Insurance agent testifies he gave Rodrigues cash

By David Waite
Advertiser Courts Writer

A life insurance agent who sold group benefit plans to United Public Workers union members testified yesterday that he gave union leader Gary Rodrigues envelopes stuffed with $100 bills every three or four months in hopes it would ensure he could continue doing business with the union.

Herbert Nishida, a sales agent for Transamerica life insurance company and head of the Occidental life insurance company in Hawai'i, estimated that he gave Rodrigues, the UPW's state director, an average of $20,000 a year from 1993 until 1998.

Nishida grudgingly said he cashed the commission checks he got from selling Transamerica insurance policies to union members and used the money to make the payments to Rodrigues. The insurance agent testified he stopped after learning in early 1998 that federal officials had begun investigating Rodrigues and his daughter, Robin Rodrigues Sabatini.

Nishida, a key prosecution witness, testified at the federal court trial of Rodrigues, head of the 13,000-member UPW, and Sabatini.

The two are charged with 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.

They both deny the charges.

The prosecution contends that Rodrigues negotiated health and dental insurance contracts with private insurance companies on behalf of UPW members and asked that a portion of the premiums paid on behalf of union members be set aside to pay a union consultant to periodically review and evaluate the two benefit plans.

Instead of hiring legitimate consultants, Rodrigues first hired his then-girlfriend's stepfather as a consultant and a few years later, Sabatini, without his union's knowledge or consent, the prosecution claims. At issue in the case is how much consulting work the two actually did in exchange for the pay they received.

Nishida testified he visited Rodrigues at the UPW union hall on North School Street "at least quarterly," each time bringing a cash-filled envelope with him. On one occasion he gave an envelope to Rodrigues at Kenny's coffee shop in Kalihi, Nishida said.

In response to questions from Lynn Panagakos, an assistant U.S. attorney with the Organized Crime and Racketeering section of the Department of Justice in Washington, Nishida said he "grew up together on Kaua'i" with Rodrigues and would not be testifying against him were it not for a court order requiring him to do so.

Nishida said he was earning commissions of $6,600 to $6,800 per month during the first part of 1996 but the commissions jumped to between $9,000 to $11,0000 per month beginning in June 1996, with the vast majority of his commission money coming from the sale of life insurance policies to UPW members.

"It was my largest account," Nishida said.

When asked by Panagakos why he gave the money to Rodrigues, Nishida said, "I appreciated the help he gave me ... the business he gave me."

Panagakos showed Nishida a series of dates from 1993 to 1998 when he withdrew "sizable amounts of cash" from his checking account and asked what he did with the cash each time he made withdrawals "in chunks of $5,000 or more."

"I went to see Gary," Nishida said.

He said he met with Rodrigues in early 1998 after reading a news article that federal officials had begun investigating Rodrigues and the topic of the payments Nishida was making came up.

"He told me, 'Nobody knows about the payments ... nobody knows about it, there is no proof,'" Nishida said.

His testimony jibed for the most part with that of Georgietta Carroll, Rodrigues' ex-girlfriend, who was the first to testify about Nishida's payments to Rodrigues when she was called to the witness stand on Monday.

But in her testimony, Carroll said Nishida told her in 1993 that he had stopped making payments to Rodrigues because Nishida's tax burden had become too great.

Nishida yesterday admitted he lied to Carroll about the matter. "I didn't think it was any of her business," Nishida said.

In response to questions from Rodrigues' lawyer Doron Weinberg, Nishida said he would take other customers out for lunch or dinner or perhaps buy them a box of "candies" but never gave "gifts of money" to anyone but Rodrigues.

"I appreciated Gary, I appreciated the (UPW) business, I appreciated all of the help he gave me," Nishida said.

He said at one time he considered trying to recruit Rodrigues to sell life insurance when the time came for Rodrigues to retire from the UPW.

Nishida said he never told Rodrigues the payments were in exchange for the UPW's business and that Rodrigues never asked for any money or ever suggested that money needed to be paid to him for Nishida to be able to continue selling life insurance to union members.

In addition, Nishida said, when he stopped the payments, Rodrigues did not protest, did not ask him to continue making payments and did not take union members' business away from him.

But later, in answer to questions from Panagakos, Nishida said Rodrigues never refused any of the money and never gave any of it back.

The trial before federal Judge David Ezra will resume Oct. 22.

Reach David Waite at dwaite@honoluluadvertiser.com or 525-8030.