Labor Union Reported Political Embezzlement Allegations to FBI, Local Police

The Seafarers International Union has told the FBI and Prince George’s County Police Department in Maryland that it suspects the union president’s daughter embezzled hundreds of thousands of dollars from two union-linked political committees.

A NOTUS report in May revealed the union suspected Chelsea Diab of embezzling nearly $300,000 from its federal political action committees. The union confirmed the report in a recent letter to the Federal Election Commission.

“Diab initially denied wrongdoing, but subsequently acknowledged her responsibility upon being confronted with contradictory evidence” after the union initiated an internal review in October 2025, the Seafarers International Union wrote to the FEC.

The union said an internal investigation determined that Diab had “acted alone” and that no one else was “involved in or aware of the misconduct.” The union has fired Diab, who also goes by the name Chelsea Heindel and is the daughter of Seafarers International Union President David Heindel.

Neither Diab nor the Seafarers International Union have returned repeated requests for comment. The union previously released a statement saying it was “fully cooperating” with unspecified law enforcement activities.

The union’s financial drama has since captured the attention of the House Education and Workforce Committee, whose top Republican sent a letter to the Seafarers International Union demanding more information.

Committee Chair Tim Walberg (R-Michigan) and Rep. Rick Allen (R-Georgia), who chairs the subcommittee on health, employment, labor and pensions, said NOTUS’ reporting had raised “significant concerns regarding financial accountability, internal controls, and possible breaches of fiduciary duty involving these PACs.”

Rep. Tim Walberg (R-Michigan). Joshua A. Bickel/AP

“Workers’ political contributions should never function as a personal checking account for union insiders. The apparent absence of meaningful safeguards raises the troubling question of whether anyone was watching the money at all,” Walberg and Allen wrote to the union in its letter, which Bloomberg Law first reported.

The two lawmakers added that they were “particularly troubled that the suspected misconduct may have persisted for years before being detected.” They also asked if the union, a tax-exempt organization largely funded by member dues, had notified federal authorities of the alleged embezzlement.

The lawmakers gave the union until June 22 to respond to a list of questions. Walberg told NOTUS on Wednesday that his staff had not told him if they’d received a response.

“I’ll have to get back with you,” Walberg told NOTUS.

Audra McGeorge, a spokesperson for Walberg, confirmed Thursday that the union had responded, but she did not detail what the union said.

Neither Allen nor a spokesperson responded to requests for comment from NOTUS.

The financial crimes division of the police department in Prince George’s County, where the union is based, did not respond to a request for comment from NOTUS. The FBI declined to comment, and the FEC does not comment on investigations or enforcement matters.

As NOTUS previously reported, FEC records indicate Diab’s financial saga began at least a year and a half ago, when she gave $3,000 to the union’s PAC in January 2025 for “return of misappropriated funds.” The payment was made months before the union says it launched its review of Diab’s actions as its PAC treasurer.

The union also told the FEC that its insurance carrier had reimbursed the union for the full amount of the money allegedly embezzled, minus a $2,500 deductible. The union reported receiving $292,888.69 from Chubb and Son Federal Insurance Company on March 9 for “insurance recovery” related to “embezzlements by former Treasurer.”

The union did not disclose in its latest letter to the FEC what internal controls were in place at the time of the alleged embezzlement, but it said it had made a number of changes including requiring two signatures for all PAC disbursements, and implementing a formal accounting system and a two-person review process for all FEC filings.

The union also said it had “retained outside legal counsel, engaged a forensic auditor, and hired a professional reporting compliance firm” to help prepare and file amended reports to the FEC to account for the misappropriated funds.

In addition to asking if law enforcement had been notified of the alleged misconduct, Walberg and Allen asked if union members or donors had been notified. The Seafarers International Union did not address this in its letter to the FEC, but officials wrote in a statement released the day NOTUS published the initial story that they “reported the situation to the rank-and-file membership during monthly meetings throughout the country.”

“While we are extremely disappointed in the conduct of the former employee, we believe that the behavior of a lone staff member does not change our organization’s decades-long history of outstanding administration,” the union wrote last month.

Of late, several political committees have experienced high-dollar cases of embezzlement or alleged theft by treasurers or other staffers, NOTUS reported this month.