Labor Juggernatus Takedown Roils Sacramento


Carla Marinucci and Isabella Bloom/Politico California

Labor juggernaut’s takedown roils Sacramento


By Carla Marinucci and Isabella Bloom


THE BUZZ — SEIU SHOCKER: Allegations against one of the state’s biggest power players — the leader of a major labor union — stunned Sacramento Wednesday.

California Attorney General Rob Bonta’s office announced a 13-count complaint alleging that Alma Hernandez, the executive director of the powerhouse 700,000-member Service Employees International Union California and her husband, Jose Moscoso, are guilty of perjury, tax fraud, embezzlement and failure to pay unemployment insurance taxes.

The Sac Bee’s Jeong Park scooped the story. Hernandez, who had held the post since 2016 and was the first Latino to hold the job, resigned immediately.

Bonta’s office charged the union leader and her husband on Oct. 4 in the Sacramento County Superior Court. Also among an eye-opening 49-page litany of charges: grand theft, filing false income tax returns and failing to file them at all and aggravated white-collar crime with a loss greater than $100,000.

WHY IT MATTERS: Hernandez was a regular on the Capitol Weekly’s Top 100 list of biggest influencers. More recently, she was a frontline soldier for SEIU in the fight against Gov. Gavin Newsom’s recall. Unions put up $10 million to fight the recall, and SEIU led the charge with a hefty $6 million check. By vocally backing Newsom, she broke with the SEIU’s new president-elect, Richard Louis Brown, who vowed that Newsom “will not get any help from us” and was “on his own” in beating back the recall. She’s also been a major backer of Insurance Commissioner Ricardo Lara, and was this year honored as a “Badass in Green” by EnviroVoters.

Hernandez had been the focus of an investigation since June 2019, after the state’s Fair Political Practices Commission spotted questionable payments made to her husband, according to the timeline laid out in the court documents. Search warrants were served on their home, businesses and tax preparers’ offices in October 2020, the documents show. Nevertheless, despite the gathering clouds, Hernandez chose not to step down — or even warn of the coming storm, Sacramento insiders note. Wednesday’s news left labor leaders feeling completely blindsided, sources told POLITICO: “Nobody knew this was coming,’’ said one person familiar with the case.

ISN’T IT IRONIC? According to court documents, the investigation was assisted by the Tax Recovery in the Underground Economy task force to “determine if there was any additional fraud” conducted by the couple. They found Moscoso “did not disclose to EDD that he employed multiple individuals to work in his air duct cleaning business, resulting in more than $300,000 in unreported wages.

“The irony — that they got done by the underground economy task force that organized labor pushed for — is rich,” one labor leader told POLITICO. Unions “fight every single day” to “protect workers from that underground economy,” they added. “That was her job. It’s crazy.”

The investigation was years in the making, but Bonta’s bombshell came more than a month after the Sept. 14 recall election. That’s noteworthy because, given Hernandez’s high-profile and generous support of Newsom, these allegations would have been a national story — had they been in the headlines prior to the recall election.

WHAT HAPPENS NOW? The couple, who have two young kids, allegedly owe the state more than $140,000 and could face state prison. Stay tuned.

NO COMMENTHernandez’ sister Mari issued a statement Wednesday saying that Hernandez “doesn’t wish to comment” on the case. But she defended her sister as one who has “devoted her entire working life to the cause of justice and dignity” for working people. “In the end, we know their family will clear their name, and they will both return to raising their children and fighting for the future of our family and community,’’ she said.