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Battle Escalates Over $100 Million-Plus Of SAG-AFTRA Funds

Federal filing shows union's funds soared to $132.3 million

The battle over SAG-AFTRA’s funds held in trust has escalated in the wake of Ed Asner’s lawsuit alleging misconduct over how the union handles over $100 million of such monies.

The long-running firefight, dating back to a 2007 lawsuit filed by “Leave It to Beaver” actor Ken Osmond, received additional fuel via SAG-AFTRA’s LM-2 report filed last week with the U.S. Department of Labor. The report for the fiscal year ended April 30 listed that the “Funds Held in Trust for Others” category totalled $132.26 million.

That’s a substantial increase over the funds listed in last year’s reports from SAG and AFTRA, which merged in March, 2012.  SAG’s fiscal 2012 report listed $100.48 million for the same item while the AFTRA LM2 national report listed a total of $11 million including $7.53 million of funds due to members that the union could not locate.

None of the reports broke down the funds further. A SAG-AFTRA spokesperson said, “The increase in these funds is primarily due to more and larger producer’s deposits received over the last fiscal year.”

That’s prompted a blistering response from the attorney for Asner and 15 other who filed the lawsuit as the United Screen Actors Committee. Sunny Wise told Variety that the lack of disclosure in the LM-2 filing is unacceptable.

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“The sudden increase in monies held in trust by $20 million shows exactly why USAC is seeking transparency in federal court,” Wise said. “USAC was created to try and convince the leadership of SAG-AFTRA that the union must be accountable to its membership.”

SEE ALSO: Ed Asner, 15 Others Sue SAG-AFTRA Over Unpaid Funds (EXCLUSIVE)

The suit, filed on May 24 in federal court in Los Angeles, alleges that SAG-AFTRA has improperly withheld funds and stonewalled requests for information about $110 million held in trust by the union. The suit alleges that the union receives those funds from collected residuals as well as through foreign collecting societies without authorization or knowledge of union members.

SAG-AFTRA has denied any wrongdoing and filed a motion to dismiss the suit on July 31. The motion asserted that the plaintiff lack the standing to litigate the issues. The union, which asked for a hearing on Oct. 7, also asserted that the issues raised by the suit have already been resolved in the 2010 settlement of a class-action lawsuit filed by Osmond.

SEE ALSO: SAG-AFTRA Seeks Dismissal Of Ed Asner Suit Over Unpaid Funds

Wise said that the refusal of the union’s leadership to engage in any dialogue made the federal lawsuit necessary.

“The wrongful withholding of residuals and foreign royalties — and constantly changing reports about what has been received and what has been disbursed if not diverted elsewhere — demonstrates precisely why accountability and a proper and thorough accounting of all funds received by the merged union as well as their predecessors is warranted,” she said. “It is a sad day when a labor organization claims it has the right to do with all monies It collects as it pleases.”

Wise also asserted that USAC believes the actual amount of funds for members that SAG and AFTRA have collected without disclosure is far larger than the $132 million listed in the LM-2.

“Any suggestion that SAG/AFTRA has the right to do with said monies as it pleases, evidences a total disregard for the obligations of a labor organization to remain accountable to its membership,” she added.

In response, SAG-AFTRA General Counsel Duncan Crabtree-Ireland reiterated the union’s position that most of the funds are deposits by producers — but did not disclose specific numbers.

“The majority of funds held in trust relate to production security deposits and residuals reserves – funds that will be returned to producers unless they breach their obligations under SAG-AFTRA collective bargaining agreements,” he said. “The amount of these funds held fluctuates greatly depending on production activity and production budgets. Only a very small portion of these funds relate to foreign royalties, and those funds are only held temporarily while they are allocated and distributed.”

Crabtree-Ireland also defended how the “foreign royalty” funds are distributed, reiterating the position that members would not have received the funds without the union’s efforts.

“Inflammatory rhetoric cannot change the reality that the only foreign royalty-related funds retained by SAG-AFTRA are the board- and court-authorized 10% administrative fee and any interest that may accrue during processing,” he said. “SAG-AFTRA is justifiably proud of its foreign royalties program that has singlehandedly delivered to our members more than $15 million from foreign collections that would otherwise have been lost forever.”

He also said denied that SAG-AFTRA is withholding information and accused the plaintiffs in the Asner suit of being out of step with the rest of the union’s membership.

“As to transparency and disclosure, labor unions like SAG-AFTRA have some of the most extensive and stringent financial disclosure requirements of any organization,” Crabtree-Ireland said. “Members who wish to delve into the financial details of their union have access to more than 450 pages of annual reporting available online from the Department of Labor. SAG-AFTRA members seem to be more than satisfied with the level of detail and transparency these disclosures provide – with the exception of those who are engaged in repeated, unnecessary litigation against their own union.”

 

 

 

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