By Jon Ortiz
jortiz@sacbee.com
Published: Saturday, Oct. 23, 2010 – 12:00 am | Page 3A

A federal jury hammered the state’s correctional officers union on Friday, awarding $10 million in punitive damages in a defamation case.

The damages come on top of $2.3 million in actual damages awarded against the California Correctional Peace Officers Association in the same case Monday.

The Bee learned of the punitive damages award after U.S. District Court had closed. Plaintiff attorney Daniel Baxter confirmed the details.

CCPOA officials did not return calls for comment about the award or the possibility of appeal. It’s unclear how the judgment could affect the powerful union’s leadership and political activity. The union has failed to negotiate a contract with the Schwarzenegger administration for four years and lost its recent battle to stop pension changes inspired by Gov. Arnold Schwarzenegger.

The jury’s decision caps a 3-year-old lawsuit against CCPOA and Auburn-based Corrections USA that claimed union President Mike Jimenez and other officials breached contracts and spread lies about Brian Dawe and two co-plaintiffs.

Dawe is a founder and former executive director/treasurer of Corrections USA, a coalition of individual prison officers and prison officer unions from around the country.

CCPOA was a member. It eventually took over the coalition’s board and ousted Dawe, who had started “investigating improprieties” in the coalition’s California bank account, according to court records.

Dawe said the unjust firing and false remarks to justify it breached a contract, damaged his reputation and devastated his livelihood.

The jury returned to Judge Lawrence Karlton’s courtroom Friday to consider punitive damages and got a rare public glimpse into the union’s financial books:

• CCPOA’s net worth has fallen from $16.55 million in 2006 to about $4.7 million now. Jeff Nicolaysen, chief financial officer, said increased legal costs brought on by furlough litigation and higher costs for individual member representation, attrition and members who refuse to pay dues have cut into assets.

• CCPOA dues total $30 million annually. The union’s annual budget roughly matches its income.

• CCPOA has budgeted $11 million for pay and benefits for between 86 and 92 employees this year.

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