Welfare Fund Waste

Unions Spend Millions in City Dollars on Patronage Contracts and Expense Excesses

The report also detailed how Ralph Pepe, who worked for Yasser's fund and managed the building it owned at 125 Barclay Street, awarded two construction-manager contracts to a company shrouded in scandal, Herbert Construction. Not only was the company's president under indictment, but one of its chief salesman, Anthony Scotto, was a convicted racketeer and Gambino crime family soldier who once ran the city's longshoremen's union. Bert Perkel, who was the counsel to the DC 37 fund at the time the $335,596 in contracts were awarded, between 1995 and 1997, had once been Scotto's lawyer.

Yasser left the fund last Spring to go to work for HIP, one of the city's top health care providers, which also had millions in contracts with the DC 37 fund she ran. Representing the union on the HIP board for 20 years, Yasser billed the fund for parking at 27 different HIP meetings between '95 and '98, more than any other parking submission. Randi Weingarten, the teachers union president who heads the Municipal Labor Committee overseeing all city unions, conceded that Yasser had helped prepare an April 2002 request for proposals for a still pending $1.6 billion—a year—medical and hospital plan for all city employees. A HIP spokesman confirmed that Yasser nonetheless "participated in helping the staff of HIP to reply to the RFP and was one of 15 HIP staff who attended the first presentation HIP made." before the joint MLC-city selection committee for the five-year contract.

Yasser was asked to resign by DC 37 around March 1, but did not leave until May 31. Bids on the RFP were due April 3, yet HIP says Yasser worked on its response while she was still on DC 37's payroll. As the longtime chair of MLC's health committee, Yasser's two hats cloud this extraordinarily expensive bid process, leaving open the possibility that she might have been in a position to become familiar with the proposals of HIP's major competitors.

While this contract does not involve welfare funds—which are designed to supplement the benefits of this core medical and hospital plan—Yasser's questionable conduct is just one more indication of how blurred the conflict-of-interest lines have become in the netherworld of city-union business. If Yasser were a city employee, she could not legally appear before an agency she'd just left, a bar designed to prevent collusive contracts.

Research assistance: Cathy Bussewitz, Alexa Hinton, Felicia Mello, Solana Pyne, E.B. Solomont, and Steven I. Weiss

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