Tony Rutledge responds
to union charges
Tony Rutledge, facing a union review board's steps to ban him from working for Local 5 again, says the move is in retaliation for his opposition to the union's international parent.
Rutledge, in response to disciplinary charges brought by the Public Review Board of the Hotel Employees & Restaurant Employees International Union, said the board's move has no legal justification.
"It is retaliatory because I have challenged certain actions by the international union in recent years, such as the amount of local dues being forwarded out of state with very little benefit in return, and their increased emphasis at controlling Hawaii activities from afar," Rutledge said in a two-page statement yesterday.
In his statement, the former union leader did not contest the specifics of the charges, including an allegation that he took part in a scheme to mislead the Local 5 pension fund about the credentials of an investment consultant.
The consultant, Anthony G. DiPace of Albany, N.Y., was found guilty in 2000 of 11 counts of mail fraud for misrepresenting his qualifications to be hired as Local 5's pension fund monitor.
Rutledge, Local 5's leader from 1986 through 2000, defended the hiring of DiPace, saying it was not done for personal reasons, but because DiPace's proposal made the most economic sense.
Rutledge acknowledged that he kept in contact with the consultant after DiPace's fraud conviction. The Public Review Board charged that Rutledge's association with a convicted person violated the union's constitution and a federal consent decree.
Rutledge said he kept in contact with DiPace because the consultant owed him money, which he wanted back. "Anyone would have done the same," Rutledge said.
Rutledge posted half of DiPace's $100,000 bond, according to the union charges. Rutledge said the money was a loan.
Rutledge also acknowledged that he may have submitted erroneous federal financial statements, another union charge. The review board said that Rutledge did not disclose several thousand-dollar loans made to Local 5 employees in 1998 and 1999.
Rutledge said the loans were legal and paid back in full, and that later audits showed that the errors were mistakes and no union funds were lost. He blamed the errors on "staffing problems," noting that Local 5 went through several bookkeepers and auditing firms at the time.
"The bottom line is, no member of Local 5's rights were abridged nor were any union funds lost as a result of our dealings with Mr. DiPace. There was no harm done except to myself," Rutledge said.
Rutledge, unseated by Eric Gill as Local 5's leader in 2000, said it's clear that people in the international union and Local 5 don't want him to run for union office again.
Rutledge sued the Public Review Board and the union's international leaders last year for not taking action on charges filed in 2000 against Gill. A federal judge threw out the case earlier this year, and it is now before the 3rd Circuit Court of Appeals.
Meanwhile, Rutledge and his son face a jury trial scheduled for Dec. 2 on separate federal charges of tax evasion and fraud, for allegedly skimming more than $350,000 of the earnings from the family's Waikiki beach concession stand business. According to a federal indictment, Tony and Aaron Rutledge have blamed the scheme on Art Rutledge, Tony's late father and union leader, who died in 1997.
