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Financial Misconduct Committee report

30 Dec, 2022

COMMITTEE REPORT ON FINANCIAL MISCONDUCT

 

FORMATION: At the direction of the President and Executive Board of CWA Local 9423,this committee was formed. The committee was explicitly granted autonomy from the outside influence of any officer of the Local in order to fulfill the duty of which it was commissioned.

 

SCOPE: The committee was assigned to investigate allegations from members of financial misconduct in the Local and to return a report to be submitted to the Executive Board and membership of the Local.This is a non-partisan committee, and all findings are based on concrete facts which are supported by actual documents and first-hand accounts.

 

BACKGROUND: On or about June of 2021concerns were raised after the President and the Executive Board discovered that CWA Local 9423’s savingsseemed to inexplicably decrease from $108,710.05 (5/18/18) down to $48,567.69 (6/30/21). Additionally, Secretary-Treasurer Monica Alvarado raised concerns that President Robert Hogue had charged the Local inappropriately for mileage. Furthermore, formerPresident Jason Hall filed chargesagainst the entireExecutive Board because a hard copy of the annual budget was not mailed to members prior to the budget explanation meeting for the 2022 budget. To investigate these concerns, this committee was given access to the bank records, Executive Board Minutes, Executive Board members themselves, and all other evidence and documentation (i.e., emails, bills, etc.) to investigate all claims thoroughly. Key witnesses were asked to interview before the committee.This included President Robert Hogue, Secretary-Treasurer Monica Alvarado, and former Local President Jason Hall. Both Mrs. Alvarado and Mr. Hall declined an interview with the committee. President Hogue was interviewed.


 

FINDINGS

 

Allegation of Inappropriate MileageClaims by PresidentHogue: The allegation that President Robert Hogue inappropriately charged the Local for mileage is unfounded.

It is appropriate for Officers to charge mileage to the Local when commuting in a personalvehicle for Union business in accordance with the CWA local policies and practices. It was alleged that Robert Hogue’s mileage claims were potentially inappropriate. In response, President Hogue contacted the Department of Labor, which oversees unions and their expenses. [Exhibit #1] It is important to note that the Department of Labor has the ability to charge and arrest union officials when they are caught committing crimes such as embezzlement, which an accusation of falsifying mileage qualifies. Essentially, President Hogue requested the Department of Labor to investigate himself. No charges were filed, and the Executive Board reviewed all mileage vouchers for President Hogue at his request.

FINDING: NO VALIDITYTO THE ALLEGATION.

 

Allegations of failureto send Local Budgetto Membership: The allegation has no merit and is unfounded. Former President Jason Hall filed charges against the Executive Board, alleging that they did not mail out a hard copy of the annual budget prior to the budgetexplanation meeting for 2022. This charge was evaluated for merit by CWA District 9, and it was found to have no merit for the following reasons:

  • While it was true that Secretary-Treasurer Monica Alvarado failedto mail out a hard copy of the budget, they rescheduled the budget explanation meeting once the Executive Board became aware of this. Subsequently, a hard copy of the budget was sent out to the membership.
  • Former President Hall never advised the Executive Board that he felt they had done anything wrong prior to filing charges against the Local, and the Local immediately corrected the oversight upon discovery.

FINDING: NO VALIDITY AS OVERSIGHT WAS TIMELY CORRECTED.

 

Allegations of Financial MisconductAccording to testimony given in President Hogue’s interview: In or about February or March of 2021, President Hogue requested access to the Local’s QuickBooks in order to review the Local finances for February/March time frame of 2021. Secretary-Treasurer Monica Alvarado refused to grant the President this access. The Executive Board directed Monica Alvarado to grant the President access to QuickBooks. [Exhibits #2, #3] In addition, President Hogue demanded bank records from Secretary-Treasurer Alvarado on 7/26/21. [Exhibit #4] All of these demands were ignored. According to President Hogue’s testimony, he subsequently had to go to the bank in person to get the records. At this time, he confirmed the $60,000 decreasein Local savingsalong with a number of additional facts. [Exhibits #5, #6 bank records for savings]

 

According to President Hogue, and supported by Executive Board minutes, President Hogue reported his findings to the Executive Board in his report at the Executive board meeting on 8-11- 2021. President Hogue reported that he had discovered that the savings were down to $48,567.69 This means that the Local had been deficit spending despite claims by previous Local President


 

Jason Hall and Secretary-Treasurer Monica Alvarado to the contrary. [Exhibits #5, #6] President Hogue testifies (supported by documentation) that he identified negligent actions on behalf of the Secretary-Treasurer that resulted in the loss of dues-payer monies. This includesApproximately 20 overdraft checks that had been written [Exhibits #7 through #16] and numerous bills that were not paid on time resulting in late fees. [Exhibit(s) #17 through #28]. Additionally, it was discovered that the Local amassed $1100.00 in finance charges between 2018 and 2021 for its mail account (Pitney Bowes) [Exhibit(s) #29]. Also discovered were late credit card payments from 3/21, 5/21, 9/21 [Exhibit(s) #17, #18, #19]. By not paying the credit card balance off each month, the result was $1227.58 in unnecessary finance charges for 2021 [Exhibit(s) #20]. This pattern extended back to 2020 and 2019. In 2020 the Local credit card was paid late on 1/20, 3/20, 6/20, 7/20, and 12/20 [Exhibit(s)s #21, #22, #23, #24, #25].by failing to pay the balance off each month in 2020 the result was $1800.42 in unnecessary finance charges [Exhibit(s)s #26]. In 2019 the Local credit card was paid late 12/19 [Exhibit(s) #27]. By failing to pay the balance of the credit card off each month, the result was $1261.96 in unnecessary finance charges [Exhibit(s) #28].

 

During his interview, President Hogue stated that at the Executive board meeting in August of 2021, Secretary-Treasurer Alvarado misled the Executive Board when asked about deficit spending and whether NSF checks had been written. Summarily, the statements alleged to be untrue were

  1. the Local had not been deficit spending, b) that there had been no NSF checks written, c) that the balance in the Local savings account was approximately $75,000.WITNESSES: Jason Childs, Jerome Yabut, Robert Hogue, John Butler, John Menti, Courtney Hawkins, Carlos Tikay, James Pimentel, Chris Friesch. President Hogue sent out a group text with a screenshot showing the Local balance of $48,567.69 [Exhibit(s) #6] to prove he was honest in his report. Documents provided, and witness interviews in evidence correlate with Robert Hogue’s claims and show that Secretary-Treasurer Alvarado’s statements at the time were untruthful.

 

Furthermore, President Hogue stated during his interview, “It is the duty Secretary-Treasurer to ‘pay all of the bills of the Local’ per CWA Local 9423 bylaws. [Exhibit #29]. As such, despite the question of diminishing bank accounts, the Local had the funds to pay off the credit card each month. [Exhibits #5, #6] In addition, PresidentHogue explained that Secretary-Treasurer Alvarado also had the ability to electronically transfer funds from savings to checking. Documents in evidence substantiate this. [Exhibits #30, #31, #32, #33].

 

President Hogue continued to explain to the committee that when Mrs. Alvarado was questioned regarding these deficiencies or other matters regarding her role as Secretary-Treasurer, she has been dishonest, evasive, or refused to answer the questions. When asked for examples, President Hogue cited an Executive Board meeting in November of 2021 in which Monica was asked by Executive Board members Edwin Guadamuz and John Menti why she had not complied with the Executive motion which directed her to provide President Hogue with access to the Local QuickBooks. Monica stated she would provide this by the end of that month. According to President Hogue, he was never provided access, resulting in significant expense to the Local due to subsequent litigation costs in pursuing access to Local 9423’s accounting records. [Witnesses: Jason Childs, Jerome Yabut, Robert Hogue, John Butler, John Menti, Courtney Hawkins, Edwin Guadamuz, Carlos Tikay, James Pimentel, David Bevans, Chris Friesch.]


 At the conclusion of President Hogue’s interview, President Hogue felt compelled to add that Mrs. Alvarado’s actions continue to impact 9423. He added the following example: During the October 2022 Executive Board meeting, Edwin Guadamuz questioned Secretary Alvarado as to why she had refused to provide QuickBooks access. Secretary Alvarado stated she felt the question was harassing her and told Edwin Guadamuz to “ask my lawyer,” referring him to her lawyer and refusing to answeran Executive Board member's question. Robert states this is significant because the question being asked related to Local funds in the thousands of dollars being spent on attorney’s fees. [Witnesses: Jason Childs, Robert Hogue, John Butler, John Menti, Courtney Hawkins, Edwin Guadamuz, Carlos Tikay, James Pimentel, David Bevans, Chris Friesch.]

 

 

CONCLUSION

 

We, the membersof the committee, have arrived at the followingconclusions:

  • It is a fact, proven through financialdocuments, that Secretary-Treasurer Monica Alvarado has been negligent in her duties. Documents dating back to 2019 show that Secretary- Treasurer Alvarado did, in fact, write NSF checks to the Local’s checking account. This resulted in thousandsof dollars in overdrafts againstCWA Local 9423’s checking account. Furthermore, although the 9423 banking accounts had been inexplicably decreasing, Mrs. Alvarado had the ability to transfer funds into the checking account. Evidence shows she had the authority to do so, the Local had the funds in savings, and she demonstrated the knowledge of how to execute electronic and telephone transfers if needed.
  • It is a fact, proven through financial documents, that Secretary-Treasurer Alvarado neglected various bills of the Local incurring thousands of dollars in late fees and finance charges. Considering that there are times when extenuating circumstances occur, such as something being lost in the mail, etc.,the frequency of these occurrences was not isolated. Whether willful or accidental, these additional expenses could have been avoided, and the lost funds put to practical use.
  • As Secretary-Treasurer, Mrs. Alvarado had a fiduciary and ethical duty to report to the Executive Board and, subsequently, the 9423 membership regarding any financial inconsistencies, disparities, and anomalies. This includes deficit spending and other financial improprieties. Mrs. Alvarado’s consistent failure to report the finances of the Local accurately and truthfully for as long as she did callsinto question whetherher actions were an intentional attempt to cover up breaches of duty. Monica’s constant and persistent refusal to provide Local President Hogue access to the Local’s accounting books only serves to further casts suspicion of other nefarious financial activities beyond what is proven through documentation and first-hand testimony.
  • This committee finds that former President Jason Hall is complicit in the dereliction of fiduciary duty. President Hall either knew or should have known of the overdraft checks, deficit spending, and late bills. In a letter to the membership, which went out in the Executive Board minutes for 10/14/20 [Exhibit #34], former President Hall assures the membership that “…as far as he can tell,our finances are in order…”Financial documents from his presidency, reviewed by the committee, show this was an inaccurate statement. Mr. Hall, through either obliviousness, disregard, and failure to act, allowed the fiscal impropriety to persist for years during his Presidency. Either is unacceptable from a President of the Local responsible for the well-being of 9423 and its members. It is important to note that both Jason Hall and Monica Alvarado were offered the opportunity to interview before the subcommittee, provide evidence in support of their allegations against 9423, and defend allegations against them. Both declined those opportunities with this committee.
  • The committee finds that the allegations leviedagainst President Hogue,and the officersof 9423 are unfounded. Conversely, this committee finds, through testimony and documents submitted as evidence, that Former President Jason Hall and Secretary-Treasurer Monica Alvarado are responsible for fiscal improprieties that not only erode the faith of our members in our stewardship of their dues monies but also serve to possiblyplace our Local in disrepute. The current President and Executive Board have taken steps to ensure these actions will not be repeated. As reported by President Hogue, these actions include:
    • Creation of an electronic bill-paying account calledbill.com.
    • President Hogue has implemented bank controls so that it takes two officers to approve transfers of funds.
    • Through consistent and diligent financial management, the Local’ssavings and checking accounts have increased during the last two years.
    • For increased transparency, the finances or banking information is presented at every Executive Board meeting.
  • This committee finds that due to her proven inability to carry out the duties of Secretary- Treasurer and the risk posed to the financial stability and reputation of 9423, appropriate actions should be taken against Monica Alvarado.

 

Committee Members:

Courtney Hawkins

Dave Gonzales

Ed Vallejo

Francisco Rivas

Ricky Alcala

Wibert Wright

 

We hereby swear and affirm this statement is true and correct to the best of our knowledge. Signed by Committee chair, Courtney Hawkins.

 

A signed copy along with evidence and citations will be available at the Hall.
 

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