Local 5 members
sue Tony Rutledge
More than a dozen members of the Local 5 hotel workers union have sued ex-Unity House President Tony Rutledge and members of the labor organization's executive board, alleging they "exploited their control and influence over the labor organization for personal gain."
In an 83-page civil racketeering lawsuit filed in U.S. District Court on Monday, union members including Unite Here Local 5 financial secretary-treasurer Eric Gill, said they want to put an end to a "systemic and long-standing corruption of Unity House and to restore control of its affairs to members of the labor organization."
"This complaint is brought against Unity House, the executive board of Unity House, Tony Rutledge, Aaron Rutledge and others to rid the labor organization of domination and influence of corrupt individuals who have exploited their control and influence over the labor organization for personal gain," the lawsuit said.
Jeff Rawitz, Rutledge's attorney, declined comment, saying he has not seen the suit.
The civil complaint mirrors many of the charges raised by a federal grand jury that indicted Rutledge and his son Aaron Rutledge on tax and wire fraud charges. The federal government seized Unity House last year and placed its $42 million in assets under the control of a court-appointed receiver.
Union members are raising new questions of mismanagement in the lawsuit.
The complaint alleges that Unity House's board was negligent when it hired mainland investment advisor Dean Kirkland against the advice of Unity House's investment monitor and without performing a due-diligence background check.
Kirkland, who headed Granite Investment Advisors LLC, churned Unity House's account to generate improper commissions, union members said. And in May 2004, a federal judge found Kirkland guilty of wire fraud, obstruction of justice and giving illegal gratuities in a case unrelated to Unity House, the lawsuit said.
The suit also criticized a $250,000 contract to Bob Awana, now Gov. Linda Lingle's chief of staff. The contract was for surveying Unity House members between 1999 and 2000 before Lingle was elected governor, the complaint said.
After Lingle was elected, Rutledge met 11 times with Awana, the suit said. In a May 2003 letter obtained by the Star-Bulletin, Rutledge asked for Awana's help in getting the governor to sign a bill to convert Unity House from a member-based organization to one controlled by its board of directors.
The measure, which was introduced by former state Rep. Romy Mindo, essentially allowed Rutledge and the board to misappropriate Unity House's assets, the lawsuit said.
Lingle previously said the legislation received no special treatment from her staff and that she did not speak to anyone from Unity House before she signed it.
Awana could not be reached for immediate comment.
In their suit, the Local 5 members are asking that Unity House be restored as a member-based organization. They also are asking that the Rutledges and Unity House's board pay triple damages for their actions.