Lawsuit Claims LA Union Slush Fund Scandal Still Ongoing

A long-time employee of the Los Angeles Department of Water and Power has filed a federal civil rights lawsuit alleging a decades-long shakedown involving the utility and the union representing its workers may have altered its form, but is still very much alive. 

The suit, filed by Christopher Deering, names the city of Los Angeles, International Brotherhood of Electrical Workers (IBEW) Local 18, and California Attorney General Rob Bonta as defendants and claims Deering’s paychecks — and those earned by thousands of other public employees — are being unconstitutionally garnished and the money funneled into a union-created slush fund used to line the pockets of IBEW bigwigs and bankroll leftist political candidates and causes. 

In 2013, a Los Angeles Times investigation uncovered a messy scandal in which thousands of LA Water and Power customers saw their monthly bills padded, with the overcharge funneled into a pair of suspicious nonprofit corporations whose vaguely written charter claimed their purpose was to improve relations between the utility and IBEW.

A subsequent audit revealed the scam had raked off more than $40 million before it was exposed and supposedly shut down. 

Deering’s lawsuit claims the slush funds — designated the “Joint Safety Institute” and “Joint Training Institute,” respectively — are as flush as ever. The only difference is that nowadays it is unwitting IBEW members rather than ratepayers who are being bled to pay for it all. 

The nonprofits were first created in the early 2000s, supposedly to improve the training and safety of Water and Power employees. But the Joint Safety Institute and Joint Training Institute spent the next 10 years collecting millions of dollars without any oversight or accountability, providing little to no safety training in return. 

Suspicions arose that the funds’ trustees (the same people for both) were misusing the funds for inappropriate purposes. The situation got so bad that Los Angeles Mayor Eric Garcetti and City Controller Ron Galperin demanded an audit be conducted.  

Their worst suspicions were confirmed.  

The audit revealed a disturbing lack of procedures or reporting.  

Specifically, the use of trusts’ funds for the benefit and personal enrichment of the trustees, including unusually high credit card expenditures (exceeding $667,459), more than $86,764 on auto-related purchases, and extravagant expenses ($421,550) for conferences, meetings, and travel.  

The funds also paid administrators and employees’ salaries as high as $220,000 a year, which is significantly greater than the average salaries for similarly situated workers. 

Based on these shocking revelations, plans were announced to combine the funds into a single entity, the “Joint Safety and Training Institute.” And most important for Christopher Deering, who brought the suit, the funding for the “new” trust was shifted from ratepayers to department employees. 

Deering has been a customer service representative for the utility since 2005. While he did execute a dues’ authorization card with IBEW 18 when he began work with the department, this agreement not only allowed him to end the payments at any time but did not mention any contributions for other purposes. 

In 2018, the U.S. Supreme Court held in Janus v. AFSCME that public workers have a First Amendment right to refuse to subsidize the political speech of unions like IBEW 18, unless they have affirmatively consented to waive their rights. 

Represented bro bono by the Freedom Foundation, a national organization focused on defending public-sector employees from government union abuse, Deering alleges the actions of the city and IBEW 18 in taking his money and spending it on politics, either through purported union dues or the activities of the Joint Safety and Training Institute, violated his constitutional rights, and continue to do so.  

I explained the case on KFI radio on “The John and Ken Show”.

All under a system defended as perfectly constitutional by the state’s attorney general.  

If successful, Deering’s lawsuit will help prevent the future ability of government unions to bolster government power through the use of public workers’ paychecks.