October 26, 2010
CUSA Trial Update from CCPOA
Dear Member,
As you may already know, a jury recently ruled that CCPOA and a group named Corrections USA must pay $12.5 million in damages to two former employees of Corrections USA.
This case was brought against our union in January 2007 for events that occurred in mid-2006.
Due to a protective order issued by the court, we were prevented from communicating in detail about this case during the trial. With the trial now concluded, and our decision to appeal the ruling, we will do our best to explain the case and answer your questions.
Our first priority is to clarify what happened:
Corrections USA is a national non-profit formed in 1998 to represent and advocate on behalf of the interests of publicly employed correctional officers across the nation and fight against the privatization of prisons.
With the approval of the State Board, CCPOA became the first organizational member of Corrections USA and continues to be the largest member of the group.
In mid-2006, following some questionable financial transactions involving Corrections USA President Richard Loud, and Executive Director and Treasurer Brian Dawe, Corrections USA’s Board of Directors began requesting that the two turn over all financial books and records from Corrections USA for inspection. The two paid employees resisted responding to these requests.
In August 2006, Corrections USA’s Board of Directors, including CCPOA President Mike Jimenez, voted to suspend, without pay, Loud and Dawe from their positions as President and Treasurer pending further investigation. The two were also again directed to deliver financial and associated Corrections USA records for an independent audit. Still, Loud and Dawe continued to resist providing the requested information to Corrections USA’s Board of Directors.
In late 2006, Corrections USA asked a court to compel Loud and Dawe to permit an independent inspection of the records that they repeatedly had refused to provide to Correction USA’s Board. In January 2007, Dawe responded by filing a lawsuit against Corrections USA, CCPOA, Joe Baumann and Jim Baiardi. (Baumann and Baiardi were named in their capacity as officers and board members of Corrections USA.)
CCPOA has been defending itself against the suit since 2007. On October 18th, 2010 a jury found the union liable for $2.3 in initial damages and later added $10.1 million in punitive damages.
Some important facts:
• CCPOA did not file this lawsuit. We were sued and responded with an aggressive defense.
• The case is not over. We will file an appeal and have every confidence the case will be overturned. If there are any damages, those will not need to be paid until the appeal is complete – probably years from now.
• The union is not bankrupt. Our most important priority is to continue representing our members and getting a contract. We have gotten very close to a contract agreement with the current administration, are hopeful we can finalize a deal with the next administration. While losing this suit would be damaging, it will not stop us from delivering that contract and continuing to represent members.
As this case continues to move forward, we will do our best to keep you apprised of new developments.
There are a lot of rumors out there and, when left without response, the worst and least truthful often rise to the top. We will do our best to keep delivering the facts and keep you informed.
