AFGE National President J. David Cox speaks to union members in 2012.

AFGE National President J. David Cox speaks to union members in 2012. Bizuayehu Tesfaye/AP Images for American Federation of Government Employees

Ousted Local Officials Accuse Largest Federal Employee Union of ‘Sloppy Coup’

AFGE put its Labor Department local in trusteeship over spending on a settlement distribution event.

For the second time in three months, officials at the largest federal employee union are embroiled in a contentious internal dispute over resources and authority.

National leaders at the American Federation of Government Employees last week ousted officials at the local covering Labor Department headquarters over spending on a recent event. But officials at the Local 12 say the move by AFGE National President J. David Cox was politically motivated.

In a memo to AFGE Local 12 members first acquired by Bloomberg BNA, Cox imposed a trusteeship on the local, removing its officers and placing AFGE National Representative Nate Nelson at the helm. Cox accused the local’s executive board of authorizing $18,000 for a luncheon at the Hyatt Regency in Washington without members' approval and said the board failed to hire a new outside auditor, as required by the local’s audit committee.

But Alex Bastani, who until last week was president of AFGE Local 12, said the hotel expenditure was appropriate under the circumstances. The event was organized to hand out checks to Labor Department employees and retirees after a decade-in-the-making $7 million settlement with the department over an overtime back-pay dispute and was funded by the settlement, not through the local’s normal budget process.

“This case took 12 years, these things take forever,” Bastani said. “We had no idea when it would settle—it was like ‘Waiting for Godot.’ We couldn’t budget for it [ahead of time], and we had to take advantage of it as a recruiting tool, because we don’t win that kind of money every single year.”

Local 12 Vice President Eleanor Lauderdale said the organization did not hire a new auditing firm because the local's leadership could not find evidence that the recommended auditor was a certified public accountant. In the meantime, she said, the board re-hired its previous auditing firm, but only for the purpose of filing mandatory forms with the Labor Department and the Internal Revenue Service.

“[The national office] said we have hired an accounting firm that the members told us not to hire to do an audit, but we didn’t hire them to do an audit,” Lauderdale said. “We did it to get these forms in on time.”

Lauderdale, in a statement of the Local 12’s position, called the effort a “sloppy coup,” and accused the AFGE National Executive Board of intervening to remove officials who were occasional thorns in their sides. Bastani has run against Cox and National Vice President Steve Bunn a number of times over the years, although he lost each time. Lauderdale said questions over Cox’s early endorsement of Hillary Clinton over Bernie Sanders during the 2016 presidential election, along with the local's recent victory in the Labor Department case, made Bastani a significant threat to Cox in next year’s union elections.

“Now [Bastani's] got the $7 million back wage award, and we’ve got several cases where people who had been removed were reinstated, and the thought is that Alex would use this to run on,” she said. “So this was their way of tainting Alex, to get him out of office and to get him out of the way so he doesn’t become a competitor.”

The AFGE national leadership’s installation of Nelson is further evidence the action was politically motivated, the ousted officials said, because the trustee cancelled Local 12 elections planned for Oct. 18 and installed the incumbent leadership’s opponents in the race.

“When the election was cancelled, our election committee already had a contract with a private contractor [to conduct the election], and they do a great job,” Bastani said. “But because of the national office interference and the cancellation, that was a sunk cost of about $10,000 to $15,000 on the election that we’ll never get back. Ironically, that’s almost as much as the amount they’re complaining about with the Hyatt event.”

Lauderdale said she plans to file an injunction against the trusteeship, and on Wednesday she filed an unfair labor practice complaint against the Labor Department with the Federal Labor Relations Authority, alleging that the department inappropriately aided the AFGE national office when it provided security personnel to escort the ousted officials out of the Local 12 office, confiscate their computers and change the union office locks.

AFGE said in a statement that the executive board followed all the procedures laid out in its constitution in authorizing the trusteeship, and noted that such an action requires a recommendation from the national vice president for the union district and a majority vote by the board.

“The purpose of the trusteeship is to preserve the funds and records of the local until the affairs of the local can be put in order and new elections can be held for local officers,” the union said. “A hearing will be held to determine whether the initial decision to place the local in trusteeship should be confirmed . . . AFGE follows this deliberate process for every local placed in trusteeship and has a legal duty‎ and an obligation under the AFGE Constitution to provide this oversight and to take steps to safeguard the members' dues, regardless of the political consequences.”

According to Cox’s memo, the trusteeship hearing is scheduled for Dec. 1, after which an impartial panel will have 30 days to decide whether to ratify or rescind the trusteeship.

This is not the first time AFGE internal politics have spilled into public view in recent months. In August, former National Secretary-Treasurer Eugene Hudson accused the union’s national executive board of ousting him over clashes with Cox. The union maintains Hudson was ousted for using union resources for personal purposes after Hudson instructed an AFGE staffer to send an email on his behalf to union members shortly after the 2016 election.