Report: Teamsters in Fargo plotted bogus benefit for fake baby
FARGO - The manager of the Teamsters bar and gaming facility in Fargo was fired in 2011 after she objected to a supervisor's suggestion that the bar host a phony charity event for a nonexistent sick infant to boost business.
That is one of the allegations in a report issued by the Independent Review Board, which details suspected corruption by high-ranking officials with the Teamsters Local 120, based in Blaine, Minn.
The Fargo Teamsters Club was shuttered last week when Teamsters President James Hoffa announced the suspensions of Brad Slawson Jr. and his father, Brad Slawson Sr., the president and secretary-treasurer of Local 120, respectively.
The two men are based in the Twin Cities.
Slawson Sr. was part of a ticket that ran against Hoffa in the national Teamsters election last year in a failed attempt to unseat Hoffa as general president.
Teamsters officials stressed that no Fargo members of the union are accused of wrongdoing, and the Local 120 business agents in Fargo remain in place.
Local 120 took control of the Fargo Teamsters Club in 2007, when the Teamsters Local 116 merged into Local 120.
The report issued by the Independent Review Board, a three-member panel established to investigate allegations of corruption within the Teamsters union, is posted on a website maintained by Teamsters for a Democratic Union, an independent organization that pushes for reforms in the Teamsters union.
According to the IRB report:
Shortly after the 2010 retirement of Dean Cypher as the bar and gaming board president in Fargo, Brad Slawson Sr. made himself and his son Brad Slawson Jr. top officers of the Teamster Club's bar and gaming board.
Their monthly salaries were set at $1,500 and $1,300, respectively.
The IRB report said that between March 2007 and August 2012, Brad Slawson Sr. received a total of $68,100 over and above his normal salary, with the extra money coming from bar and gaming revenue.
His son received $72,700 above his normal salary from bar and gaming funds, even though Local 120 members never were told about the stipends, the report said.
"By diverting these revenues to themselves, the bar and gaming board members left the operations with insufficient revenues to cover costs," the IRB report said.
As a result, the report added, the Local had to use money from the general fund to pay the bar and gaming operations' expenses such as taxes, equipment purchases and salaries.
The IRB report stated that in March 2010, Brad Slawson Sr. hired Todd Chester, a family friend, as a part-time consultant for the Teamsters Club in Fargo.
Chester later became a part-time employee. Unlike the full-time bar employees, Chester received health insurance benefits.
The IRB report said that, based on information from former employees, Chester at one point suggested the bar run a fake benefit for a nonexistent sick baby or other false cause to generate more sales.
The bar's manager at the time, LeAnn Krebsbach, objected to the idea and was fired shortly thereafter, the report said.
Reached by phone, Krebs-bach declined to talk about her time at the Teamsters Club.
Another bar employee who objected to the phony charity plan told IRB investigators that Brad Slawson Jr. initially supported Chester's suggestion before agreeing with others that it could not be done, the IRB report said.
During the 18 months Chester was employed at the Teamsters Club, revenue at the bar was inexplicably low, according to the IRB report.
"The conclusion is that inventory was being diverted from the bar's operations," the IRB report stated, adding that Chester, "as a bankrupt bar owner" with control over the Teamsters Club's stock of beer and liquor, had both the means and motive to remove inventory.
The IRB report said a claim by Chester that inventory was returned to wholesalers for credit was found to be untrue and appeared to be a cover story for the missing inventory.
The IRB report showed that for 2010 and 2011, there was a difference of $235,761 between the projected value of the inventory used by the bar compared with the amount of money actually taken in by the bar based on reported sales.
A message left at a Twin Cities area phone listing for Chester was not returned.
Messages left for Brad Slawson Jr., Brad Slawson Sr., and Martin Costello, who has served as general counsel for Local 120, were not returned.
Bret Caldwell, director of communications for the national Teamsters union, said the Local 210 has been placed in trusteeship and the Slawsons have been placed on leave of absence pending a hearing before a panel that ultimately will decide whether the trusteeship should continue.
The closing of the Fargo Teamsters lounge, which could be permanent, saddens Cypher.
"I put 18 years of my life into that place, and to see what happened in two short years, it hurts. There's a lot of good people that worked there," Cypher said.
During Cypher's years at the Teamsters Club, the lounge hosted an annual karaoke contest and fundraiser for the Make-A-Wish Foundation.
Cypher's rough estimate is that more than $300,000 was raised for the charity.
"That particular fundraiser was always near and dear my heart," Cypher said. "It's just so sad something like this could happen in that short a time."