LOCAL 500 PROBE: Copeland received back pay from union

Article published Tuesday, March 14, 2006

LOCAL 500 PROBE
Copeland received back pay from union
Official denies link to paying tax debts

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Laborers Local 500 paid Toledo City Councilman Phil Copeland, the union’s secretary-treasurer, more than $35,000 in deferred raises last October, including the check above. Mr. Copeland said the decision to accept the back pay was not directly related to a $63,000 tax bill he settled days later.

By JIM TANKERSLEY and JOSHUA BOAK
BLADE STAFF WRITERS

Toledo City Councilman Phil Copeland waited 15 months to collect $35,000 in back salary from Laborers' Local 500 - a day before he began to repay $63,000 in back taxes.

The Oct. 18 payment from the union to Mr. Copeland, its secretary-treasurer, totaled $27,288 after taxes were withheld. The next day he sent the state attorney general a $5,500 check - dated five days earlier - to settle unpaid taxes from as far back as 1983.

Days later he paid the Internal Revenue Service more than $57,000 to resolve a similar debt.

The laborers union's payment to Mr. Copeland drew suspicion from federal agents investigating Local 500's finances for possible criminal spending, a union attorney said last week.

Union leaders said they paid Mr. Copeland money he earned between 2002 and 2004 but chose to defer, interest-free, to help Local 500 weather hard times.

Mr. Copeland, a Democratic candidate for Lucas County commissioner, defended the union payment yesterday and said the timing of the check was not directly related to the taxes he owed from a failed business venture.

"That wasn't a calculation to do that with anything to do with my taxes," Mr. Copeland said. "But let's be realistic. A lot of money was going out. So what I did at that time, I just said, that money was mine, so I just got my money. It was as simple as that," he said.

Later, he added: "I was going to pay those taxes whether the money was going to come through or not ... I was waiting on the IRS."

The U.S. Department of Labor began investigating last August whether Local 500 allowed members to use union funds for personal entertainment.

Local 500 provides construction workers for contractors in the area.

Union officials said last week the investigation included members' rafting trips at union expense, along with spending by Mr. Copeland, union business manager Steven Thomas, and others.

Local 500 tightened reimbursement policies late last year and banned the use of union funds for "entertainment expenditures," which Mr. Thomas has said include rafting and time spent at strip clubs.

Mr. Copeland said the results of the investigation will absolve him of wrongdoing.

Documents released by Mr. Copeland's advisers yesterday and last month - at Mr. Copeland's campaign kickoff - show the chronology of payments from the union to Mr. Copeland and from him to the government.

Between November, 2002, and July, 2004, the documents show, Mr. Copeland gave up $35,383 in scheduled raises. That includes more than $10,000 in 2004, when Mr. Copeland made just under $114,000 but was scheduled to receive about $124,000.

If Mr. Copeland had received the full amount, he would have grossed an 85 percent raise from 2000 to 2004. Instead, his salary increased by 69 percent at a time when the union was running operating deficits.

Mr. Copeland said he intended to take the extra money eventually but deferred it, without interest, because the union was "having hard times at the time, and I didn't need it."

Two decades of unpaid tax bills pushed government officials to file liens against Mr. Copeland as recently as 2002.

He paid the bills and shed the liens last October after The Blade reported the back taxes while he was running for an at-large council seat.

Mr. Copeland said personal savings and loans from individuals, whom he declined to name, helped him reconcile with the government.

Federal investigators discussed the October, 2005, payment from the laborers' union to Mr. Copeland with a union attorney last month, according to the attorney, Joseph Allotta.

The Blade first reported the labor department investigation on Sunday, after union officials locally and nationally confirmed it. Mr. Copeland's advisers, however, knew of its existence late last year, an internal campaign e-mail obtained by the newspaper shows.

The investigation was "nothing we didn't know about in December," one of Mr. Copeland's consultants, B.J. Fischer, wrote to colleagues after Mr. Copeland first discussed it with The Blade earlier this month. "However, its (sic) clearly not going to be a good story."

Mr. Fischer - who verified the e-mail's authenticity yesterday - wrote the political effects of the investigation likely depended on when the labor department reports its findings.

"If it shows problems and is released in late April, that's an issue. If it is clean, then the timing matters as well," he said.

"Obviously," he concluded, "thoughts are appreciated."

Contact Jim Tankersley at:
jtankersley@theblade.com
or 419-724-6134.