Posted on: Friday, November 8, 2002
UPW consulting fees questioned
By David Waite
Advertiser Courts Writer
United Public Workers union leader Gary Rodrigues never told the organization's executive board that his daughter was earning hundreds of thousands of dollars as a consultant to the union on health insurance issues, but he should have made it known, a member of the board testified yesterday.
George Yasumoto, state secretary-treasurer of the UPW for most of the past decade, said the board trusted Rodrigues to sign contracts on behalf of union members and to negotiate health insurance contracts.
Yasumoto said he didn't believe the union's bylaws or constitution required Rodrigues to tell the board whom he selected to serve as a consultant on a dental insurance plan provided to UPW members by Hawaii Dental Services.
But he said he believes Rodrigues should have told the board that some of the money that was generated in consulting fees was used to pay off a personal loan to the stepfather of Rodrigues' girlfriend.
Rodrigues also should have told the board that he ordered the consulting fees that arose out of the dental insurance plan during 1994 and 1995 be paid to a company owned by his daughter even though her company wasn't formed until early 1996, Yasumoto testified.
Rodrigues and his daughter, Robin Sabatini, are being tried on federal charges of mail fraud, conspiracy to defraud a healthcare benefit program and money laundering. Rodrigues alone is charged with embezzling labor organization assets and accepting kickbacks in connection with an employee welfare benefit plan.
The prosecution is expected to wrap up its case shortly, possibly by the end of today.
Prosecutors contend the consulting fees were included in contracts with health insurance providers without the knowledge of the union's board of directors or the rank and file.
But Rodrigues' lawyer contends that the money paid to Sabatini for consulting came out of the insurance carriers' profits and had no effect on what union members paid for health or dental insurance.
