Daily News Clips
Office of the Chancellor / Public Affairs
Wednesday, July 30, 2003
 

Sacramento Bee 7-30-03

Ex-staffer suspected of stealing from CSEA
A union official says nearly $1 million was embezzled over a seven-year period.
By Ed Fletcher

 

A former employee of California's largest state labor union embezzled nearly $1 million from the organization over a seven-year period, officials said Tuesday.

The California State Employees Association said the staff member was a woman who worked with the union for 10 years and recently left before the theft was discovered. Officials refused to identify the former employee, citing an ongoing investigation.

"Obviously we are all shocked and angered by this event," CSEA President Perry Kenny wrote to the 140,000-member organization.

Kenny said the theft, which is under investigation by Sacramento police, occurred between 1996 and this year. He said he notified his board of directors Monday night after discrepancies were discovered about two weeks ago.

Kenny vowed to get to the bottom of the matter and said the organization will employ two independent auditors to find out what happened and prevent future problems. The union also will seek reimbursement, he said.

Kenny's statement drew strong criticism from longtime political foe Jim Hard, director of CSEA's civil service division. Hard called on union officials to keep their hands off the investigation to ensure members' confidence in the inquiry.

"President Kenny's statement does nothing to explain exactly what happened, how this could have gone on for seven years, who benefited, or who was asleep at the switch," Hard said.

Several of the roughly 200 CSEA employees said they were caught off-guard that someone they knew would steal from the organization. The union represents current and retired civil service workers, supervisors and managers, and employees of the California State University system.

Kenny said the embezzlement was limited to CSEA's political action account and the funds of one of its member groups, the Association of California State Supervisors. Both of those accounts are funded through voluntary contributions.

The organization's annual budget is about $33 million. The supervisors' account is about $2.5 million annually, while the political fund varies with the election cycle.

Funds from other accounts -- including money from nonmember "fair share" fees -- were unaffected, Kenny said.

The CSEA president said the woman suspected of embezzling the funds did not work specifically with the accounts affected and left the organization on her own before the theft was discovered.

Besides the embezzlement, CSEA officials are investigating why co-workers didn't notice the theft. Disciplinary action has been taken against two union employees, including one who was fired and another who was demoted, Kenny said.

"We are concerned about the lack of supervision," Kenny said. "We not sure what other areas lack supervision as well, but we hope there are none."

Sgt. Justin Risley, a spokesman for the Sacramento Police Department, said the department's investigation is ongoing but refused to provide details.