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Until October, Leroy Holmes was a fixture in the lobby of the K Street offices of the Washington Teachers’ Union. Holmes wasn’t on the union’s payroll, yet everyone on staff knew him. He was the guy you’d get to help carry heavy boxes or make deliveries. He was the union’s odd-jobs man, President Barbara Bullock’s personal driver. Anywhere she needed to go, he would take her in one of his three Cadillacs.

He was there for the big jobs, too.

Holmes helped spearhead the union’s creative approach to financial management. Here’s how it went: Checks were made out to Holmes, he cashed them, and then he forwarded the proceeds to union officials or their relatives, while pocketing some for himself, according to a union audit released last week. On some checks, the names of payees were crossed out and Holmes’ name was put in their place. More than $1 million in union checks passed through Holmes’ hands from 1998 to 2001, the audit alleges.

“When I noticed [Holmes] was getting a lot of checks in his name and he wasn’t reporting that income, I told him he shouldn’t be cashing any more checks for them,” says James Goosby Jr., Holmes’ tax preparer. Goosby also prepared the tax forms for Bullock and the union—documents that the FBI alleges are wildly inaccurate.

“I don’t think he understood the legal ramifications of what he was doing. He’s not too bright when it comes to the law,” says Goosby. “I think he wanted to keep his job, so he didn’t complain enough.”

Holmes told auditors he pulled down $105,000 a year; if he had been an official union employee, that would have made him the second-highest-paid union staffer behind Bullock. Bullock’s official salary was $106,840, although the audit calculates that over the years she gave herself a bonus on top of that: approximately $1.2 million in “inappropriate” credit-card charges, $600,000 in “questionable” credit-card charges, and $247,000 in “improper” payments and reimbursements. This is just part of the $5 million the audit accuses Bullock and other union officials of taking from the union treasury since 1995, an amount equivalent to two years’ worth of member dues. Auditors, meanwhile, are still counting.

Few union officials had any idea what Holmes was doing with union money. “I knew Mr. Holmes. I didn’t know he was no driver,” says executive-board member Alan Clipper Sr., a music teacher at Marie H. Reed Community Learning Center. “I thought he was just giving her a ride.”

With the proceeds from her check-diverting operation and armed with a union credit card, according to an FBI affidavit, Bullock allegedly decked herself out in majesty: custom-made clothes and jewelry, artwork, fine china. No one detected Bullock’s shopping habits or the alleged plundering that lay behind all of it. The executive board, the board of trustees, the union’s parent organization, and the teachers themselves all appear to have been equally clueless. It appears oversight at the union was to ask very basic questions about operations and nod at the answers, whatever the answers were. Unless you were merely a member, in which case you were stonewalled.

Executive-board member Jerolyn Spicer says she responded with “stunned disbelief” when Bullock confessed to certain misdeeds at an October board meeting, although she won’t detail exactly what those misdeeds were. “She admitted responsibility for all the wrongdoing, I’ll put it that way,” says Spicer. “And she said Esther [Hankerson, formerly the union’s second-in-command, currently the embattled interim president] had nothing to do with it.”

The shenanigans are dragging down the organization:

* A federal grand jury is reviewing evidence, although criminal charges have yet to be filed. Holmes, Bullock, Bullock’s special assistant Gwendolyn Hemphill, and union treasurer James O. Baxter II were ousted in October; they have all publicly denied the allegations of wrongdoing.

* Creditors are descending on the teachers’ union. In November, American Express filed a $209,000 claim against the union for outstanding bills.

* Union leaders are resorting to gimmickry in fulfilling the union’s role as defender of the interests of D.C. public-school teachers. The union’s current leadership recently secured a $250,000 bank loan against future dues to refund some teachers the $700,000 or so in dues that were improperly deducted from members in June—the deduction that prompted the investigation. In other words, the union borrowed from teachers to return to teachers what shouldn’t have been taken in the first place. A federal judge was stunned when he heard about the desperate maneuver in a hearing two weeks ago.

* In December, a teacher sued the union for fraud and negligence. The suit followed the spectacular allegations against union officials by the FBI, which removed a treasure hoard of clothes, jewelry, and electronics from the homes of the officials. Named in the teacher’s suit are the current executive board, the board of trustees, the scandal-ridden former leadership, and the parent organization, the American Federation of Teachers (AFT). Some teachers are trying to widen the case into a class-action suit representing all 5,000 union members.

* Last week, the AFT filed a civil suit against Bullock, the other deposed local leaders, and others, claiming violations of federal racketeering statutes and demanding restitution. This week, the AFT’s executive council voted unanimously to take over the Washington union.

The embarrassing events now besieging the union are what happens when $5 million disappears. Lift that kind of money from any organization—let alone a union of municipal employees—and someone is going to notice sooner or later. You can be grateful for that eventuality, says AFT spokesperson Alex Wohl, because there’s not much you can do to prevent wall-to-wall theft, not if someone has set his or her mind on it.

“People steal every day in all walks of life,” Wohl says, “and it usually catches up with them.”

Last fall, in the wake of initial findings of missing funds, the offices of the D.C. teachers’ union were functioning more or less as usual. Staffers kept to their casual routines: They addressed teacher grievances as they came up. Field representatives met regularly with building reps.

At the union’s helm was Hankerson, the general vice president who took over for Bullock. She hadn’t dealt with the finances at all before, and she had to work carefully: Her every step was shadowed by an AFT official who’d come on board after the investigation into the improper deduction.

Hankerson repeatedly informed members that with AFT help, everything was under control, and that the dues-refund issue would soon be resolved. A teacher “hot-line” message dated Nov. 15 carried mundane announcements about upcoming retiree workshops and next year’s staggered-bell schedule. Hankerson closed with: “Thank you, and, as usual, with your support the union will continue to be strong.”

Asking for support from membership was a tall order, especially when the stewards of the union’s purported rosy future were the same people who had supposedly been on guard in the not-so-distant past. Hankerson herself refunded the union about $1,500 after a preliminary audit determined that a union credit card had been used for some of her personal expenses. And the more comprehensive audit released last week says Hankerson failed to report Bullock when she discovered that the president had forged Hankerson’s signature on an $8,000 check. The check, as Hankerson learned from Bullock, had been used to cover some of Bullock’s personal debts.

Every two years, the AFT, which represents 1 million school personnel nationwide, is supposed to demand an audit from each of its locals. But the AFT’s enforcement of that policy appears to have been informed by a supreme belief in the inherent goodness of man.

The Washington union hadn’t provided the AFT with a mandated audit of its finances since 1995—an oversight that drew little notice among union ranks. Nor did alarms sound when the local fell far behind in its dues in 2001 and 2002. The AFT chose not to take action, says Wohl, because “there was no reason to think there was anything remiss otherwise.” The AFT wasn’t bothered, so why should anyone else be?

“These are people you work with, and you have no reason to suspect that they’ve been doing anything of the magnitude that’s been reported,” says Wohl. Of course, that’s why you have regular audits: to uncover reasons for suspicion, or to catch what may simply be innocent errors in spending.

Wohl, who admits that hindsight suggests the AFT should have been tougher, says there was little the parent organization could do about the lapsed audits, short of the drastic steps of takeover of the local or expulsion from the AFT.

Yes, but couldn’t the AFT have at least confirmed that the D.C. union had a bookkeeper? The Enron generation might have devoted considerable resources to creative accountants, but the local union cut out the middleman. Not only did it ditch the audit concept for seven years, but for five of those years, it didn’t even have an accountant keeping its books. Never mind that the budget allotted about $100,000 every year for accounting services.

Goosby, the tax preparer, was asked by the union in 2001 to figure out its finances. Since there weren’t any actual books to work with, he was handed a pile of checks instead. “I couldn’t find any financial statements after 1996,” he says. That was the year the last union accountant died. No one had been hired to take his place.

Of course, an inquiring executive board, which must approve all hirings and firings, might have noticed the omission, but board members didn’t bother themselves with the weighty responsibilities that the union’s constitution accords them.

“If someone’s trying to hide something from you, you can’t find out until something goes wrong,” says Clipper, who was first elected to the board in 1999. “We don’t have real police powers over [union officials].

“You say you want an audit. And they say OK. And you take that at face value. You ask again. ‘It’s coming.’ I’m not going to sit there and keep asking, back and forth. It would be different if [being a board member] was a paid position.”

Teachers have displayed little interest in union finances over the years. Personal finances, however, are another matter. According to Clipper, at general membership meetings, teachers seem to care only about pay raises—if they show up at all. If regular members aren’t interested in the books, he says, then he isn’t going to express undue interest himself, especially because he, too, has to devote most of his energies to teaching. “If we do the bidding of teachers and they don’t come to the meeting, how far do you go? That’s a lot to do….We’re educators first.”

If teachers were asleep before, the opulence hauled from the homes of their former union officials in December shocked them awake. “The phones were hot over the holidays!” says Nathan Saunders, an Anacostia Senior High School government teacher. Just before Christmas, he says, teachers were busy at school printing copies of the detailed FBI affidavit used to justify the searches. Because paper is carefully rationed in District schools, some teachers even postponed scheduled tests.

Saunders is the teacher who filed the lawsuit against the union, and he reserves a special place in his angry heart for the executive board, whose members he holds just as responsible as the alleged thieves. They fell down on the job, he says, and hurt teachers’ reputations in the process. “Teachers are conservative,” he says. “Many have traditional values….Their position they take seriously. And this made them look like complete idiots.”

Saunders doesn’t seem to understand that oversight can be an uncomfortable burden. Sometimes you’ve just got to let it go. Take the case of Baxter, the union’s elected treasurer since 1994. His job, it appears, consisted of little more than co-signing lots of checks, according to the audit. Apart from the hundreds of thousands he is alleged to have taken for himself from union funds, Baxter made a tidy salary for his minimal duties: $55,709 in fiscal year 2001. With all his free time, there was an opportunity to make some extra cash on the side. From 1997 to 2000, he served full time in the D.C. government, mostly as labor-relations director. He made $96,273 a year in that post. At no time during his government sojourn did Baxter stop serving as the union’s paid treasurer.

Defending his oversight of Baxter’s double dip, Clipper says, “I don’t think that’s my concern. You can go asking something, especially if they’re doing something [wrong], [but] people can get real touchy. If you ask someone something, and they think you’re getting too close, you get real sharp answers from people.”

Mayoral spokesperson Tony Bullock (no relation to Barbara Bullock) says he can’t discuss personnel matters. But, he says that in the abstract, “It is untenable, it is completely unworkable, that a District government employee involved in labor relations for the District could also be an employee of a union. That’s a conflict the size of the Washington Monument. That situation was obviously not an acceptable one.”

“It’s like it’s OK we didn’t know,” says George Parker, a building representative at Eliot Junior High School, who helped organize an emergency meeting of angry teachers last week. At the unsanctioned meeting, a group of about 175 teachers overwhelmingly passed a motion of no confidence in the executive board. “It’s not OK we didn’t know. They had a responsibility to know,” Parker says.

“How do you, as an executive-board member, who knows you are part of an organization responsible for $3.5 million in union dues, allow the union to be without an accountant?” asks Parker.

Like the executive board, the union’s board of trustees was quick with the rubber stamp. The great honor of being elected one of three trustees comes with great responsibility: Trustees are supposed to review the union finances on a regular basis. How carefully is up to them.

The job isn’t too taxing. Every quarter, according to the union bylaws, the trustees are to meet with the treasurer to confirm the health of the union balance sheet and report their findings to the executive board. Once a year, the trustees are to OK the accuracy of bank statements and then join the treasurer in presenting a proposed budget to the general membership. To fulfill their oversight role, they have access to all financial records, receipts, and bills—in short, everything they might need to ensure that millions in teachers’ dues are used appropriately.

“I can say we did meet,” says John Traina, a retiree who was elected to the board of trustees in 2001. The board would ask Baxter if the bills were paid, receive an affirmative, and then move on. It was a simple procedure, lasting 30 minutes, maybe an hour. The board didn’t review the union credit-card statements, which the FBI and union auditors later said documented hundreds of thousands in obvious personal purchases.

Sometimes, though, the trustees “did bring up things” with Baxter. The response was that the request would get done, says Traina, who is hesitant to discuss the details for fear of hindering the ongoing investigation. “I don’t want to discuss it now. It may get too…you know. But it did come up.” At such times, Baxter would indicate that he had to run the trustees’ request through Hemphill, who one source says was really the one responsible for union finances. Trustees, though, usually didn’t follow up on requests, says Traina, and answers or documents weren’t provided.

“One thing has to be understood,” he says. “We thought Baxter was volunteering his work. We didn’t know he was getting paid.” Therefore, says Traina, they didn’t think Baxter had enough time on his hands to answer their questions. “We didn’t expect that much.”

Although Baxter may not have been a regular at the union’s K Street offices, he did receive a paycheck, according to union disclosure forms. It said so in every annual report submitted to the U.S. Department of Labor since 1994. Such public documents outline a union’s basic anatomy, and for the curious they are a resource of first resort. But you have to go all the way to the Web to find them. If you’re a trustee, you might also come across employee salaries when preparing the annual budget proposal. It’s the largest line item.

(However fruitful government and union work might have been for Baxter, it may pale in comparison with his real-estate wizardry. According to District records, in November, a month after his suspension from the union, Baxter sold for $485,000 a downtown Washington commercial property that he bought the year before for $85,000, with the help of a $285,000 federally backed rehabilitation loan. His attorney says he made a profit of about $100,000 in the deal.)

Trustee Traina trusted Baxter. “I trusted Barb [Bullock], too,” he says. “Maybe we trusted too much, but people are working hard” to fix things.

Not everyone relied on blind faith. Sometimes teachers would prod officials for information on union business, but they were often rebuffed. Bullock and her underlings were stingy with the personal attention given to union members. “They did everything by telephone,” says Art Siebens, the former building representative at Wilson Senior High School. “No written documents until they’re pressed to the wall. We had to wait months for a written document.” The secrecy reflected the union’s general lack of interest in serving teachers, says Siebens, and it cultivated lower expectations. “They treated me as if I was their paid employee, and they’re supposed to be working for me.”

The executive board was silent for other reasons. “I really think they were so in awe of [Bullock],” says Clay White, union building representative at Anacostia Senior High School.

Inattentive trustees, board members, and rank-and-file teachers allowed Bullock & Co. to manage the organization’s finances in accordance with their personal needs. As long as teachers were well-cared-for in the union’s relationship with Mayor Anthony A. Williams, it mattered little to so-called union watchdogs what Bullock and crew were up to. After all, Bullock and Hemphill were among the mayor’s closest political allies.

In 1998, when Williams was first running for mayor, the union was at a crossroads of sorts, as were other unions and special interests that had mastered the wiring of influence in the administration of Marion S. Barry Jr. Unions knew Williams as the chief financial officer who had axed city workers like so many dead limbs; they stayed away. But Bullock and Hemphill, sensing a winner, delivered the teachers’ endorsement to Williams at a time when no other major union had backed the candidate. As mayor, Williams returned the favor by agreeing to a hefty teacher pay raise.

It is, or was, a cozy relationship of give and take. After his 1998 win, Williams gave Hemphill’s husband, Lawrence Hemphill, a comfortable government job as community outreach director. The mayor also retained Baxter, a holdover from the Barry administration, as his director of labor relations.

When re-election time rolled around, the teachers’ union lent the mayor the services of Gwendolyn Hemphill, a veteran political operative, who served as co-chair of his campaign. And the mayor indulged her, sticking with her even after the fraudulent petition effort that got him booted from the primary ballot.

These favors were no secret. But virtually unknown to the union membership, like so much union business, was the alleged contract-steering that one former District cabinet official says was carried out at Bullock’s request.

On Sept. 13, before the union scandal broke, Charles Holman, former director of the Office of Human Rights, filed a wrongful-termination and defamation suit against Mayor Williams. He claims that he was fired in June 2002 not because his agency was a mess, as was suggested in reports at the time, but because he objected to the performance of a contractor, Curtis Lewis & Associates, which he says the administration went to great lengths to please.

Curtis Lewis, a Washington attorney, is close to the Washington Teachers’ Union. He represented the union at the time, he had once employed Bullock, and he is Baxter’s brother.

In his complaint, Holman describes a meeting in 2001 with Bullock and Joy Arnold, Williams’ chief of staff at the time. They weren’t jawing about education; that’s not really Holman’s department. Rather, Bullock “demanded” that Holman award a contract to Lewis’ firm, according to his complaint. Holman had already been considering doing so, but he said existing procedures limited his ability to do so as quickly as Bullock wanted. Arnold arranged for it anyway. In September 2001, in a competitive bid process Holman says was rushed, Lewis was awarded a $296,500 contract to handle the agency’s backlog of grievances.

“I’d never met her before,” Holman says of Bullock. “I didn’t know who she was, that she was politically connected to the mayor….She was very gruff, to the point, very firm. There was nothing smooth or subtle about it. It was right in your face: ‘This is what I expect you to do.’”

Holman says he told his superiors he was unhappy with Lewis’ work but was ignored. His concern peaked in May 2002, when a former government aide, Terence Coles, was indicted for allegedly accepting kickbacks from city contractors. Holman says Coles was the staffer who had carried out Bullock’s diktat the year before.

Holman didn’t like the smell of things. He brought the matter to the attention of Deputy Mayor Carolyn Graham and Arnold. Arnold ignored him, but Holman did finally get a meeting with Graham, he says, who “shook her head and said, ‘Charles, this is bad.’”

Two weeks later, Holman says, he was told the mayor wanted him to resign before Williams announced for re-election. The mayor, he was told, felt “somewhat vulnerable” politically. Holman refused; he was fired instead. His ouster came out of nowhere; in a cabinet meeting just an hour beforehand, says Holman in his complaint, the mayor had shaken his hand and told him he was “doing a good job.”

Tony Bullock says he has no comment on whether such a meeting with a mayoral supporter “would be usual or not usual.” Regarding Holman, he says he can’t discuss a matter that’s pending in court. “There were solid reasons by the government for terminating his employment,” he says. When Holman was fired, media reports described him as a truculent boss whose employees were mutinying and whose agency was in turmoil. Two employees had filed reverse-discrimination claims against him.

Holman, a former civil-rights attorney in the U.S. Department of Justice, says the cases have no merit. He took over a chaotic, nonperforming agency in 2000 and was given no support, he says; quite apart from discriminating, he says he integrated the small office. An organizational development study commissioned by Graham a few months before Holman’s firing determined that the office was “an effective and efficient organization” and that “a majority of [office] employees view the director as fair, technically competent and an effective leader.”

Obviously, even the perception of a problem with Holman could potentially hurt the mayor’s image, but Holman says that Graham told him the discrimination cases and the agency problems had nothing to do with the mayor’s decision. “‘Charles, that’s not even relevant now,’” he says Graham told him, “‘It’s political.’”

The mayor says that the matter is “under review.” Arnold and Graham didn’t return calls for comment.

“I didn’t know Barbara Bullock was in a position to demand from anybody a contract,” says Lewis, who says he didn’t know of any effort to steer work his way. He had been building a relationship with the Office of Human Rights for years before he was awarded the contract, he says. Any problems he had carrying out the work were due to the “poor condition of files” and ever-changing guidelines. The agency stopped sending him files, he says, and so he never collected the full $296,500.

Coles, the aide who has been indicted, says he doesn’t remember the contract and doesn’t “feel comfortable” commenting beyond that. He has pleaded not guilty to the indictment.

Many union members learned of the Holman affair only last week, when it appeared in the Washington Post. If Bullock’s brush with the likes of Coles, Holman, top city officials, and the D.C. Office of Human Rights appears to have nothing to do with the functioning of the Washington Teachers’ Union, that is exactly the point. With teachers given a bone to chew in the form of the pay raise, it was a perfect chance to make the union work for its leadership, not just its dues-paying members.

The inventory of items seized from the downtown Washington apartment of Barbara Bullock on Dec. 19 reads like the manifest of a pirate ship, firearms and all:

288-piece Tiffany silverware

Trotter 535 treadmill

William Tolliver artwork, semi-nude female

5 William Yeoward glasses

13 William Yeoward glasses, 1 William Yeoward bowl

Mink hat, no identifying marks…

3 fur coats: 1) Rosendorf-Evans; 2) Sitka; 3) Miller’s Furs mahogany bomber

Royal Crown Derby English bone china set

4 Fendi handbags

2 Judith Leiber handbags; 2 Kieselstein-Cord handbags

1 Gucci; 2 Dolce & Gabbana; 1 Bally; 1 Ferragamo; 1 Kieselstein-Cord handbag(s)…

11 boxes of shoes: 3 Bruno Magli; 8 Salvatore Ferragamo…

2 Donald Pliner; 1 Stuart Weitzman; 1 Bruno Magli; 7 Salvatore Ferragamo pairs of shoes…

9 wigs…

2 boxes Chanel designer handbags…

Herend porcelain, Tiffany pearls, a silver Tiffany watch… In an affront to D.C. merchants, over $500,000 was spent on clothing at a suburban Baltimore boutique alone. The single-spaced, handwritten list finally concludes in the middle of the seventh page.

An appended Page 8 lists a single item: one

double-barrel shotgun, seized, says an FBI spokesperson, because Bullock didn’t have a permit for it.

(Despite Bullock’s lavish spending, she has yet to pay off a $24,551 federal tax lien filed in July due to unpaid income taxes.)

All that finery, and not even those who worked closely with Bullock noticed. Whatever Bullock’s faults, garish display of her union-funded riches was not one of them.

“Everybody had nice clothes except for me,” says Guy Brandenburg, a teacher who worked for months at Bullock’s side in 2001 as part of the contract-negotiating team. “You know, I wear sweaters and, occasionally, shorts. I didn’t think much of it.”

Spicer, who has more discerning tastes, says, “Nothing screamed and said, ‘Gee, this cost $1,000.’” Spicer remembers commenting on a topaz-colored ring Bullock was wearing when they first met 10 years ago. “That’s my birthstone. She said it wasn’t real.” Bullock wore a lot of jewelry over the years, but Spicer says there was no way of knowing its value. “She wore large jewelry. Showy jewelry. But again, she was a large woman,” says Spicer, pointing to a well-established rule of dress. “Smaller jewelry would get lost.” CP