U.S. Department Of Justice
FOR IMMEDIATE RELEASE
May 2, 2003
Roscoe C. Howard, Jr.
United States Attorney for the
District of Columbia
555 4th Street, N.W.
Washington, D.C. 20530
For Information Contact Public Affairs
Channing Phillips (202)514-6933
Former outside law firm for the International Association of Iron Workers enters deferral of prosecution agreement and agrees to remove name of former partner Victor Van Bourg from its title
Washington, D.C. - United States Attorney Roscoe C. Howard, Jr. announced that the Oakland, California based law firm of Van Bourg, Weinberg, Roger & Rosenfeld, P.C. and the United States Attorney's Office for the District of Columbia this week entered into an agreement by which criminal prosecution of the law firm for fraud, false statements and related offenses would be deferred, and ultimately not pursued, in exchange for the law firm undertaking actions to remedy past misconduct by its former name and founding partner, Victor Van Bourg, who is now deceased.
This matter grows from the investigation of corruption within the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers ("Iron Workers Union"). Among the remedial actions to be taken by the law firm pursuant to the deferral of prosecution agreement, the law firm has agreed to drop the name of Van Bourg from its title, to pay restitution to the Iron Workers Union and an affiliated pension fund, to reimburse the U.S. Attorney's Office for costs associated with the investigation, and to undertake internal reforms and training to avoid any similar misconduct by its other lawyers. In addition, the law firm has agreed to send a letter to all of its labor union clients advising them of the misconduct of Van Bourg and advising them of the proper reporting requirements for Union expenditures for top Union officers in annual financial disclosure reports to the U.S. Department of Labor.
The Iron Workers Union, which is located here in Washington, D.C., is the parent union organization for more than 125,000 iron workers throughout the United States and Canada. Iron Workers are the skilled tradesmen who, in addition to other skills, build and erect the steel structure of skyscrapers, bridges, stadiums, and other buildings. Their work is often dangerous but essential to our national and local economies.
From 1984 until his death in October 1999, Victor Van Bourg served as the General Counsel of the Iron Workers Union as well as the Bridge and Iron Workers Staff Retirement Plan ("Staff Retirement Plan") and other pension plans affiliated with the Iron Workers Union. Van Bourg was also the name and founding partner of the Oakland, California law firm of Van Bourg, Weinberg, Roger and Rosenfeld. Van Bourg and his law firm were among the most well known labor lawyers in the country, representing numerous labor unions throughout the country. Van Bourg personally argued cases in front of the United States Supreme Court as well as numerous federal and state courts and administrative agencies in the United States.
Beginning at least by 1992, Victor Van Bourg was an active and leading participant with the Union's President Jake West, other top Union officials, and the Union's outside accounting firm (the Thomas Havey Company) in a conspiracy to defraud iron workers and the U.S. Department of Labor by concealing and covering up the full amount of Union expenditures for Union President Jake West, Union General Secretary LeRoy Worley, Union Treasurer James Cole, and several other Union officials.
Those top Union officers and others spent nearly half a million dollars for their dining and drinking at the Prime Rib restaurant in Washington, D.C. during the years from 1992 through 1998. That $500,000 was in excess of and in addition to more than one million dollars ($1,000,000) paid during the same time period directly to Union officials West, Worley, Cole, Darrel Shelton and Fred Summers or to other restaurants and country clubs for their dining, drinking, golfing, and entertainment.
Victor Van Bourg joined the effort to conceal those expenditures from the dues paying iron workers by filing false and misleading annual financial disclosure reports, which are known as LM-2 Reports and which are required by federal law to be filed annually with the U.S. Department of Labor. In addition to the concealment of those unauthorized expenditures and embezzlements of the Union's money, the investigation revealed that Van Bourg also directed that the amount of legal fees paid by the Union to him and his firm be under reported and concealed in the annual LM-2 Report.
When the Department of Labor and this Office began to investigate the fraud and embezzlements by Union President Jake West in 1998, Van Bourg acted to obstruct justice and the investigation by withholding incriminating documents from the grand jury, by falsely testifying about his role in that fraud, and by creating false and misleading documents with Union President Jake West in an effort to avoid criminal responsibility. Furthermore, Van Bourg, although he was paid nearly $200,000 each year to represent the Iron Workers Union as an organization rather than any particular person, sought to shift blame and responsibility for Jake West's offenses on to several subordinate Union officials who acted at West's direction and orders.
The investigation also revealed that in 1998 and 1999, Victor Van Bourg participated in an effort with Union President West and others to defraud the Internal Revenue Service and union pensioners who were beneficiaries or participants in the Staff Retirement Plan. Van Bourg participated in a scheme by which illegal and unauthorized pensions were paid to Union President West and former Union General Secretary LeRoy Worley.
The scheme put at risk the tax qualified status of the pension plan or the very existence of the pension plan. In order to enrich West and Worley, Van Bourg was willing to and did put at risk the pensions of other iron workers and employees of the Iron Workers Union.
That scheme was shielded from discovery by false statements and certifications to the Internal Revenue Service by Van Bourg's law firm and others. Finally, the investigation has revealed that Van Bourg allegedly offered to pay illegal kickbacks to a local union official in return for that union official steering union members to Van Bourg's law firm with regard to workers compensation and other litigation.
In announcing the agreement with the law firm of Van Bourg, Weinberg, Roger and Rosenfeld, which was entered this week, United States Attorney Howard praised the investigative efforts of Supervisory Investigator Stephen Willertz, Senior Investigator Christopher Degnan, Investigator Cynthia Downing, and Auditor Tyrone Ross of the Office of Labor-Management Standards of the United States Department of Labor, Special Agent Stephen Schmidt of the Federal Bureau of Investigation, as well as Assistant United States Attorneys Steven W. Pelak and Carol Fortine Ochoa, who prosecuted the case.
United States Attorney Howard wished to make special mention of the dedication to this matter by the Office of Labor Management Standards within the United States Department of Labor which is responsible for the detection and investigation of embezzlement from labor unions.
To date, in addition to resolution of this matter with the Van Bourg law firm, this ongoing investigation has led to the guilty pleas of ten persons, including seven former top officials and employees of the Iron Workers Union, two outside public accountants for the Union, and an insurance broker who paid kick backs to former Union President West and Union General Secretary Worley, to a variety of embezzlement, false financial reporting, union bribery, and conspiracy charges.