Study Reveals Cost of Hoffa’s Broken “Cut and Cap” Promises

October 30, 2005: When Hoffa launched his candidacy for General President, he pledged to implement a series of financial reforms at the IBT. Instead, bloated IBT salaries and perks are at an all-time high.

Our $100,000 Club study reveals that Hoffa’s broken “Cut and Cap” pledge has cost our union more than $15 million since he took office in 1999. That’s $15 million that could have been spent to organize new members and increase our bargaining power—nearly four times what
Hoffa saved by pulling the Teamsters out of the AFL-CIO, a move that was supposedly made to free up resources for organizing.

Hoffa made his promises to “Cut and Cap” and “Eliminate Expensive International Union Perks” in an official Hoffa Slate platform. These broken promises include:

Hoffa promised to cap the General President and Secretary-Treasurer’s salaries at $150,000 a year. Hoffa’s salary in 2004 was $251,529; Secretary-Treasurer Tom Keegel’s was $228,277. This broken promise drained $179,806 from the treasury in 2004.

Hoffa promised to cap the aggregate salaries of everyone on the IBT payroll at $150,000. Our $100,000 Club data reveals that 44 officials on the Hoffa payroll are in violation of this cap. The cost of this broken promise for 2004 alone was more than $1.66 million.

Hoffa promised to “Eliminate expensive International Union perks,” including the IBT’s practice of paying the employee portion of social security taxes. This amounts to a 7.65 percent tax on Teamster members and hidden extra compensation for International officials. For the 119 International officials listed here, this is costing Teamsters $628,000 every year.

Hoffa also broke his promise to prohibit payment of housing expenses for officials in Washington, D.C. He pays himself and Keegel about $66,000 a year to live in a fancy Washington hotel. Hoffa and Keegel signed checks of $2,000 a month for a phony housing allowance to Carlow Scalf until the IRB caught wind of it and forced Scalf to pay the money back.

TDU members intend to give Hoffa a second chance to implement his abandoned reforms by submitting them to a binding vote at the 2006 IBT Convention in Las Vegas.

Click here: Organizing Report Shows Need for New Strategies to Build Power
Click here: IBT Organizing Lags Again in 2004
Click here: NLRB Statistics on Teamster Organizing

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