Rodrigues guilty of union fraud
| • | Labor prospered under Rodrigues |
| • | Labor leaders defend union credibility |
By David Waite and Walter Wright
Advertiser Staff Writers
United Public Workers leader Gary Rodrigues, one of Hawai'i's most powerful and influential labor leaders, was found guilty in federal court yesterday of 101 criminal charges that described how he enriched himself by taking kickbacks and steering phony union consulting contracts to his daughter.
Gregory Yamamoto • The Honolulu Advertiser
The jury of seven women and five men deliberated a little less than 12 hours beginning Monday afternoon before finding Rodrigues and his daughter, Robin Rodrigues Sabatini, guilty of all charges.
Gary Rodrigues, center with his daughter Shelly, leaves Federal Court after he was found guilty of fraud. His other daughter, Robin Rodrigues Sabatini, who also was convicted, is behind him. Attorney Doron Weinberg is at right.
The two were allowed to remain free, but they must return to court today to listen to arguments about how much, if anything, they must forfeit to the federal government because of their crimes. Their sentencing has not been scheduled, and it is not known how much prison time prosecutors will be seeking.
For the 61-year-old Rodrigues, the guilty verdicts mean certain prison time and removal from his $200,000-a-year job as state director of the 12,000-member UPW, an affiliate of the American Federation of State, County and Municipal Employees. Rodrigues has led the union for 21 years.
Rodrigues left the federal courthouse without commenting, but the verdicts clearly angered him. He bent over a young boy in his family's large party in the courtroom and pointed a finger at the prosecutors. "Get a good look at their faces, remember their faces," he told the youth.
The verdicts also stunned his daughter, who burst into tears. "But I didn't do anything wrong," she cried out.
Rodrigues' lawyer, Doron Weinberg, called the trial "an injustice, an unmitigated injustice" and said he would file an appeal.
The prosecutors, Florence Nakakuni and Lynn Panagakos, left without commenting.
The verdicts came after a three-year investigation by federal labor, IRS and FBI agents and the Ho-nolulu police that resulted in the indictments of Rodrigues and his daughter in March 2001. The trial began Oct. 2.
"History will show that Gary Rodrigues was one of Hawai'i's most effective labor leaders," Gov. Ben Cayetano said in a brief statement yesterday. "Today's conviction, however, will tarnish that record."
Gregory Yamamoto • The Honolulu Advertiser
Rodrigues was convicted of engineering a scheme from 1996 to 2000 in which he accepted kickbacks from insurers who did business with the union. He also set up a consulting arrangement for his daughter, who was supposedly hired to review the benefits programs of the union but actually did little or no work. Rodrigues set up a similar arrangement for the stepfather of an ex-girlfriend. Rodrigues owed the man $10,000, but instead of paying him back, Rodrigues had the UPW pay him as a benefits consultant.
Robin Sabatini was found guilty of mail fraud. Gary Rodrigues' lawyer, Doron Weinberg, right, called the trial "an injustice, an unmitigated injustice," and said he would appeal.
One insurance agent testified that he gave Rodrigues an average of $20,000 in kickbacks from insurance premiums from 1993 to 1998. Sabatini was paid more than $100,000 for what was described at the trial as little or no actual work.
Weinberg and Richard Hoke, Sabatini's lawyer, argued that Rod-rigues did not need his union's approval to include the consulting fees in health insurance contracts and that Sabatini provided a valuable service for the money she was paid.
The defense team called no witnesses during the trial, contending instead that the government had failed to prove its case.
Sabatini was found guilty of mail fraud resulting from her father's embezzlement of union money but did not aid him in the embezzlement scheme.
Senior U.S. District Court Judge Sam King filled in for Judge David Ezra, who had to leave for a federal hearing in Phoenix.
After crying out in protest, Sabatini, 38, a Kaua'i accountant, buried her head in her arms, leaned forward and rested her arms on the defense counsel table, sobbing. Rodrigues sat stoically at her side for several minutes, then turned to her and took her in his arms, gently rocking her.
The sobbing continued for the 15 minutes it took a court clerk to read each count against the father and daughter, and the verdict rendered by the jury.
King allowed both defendants to remain free on their own recognizance, the same bail status the two were placed on during the two years they were awaiting trial. The prosecution did not object.
Weinberg immediately asked for a new trial, a decision King said would be decided by Ezra.
At 5:12 p.m., King adjourned the court, but Sabatini remained seated at the defense table sobbing in her father's arms. Family members streamed forward for a mass hug in the courtroom.
Then Rodrigues' other daughter, Shelly, a Kaua'i police officer, turned toward prosecutors and shouted, "Are you happy now? This is all lies. Can you sleep tonight?"
The prosecution team left the courtroom by a back door as the Rodrigues family and friends moved outside.
Weinberg said "the defendants could not get a fair trial," in part because of the way the case was structured. "This case is coming back (here) after appeal," he said.
As the Rodrigues group left the courthouse, a TV reporter put her microphone in front of Rodrigues to ask if he had anything to say. Shelly Rodrigues shouted "Get out of here!" as Gary Rodrigues grabbed the microphone out of the reporters' hand and hurled it to the ground.
Federal law bars a person convicted of embezzling union health benefit money from holding elective office in the union for 13 years from the date of conviction, or from the time a prison sentence is completed, whichever is longer.
