Union Corruption Syndicate content

Foundation to DOL: Union Benefit Funds Invite Corruption and Mismanagement

In early December, the Department of Labor issued a request for information regarding Voluntary Employees' Beneficiary Associations (VEBAs). VEBAs are health and welfare trust funds set up by employers and union officials using "voluntary" contributions from workers.

Unfortunately, lack of oversight and an influx of money frequently encourages union corruption, so the National Right to Work Foundation submitted comments (.pdf) warning the DoL about the dangers of giving union bosses a blank check.

As the Foundation's comments point out, VEBAs should not be surpervised solely by the union hierarchy, but rather should involve employer oversight. Not only would handing over a massive trust fund to union bosses violate the Labor Management Relations Act, which prohibits employers from giving union bosses "any money or other thing of value," it also further encourages union corruption and mismanagement.

In one notable Foundation case, union bosses had the gall to finance a new luxurious union headquarters building with funds diverted from employees' VEBA. This expenditure was euphemistically termed an "investment" by the the VEBA's trustees, who were evidently more concerned with helping the union bosses than bringing workers a good return on their money.

The Foundation's experience with worker-funded VEBAs makes one thing clear: corrupt union bosses should not exercise sole control.

Obama-Solis Transition Team for DOL is Already Making Plans to Gut Union Boss Accountability Measures

The Wall Street Journal has a good editorial up on the incoming Secretary of Labor's skewed enforcement priorities. Key quote (emphasis mine):

From day one of the Obama era, union leaders (sic) want the lights dimmed on how they spend their mandatory member dues. The AFL-CIO's representative on the Obama transition team for Labor is Deborah Greenfield, and we're told her first inspection stop was the Office of Labor-Management Standards, or OLMS, which monitors union compliance with federal law.

Ms. Greenfield declined to comment, citing Obama transition rules, but her mission is clear enough. The AFL-CIO's formal "recommendations" to the Obama team call for the realignment of "the allocation of budgetary resources" from OLMS to other Labor agencies. The Secretary should "temporarily stay all financial reporting regulations that have not gone into effect," and "revise or rescind the onerous and unreasonable new requirements," such as the LM-2 and T-1 reporting forms. The explicit goal is to "restore the Department of Labor to its mission and role of advocating for, protecting and advancing the interests of workers." In other words, while transparency is fine for business, unions are demanding a pass for themselves.

Thank goodness we'll finally get some budget cuts at DOL! After all, union corruption is such a "minor" problem...

Video: Foundation Discusses Blagojevich's Corrupt Ties to Top SEIU Union Bosses on Fox Chicago

A Fox affiliate in Chicago investigated Blagojevich's corrupt relationship with the powerful Service Employees International Union (SEIU). We've got the video, which includes a clip from Foundation VP Stefan Gleason:


For more on Blagojevich's connection to the SEIU, be sure to check out the Foundation's latest podcast.

SEIU Union "Charity" Isn't the Least Bit Charitable

In August, we told you about allegations of corruption against Tyrone Freeman, then head the largest Service Employees International Union (SEIU) affiliate in California. Over the weekend, the Los Angeles Times published new allegations against Freeman and his union.

In 2004, Freeman's local launched what they called a "charity" to develop affordable housing for its members. The charity's board is mostly comprised of union officials, and the charity shares office space with the union.

The problem? In at least two years of operation, the "charity" failed to spend a single cent on its charitable mission.

The charity, launched by a scandal-ridden Los Angeles chapter of the Service Employees International Union, had total expenses of about $165,000 for 2005 and 2006, and all of the money went to consulting fees, insurance costs and other overhead, according to its Internal Revenue Service filings.

Charity watchdogs say that nonprofits should never have zero program expenses in two successive years and that well-performing charities direct at least 70% of their annual spending to their charitable purpose.

"Of the 5,000-plus charities we've looked at, I don't think we've ever seen one that didn't spend anything on its charitable programs," said Sandra Miniutti, vice president of Charity Navigator, an online rating service.

Running a union-affiliated charity that doesn't actually do any charity -- sounds a bit like the kind of job Rob Blagojevich was asking the SEIU to set up for him.

BlagoGate II - Podcast Edition

Foundation VP Stefan Gleason sits down with Hot Air's Ed Morrissey to discuss disgraced Illinois Governor Rod Blagojevich's connection to union corruption:

You can also listen to the Foundation's podcast via iTunes or manually subscribe to the feed. The Foundation's previous coverage of Blagojevich can be found here, here, and here.

[Note: Some listeners have reported technical difficulties while using the Firefox web browser. If you're having problems, click here to listen.]

Dear SEIU President Andrew Stern: What's the going rate for a U.S. Senator?

[For more on this scandal, see this post: SEIU Bosses Gave Gov. Blagojevich More Than $1.7 Million Already, Not Including Possible Payout for Senate Seat]

By now, many of you have already heard about the pay-for-play scandal enveloping Illinois Governor Rod Blagojevich. Unsurprisingly, Blago's corrupt antics are intimately connected to Big Labor. In return for a cushy appointment at the SEIU's Change to Win coalition, he apparently offered to name SEIU's hand-picked candidate to Barack Obama's newly-vacant senate seat (from the federal complaint .pdf):

Defendants ROD BLAGOJEVICH and [his aide] JOHN HARRIS, together with others, attempted to use ROD BLAGOJEVICH’s authority to appoint a United States Senator for the purpose of obtaining personal benefits for ROD BLAGOJEVICH, including, among other things, appointment as Secretary of Health & Human Services in the President-elect’s administration, and alternatively, a lucrative job which they schemed to induce a union to provide to ROD BLAGOJEVICH in exchange for appointing as senator an individual whom ROD BLAGOJEVICH and JOHN HARRIS believed to be favored by union officials and their associates.

--

HARRIS said they could work out a three-way deal with SEIU and the President-elect where SEIU could help the President-elect with ROD BLAGOJEVICH’s appointment of Senate Candidate 1 to the vacant Senate seat, ROD BLAGOJEVICH would obtain a position as the National Director of the Change to Win campaign, and SEIU would get something favorable from the President-elect in the future.

The SEIU, of course, is denying any connection to the Blagojevich bribe, which is a bit hard to swallow given the circumstances. Here's another damning excerpt from the charges (emphasis mine):

On November 12, 2008, ROD BLAGOJEVICH spoke with SEIU Official, who was in Washington, D.C. Prior intercepted phone conversations indicate that approximately a week before this call, ROD BLAGOJEVICH met with SEIU Official to discuss the vacant Senate seat, and ROD BLAGOJEVICH understood that SEIU Official was an emissary to discuss Senate Candidate 1’s interest in the Senate seat. During the conversation with SEIU Official on November 12, 2008, ROD BLAGOJEVICH informed SEIU Official that he had heard the President-elect wanted persons other than Senate Candidate 1 to be considered for the Senate seat.

SEIU Official stated that he would find out if Senate Candidate 1 wanted SEIU Official to keep pushing her for Senator with ROD BLAGOJEVICH. ROD BLAGOJEVICH said that “one thing I’d be interested in” is a 501(c)(4) organization. ROD BLAGOJEVICH explained the 501(c)(4)idea to SEIU Official and said that the 501(c)(4) could help “our new Senator [Senate Candidate 1].” SEIU Official agreed to “put that flag up and see where it goes.”

For those of you wondering, "Senate Candidate 1" is Valerie Jarrett, the SEIU's once-favored choice for the Illinois senate vacancy. As the excerpted segment shows, the feds also have an anonymous SEIU official agreeing on tape to convey Blago's proposed bribe to his superiors.

BREAKING NEWS: Notwithstanding SEIU denials, Politico reports a Democrat source has revealed the unnamed SEIU official is none other than President Andrew Stern himself.

UPDATE: NPR now reports that the SEIU official was actually Tom Balanoff, the union's Illinois chief.

Blago's abortive bargain was a pretty sweet deal. The Illinois governor would have picked up a plum SEIU job funded by forced union dues, while Big Labor would have gotten another bought-and-paid-for senator.

The workers funding Blago's lavish new salary and the SEIU's vast political apparatus may have felt left out of the deal, but that's just the way Big Labor operates.

Just another example of the corruption that goes hand-in-hand with the injustice of forced unionism.

New Right to Work Video Report: "In The Dark"

Check out the Foundation's latest Right to Work Video Report on compulsory unionism in the workplace. John McHenry, a Philadelphia worker and union member his entire life, never knew he could resign his formal union membership and stop paying full union dues. But when union bosses rammed a corrupt pension plan down his throat, he turned to the National Right to Work Foundation for help:


For more Right to Work video updates, remember to check back regularly at the Foundation's YouTube channel or Eyeblast.tv channel.

DOL's Revised Union Trust Disclosure Rules Leave Major Loopholes -- And Even DOL Admits It!

Yesterday, the Department of Labor’s Office of Labor-Management Standards (OLMS) posted on its website a weak final rule which revises standards governing disclosure of certain expenditures of union trusts, including union pension funds, strike funds, and credit unions.

Earlier this year, OLMS sought comments from interested parties concerning the new standards. On April 14, Glenn Taubman, staff attorney at the National Right to Work Legal Defense Foundation and counsel for the National Right to Work Committee, submitted comments regarding the gaping "sensitive information" loophole which allows union bosses to hide the very waste, fraud, and corruption that are all too common in these notoriously mismanaged and underfunded union trusts:

This "sensitive information" exception to full disclosure is simply a loophole allowing union and trust fund officials to unilaterally determine what disclosure must be made public, and then hide a vast array of questionable expenditures. Financial reports of trust fund operations and expenditures can never be considered "confidential" information, because this money is owned by the employees, not the union or trust fund officials. Fiduciary agents have no right to maintain secret records or engage in secret transactions that are purposefully hidden from principals - the employees who are the actual owners of the funds.

But instead of closing the loophole, DOL merely pays lip service to these serious concerns. The fact is -- as long as this loophole exists, corrupt union bosses will be able to withhold disclosure of any expenditures they wish, claiming an exemption. DOL officials "reiterate" or "emphasize" that their sensitive information loophole should be used "sparingly." They say abuse of the loophole will be investigated. But why even have it?  There is no justifiable reason, as Foundation attorneys had explained.

The Department of Labor's serial refusal to promulgate disclosure rules with real teeth is deeply troubling. If President Bush's DOL appointees intend to leave so much discretion to the bureaucrats, these appointees ought to go ahead and quit now -- rather than waiting until January.

Foundation Attorneys Win Another NLRB Case: Union Bosses Retaliated Against Nonmember By Yanking Seniority

The National Labor Relations Board (NLRB) has ruled in favor of a nonunion worker represented by National Right to Work Foundation attorneys, finding that Interstate Bakeries Corp. and local Teamsters union officials violated the law when they stripped a nonmember worker of his seniority during a merger.

In November of 2005, company and union officials agreed to consolidate two corporate divisions. One division was staffed by a single nonunion sales representative who had put in more time with the company than any of his counterparts at the other division. Company officials tried to ensure that he retained his seniority during the merger, but Teamsters officials stood fast, insisting on discriminating against him because of his nonunion status.

In the sales business, seniority has serious implications for workers. The longer you've been with the company, the better your chances are of securing more desirable sales routes and vacation time. In this case, union officials wanted to unilaterally strip a nonunion sales representative of his earned seniority, placing him at the bottom of the totem pole. It was effectively retaliation for his nonunion status.

Fortunately, the NLRB agreed with Foundation attorneys and found that union officials broke the law when they discriminated against the nonunion sales representative by favoring unionized employees during the merger. Here's the crux of the decision (emphasis mine):

The only difference between Rammage [the nonunion worker] and those Dolly Madison employees who were dovetailed [given favorable seniority status during the merger] was the fact that Rammage had not previously been represented by the Union. The Union admits that it treated Rammage differently and unfavorably because he was not previously represented. In addition, the comments of Respondent Employer's managers Roberts and Simmons to Rammage, that he lost his seniority because "he was not in the Union," demonstrate that he was singled out becasue he had not previously been represented by a labor organization.

 

Maine State Employees Union Boss Could Face One Year In Jail, Forced Unionism Privileges Still Intact

Ah, the Maine State Employees Association. When they're not extorting workers' dues to pay for union activism and legal schemes, MSEA bosses are evidently fond of harassing UPS truck drivers:

Timothy Belcher, the leader [sic] of the state's workers' union, has requested that a jury hear allegations that he illegally blocked a UPS driver from continuing his rounds earlier this summer.

Belcher's attorney, Leonard Sharon, said this week that a trial date has not yet been set in Sagadahoc County Superior Court.

Belcher, 53, the executive director of the Maine State Employee Association, a labor union representing more than 15,000 public and private sector workers throughout Maine, was issued a summons charging him with criminal restraint on June 25 after allegedly standing in front of the UPS drivers' truck to prevent it from leaving the driveway to Belcher's Bowdoinham home.

Criminal restraint is a Class D misdemeanor that carries a maximum potential penalty of a year in jail and a fine, Sharon said.

The MSEA, of course, is one of the parties in the upcoming Foundation Supreme Court case Locke v. Karass. Foundation attorneys seek a court ruling that would put greater teeth into protections for nonunion workers laboring under forced union dues.

Here's how the responding officer described Mr. Belcher's decision-making faculties after the hapless UPS driver called the police:

"He just seemed to be irrational at the time and wasn't making good decisions," [Officer] Rogers said.

Now ask yourself: would you trust Mr. Belcher to manage your hard-earned money? Why should Maine State employees be forced to hand over their hard-earned money to Belcher?

 


Terms of Web Site Use

Copyright © 2008 National Right to Work Legal Defense Foundation
 National Right to Work Legal Defense and Education Foundation, Inc.
8001 Braddock Road / Springfield, Virginia 22160
(703) 321-8510 | (800) 336-3600 / (703) 321-9613 fax - general (703) 321-9319 fax - legal department