In the Matter of Arbitration Between__ 

) 

Melissa Chinery ) 

Sandra Lee ) RE: Article VII Charges 

) Violations of APFA Constitution 

APFA Charging Party Members ) and APFA Policy Manual 

(Plaintiff) ) 

) 

And ) 

) 

Eugenio Vargas, Former APFA ) 

National Treasurer ) 

) 

APFA Charged Party Member ) 

(Defendant) ) 

) 

__________________________________ 

Before: Alternate Article VII Arbitrator Ruben R. 

Armendariz 

Place and Dates of Hearing: The Westin Irving Convention Center at Las 

Colinas, 400 West Las Colinas Boulevard, 

located in the City of Irving, Texas.

September 14, 15 and 16, 2021 

Appearances: 

For Charging Party Members: Melissa Chinery, Representative 

Sandra Lee, Representative 

Heather Olenjack, Representative 

For Charged Party Member: Heidi Morgan, Representative 

Nena Martin, Representative 

Eugenio Vargas, Former National Treasurer 

EXHIBIT A

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 1 of 39 PageID 119
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

2

INTRODUCTION 

This is an Article VII Hearing that was heard at the Westin Irving Convention Center at 

Las Colinas, Irving, Texas on September 14, 15 and 16, 2021. The arbitration hearing was 

transcribed by Carson Reporting & Associates. 

Charging Party Melissa Chinery and Sandra Lee, will be hereinafter referred to as the 

“Plaintiff.” Charged Party Eugenio Vargas, will be hereinafter referred to as the “Defendant.” 

Plaintiff presented for testimony Former Treasurer and Retired Flight Attendant Cathy 

Lukensmeyer, Business Owner Michael Trapp, Former Boston Base President and Flight 

Attendant Jennifer McCauley, DFW Base President and Flight Attendant Michael Truan, Flight 

Attendant Heather Olenjack, Los Angeles Base President and Flight Attendant John Nikides, 

Flight Attendant and National Treasurer Erik Harris, Flight Attendant Christopher Thedford, Flight 

Attendant Debbie Hoover, Flight Attendant and National Secretary Josh Black, Flight Attendant 

Sandra Lee and Flight Attendant Melissa Chinery. 

Defendant presented for testimony Former Base Council Representative and Flight 

Attendant Shane Staples, Flight Attendant Chuck Ransdale, Budget Committee person Yvonne 

Johnston, Former National Treasurer Craig Gunter, Former APFA President Marcus Gluth, 

Former Board of Director and Miami Base President Randy Trautman and Former National 

Treasurer Eugenio Vargas 

All of these witnesses were afforded full opportunity to be heard, to be examined, and to 

be cross-examined. The parties were allowed to introduce evidence on the issues. Based on the 

entire record, my observation of the witnesses, examination of the evidence, exhibits presented, 

post-hearing briefs1 submitted, and arguments presented therein, this arbitrator makes the 

following findings and renders the following Discussion, Opinion, and Award. 

THE ISSUES 

The issues presented in the Article VII grievance and heard in this proceeding are described 

as follows: 

The Plaintiff 

Plaintiff submits the issue to be determined by the Article VII arbitrator is stated as 

follows: 

Whether Eugenio Vargas, the Charged Party herein violated the terms of the APFA 

Constitution and Policy Manual by; 

(1) Violating the Meal Expense Policy? 

1

 The parties agreed to submit post-hearing briefs by e-mail to arbruben@gmail.com on November 16, 2021 and 

reqeusted an extended to December 31, 2021 and was granted. The post-hearing briefs were timely emailed and 

received, thus, the arbitrator finds the record in this matter closed on December 31, 2021. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 2 of 39 PageID 120
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

3

(2) Failing to maintain an inventory thereby violating Article III, 

Section 6.E. of the APFA Constitution by failing to maintain 

union assets? 

(3) Allowing himself and his fellow National Officers to receive 

inflated sick and vacation payouts when they were not entitled to 

such? 

(4) Allowing the payment to former National President Bob Ross 

thousands of dollars in Meal Expenses Allowance (MEA) and 

SAF when he was no longer working for APFA? 

(5) Violating the credit card policy by charging a rental car and meals 

for a trip to Spain? 

(6) And, if so, what should be the appropriate remedy? 

The Defendant 

Defendant submits the only issue to be determined by the Article VII arbitrator is stated 

as follows; 

(1) Whether Former APFA National Treasurer Eugenio Vargas committed 

the following act(s) was “WILLFUL” violation of an expressed Article 

of the APFA Policy Manual, the APFA Constitution, or of a proper and 

express written resolution or policy of the Board of Directors or 

Executive Committee of the APFA Constitution, as it is set forth in 

Article VII, Section 1.F. 

(2) And if not, what is the appropriate remedy? 

THE FACTS 

It is undisputed the charges herein arose from an internal filing of an Article VII grievance 

filed by Plaintiff Members Melissa Chinery and Sandra Lee against Defendant Member Eugenio 

Vargas, Former National Treasurer. 

Plaintiff alleged Former National Treasurer Eugenio Vargas violated the detailed language 

of the APFA expense policy by charging thousands of dollars of unauthorized meals to his APFA 

credit card. Vargas charged meals in his city of residence, Dallas Fort Worth (DFW), when he had 

no right to meals in his home location, double-dipped when he was receiving per diem out of base, 

and claimed actual meals while receiving Guaranteed Meal Allowance. Vargas further violated his 

responsibilities as treasurer by routinely authorizing inappropriate payments to other APFA 

officers who were committing similar violations of the meal expense policy. 

Plaintiff alleged Former National Treasurer Eugenio Vargas failed to maintain an inventory 

and violated Article III Section 6.E. of the APFA Constitution by failing to maintain union assets. 

Vargas failed to maintain an inventory of furniture and failed to safeguard union assets as required 

by the APFA Constitution. Vargas failed to safeguard tens of thousands of dollars of furniture left 

by his and prior administrations. The evidence will show Vargas misappropriated tens of thousands 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 3 of 39 PageID 121
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

4

of dollars of furniture that he had no right to take, concealing the fact from the APFA leadership 

and members. 

Plaintiff alleged Former National Treasurer Eugenio Vargas allowed himself and his fellow 

National Officers to receive inflated sick and vacation payouts that they were not entitled to.

Vargas changed the long-standing formula on the payout of sick and vacation payout to inflate his 

and his fellow national officer’s payouts by thousands of dollars, failing to inform the Board of 

Directors. 

Plaintiff alleged Former National Treasurer Eugenio Vargas was paying former National 

Officer Bob Ross thousands of dollars in Meal Expense Allowance (MEA) and SAF when he was 

no longer working for APFA. Vargas allowed Bob Ross to be paid expense allowances when he 

was no longer working for APFA. This payment was not specified in Ross’ exit package. 

Plaintiff alleged Former National Treasurer Eugenio Vargas violated the credit card policy 

by charging a rental car and meals for a trip to Spain. Vargas used the union credit card for a rental 

car while on vacation in Spain as well as charging a meal while also on per diem. 

The APFA Board of Directors could not resolve this matter internally and pursuant to the 

provisions set forth in Article VII of the APFA Constitution, the undersigned Alternate Article VII 

arbitrator was selected solely to conduct an evidentiary hearing and decide this matter on its merits. 

THE RELEVANT PROVISIONS OF THE APFA CONSTITUTION AND POLICY 

MANUAL CITED IN THE CHARGES 

APFA CONSTITUTION 

Article I. Section 7. DEFINITIONS: 

As used in this Constitution, the following words or terms shall mean: 

E. "Duty" means an obligation of performance, care or observance 

which rests upon a person in any position or fiduciary capacity with 

or as a member of the APFA. 

M. "Privilege" means a benefit or advantage enjoyed by a person in 

any position or fiduciary capacity with or as a member of the APFA. 

O. "Responsibility" means an obligation to answer for a duty to act or a 

failure to act by a person in any position or fiduciary capacity with or as 

a member of the APFA. 

Q "Rights" means those powers and/or privileges inherent to a person 

in any position or fiduciary capacity with or as a member of the 

APFA. 

Article II. Section 2. OBLIGATIONS OF MEMBERS: 

Members of the Association do accept and agree to abide by this Constitution 

of the APFA as it is in force or as it may be altered, added to, deleted from, or 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 4 of 39 PageID 122
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

5

amended in accordance with the provisions of this Constitution. Ignorance of 

this Constitution will not be considered a proper excuse for any violation of the 

provisions contained herein. Inherent in the rights, privileges, duties, and 

responsibilities of membership in the APFA is the obligation to responsibly 

exercise these rights, privileges, duties, and responsibilities. 

Section 3. BILL OF RIGHTS OF MEMBERS 

B. All members of the APFA shall have access to all administrative and 

financial reports and records except as provided in Section 5.B(1) of 

this Article II. 

Article III, GOVERNMENT OF THE APFA 

Section 3 Board of Directors

A. The Board of Directors is authorized and empowered to take any and all 

lawful action consistent with this Constitution to safeguard and protect 

the APFA, and the rights and privileges, duties and responsibilities of 

the officers, representatives and members of the APFA. The Board of 

Directors is authorized to interpret this constitution and to establish, 

prescribe and adopt such other policies which may be consistent with 

this constitution as required for the direction and management of the 

affairs of the APFA. 

L. Jurisdiction and Duties: The Board of Directors shall have the following rights, 

privileges, duties and responsibilities; 

1. Set policy for the APFA; 

2. Modify the APFA Policy Manual as it deems appropriate; 

3. Approve the annual budget; 

4. Set annual goals for the APFA as it deems appropriate; 

5. Assign to each Ad Hoc Member of the Executive Committee those Presidents 

with whom s/he shall maintain regular contact and communication; 

6. Determine the number of administrative, committee, and support positions as 

may be required under Article IX of this Constitution to meet the needs of the 

membership; 

7. Nominate and appoint members of the National Balloting Committee and 

Budget Committee when appointments are appropriate; 

8. Review the base assignment of any OAL Operation or satellite and, when 

necessary alter operation or satellite assignments. 

While not limited to the following, the Board of Directors may: 

9. Review the dues structure of the Association; 

10. Override the Executive Committee rejection of a proposed Collective 

Bargaining Agreement; 

11. Establish the Regions and the National Vice President will assign the 

Regional Representatives; 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 5 of 39 PageID 123
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

6

12. Establish, combine, delete or change the duties, responsibilities and specific 

job descriptions of administrative, committee and support personnel in 

accordance with the provisions of Article IX of this Constitution for budgetary 

or policy reasons, taking into consideration the recommendations of the 

National Officers; 

13. Direct special mailings to the membership; 

14. Recognize the accomplishments and achievements of members of the APFA; 

15. Give annual awards; 

16. Confer Honorary membership; 

17. Approve hardship dues forgiveness and review other hardship requests that 

may be brought before the Board; 

18. Appoint special committees; 

19. Appoint or change the Article VII Arbitrator or Alternate Article VII 

Arbitrator(s); 

20. Approve Article VII administrative changes; 

21. Suspend officers or representatives pursuany to Article VII; 

22. Take any and all appropriate action deemed necessary by the Board and in 

accordance with this Constitution to promote the welfare of the members of 

the APFA, and this shall include the right to reverse an action or decision of 

the Executive Committee, National Officers or other representatives, except as 

provided in this Article III, Section 4.J.11 or Article VIII, Section 6.Bof this 

Constitution. 

Article VII. Section 1. Grounds For Charges: 

Any member is subject to fine, suspension or expulsion, or suspension from or 

removal from office, for any of the following acts: 

A. Failure to pay dues, assessments or penalties levied by the Association. 

B. Advocating, or working toward, the displacement of the APFA as 

bargaining representative (providing that advocating, or working toward an 

affiliation, merger or federation of the APFA pursuant to Article XII of this 

Constitution shall not be grounds for discipline); 

C. Willfully acting as a strike breaker during any work stoppage duly 

authorized by the Association; (1) Notwithstanding Section 1.C., above 

(which provides as a grounds for charges willfully acting as a strike breaker 

during any work stoppage duly authorized by the Association) APFA shall 

not process any charge of willfully acting as a strike breaker during the 

November 1993 strike against American Airlines. 

D. Willful violation of a Flight Attendant's Collective Bargaining Agreement 

E. Theft or embezzlement of Association monies or property 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 6 of 39 PageID 124
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

7

F. Willful violation of an express Article of this Constitution, or of a proper 

and express written resolution or policy of the Board of Directors or the 

Executive Committee 

G. Willfully acting in a manner that causes the Association to violate its legal 

obligations; or 

H. Willfully bringing charges without reasonable basis against another 

member, officer, or representative of the Association, should such charges 

be dismissed for any reason by the Article VII Arbitrator designated herein, 

or should such charges not be sustained by the Article VII Arbitrator. 

APFA POLICY MANUAL 

Section 5.G.1. Trip Removal and Expense Policy – Other Expenses 

1. Actual out-of-pocket expenses incurred by a member in conducting APFA 

business will be reimbursed to the extent provided in this policy. In all cases, 

receipts must be submitted to verify the expense and to substantiate 

reimbursement. Expense reimbursement is not intended to be for the 

personal profit of the APFA member, but to compensate him / her for actual 

expenses and losses and is exclusive of other applicable reimbursement 

provisions in this policy. 

Section 5.F.5.a. Trip Removal and Expense Policy–Meal Expense/Allowance 

a. Representatives are authorized to pay for and to be reimbursed for the meal, 

snack or beverage of a guest(s) or other business associate(s) on those 

occasions when the representative would reasonably be considered the host 

of an authorized APFA function or meeting. 

(1) Discretion and good judgment should be used when exercising this privilege 

and when incurring such legitimate and necessary Business-Related 

Expense. Abuse, as determined by the Executive Committee, may lead to 

limitation or revocation of this privilege. 

(2) The reimbursement of a Business-Related Expense shall not count against 

a representative's MEA. 

PLAINTIFF TESTIMONY 

Only certain testimony this arbitrator has deemed relevant to the issues at hand are as 

stated herein. 

Cathy Lukensmeyer 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 7 of 39 PageID 125
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

8

Ms. Lukensmeyer is a retired 30-year American Airlines Flight Attendant. She is a member 

of the APFA. She has held several APFA positions in Chicago, Illinois as a Council 

Representative, Vice Chair, Chairperson, negotiations member in 1986 and National Treasurer for 

the APFA for 4-years from 2004 to 2008. She testified she had received training as a National 

Treasurer for only one transitional month. She stated she is familiar with the APFA Policy Manual 

and Constitution as it relates to financial matters and the role of the National Treasurer. The APFA 

Policy Manual dictates the day-to-day operations of the APFA and is approved by the Board of 

Directors. She further said, Article II, Section 2 states ignorance of the Constitution is not a proper 

excuse for any violation of the provisions. She further explained the duties of the National 

Treasurer to include the care of the office, the staff, all of the assets of the Union. They inventory 

the assets and are in charge of expense reports and the monitoring of expense reports, questioning 

expense reports, prepare government filings and to provide to the Board monthly financials. And 

making sure all meals have proper receipts in accordance with the policy manual, which is a part 

of the expense report. Only the Board of Directors (BOD) can modify the policy manual. 

Additionally, she testified that she was familiar with the Meal Expense Allowance (MEA) and per 

diem. When working for the Union, flight attendants would receive an expense, a per diem and an 

MEA. The Officers and the people on full time would lose out on that source of income. You have 

actual and you have guaranteed up to a certain point as defined by the policy manual as to how 

much you get. MEA is for persons away from their base and the per diem is also away from the 

base. The Officer’s would receive a guaranteed base because they weren’t flying and that is what 

would make them whole. And that is put on the weekly expense report. When asked, ‘should one 

be getting the Union credit card to buy meals and getting guaranteed MEA for the .... same days?” 

She answered “No” it is double dipping. They are already getting paid, meals do not go on the 

credit card. The per diem is a daily allowance and was negotiated for the Flight Attendant and 

then copied the CBA and it would cover those expenses. Per diem’s away from the base. National 

Officers are assumed to be living within a radius of Dallas per the policy manual and for purposes 

of expenses and other policies regardless of where their permanent residence is located. A hosting 

exception is when there is an arbitration for example with lawyers and witnesses, the Vice 

President would order a meal and everyone would be included. Lunch does not qualify for a 

hosting exception. She was asked if one should be getting guaranteed MEA while getting per diem 

and she said “No.” She was asked, “if all Union officers are receiving meal allowance, should they 

be charging a meal to the Union when everyone is on MEA and she said, “No.” 

She further testified that under the APFA Constitution, the National Treasurer is responsible for 

assuring accurate receipts, the purpose of the expense and who was present. She was provided 

Exhibit (CP-2) and reviewed some of the credit card and receipts related to Vargas expenses. She 

said Officers are not allowed to take guaranteed and actual meal expense. 

Lukensmeyer additionally testified that in 5h 3 deals with electing an apartment or a paid 

move. She said that when you get elected to office, you have a choice. You can either move, or 

transfer totally to Dallas. The Union will cover the expenses, $10,000.00 will be given or you 

could choose to have an apartment in Dallas that is furnished, no smaller than one bedroom. The 

Officers get two bedrooms that has an office. She explained that when she came into office, her 

apartment was from the preceding Treasurer and it was already furnished with towels and sheets, 

you name it, it was there, except for one room, the office. She had to get a couch and table because 

no furniture was there, but the rest of the apartment was fully furnished. The Treasurer’s Office 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 8 of 39 PageID 126
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

9

takes care of corporate apartments. The Treasurer would obtain the apartments and take care of 

furnishing them if there was no furniture. The furniture should already be there. She said she put 

into place a policy 5.22, No. 7, for incoming National Officers and other representatives shall 

normally be able to use outgoing National Officers or Representatives furniture and furnishings 

rather than replace these items with each change of National Officer or Representative, subject to 

the right to reasonably refuse furniture and furnishings. This policy was in place before October 

2016 and the policy requires that there be a silent auction of furniture. These are assets of the 

Union and we have to consider the depreciation value and the fair market value. It’s not possible 

for an item to be depreciated to zero. The Bylaws do not provide for rental cars in the city of 

residence. So once a National Officer takes office, they are not entitled to a car in DFW or Dallas. 

The expense reports are supposed to have two signatures, so there should be another person who 

is overseeing what the Treasurer is doing or spending, whomever signs the other half of that 

expense report. It is not normal for a Treasurer to repeatedly have to pay back the organization for 

erroneous charges. 

On cross-examination, Defendant presented Resolution No. 14 into the record and was 

identified as APFA Apartments Board of Directors Resolution No. 14 dated March 9, 2016. She 

testified it is a new policy on apartments and furnishings. Equipment in need, furnishings in need 

of replacement, replace as needed and they talk about damaged, worn out, depreciated, not useful 

and that replacement items may be purchased in accordance with the table. Surplus furnishings 

shall be sold through a public online market, Craigslist and it must be stored and inventoried. It 

also says, Outgoing National Officers or Representatives shall have the option of purchasing at 

Fair Market Value the furniture, furnishings, appliances, equipment that were provided in their 

APFA accommodations. Lukensmeyer said she was not aware of this new policy. 

Michael Trapp 

Mr. Trapp is the owner of Trapp’s Residential Services, and Trapp’s construction. He 

testified that he has performed work for the APFA from 2014 until he became sick. He performed 

maintenance, electrical, plumbing, painting, moving stuff and remodeling. He said he would clean 

the apartment and move all of that stuff. Ms. LaDonna Casey would let him know where to go and 

they would pack up everything. Take it to the office or other apartments. After Mr. Gunter, former 

National Treasurer passed away, he moved his furniture from Corporate APFA apartments to the 

back room of the APFA since there was no room to store the furniture at Uncle Bob’s storage 

place. Trapp identified Exhibit (CL-13) as being his invoices for work performed. There were three 

storage lockers full at the time. After the elections Greg’s stuff was moved to Mr. Vargas 

apartment. 

On Cross-examination, Trapp stated that between 2016 and June 2017 he picked up 

furniture at the APFA storage units and dropped them off at donation. He said he dealt with Ms. 

LaDonna for him to pick up items, take it, put it back together 

Jennifer McCauley 

Ms. McCauley is a Flight Attendant for American Airlines and based in Boston, MA. She 

has been employed with American Airlines for over 30 years. She has held Union positions such 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 9 of 39 PageID 127
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

10

as Base President (1997-2012) for the Boston International and Domestic domiciles. From 2012 

to 2016 she was appointed to the SBA department as a Regional Representative. And from 2016 

to 2019 she was elected to the Executive Committee as an ad hoc by the APFA Board of Directors. 

She testified that she attended the Executive meeting on September 8 or 9, 2016 regarding furniture 

but was told by Eugenio Vargas the furniture was in storage and had not been inventoried because 

it was too hot to go to the storage area Exhibit (CL-14). Exhibits CL-14, Cl-15 and CL-16 were 

offered and received into the record without objection. 

Michael Truan 

Mr. Truan is a 23-year Flight Attendant with American Airlines. He has held several 

positions with the APFA. In 2004 he worked in the communications department and moved on to 

be a DFW Base Representative and then became a full-time Dallas Base Representative. He 

worked in contract scheduling as well in the safety department. He was elected to the position of 

a domestic negotiator with the negotiating Team back in 2013 and DFW base president in 2019. 

Truan testified that at a Board of Directors meeting, it was discovered that Mr. Vargas, Ms. Martin 

and Mrs. Dunaway received large payouts at the end of their term for unused vacation and sick 

leave and it wasn’t calculated correctly. Two Special BOD meetings were held on August 26, 2019 

and via resolution the BOD passed to have these former Officers pay back the money owed to the 

Union. Payout is supposed to be calculated per APFA policy and National Officers salary. The 

former Treasurer had calculated additional income into that calculation which is not part of the 

policy at APFA. Exhibit (CLX-18) is the Executive Meeting that transpired on December 5-7, 

2019 and Resolution No. 2 was passed on August 29, 2019. In this resolution, if the payouts were 

not paid back no later than January 26, 2020, the APFA Attorney was directed to file a civil lawsuit 

to collect these funds. Truan stated that from August to December, the money had not been paid 

back. Exhibit (CLX-17) is the second meeting of the BOD. National Treasurer Craig Gunter and 

BOD voted pretty much unanimously on Resolution No. 2 (Ms. Martin was on the Board of 

Directors and abstained), where it directed Mr. Vargas, Ms. Martin and Ms. Dunaway to make 

APFA whole to recover the overpayment. Both CLX-17 and 18 were received into the record 

without objection. On cross-examination, Truan was asked how is the Officer salary calculated 

and he said through APFA policy. The officers (President, Vice President and Secretary) are paid 

the highest international purser rates. As far as vacation, sick, or any other items included in their 

monthly salary. Truan said that according to their attorney’s at the time, MEA, SAF was not 

additional income to be added to the payout. The officer’s salary should only include the highest 

international rate, purser premiums per APFA policy. Charged Party Exhibit (CL-99) was 

introduced into the record and is a string of emails requesting an explanation of the formula used 

for the calculation. The formula should not have included MEA and SAF. The former National 

Officers were disputing the APFA calculation of the amount of overpayment owed back to the 

APFA in Resolution No. 2 (CL-99). Truan stated in the Executive Committee meeting, he became 

aware that the recalculation was based on a 1987 payout formula, Exhibit (CP-99) and Exhibit 

(CP-1) were received into the record. On re-direct, Truan stated a power point presentation was 

given of the formula that should have been used for payout. 

Truan stated the elevated overpayment was included in the Bob Ross exit package. Truan said that 

they had a Base President call with Attorney Bruce Lerner and several BOD’s where he asked 

Vargas if he wanted an attorney to be present as this could possibly become criminal charges. In 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 10 of 39 PageID 128
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

11

the e-mail chain from Patrick Hancock, he told Ms. Martin the original formula has been used for 

over 30 years and has been included in 30 plus audits and multiple DOL reviews and is a longstanding established practice. This is the appropriate starting point. The amount you owe APFA is 

calculated by taking what you should have been paid, original formula, and subtracting what you 

were actually paid. On further re-direct, Exhibit (CL-99) Truan was asked to further read it into 

the record as follows, 

A. “APFA does not and should not have to decipher what was wrong with 

the new formulas and try and fix it for you. The fully functional original 

formula defines what you should have been paid. Your overpayment is 

easy to calculate using that number. The EC has now established the 

deadline of January 6, 2020 for you to reimburse the Union. I look 

forward to hearing that APFA has been reimbursed and we can move on 

to addressing the many challenges facing our Union. Patrick Hancock 

Ad hoc 5.” 

On re-cross-examination Truan was again asked, “isn’t it true the original formula is a 

formula that has nothing to do with MEA and SAF and he said “yes.” 

Heather Olenjack 

Ms. Olenjack has been an American Airlines Flight Attendant for over 24 years. She has 

been Base Council Representative and Health Representative from 2014-2015 at National 

Headquarters. Laura Glading was the National President from 2014 and 2015. In the summer of 

2016, she had concerns over APFA furniture and spoke with National Treasurer Vargas on 

September 21, 2016. She had concerns of moving expenses, furniture. Vargas had a book of 

financials that he showed her. She discovered several APFA apartments were vacant. She 

discovered that Bob Ross and Nena Martin had used their whole allotment and was concerned that 

it may have gone over that amount. She asked about moving expenses and he showed her receipts 

of Bob Ross and Nena Martin. Vargas said Ross was about $2500.00 as he moved with nothing 

and that he actually purchased Greg Gunter’s furniture. Vargas said Ross wrote a personal check 

to the Union. In the meeting of June 2017, Vargas said that he had paid $219.00. She further stated 

APFA policy was not used for the handling of this furniture. It could have been reused, given to 

another representative or National Officer in a corporate apartment. If not used, should have been 

placed into storage until needed and if it was deemed unusable, then it was to be placed on the 

silent auction at APFA for Flight Attendants to bid on or a staff member. She further said she was 

looking into furniture. Gaby Harty was the Health Chair and she had purchased quite a bit of new 

furniture. Harty resigned 8 months later and that furniture was sent to a consignment store for 

resale and not stored. Vargas said he was following the policy. She told him that he made a policy 

change in October to include it. The APFA took a big loss on reselling the furniture as they 

purchased a couch for $800.00 and listed it at the consignment store for $300.00. APFA would 

only receive 50% of the retail cost. On cross-examination Ms. Olenjack said the policy said 

$5000.00 one way move and $10,000.00 for a round trip. She was given Exhibit (CP-10), 

Resolution No. 12 dated October 5-6 as to the disposition of furniture of outgoing National Officers 

or Representatives. She also said she was aware Ms. Harty resigned in January and there was a 

lease on that apartment until May. The furniture remained in that apartment for the duration and a 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 11 of 39 PageID 129
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

12

representative was moved in. She said she was aware of this Resolution. She said she was aware 

Vargas presented a change for the disposition of the furniture that passed where Outgoing National 

Officers or Representatives shall have the option of purchasing furniture at fair market value. If 

not, it shall be sold through a consignment store and if not sold within 6 months, it shall be donated 

to charity. And four months later the consignment store gave a check for $1,159.00 for the items 

submitted. 

John Nikides 

Mr. Nikides has been employed with American Airlines for 371⁄2 years. He is the Los 

Angeles Base President. He has been a Rafety representative with LaGuardia, San Francisco Vice 

Chair, Assistant to the President, American Eagle liaison, LAX International Vice Chairperson, 

LAX Domestic Chairperson and LAX Base President since April 1, 2001. He testified that he was 

on a BOD call with Vargas discussing the change of Formula for vacation payouts. Discussed at 

this meeting was MEA and SAF. The MEA is the meal expense allowance. And SAF is Special 

Activity fee. In the phone conversation MEA and SAF had come up as to whether were considered 

wages. Vargas claimed MEA ands SAF are wages and that was based on certain payouts the 

National Officers. Vargas said in this phone conversation that there would have been no reason to 

exclude Bob ross from our actions, the actions we took to secure the monies from the other three 

national Officers. Attorney Bruce Lerner informed Vargas to get Legal Counsel. MEA and SAF 

were never intended to be wages. He said he became aware of several moving resolutions in 

September 2016 to October 16, 2016, that Bob Ross was in violation of the policy manual but had 

been permitted by Vargas to first get an apartment, which he was entitled to under APFA Policy 

Manual but then decided this wasn’t working out for him and decided to move his family down 

there and Vargas paid his moving expense. You get either an apartment or you get moving 

expenses. You don’t get both. This came up in the BOD meeting of what Bob Ross had been 

permitted to do and that moving resolution was turned down. Ross had an exit package and Nikides 

was one of the BOD members. Ross got paid MEA and SAF. MEA and SAF is intended for work 

actually done. Ross wasn’t working during that time period. Nikides stated he expected the 

Treasurer to be the gate keeper. Nikides also said there was a BOD call and was informed that 

Bob Ross had to pay back $3600 for the furniture. This furniture went to Ross residence and not 

to the Corporate apartment. So, Ross paid it back two years later. Vargas also paid back some 

money for a rental car. Vargas used the APFA credit card to rent a car in Spain. 

Nikides also testified that once the formula was clarified using the 1987 formula calculation 

Ms. Martin immediately paid off the owed debt. He stated that he is familiar with the Ross 

Transition Agreement (CL-98), he also verified that was his signature on the last page. He said 

they signed this page in the absence of a printed Transition Agreement. Nikides also stated you 

cannot use a Union credit card to eat a meal when you are on MEA, that is double dipping. On recross examination, Nikides was asked if any National Treasurer, the gatekeeper of the books, has 

ever told him how to deduct MEA from your expenses because the secretary who sets up those 

meetings are purchasing meals with an APFA credit card while you are on MEA, and he answered 

“no.” On further re-direct examination, Nikides was asked if it would be a violation to go to a golf 

course 54 times when it’s just the National Officers on the ticket and he answered “yes.” 

Erik Harris 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 12 of 39 PageID 130
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

13

Mr. Harris has been an American Airlines Flight Attendant since May 2014 and is currently 

the National Treasurer for APFA since April 1, 2020. He said the state of the Union financial 

records were bad. There were pay loss bills behind and lots of overspending. The books were not 

kept well. Harris was asked what is the obligation for Union Officers to substantiate credit card 

spending. He said prior to this year, the only requirement or obligation was that OLMS and that 

requirement was to provide receipts and substantiate credit card purchases and document those 

items with a receipt along with credit card statements. On the receipt, it should be the same date, 

the same charge amount and what was purchased and what department to charge it to for financials 

in the budget and who was there and who made the purchase, and this is done on a monthly report. 

Harris issued the Charging Party’s an email in response to a subpoena request. It was discovered 

while retrieving documents, certain items were missing. In item #1, the box containing all accounts 

payable invoices, reports and documents for fiscal year ending 2017 beginning with the letter S 

through V was missing. This would contain all backup and support documents, receipts for 

Eugenio Vargas monthly reports during this time frame. In item #2, receipts for Eugenio Vargas 

purchases - purchase of Greg Gunter’s APFA owned furniture. In item #3, we ended up locating 

the petty cash. Harris said they did not locate the record and receipts for letters S through V for 

fiscal year ending 2017 – April 1 through March 31. Harris also talked about an email from Liz 

Marko to Rachel Early regarding a rental car that was reserved in Eugenio’s name to be driven by 

Ellen Eherts and charged to the General Administrative Account. (CL-1, 2, 3, 5, 6, 7, 8, 9,10 and 

11) were introduced and received into the record. Harris also said the monthly and weekly’s were 

missing from April 1, 2016 to March 31, 2017 (S through V). Harris also said the receipts for 

furniture purchased by Eugenio Vargas from April 2016 through March 31, 2017 could not be 

found. Harris also said APFA has a policy on keeping inventory, there are no specifics on how 

they are to be kept and this is the responsibility of the Treasurer. Harris also said he could not 

locate the inventory list for furniture from the Vargas Administration. Harris also talked about the 

issue related to the formula for the payout of vacation for former officers Vargas, Ms. Martin, Mrs. 

Dunaway and Bob Ross. There was a disagreement on the formula whether it included the MEA 

and SAF payments. For calculating the payout, the annual payout takes your annual salary and it’s 

a formula based on that. The MEA and SAF are payments above and beyond the salary and those 

amounts were included in the formula. Harris also said Vargas is currently making payments as 

well as Dunaway and Ms. Martin has paid her debt in full. Bob Ross has not paid back the money 

($5400.00) owed. Harris did state Bob Ross received an exit package when he left office as 

National President and it paid him from March through July. Ross was paid a guaranteed meal 

expense during the time he was no longer working for APFA. Bob Ross did not fill out a weekly 

report. Payment is approved by two National Officers who would sign off on a weekly report. The 

weekly report would substantiate the meal allowances or the MEA and the SAF. Harris said they 

sponsored a set of Resolutions related to financial matters, financial reform. It was a cleaning up 

policy related to Section 5 and 6 of the Policy Manual. Section 5 is the trip removal and expense 

policy and Section 6 is the National Officers’ salaries and benefits. Resolution No. 8 was APFA 

credit cards basically aligning APFA policy with OLMS and the OLMS standards for corporate 

cards for unions because there was no policy. Resolution No. 9 is creating policy or creating and 

cleaning up policy related to apartments and furnishings, relocations, determining limits, things 

that were not really defined. Harris said they saw a need to create parameters and boundaries 

concerning apartments and furnishings. Resolution No.10 deals with business related meals 

realigning the credit card policy with OLMS, but to also further clarify what business related meals 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 13 of 39 PageID 131
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

14

and expenses are and what the procedure is for seeking reimbursement or use of the APFA credit 

card. Harris said there was no policy in place for credit card expenses, name, nature of business, 

etc. but it was in place with OLMS, because it is the law. Resolution No. 10, business related meals 

and this new policy is for group meals to be incompliance with LMRDA regarding meal purchases 

using an APFA credit card. All meal charges must be accompanied with a written explanation of 

the specific union business conducted during the meal and the full name of and title of all attendees, 

created policy to reinforce what the law states. On Resolution No. 11, the policy language in the 

manual had very minimal language on parameters around rental cars. It only allowed officers to 

just authorize it, but we wanted to further clarify the procedures over rental cars. We don’t provide 

rental cars for your home base as you are a resident. Resolution No. 12 deals with officer relocation 

and speaks of $10,000.00 round trip move to Dallas. We clarified what is round trip versus one 

way. Resolution No. 13 deals with the collection of non-dues owed to APFA. Resolution No. 14 

deals with resignation or recall of a National Officer. This eliminated the need for an exit 

agreement in the future. Harris said that they realized the policy manual was not clear enough and 

were receiving a lot of questions about certain policy and it left areas open for interpretation. This 

is the reason for so many resolutions to be created to clarify policy. 

On cross-examination, Ms. Morgan asked Harris, did the charging party’s ever request to 

review documents from any other administration outside of the Ross Administration and he said 

“no.” He also said they would have working lunches for the budget committee team. Harris also 

said that prior to March, the APFA did not have a set policy on the handling of receipts in Section 

5 of the Policy Manual. Plaintiff objected to Ms. Morgan introduction of several documents into 

the record to reveal their conclusive proof these documents received disclosed a past practice and 

were shared with the Plaintiff through email as soon as Harris provided it to them. The arbitrator 

overruled the objection and allowed these documents into the record. Harris said no Article VII 

charges were ever filed against him for not having receipts. Harris said the Treasurer before him 

was Craig Gunter. He took office in 2018. Harris said that he was on Vargas budget committee in 

the administration prior. Harris further said APFA’s finances were strong when Vargas left office 

on July 1, 2018. Harris said they went from a strong financial position to dire state October 31, 

2019 due to rampant overspending. The prior administration brought in their own outside opinion 

and they advised the administration and the BOD that there needed to be some oversight. The 

BOD then created the budget oversight committee. Harris also said that it appeared from the 

depreciation schedule that two persons share the Ashley furniture. Harris also said that he has had 

to rent cars when additional representatives are in town and are rented under the National Officers 

name for the representative. Harris said Section 5 of the policy manual governs trip removals, 

which is a pay loss, representative salaries, reimbursements and meal expenses. National Officers 

are paid in accordance with Section 6. As an officer, Harris said he receives guaranteed MEA and 

SAF in Section 6 and stipend for maintaining an office outside of his home. Section 6 covers four 

officer salaries including him. Section 5 applies to all representatives. Defendant’s Exhibit (V-44) 

was introduced and received into the record. Harris also said that in his email that he had read 

previously into the record that “there are individuals, who have seen these documents in the recent 

past; however, they have inexplicably disappeared from my custody.” Defendant Exhibit (V-98), 

the Ross Transition Agreement was introduced into the record and discussed. Harris confirmed 

this was the document given to the Plaintiff. Harris read into the record Item No. 4, the economic 

terms of the Ross Transition Agreement, “APFA agrees to pay Ross all of his accrued and unused 

sick and accrued and unused vacation time from April 1, 2016 through July 31, 2018. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 14 of 39 PageID 132
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

15

On cross-examination, Harris testified to Laura Glading’s administration was not providing 

receipts for year ending 2013. Harris testified that Marcus Gluth was not providing receipts for 

year ending 2014. Harris testified that based upon what he has seen the practices in the past are 

not the same as the present. The reason is, we have a different system and put in place policy 

procedures on how to use the corporate card to correct deficiencies and to be in alliance with the 

law. On re-direct, Harris said that Ross was overpaid on his vacation by 35 days. Vargas made this 

mistake and the check went to Ross. Vargas did not benefit from this error. Harris also said they 

got overpaid on their 401K, it was inflated wrong by the amount used to calculate that was based 

on that formula. Vargas made this mistake. 

Christopher Thedford 

Thedford testified that he has been employed with the APFA since November 2019 as a 

Staff Member and Senior Accountant. He does general ledger entries, credit card entries to the 

general ledger including invoicing and payments. He is very familiar with the standard accounting 

procedures. He says that it is important for a business or an organization to maintain proper 

inventory control of furniture. You need to know what you have in the building, the cost you paid 

for it and the current market value. There are different ways, different accounting methods that 

you can do it, one is just a simple depreciation where you recognize the initial value of it and then 

depreciate it over a certain time span, at a straight-line method, that’s the most common method. 

So, each item, such as furniture, it needs to be accounted for until it’s taken off the books. He says 

he has viewed APFA records, and seen the entries but that he really does not know their standards. 

He is not aware how long Union’s are required to keep financial records. He explained book value 

is what you initially purchased an item. Market value is essentially the same thing but the price is 

now is set at a certain time period. And then the depreciated value is after a certain time period 

how much it’s worth after depreciation. As to the APFA vans, they are paid off. After seven years 

in possession, the vans would have depreciated to zero for accounting purposes, but it would still 

have a fair market value and a salvage value. Exhibit (CL-6) was introduced, the APFA’s General 

Ledger October 2016. He was asked to see the reference to Greg Gunter’s furniture being written 

off. He said he doesn’t recognize if it’s normal or not and did not see a reason to write off the full 

value of the furniture with the information here. He was asked in terms of meal receipts, what 

should be on a receipt for a business meal. He said it would be an itemized receipt listing every 

item. What is needed on the receipt is the item, the amount and then a signature for payment. He 

said, the treasurer deals with policy and the accountant deals with accounting. He also said that he 

assisted in locating documents in response to the subpoenas and there were a few credit card 

receipts missing between fiscal year 2016 -2018. On cross-examination he said the missing credit 

card receipts for 2018 – 2020 were from National Officer Lori Bassani. 

Debbie Hoover 

Ms. Hoover has been employed with APFA for 22 years as an accountant. She does payroll, 

trip removal stuff and flight attendant expenses. She said she was familiar with the issue related to 

former National Officers during the Ross Administration changing their vacation formula for their 

vacation payout at the end of their term in June 2018. She said National Officer Eugenio Vargas 

approached her about changing the formula. She said she was told to add SAF and MEA. This did 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 15 of 39 PageID 133
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

16

raise a red flag to her because this has never been done before, it wasn’t past practice. This was 

completely different. On cross-examination, she said Senior Accountant Rene Berthelot worked 

with her. She said in box number 1 of Vargas W-2 is everything you get paid minus the 401K 

because that’s nontaxable. She was asked if that would include MEA, SAF and an office outside 

of residence and she said they are included in box 1. 

Josh Black 

Black is employed with American Airlines and is currently, the National Secretary for 

APFA. He maintains files related to the Executive Board and BOD’s meetings. And he oversees 

the Article VII process. At the August 4, 2020 meeting Melissa Chinery, Sandra Lee, Josh Black, 

Margot were present to view the Ross Transition Agreement. Union Attorney Bill Osborne 

provided a copy of the Ross Transition Agreement to the APFA. 

Sandra Lee 

Ms. Lee has been employed with American Airlines for 36 years as a Flight Attendant. She 

has never held a position with the Union. Her concern for looking into the Union’s finances was 

the Bob Ross exit package. She had requested to see the Union’s finances at APFA headquarters. 

She had a meeting with Liz Geiss APFA Vice President and Craig Gunter, the APFA National 

Treasurer in a conference room. The monthlies were spread out for each month of the year. It had 

a breakdown of payroll, fixed costs in the building, secretary’s salaries, etc. Several months were 

missing of payroll for Bob Ross and Nena Martin. Chinery asked about furniture, an inventory list 

and she was told there was no inventory list. Exhibit (CL-2) is the furniture receipt purchased from 

Ashley Furniture. We were able to review the Ross Transition Agreement under Julie Hedrick’s 

Administration. Bill Osborne was the attorney who allowed us access. Ms. Lee stated they also 

learned that MEA and SAF was included in the payout to the four National Officers. It was 

included in the Bob Ross exit agreement. Bob Ross was paid five months after he exited the 

building as President. The five months of pay included MEA and SAF. Also learned was that Ross 

had received extra vacation. 

Michele Chinery 

Ms. Chinery has been a Flight Attendant with American Airlines for 25 years. She stated 

she supported Bob Ross, Eugenio Vargas, Nena Martin and Marcy Dunaway. But, could no longer 

support Ross because he promised to do a lot for the merger with Legacy US. Air and Legacy 

American and unite us. Ross ignored the U.S. Airway Flight Attendants. She stated per the 

constitution, they initiated a recall for all four of them. It lasted about a year and they had enough 

signatures on the petition to trigger an election. Thirty percent is all that is required to trigger a 

recall and they presented the petitions at the National Convention but they were not validated and 

there was no recall vote. She also stated she was allowed to view financials from the Bassani 

Administration. She also asked for credit card receipts of the Ross Administration. Chinery stated 

they looked at the Ross exit package first and then looked at Laura Glading’s exit package. We 

then looked at credit cards. We looked at mileage. We looked at monthlies, and weeklies receipts. 

The financial records were a mess. We only saw the records that were provided to us as some were 

missing. The receipts for Vargas monthlies were missing. We were also informed of missing boxes 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 16 of 39 PageID 134
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

17

of financial documents. Harris said the box S to Z was missing for fiscal year 2017. She also said 

there were a hundred and fifty restaurant charges. It could be Vargas charged those for other 

individuals, reps.. She also stated she prepared a document using Exhibit (CL-1 and 2) and 

compared this information against the receipts. The first entry was May 9, 2016 to May 25, 2018 

and $10,945.28 was spent with the Union credit card on food. Vargas was receiving guaranteed 

MEA. The food chart exhibit mentioned includes meals purchased on Vargas credit card and 

equates 150 meals for a total cost of $10, 945.28. Vargas loved Taco Cabana and he went 52-54 

times to the Raven’s Grill & Golf course. Some of these receipts were filled out properly and some 

were not. Most of them were not. For example, June 30, 2016, it does not list the reason or who 

was there with him. Most of the receipts are undocumented. There were receipts where Officers 

were purchasing meals for one or two other Officers and they were listed on the receipt. She said 

the policy manual does not allow an Officer to take both guaranteed meal expense and actual meal 

expense. When Vargas actually charged a meal, he did not reduce guaranteed meals for the day. 

DEFENDANT TESTIMONY 

Only certain testimony this arbitrator has deemed relevant to the issues at hand are as 

stated herein. 

Shane Staples 

Mr. Staples has been employed with American Airlines for over 30 years as a Flight 

Attendant. He served in the APFA Bob Ross Administration starting in March 2016 in 

Communications. APFA provided furniture to be used at the Bear Creek apartment he was given. 

He stayed in a hotel for a month prior to being accommodated. When his term ended in July 2018, 

he moved out of the apartment. This occurred after Vargas left office. He said it is standard practice 

for the Coordinators or the National Chairs to stay on with the new administration. When he moved 

out, he did an inventory of the items in the apartment. Exhibit (V-32) is an email of his inventory 

list. 

Chuck Ransdale 

Ransdale has worked as a Flight Attendant for American Airlines for over 33 years. With 

the APFA, he was the Vice President for the Baltimore domicile as well as the National Contract 

Chair. He served in the Bob Ross administration as a contract chair. APFA provided 

accommodations and he provided documentation in support. Maddie was the attorney for the 

APFA at the time. He did go to a garage in the Bear Creek complex but all the furnishings were 

tagged going to other apartments. He said he was on a flight to Madrid doing a time study. 

Vargas was working the flight and we did have a working dinner to talk about the time study. 

Vargas picked up the dinner tab and he picked up the wine tab. And they were all on MEA and 

SAF and getting per diem. He paid for the wine with his personal credit card. On re-direct, 

Ransdale was asked if he knew of Melissa Dyer. He said Dyer worked on policies and 

procedures for American Airlines under Michelle Morenas. 

Yvonne Johnston 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 17 of 39 PageID 135
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

18

Johnston has been employed with American Airlines for 34 years. She has a Bachelor’s 

Degree in Behavioral Science and Health and Economics. She also has a Master’s Degree in 

Forensic Accounting. She has served on APFA Budget Committee and served under National 

Treasurer(s) Eugenio Vargas, Craig Hunter, Erik Harris and Greg Gunter. She states that she 

helped streamline the way the taxes are taken out of APFA representative paychecks and 

unemployment insurance. On the budget committee she worked with Kimberly Smedley, Russ 

Reed, Erik Harris, Amy Milinkovich, Todd Breckenridge, Robert Norvell and Beth Flannery. She 

said usually the Treasurer would have lunch brought in so we could continue to work. The group 

would usually go out for dinner and the Treasurer would pay the bill with the APFA credit card. 

Some of them claimed MEA and SAF. Vargas would take them out and would pay using the Union 

credit card. Erik Harris, Craig Gunter, Greg Gunter would take her out and use the credit card to 

pay for the bill. She also said that she saw other officers in all other administrations have the 

practice of purchasing food and beverages for themselves and for others who were already 

receiving MEA and SAF. She stated it has been a standard practice across the board not only 

Treasurers but all other Officers to be permitted to use the APFA credit card for food purchases 

and beverage purposes when people are receiving MEA and SAF when they are at APFA. She 

resigned her position because she was not getting the proper financial documents in a timely 

manner in order to be able to do her job properly. She also stated that when Eugenio was in office, 

the state of the finances in her opinion looked good. She also said that if a personal purchase was 

made and it was corrected within the same billing cycle and repaid, the institution was not harmed. 

She also stated Vargas has an impeccable work ethic, he is fair, honest and reliable. 

Craig Gunter 

Gunter was treasurer of APFA and said that Ms. Chinery and Ms. Lee came to APFA to 

view documents four or five times. He stated he was the Chair of the Budget Committee and there 

were six persons on the budget committee. When the members of the budget committee came into 

town for their regularly scheduled meeting, he would order food for them to have a working lunch. 

The food was paid for on a APFA credit card and they were receiving MEA and SAF. This has 

been a past practice for many years. This was actually a cost savings to have the meetings continue. 

Ms. Lee and Ms. Chinery when examining Vargas documents never questioned him about similar 

expenditures. He said that when he took over from the Ross Administration the state of the APFA 

Treasury was in order. 

On cross-examination, Gunter stated that he had prepared and presented a PowerPoint 

presentation showing in great detail how the payouts were calculated and determined the 

calculations were correct. Ms. Martin requested of him to set up a conference call with the BOD 

to talk to Eugenio Vargas because they did not trust the calculations he did. The attorneys and 

BOD members interviewed Vargas. Vargas admitted that he had calculated the amounts using 

additional salary, the additional income added into the salary amounts. And he admitted that he 

knew the past practice did not use this calculation. He admitted that he directed the accountant to 

use his calculations and the accountant was not comfortable in doing so. After verifying the 

calculations and interviewing Vargas, the Board passed a resolution demanding repayment. The 

attorney got involved as this was going on for over four months. In December the Executive 

Committee had to threaten to file a lawsuit if they did not pay it back within 30 days. The 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 18 of 39 PageID 136
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

19

Resolution was passed by the Executive Committee and Ms. Martin paid the full amount and 

Vargas and Dunaway set up a repayment plan. 

Marcus Gluth 

Mr. Gluth has been employed with American Airlines for approximately 30 years as a 

Flight Attendant. He was the Southeastern Division Representative and had seven bases in his 

division dealing with upper-level grievances. A member of the National Committee from 2000-

2002. In 2015 the APFA president resigned and he was elevated to the President until April 2016. 

The Bob Ross agreement was negotiated with a Non-Disclosure Agreement (NDA). He assisted 

the BOD as Lead Counsel in their representation when they were charged with violating the APFA 

Constitution by Julie Moyer. 

Mr. Gluth discussed the Ross Agreement and the Laura Gladings Agreement. Admitted 

into the record as Exhibit (V-100) the amicus brief. 

Randy Trautman 

Trautman is the APFA Miami Base President. He has been employed for over 38 years. He 

has held positions such as National Scheduling Coordinator and International Negotiator. He was 

on the BOD on March 1, 2018. Attorney Mark Richards and the BOD were present regarding the 

Ross Transition Agreement. In the Laura Glading’s exit agreement, it included full salary and SAF 

and related payments. He has been a member of the BOD for over 22 years. He represents the 

fiduciary responsibility of the Union, sets policy and interprets the Constitution. As a Board 

Member, he became aware at a Board meeting that Eugenio Vargas, Marcy Dunaway and Nena 

Martin had received an inflated formula for MEA and SAF. 

Trautman admitted that at the last convention in March, the BOD passed several 

resolutions. Those resolutions passed by the BOD are to set policy on moving expenses, National 

Officers payouts, APFA apartments and furniture because there was no policy in place. 

Eugenio Vargas 

Vargas has been employed with American Airlines for 26 years. He has held the position 

of Boston International Vice Chair, Boston International Chairperson and APFA National 

Treasurer. He testified that on August 11, 2016 he was on vacation with his spouse in Madrid, 

Spain. He rented a car from Enterprise Car Rental. He walked over to the Enterprise counter but 

he had to go to the restroom and asked his spouse to handle it. When he came back the car rental 

agreement was ready for him to sign and he signed it. In early September when the bill for the 

credit card came in, he was doing reconciliation of the credit card bill and noticed the Enterprise 

charge. When he arrived home, he obtained the enterprise receipt and noticed that the APFA credit 

card was used. He brought the receipt back to APFA the following morning and when senior 

Accountant Rene Berthelot arrived to work, he told him what happened. Berthelot said all you 

have to do is pay it back. He paid it back on September 9. Exhibit (V-19) is Vargas personal Chase 

account. Exhibit (V-20) is proof that Vargas made the payment and reconciled the rental car from 

his personal account for the full amount. Exhibit (V-21) is the bill in question. The total amount 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 19 of 39 PageID 137
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

20

was $872.34 and deducted a credit of $258.07 (Deposit) owing APFA $614.29. He has made one 

trip to Madrid on vacation and one trip to Madrid with APFA. He charged a meal, and this occurred 

when American Airlines introduced the premium economy class on the 787 aircraft with the time 

study. National Contract Chair Chuck Ransdale, AFPA Representative Neil Fernandez and 

Melissa Dyer. Exhibit (V-17) is Vargas (V-1) showing the dates on which he traveled to Madrid 

doing the time study as a working Flight Attendant where he displaced a Flight Attendant to work. 

He said he did have a working dinner with the group and he paid for the dinner and Chuck Ransdale 

paid for the alcohol tab. This was only time he charged meals in Madrid. He said he saw no issue 

for Flight Attendants who were receiving MEA. He also stated that he has working lunches with 

other officers. He said that he did order lunch for the budget committee. He took them to dinner 

and paid for it with the APFA credit card. He said that he has never used the APFA credit card 

for his personal use. He stated that in all of the years of eating food provided by APFA, no one 

from APFA has ever instructed him to deduct any amount from his MEA. Exhibit (V-28) is a 

document of purchased furniture. The three persons listed on the document of the furniture 

purchase were National Chairs, Shane Staples, the Communication Chair, Gaby Harty, Health and 

Chuck Ransdale were on the contract. Vargas said the purchase was for the Coordinator’s. He 

asked them to go over to the garage where Bob Ross’ apartment and go through the furniture that 

was there and see what they could use prior to going out and getting new furniture. Exhibit (V-36) 

is an email from Bob Ross stating that Gaby Harty had resigned and Kim Coats Tuck would be 

the interim National Health Chair until it is filled with a permanent appointment. Gaby’s apartment 

lease was up in May, five months away and APFA had to pay for it. Vargas decided to move one 

of the representatives in the back, that there was a full month removal into Gaby’s apartment and 

that would be a net savings for APFA. She moved in until the May 15, 2017 and allowed enough 

time to take inventory of what was there because the lease was up at the end of the month. Rachel 

Early worked in the account department and dealt with apartments, took inventory and packed 

some stuff. Exhibit (V-29) is an email from LaDonna stating that she had contacted, Kiss it Good 

Buy, and set up a meeting for May 25. Mike Trapp would move the furniture to, Kiss it Good 

Buy. Exhibit (V-30) is an email from LaDonna Casey to Vargas informing him that the items had 

been sold and they would send a check to APFA for $1,159.00. Exhibit (V-33) is a check for 

$339.10. All three of the representatives furniture were accounted for and this documentation 

accounts for the record location of the Ashley furniture addressed in the charges totaling $8,753.89. 

Attorney Mark Richards showed him Items 3, 4 and 5 of Exhibit (V-100) the Bob Ross Transition 

Agreement. Vargas said he did not benefit directly or indirectly from the Ross Transition 

Agreement. Vargas was asked what the difference was between basic salary and full salary for a 

National Officer. Basic salary is an hourly rate plus international override and purser pay times a 

set amount of hours. Full salary would include basic salary and include guaranteed MEA, and 

guaranteed SAF and Ross was paid this way. Laura Glading received the same as Ross and the 

BOD agreed. Vargas said that Patrick Hancock informed him that the formula used was a 1987 

package formula. Vargas said he entered into a payment agreement to repay the overage debt. 

Vargas also said that it was his interpretation to change the formula for the MEA, SAF to be 

included in their payouts. 

THE PLAINTIFF’S ARGUMENTS 

Plaintiff argues Vargas violated the detailed language of the APFA expense policy by 

charging thousands of dollars of unauthorized meals to his APFA credit card. Vargas charged 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 20 of 39 PageID 138
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

21

meals in his city of residence, Dallas Fort Worth (DFW), when he had no right to meals in his 

home location, double-dipped when he was receiving per diem out of base, and claimed actual 

meals while receiving Guaranteed Meal Allowance. Vargas further violated his responsibilities as 

treasurer by routinely authorizing inappropriate payments to other APFA officers who were 

committing similar violations of the meal expense policy. 

Plaintiff argues Section 5.F of the policy manual provides the following. 

1. Per Diem MEA Away From Residence 

 a. Per Diem Rate (Accountable Plan) 

(i) All members shall be entitled to an APFA Meal Expense Allowance 

(MEA) while performing work for the APFA when away from their 

residence for one (1) or more nights at the Collective Bargaining Agreement 

Domestic Per Diem rate while traveling domestically and the Collective 

Bargaining Agreement International Per Diem rates while traveling 

internationally, for each hour they are away from their residence. 

2. Actual MEA at Residence 

a. On days s/he is not trip removed, the APFA will reimburse a 

representative actual meal expenses at his / her residence city to the limit 

provided in F.2.a.(1) below when it is necessary to conduct APFA 

business during such meal, or when a representative is required by the 

transaction of APFA business to meet during a normal meal time. 

(1) Allowable MEA at Residence City is as follows: 

Breakfast up to: $ 6.00 

Lunch up to: $10.00 

Dinner up to: $17.00 

Snack up to: $ 3.00 

 (2) In addition to the required receipt, all such MEA reimbursements 

shall require the representative to note the name(s) of the other 

individual(s) meeting during the meal time and the nature of the 

APFA business being conducted. 

3. Guaranteed MEA at Residence 

1. On days a representative is both trip removed by and performing work for 

the APFA at his / her residence city, such representative will receive a 

“Guaranteed MEA at Residence” in lieu of any actual MEA at residence as 

provided in F.2. above. 

2. The “Guaranteed MEA at Residence” shall be paid at the rate of twentyfive dollars ($25) per day. 

3. The maximum “Guaranteed MEA at Residence” that will be paid to a 

member shall be seventy-five dollars ($75) per week or three hundred 

dollars ($300) per month. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 21 of 39 PageID 139
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

22

4. National Officers, Regional Representatives, National Chairs and other 

representatives who are authorized a full month trip removal or the 

equivalent shall receive a “Guaranteed MEA at Residence” of three hundred 

dollars ($300) per month. 

4. Calculation of MEA 

 a. National Officers, Regional Representatives, National Chairs and other 

representatives who are authorized a full month trip removal or the 

equivalent (e.g. “Payback” as provided in paragraph D. above) shall receive 

a minimum MEA of three hundred dollars ($300) per month. 

 b. The combination of “Per Diem MEA Away from Residence” as provided 

in f.1 above, “Actual MEA at Residence” as provided in F.2 above, and 

“Guaranteed MEA at Residence” as provided in F.3 above shall not be 

capped. 

 c. MEA expenses will be calculated and paid in the following order: 

 (1) “Per Diem MEA Away from Residence,” then the remaining balance 

owed, if any, will be paid as 

 (2) Actual MEA at Residence,” then the remaining balance owed, if any, 

will be paid as 

 (3). “Guaranteed MEA at Residence.” 

5. Business Related Expenses 

a. Representatives are authorized to pay for and to be reimbursed for the meal, 

snack or beverage of a guest(s) or other business associate(s) on those occasions 

when the representative would reasonably be considered the host of an 

authorized APFA function or meeting. 

i. Discretion and good judgment should be used when exercising this privilege 

and when incurring such legitimate and necessary Business- Related 

Expense. 

ii. Abuse, as determined by the Executive Committee, may lead to limitation 

or revocation of this privilege. 

iii. In no case may an individual who is otherwise receiving an APFA MEA in 

any manner be considered the “guest” for the purposes of this provision. 

The reimbursement of a Business-Related Expense shall not count against 

a representative's maximum MEA. 

Plaintiff argues that Vargas spent thousands of dollars in DFW on meals not allowed by 

the Policy Manual. The APFA Policy Manual does not permit National Officers to charge actual 

meals in their City of Residence, except for narrow exceptions. The hosting exception is very 

narrow. National Officers who travel away from DFW on Union business are paid at per diem at 

the same rate as American Air Lines Flight Attendants and are not permitted to “Double Dip: and 

receive actual meal expenses. There is no working lunch exception in the Policy Manual. APFA 

Representatives are required to follow Provisions of the Policy manual. The Charged parties failed 

to establish a practice of violating meal policy. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 22 of 39 PageID 140
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

23

Plaintiff argues Vargas failed to maintain an inventory of furniture and failed to 

safeguard union assets as required by the APFA Constitution. Vargas failed to safeguard tens of 

thousands of dollars of furniture left by his and prior administrations. The evidence will show 

Vargas misappropriated tens of thousands of dollars of furniture he had no right to take, 

concealing the fact from the APFA leadership and members. The portion of the charges dealing 

with furniture reads as follows: 

Finally, thousands of dollars of furniture, including furniture purchased by 

Vargas, is unaccounted for. As Treasurer Vargas had an obligation under 

the APFA constitution and federal labor law to safeguard union property. 

On one receipt dated 5/18/16 under Vargas's union credit card charges we 

found a purchase for $8733.89 at Ashley furniture. There is no record or 

inventory of that furniture nor can the furniture be located. The APFA 

policy manual requires that the National Treasurer inventory equipment and 

monitor the transfer of equipment between representatives. This was never 

done. 

The Treasurer has the responsibility to safeguard the funds of the APFA 

union members as outlined in Article III Section 6.E. of the APFA 

Constitution: Duties of the Treasurer: The Treasurer shall be responsible for 

the care and custody of the funds and securities of the APFA. 

The specific charge was failure to maintain an inventory list but the charges 

also listed a violation of the broad duty as APFA Treasurer to “be 

responsible for the care and custody of the funds and securities of the 

APFA.” 

Article VII, Section 2 of the APFA Constitution states members can file 

charges over “act(s) and/or the Article(s) of this Constitution allegedly 

violated which constitute the basis of the charge(s).” (emphasis added) Here 

Vargas is charged with both a specific act and a violation of an article of the 

Constitution. 

Vargas did not maintain an inventory list. The Ashley furniture purchased by Vargas 

cannot be accounted for. The missing furniture from the prior administration. Vargas last minute 

objections should be rejected. Eugenio Vargas failed to safeguard the furniture of the prior 

administration. 

Plaintiff argues Vargas changed the long-standing formula on the payout of sick and 

vacation payout to inflate his and his fellow national officer’s payouts by thousands of dollars, 

failing to inform the Board of Directors. 

On his last days in office, Eugenio Vargas changed the longstanding formula on vacation 

payout to inflate the pay of himself and his fellow officers, Bob Ross, Nena Martin, and Marcy 

Dunaway. Rather than including just the salary in the payout of vacation, they included items 

from expenses such as Meal Expense Allowance and SAF. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 23 of 39 PageID 141
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

24

The policy manual provides that officers may be paid out of unused sick and vacation. (Joint Ex 

1.) This should be paid out at their rate of pay. Instead, Vargas inflated their pay to include 

MEA, SAF and stipend which caused them to each be paid over $5000 above what they were 

entitled to. 

Section 6.B.1.c of the policy manual allows an outgoing National Officer to be paid out vacation 

“ at a rate prorated on the National Officer’s annual salary, as defined in 6.A above...” Section 

6.A provides the “The salary of the National Treasurer shall be equivalent to the highest purser 

flight attendant pay rates, including international override pay, for a flight attendant based on 105 

hours monthly.” (Joint Ex 1) There is no ambiguity in the language whatsoever. 

Vargas, along with his fellow national officers Marcy Dunaway and Nena Martin, inflated this 

pay by adding in MEA, SAF and stipend. But nowhere in the policy does it provide that 

expenses and other payments are included. 

This was simply a money grab on their last days in office. Vargas admitted on cross examination 

that this was his idea to do this and that he did not inform the BOD. (TR 656) Even worse they 

broke the checks up into a series of four $4000 checks which they signed for each other three 

days before they left office. (TR 213-214, 661.) While Vargas claims it was to avoid taxes that 

makes no sense since lump sum distributions are always taxed the same.A member of the APFA 

accounting department, Debbie Hoover was subpoenaed and testified in this hearing. Ms Hoover 

testified that she was ordered to add the MEA, SAF and stipend to their pay. She testified it 

raised red flags as it “just had not been done that way. It wasn't past practice.” 

In an exchange, Patrick Hancock, a longstanding member of the APFA leadership, explained to 

Vargas and his cohorts that this policy had been in place since 1987 and was very simple. It was 

based on their pay using their hourly rate. Hancock noted they had paid themselves based on a 

new formula which added in “things like profit sharing, MEA/SAF, Grand Slam rewards, and 

who knows what all. This New Formula was not approved by the BOD or EC....” 

Plaintiff argues Vargas allowed Bob Ross to be paid expense allowances when he was no 

longer working for APFA. This payment was not specified in Ross’ exit package. 

Bob Ross resigned office in March, 2018 receiving an exit package negotiated by outside 

attorney Mark Richard. The validity of the Ross exit package is not in play in this arbitration. A 

separate arbitration ruled the BOD was within their authority to sign that deal. Chinery and Lee 

were not parties to that case. 

Plaintiff argues this case does not challenge the exit package but rather charges Vargas 

allowed Ross to receive thousands of dollars in payments not provided for in the policy manual 

or the exit package. The exit package provides that Ross shall receive the following economic 

items: 

3. Bob Ross will continue to receive from APFA his current full salary and benefits 

including his insurance through July 31,2018. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 24 of 39 PageID 142
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

25

4. APFA agrees to pay Ross all of his accrued and unused back vacation time from 

April 2016 through July 31 2018. 

5. APFA agrees to pay upon his request a one time lump sum in the total amount of 

ten thousand dollars ($10,000) which represents Ross’s moving expenses. Ross 

shall present the moving expenses to APFA for payment through 2019. 

Nowhere in the exit package language does it specify Ross should get paid expense 

payments for months he is not working. Yet Vargas paid Ross $1050 for five months from 

March through July 2018 for a total of $5250. 

Plaintiff argues Vargas used the union credit card for a rental car while on vacation in 

Spain as well as charging a meal while also on per diem. Vargas was charged with violating 

policy by charging a rental car for the week at a cost of almost $700 when he was on vacation in 

Madrid, Spain. Additionally, Vargas was charged with violating meal policy by charging meals 

in Spain while on per diem. Here the record is undisputed that Vargas used the union credit card 

to purchase the rental car. Vargas claims that he was on vacation with his husband and used the 

restroom and somehow his credit card was signed. Vargas claims he paid it back on September 9 

after discovering the mistake. The question then becomes was this an inadvertent mistake or did 

Vargas intentionally misuse the credit card and pay after he realized? Current treasurer Erik 

Harris testified that when Chinery and Lee originally filed the charges he could not find the 

receipt. (TR 378-382.) The receipt was provided by Vargas. So based on the information 

available at the time of charging, these charges were proper. 

Plaintiff argues Article III, Section 6.E of the APFA Constitution places the responsibility 

on the APFA National Treasurer the duty to safeguard the assets of the union. Vargas, in fact, did 

the opposite, repeatedly violating the policy manual for the benefit of himself and others. 

Plaintiff’s request the following remedy: 

1. Vargas repay APFA for the following economic harm: 

a. Vargas repay APFA for all meals charged to his card which lack a proper receipt 

containing itemized meal, business purpose, attendees and/or any meal which 

does not meet the hosting exception. Alternatively, Vargas should repay APFA 

the value of MEA he received during his term which is $7500. 

 b. Vargas repay APFA for the fair market value of Greg Gunther’s furniture he 

embezzled. 

 c. Vargas repay APFA for the value of furniture he failed to protect, including from 

prior administrations. 

2. Vargas be prohibited from serving in any APFA position for life. 

3. We request that a fine be leveled against Vargas equal to the cost of this arbitration 

proceeding pursuant to Article, Section 7.C. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 25 of 39 PageID 143
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

26

4. That APFA be instructed to conduct a full audit of Vargas’ administration and assess 

Vargas any additional funds which are uncovered in the audit. 

5. We ask that the arbitrator retain jurisdiction in case the parties cannot agree on any 

amounts due. 

THE DEFENDANT’S ARGUMENTS 

Defendant argues the only issue to be determined is whether former APFA National 

Treasurer, Eugenio Vargas, committed the following act(s) was a “willful violation of an express 

Article of this Constitution, or of a proper and express written resolution or policy of the Board of 

Directors or Executive Committee” of the APFA Constitution, Article VII, Section 1.F. and did 

Members Melissa Chinery and Sandra Lee (Plaintiff) willfully bring these charges against the 

former APFA National Treasurer, Eugenio Vargas (Defendant), without having evidence 

sufficiently sustain the charges. 

Defendant argues that by definition, were the actions of the former APFA National 

Treasurer, Eugenio Vargas; deliberate, intentional, premeditated or calculated regardless of the 

consequences or effects? Or were they not accidental or done deliberately with disregard to the 

APFA Policy Manual or APFA Constitution. 

Defendant argues the allegations raised by the Plaintiff against former National Treasurer 

Eugenio Vargas were not willful or deliberate, intentional, premeditated or calculated. Mr. Vargas 

however, takes full responsibility for his actions and has provided his full support in Defense of 

these charges. 

Defendant argues the plaintiff has the burden of proof. There are three standards of the 

burden of proof, (1) preponderance of the evidence, (2) clear and convincing evidence and (3) 

beyond a reasonable doubt. This obligation has not been met by any the burden of proof standards. 

Defendant argues the Plaintiff argued in the Article VII charges the credit card use and 

expenses, where the union credit card was used for personal use (rental car) in Madrid Spain. 

Defendant argues the charging parties cite Policy Manual Section 5.G. in support of their 

Article VII charges, when the referenced section of the Policy Manual actually applies to “Actual 

out-of-pocket expenses incurred by a member in conducting APFA business will be reimbursed.” 

Not only was this an invalid citing of the APFA Policy Manual but an indication of their lack of 

understanding of said policy and it’s interpretation, while arguing inaccurate and irrelevant points 

to support their charges. While on vacation with his spouse in Madrid, Spain, and while awaiting 

the keys for a rental car at the Enterprise car rental counter, Vargas handed his spouse his wallet 

to pay for the rental car while he went to the restroom. Upon his return to the car rental counter 

the rental agreement was ready for a signature and the car was ready for pick up. Not until early 

September did Vargas realized a mistake had been made with the payment for the rental car while 

in Madrid, Spain. Vargas realized his spouse had used the APFA Chase Credit Card from his wallet 

instead of his personal Chase Credit Card, when paying for the car rental in Madrid, Spain. The 

following day Vargas returned to APFA with the car rental receipt and explained to the APFA 

senior accountant, Rene Berthelot what had happened, to which he responded “don’t worry, all 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 26 of 39 PageID 144
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

27

you have to do is pay it back. It happens.” Vargas made a payment of $614.20 to APFA on 

September 9, 2016, for the personal rental car charge made to his union credit card. Former APFA 

National Treasurer, Craig Gunter, a licensed CPA, was also questioned on the record about any 

personal purchases he may have inadvertently made with his union credit card, stating “I could 

have, but I don’t think I ever charged anything on it, but you know, they’re all in your wallet so.” 

He further stated, if I had done so “I would have gone to the accountant and said I accidentally did 

this. Here, let me write you a check”. Former APFA National Treasurer, Craig Gunter, also stated 

for the record the process for personal purchases inadvertently made on a union credit card by 

other officers in his administration. 

Defendant argues the Current APFA National Treasurer, Erik Harris, also confirmed that 

the personal car rental purchase inadvertently made by Mr. Vargas on his union credit card while 

on vacation in Madrid, Spain was reimbursed to APFA. Personal purchases made by other APFA 

National Officers using their union credit card were identified on the record. Former APFA 

National Secretary, Jeff Pharr’s union credit card statements revealed multiple personal purchases. 

Mr. Pharr’s union credit card statements also expose this practice as an acceptable habit, multiple 

personal credit card charges along with charges identified for other union representatives. Former 

APFA National Secretary, Jeff Pharr had approximately eight (8) identified personal charges to 

his union credit card along with personal charges made for other union representatives. Mr. Pharr 

was subpoenaed without acknowledgement. 

Defendant argues that former APFA National Treasurer, Eugenio Vargas was charged with 

failing in his responsibility to act in accordance with the APFA Policy Manual Section 5.F., by 

citing “The policy is clear that meals may only be reimbursed on rare and limited occasions when 

entertaining outside guests and in no instance when all participates are already receiving meal 

expenses. This is to prevent double dipping by having APFA pay MEA for meal expenses and 

then also pay for a representative’s meals.” 

Defendant argues APFA had no policy in place on how to differentiate or separate any 

amount from the guaranteed MEA/SAF totals when a National Officer, Regional Representative, 

National Chair, or another Representative, who are authorized a full month removal and receiving 

guaranteed payments of MEA/SAF, is considered a host of an authorized APFA meeting. APFA 

also had no policy in place until this year for a National Officer in relation to ones union credit 

card practice. Current APFA National Treasurer, Erik Harris clarified this fact on the record. APFA 

MIA Base President, Randy Trautman also confirmed no polices were in place for said issues. 

APFA National Treasurer, Erik Harris identified on the record, he himself was non-compliant with 

the “OLMS Law” by not providing the required information while receiving MEA/SAF and was 

never charged with Article VII. The Budget Committee meetings hosted by the APFA National 

Treasurer is one example of an authorized APFA meeting. It is an established practice that has 

been followed through the years for the APFA National Treasurer to provide lunches/dinners for 

their committee members. Yvonne Johnston, Craig Gunter and Erik Harris this practice. 

Defendant argues that the APFA Board of Directors Annual Convention was held in March 

2021, APFA National Vice President, Larry Salas, put forth Resolution No. 10, Business Related 

Meals, which provides a clear policy on reimbursement of business-related meals and group meals 

and entertainment expenditures. The APFA Board of Directors unanimously passed this resolution. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 27 of 39 PageID 145
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

28

This resolution secures the established practice of an APFA Representatives authorization to pay 

for meals of a guest/business associate when the Representative would be considered the host of 

an authorized APFA function or meeting, while not counting against a Representatives MEA. 

Defendant argues The APFA Chase Credit Card statement dating, May 9, 2016, to June 8, 

2016, reflects a purchase made by APFA National Treasurer, Eugenio Vargas, on May 18, 2016, 

in the amount of $8733.89 to Ashley Furniture. This purchase was to augment what was needed 

for the corporate apartments for the three (3) newly appointed APFA National Department Chairs. 

The G/L Acct 1246 document for Furniture & Fixtures provides a record of items purchased under 

the name of each APFA National Department Chair and amount spent. The total value of the initial 

charge differs due to a credit of $104.98. 

Defendant argues that in January 2017, APFA National Health Chair, Gabby Harty 

tendered her resignation. APFA National President, Robert Ross appointed Kim Coats Tuck, as 

interim National Health Chair on January 17, 2017. With 5 months remaining on the Harty 

apartment lease, and in a cost saving measure for the union, Mr. Vargas proffers the empty 

furnished apartment to full time APFA Representative, Renee Mayer in lieu of her Monday-Friday 

hotel expenditures. APFA Office Coordinator, LaDonna Casey scheduled an appointment at the 

end of the Harty apartment lease with “Kiss it Goodbye”, a local consignment shop to provide 

APFA with an estimate for the accepted furnishings remaining in the Harty apartment. Four (4) 

months after receiving the furnishings from the Harty apartment, “Kiss it Goodbye” informed 

APFA with the total dollar amount sold by consignment. APFA received $1159.00 in payment 

from “Kiss it Goodbye”. There was extensive testimony and documents exchanged regarding 

“Kiss it Goodbye” by both parties and the dollar amount ($1159.00) received. On July 2, 2018, 

upon the departure from his position as APFA National Treasurer, Eugenio Vargas had accounted 

for all of the furniture purchased from Ashley Furniture for former APFA National Health Chair, 

Gabby Harty. Chuck Ransdale, after being appointed to the position APFA National Contract 

Chair, testified that for his corporate apartment, APFA purchased bedroom furniture and 

mattress/box springs, including queen bed, chest, and nightstand from Ashley Furniture. In 

December 2017, APFA National Contract Chair, Chuck Ransdale tendered his resignation. The 

bedroom furniture purchased by APFA from Ashley Furniture was in his corporate apartment 

when leaving Dallas. Shane Staples, after being appointed to the position APFA National 

Communications Chair, testified he was instructed to salvage any furniture he could use for his 

corporate apartment from a garage at the Bear Creek apartment complex, which was being used 

by APFA as storage. After these items were repurposed, the Ashley Furniture items were 

purchased. In preparation for the end of his term and transition period, APFA National 

Communications Chair, Shane Staples completed a detailed inventory of all his furnishings in his 

APFA corporate apartment, which contained the contents purchased at Ashley Furniture. 

Defendant argues Members Melissa Chinery and Sandra Lee have cited language from 

Section 8.I.3.b.(5) of the APFA Policy Manual which governs the inventory and transfer of Office 

Equipment only. The Charging Parties have once again quoted and used invalid language to 

substantiate their Article VII charges against former APFA National Treasurer, Eugenio Vargas. 

Defendant argues Members Melissa Chinery and Sandra Lee have alleged that former 

APFA National Treasurer, Eugenio Vargas, failed in his responsibility to act in accordance with 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 28 of 39 PageID 146
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

29

the APFA Policy Manual by citing “ Vargas failed to properly oversee Ross’ payments and 

allowed Ross to receive payment for MEA, SAF and Maintaining Office Outside Residence all 

which is not part of basic salary.” The APFA has an organizational structure that is two-tier, 

consisting of Base Presidents, who are the voting members and the four (4) National Officers, who 

are non-voting members collectively they make up the APFA Board of Director. In February 2018, 

Charlotte, North Carolina the APFA Board of Directors (BOD) convened for their annual 

convention, the voting Board of Directors, under strict consult of APFA Legal Counsel, Mark 

Richard, negotiated a Ross “Transition Agreement.” The negotiations were solely between the 

voting Board of Directors, APFA Legal Counsel, Mark Richard and APFA National President, 

Robert Ross. APFA National Treasurer, Eugenio Vargas was neither involved in the negotiations 

of the Ross “Transition Agreement” nor was he present in the room or a signatory of said 

agreement. In fact, APFA National Treasurer, Eugenio Vargas, had never viewed the Ross 

“Transition Agreement” in its entirety, only the economic portions which encompassed covenants 

#3, #4 and #5. 

Defendant argues Members Melissa Chinery and Sandra Lee have alleged that former 

APFA National Treasurer, Eugenio Vargas, failed in his responsibility to act in accordance with 

the APFA Policy Manual by citing “ Vargas failed to properly oversee Ross’ payments and 

allowed Ross to receive payment for MEA, SAF and Maintaining Office Outside Residence all 

which is not part of basic salary.”

Defendant argues the APFA has an organizational structure that is two-tier, consisting of 

Base Presidents, who are the voting members and the four (4) National Officers, who are nonvoting members collectively they make up the APFA Board of Director. In February 2018, 

Charlotte, North Carolina the APFA Board of Directors (BOD) convened for their annual 

convention, the voting Board of Directors, under strict consult of APFA Legal Counsel, Mark 

Richard, negotiated a “Transition Agreement”. The negotiations were solely between the voting

Board of Directors, APFA Legal Counsel, Mark Richard and APFA National President, Robert 

Ross. APFA National Treasurer, Eugenio Vargas was neither involved in the negotiations of the 

Ross “Transition Agreement” nor was he present in the room or a signatory of said agreement. 

APFA National Treasurer, Eugenio Vargas, had never viewed the Ross “Transition Agreement” 

in its entirety, only the economic portions which encompassed covenants #3, #4 and #5. 

Defendant argues Covenant #3 of the Ross “Transition Agreement” states “APFA agrees 

that Bob Ross will continue to receive from APFA his current full salary and benefits, including 

full insurance coverage, through July 31, 2018. Former APFA National Treasurer, Eugenio 

Vargas, stated for the record the difference between, “Basic Salary” and “Full Salary” regarding a 

National Officers compensation. Former APFA National President, Laura Glading, also received 

“Full Salary” upon her exit, per the terms of her “Transition Agreement.” “Full Salary” for a 

National Officer, per the APFA Policy Manual, Section 5, entitles them to receive guaranteed 

MEA, SAF and Office Outside Residents payments. This guaranteed payment of $1050 is included 

in the gross wages “Box 1” of the National Officers W-2 tax form. Marcus Gluth corroborates the 

meaning of Basic Salary vs. Full Salary. 

Defendant argues The NDAs on both the Glading “Transition Agreement” and the Ross 

“Transition Agreement” were lifted at the same time by APFA National President, Julie Hedrick, 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 29 of 39 PageID 147
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

30

allowing Members Melissa Chinery and Sandra Lee, to view both agreements in their entirety for 

any language and payment comparisons. No article VII charges were filed against Laura Glading 

for her ‘Transition Agreement.” 

Defendant argues the hearing in the Matter of Arbitration between Julie Moyer (charging 

party) and the 2018 APFA Board of Directors (charged party), before Article VII Arbitrator, 

Edward B. Valverde, Esq., was held on June 1-3, 2021, with a decision rendered on September 21, 

2021. The Award clearly determined, in line with the charged party’s defense, that Article III, 

Section 3.A authorizes the APFA Board of Directors to take any and all lawful action consistent 

with the Constitution to safeguard and protect APFA. 

Defendant argues Former APFA National Treasurer, Eugenio Vargas used “Full Salary” 

to calculate the vacation buyback, sick buyback, and end of term calculations for the Ross 

administration when leaving office, which included MEA and SAF. After numerous requests for 

a meeting, the first written communication on behalf of APFA was sent by In-House Counsel, 

Susannah Bender, to the three (3) former National Officers of the Ross administration on 

September 4, 2019, approximately 2 months after the original Facebook post on July 11, 2019. 

The letter confirms that certain payouts made in 2018, incorrectly included MEA and SAF in the 

calculation. The letter continues to request that the “Union be made whole” but still no specific 

dollar amount owed had been established. Not until September 18, 2019, was the three (3) 

members of the Ross administration noticed of a dollar amount owed, supported by a single sheet 

of paper and without documents to substantiate the claim. Patrick Hancock revealed that APFA 

believed their calculations were correct based on a 1987 formula invented by former APFA 

National President, Patti Gibbs. Former APFA National Treasurer, Eugenio Vargas, stated for the 

record that he did include “Full Salary” which included MEA and SAF in the calculations of 

vacation buyback, sick buyback, and end of term calculations for the Ross administration when 

leaving office. He has never disputed that fact. Mr. Vargas used the same “Full Salary” logic that 

was used in the calculation of the Ross “Transition Agreement” and the Glading “Transition 

Agreement.” He used the one and only number identified on the officers W-2 as gross wages, 

which include MEA and SAF in his calculations, but in actuality this calculation was irrelevant 

due to the fact that a “1987 formula” should have been used. 

Defendant requests the Article VII charges against Eugenio Vargas be dismissed in its 

entirety. 

DISCUSSION AND OPINION 

The arbitrator finds the allegations raised by Plaintiff against Defendant, the former 

National Treasurer Eugenio Vargas must be a willful violation of an express Article of this 

Constitution, or of a proper and express written resolution or policy of the Board of Directors or 

the Executive Committee. (See Article VII, Section 1) The definition of “willful” has many 

meanings, its construction often influenced by its context. It often denotes an act which is 

intentional, or knowing, or voluntary, as distinguished from accidental. But when used in a 

criminal context it generally means an act done with a bad purpose; without justifiable excuse; 

stubbornly, obstinately, perversely. It may also be construed to mean an act or omission is willfully 

done, if done voluntarily and intentionally and with the specific intent to do something the law 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 30 of 39 PageID 148
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

31

forbids, or with the specific intent to fail to do something the law requires to be done; that is to 

say, with bad purpose either to disobey or to disregard the law. Additionally, a willful act may be 

described as done intentionally, knowingly, and purposely, without justifiable excuse as 

distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently. (Black’s 

Law Dictionary, 5th Edition, pg. 1434). 

Additionally, the arbitrator is of the Opinion that in order for the Plaintiff to meet its’ 

burden of proof, it must not only be a “willful” violation but such proof must be supported with 

clear and convincing evidence. 

Issue No. 1: – Violating the Meal Expense Policy 

The arbitrator finds the scope of Section 5.F. of the Policy Manual deals with Meal 

Expenses/Meal Expense Allowance (MEA); Per diem MEA Away from Residence; Actual MEA 

at Residence; Guaranteed MEA at Residence; Calculation of MEA and Business Related 

Expenses. 

Plaintiff argued that Former National Treasurer Eugenio Vargas spent thousands of dollars 

in DFW on meals that are not allowed by the policy manual. Vargas spent $10,945.28 on his APFA 

Union credit card on meals during his two-year term of office. Plaintiff submits that many of the 

meals lacked the proper documentation; by failing to provide an itemized receipt, the purpose, 

and/or the attendees of the meal. At the same time, Vargas was receiving a guaranteed meal 

expense allowance of $300.00 per month for his National Officer position and was therefore 

double-dipping at the expense of the membership. Thus, for his 25-month tour as National 

Treasurer, Vargas received $7,500.00. 

The arbitrator finds and the record evidence supports the fact that APFA maintained a 

check and balance system to insure the proper disposition of these expenses. Lukenmeyer testified 

expenses are reported on an expense report and are supposed to have two signatures, so there 

should be another person who is overseeing what the Treasurer is doing or spending, whomever 

signs the other half of that expense report. Another National Officer is usually the person signing 

and affirming the expenses are true and accurate. The only way this could be accomplished is by 

having the proper documentation to include an itemized receipt, the purpose of the meal expense 

and the name of the attendees. Plaintiff argued Vargas and his fellow National Officers frequented 

Raven’s Grill Country Club. Vargas spent $1,727.00 on his APFA credit card for several meals at 

Raven’s Grill but other National Officers took turns buying meals for each other on their own 

APFA credit card. This raises the question as to whether or not the check and balance system had 

failed. We however have to consider that the person who is approving these expenses was 

knowledgeable of the policy manual and what was required for it to be a true and accurate expense 

report was submitted with the proper documentation. Defendant argued this Check and balance 

procedure is a past practice of prior administrations. Record evidence revealed that this has been 

a frequent ongoing past practice in several administrations prior to and after the Ross 

Administration. Plaintiff filed an Article VII charge against Vargas when they could have filed 

charges on other National Officers as well. Plaintiff’ represented that these meal expenses lacked 

the proper documentation. Record evidence revealed there were missing files of the Vargas 

administration, then it could be conceivable that these missing files contained the rest of the 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 31 of 39 PageID 149
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

32

documentation. Thus, the check and balance system in place may or may not have failed to catch 

the meal purchases lacked the proper documentation, as we are unsure. Record evidence revealed 

other National Officers were also taking turns in buying meals on their APFA credit card. They 

too may not have been aware of this activity could be viewed as “double dipping” to uphold an 

inappropriate use of the APFA Union credit card. So, when a weekly expense report is submitted 

to whomever for signature from Vargas, the individual signing it did not foresee a problem and 

signed off affirming the expenses were true and accurate. Present day National Treasurer Erik 

Harris testified there has been a lot of interpretation and no definitive policy was in place on the 

use of the APFA Union credit card. He also said the Union was aware of these shortcomings and 

the BOD recently took affirmative action and passed Resolution No. 10 - Business Related Meals, 

Exhibit (V-15) to correct and clarify. Without a clear policy in place, this arbitrator cannot affirm 

the expenses Vargas submitted for payment was proper. 

Thus, the arbitrator is of the Opinion the evidence Plaintiff submitted is their interpretation 

of what they believe should be considered improper use of an APFA Union credit card. This 

arbitrator is not persuaded with the evidence presented. Additionally, no questions were asked of 

Vargas regarding all of these expenses. Plaintiff argued that the APFA Constitution states, 

“Ignorance of this Constitution will not be considered a proper excuse for any violation of the 

provisions contained herein.” Without a definitive explanation or proper documentation from 

Vargas over each expense, we would be guessing if Vargas engaged in improper use of the APFA 

Union credit card! 

It is the arbitrator’s Opinion an independent auditor be hired to audit Vargas APFA credit 

card usage as to whether proper documentation was provided with the expense reports. 

Additionally, such auditor shall audit Vargas Tenure as National Treasurer and inspect his APFA 

credit card statements, expense reports, and whether two signatures were provided and whether it 

documented the purpose of the meal and with the names of the attendees. Thus, the evidence 

presented does not establish Vargas’ behavior at this juncture was “willful” in violation of Article 

VII, Section 1, but if the audit conducted finds Vargas purchased meals for himself only then it 

would be found that his conduct was “willful” and would require him to repay APFA. This audit 

would reveal whether Defendant failed in his fiduciary duty as National Treasurer. Moreover, the 

record evidence at this point is not clear and convincing enough to establish Vargas expenses were 

inappropriate at this juncture. Only an independent audit will determine whether the evidence 

compiled is clear and convincing. 

Moreover, the arbitrator finds in Exhibit (V-13, dated March 8-10, 2021) Resolution No. 8 

where the BOD adopted a new credit card policy for APFA issued credit cards. Under 

“Documentation of usage” it states, 

a. Each National Officer shall submit an electronic report to the accounting 

department within thirty (30) days of the end of the month in which the 

charges were made. The report to be sent to the accounting department shall 

include: 

(1) The month and year must clearly be denoted on the report. 

(2) A copy of the itemized receipts for all purchases made. 

(3) The department(s)/budgets to which the charges are being 

made. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 32 of 39 PageID 150
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

33

b. Each report must be signed by two (2) National Officers, one of whom must 

be the National Officer who submitted the report. 

Resolution No. 8 also provides for the “Maintenance of Records”, “Payment of statements should 

be paid as soon as possible so as to avoid unnecessary interest charges”, “Policy Compliance”, 

“Training” and all credit card holders are required to sign the APFA Card-Holder Agreement. The 

National Treasurer will maintain a copy of all signed agreements. 

Under these given circumstances Issue No.1 is remanded to the BOD or EC to hire an 

Independent Auditor to audit Vargas credit card charges during his term as National Treasurer. 

Additionally, if the missing files are in the position of the Defendant, it is hereby Ordered that they 

be turned over to Erik Harris, the National Treasurer for the independent auditor’s audit. In the 

hearing, Plaintiff argued that some of Defendant’s evidence were part of the missing documents. 

If not provided, an adverse inference may be drawn. 

Issue No. 2: - Failing to Maintain an Inventory list thereby violating Article 11, Section 6.E. 

of the APFA Constitution by failing to maintain Union assets? 

Plaintiff argued that Vargas handling of APFA furniture is unaccounted for. Plaintiff 

stated, 

“Finally, thousands of dollars of furniture, including furniture purchased 

by Vargas, is unaccounted for. As Treasurer Vargas had an obligation 

under the APFA constitution and federal labor law to safeguard union 

property. On one receipt dated 5/18/16 under Vargas's union credit card 

charges we found a purchase for $8733.89 at Ashley furniture. There is no 

record or inventory of that furniture nor can the furniture be located. The 

APFA policy manual requires that the National Treasurer inventory 

equipment and monitor the transfer of equipment between representatives. 

This was never done. 

The Treasurer has the responsibility to safeguard the funds of the APFA 

union members as outlined in Article III Section 6.E. of the APFA 

Constitution: Duties of the Treasurer: The Treasurer shall be responsible 

for the care and custody of the funds and securities of the APFA.” 

Plaintiff argued Vargas is charged with an act of omission, the failure to maintain an 

inventory of furniture. Vargas is also charged with a violation of a specific Article of the 

Constitution, which is his duty “to safeguard the funds of the APFA union members as outlined in 

Article III, Section 6.E. of the APFA Constitution.” 

Plaintiff requested of then National Treasurer Craig Gunther to supply the inventory lists 

and Craig Gunther testified the APFA has no records of furniture from Vargas’ tenure as National 

Treasurer. This is corroborated by present National Treasurer Erik Harris who also stated there is 

no record of inventory from the Vargas Administration. 

Record evidence revealed the Defendant submitted a depreciation list which referenced the 

furniture but according to Erik Harris’ testimony, a depreciation list does not constitute a proper 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 33 of 39 PageID 151
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

34

inventory list. Defendant argued the Ashley Furniture has been accounted for as Vargas purchased 

the furniture for three committee chairs, Gaby Harty, Chuck Ransdale and Shane Staples. 

Defendant argued the APFA Chase Credit Card statement dating, May 9, 2016, to June 8, 

2016, reflects a purchase made by APFA National Treasurer, Eugenio Vargas, on May 18, 2016, 

in the amount of $8733.89 to Ashley Furniture. This purchase was to augment what was needed 

for the corporate apartments for the three (3) newly appointed APFA National Department Chairs. 

The General Ledger Account 1246 document for Furniture & Fixtures provides a record of items 

purchased under the name of each APFA National Department Chair and amount spent. The total 

value of the initial charge differs due to a credit of $104.98. 

Defendant argued that in January 2017, APFA National Health Chair, Gabby Harty 

tendered her resignation. APFA National President, Robert Ross appointed Kim Coats Tuck, as 

interim National Health Chair on January 17, 2017. With 5 months remaining on the Harty 

apartment lease, and in a cost saving measure for the union, Vargas proffers the empty furnished 

apartment to full time APFA Representative, Renee Mayer in lieu of her Monday-Friday hotel 

expenditures. APFA Office Coordinator, LaDonna Casey scheduled an appointment at the end of 

the Harty apartment lease with “Kiss it Goodbye”, a local consignment shop to provide APFA 

with an estimate for the accepted furnishings remaining in the Harty apartment. Four (4) months 

after receiving the furnishings from the Harty apartment, “Kiss it Goodbye” informed APFA with 

the total dollar amount sold by consignment. APFA received $1159.00 in payment from “Kiss it 

Goodbye”. There was extensive testimony and documents exchanged regarding “Kiss it Goodbye” 

by both parties and the dollar amount ($1159.00) received. On July 2, 2018, upon the departure 

from his position as APFA National Treasurer, Eugenio Vargas had accounted for all of the 

furniture purchased from Ashley Furniture for former APFA National Health Chair, Gabby Harty. 

Chuck Ransdale, after being appointed to the position APFA National Contract Chair, testified 

that for his corporate apartment, APFA purchased bedroom furniture and mattress/box springs, 

including queen bed, chest, and nightstand from Ashley Furniture. In December 2017, APFA 

National Contract Chair, Chuck Ransdale tendered his resignation. The bedroom furniture 

purchased by APFA from Ashley Furniture was in his corporate apartment when he left Dallas. 

Shane Staples, after being appointed to the position APFA National Communications Chair, 

testified he was instructed to salvage any furniture he could use for his corporate apartment from 

a garage at the Bear Creek apartment complex, which was being used by APFA as storage. After 

these items were repurposed, the Ashley Furniture items were purchased. In preparation for the 

end of his term and transition period, APFA National Communications Chair, Shane Staples 

completed a detailed inventory of all his furnishings in his APFA corporate apartment, which 

contained the contents purchased at Ashley Furniture. 

Plaintiff argued Vargas violated his duty as National Treasurer of APFA to safeguard union 

property as required in Article III, Section 6.E. 

Plaintiff argued the APFA Constitution, Article VII, Section 6.D specifies the procedure a 

charged party can utilize if they want to narrow the scope of charges, stating: 

D. The Article VII Arbitrator may, on his/her own motion, or 

upon motion filed by the accused, determine that charges are 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 34 of 39 PageID 152
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

35

not sufficiently specific and that they will be dismissed 

unless the accuser amends them to provide sufficient 

specificity. 

Here, Defendant objected at hearing for Plaintiff broadening the scope of this charge over 

questions asked of Vargas regarding Greg Gunter’s furniture that he had purchased it for his own 

personal use. Defendant states the charges were deemed valid, timely and specific before the EC 

and it only raised issues with Ashley Furniture. Defendant agrees Vargas needs to answer to the 

charge of the Ashley furniture of $8,733.95 that he purchased as the Treasurer of APFA. Plaintiff 

however argues Defendant failed to follow proper procedure in raising objections and in doing so 

failed to follow the APFA Policy Manual and Constitution. By failing to follow proper procedure, 

Defendant raised an objection in a manner which does not protect the rights of the charging parties. 

This arbitrator does not agree, the Ashley Furniture is the only issue that is valid, specific and 

timely in the grievance charges. It does not say anything else about Greg Gunter’s furniture. 

Plaintiff failed to amend the grievance charge to include Greg Gunter’s furniture. By Plaintiff 

raising this additional issue at hearing for the first time, this is an attempt by Plaintiff to engage in 

an “ambush through arbitration.” Thus, the objection raised by Defendant is correct and is hereby 

sustained. 

Plaintiff argued that Section 8.I.3.b.(5) of the Policy Manual deals with the National 

Treasurer duty to maintain a procedure to monitor the transfer of equipment, when appropriate, 

between representatives in the field. The arbitrator finds no evidence was presented to support this 

allegation. 

The arbitrator finds Vargas failed to prepare an inventory list. This arbitrator is of the 

Opinion that all of the Ashley furniture has been fully explained and accounted for. Record 

evidence however revealed there was no inventory list prepared and Harris testified there was no 

inventory list. Under these circumstances, Vargas did fail in his fiduciary duty as National 

Treasurer to prepare an inventory list to maintain Union assets and violated Article 1, Section 2.J, 

Section 7.E.O.Q and Article 1II, Section 6.E. of the APFA Constitution. 

Thus, it is the arbitrator’s Opinion Issue #2 has merit by Vargas failing to prepare an 

inventory list to maintain Union assets. 

Issue No. 3 Allowing himself and his fellow National Officers to receive 

inflated sick and vacation payouts when they were not entitled to 

such, and 

Issue No. 4 Allowing the payment to former National President Bob Ross 

thousands of dollars in Meal Expenses Allowance (MEA) and 

SAF when he was no longer working for APFA? 

The arbitrator has consolidated Issue No. 3 and Issue No. 4 as it involves the same issue. 

Plaintiff argued that Vargas changed the longstanding formula on vacation payout for 

himself and fellow officers Bob Ross, Nena Martin and Marcy Dunaway. Vargas included expense 

items such as Meal Expense Allowance (MEA) and SAF. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 35 of 39 PageID 153
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

36

Plaintiff argued the Policy Manual provides that officers may be paid out of unused sick 

and vacation. This should be paid at their rate of pay. Vargas inflated their pay to include MEA, 

SAF and stipend, which created an overpayment of $5,000.00 above what they were entitled. 

Plaintiff argued Section 6.B.1.c of the Policy Manual allows an outgoing National Officer 

to be paid out vacation “at a rate prorated on the National Officer’s annual salary, as defined in 

6.A above...” Section 6.A provides, “The salary of the National Treasurer shall be equivalent to 

the highest purser flight attendant pay rates, including international override pay, for flight 

attendant based on 105 hours monthly.” Plaintiff argued this was simply a money grab on their 

last days in office. Vargas admitted on cross-examination that this was his idea to do this and that 

he did not inform the BOD. Even worse they broke the checks up into a series of four $4000.00 

checks which they signed for each other three days before they left office. Vargas claimed it was 

to avoid taxes. 

Plaintiff presented accountant Debbie Hoover who testified that National Officer Eugenio 

Vargas approached her about changing the formula. She said she was also told to add SAF and 

MEA. This did raise a red flag with her because this has never been done before, it wasn’t past 

practice and this was completely different. On cross-examination, she said Senior Accountant 

Rene Berthelot worked with her. She said in box number 1 of Vargas W-2 is everything you get 

paid minus the 401K because that’s nontaxable. She was asked if that would include MEA, SAF 

and an office outside of residence and she said they were all included in box 1. 

Defendant Vargas testified that Attorney Mark Richards showed him only the economic 

Items 3, 4 and 5 of the Bob Ross Transition Agreement, Exhibit (V-100). Vargas said he did not 

benefit directly or indirectly from the Ross Transition Agreement. Vargas was asked what the 

difference was between basic salary and full salary for a National Officer. Vargas stated that Basic 

salary is an hourly rate plus international override and purser pay times a set amount of hours. Full 

salary would include basic salary and include guaranteed MEA, and guaranteed SAF and this is 

what Ross was paid. Laura Glading in her exit agreement received the same as Ross and the BOD 

agreed. 

Defendant Vargas takes full responsibility for his actions involving his oversight and 

payment of the Ross “Transition Agreement” after only viewing the economic portions, which 

encompassed covenants #3, #4 and #5 and has provided his full support in these charges, including 

the mathematical determination he created to be used for “Full Salary” vs “Basic Salary” for said 

payments. The Ross “Transition Agreement” has been deemed valid by Arbitrator, Edward B. 

Valverde, and the actions of the APFA Board of Directors were permissible under the provisions 

of the APFA Constitution and no evidence that the APFA Board of Directors was fiscally 

irresponsible when entering into the Ross “Transition Agreement”. 

Defendant Vargas takes full responsibility for his actions involving his changing of the 

mathematical formula when using “Full Salary” vs “Basic Salary” to calculate the vacation 

buyback, sick buyback, and end of term calculations for the Ross Administration when leaving 

office. Vargas said that Patrick Hancock informed him that the formula always used was a 1987 

package formula. Vargas has provided his full support in these charges, including months of 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 36 of 39 PageID 154
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

37

correspondence between the three former officers, APFA National Officers, APFA Board of 

Directors, APFA In-House Counsel, APFA Executive Committee and Members Melissa Chinery 

and Sandra Lee, by providing a clear picture of his willingness to repay the overage, once 

established from the “1987 “ formula that was exposed months after the July 11, 2019, Facebook 

post by Member Sandra Lee. Eugenio Vargas never stated he would not pay an amount if owed, 

but expected the calculation to be accurate and accounted for. 

The arbitrator finds Vargas interpretation of the Ross Transition Agreement to not only 

include MEA and SAF but he included a stipend. Vargas had instructed Hoover to change the 

formula to include MEA and SAF and the stipend in the payouts of National Officers Ross, Martin, 

Dunaway and himself. Thereafter, written communication on behalf of APFA was sent by InHouse Counsel, Susannah Bender, to the three (3) former National Officers of the Ross 

administration on November 8, 2019, stating “After the meeting held on October 30, 2019, to allow 

you to review the independent auditor’s calculations, it is our understanding that you take issue 

with how the calculations were made. We researched the issue again and believe our initial 

calculation is correct”. 

Defendant argued in the calculations provided at the October 30, 2019, meeting, simple 

math was used to determine the alleged monies owed by taking “Full Salary” minus “Basic 

Salary”, then stating the difference was MEA and SAF. Calculating MEA and SAF in this manner 

was incorrect due to other income being included in the “Full Salary”, like the UAL Arbitration 

payout, which provided a pay increase with retroactive pay. 

The arbitrator finds in the APFA Executive Committee meeting dated December 5-7, 2019 

Resolution #69 where the EC resolved this matter by stating, “that if the repayment plan is not 

received, the APFA Attorney is directed to file a State Civil lawsuit no later than January 6, 2020 

to collect these funds,” and any settlement agreements be approved by the Executive Committee 

prior to APFA acceptance. 

Defendant Vargas said he has since entered into a payment agreement to repay the overage 

debt. Vargas admitted that it was his interpretation of the Ross Transition agreement to change the 

formula for the MEA, SAF to be included in their payouts and this is what created the overage. 

It is this arbitrators Opinion, Vargas attempted to benefit monetarily and thus failed in his 

fiduciary duty as National Treasurer by willfully changing the formula for the payouts for Bob 

Ross, Nena Martin and Marcy Dunaway as well as himself. 

It is therefore the Opinion of this arbitrator, Issue No. 3 has merit as Vargas violated his 

fiduciary duty as National Treasurer. 

With respect to Issue No. 4, the arbitrator finds Vargas admitted that he had changed the 

formula, this has been established in Issue No. 3. But in Issue No. 4, Plaintiff argued that Vargas 

paid Ross MEA and SAF when he was not working. Under item No. 3 of the Ross Transition 

Agreement, it clearly states, “APFA agrees that Ross will continue to receive from APFA his 

current full salary and benefits, including full insurance coverage, through July 31, 2018.” The 

Ross agreement is binding as stated by Arbitrator Edward B. Valverde. Vargas did include MEA 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 37 of 39 PageID 155
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

38

and SAF in Ross’s salary in accord with Item No. 3 as well as Item No. 4. “APFA agrees to pay 

Ross all of his accrued and unused sick and accrued and unused vacation time, from April 1, 2016 

through July 31, 2018.” But Ross too received an overage because Vargas had changed the formula 

and he too is required to pay the debt owed. 

In Issue No. 4, Ross did receive an overpayment because Vargas admittedly changed the 

formula. It is my understanding Ross has an outstanding debt with the APFA. It is clear Vargas 

manipulated the payout formula. In the Bob Ross Transition Agreement, MEA and SAF were 

included. The issue with MEA and SAF has been resolved as well as the overpayment to Ross, 

Nena Martin, Eugenio Vargas and Marcy Dunaway. Dunaway and Vargas have agreed to a 

payment plan and Martin has paid her debt in full. Only Ross has not paid. Thus, Issue No. 4 has 

been resolved and is now moot. 

Issue No. 5 Violating the credit card policy by charging a rental car and 

meals for a trip to Spain?

Here, Vargas made two trips to Madrid Spain. One was for vacation and the other was 

work related for the APFA where he engaged in a time study aboard a 787 airplane. On the vacation 

trip, he approached the Enterprise Rental Car counter to rent a car. He told his spouse he needed 

to go to the restroom and gave his spouse his wallet. Upon his return was the rental agreement and 

he signed it. He did not notice the charge was on the APFA Union credit card and not on his Chase 

Visa card. In early September when the bill for the credit card came in, he was doing reconciliation 

of the credit card bill and noticed the Enterprise charge. When he arrived home, he obtained the 

enterprise receipt and noticed that the APFA credit card was used. He brought the receipt back to 

APFA the following morning and when senior Accountant Rene Berthelot arrived to work, he told 

him what happened. Berthelot said all you have to do is pay it back. He paid it back on September 

9. Exhibit (V-19) is Vargas personal Chase account. Exhibit (V-20) is proof that Vargas made the 

payment and reconciled the rental car from his personal account for the full amount. Exhibit (V21) is the bill in question. The total amount was $872.34 and deducted a credit of $258.07 (Deposit) 

owing APFA $614.29. He charged a meal, and this occurred when American Airlines introduced 

the premium economy class on the 787 aircraft with the time study. 

The arbitrator finds Vargas in this instance recognized the charge of the rental car he rented 

in Spain while on vacation. The charge was on his APFA credit card statement. Vargas paid back 

the APFA $614.29. This reveals Vargas recognized that he had made an error and rectified it. As 

to the meal alleged this was a work-related meal when he conducted the time study on a trip to 

Madrid. It is therefore, the Opinion of this arbitrator this matter is now moot. Thus Issue No. 5 has 

no merit. 

Conclusion 

The arbitrator having found no merit to Issue # 4, #5 are hereby dismissed. Issue #2, #3 

have merit. Issue No.1 is remanded to the BOD or EC to hire an Independent Auditor to audit 

Vargas credit card charges during his term as National Treasurer. Additionally, if there are missing 

files in the possession of the Defendant, it is hereby Ordered that they be turned over to Erik Harris, 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 38 of 39 PageID 156
RE: Charging Party Members Melissa Chinery and Sandra Lee (Plaintiff) vs. Charged Party Member 

Eugenio Vargas (Defendant), Article VII Hearing 

39

the National Treasurer for the independent auditor’s audit. If not, an adverse inference may be 

drawn. 

Remedy 

Vargas is to repay APFA for the following: 

1. If after the Independent Auditors audit is completed and he/she determines that 

Vargas had used the APFA credit card for his own personal use on meals during his 

tenure as National Treasurer, Vargas is hereby Ordered to repay APFA for all meals 

he charged to the APFA credit card. 

2. Vargas is prohibited from serving in any APFA National Officer position or Regional 

Officer position for life. 

3. Vargas is hereby fined and Ordered to repay the APFA for half of the Arbitrator’s Fee 

for this arbitration. 

4. The arbitrator shall retain jurisdiction for 90-days over any issue involving this remedy 

only. Moreover, if the Independent Auditor determines any monies are due from 

Vargas, that will be the amount to be assessed or due and the BOD or EC shall Order 

said repayment from Vargas. 

AWARD 

The grievance is sustained in part and dismissed in part as stated above. 

Issued in San Antonio, Texas, the 18th day of February, 2022. 

Case 4:22-cv-00430-Y Document 11-1 Filed 06/13/22 Page 39 of 39 PageID 157