FBI agents have seized bank documents, tax records and hundreds of luxury items from the residences and offices of two former top officials of the Washington Teachers' Union and at least one of their relatives in an investigation tracking more than $2 million in allegedly misspent union funds, according to court papers filed yesterday.
As the union began investigating the financial integrity of its pension and health insurance funds yesterday, the FBI filed documents in U.S. District Court providing a partial list of the designer clothes, furniture and financial records seized. The goods include a $57,000 Tiffany tea set, a $13,000 plasma television, dozens of wigs, fur coats, boxes of shoes, designer handbags and original artwork.
Those items -- allegedly purchased since 1995 with union money -- were seized Thursday from the apartment of Barbara A. Bullock, the former union president, and the home of Gwendolyn M. Hemphill, Bullock's former assistant and former campaign co-manager for D.C. Mayor Anthony A. Williams (D), the court papers said.
The investigation is focusing on records of financial transactions, and federal agents also reported that they had taken a computer, nearly 100 disks, tax records and phone numbers from the office of Michael Martin, Hemphill's son-in-law and a supervisory programs analyst at the D.C. Department of Health's office of HIV/AIDS prevention. Martin ran a company called Expressions Unlimited that billed the union for false or misleading expenses, investigators said in a court affidavit filed last week.
No criminal charges have been filed in the case, which began in September when union officials uncovered financial irregularities and reported the problem to the U.S. attorney's office. Prosecutors are working with investigators from the FBI, the Internal Revenue Service, the Labor Department and the D.C. inspector general's office.
Channing D. Phillips, spokesman for the U.S. attorney's office, declined to comment yesterday when asked whether a grand jury was considering the matter.
The inventories filed yesterday did not include material seized at four other locations in Maryland and Virginia. Those searches, for which court papers will be filed in the coming days, were at the homes of Martin and his wife, Cheryl, who is Hemphill's daughter; James O. Baxter II, the union's former treasurer; and Gwendolyn B. Clark, Bullock's sister; and at the offices of Miller Furs, a Chevy Chase company "where investigation has revealed Bullock stores fur coats believed to be purchased with WTU funds," according to the affidavit filed by the FBI in advance of the searches.
Hemphill has talked to federal authorities, according to sources familiar with the investigation. The sources said Bullock's driver, Leroy Holmes, also has talked with authorities. Holmes allegedly received scores of union checks, some of which he used to pay himself $90,000 a year and to pay for his personal vehicles, the affidavit said.
Hemphill's attorney, Frederick Cooke Jr., said yesterday that "we have been as cooperative as we know how. To the extent we've been asked to do things, we've done them. . . . There are no arrangements, no understandings, no agreements."
Stephen R. Spivack, Bullock's attorney, did not return a message left on his office voice-mail yesterday, and his secretary said he was out of the country. Bullock did not return a message left on her home answering machine.
In other developments yesterday, the American Federation of Teachers said union auditors were investigating whether the 5,000-member Washington Teachers' Union failed to pay premiums to two health care providers for retired teachers who were union members.
Another emerging issue involves the union's pension fund for its staff. For the past two years, according to sources familiar with the issue, the union's executive committee approved money to be put into the pension funds at the rate of 11 percent of staff salaries. Much of the money was never put into the funds, the sources said.
Bullock and Hemphill resigned after authorities began investigating various union finances. Baxter has stepped aside pending results of the investigation. According to paperwork filed by the union with the Labor Department in December 2001, Bullock's union salary was $106,840; Hemphill was paid $66,950; and Baxter was paid $55,709. A union official said Bullock's most recent salary was about $112,000.
Officials with the American Federation of Teachers and current Washington Teachers' Union leadership said they were attempting to sort out what happened and how far back the trouble goes.
"While we didn't know the specifics of these kinds of activities, it is precisely because our internal audit began turning up questionable practices along these lines that we took it to the U.S. attorney," said Alex Wohl, an AFT spokesman.
Esther S. Hankerson, the interim president of the local union, said she had been told about discrepancies in the pension funds but was unsure how much might be missing.
Hankerson said that after the allegations of financial problems surfaced, she reviewed her own union credit card charges and repaid about $1,500. Hankerson said she discovered that her assistant mistakenly charged travel expenses for her granddaughter on her union charge account instead of putting it on her personal credit card. She said she also reimbursed the union for several meals because she could not be certain that they involved union business.
Hankerson said the union has no written guidelines on the use of its credit cards.
Staff writers Allan Lengel and Valerie Strauss contributed to this report.