WE, THE MEMBERS OF SAG-AFTRA, ARE DEMANDING AN IMMEDIATE, FORENSIC AUDIT OF BOTH THE SAG-PRODUCERS PENSION AND HEALTH PLANS AND THE AFTRA H&R PLANS FOR THE FOLLOWING REASONS:
- Despite multiple charges of malfeasance and embezzlement being brought against high ranking staff at SAG P&H, AND the criminal indictment and conviction of Nadir Karimi, former CIO of the plan, there has been NO independent investigation or qualified (forensic) audit into the Plan’s fiscal health. Furthermore, the Department of Labor has had both civil and criminal investigations of SAG PP&HP open since 2009. http://deadline.com/2016/04/nadir-karimi-sentence-sag-pension-health-plans-tax-fraud-1201737873/
- It has been announced that the SAG and AFTRA HEALTH PLANS will be merged by January 2017. Regarding the merger, National Executive Director, David White said, “There will be pain all around.” Senior Performers who had been grandfathered into the plan, had their premiums increased 230% April 2016. 300 early retirees with SAG P&H have had their health coverage discontinued because the plans “couldn’t afford them.” The stock market is up 200% since the lows of 2009. If our investments are being properly handled, why couldn’t they be afforded? http://deadline.com/2015/11/sag-health-plan-meeting-early-retirement-1201629301/ The fiscal health of both plans MUST be determined to insure a successful merger.
- AFTRA misrepresented its fiscal health prior to the merger of 2012. AFTRA conducted an audit, but failed to act on most of the auditor’s recommendations. The effect of this on AFTRA H&R remains unknown. http://www.hollywoodreporter.com/news/audit-reveals-pre-merger-aftra-624083 https://www.sagwatchdog.com/wp/2013/09/09/pre-merger-aftras-financial-holes-ah-woes/
- The Board of Trustees of SAG PP&HP and AFTRA H&R are charged by the Employee Retirement Income Security Act (ERISA) to look out for the best interests of the members of the union. Failure to do so may result in legal action. “Courts may take whatever action is appropriate against fiduciaries who breach their duties under ERISA including their removal.” http://www.dol.gov/general/topic/health-plans/fiduciaryresp
PLEASE READ THIS TIMELINE OF EVENTS TO UNDERSTAND WHERE WE ARE NOW:
At the suggestion of senior SAG staff, SAG PP&HP agreed to cover the staff members who work for SAG. Both staff and SAG members accrued benefits at the rate of 3.5% with member contributions coming from Producers, and staff contributions coming from membership dues.
2006 July 6
Gary Mathis, SAG P&H Director of IT, brings attention to the misappropriation of Plan funds by CIO, Nadir Karimi and CEO, Bruce Dow to the Department of Labor. Mr. Mathis was fired as a result. https://pmcdeadline2.files.wordpress.com/2014/11/sag-ph-wm.pdf
AFTRA deliberately undermines many of SAG’s contracts during the TV Theatrical negotiations causing a loss of revenue to the SAG PP&HP. http://deadline.com/2008/03/sources-aftra-now-refusing-to-jointly-negotiate-with-sag-for-contract-5339/
Craig Simmons is hired as consultant, then made Executive Director of Human Resources, IT and Risk Management at SAG P&H.
Nadir Karimi, CIOof the P&H Plan, leaves his post after he is implicated in a multi-million dollar kickback/embezzlement scheme taking place in 2008. No charges are brought against him by his employers at the P&H Plan. No “qualified” audit is done to discover the extent of the embezzlement. No word of this embezzlement was ever reported to SAG members. Karimi has since been convicted of tax evasion. and was sentenced 14 April 2016.
2009 / 2010
Plan Trustees decide to diminish actors’ accrual rate from 3.5% to 2%, without informing members that staff would remain at the 3.5% accrual rate. This results in an approximate 43% reduction in accrual rates for each working actor/participant. Why was there no reduction imposed on staff? Why only the actors? This not only affects the fiduciary health of every union member, it also undermines the fiduciary health of the P&H Plan due to lost revenue. (To date, Staff continues to accrue at 3.5% with all contributions going into one fund.) Staff is allowed to retire early at age 55 with full pension, while actors who retire at 55 receive only 70% of their accrued pension.
Taking early retirement at age 55, STAFF can use their highest earning 5 years to calculate their retirement pension up to the ERISA pension cap of $210,000 annually, while actors must use all of their pension credited years to calculate their pension. However, no matter how much they have made in their career, their cap is $96,000.
Staff needs only 20 years of service to achieve the cap of $210,000 while union members are required to have 35 years of service to receive the cap of $96,000, and must sacrifice 30% of their pensions if they retire early at age 55. Such members achieve a much lower cap of $67,200 annually. This is a difference of $142,800 annually-below what staff, would get. Remember, Staff salaries are paid by membership dues.
2011 March 24
Craig Simmons, Executive Director of HR, IT and Risk Management of the SAG P&H Plans, informs Duncan Crabtree-Ireland, SAG P&H Trustee/ Deputy National Executive Director & Senior Counsel of SAG, of malfeasance and misappropriation of funds by both Bruce Dow, SAG P&H Plan CEO, and Nadir Karimi, former CIO of the Plan.
2011 March 25
Craig Simmons, Executive Director of HR, IT and Risk Management is fired seven weeks after receiving an excellent performance review and a merit pay increase.
2011 August 23
Craig Simmons notifies all Union Trustees of his findings and receives no response from any of them. http://www.scribd.com/doc/65135998/Craig-E-Simmons
2011 September 15
The Wrap breaks “Embezzlement Cover-Up” at SAG P&H.
2011 September 16
In an article in the LA Times business section, Simmons, the former HR Exec alleges Nadir Karimi was involved in a $5-$10 million embezzlement of the Plans funds.
SAG P&H Board announces they have retained “outside counsel” to do a “full review” of the allegations but still gives CEO Bruce Dow their “full support”.
2011 October 17
The LA Times reports that the plans received a $2 million payment from its insurer to recover a substantial portion (not all) of the losses.
2011 December 11
Over 1000 SAG members sign a petition demanding a thorough investigation of the embezzlement charges. http://deadline.com/2011/12/sag-health-pension-plan-fund-scandal-hundreds-sign-petition-forimpartial-probe-207033/
2011 December 22
Participants receive a response from The Board of Trustees stating that “most [not all] of Mr. Simmons’ allegations are false” and that an independent investigation was done. The “independent investigator” was found to be Ms. Nancy Solomon, a former colleague and personal friend of David White, SAG NED and Union Trustee of the SAG P&H plan. This is a major conflict of interest. www.sagph.org/html/btmessage.pdf
Bruce Dow takes “60 Day Medical Leave”. http://www.hollywoodreporter.com/thr-esq/sag-pension-health-wrongful-termination-lawsuit-303459
Participants reply to The Board of Trustees, (in part): “Your response coupled with the recent announcement that Bruce Dow has taken a leave of absence, has left us with even more unanswered questions and troubling concerns.” If the Trustees “discovered in 2008 that approximately $2 million had been misappropriated”, why did PricewaterhouseCoopers (PwC) not report it in their 2009, 2010, or 2011 audits of the SAG Funds? Why was this not reported to the Department of Labor?
SAG P&H Union Trustees (made up of both SAG staff and SAG National Board Members and Officers) continued “to keep the information secret so as to encourage the merger of the SAG-PPHP with the AFTRA pension and health plans” and the merger of SAG and AFTRA! http://www-deadline-com.vimg.net/wp-content/uploads/2012/03/DOL_complaint_CES_9_2011v2__120315232453.pdf
By not speaking out, the Union Trustees were, essentially, urging the membership to cast a completely uninformed vote on a merger that had not been fully vetted.
Despite the fact that Appendix I of the SAG Constitution set forth the pre-merger steps the National Board of Directors was required to take for the purpose of merger, those steps were not taken, thereby violating ERISA law and Title V of the LMRDA. Demands for specific studies to assess the impact of a merger on member benefits were also ignored.
2012 February 2
AFTRA H&R Trustees issue a statement that such a study needed to be done, the SAG Trustees decided not to do so. http://latimesblogs.latimes.com/entertainmentnewsbuzz/2012/02/aftra-health-pension-plan-trustees-union.html Further underscoring the lack of fiduciary responsibility to the members, the membership was never informed that those necessary steps had not been taken. Instead, Participants were assured that their benefits would be safe without the necessary studies.
2012 March 13
Robert Carlson, the only one of the 18 Trustees representing the Union, speaks out regarding the need for the required due diligence. http://variety.com/2012/film/news/pension-plan-trustee-against-merger-1118051433/
2012 March 26
Robert Carlson is removed as trustee by the SAG National Board. http://www.hollywoodreporter.com/news/sag-pension-health-trustee-removed-304866
Long time SAG P&H CEO, Bruce Dow resigns to become a consultant to the plans! http://www.thewrap.com/bruce-dow-exits-sag-pension-and-health-ceo-37416/
In an article regarding the case, Bruce Dow, former CEO of the Plan is on record as having said that even he did not know what the total loss from embezzlement might be. http://deadline.com/2015/11/nadir-karimi-guilty-sag-pension-health-plans-tax-fraud-1201625699/ However, it is alleged that the amount of Karimi’s embezzlement was far greater than $2 million dollars. Some have indicated that it is somewhere between $5 million and $24 million. Why has a qualified audit never been done, especially after proof of embezzlement?
2015 November 23
A meeting is held as a result of SAG P&H Early Retirees receiving a letter in October informing them that the self-pay program will be discontinued and their health coverage will end 1 January 2016. At this meeting, they are told they “can no longer be afforded”. http://deadline.com/2015/11/sag-health-plan-meeting-early-retirement-1201629301/ It is also revealed that Senior Performers who had been grandfathered into the plan, will have their premiums increased 230% in April 2016.
The stock market is up 200% since the lows of 2009. If our investments are being properly handled, why can’t all participants be afforded?
Several Board Members request another meeting ASAP for the members with David White, the Trustees and the heads of the SAG P&H Plans. Mr. White asks for a list of questions to be posed at the meeting and assures them a meeting will be arranged no later than April 2016.
2016 January 23
NED, DAVID WHITE, DELIVERS ALARMING NEWS TO THE NATIONAL BOARD:
“We were hit with some surprises after merger.” Mr. White and others charged with protecting our best interests have known about these “surprises” for the last 4 years:
- We were lied to by AFTRA prior to merger.
- AFTRA was, in fact, near bankruptcy.
- Had the merger been delayed by even a few months, this devastating information would have come to light.
- The true number of fully paid up AFTRA members was not revealed to SAG members.
How much money did merger cost SAG due to having to shore up AFTRA’s near bankruptcy? Surely, this bail out took a toll on the fiscal health of SAG PP&HP. http://www.hollywoodreporter.com/news/audit-reveals-pre-merger-aftra-624083
David White receives a list of questions to be addressed by the SAG P&H Trustees. Member calls about scheduling the requested meeting are not returned.
2016 April 15 & 16
Letters signed by 65 SAG-AFTRA members (containing much of the same information as is in this petition) and the original list of questions sent to David White are sent to Duncan Crabtree-Ireland, John McGuire, Ray Rodriguez, Bob Bush and every Union Trustee of SAG PP&HP. Several letters are hand delivered to the Plan offices and others are sent via certified mail. There has been no response from any of our Executive Staff or SAG P&H Trustees.
SINCE DECEMBER 2011, EFFORTS AT OBTAINING PERTINENT INFORMATION REGARDING ALL OF THESE ISSUES HAVE BEEN MET WITH RESISTANCE, OBFUSCATION, AND DELAY FROM HIGH LEVEL STAFF AND BOARD MEMBERS.
JOIN US IN DEMANDING THAT AN INDEPENDENT, QUALIFIED (FORENSIC) AUDIT BE PERFORMED IMMEDIATELY ON BOTH THE SAG PP&HP AND THE AFTRA H&R PLAN.
WHAT HAPPENS NEXT IS IN YOUR HANDS.
PLEASE SIGN AND SHARE THIS PETITION DEMANDING TRANSPARENCY AND ACCOUNTABILITY FROM THOSE CHARGED BY LAW TO LOOK OUT FOR THE BEST INTERESTS OF THE PARTICIPANTS OF SAG P&H AND AFTRA H&R.
SAG P&H Union Trustees:
John Carter Brown
John T. McGuire
John H. Sucke
David P. White
SAG P&H Management Trustees:
Eryn M. Doherty
Gary M. Elliott
Robert W. Johnson
Stacy K. Marcus
Alan H. Raphael
John E. Rhone
Samuel P. Wolfson
AFTRA H&R Union Trustees:
Kristen P. Browde
Mathis L. Dunn Jr.
AFTRA H&R Producer Trustees: