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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ---O0O---

4 SERVICE EMPLOYEES INTERNATIONAL UNION, et al., 5 Plaintiffs, 6 vs. 7 SAL ROSELLI, et al., 8 Defendants. 9 ________________________________/ 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

No. C 09-00404-WHA

DEPOSITION OF JIM PHILLIOU

Taken before JEANNIE M. CHIMPKY CSR No. 12742 December 11, 2009

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INDEX PAGE 4, 208 205

3 EXAMINATION BY MR. HABERFELD 4 EXAMINATION BY MR. DAYAN 5 6 7 8 DEFENDANTS' 9 853 10 854 11 12 855 13 856 14 15 857 16 858 17 18 859 19 860 20 21 861 22 23 24 25 Aiken Welch Court Reporters J. Philliou Plaintiffs' Third Electronic Production Privilege Log E-mail from Jim Philliou to Kirk Adams dated October 14, 2008 Transcript of Proceedings taken on November 15, 2008 Plaintiff's Paper Productio Privilege Log Plaintiff's Answers Under Oath to Court-Ordered Interrogatories Letter to Jim Philliou from John Vellardita dated July 4, 2008 E-mail from Kirk Adams dated January 27, 2009 E-mail from Mary Kay Henry dated December 29, 2008 E-mail from Kirk Adams dated January 9, 2009 EXHIBITS

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DEPOSITION OF JIM PHILLIOU BE IT REMEMBERED, that pursuant to Notice, and

3 on the 11th day of December 2009, commencing at the 4 hour of 9:30 a.m., in the offices of Siegel & Yee, 5 499 14th Street, Suite 200, Oakland, California, before 6 me, JEANNIE M. CHIMPKY, a Certified Shorthand Reporter, 7 personally appeared JIM PHILLIOU, produced as a witness 8 in said action, and being by me first duly sworn, was 9 thereupon examined as a witness in said cause. 10 11 12 13 APPEARANCES: 14 For the Plaintiffs: 15 16 17 For the Defendants: 18 19 20 21 22 23 24 25 PETER HABERFELD Siegel & Yee 499 14th Street, Suite 200 Oakland, California 94612 ALSO PRESENT: Fred Seavey. LEON DAYAN Bredhoff & Kaiser, P.L.L.C. 805 Fifteenth Street, NW Washington, D.C. 20005 ---o0o---

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1 Mark Kipfer, Marti Garza, Kadesha Kaba (phonetic), 2 Gabe Kristal, they would be the ones who would have the 3 historical memory and they made no effort to share that 4 with trusteeship as far as I know. 5 Q. You already testified about what you know to be

6 the effort that the trustees made to converse with them 7 after the imposition of trusteeship; right? 8 9 A. Correct. Q. During the UHW trusteeship hearing, you

10 testified that in 2001 you reported to SEIU officials 11 your concerns about possible financial problems that 12 SEIU local 6434 related to the locals contracts with 13 vendors, did you not? 14 MR. DAYAN: Objection. Object to form. If you

15 have the testimony, you can show it to him. I don't 16 think you're accurately characterizing the testimony. 17 MR. HABERFELD: I'd like this to be marked as

18 Exhibit 857. 19 20 21 THE COURT REPORTER: 858. (Defendants' Exhibit No. 858 marked for Identification.)

22 BY MR. HABERFELD: 23 Q. So did you not say in that transcript or in

24 that hearing that you had concerns about possible 25 corruption at SEIU Local 6434 related to the local's

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1 contracts with its vendors? 2 MR. DAYAN: Objection. Misstates the

3 testimony, but go ahead. 4 THE WITNESS: No. Clearly did not have

5 concerns about corruption. 6 BY MR. HABERFELD: 7 Q. Did you have concerns about the vendor

8 contracts? 9 10 A. Yes. Q. Did you have concerns that the amounts of money

11 charged by the vendors were perhaps a little out of 12 proportion with what they should have been, a little 13 excessive? 14 A. My concern was some of those expenditures were

15 questionably high. 16 Q. And you told Ms. Sheila Velasco about your

17 concerns? 18 19 20 A. Correct. Q. What was her position within the International? A. She was the chief of staff for the western

21 region. 22 Q. So when in 2001 did you report your concerns to

23 Ms. Velasco? Do you have a recollection? 24 25 A. It was April or May. Q. How do you know that? How do you recall the

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1 month? 2 A. Because it was around the time of a

3 jurisdictional hearing in Los Angeles where the 4 healthcare locals gave testimony about future 5 organizing, and I recall it around that time, which is 6 the end of April. 7 Q. Did you -- how much earlier did it come to your

8 attention that vendors were charging more money than 9 you thought appropriate at Local 6434? 10 11 A. It was in April. Q. So you became aware of it in April and you

12 communicated that to Ms. Velasco in the same month? 13 14 A. Correct. Q. Ms. Velasco was working under the direction of

15 Eliseo Medina at the time; is that correct? 16 17 A. That's right. Q. Did you ever have conversations with Eliseo

18 about the same concern? 19 20 A. No. Q. Did you have conversations with anybody else

21 who was working with SEIU International staff about 22 those concerns? 23 24 25 A. David Kieffer, K-i-e-f-f-e-r. Q. Two Fs? A. Correct.

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Q. What was David Kieffer's position within the

2 SEIU hierarchy? 3 4 A. At that time he was the nursing home director. Q. What, if anything, did Ms. Velasco say to you

5 when you expressed those concerns? 6 A. I requested that I no longer be assigned to

7 cosign the checks at 434B, and she agreed to remove me 8 from that assignment. And she indicated that there 9 would be some type of audit of the local that I didn't 10 need to see as part of my assignment. It was going to 11 be done by the auditors. 12 13 14 15 16 Q. Do you know whether that audit took place? A. I don't know firsthand. Q. You don't know? A. I don't have any firsthand knowledge. Q. Did anybody tell you the audit had been

17 conducted? 18 19 A. David Kieffer. Q. And what, if anything, did Dave Kieffer say to

20 you in response to your concerns when you first 21 approached him about what was going on at 6434? 22 A. He told me later that there had been some type

23 of audit and the expenditures were, quote, 24 "questionable but legal," end quote. 25 Q. When you first spoke with Mr. Kieffer -- Strike

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1 that. 2 When did you first speak with Mr. Kieffer? You

3 mentioned that you spoke first with Ms. Velasco in 4 April or May of 2001. When did you speak with 5 Mr. Kieffer? 6 A. Later than that, because I recall we were off

7 of the jurisdictional hearing. The nursing home 8 workers in Southern California were transferred to 9 434B, so he was assigned to work with me. He was 10 actually assigned to that transition. 11 Q. Why were you cosigning checks for 6434 prior to

12 your conversation with Ms. Velasco? 13 A. The local at that point was a provisional

14 local. It was receiving a heavy organizing subsidy 15 International union. I was assigned to keep track of 16 the expenditures of the subsidy. 17 Q. Do you recall in 2001 Mr. Freeman's relatives

18 were working for vendors of 6434? 19 20 MR. DAYAN: Objection to form. THE WITNESS: I had no knowledge that any of

21 Freeman's relatives were in any of the vendor 22 contracts. 23 BY MR. HABERFELD: 24 Q. Do you recall whether one of the vendors was

25 called the Carmen Planeels Family Childcare business

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1 that -- was that one of the vendors that you noted as 2 you became suspicious that some of the charges were 3 excessive? 4 5 MR. DAYAN: Objection to form. THE WITNESS: I don't recall the name. I just

6 recall the amounts. 7 BY MR. HABERFELD: 8 Q. Do you recall the name Lotus 7 Productions,

9 Inc.? 10 11 A. No. Q. Did you ever receive reports from staff members

12 of 6434 regarding their concerns -- regarding any 13 concerns they might have had about possible financial 14 misdealings at Local 6434? 15 MR. DAYAN: Could you repeat it.

16 BY MR. HABERFELD: 17 Q. Did you ever receive reports from staff members

18 of Local 6434 regarding any possible concerns of theirs 19 about possible financial corruption at Local 6434? 20 21 A. No. Q. To your knowledge did any other staff person

22 with SEIU International receive reports concerning 23 possible financial corruption at 6434? 24 MR. DAYAN: Objection to form. Go ahead. You

25 can answer.

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A. SEIU staff assigned to Michigan, then to SEIU

2 healthcare Michigan. 3 Q. When you asked to have your assignment changed

4 so you would no longer have to cosign checks with 5 Mr. Freeman -- I forget. Where was it that you were 6 assigned after that? 7 8 MR. DAYAN: You can answer. THE WITNESS: My assignment didn't change.

9 That particular assignment was at my request removed 10 from me, but I was still the western regional 11 organizing director. 12 BY MR. HABERFELD: 13 14 15 Q. But that job duty was removed from you? A. Correct. Q. Why did you ask that it be removed from your

16 responsibilities? 17 A. Because I felt like I was representing the

18 International union and if I signed my name to 19 something, I had to believe it was a justifiable 20 expense of the members' money. And if I didn't believe 21 that, I could not sign my name. 22 Q. Do you know who it was who took over the

23 responsibility after you no longer performed it of 24 cosigning checks with Mr. Freeman? 25 A. No one.

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Q. So the SEIU no longer had somebody representing

2 it cosign those checks? 3 A. At that point the local became more

4 self-sufficient economically and it was agreed they 5 would simply have to function like any other local. 6 Q. Can you explain more what it is that you mean

7 by "justifiable expenses"? I'm going to withdraw the 8 question to give you a little indication of where I'm 9 going. 10 You indicated that you had reservations about

11 some of the expenditures that were being made by 12 Mr. Freeman; is that right? 13 14 A. Correct. Q. You said that because of those reservations,

15 you asked that your supervisor no longer require you to 16 cosign those checks? 17 18 A. Correct. Q. You said also that there was something about

19 the amounts of the checks that you regarded as -- that 20 caused you to question the legitimacy of the charges 21 that were being made by vendors; is that right? 22 MR. DAYAN: Objection. I think that misstates

23 the testimony. 24 BY MR. HABERFELD: 25 Q. If I'm mistaking your testimony, could you

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1 correct it please. 2 A. The size of the -- some of the expenditures

3 seemed unduly large to me and I could not justify 4 putting my name on those checks as being in the 5 members' best interest. 6 Q. Were you aware of what the checks were charging

7 the local for what kind of services that were being 8 paid for? 9 A. I saw Excel spreadsheets with description of

10 the payments, then that's when I asked. 11 Q. When you say you they were "unduly large,"

12 "unduly" meaning that they were unjustifiably large? 13 14 A. Questionable. Q. That they were -- that the vendors were

15 charging the local for more than what the vendors were 16 providing to the local? 17 A. It seemed like the charges to the local were

18 larger than should have been given what I knew about 19 the activities of the local. 20 Q. Do you recall what services were being provided

21 and being charged in amounts that you considered 22 unjustifiable? 23 24 25 MR. DAYAN: You can answer. THE WITNESS: Mostly the lawyers. MR. DAYAN: Now, you can't answer. Conflict of

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1 interest on my part. I'm just joking around. 2 THE WITNESS: Lawyers communications and

3 childcare. 4 BY MR. HABERFELD: 5 Q. Who was getting childcare in the local? What

6 kind of operation was that? Can you describe it? 7 A. When I asked for information, I was told that

8 the local was purchasing slots in the childcare center 9 and that those slots were for use by home care members 10 who were training to upgrade to certified nurse 11 assistant. This childcare program was to subsidize 12 their childcare so they could train for upgrading. 13 Q. What about communications; can you be more

14 specific about what those charges were for? 15 A. I don't remember the specifics on that one. I

16 just know they seemed large. 17 Q. We don't ask about the lawyers' fees because we

18 understand they're all unjustifiably high. 19 20 A. Right. Q. Do you recall the SEIU's 2006 California

21 jurisdictional hearings? 22 23 24 25 A. No. I wasn't involved in that. Q. You didn't attend? A. No. Q. Did you at any time personally recommend that

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A. No. Not on a regular basis, no. Q. When we talked earlier about your having given

3 information to Sheila Velasco in 2001 -- April, May of 4 2001 concerning your discomfort about continuing to 5 sign or cosign checks on the 6434 account, you also 6 said that you spoke with Dave Kieffer. In what month 7 did you speak with Dave Kieffer? 8 9 10 11 A. I recall to be in the summer. Q. Summer 2001? A. Correct. MR. HABERFELD: I'd like to have this marked as

12 our exhibit next in order which I believe is 861. 13 14 (Defendants' Exhibit No. 861 marked for Identification.)

15 BY MR. HABERFELD: 16 Q. For the record, this is an e-mail -- or two

17 e-mails. The top one is from Phil -- Jim Philliou sent 18 October 14th, 2008 to Kirk Adams, and the subject is 19 "Regarding meeting on California work plan." And it's 20 a copy of an e-mail that was sent by Kirk Adams to 21 Eliseo Medina, Gerald Hudson and Dave Regan. 22 23 24 25 A. Right. Q. Do you recall receiving this e-mail? A. Yes. Q. In the first main paragraph -Aiken Welch Court Reporters J. Philliou 12-11-09