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SAG-AFTRA Leaders Threatened With Suit Over Alleged Misconduct (EXCLUSIVE)

Variety logo Variety 4/21/2017 Dave McNary
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Former SAG president Ed Asner and eight other SAG-AFTRA members have accused the union’s leadership of extensive misconduct and threatened to file a federal lawsuit if the policies are not corrected.

Variety has learned that the United Screen Artists Committee delivered a letter of demand Friday morning to SAG-AFTRA headquarters in Los Angeles to National Executive Director David White and President Gabrielle Carteris.
The United Screen Actors Committee is the same entity that sued the union in federal court in 2013 over the issue of the union’s alleged mis-handling of $130 million foreign royalties and residuals. That suit was dismissed in 2014.
Carteris issued a blistering response Friday: “It’s time to stop the politics. This group of people should be deeply ashamed.  After years of failed attempts to derail the success of this union through deceitful litigation, they are putting our members at risk on the eve of our most important contract negotiations. Their repeated pursuit of frivolous politics merits utter contempt. The timing of this action and its leak to a trade publication leave no doubt of their intent.”SAG-AFTRA is expected to begin contract negotiations with the Alliance of Motion Picture and Television Producers once the Writers Guild of America makes a deal. The WGA deal expires May 1; SAG-AFTRA’s deal expires June 30.
In response to the 2013 suit, the union repeatedly insisted that it had done nothing wrong and characterized that litigation as “frivolous.” It also asserted on numerous occasions in 2013 and 2014 that without its efforts, actors would not have seen any of the foreign funds nor received unclaimed residuals.

The letter of demand incorporates several of the allegations from the 2013 suit along with new accusations of misconduct by White, general counsel Duncan Crabtree-Ireland and senior advisor John Mcguire and consultant Robert Hadl. Besides Asner, the letter was signed by Alan Ruck, Clancy Brown, Eric Hughes, Steve Barr, Terrence Beasor, Tom Bower, Alex McArthur and Dennis Hayden.

Asner, who served as SAG President between 1981 and 1985, is a current member of the SAG-AFTRA national board and Brown is a former national board member. All nine except Ruck were plaintiffs in the 2013 litigation.

“For five years now, SAG-AFTRA has been redefining the method for keeping the membership informed, resorting to communications which are like press releases wherein information is managed, intentionally incomplete and misleading,” the letter began.

“With the recent release of the video SAG-AFTRA Celebrates 5 Years, this five-year practice of spin in place of transparency must be viewed in context of real events and actions prompting many questions that require immediate answers from not only yourselves but all union representatives whether elected, appointed or employed.”

According to the union’s most recent LM-2 filing with the federal government, SAG-AFTRA reported last year that  funds held in trust for others had increased by 4.5% to $171.7 million since 2015.  The 2015 report showed a 7.5% gain in the funds held for others to $164.3 million; the 2014 report listed those funds at $153.04 million, a 16% jump from 2013’s figure of $132.26 million.

But the letter of demand asserts that the union is not telling the truth about its finances in the LM-2 filings.

“Although undersigned would have hoped that the consequence of prior reviews and court decisions would have resulted in accountability from within, it appears that the exact opposite has occurred,” the missive said. “Rather than file LM-2s that fully account for residuals and royalties belonging to members and non-members alike, regression in reporting has occurred instead.”

The letter was delivered two months after SAG-AFTRA announced that it was offering members delivery of residual payments through direct deposit for the first time, replacing paper residuals checks. The performers union, which has about 160,000 members, announced Feb. 8 that it had entered into a multiyear agreement with Exactuals, a Los Angeles-based payments software company, to deliver residuals payments through direct deposit.

“What appeared to be the improper handling of One Hundred and Fifty Million Dollars of monies held in trust is now approaching at least a Billion Dollars, spread out among internal accounts, as well as such entities as Sound Exchange, AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund, and a recent threat to allow a brand-new enterprise, Exactuals, to become a part of the process as well.”

The letter said that by switching to Exactuals, millions of dollars which have been invested at the direction of the union’s executive leadership and high level managers to upgrade and streamline the processing of residuals and foreign levies/royalties within SAG-AFTRA will have been “needless and profligate acts.”

The letter accuses White, who has been national executive director since 2009, of an array of financial misconduct, including charging the union for cell phones for seven different numbers;  limousine service to attend the SAG Awards; use of hotel and airline reward programs for his personal use ; donating purportedly unclaimed residuals and royalties to not-for-profit organizations while sitting on their boards; authorizing expenditure of millions of dollars for hotels in New York and Los Angeles for non-members and relatives.

Crabtree-Ireland was accused of buying tickets to events such as the Grammy Awards and to fund-raising private

parties with Union funds, submitting invoices and obtaining reimbursement without obtaining approval for such from the national board; using hotel and airline reward programs for his personal use; and having SAG-AFTRA pay for bar dues and participation bar associations, copyright, patent, intellectual property and parliamentarian organizations.

McGuire was accused of being instrumental in causing SAG-AFTRA to donate unclaimed residuals and royalties to not-for-profit organizations such as the Museum of the Moving Image, so that he and  others could in turn be honored for their “philanthropic” endeavors. He was also accused of being paid for first and business class airfare to attend conferences without advance approval from the executive board and using frequent flier mileage for trips to Ireland, Belgium, Morocco and Beijing.

Hadl is accused in the letter of not filing reports with the Department of Labor for services purportedly rendered to SAG-AFTRA and for claiming he is “legal counsel” to SAG-AFTRA, although not licensed to practice law. He was also accused of charging for first class airfare and upgraded lodging to attend conferences while billing other unions and the Motion Picture Association of America for the same trips.

The letter also accused SAG-AFTRA of purchasing a Tennessee building it already owned, paying itself $824,800 in 2014 and failing to report the transaction in federal filings.

The 10-page letter also said that the SAG National Board of Directors — which is scheduled to meet Saturday and Sunday — would have until June 5 to respond if a lawsuit is to be averted.

“Prefatory to commencing a federal lawsuit to address breaches of fiduciary duties, we are compelled to give the National Executive Board an opportunity to consider the breaches which have taken place and to timely redress same, including by demanding that the accused officials and high level executives reimburse the Union, forthwith,” it warned. “Absent doing so, an action seeking same will in fact be filed.”

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