UPW head, daughter challenge accusations
By David Waite
Advertiser Staff Writer
Lawyers for Hawai'i United Public Workers union leader Gary Rodrigues and his daughter, Robin Haunani Rodrigues Sabatini, asked a federal judge yesterday to dismiss portions of 51 counts of a 101-count indictment that accuses Rodrigues of defrauding union members by overcharging them for healthcare benefits.
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The two are scheduled to go on trial Oct. 1.
Gary Rodrigues, leader of the Hawai'i public workers union, is charged with several counts of fraud and money laundering.
Doron Weinberg, a San Francisco-based lawyer who represents Rodrigues, told federal Judge David Ezra that portions of a revised indictment issued against Rodrigues and Sabatini on Dec. 19 fail to explain what Rodrigues and his daughter did that prosecutors believe is a violation of federal law.
Weinberg said the indictment accuses Rodrigues of violating his fiduciary responsibility to union members but does not specifically say what the alleged violations were.
Honolulu attorney Richard Hoke, who represents Sabatini, joined with Weinberg in objecting to the wording of the indictment.
Ezra suggested that Rodrigues' decision to award consultant contracts to his daughter's firm to review healthcare benefits procured by the United Public Workers union members did not necessarily violate any federal laws.
The process used by state and federal officials in awarding such contracts is "very subjective," Ezra said.
"Clearly, it is a matter of judgment as to who is the most effective or best or most appropriate," Ezra said.
But when contracts are awarded to consultants, whether most appropriate or not, in exchange for kickbacks, federal laws are violated, Ezra said.
Lynn Panagakos, an assistant U.S. attorney with the Organized Crime and Racketeering section of the Department of Justice in Washington, D.C., said that the prosecution will stick to allegations that Rodrigues violated federal law by breaching his fiduciary responsibilities to union members and also committed "service fraud."
Ezra took the matter under advisement and said he would issue a written decision later.
The 60-year-old Rodrigues remains head of the 12,000-member UPW.
The initial indictment, issued in March 2001, charged that he had negotiated agreements with Hawai'i Dental Service and the Pacific Group Medical Association, under which some of the money paid by union members for monthly premiums was later used to pay consultants reviewing the health plans.
The indictment said Rodrigues instructed the healthcare companies to issue checks for consultant services to companies owned by his daughter. It also said Rodrigues never told the UPW's executive board or union members that he had included consulting fees as part of the contracts and set up his daughter and her company primarily to receive those fees.
The revised indictment issued in December charges Rodrigues and Sabatini with 50 counts of mail fraud, one count of conspiracy to defraud a healthcare benefit program, two counts of conspiracy to commit money laundering and 42 counts of money laundering.
Rodrigues alone is charged with five counts of embezzling labor organization assets and one count of accepting kickbacks in connection with an employee welfare benefit plan.
