Labor Pains: Because Being in a Union can be Painful

  1. Labor Racket Weekly: October Round Up

    This Thanksgiving, some union bosses have more to be thankful for than others. Below are the best labor rackets from last month — you might even spot some familiar UAW officials.

    In Michigan, Edward “Nick” Robinson, President of Auto Workers (UAW) Midwest CAP Council, was charged by information with one count of embezzling union funds and conspiracy to embezzle union funds. Robinson embezzled and conspired to embezzle approximately $1,500,000 in union funds. Robinson was also charged with one count of conspiracy to defraud the United States for failing to report over $1,500,000 in income on the IRS Form 990 returns filed by the UAW and UAW Midwest CAP Council and for failing to report the income on his Form 1040 tax returns filed with the Internal Revenue Service.

    In Michigan, Jeffery Pietrzyk, former senior official in the General Motors Department of the United Auto Workers International Union (UAW), pleaded guilty to one count of conspiracy to commit honest services wire fraud and one count of conspiracy to commit money laundering.

    In Texas, Orville Lynn Merritt, former business manager for Laborers International Union of North America (LIUNA) Local 1168, pleaded guilty to misapplication of fiduciary property with a value between $30,000 or more but less than $150,000. Merritt was sentenced to three years in prison and ordered to pay $279 in court costs.

    In Illinois, Eastern Division, Rebecca Hedman, an officer and agent of three medical service providers, was indicted on one count of conspiracy to commit commercial bribery.  The conspiracy involved a violation of 18 U.S.C. 1952(a)(3) (Use of a Facility in Interstate Commerce in Aid of a Racketeering Enterprise) when cellphones were used by Hedman and Robert Kurtycz, former comptroller of Workers United, SEIU, Chicago and Midwest Regional Joint Board, to promote, manage, and carry on, and to facilitate the promotion, management, and carrying on of the unlawful activity, namely commercial bribery, and thereafter did perform and attempt to perform an act of promotion, management, and carrying on, and facilitation of the promotion, management, and carrying on of the same unlawful activity.

    In New Hampshire, Dennis Robertson, former business manager for Laborers International Union of North America (LIUNA) Local 668, was sentenced to three years of probation and ordered to pay $37,897 in restitution.  On June 25, 2019, Robertson pleaded guilty to embezzling union funds.

    In Pennsylvania, Tony J. Liesenfeld, former Secretary-Treasurer and President of American Federation of Government Employees (AFGE) Local 148, pleaded guilty to one count of wire fraud in the amount of at least $77,716.

    Categories: Crime & CorruptionDOLLabor Racket Weekly
  2. The UAW’s Terrible, Horrible, No Good, Very Bad Day

    Yesterday was quite a whirlwind for the United Auto Workers (UAW). Just moments after the UAW’s executive board moved to oust President Gary Jones, as well as Vance Pearson — another top official who has been charged in the ongoing corruption investigation at the union — Jones himself decided to resign.

    Jones claims his decision to step down was made before he knew what the board was up to. Whether that’s true or not, it’s unlikely Jones was able to ignore the revolt against him among the UAW’s own members. At least six local unions were reported asking for Jones’ removal just one day earlier.

    The resignation also came on the same day that General Motors (GM) filed a lawsuit against Fiat Chrysler Automobiles (FCA), seeking “recourse against FCA Group and its officials responsible for this long-running bribery scheme” with the UAW. The lawsuit documents a “near decade-long conspiracy to bribe senior [UAW] officials to corrupt the collective bargaining process and labor relations.”

    In the racketeering suit, GM claims FCA manipulated contract negotiations with the union in order to get itself the best deal, causing GM to incur “massive monetary damage.” It describes how high-ranking FCA officials helped funnel money to UAW leaders through the union’s National Training Center — a crime that resulted in the conviction of three FCA leaders.

    So, just to recap, Jones’ mere 17-month tenure with the union was marked by: An ongoing federal investigation into a wide scale scheme to defraud workers; Jones himself being accused of embezzling almost $1 million in union dues; 13 officials facing federal charges; and seven UAW leaders convicted of wrongdoing. Now, just add in Jones’ resignation and a bombshell legal battle between two of the country’s top automakers.

    So much for Jones being a “steady hand” among labor leaders.

    Jones’ removal also brings into question the status of his other leadership positions outside of the UAW. For example, he remains on the board of the Economic Policy Institute — a think-tank notoriously backed by Big Labor interests.

    There is one silver lining here: Auto workers that have recently voted against unionizing with the UAW, including workers at VW in Chattanooga, TN, now have further proof they made the right decision. As if they really needed it.

    Categories: Crime & CorruptionUAW
  3. Are the UAW’s Ethics Reforms a Bust?

    The United Auto Workers (UAW) claims it’s enacting “several reforms in an effort to prevent and root out corruption.” The union’s plan was announced by acting president Rory Gamble — who took over when former president Gary Jones stepped down after being accused of scheming to steal $700,000 in members’ dues.

    Since the union is still entrenched in a corruption investigation (which has resulted in thirteen federal charges to date), we have a few questions about its “reforms.”

    1)  The UAW will hire an “Ethics Ombudsman” to “receive, review, and respond to ethics complaints and allegations.” It will also hire an “Ethics Officer who will not be an employee of the International Union.”

    Sounds good so far. But, this “Ethics Officer” appears to have little independent enforcement power. Any complaints have to be referred to this independent officer by the “Ethics Ombudsman or the [International Executive Board].” Then, it’s the IEB that must enforce the independent officer’s decision. But wait, wasn’t it members of the IEB who were corrupt in the first place? It seems foolish for workers to trust the IEB to not only refer a complaint to the Ethics Officer, but to enforce the officer’s decision as well.

    If the UAW was serious about rooting out corruption, it would establish an independent officer who could investigate complaints directly from workers, with little-to-no involvement from the IEB.

    2) The union says it will set up an “Ethics Hotline” for those who want to report a concern.

    Nothing new here: The union provided a similar hotline for whistleblowers in the past. Women who tried to report pervasive sexual harassment at a Ford plant in Chicago said the hotline was essentially worthless. Why should workers believe this hotline will be any more effective?

    3) The union plans to sell former president Dennis Williams’ cabin at the UAW’s Black Lake resort.

    Selling the cabin seems to be the right thing to do, considering it was built for former president Dennis Williams — another official implicated in the corruption scandal. The money used to build the cabin was allegedly part of the millions of dollars funneled by union executives through the UAW’s training fund. That’s not to mention that at least part of the cabin was built using non-union labor. Given the cabin’s shady origin, does the union plan to put the profits from the cabin’s sale towards auto workers? UAW officials haven’t suggested that’s the plan.

    Until these questions are answered, it looks like the union’s latest “reforms” are nothing more than a publicity stunt to help rebuild its crumbling reputation.

    Categories: Crime & CorruptionUAW
  4. SEIU’s Fight for 15 Overlooks Its Own Scandals in Attack on McDonald’s

    Over the weekend, McDonald’s announced that its CEO Steve Easterbrook would be leaving the company, following a “consensual relationship with an employee that violated company policy.”

    If Easterbrook violated the rules, McDonald’s was right to ask him to leave. What’s not right is how the Fight for $15 movement — which is spearheaded by the Service Employees International Union (SEIU) — has jumped on this opportunity to decry McDonald’s culture as “rotten from top to bottom.” Fight for 15 has no place slinging accusations against another organization, given the sordid behavior of its own staff.

    A recent investigation into workplace harassment at the Fight for 15 led to the resignation or firing of four officials, including SEIU Vice President Scott Courtney, Fight for 15 organizing director Kendall Fells, and the head of the campaign’s Detroit chapter Mark Raleigh. A union spokeperson said the high-level staff changes were the next step in the investigation, “which brought to light the serious problems related to abusive behavior towards staff, predominantly female staff.”

    Over a dozen staff members interviewed about the situation said “complaints about top-level staff on the Fight for 15 campaign, including Executive Vice President Scott Courtney, were an open secret.” Apparently, reports of “abusive and aggressive behavior…led to no action.”

    It doesn’t end there. In an ongoing lawsuit against the SEIU’s largest local, its vice president Dave Regan is accused of “sexual misconduct and assault” by a former union employee. Another employee has stepped forward to relay similar accusations. She was fired for speaking out.

    Regan has reportedly made it known that any potential whistleblowers should think twice before speaking out against him or the union.Unfortunately, that’s just the tip of the iceberg when it comes to accusations of sexual misconduct against the SEIU and its Fight for 15 movement. Perhaps the union should worry about the skeletons in its own closet before going after other organizations.

     

    Categories: SEIU
  5. Was the UAW Strike Worth It For Workers?

    Auto workers have been on strike for over a month. What do they have to show for it? A tentative deal between the United Auto Workers (UAW) and General Motors (GM) that’s been described as a “wash” for union members and almost “identical to GM’s initial proposal from September,” begging the question: Was the strike really worth it?

    The consensus from auto workers seems to be “no.”

    In fact, several workers took to Facebook to say they’d be voting no on this contract. The overwhelming feedback doesn’t bode well for the union:

    The bottom line is that three of four plants are closing, and the factory that GM will maintain (though it will be retooled for electric vehicle production) was already part of the company’s original offer — meaning the union’s month-long strike had little impact on the factory’s future.

    Even some of the contract highlights — a ratification bonus for employees of $11,000 — existed prior to the strike. GM offered $8,000 last month; is the extra $3,000 worth the loss of an estimated $6,000 in wages and profit share?

    UAW skeptics at the Autoworker Newsletter point out that the union’s “promise” to retain or hire 9,000 workers is not directly stated in the contract. Nor is the rumored $7.7 billion dollars in investments from GM. That’s a drastic departure from the union’s 2015 agreement, which listed concrete job numbers across 24 plants.

    When it comes to this latest deal, workers might be struggling to find the so-called “key gains” the UAW claims to have achieved.

     

    Categories: Uncategorized
  6. 60 Years of Union Transparency, Still Progress to be Made

    It’s been sixty years since Congress passed the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) in an attempt to curb union corruption. Thanks to LMRDA, otherwise known as the Landrum-Griffin Act, private-sector unions are required to file annual financial reports. This means union members can see first-hand how much and where union officials spend workers’ dues.

    According to the latest union filings, we know that the International Brotherhood of Electrical Workers ran up almost $30,000 in bills at Dick’s Last Resort, a chain restaurant known for its obnoxious staff and crude language. We also know that the United Association of Plumbers and Pipefitters spent over $150,000 sponsoring the Baltimore Orioles.

    Perhaps most notoriously, these filings have helped expose out-of-control spending at the United Auto Workers. In addition to being the subject of an ongoing federal corruption investigation, the UAW has reported some pretty questionable expenses over the years. In 2018 alone, the union’s spending included:

    • $11,540 at Infinity and Ovation Yacht Charters in Michigan for a Boat Charter for a UAW Executive Board Event;
    • $327,350 at the Renaissance Palm Springs Hotel, the resort site where previous spending has drawn federal investigators’ attention; 
    • $432,395 for “grand” lodging—including conferences and events at the Grand Hotel in Cape May, NJ, the Grand Traverse Resort and Spa in Traverse City, the MGM Grand Hotel in Las Vegas, and the Trade Winds Island Grand Resort in Florida.

    The rest of the union’s spending data can be accessed at UAWAccountability.com.

    Unfortunately, LMRDA does not extend to public-sector unions. That means public-sector union members have little-to-no transparency when it comes to how unions are spending members’ dues.

    The Department of Labor should extend reporting requirements to ensure accountability across the labor movement. But until then, public union members can at least access their union’s political spending through PublicUnionFacts.com. (Spoiler alert: the vast majority of political donations have gone to Democrats.)

    Categories: Crime & CorruptionDOLPolitical MoneyUAW
  7. Labor Racket Weekly: Best of September

    Below are some of the best labor rackets from September. If you look closely, you can catch the latest guilty plea to come out of the federal investigation into corruption at the United Auto Workers.

    In Iowa, Theodore E. Watson, former business manager for Insulators Local 74, was sentenced to 18 months in prison followed by three years of supervised probation.  Watson was also ordered to pay restitution of $125,443.  On April 15, 2019, Watson pleaded guilty to one count of embezzlement and one count of mail fraud.

    In Pennsylvania, Tony J. Liesenfeld, former President and Secretary-Treasurer of American Federation of Government Employees (AFGE), was charged in a one-count information with wire fraud in the amount of at least $77,716.

    In the District of Columbia, Audonus Duplessis, former President of American Federation of Government Employees (AFGE) Local 2463, pleaded guilty to one count of interstate transportation of stolen property for transporting $11,300 of stolen union funds from Washington, D.C. to Virginia to purchase a Dodge Charger for his personal use.  The total embezzlement by Duplessis was more than $80,000.

    In Maryland, Annette Jones, former President of American Federation of Government Employees (AFGE) Local 331, was sentenced to two years in prison followed by three years of supervised probation.  Jones was also ordered to pay restitution of $82,180.  On May 7, 2019, Jones pleaded guilty to one count of bank fraud.

    In New York, Frank Cognetta, former Secretary-Treasurer of United Food and Commercial Workers (UFCW) Local 1-D, was sentenced to two years in prison followed by three years of supervised release. On March 11, 2019, Cognetta pleaded guilty to racketeering conspiracy.

    In Michigan, Michael Grimes, former senior official in the General Motors Department of the United Auto Workers International Union (UAW), pleaded guilty to one count of conspiracy to commit honest services wire fraud and one count of conspiracy to commit money laundering.

    In Michigan, Stephen Perez, former Treasurer of Steelworkers Local 402, pleaded guilty to one count of embezzling approximately $14,408 in union funds.

    Categories: AFSCMECrime & CorruptionDOLLabor Racket Weekly
  8. SEIU Facing Backlash From Its Own Staff

    One of the nation’s largest labor unions is being accused of union-busting by its own employees. Staff employees of the Service Employees International Union (SEIU) have launched a campaign and walk out against the labor union, tweeting out that they “refuse to tolerate SEIU’s hypocritical #unionbusting behavior.” The staff are part of the Office and Professional Employees International Union Local 2 (OPEIU Local 2).

    The walk out comes after a year of contract negotiations between OPEIU Local 2 and the SEIU. According to the union, during that time the SEIU has been outsourcing union jobs, eliminating work for staff members, and misclassifying employees.

    Perhaps the most egregious accusation has been the cuts made to the SEIU’s pension fund. In the past five years, OPEIU Local 2 reports that the SEIU’s pension fund has been cut in half. There’s also been a significant decline in OPEIU Local 2 workers since 2005, decreasing from 171 members to just 84. Maybe that’s partly to do with the claim that the “SEIU spent $21.6 million outsourcing work to non-union consultants in 2017.”

    That’s not to mention the accusations of “widespread bullying and sexual harassment” by SEIU officials that have surrounded the union’s leadership in recent years.

    OPEIU Local 2 members and their supporters are calling on the SEIU to “practice what they preach.” Only time will tell if the union is willing to listen.

    Categories: SEIU