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Thursday, August 13, 2015

FBI: Marijuana Union Organizer Took Bribes, Rigged Process

Posted By on Thu, Aug 13, 2015 at 10:46 AM

click to enlarge Dan Rush, union organizer, indicted on federal charges. - MICHAEL ARES/SF WEEKLY
  • Michael Ares/SF Weekly
  • Dan Rush, union organizer, indicted on federal charges.
A Harley-Davidson-riding union organizer — once hailed as a "Superman" by the California cannabis movement — has been indicted on federal charges for allegedly taking bribes and rigging the union organizing process.

Oakland native Dan Rush, 54, an organizer with the United Food and Commercial Workers, arrived on the medical marijuana scene in 2010 at a crucial moment. Via the union's political connections, Rush offered the emerging legalization movement and nascent medical marijuana industry legitimacy.

But before a single shop had been organized, Rush took $600,000 in loans from a dispensary operator, money spent at Indian casinos and to pay local Hells Angels cell phone bills, according to an affidavit filed in federal court by the FBI. These loans were never repaid. Instead, Rush offered his creditors services, like ensuring union endorsements or rigging the organizing process against workers, the FBI alleges. 

Rush did not answer his cell phone Thursday morning. The UFCW's Washington, D.C. headquarters said in a statement released just now that Rush has been fired from the union.

In the meantime, the details of the indictment — yet another local corruption investigation by the FBI — are stunning.

A warrant for Rush's arrest has been issued following his indictment in federal court on August 10.

It was not immediately clear Thursday if he is in custody.

An FBI spokeswoman did not immediately return a request for comment.

It's hard to overstate how central of a figure Rush has been to legal cannabis.

click to enlarge Dan Rush in his Oakland home. - MICHAEL ARES/SF WEEKLY
  • Michael Ares/SF Weekly
  • Dan Rush in his Oakland home.

Rush, recall, catapulted to fame in 2010 by organizing medical marijuana workers in the Bay Area, the first cannabis workers in America to have union cards.  That same year, union affiliation helped legalization measure Prop. 19 earn endorsements from political leaders and the NAACP.

He is also involved with the Coalition for Cannabis Policy Reform, and was until recently a member of its board. He appears to have been scrubbed from that listing as of Thursday morning.

Here's Rush and the UFCW in 2010 at a press conference with workers at Oaksterdam University, announcing the union's entry into the industry. Appearing at this conference are also some of the witnesses who would build the case against him.

Rush, who was closely involved in Measure D, the process to regulate medical marijuana dispensaries in Los Angeles, is also connected to legalization's most prominent pitchman: Lt. Gov. Gavin Newsom.

Here's Gavin appearing on Rush's behest, giving the welcoming address to the annual awards dinner of the Instituto Laboral de la Raza, a low-income workers' group which Rush serves as treasurer.

It appears that the case against Rush has been building for at least three years. Beginning in 2012, several Oakland-based dispensary operators — Carl Andersen, who operated a dispensary called Old Oaksterdam, and Martin Kaufman and Derek Peterson, who are involved with current Oakland dispensary Blum — began giving the FBI information on a bribery and union-riggng process that began in 2010.

Details below come from recorded telephone conversations and wires worn by witnesses including Marc Terbeek, Rush's attorney who started cooperating with the FBI in January of this year, but may also be prosecuted.

Rush is also accused of sending Terbeek clients in exchange for $110,000 in kickbacks, cash Rush used to fund union activities, like an annual labor dinner, as well as personal expenses and the cell phone bills of the Oakland Hell's Angels, according to the FBI.

Now is as good a time as any to mention that rumors of strong ties to the Hells Angels, members of which including legendary leader Sonny Barger have been friends with Rush for years,  have dogged Rush for a long, long time.

According to the FBI, Rush took two cash payments totaling $600,000 payment in 2010 from Kaufman. The cash was supposed to be a loan Rush would use to remodel a house near his home on West MacArthur Boulevard into a medical marijuana dispensary. Instead, he used the money to pay off an earlier private loan taken out using his house as collateral.

Under an agreement brokered by Rush's Oakland-based attorney, Marc Terbeek, the cash was a loan to be repaid in January 2015. In the meantime, Rush would pay Kaufman $3,000 a month — interest on the loan — as a "consultant." IRS tax forms revealed this, but Kaufman did no work, according to the affidavit.

Meanwhile, Rush also took a $51,000 interest in Andersen's future dispensary. Recall that at the time, Oakland was taking applications to expand its medical marijuana dispensaries from four to eight, and union membership was a way to score more points on a "merit-based" application.

In 2014, Kaufman was informed that Rush would be unable to pay back the loan.  Instead, Rush offered services in return. Specifically, he offered to rig the union organizing process in Las Vegas, where Kaufman wanted to open a dispensary, against workers and for the employer in Kaufman's favor. 

And to really drive the point home, Rush also informed him that the original cash — stemming as it did from medical marijuana, pre-2010 — was unclean, and any attempt to recover the loan might not go so well. Details from the indictment are below.

click to enlarge rush_1.jpg

click to enlarge rush_2.jpg
click to enlarge rush_3.jpg
Here's how it all fell apart: Terbeek flipped on Rush in January of this year, following Andersen and Kaufman going to the FBI in 2012 and 2013, according to the FBI.

The fallout from all of this is just beginning. We'll update this story as we learn more.

In a statement, a UFCW spokeswoman said that Rush had been terminated, but did not specify when.

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About The Author

Chris Roberts

Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.

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