Labor Pains: Because Being in a Union can be Painful

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  1. Biden Labor Candidate Oversaw $1 Billion in Fraudulent Benefit Payments

    The “most significant fraud on taxpayer funds in California history” occurred under the watch of Julie Su, a top contender to become Joe Biden’s Labor Secretary.

    According to a New York Times report, tens of thousands of inmates — including 133 death row inmates — scammed the state of California out of tens of millions of dollars in unemployment benefits. Su is the secretary of the California Labor and Workforce Development Agency, which oversaw the almost $1 billion in fraudulent payments.

    The checks were distributed to some of the worst offenders in the state, including Cary Stayner, Scott Peterson, Isauro Aguirre. Stayner, one of the serial killers who received payments, has been in prison since he murdered several women in Yosemite National Park in 1999. Peterson has been in prison since killing his pregnant wife Laci in 2004. Aguirre was convicted of torturing an 8-year-old to death in 2013.

    These were just a few inmates who were dolled taxpayer-funded unemployment checks under Su’s watch. Meanwhile, as many as 1.8 million Californians had their unemployment payments delayed because of the influx of applications during the pandemic. Su took responsibility for the delays in April and vowed to correct the agency’s response, but it’s evident that deep problems — from chronic fraud, to countless Californians missing benefits — still exist. The delays and other major glitches prompted the audit which uncovered the fraudulent payments to California prisoners.

    The investigators noted that California lacked the technology to crosscheck unemployment applications with the state’s 58 county jails, state hospitals, and other institutions. The state did, however, have the ability to crosscheck state prisons where fraudulent disbursements were still uncovered. Fraudulent payments were spotted in each and every one of the state’s prisons.

    California Gov. Gavin Newsom called the problem staggering. While investigators did shine a light on the fraud, there are no guarantees that Su’s agency will be able to stop it. This track record suggests that more scrutiny is needed before elevating Su to a higher-profile position.

    Categories: Crime & Corruption
  2. Will a Biden Admin Tap the Brakes on Federal Oversight at the UAW? 

    The current administration has been committed to weeding out corruption at the United Auto Workers (UAW). A multi-year investigation found two former union presidents, and numerous other high-ranking officials, guilty of helping embezzle hundreds of thousands of members’ dues dollars. Now, government oversight of the union is on the table — but perhaps not for long.

    Joe Biden has made it clear that “unions are going to have increased power” once he’s president, and the UAW is no exception. During his presidential campaign, Joe Biden was sure to make an appearance at the UAW Region 1 headquarters in Michigan — despite the union’s ongoing scandal.

    Now, as he prepares to take office in 2021, Biden has met with several political allies in union leadership, including UAW President Rory Gamble. In fact, Biden met with the UAW leadership on the same day that federal prosecutors recommended a jail term of almost three years for a former UAW vice president.

    It remains to be seen whether Joe Biden will choose to cut the UAW a break; the current U.S. attorney who has suggested government oversight of the union is a political appointee. But Biden should avoid prioritizing his pals in union leadership over rank and file workers.

    After all, union members are still reeling from the crimes committed by their disgraced union leadership. This includes a long-standing scheme to funnel union funds toward luxury expenses, including “private villas, high-end liquor and meal expenses, golfing apparel, golf clubs and green fees.” With that track record, it’s no wonder workers at the Chattanooga Volkswagen plant have twice chosen to reject the UAW. As the investigation continues, more auto workers will likely do the same.

    Holding labor unions accountable shouldn’t be a partisan issue. If government oversight is the only way to reverse years of entrenched corruption at the UAW, the next administration should be committed to pursuing it.

    Categories: Crime & CorruptionUAW
  3. Prop 22 Opponents Have a Bad Case of Sour Grapes

    This week, Proposition 22 — a California ballot measure that allows certain gig workers to be exempt from the state’s AB 5 law — passed with 58 percent of the vote. Now, app-based drivers for gig companies including Uber and Lyft are able to retain their independent contractor status, instead of being reclassified as employees against their will.

    But labor unions and their allies have a bad case of sour grapes over the ballot measure’s victory. A common theme from Gig Workers Rising — a union-backed front group that fought against Prop 22 — is that gig companies “hijacked the ballot measure system in CA by spending millions to mislead voters.” Labor attorney Shannon Liss-Riordan, who has filed numerous suits against gig companies, shared this complaint, claiming “gig businesses leveraged their financial might to buy an exemption [to AB 5].”

    Her objection is perhaps a self-interested one. If Prop 22 failed, lawyers like Liss-Riordan could have continued targeting gig companies with lucrative lawsuits over the employment status of their contractors. Liss-Riordan and her firm have a history of going after Uber in particular, earning multi-million dollar fee payouts.

    But let’s not forget the many elections labor unions themselves have tried and failed to buy. For starters, labor unions also spent big on “No on Prop 22,” either directly or through so-called “grassroots” front groups. The campaign itself raised more than $10 million, and its top contributors were the United Food and Commercial Workers union (UFCW), the Teamsters, and the Service Employees International Union (SEIU). As we recently reported, the UFCW was even funding Facebook ads for the Gig Workers Collective, yet another front group fighting the ballot measure. The union even hired two GWC staffers full-time to help their efforts.

    In California, the SEIU-United Healthcare Workers West (SEIU-UHW) has spent over $21 million on ballot initiatives since 2012. Unions who today cry foul about a “hijacked” system didn’t raise a peep as UHW President Dave Regan used the ballot box to wage his union’s personal battles.

    Not that Regan was successful. In the 2012 and 2016 election cycles, not a single one of the union’s ballot measures ever took effect. This year, the union spent another $9 million on a measure to impose new regulatory requirements on kidney dialysis centers. The measure failed, and even the Los Angeles Times called out the union for “hijacking the initiative process for its organizing campaigns.”

    If any election can simply be bought, then how can unions account for these abject failures? The SEIU-UHW’s record especially says more about voters’ ability to recognize misguided policies than the impact of political spending.

    This isn’t unique to California. The same argument applies to the three most expensive congressional races in history, which all fell flat in this past election. Democratic candidates in South Carolina, North Carolina, and Iowa raised $200 million dollars to win Senate seats in these states. Despite the millions of dollars raised, Democrats were still unsuccessful in two states, and it appears that all three seats will go to Republicans by the time ballot counting is over.

    In California, gig companies succeeded in passing Prop 22 not because of the money they spent, but because Californians recognized the ballot measure was a good idea that gave actual workers, not the government, control over how they earn a living. Gig workers, by a four to one margin, prefer their current status to becoming full-time employees.

    Of course, opponents to Prop 22 will never give voters that much credit.

    Categories: SEIUUFCWUncategorizedWorkers Center
  4. Teachers Want to Get Back in the Classroom — If Only Unions Would Let Them

    Despite pleas from parents and educators alike, teachers’ unions across the country have made one thing clear: Schools will only reopen at their say so, or not at all.

    The Fairfax Educators Association (FEA), a major teachers’ union in Virginia, is demanding that students stay out of the classroom until the end of the school year. Carla Okouchi, the union’s vice president, argued that this is the only way to keep the Fairfax community safe.

    United Teachers of Los Angeles (UTLA) has also fought against reopening efforts, demanding a slew of left-of-center policies be put in place before schools resume in-person learning. That includes “defunding the police, increasing taxes on the wealthy, [and] implementing Medicare for all.”

    But data shows that schools are not a significant source of coronavirus outbreaks. Just last month, Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, told the Washington Post that there have not been “explosive outbreaks of transmission in the schools,” as experts had once feared.

    Over the summer, YMCA Camps that provided care for the children of healthcare workers and first responders had just over one percent of staff test positive for COVID. Less than one percent of students tested positive for the virus. Elliot Haspel, an education policy expert and child care advocate, said there have been “almost no recorded cases of child-to-adult transmission of COVID-19.”

    The American Academy of Pediatrics even released guidance advising schools to reopen, highlighting the detrimental effects that school closures have had on children. They warned that students are receiving a subpar education and missing out on mental health resources, school nutrition programs, and socialization with their peers.

    The academy noted that students who suffer the most under distance learning are children from low-income and minority families. But that doesn’t seem to bother teachers’ unions.

    The FEA, UTLA, and other teachers’ unions advocating for distance learning are treating the coronavirus as a bargaining chip they’re unwilling to give up. Meanwhile, students and their teachers are being held hostage.

    That’s why a campaign from the Center for Union Facts called Speak Out For Teachers is collecting video testimonials from teachers who believe students need to return to safe, in-person learning as soon as possible.

    “Too many kids are sitting at home being depressed, being frustrated, being nervous. They need to be out and they need to be all together,” said one teacher from Carlsbad, California. Another teacher from Arizona summed it up perfectly: “What are we doing? We need to be back…let the union get out of the way.”

    Categories: Teachers UnionsUncategorized
  5. “Grassroots” Gig Workers Collective Exposed As UFCW Front

    Update: After this post went live, the Gig Workers Collective posted a response on its Facebook page. The post describes an even closer collaboration with the UFCW than we documented below. The Collective acknowledged that the union “directly [paid] Facebook for our newly launched ads” and has been “granted…access to our facebook (sic) page.” The Collective also said the UFCW “temporarily directly [hired] two of our long term volunteer organizers to help with the duration of the No On Prop 22 campaign.”  The Collective’s post argues that the UFCW managing and paying for its Facebook ads, as well as paying two of its organizers, does not compromise its independence from the union. Readers can decide for themselves whether this explanation adds up.

    The Gig Workers Collective’s cozy relationship with the UFCW was revealed through Facebook’s “page transparency” feature. The UFCW International in Washington, DC, is the sole entry on the list of “Organizations That Manage This Page.” UFCW is said to be “responsible” and has “claimed responsibility” for the Collective’s Facebook page. A phone number on the page connects to the UFCW’s press office in Washington. Presently, the Gig Workers Collective is running sponsored Facebook ads related to California’s Proposition 22 that say “Paid for by the United Food and Commercial Workers Union.” The UFCW is one of the top-three funders of the opposition campaign to Proposition 22, and has sought to organize workers in the gig economy.

    Members of the Gig Workers Collective have in the past denied being funded by the UFCW. Matthew Telles, an early member, said in February of this year that he is “not paid by the ufcw (sic) or anyone else for that matter.”

    While that may have been true at the time, the UFCW and other labor groups have been repeatedly connected to the Collective’s activities. This spring, Gig Workers Collective founder Vanessa Bain described “support from the UFCW and other partners” as being “crucial” to its mission. The Collective’s members have in the past worked extensively with Working Washington, a worker center backed by the SEIU that manages a national campaign to organize the gig economy. (Working Washington is the subject of an extensive complaint with the Office of Labor-Management Standards.)

    This isn’t the first time a purportedly “grassroots” worker group has been revealed to have union ties. The so-called Fight for $15, launched in 2012, was portrayed as a series of grassroots worker strikes; later financial reports filed with the Department of Labor revealed that the SEIU funded the protestspaid for public relations, and even used its fronts to make direct payments to the strikers. 

    Filings available next year with the Office of Labor Management Standards will provide greater detail on the UFCW International’s funding commitment. For now, the Gig Workers Collective deserves a permanent asterisk next to its “grassroots” description. As with other such groups, look for the union label.

    Categories: UFCWUncategorizedWorkers Center
  6. Labor Racket Weekly: Fall Roundup

    The seasons may be changing, but union bosses are still up to the same old tricks. Read more about this Fall’s best labor rackets below.

    In Missouri, Yvette Luster, former Treasurer of Postal Mail Handlers Local 314, was charged with one count of embezzlement of labor union assets in the amount of $184,138.

    In West Virginia, Cathy Byers, former Treasurer of American Federation of Teachers (AFT) Local 6540, was sentenced to eight months of home confinement and five years of supervised release. She was also ordered to pay a $100 special assessment. Byers previously paid $22,000 in restitution. On June 16, 2020, Byers pleaded guilty to one count of wire fraud in the approximate amount of $22,000.

    In Kentucky, Rocky Gannon, former President of American Federation of Government Employees (AFGE) Local 2302, was sentenced to 15 months of home incarceration, four years of probation, and 250 hours of community service. He was also ordered to pay $116,353 in restitution and a $1,200 assessment. On June 25, 2020, Gannon pleaded guilty to three counts of wire fraud and nine counts of forged securities.

    In North Dakota, Chad Michael Waldoch, former Secretary-Treasurer of Sheet Metal, Air, Rail and Transportation (SMART) Workers Local 980, was sentenced to 30 months of supervised release. He was also ordered to pay $50,270 and a $100 assessment. Waldoch previously paid $56,436 in restitution. On June 12, 2020, Waldoch pleaded guilty to one count of embezzlement of union funds in the amount of $107,707.

    In South Carolina, Dana Roush, former President of American Postal Workers Union (APWU) Local 403, was sentenced to 60 months of imprisonment and three years of supervised release. She was also ordered to pay restitution in the amount of $10,089. On October 22, 2019, Roush pleaded guilty to one count of embezzlement of union funds.

    In California, Marcus Asay, founder of the American Labor Alliance (ALA), was charged in a 19-count superseding indictment for wire fraud, mail fraud, conspiracy to commit mail fraud, and money laundering.

    In California, Antonio Gastelum, a former officer of the American Labor Alliance (ALA), was charged in a 19-count superseding indictment for wire fraud, mail fraud, conspiracy to commit mail fraud, and money laundering.

    In Indiana Superior Court, Misty Fain, former office manager for Laborers’ International Union of North America (LIUNA) Local 120, pleaded guilty to three counts of theft of union funds with a value of at least $750 and less than $50,000. Fain was then sentenced to one year in prison (suspended) and one year of probation. She was also ordered to pay restitution in the amount of $10,000.

    In Texas, Harold Bryan Weatherford, former Treasurer of National Staff Organization (NSO), Professional Staff Association, pleaded guilty to embezzlement of union funds totaling $82,560.

    In Texas, Edward C. Davis, Jr., former Secretary-Treasurer of Brotherhood of Locomotive Engineers and Trainmen (BLET) Division 620, pleaded guilty to embezzlement in the amount of $61,386.

    In Texas, Edward C. Davis, Jr., former Secretary-Treasurer of Brotherhood of Locomotive Engineers and Trainmen (BLET) Division 620, was charged in a criminal information with one count of embezzlement of union funds in the amount of $61,386.

    In New York, Brian Arnold, former Financial Secretary of United Steelworkers of America (USW) Local 104M, was sentenced to two years of probation including six months of home confinement with electronic monitoring. He was also ordered to pay $33,224 in restitution and a fine of $3,000. On June 9, 2020, Arnold pleaded guilty to one count of embezzlement of union funds.

    In New York, Kenneth Wynder Jr, former President of the Law Enforcement Employees Benevolent Association (LEEBA), was charged in a 13-count superseding indictment for wire fraud, conspiracy to defraud the United States, tax evasion, false statements to federal agents, and obstruction of a grand jury investigation.

    In New York, Steven Whittick, former Treasurer of the Law Enforcement Employees Benevolent Association (LEEBA), was charged in a 13-count superseding indictment for wire fraud, conspiracy to defraud the United States, tax evasion, false statements to federal agents, and obstruction of a grand jury investigation.

    Categories: Crime & CorruptionLabor Racket Weekly
  7. Former UAW Prez Williams Joins UAW Hall of Shame With Guilty Plea

    Last week, former United Auto Workers (UAW) President Dennis Williams became the 15th person to be convicted in the ongoing investigation into union corruption. He is the 11th UAW official overall to plead guilty, and the second former president.

    As an ad we’re running today in the Chattanooga Times Free Press states: “[Volkswagen] employees have twice rejected the UAW. With his guilty plea this week, the UAW’s former president demonstrated why.”

    The last we heard from Williams, he was being held at gunpoint while the FBI raided his home in California. Agents seized several items in the raid, including golf clubs and other golf merchandise. Now, he joins the UAW’s hall of shame for betraying workers’ trust.

    Williams tried to lay much of the blame on his fellow former President Gary Jones, saying of the union’s lavish expenses, “I knew in many cases such as golf and cigars, that there was no good-faith basis to think these expenses were for the benefit of our union.“

    When it came to these and other expenses, including stays at luxury resorts or dinner at five-star restaurants, it seems Williams easily overlooked any questions he had. All it took was Jones assuring him that all of the payments were “above board.” Jones himself recently pleaded guilty for helping embezzle almost one million dollars in members’ dues. Williams did admit that he made a “deliberate and conscious decision” not to actually check to see if Jones was telling the truth.

    The charge against him is punishable by up to five years in prison and a $250,000 fine. However, under his plea agreement, Williams may not see more than 24 months of prison time. We won’t know his final fate until he’s sentenced in January.

    Williams said he hopes that by accepting responsibility, he can help “restore faith” in the UAW. Good luck with that. His guilty plea is just the latest example of how the UAW failed its own members. With government oversight of the UAW still on the table, workers aren’t likely to forget Williams’ or any other union leaders’ crimes any time soon.

    Categories: UAWUncategorized
  8. Another One Bites the Dust at the UAW

    The ongoing federal probe into corruption in the ranks of the United Auto Workers (UAW) has taken down yet another union leader. Former UAW President Dennis Williams is set to plea guilty to his role in the union’s spending scandal at the end of the month.

    The indictment comes just a few months after another former union president Gary Jones’ own guilty plea. That’s right, Williams will be the second former UAW president to plead guilty to taking part in the wide-scale scheme to embezzle members’ dues money. Nine other high-ranking union officials have already been convicted. Overall, Williams is the 15th person to be charged in the federal investigation into wrongdoing at the union.

    The probe unearthed a long-standing scheme to funnel union funds to pay for luxury expenses, including “private villas, high-end liquor and meal expenses, golfing apparel, golf clubs and green fees.” Jones even spent $13,000 on cigars, and that was just in one instance. Other outrageous expenses included spa treatments for spouses, horseback riding on the beach, and sunglasses according to U.S. Attorney Matthew Schneider.

    Williams himself is charged with conspiring with six other union leaders to embezzle members’ dues. During the investigation, a luxury cabin was built for him at the UAW’s Black Lake resort. The cabin, which was built partly with the use of non-union labor, was officially taken back from Williams last year. The union was also paying Williams’ legal fees up until earlier this year, and has most recently forced the former president to pay back $56,000 in personal travel and lodging expenses. Now, Williams could face up to five years in prison and $250,000 in fines.

    In addition to a long-lasting black mark on the union’s record, the investigation could result in a decade-long period of government oversight at the UAW. Despite all this, presidential candidate Joe Biden still made a campaign appearance at the UAW Region 1 headquarters in Michigan last week. The UAW International Executive Board Vice President Gerald Kariem was also present at the event, just months after a federal lawsuit accused him of sexual harassment. 

    But, try as it might, the UAW can’t hide from its past. This latest conviction will probably discourage already-outraged auto workers from sticking with a union that has betrayed its own members.


    Categories: UAW