AFSCME: Fred Licon Used Money Donated to Union as Personal Slush Fund

Fred Licon

March 23, 2022

AFSCME: Fred Licon Used Money Donated to Union as Personal Slush Fund

By Brian Hews

In June of 2019, Hews Media Group-Community News exclusively obtained a written decision showing that Hawaiian Gardens Local 3624, who’s president was Hawaiian Gardens resident and city employee Fred Licon, was placed under receivership/administratorship after allegations of serious financial fraud and administrative irregularities were levelled against Licon.

Others accused included Frank Amaro, Armando Soto, Luis Polanco, Eric Leon, Claudia Raya-Ortiz, and Luis Gonzales.

Staff Representative Pete Schnaufer leveled the serious allegations of financial fraud against Licon including large amounts of cash that was withdrawn from the union bank account.

Licon told HMG-CN that, “the [International Union’s] audit will exonerate me. This is all political; three union members want to take control.”

Nearly two years later, an audit has proved Schnaufer was correct.

Hews Media Group-Community News has obtained documents from the AFSCME, AFL-CIO audit department that outlines Hawaiian Gardens employee Fred Licon’s massive misuse of AFSCME Local 3624 funds while he was president.

Licon and his cronies tapped money donated to 3624 to spend any way they pleased without transparency or proper reporting.

The review, “revealed concerns about various actions of 3624 that depart from AFSCME’s Financial Standard Code, and concerns about the nature of some of the transactions.

More concerning, 90 percent of the 3624’s revenue stems from donations, which triggers a fiduciary responsibility or “duty” to safeguard the funds; the misuse of trust funds by Licon could catch the attention of the Los Angeles District Attorney’s Public Integrity Division.

The process started with Licon and his buddies shamelessly soliciting donations, telling companies that the money would fund community youth sports, drug education, health fairs, and senior fairs.

But according to the auditors, “the majority of the funds were spent on union activities.”

The investigation found several areas of concern, including unapproved large cash withdrawals, large transfers to personal checking accounts, lack of canceled check reports, and extravagant Christmas parties.

The audit found that Licon wrote checks out of the union fund, payable to him, in the amount of $43,000 between 2014 and 2018; Alfredo Licon cashed another $5,000 check; no canceled checks were saved.

The auditors also stated the checks were paid, “without documenting where the money went.”

AFSCME’s code prohibits personal withdrawals because “they circumvent the policies that expense reports must be submitted and that two officers must sign the disbursement checks.”

The audit also found that Licon’s personal bank account and the 3624’s bank account were at the same bank.

In October and December of 2016, Licon again tapped his personal union piggy bank, initiating an inter-bank transfer of $7,000 for “Christmas raffle and prizes.”

Licon documented the expenses but, “there was no documentation approving the transfers.”

Finally, and most flagrant, the audit found Licon spent the union funds on “extravagant Christmas parties,” for an organization that has only forty members.

From 2012 to 2019, Licon authorized the spending of nearly $96,000 on lavish union holiday parties, averaging an eye-opening $12,000 per event or $300 per union member; funds that were meant for Hawaiian Garden youth and senior programs.

Licon paid himself $73,000 from 2012-2019 for Christmas raffle and prizes, once again not documenting any  expenses.

His buddy Luis Polanco was given a check for $18,000 one year for Christmas raffle and prizes and Luis Gonzales paid $3,000.

Sources are telling HMG-CN that some of the donated money, in violation of several Political Reform Act laws,  went into “certain Hawaiian Gardens City Council camaign coffers.”