Teamsters Local 120 -- a large and prominent Minnesota local -- was taken over Tuesday by its parent union after an investigation found evidence of financial irregularities by top leaders.
The union and its president, James P. Hoffa, put Local 120 into emergency trusteeship after a "determination that there has been a violation of fiduciary responsibility," said Bret Caldwell, a spokesman for the International Brotherhood of Teamsters.
The top two executives of Blaine-based Local 120, Brad Slawson Sr. and Brad Slawson Jr., have been put on a leave of absence, and the local's executive leadership board has been dissolved, Caldwell said.
Teamsters 120 has about 10,000 members and offices in four states, and Slawson Sr. is a nationally known Teamsters leader. Trusteeships are not common, particularly for such a large local. Caldwell said Local 120 was put into trusteeship because of the "severity" of the allegations.
The investigation has been conducted over the past several months by the Teamsters Independent Review Board, which is aimed at rooting out corruption within the union and was created about 20 years ago at the behest of the U.S. Justice Department.
When the review board discovers potential misconduct, it brings its investigation to the Teamsters president, who determines whether a local should be taken over. The problems at Local 120 "appear to be pervasive and ongoing," Hoffa wrote in a memo posted at the local's offices.
The memo listed several "concerns" that led to the trusteeship, including apparent irregularities with the local's purchase of real estate for, and construction of, a new union hall in 2007 and 2008.
Among the irregularities were an allegedly improper $90,000 "finder's fee," paid by the building's general contractor to a family friend of a union leader, and an unauthorized diversion of $189,000 from Local 120's strike fund to pay for the new building.
The memo said such irregularities resulted from fiduciary breaches by Slawson Sr. and Slawson Jr. Neither could be reached for comment.
The memo said investigators also found irregularities in the operation of a bar and gaming operation in Fargo, N.D., known as the Teamsters Club. A family friend of the Slawsons was allegedly employed by the club as a consultant and was paid without approval of the local's executive board.
The memo said Local 120 also used the local's funds to subsidize the Teamsters Club's "substantial and continuing business losses" without disclosure to its executive board or membership.
Other issues cited from the investigation and included in Hoffa's memo were:
• Attempts by Slawson Jr. to avoid paying personal debts to two of Local 120's vendors by promising them additional business from the local.
• Efforts by Slawson Jr. to obstruct the investigation into Local 120 by testifying falsely under oath and soliciting an employee of the local to provide "false testimony."
• A "pattern" of spending by the Slawsons and other Local 120 officers and business agents "for which there was no union purpose."
Peter Rachleff, a history professor and organized labor expert at Macalester College, said the allegations suggest that the Slawsons "ran this local union as if it were their own personal property, and that is egregious behavior by a union officer."
"They kept the membership in the dark," he said. "This is exactly what unions are not supposed to be."
Caldwell said Slawson Sr. and Slawson Jr. are both on a leave of absence. Within 30 to 60 days, a Teamsters hearing panel appointed by Hoffa will review the allegations involving Local 120.
If the claims are upheld, the Slawsons will not be allowed to return to leadership positions at Local 120, Caldwell said. They are also on leaves of absence from other positions they hold in the Teamsters union, leaves that will also become permanent if the allegations hold up.
Slawson Sr., who started as a Teamsters driver in 1970, is central region vice president for the national union, and is recording secretary for Teamsters Joint Council 32, an umbrella group for Minnesota Teamsters locals.
While Teamsters Local 120 covers several industries, it's known best as a local for drivers, freight handlers and warehouse workers. Aside from its headquarters, Local 120 has offices in Mankato, Fargo, Sioux Falls, S.D., Des Moines and Dubuque, Iowa.
Teamsters Local 120's business agents, who service various contracts, remain in place during the trusteeship. The trustee now running the local is William Moore, an international Teamsters representative and leader of a Kansas local.
Moore was disciplined in 2008 after the Independent Review Board found that he intentionally gave false testimony concerning the last time he had seen Dane Passo, a Chicago Teamster and onetime Hoffa aide who was permanently barred from the union in 2002 for corruption.
Moore was suspended from holding a union office for one year. "The charges against Bill were not about corruption, but about association," Caldwell said. "Bill admitted his mistake and essentially took his medicine, and since has an unblemished record."
Caldwell said the Independent Review Board knows that Moore is Local 120's trustee. The review board was set up after the 1989 settlement of a U.S. Department of Justice racketeering suit against the Teamsters.
Mike Hughlett • 612-673-7003