By Michael E. Miller
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Yet back in the mid-Eighties, Elizabeth du Fresne, a labor attorney and close Tornillo friend, was so worried about Tornillo's financial security that she began paying $500 per month into an annuity for the little tough guy who'd helped launch her legal career. "He'd had a divorce in the Seventies in which he basically gave everything to his wife," recalls du Fresne, who is now retired. "I established an annuity in the Eighties because I was deeply concerned that Tornillo didn't have a plan for the future. I was scared at that stage what he and [current wife] Donna would do when he retired."
At the time, du Fresne certainly didn't expect Tornillo (now 77 years old) to hang on to his job for another twenty years, or that his otherwise impressive four-decade legacy would be eclipsed by the sight of federal agents carting all those boxes of financial records out of United Teachers of Dade headquarters. Nor did she know then that Tornillo's connections to high-profile lobbyists (such as Eric "Ric" Sisser and before him the legendary Steve Ross) and his manipulation of school-district insurance contracts that benefited their clients would eventually stink so badly even the olfactory-challenged school board would have to take note.
Du Fresne, who served as long-time legal counsel to the union, was instrumental in setting up one of those insurance deals for teachers, a prepaid plan that gives employees who choose it access to inexpensive legal advice. Essentially only one company has had the contract since its inception in 1981 (the original company, Midwest Legal Services, was bought in 1989 by ARAG Group). With 11,724 employees enrolled in the program as of this past May, that contract is worth an estimated $2.43 million to ARAG Group in 2003 alone.
Which is one reason the feds may want to learn more about why du Fresne for years was earning several thousand dollars per month as a consultant to the insurance company, at roughly the same time she was giving Tornillo $500 monthly toward his retirement. According to du Fresne's ex-husband and former law partner William du Fresne, the arrangement was a bit strange. He made that observation in a 1998 deposition taken during a lawsuit over an unrelated business matter. William du Fresne was suing attorney Teresa Pooler, claiming she owed him about $9000 for assuming maintenance of Midwest Legal Services' prepaid hotline when he retired and moved to New Mexico in 1995.
During the deposition, du Fresne was asked by Pooler's attorney, Scott Bernstein, to clarify how Midwest paid his firm, Du Fresne and Bradley, for the services it provided. He replied that handling the Midwest contract was worth about $12,000 to $14,000 per month to his firm in 1995. Bernstein then asked du Fresne whether he passed any of the money from Midwest to third parties. Du Fresne noted that although the money earned from the contract stayed in his firm, he did distribute "other funds" sent by Midwest.
Bernstein: "What other funds were they?"
Du Fresne: "Midwest paid a monthly fee to my former partner Elizabeth du Fresne. Elizabeth was the main -- Elizabeth and Pat Tornillo, who is the executive vice president of UTD, they were the main reason that when the Dade County school board decided to implement an insurance policy, a group insurance policy for their employees, that Midwest was chosen. There were other candidates, and so as an administrative fee, they sent to my office monies for Elizabeth each month."
Bernstein: "Did they also send money for Pat Tornillo?"
Du Fresne: "Yes."
Du Fresne went on to say that his ex-wife received $3666.67 each month.
Bernstein: "And how much went to Pat Tornillo?"
Du Fresne: "I think he got $500. And it's mostly because in addition to the United Teachers of Dade, Pat Tornillo was the leader of the statewide branch of the American Federation of Teachers, and in that capacity he was able to recede [sic] into other school districts and they adopted Midwest...."
Bernstein: "Did Elizabeth du Fresne provide any legal services for Midwest?"
Du Fresne: "Yes. Well, she advised them. If they had a problem or whatever, she would advise them." (He went on to explain that his ex-wife was counsel to both UTD and Midwest, even after leaving his firm to join Steel Hector & Davis. The monthly $3666 was her fee from Midwest.)
Bernstein persisted in his puzzlement: "But approximately $44,000 a year was sent to Elizabeth du Fresne by Midwest, and it was funneled through your law firm, even though she was no longer an employee of your law firm. Is that what you're telling me?"
Du Fresne confirmed this. When Bernstein asked him if he'd claimed the money as business income, he said he did not since he simply deposited the check "in trust with respect to Elizabeth and Pat." Bernstein's question echoed one asked by his client Teresa Pooler in December 1995, after she took over the Midwest contract. In a letter to du Fresne in New Mexico, Pooler asked, "How did you handle the payouts to Elizabeth and Tornillo for tax purposes? Do I need to send them a W-something form?"