Dues Hike: Where Did the Money Go?
March 16, 2006: It has been nearly four years since a special IBT Convention was held to raise dues from two hours pay to 2.5 hours pay. In that time, an additional $525 million has been raised as a result of the dues hike. Members are asking, where did that money go? Here we present some factual answers, based on financial reports obtained from the union, including the 2005 General Secretary Treasurer report.
Who got most of the dues hike? The dues hike generates about $140 million extra each year. Because a large bite of it goes to the International Union, the dues income of the IBT almost doubled as a result of the increase—from about $80 million to $140 million per year.
Hoffa says he solved the union’s finances. Has he? Actually, the members solved it by paying an extra $60 million per year in dues to the International in the dues hike. Since July 2002, an extra $225 million has flowed into the International treasury. Hoffa’s own dues would be $302 per month if he paid 2.5 times his hourly rate. But he pays $63 per month, so it hard to see how he solved the union’s finances.
How much of my dues goes to the strike fund? 3.3 percent of your dues goes to the strike fund, so about 97 percent goes elsewhere. How did we get that 3.3 percent ? The IBT Constitution specifies that 22 percent of your dues goes to the International, and 15 percent of that (15 percent of 22 percent is 3.3 percent ) goes to the strike fund. For example, if your dues are $50 per month, then $1.65 of your dues goes to the strike fund.
Doesn’t the rest of the dues hike go into organizing?2.2 percent of your dues goes to the International’s organizing program. (That’s 10 percent of the 22 percent). That’s about $14 million per year. $15.9 million was spent in 2005. Most International unions are putting much more into organizing. On $50 dues, that’s $1.10 to organizing.
If the International Union almost doubled its income from our dues, and just these modest amounts go to organizing and the strike fund, where does the rest go? That’s a good question. A good bit goes to pay 148 multiple salaries to officials, almost all of them very large donors to Hoffa’s campaign. Over $8 million went to “communications” last year, most of it PR for Hoffa. Some went to meetings at resorts. An unknown amount went to make oil portraits of Hoffa and Keegel. While only $1.2 million went to help corporate campaigns against employers, $28.6 million went to administration in 2005.
Hoffa says the “government” costs a lot. How much? The Independent Review Board (IRB) cost $2.9 million in 2005, one of the smaller items in the IBT budget, and less than half of one percent of a Teamster dues dollar.
How much does the “Family Plan,” the lucrative pension plan that covers top officials, cost? $9.9 million in 2005, almost as much as the International’s organizing budget.
Who determines these financial priorities? The IBT Convention in June can set some guidelines and should. The International officers elected this fall will largely determine where the International spends money in the future. Will it be organizing and building Teamster power, or more salaries for friends and comforts for officials?
If you have questions on Teamster finances, contact TDU for answers or documentation fo your own research. Your Teamster dues dollar is a great investment; get involved to make it work effectively to build our union.
Members Prove Chicago Local Rigged Election
January 30, 2006: What Happens When Elections Are Not Supervised! Members Prove Chicago Local Rigged Election January 30, 2006. “We knew the election was stolen from us. But I don’t think we expected to get the black and white proof, and see how they did it,” explained Richard Berg, leader of the New Leadership Slate in Chicago Local 743.
Berg referred to documents obtained by his attorney, Tom Geoghegan, from the U.S. Department of Labor showing that hundreds of ballots were diverted to the addresses of employers, stewards and even a Russian bath house that the union president frequents. Those ballots were then voted and counted in the December 2004 local union election.
The phony ballots, which were mailed in bulk to stewards, employers and cronies, kept Robert Walston in office instead of the New Leadership Slate, which would have won the election. The election was already a “do-over” that Walston called after Berg won two months earlier by seven votes (despite the ballot box stuffing!).
The local leadership was named as corrupt in the April 2004 report by former Teamster anti-corruption czar Ed Stier, before he resigned his position in protest. The officers also use Hoffa’s political advisor Richard Leebove as a consultant. The Department of Labor has gone to federal court against the Local 743 leadership to overturn the vote.
New Leadership Slate is also planning their own legal action in addition to the Department of Labor action. And they continue to build their support among the rank and file. The New Leadership Slate plans to run a slate of delegate candidates to represent Local 743 with honest leaders at the IBT Convention. With an independent Election Supervisor in place, they believe they can get a fair election there.
Hoffa Adopts TDU Position on Pension Law
December 5, 2005: For nearly a year, the Hoffa administration has been lobbying for legislation that would allow Teamster benefit plans to cut members’ previously guaranteed pension benefits—and even to cut the pensions of Teamsters who have already retired.
Teamsters for a Democratic Union has fought this legislative attack on our pension security. Now at the 11th hour, James Hoffa has reversed himself and adopted TDU’s position—coming out against the so-called Red Zone Amendment.
Since early 2005, the Hoffa administration has lobbied in favor of the Red Zone Amendment—a proposal that would allow Teamster plans to cut pension benefits that members have already earned.
But in a letter to Congressional Representatives on December 2, Hoffa said, “So-called ‘red zone’ benefit cuts, would result in a reduction of vested benefits and should not be included.” This is exactly what TDU has demanded for the past year, along with many concerned Teamsters and the Pension Rights Center.
TDU members visited Congressional leaders to lobby against the Red Zone Amendment and fight to preserve federal “anti-cutback protections” that make it illegal to cut pension benefits that members have already earned.
Before Hoffa’s flip-flop on December 2, his administration had lobbied in favor of eliminating those protections. In February 2005 the IBT Legislative Director complained that “Trustees are limited by ERISA and can only affect [cut] future accruals.” In May the International again called for members to support repeal of the 1984 anti-cutback law, to give “more tools” to pension trustees to cut benefits from retirees.
“It’s nice to finally have our International Union with us, instead of against us,” said Frank Bryant a TDU member who lobbied Congress against the cuts. “My question for Hoffa would be, ‘What took you so long?’”
The pension bill is heading for the final steps. It remains to be seen if the Red Zone Amendment will be included. Hoffa’s 11th hour conversion to retirement security comes too late to affect the outcome of this legislative fight.
Fortunately, concerned Teamsters and TDU were there all along, working to protect Teamsters’ pension rights.
Report Reveals Need for Financial Reforms
A review of hundreds of Teamster financial documents uncovered a web of political patronage in which the Hoffa administration used money from the 2002 dues increase to balloon the salaries of key political supporters. The annual study of Teamster officer compensation also revealed a growing divide among union officials. On one side of the salary divide are the majority of local union officers. Half of all local unions pay their principal officer less than $86,000 a year.
On the other side of the salary divide is an elite club of super-compensated Teamster officials, most on the Hoffa administration payroll. Most take home one or more additional Teamster salaries from a Teamster local, joint council or other affiliate.
These super-compensated officials—and the multiple salaries they receive—lie at the heart of the patronage scheme.
Financial documents from the Department of Labor revealed:
• The number of officials on the IBT payroll receiving a multiple salary has increased from just 18 to 148 since Hoffa took office— a staggering 722 percent increase.
• A record 25 Teamster officials now make more than $200,000 a year. Twenty of them are on Hoffa’s payroll.
• In all, 119 officials on the IBT payroll make more than $100,000—a figure that leaped after the 2002 dues hike. Eighty percent of them get multiple salaries.
These officials form the backbone of Hoffa’s political machine. They number among Hoffa’s biggest donors and are the officials the Hoffa Campaign uses to turn out the vote.
Are the 148 multiple salaries doled out by the Hoffa administration helping to buy that political loyalty? You be the judge.
Multiple Salaries—Center of Teamster Controversy
For the last 30 years, members and concerned officers have organized to reform our union’s financial priorities—fighting to eliminate perks for top officials and put our union’s resources towards building union power. Multiple salaries have been at the center of that struggle.The $100,000 Club has informed members, shed a light on abuses and brought about change. In 1990, when TDU printed the multiple salaries of several candidates for International office, they were quietly dropped from the slate and retired.
In 1993, General President Ron Carey abolished the Area Conferences and in one day eliminated 63 multiple salaries. By 1998, only 18 officials on the International payroll got a multiple salary.
Since taking office in 1999, Hoffa has reversed that trend by handing out numerous regional titles and salaries to political allies. Hoffa also uses the IBT payroll to discipline his critics. Hoffa stripped Willie Whelan of a $20,000 a year multiple salary as the Eastern Director of the Dairy Conference after he and Billie Lee Whelan, the head of Local 803, criticized the IBT for providing no support to a Teamster organizing drive in Long Island.
Click here: Patronage or Teamster Power
Click here: $100,000 Club 2005 (Acrobat Reader Required)
Click here: Officer's Salaries: A Wide Range
Click here: $100,000 Club Findings
Patronage or Teamster Power?
Each year, the Teamster Rank & File Education and Legal Defense Foundation (TRF) conducts a comprehensive analysis of Teamster financial documents and officer compensation.
Convoy Dispatch publishes the results in our annual $100,000 Club issue.
This year, the study focuses on the record number of super-compensated Teamster officials—making $150,000, $200,000 or more—who are on the International Union payroll.
Our $100,000 Club analyzes how the Hoffa administration is using members' dues money in a political patronage scheme—by guaranteeing multiple salaries to a network of political allies.
A total of 148 officials on Hoffa's payroll get multiple salaries. This figure has skyrocketed by 722 percent since Hoffa took office.
Our study also examines the growing salary gap between these super-compensated officials and the majority of local union principal officers who make $86,000 a year or less.
Is all of our dues money being used like it should to fight corporate greed and build union power? Or is some going for patronage and pork? We provide the data and let you decide.
Organizing Report Shows Need for New Strategies to Build Power
Researchers found that not only is Teamster organizing down in the Hoffa years, but that the IBT has failed to strategically focus on the targets that could boost the union’s bargaining power in key industries.
The study was conducted by the Teamster Rank and File Education and Legal Defense Foundation, which has analyzed NLRB organizing figures and Department of Labor statistics for years. Key report findings include:
• Teamster membership has fallen by over 100,000 since 1999 when Hoffa took office. The recent mergers of two rail unions and the graphic communication workers have recouped some of these losses, but mergers are not organizing. And you don’t spend millions on organizing to merge with other unions.
• Organizing under Hoffa continues to fall far behind what was achieved in the 1990s. In 2004 the IBT won 248 elections. This figure was slightly better than the 228 wins in 2003, but worse than the 278 wins in 2002, and far worse than the average of 380 new shops organized annually a decade ago.
• Teamster organizing under Hoffa has largely ignored the nonunion competition in our union’s core industries. Tucking and warehousing companies were targeted in just 19 percent of Teamster organizing drives.
More Money, Less Organizing
General Secretary-Treasurer Tom Keegel recently reported that the Hoffa administration has “poured $44 million into organizing.” But even the largest dues hike in Teamster history failed to reverse the Hoffa administration’s record on organizing.In 2002, the Hoffa administration raised members’ dues by 25 percent, in part, he said, to boost organizing. Hoffa also reshuffled the organizing department and installed Jeff Farmer as Director of Organizing. The Hoffa administration promised then—just as they are promising now—that the IBT would focus on organizing the nonunion competition to boost Teamster membership and bargaining power in our core industries.
Not only has Teamster organizing dropped far below the levels achieved in the 1990s, but organizing is not directed at strategic targets. The IBT did not participate in a single NLRB organizing election at freight companies Overnite, Conway, Estes or Watkins in 2004.
Cintas, touted by the IBT as a big national campaign coordinated with the UNITE HERE union, does not appear at all in the NLRB statistics. How much of the $44 million was “poured” into this campaign?
Some Teamster organizing takes place outside the NLRB process, among public workers or rail and airline workers. However, most Teamster organizing, especially in our core industries, is covered by these NLRB statistics.
Making Gains in Waste
Trucking and warehousing recruitment brought a little over 2,000 workers into the union. Healthcare came in second, with a little over 1,000 workers organized The third largest group of workers organized in 2004 was in waste hauling. A number of local unions have worked with the IBT to organize BFI, Waste Management and Allied—the big players in this industry. In 2002 Waste Management accounted for the most IBT elections against any single employer (20 elections). In 2004 activity has lessened somewhat but continues to show some life. There were 16 elections (and nine wins) against BFI, Waste Management and Allied in 2004.Is DHL the Strategic Campaign We Are Looking For?
Our union experienced an organizing opportunity when the express package delivery company DHL bought Airborne Express. In 2004 the IBT won elections at up to fifty DHL contractors around the country (the exact figure is hard to determine because DHL just drops organized contractors, forcing the locals to organize the same group under another company’s name). Large units of DHL workers were also won in New York and Miami. Overall the IBT organized over 1,500 DHL workers in 2004.On paper and in press releases the DHL record looks good. Behind the scenes, however, many local union officials are unhappy with the IBT’s handling of the drive. Some locals have organized the same DHL unit more than once, investing significant resources into the same organizing drive without any end in sight of a good contract that can be defended. Local 162 in Portland, Ore. finally struck the DHL contractor, effectively shutting down their airport operation. The local had leverage until the IBT stepped in and told them to call off the strike. The employer knew of the IBT’s decision before the local did.
We need to use the clout we have with thousands of Teamsters organized at DHL, including in many big cities and including the pilots, to put pressure on DHL to stop recycling the contractors as they are organized. The DHL drive has the potential to bring 10,000 new trucking Teamsters into our national contract and pension plans. We need to make it happen.
Click here: Study Reveals Cost of Hoffa's Broken "Cut and Cap" Promises
Click here: IBT Organizing Lags Again in 2004
Click here: NLRB Statistics on Teamster Organizing
IBT Organizing Lags Again in 2004
October 30, 2005: Teamster organizing figures have decreased for the second straight year, according to the latest figures available from the National Labor Relations Board. A new report on Teamster organizing reveals the Hoffa administration is lagging far behind the organizing levels achieved in the 1990s.
Hoffa recently pulled the Teamsters out of the AFL-CIO, supposedly to free up resources for organizing. But only one percent of Teamster dues were going to the AFL-CIO. Half that amount is now going to the Change to Win Coalition for a net savings of just $4 million per year.
In contrast, Hoffa’s broken campaign promises to "Cut and Cap" officers’ pay and to introduce other financial reforms have cost our union more than $15 million that could have been put toward organizing.
Click here: Organizing Report Shows Need for New Strategies to Build Power
Click here: Study Reveals Cost of Hoffa's Broken "Cut and Cap" Promises
Click here: NLRB Statistics on Teamster Organizing
Coli, Under FBI Investigation, To Be On Hoffa Slate
Coli is best known for his prominent role in the scandal that led Hoffa’s anti-corruption czar Ed Stier to resign last year, along with the entire staff of Project RISE, Hoffa’s anti-corruption program. Coli was accused of using his influence in the General President’s office to shut down Stier’s investigations into organized crime influence and corruption in Chicago. Hoffa pulled the plug on Stier’s investigations—and Stier resigned in protest—before these allegations against Coli could be proven. But here is what is definitely known about Hoffa’s newest running mate.
Coli is the head of the powerful Chicago Joint Council and of Local 727. He inherited the leadership of Local 727 in 1992 after his father retired and his brother was removed from the Teamsters by the Independent Review Board (IRB). Coli’s father was a member of the Chicago mafia, according to the Stier Report of 2004, but he himself has never been identified as a mob associate.
Coli’s local is being investigated by the FBI, and a Grand Jury has issued subpoenas regarding alleged kickbacks and fraud involving the members’ dental plan. A report by Stier details a scheme where money from the plan travels to an “insurer” owned by a Florida dentist, then to an account in Illinois, before a lesser amount is deposited in the dental service providers’ authorized account.
What It Means
Why would James Hoffa name this man to his slate, hoping to make him a top leader of the Teamsters Union? This is a man who inherited his power, is under FBI investigation, helped kill-off the Teamster anti-corruption program, and whose first love is the members’ money.
He is doing it because Coli is a Teamster power broker: he has personal influence in high places inside our union.
This is the same reason Hoffa put another Chicago power broker, Billy Hogan, on his slate ten years ago, until investigations of his operations got too hot. Eventually Hogan was removed from the union for trying to implement a sweetheart contract with a company that his family had an interest in.
This is the opposite of the way power should flow in our union. It should flow upward, from the members, stewards and local organizers. Leadership should be earned, not inherited or extorted. Leaders should be selected for their integrity and their ability to win strong contracts.
In 2006 Teamster members will have a choice between those two kinds of leadership.
Officers’ Salaries: A Wide Range
• The median salary for a local union principal officer is $86,000. Half of all local principal officers make less than that.
• About one-third of local union principal officers make more than $100,000 in total salaries.
• Just 51 local union principal officers, or about 11 percent of those covered by the report, make total salaries of more than $150,000. Most Teamsters would agree that is excessive. Thirty-five of these 51 officials are on the Hoffa administration payroll.
• Twenty-two local union principal officers, or about 4 percent, get salaries of more than $200,000—and 18 of them are on the Hoffa administration payroll.
Each year, the Teamster Rank & File Education and Legal Defense Foundation (TRF) compiles and analyzes hundreds of Teamster financial documents filed with the Department of Labor. Convoy Dispatch publishes the results in the “$100,000 Club.”
At one time, the “$100,000 Club” was basically a list of Teamster fat cats. Over the years, inflation has pushed a growing number of officials who just slightly make six-figures into the club. In all, 368 officials make more than $100,000. Seventy-three of these officials make $150,000 or more. And 131 make $125,000 or more.
How much is too much? Should multiple salaries be banned? We give you the facts and lets you decide.
This study is non-partisan, and includes all Teamster officials, whether elected or appointed, reform or old guard.
Study Reveals Cost of Hoffa’s Broken “Cut and Cap” Promises
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