. The test of prudence depends on state law. in many states, the Trustees of nonprofits ate held under the same niles that govern Trustees of for profit corporations. In these states, prudence can be construed to ‘mean making decisions not unlike those expected in any other group of Trustees faced with relatively the same “business” facts and circumstances. The duty of care can deny using ignorance as x defense. Therefor, it is inconsistent with this responsibility to allege that the Trustee or manager does not hold any responsibility merely because he or she does not know. To know is the duty. Duty of Obedience Duty of obedience holds the Trustees responsible for keeping the organization on course. ‘The organization must be made to stick to its mission.'CISION OF THE ETHICS HEARING PAN! 015-001 ‘Appendix 111 Exhibits March 2 2015, Notarized Grievance Response, Kenneth Johnson, Maureen Kellman and Ronald Brown PEF Policy on Trustees PEF Policy on Divisions Email from Gail Nobie, Former Trustee (Petitioner Exhibit V) Swom Affidavit, Liz Felco (Exhibit 3 in Mr. Jones Ethics Grievance Petition) Trustee Report, Petitioners Exhibit J) Letter to Ms. Lee, (Petitioners Exhibit R) Letter from O*Dell to Garcia; Div 235 timeline, (Exhibit 4) Letter from O*Deli to Santhosh Thomas; Div 235 Audit (Exhibit 11) Letter from Wayne Spence to Garcia et al ~ possible malfeasance (Exhibit 14) Letter from Garcia to Wayne Spence et al response to above (Exhibit i4) uly 20, 2015 Trustees” Report (Exhibit 20) Val O°Dell testimony, Appeliant’s, (Exhibit. A). Falco Affidavit (exhibit 3) Testimony of Falco, Thomas, & O"Dell, (Appellant's Ex. A). Testimony of Val O’Dell, (Appellant's Exs. A & E). Testimony of Falco & "Dell; Thomas Affidavit, (Appellant Faloo ‘Testimony & Affidavit, (Appeliant’s Ex (Appellant Testimony of Val O'Dell, (AyREPORT AND DECISION OF THE ETHICS HEARING PAN! ERC-2015-001 Appendix IV Opinion of Counsel Coie of Ethics (d} Deprivation of PEF Priviteges Basically, the privileges that may be denied a member for breach of the Code include any of the privileges that belong to active PEF members in good standing. ‘This includes the right to participat> ix the intemal affairs of the union, such as running for union office, voting in union elections or participating in the union’s intemal processes for supporting political candidates. This could also inciude any benefits provided by PEF's membership benefits program. 2825-005