SAG Health & Pension Plan Fund Scandal: Hundreds Sign Petition For Impartial Probe

EXCLUSIVE: An ad hoc group of SAG members describing itself as “sick and tired of the corruption” last week hand delivered this letter of protest to the Screen Actors Guild’s Board Of Trustees, including SAG National Executive Director David White and senior legal counsel Duncan Crabtree-Ireland. It is now a petition with hundreds of SAG member signatures. I’ve said it before and I’ll say it again: with the SAG/AFTRA merger on the horizon, the SAG board needs to put an end to the increasing lack of transparency surrounding all its meetings and activities:

December 11, 2011
The Board of Trustees

Dear Board of Trustees of SAG – PPHP

We come to you as deeply concerned SAG members with a vested interest in our Health and Pension Plans. We want you to know that just because we have been sitting on the sidelines, it doesn’t mean we have not been paying attention.

Superficial Investigation

• First, in just the last two months, it has come to our attention that an “independent investigator,” attorney Nancy Solomon, was hired by the Plans to investigate unlawful activity by Mr. Bruce Dow, CEO of SAG-PPHP. These alleged wrongdoings were cited by former Executive Director of HR/Payroll at SAG-PPHP, Mr. Craig E. Simmons.

We put the term “independent investigator” in quotes because we have concerns about just how independent Ms. Solomon’s investigation was.

It is our understanding that Ms. Solomon is not only a friend of Mr. David White (SAG National Executive Director) but also a past associate of Mr. White’s at the law firm of O’Melveny and Myers LLP. Due to these close associations, we have serious concerns that Ms. Solomon’s objectivity and due diligence may have been compromised, resulting in the cherry-picking of certain people to interview while overlooking others who may not have been as supportive of Mr. Dow.

Ms. Solomon presented her report to the Trustees. We have been informed that her findings confirmed some of Mr. Simmons’ allegations. Likewise we’ve been told the report made several recommendations, including that Mr. Dow and his wife, Mrs. Sharman Dow, pay back some tens of thousands of dollars in unauthorized moving expenses.

Merely returning the money is not sufficient to right this wrong. At what threshold of wrongdoing is punitive action taken?

We strongly feel that someone who had no relationship whatsoever with any of the players involved in this case should have been hired to conduct this investigation.

• Second, in a complaint filed with SAG-PPHP on August 23, 2011, and reported in the business section of the Los Angeles Times on September 16th, 2011 Mr. Simmons alleges that Nader Karimi, who was Chief Information Officer with SAG-PPHP, was involved in a 5 to 10 million dollar embezzlement of the plans’ funds.

An article in the Los Angeles Times on October 17, 2011 reports that the courts approved an insurance payment of $2.5 million to the Plans to compensate for a kickback scheme orchestrated by Mr. Karimi.

This insurance settlement implies that SOME millions of dollars were errantly spent. Did the 2.5 million dollar insurance settlement approved by the courts restore to the Plan half of 5 million dollars or one quarter of 10 million dollars? The LA Times reported that Mr. Karimi left his post in 2009 and reached a settlement with the Plans for “an undisclosed amount.” Why are we, the owners of the plan, just hearing about this now? And by the way, does “settlement” mean that we paid him or that he paid us?

And why is it that we are learning about it only because further allegations of mismanagement are being leveled against the fund?

Fiduciary Responsibility of the Plans’ Board of Trustees

Your fiduciary responsibility is to protect this fund which, after all, is the members’ money. We feel you have not properly addressed these wrongs nor have you been forthright in communicating with us, the owners of the funds, about these issues. For example, has Mr. Dow made restitution to us? Is SAG prosecuting Mr. Dow or Mr. Karimi? We are hearing nothing about what is being done to address or shine light on these issues. From out here it looks as though you are not exercising your fiduciary duties as trustees.

Why was this not reported to the members? Why are we actors, the owners of the fund, forced to come to you to find out what is going on with our money? Not one word to any of us? A friend being hired to investigate the colleague of a friend? Why the silence? Why does the fox guarding the hen house come to mind?

Thousands of members rely on this pension fund. It’s your job to watch out for us! You can’t argue that tens of thousands of dollars of inappropriate expenses are clerical errors – such behavior is a huge error of judgment. Use of the Plans’ funds for Mr. Dow’s personal use is an ERISA violation. #

Why are you not aggressively addressing these wrongs and keeping us informed?

As fellow actors, you also have a vested interest in the plan’s health. As our Trustees, you have a fiduciary responsibility for its wellbeing.

Action Item

From the Web Pages of the United States Department of Labor:
Employees participating in retirement and health benefit plans are granted several important rights by the Employee Retirement Income Security Act (ERISA). Among them is the right to: disclosure of important plan information…

We firmly believe some very important plan information has not been disclosed.

As our trustees, you need to stand up now for all SAG members, commission a truly independent and in-depth investigation, hire a qualified outsider to review all of the records and interview all of the witnesses and get to the bottom of these very disturbing findings and allegations. The expense of any such investigation would pale in comparison to the losses our Pension and Health Plans may have already suffered or may suffer if you do not act. In this time of possible transition, it is more important than ever. We expect to hear from you immediately with answers to our questions.

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