|Union President Maddaloni|
Nearly two years after the Labor Dept. filed a lawsuit charging trustees of the Plumbers and Pipefitters National Pension Fund with mismanaging the plan's substantial investment in the Diplomat Resort & Spa in Hollywood, Fla., the department says it has reached a settlement, removing four trustees and requiring them to pay $10.98 million in penalties.
The settlement, announced Aug. 3, resolves allegations against the trustees, who include plumbers union President Martin J. Maddaloni and General Secretary-Treasurer Thomas Patchell. The settlement, which still must be approved by federal district court in Ft. Lauderdale, Fla., does not require either official to resign his union post.
"The plumbers trustees mismanaged the investment and placed the retirement benefits of thousands of union workers at risk," Labor Secretary Elaine L. Chao said in a statement.
In the Sept. 12, 2002, lawsuit, the department alleged that the trustees violated the Employee Retirement Income Security Act by imprudently proceeding with the Diplomat project without feasibility studies, market analyses, market-tested construction budgets, construction schedules, economic models, financing arrangements or other information with which to make an informed decision (ENR 9/23/02 p.10).
Lawyers for Maddaloni and Patchell issued a statement that said, "We find it both inappropriate and regrettable that the U.S. Dept. of Labor would issue a misleading press release regarding a matter which is before a court for consideration." The statement did not elaborate on which aspects of the release the attorneys contended were misleading.
(Photo courtesy of Plumbers' Union)