The U.S. Department of Labor is investigating the financial dealings of a Wilmington union, where Los Angeles Harbor Commissioner Michael Schwab works as business manager and recording secretary.
Terrill Dixon, acting area manager of the department's Office of Labor Management Standards, said the investigation was prompted by a complaint about alleged financial misdealings at the Pile Drivers Local 2375, where Schwab has held the two positions--the highest in the local--since 1982.
At the request of the Labor Department, a federal grand jury last month subpoenaed records of a separate investigation of the local's alleged financial problems. That probe was being conducted by the United Carpenters and Joiners of America, the parent union to the local, Dixon said.
"We are looking into the union's books and records to see if they are maintaining proper books and records and to see if they are keeping proper receipts," Dixon said. He would not elaborate on the grand jury's involvement or the Labor Department's investigation.
William Luddy, a spokesman for the United Carpenters and Joiners of America, said the parent union's investigation involves allegations by three members of the local about the alleged misappropriation of a $9,000 grievance settlement paid to the union by an employer last year.
Schwab, who has hired an attorney, denied in an interview this week that the money had been misappropriated. He described the allegations as "innuendo and slander," and said some union members were trying to discredit him before next June, when he is expected to seek reelection as business manager and recording secretary.
"I haven't done anything wrong," Schwab said. "This is all a bunch of accusations. It is power politics. We have an election coming up."
Schwab said his new-found visibility as a member of the Board of Harbor Commissioners has made him a particularly enticing target for opponents within the union. Schwab was appointed to the board, which oversees operation of the Port of Los Angeles, in August. He said there have been complaints from the union that he spends too much time on harbor business.
Neither Dixon nor Luddy would identify the union members whose complaints led to the investigations.
Fred MacFarlane, a spokesman for Mayor Tom Bradley, who appointed Schwab to the harbor board, said Schwab has informed the mayor of the investigation. MacFarlane said Bradley has taken no position on it.
"We are not going to prejudge the circumstances," MacFarlane said. "At this point, we think it is a matter for the union and Mr. Schwab."