By Robbie Dingeman
Advertiser Staff Writer
United Public Workers leader Gary Rodrigues yesterday broke the silence he has maintained since his federal indictment this week to defend his union in a dispute over a new tax-deferred compensation plan in contracts pending before the counties.
"They’re trying to twist it all now so it looks like Gary going to have his hands on more money, which is totally bogus," Rodrigues told The Advertiser yesterday in defending the compensation plan in a pending public workers’ contract. "I handled, as state director (of the UPW), through this union annually over $22 million and not a penny has been in question — never has been and never will be."
Rodrigues declined to comment on the federal indictment accusing him and his daughter of defrauding the members of the UPW of at least $200,000, or on his membership on the Judicial Selection Commission.
Meanwhile, Senate Republicans said Rodrigues should resign from the selection commission.
A grand jury indicted Rodrigues and his daughter, Robin Haunani Rodrigues Sabatini, on Wednesday on charges that they took money from the union’s dental and health benefit programs.
"I can see the slant that they’re pulling," Rodrigues said yesterday. "They’re trying to say because I have been charged with all of this, now you got to cast doubt on my character."
City officials had flagged the proposed deferred compensation plan before the indictment was announced, questioning whether it was illegal.
Union leaders and government employers reached agreement on a new contract Dec. 26, and members ratified the pact in January. But after hearing from city attorneys last week, the Honolulu City Council’s Budget Committee postponed what was expected to be routine approval of the agreement.
Rodrigues yesterday provided copies to The Advertiser of a detailed draft describing the tax-deferred compensation proposal showing that he — as state director of the UPW — would be one of seven trustees overseeing it. The plan allows savings to grow, but taxes to be deferred until later, usually after retirement.
The other trustees would include a certified public accountant, an attorney, someone with experience as a banking executive, members of UPW’s Units 1 and 10 and a business executive with experience in deferred compensation plans.
Rodrigues acknowledged that he would appoint the other trustees, but the choices would be subject to ratification by a majority of the board members.
The union leader said he would oppose a move to drop the deferred compensation plan in exchange for a wage increase. He said he agreed that new hires would get reduced sick leave and vacation in exchange for the employer putting $156 a year into a tax-deferred savings account as well as transferring money that had been in a pre-paid legal plan.
He said there is "no way" he would agree to drop the added benefit plan now.
If the employers reneged on that section of the contract, Rodrigues said, "then we would be free to invoke our right to strike."
Rodrigues said it was his understanding that state lawmakers and the governor thought the plan was legal and were asking the state attorney general’s office to make a ruling. Kathleen Watanabe, supervisor of the employment law division of the attorney general’s office, confirmed that her office is reviewing the UPW deferred compensation issue.
Rodrigues said he was told unofficially by state officials that the plan "is OK, because it was in lieu of a pay raise."
"It is not another pension plan," he added.
Rodrigues said he lobbied for and got a deferred compensation plan that would require the government employers to contribute because the existing city and state plans allow employee-only contributions. He said he was told that federal law holds that an employer contribution and employee contribution cannot be mixed.
Senate Republicans yesterday said they would introduce resolutions calling for Rodrigues to resign from the Judicial Selection Commission and for officials to investigate ways the commission can handle such situations in the future.
The powerful nine-member commission submits lists of names to the governor and chief justice for appointments to the state bench. It also decides whether the judges and justices can be retained for successive terms.
Commission Chairman David Fairbanks has said the commission rules do not address Rodrigues’ case, but that he expects the members to discuss the situation before the commission starts screening candidates for the state bench or makes decisions about judges terms.
Sen. Fred Hemmings, R-25th (Kailua, Waimanalo), said on the Senate floor that the judicial selection process is "severely tainted" with Rodrigues sitting on the commission. Hemmings said while he realizes people are innocent until proven guilty, Rodrigues should step down until his case has been adjudicated.
"I’m hoping that Mr. Rodrigues, for the honor of the institution, resigns and this matter can be resolved in federal court," he said.
The Republicans also will introduce a resolution addressing "the issues of ethics and conflict of interest in the judicial selection process."
In a statement, Hemmings said: "There are many of us who opposed the appointment of Gary Rodrigues to the Judicial Selection Committee in the first place. The recent indictment for fraud of Mr. Rodrigues would put a darker cloud over the process if he continues to participate in the selection process.
"If Gary Rodrigues chooses to continue on the committee and allows the criminal indictment to mar the integrity and needed impartiality of the judicial selection process, then I believe state legislative, executive and judicial branches of the state government should investigate ways to officially relieve him of any participation of the judicial selection process."
Advertiser staff writer Lynda Arakawa contributed to this report.
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