Rutledge withdraws
membership from
isle hotel union
Labor leader Tony Rutledge, facing tax fraud charges, has resigned as a member of the local hotel workers union just as the union's Washington, D.C.-based parent was to begin disciplinary proceedings against him.
Rutledge -- whose father, Arthur, was a founding member of the Hotel Employees and Restaurant Employees Union Local 5 -- said yesterday he quit to protest an investigation by the parent union's Public Review Board.
Rutledge, a Local 5 member for 35 years, remains chief executive of Unity House Inc., a nonprofit founded by his father to provide benefits for union members and retirees.
"Resigning from Local 5 is a very difficult decision for me, but the union has changed in recent years to the point that fairness and loyalty no longer apply to all members," Rutledge said.
Jason Ward, a spokesman for Local 5, declined to discuss details of the Public Review Board's investigation.
In August, Rutledge and son Aaron Rutledge were indicted by a federal grand jury on tax fraud charges related to the family's concession stand on Waikiki Beach. Both Rutledges, who are scheduled to go on trial Feb. 24, have pleaded not guilty and have alleged misconduct by prosecutors.
The criminal charges are unrelated to allegations raised by the five-member Public Review Board, which was scheduled to begin its hearings yesterday.
In a complaint filed last July, the board alleged that Rutledge defrauded the union by hiring his friend Anthony DiPace, of Albany, N.Y., to monitor Local 5's pension money. DiPace was later convicted of mail fraud in Honolulu Federal Court for misrepresenting his investment qualifications to Local 5.
The board, whose members include ex-Illinois Gov. James Thompson, Archbishop James Keleher, former U.S. Justice Department official Kurt Muellenberg and mainland attorneys Howard O'Leary and Ken Purcell, said Rutledge and Local 5 official Orlando Soriano directed the union to make improper loans to union members. The board also alleged that Rutledge and Soriano filed faulty financial reports to the federal government.
Rutledge said there were no allegations that he personally benefited or that union funds were lost under his watch. But he said the board had already made up its mind and that he decided to resign to avoid a lengthy and costly legal battle.
Rutledge said he believes the union's international parent is pursuing charges against him because he criticized the amount of local dues that have gone to the mainland parent.