WASHINGTON – The U.S. Department of Labor filed suit on Aug. 28against the trustees of seven union-sponsored pension and healthplans for imprudently investing plan assets in risky privateplacement investments with Capital Consultants LLC, which resultedin substantial losses to more than 19,000 workers. According to arepresentative from court-appointed receiver Thomas Lennon'soffice, credit unions were not among the clients that sufferedlosses, but the Credit Union Association of Oregon (CUAO) has beenwatching the developments because the now-defunct CCL was based inPortland. “I have been following this situation with some interestand am not aware of any direct impact on any of our credit unions,”said Gene Poitras, president of CUAO. “Indirectly, I'm certain thatmembers of some union credit unions were impacted by this.” Poitrassaid the association might consider “polling union-related creditunions for individual stories and what, if anything, they did tohelp their members.” CCL was a registered investment manager thatprovided investment services to more than 60 primarilyunion-sponsored pension, health and welfare plan clients governedby federal employee benefits law. In 2000, the Dept. of Labor andthe Securities and Exchange Commission sued CCL and its principalsfor investing plan assets in a series of “imprudent loans,self-dealing and charging excessive fees.” In April 2002, thedepartment sued trustees of 10 union plans – mostly on the Westcoast – for similar violations. As a result of the department'sactions, the court appointed a receiver who has collected more than$140 million in addition to $110 million obtained through privatelitigation. The company ceased operations in September 2000 amidcharges by federal regulators that it was running a Ponzi-typescheme. The company allegedly invested pension and other funds inhigh-risk private placements and then covered up losses from theseinvestments with new investment funds. Hundreds of union pensionplans, trusts and private investors handed over more than $500million to Capital Consultants for investment over three decades,according to the SEC. In a statement, Secretary of Labor ElaineChao said the department is “is suing on behalf of these workers torecover as much as possible for the plans and to establish newprocedures and controls to ensure that workers' pension and healthplans will not be raided again.” [email protected]