Rocky Mountain News
Pension Trustees Lost $20 Million, Suit Claims
April 18, 2001
Members of Denver's sheet metal workers union filed a class action lawsuit against the trustees of their union retirement plan Tuesday, blaming them for investment losses of more than $20 million.
The suit alleges as much as a quarter of the union's $100 million pension fund was placed in a high-risk loan portfolio managed by a Portland investment house that is now in bankruptcy.
Norbert Piet and Samual Duran, retired members of the Sheet Metal Workers Local 9, accuse eight trustees of investing the pension's assets imprudently and failing to adequately investigate the money management firm, Capital Consultants LLC.
The workers filing the suit hope to recover all of the pension's losses, and want the trustees replaced.
The Rocky Mountain News reported Saturday that at least eight union officials from Local 9 and the International Brotherhood of Electrical Workers accepted guided fishing and hunting trips from Capital while serving on various Colorado based pension and benefit plans.
Union management officials didn't return phone calls Tuesday. Walter Brauer, the union's Denver attorney, said he had not seen the lawsuit. "If you are asking who is on the hook for what . . . or how much the sheet metal pension trust invested, my answer is no comment," Brauer said.
Attorney Daniel Feinberg, whose Oakland, Calif., law firm initiated the suit, said the losses put the entire pension fund in jeopardy, and may require reducing monthly retirement payments benefits to current retirees. The Denver sheet metal union has 1,600 members.
"We believe they've lost a quarter of their plan's assets, and that has the potential to endanger people's benefits," Feinberg said.
The complaint further alleges that some trustees were influenced to retain Capital Consultants by "gifts" they received from the firm.
Three of the defendants in the class action complaint – John Lontine, Mike Salazar and Dale Swartz -- accompanied Capital consultants salesman Dean Kirkland to Sitka, Alaska, in July 1998, records show. Lontine's ex-wife says Kirkland also reimbursed the couple $2,200 for Denver Broncos season tickets.
Feinberg said his law firm is investigating whether other Local 9 trustees went on Capital-sponsored hunting excursions or accepted free tickets to professional sporting events.
Members of four other unions -- including Local 68 of the Denver electrician's union -- have filed class action lawsuits against the trustees of their funds, accusing them of recklessly investing money with Capital Consultants.
Contact John Accola at (303) 892-2666 or accolaj@RockyMountainNews.com.