September 25, 2005: In a recent interview with the Associated Press, James Hoffa said that leaving the AFL-CIO would make the Teamsters more successful at organizing the nonunion competition because “we’re more nimble and we don’t have the big bloated bureaucracy.”
Skeptics might wonder if it’s really John Sweeney and his AFL-CIO bureaucracy that has held back Hoffa’s organizing ambitions. Four months have passed since UPS announced it was buying Overnite and the nimble, bureaucracy-free Hoffa administration still hasn’t unveiled its “comprehensive plan to both organize and win a good contract at Overnite.”
It took Hoffa two months just to issue a press release promising a plan. Two more months have passed and local leaders as well as UPS and freight Teamsters have been unable to discover this plan. The IBT billed a special meeting in Chicago as the place where officers would hear the Hoffa administration’s strategy for Overnite—but officers came away empty-handed. In fact, Overnite got just ten minutes on the agenda.
A month later, Parcel Division Director Ken Hall came to a meeting of all the New York state joint councils to brief local officers on the IBT’s Overnite strategy—but the plan, if there is one, remained a secret.
“All Ken Hall told us was that the IBT was really going to need the support of the locals to be successful. No details. No specific requests. Just a general plea for support.” said Sandy Pope, President of Local 805 who attended the meeting. “There were 100 local officers in that room and every one of us understands that UPS-Overnite is a fight that will determine the fate of our union. But we can’t beat America’s number one union buster without direction or leadership from the IBT.”
At the Eastern Region meeting this month, General Secretary-Treasurer Tom Keegel boasted the IBT was “restructuring to become an organizing machine” that would focus on our core industries. Keegel mentioned parking garages and janitorial services—but never trucking.
Asked about organizing targets, Hoffa told the AP, “We want to identify jobs that can’t be shipped overseas.”
Overnite is hardly the only trucking company that won’t be moving its operations to China, but it may be the most important. The fate of Teamster members’ bargaining power in the 2008 UPS and freight negotiations—and the future health of our pension plans—depend in no small measure on the IBT’s ability to put a successful organizing plan into action at Overnite.
Thankfully, some locals are starting to take the lead. In Seattle, Local 174 is forming an Overnite Task Force of UPS and freight Teamsters. The local distributed leaflets to area Overnite workers to give them a union welcome to UPS. Chicago Local 705 is organizing UPS feeder drivers to do outreach to Overnite workers about the importance of having a union behind you when UPS is your employer.
Other locals are organizing similar activities. But it will take more than good local initiatives to organize UPS-Overnite. We need a national plan.
“Before the SEIU withdrew, they discussed the issue for two years, but Hoffa yanked 1.3 million Teamsters out of the AFL-CIO without any kind of consultation with members or local officers. That is not a responsible way to make a decision of this magnitude,” says Local 206 President Bill Zimmerman.
“I’ll be at the TDU Convention to talk with fellow Teamsters about what leaving the AFL-CIO means for our union—and what we can do to build labor solidarity on the local level and change the Teamsters to win.”
Do you have comments on the Change to Win Coalition? Send your thoughts to:
PO Box 10128
Detroit, MI 48210
Click here: Changing to Win at Overnite?
Click here: Coalition Launches Rival Federation
Click here: Teamster Viewpoint: Leaving AFL-CIO Threatens Union Solidarity
This statement appears to point in a dangerous direction. Instead of coming out squarely against raids, it provides a procedure to potentially initiate them, and even hints at a suggested reason: claim another union has a substandard contract.
We hope Teamsters, Teamster officers, and other Change to Win unions will urge Hoffa to adopt a solidarity policy. Every AFL-CIO union should do the same.
The directive to locals states that “…we did not disaffiliate for the purpose of raiding AFL-CIO affiliates at already organized job sites. In this regard, if you are planning any organizing activity in connection with a bargaining unit already represented by a AFL-CIO affiliated union, you must follow the following procedures prior to engaging in further activity:
1. Submit a letter to the General President which sets forth the name of the targeted employer; the location of the targeted employer; the current bargaining representative of the unit; and your reasons for targeting the unit (e.g. adversely affecting the area standards).
2. Courtesy copy the letter to the IBT Legal Department.”
The statement reads quite differently regarding Change to Win unions: it says there shall be no raiding or interfering with the organizing drives of those unions.
The new policy was sent out over the name of IBT General Counsel Patrick Szymanski.
What the Teamster raiding policy will be in practice remains to be seen. Hopefully, the IBT will quickly arrange no-raid agreements with all AFL-CIO unions. We need solidarity with other unions and other workers, regardless of where their leaders line up on the AFL-CIO split.
July 27, 2005: The International Union has released the “McDonald Report” (available on the IBT website) which purports to demonstrate that the Hoffa administration is working hard to maintain a corruption-free union.
However, the report actually does not deal with that issue at all. Instead it is an 89-page denunciation of Ed Stier, who was the Hoffa administration’s own anti-corruption director for five years.
The document was prepared by Edward McDonald, an attorney who works with the Hoffa administration. McDonald specializes in representing white-collar criminals.
His clients include one of the nation’s largest waste management corporations (major Teamster employers), domestic and foreign bank officials, a member of the Saudi royal family, and the former chairman and deputy chairman of the Russian Securities Commission.
He admits in the report, which took 14 months and untold dues dollars to prepare, that he never even sought to meet or speak with Stier.
The McDonald Report claims that Stier never accomplished much of anything, although he was paid millions of dollars in Teamster dues money; that Project RISE, which Stier headed, was a failure; that Stier padded his bills; and that he lacks credibility. It also claims that Carlow Scalf, Hoffa’s now-discredited Executive Assistant, was astute enough to figure all this out, so Stier falsely charged that Scalf stifled anti-corruption efforts at the behest of Chicago Teamster officials.
This raises the question of why the Hoffa administration consistently paid the bills and promoted RISE and Ed Stier for five long years, until Stier started seriously investigating powerful Teamster officials.
So, the Hoffa version boils down to this: The IBT paid $15 million over five years for an anti-corruption program, and got nothing. So now they have paid Edward McDonald a whole lot more, to denounce Stier. (They have not revealed how much McDonald was paid, but reportedly it was about $500 per hour.)
As a result, our Teamsters Union has no anti-corruption program, and no hope of replacing the I.R.B. with an internal clean-up program as long as Hoffa is at the helm. With a record like that, no wonder they need a scapegoat.
Click here for past Convoy coverage of the corruption scandal
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Click here for Ed Stier's April 29, 2004, Resignation letter
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Click here for Stier's April 2004 Corruption Report
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Click here for Stier's July 13, 2005 response to McDonald Report
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On July 15, independent Election Supervisor Richard Mark ruled that Hoffa used union funds to poll carhaulers on how they would rate Hoffa’s job approval. As a result of the violation, Hoffa was ordered to pay $2,000 to the union and to share the results of the poll with opposition candidates who later become accredited.
Hoffa inserted his campaign questions into an IBT poll of Teamsters who work for Allied Holdings, the largest carhaul employer. The members were also asked if they would accept mid-term contract concessions. On June 1 carhaulers got their first wage increase in three years, and Allied balked at paying it. Allied has been losing money (and cutting Teamster jobs) consistently for several years.
The poll questions were written by Hoffa’s campaign consultant, Richard Leebove, and his campaign manager, Todd Thompson. Neither has any experience representing carhaulers.
The election protest was filed by Allied driver and Local 957 member Rob Hackett and by TDU, both represented by attorney Barbara Harvey. Hoffa was represented by his campaign attorney and son, David Hoffa.
On July 20, Hoffa’s General Counsel, Pat Szymanski, told the Daily Labor Report that the Hoffa administration has given up its goal of ending federal supervision until at least 2007.
According to the Daily Labor Report, “Szymanski said the controversial conclusion of Project RISE, which might have served as the self-policing mechanism taking the place of the IRB, leaves the union in an inferior position to be able to end federal supervision.”
The article went on to report, “Szymanski said that the damage resulting from Stier’s departure has derailed the union’s plans” to try to end the federal consent order.
Embarrassing Failure for HoffaThe announcement is an embarrassing admission of failure and a huge retreat for the Hoffa administration, which spent $15 million over five years on Project RISE. Hoffa’s goal was to use RISE as leverage to end the consent order for the Teamsters.
But Hoffa’s leverage disappeared when RISE director Edwin Stier and his entire staff of investigators resigned in protest in April 2004, and issued a report blaming Hoffa for stifling anti-corruption efforts, including investigations of organized crime influence.
In the year since then, Hoffa paid another huge sum of union money to Edward McDonald to issue yet another report, supposedly to get to the bottom of the corruption allegations that led to the collapse of RISE.
Instead, McDonald issued a whitewash. The Hoffa administration released a portion of the McDonald report on July 14. It says nothing on the anti-corruption program. It consists solely of a denunciation of Stier, the former federal prosecutor Hoffa handpicked, paid millions of dollars of dues money, and hoped would end federal supervision of our union.
Just a week after the McDonald report’s publication, the Hoffa administration has openly admitted that this effort not only failed, but backfired, making any efforts to end federal supervision of our union pointless until at least 2007.
Union Far from CleanHoffa first promised 10 years ago to rid the union of corruption and establish an independent anti-corruption program.
After Hoffa’s two terms in office, experts say we are farther than ever from that goal.
The Association for Union Democracy’s Herman Benson told the Daily Labor Report, the Teamsters “are no place with respect to reform and they are worse off than they were before Project RISE. The very guy they hired to do the job now says they can’t do the job.”
So now our Teamsters Union has no anti-corruption program and no hope of replacing the Independent Review Board (IRB) with an internal clean-up program as long as Hoffa is at the helm.
No wonder Hoffa is hunting for a scapegoat and Teamster members are looking for new leadership in 2006.
Click Here for Past Coverage
April 25, 2005: While Hoffa prepares to release a report justifying his shutdown of RISE investigations into organized crime, government investigators and the press are pursuing the leads Hoffa claims are a dead end:
- Joint Council 25 President John Coli is under investigation by the FBI based on the leads Hoffa chose not to pursue including allegations of organized crime influence and benefit fund scams in Local 727.
- The Independent Review Board is investigating Local 714, the 10,000-member local long run by the Hogan family. At least ten people have been summoned to testify as part of the investigation.
The Independent Review Board (IRB) has already acted on other investigations shut down by Hoffa. Joseph Bernstein, a Hoffa ally and Joint Council 25 Vice President, has been barred from the Teamsters.
In another breaking story, The Chicago Sun-Times has linked former Local 726 president Daniel Stefanski with organized crime figures including “mob bookie Nick ‘the Stick’ LoCoco” who is suspected of taking bribes from working Teamsters who wanted full-time jobs or overtime opportunities.
Stefanski is also alleged to have offered a $20,000 reward to anyone who could provide the address of a mob informant that the Chicago Outfit wants dead.
The Sun-Times revealed that Hoffa knew of these allegations but chose not to pursue them for “political reasons.” Stefanski is a boyhood friend of the Illinois Governor and is now on the state’s payroll.
The collapse of Project RISE last year was a public relations nightmare for the Hoffa administration. With headlines screaming, “Mob stigma again haunts Teamsters,” Hoffa hand-picked corporate attorney Edward McDonald to issue a report and save his image.
One year later, McDonald will finally issue his long-anticipated whitewash.
Incredibly, McDonald’s report barely explores the organized crime allegations, according to the Sun Times, which got access to a leaked copy from the Hoffa administration. Instead, McDonald’s whitewash focuses on personally attacking Stier.
The IBT may not be interested in Stier’s findings. But the feds and the IRB are. TDU will continue to inform members on these breaking stories.
RISE investigators discovered that several funds are giving business to the notorious Group Administrators (GA), an outfit run by David Dorfman. Dorfman’s father Allen is an organized crime figure who was indicted for bilking the Central States Pension Fund out of millions.
Dorfman and GA were dumped from Local 743 in 1995, when an IBT-appointed trustee caught them soaking the fund with excessive fees. So why are Teamster funds still using Dorfman and Group Associates?
That’s what investigators wanted to know. Incredibly, Dorfman and GA are not only working with Locals 714 and 781, but they’re back at Local 743 too!
Another firm, Leahy and Associates served as broker for at least 10 Teamster-affiliated benefit funds in the Chicago area as of 2002.
The head of Leahy and Associates is under indictment in a RICO lawsuit for operating a racketeering enterprise along with members of the Duff family who are considered by Chicago law enforcement authorities to be linked to organized crime.
TDU has obtained a confidential report that Stier issued to Hoffa. It warned of intelligence reports that Chicago mafia figures were exerting influence in the General President’s office to block investigations into their organized crime interests.
The report charges Hoffa with personally derailing investigations into organized crime influence in multiple Chicago locals.
The General President’s office ordered a shutdown of all investigations into corruption and organized crime in Chicago in February, 2004.
In the report, Stier called on Hoffa to reverse course and enable RISE to investigate organized crime influence in Chicago locals and in the General President’s office itself. Hoffa refused and Stier resigned in April 2004, along with his entire staff of investigators.
At the time of Stier’s resignation, speculation centered on the role played by Hoffa’s-then Executive Assistant Carlow Scalf in blocking investigations into organized crime in the Chicago Teamsters, reportedly at the behest of Chicago mob officials.
But the full text of Stier’s 302-page report reveals that Hoffa himself repeatedly derailed investigations into organized crime and protected officials accused of organized crime ties. Included were Teamster power brokers who backed Hoffa in his rise to the General Presidency.
Hoffa Protects Power BrokersHoffa balked when Project RISE recommended that the IBT launch a formal investigation of Local 714, the home local of Billy Hogan Jr., a key Hoffa ally and former running mate. Hogan was barred for life from the union in 2002 for a scheme to steal Teamster trade show jobs in Las Vegas and give the work to a Chicago-based temp agency with ties to Hogan’s relatives.
RISE investigators received information that despite his ban, Hogan continued to exercise control over Local 714. (The local is headed by Billy Hogan’s son, Robert.) RISE investigators also uncovered apparent ties between Local 714 officials and organized crime figures.
Stier recommended that Hoffa appoint a personal representative to assist with a formal investigation. Hoffa took no action. When pressed by Stier, Hoffa instructed Stier to drop the investigation and turn over the Local 714 issues to the Independent Review Board.
Hoffa also refused to act on recommendations to charge three Local 786 Teamsters, including the assistant administrator of the local’s benefit funds for her association with a barred Teamster and Chicago mob lieutenant. When Stier pushed the issue, Hoffa said the charges were too minor.
Hoffa also removed his personal representative to Local 726 without notifying investigators. They were gathering information about organized crime influence in the local and a “Christmas Bonus” scheme that reportedly extorted members for hundreds of thousands of dollars per year in bribes in exchange for jobs and overtime opportunities.
Crisis PointIn all, investigations into one-third of the locals in the Chicago Joint Council were disrupted by Hoffa and his executive assistant, including an examination of the home local of Chicago Joint Council 25 President John Coli and two other joint council officers.
Hoffa also blocked the investigation into numerous reports that an International Organizer has been an organized crime associate.
The situation reached a crisis point when the General President’s office pulled the plug on all investigations into Chicago locals in February 2004.
Stier submitted a report to Hoffa a short time thereafter, detailing the organized crime allegations that needed to be investigated. The report goes out of its way not to prejudge the targets of the investigations. The issue, Stier wrote, was “whether political forces opposed to genuine anti-racketeering reforms will prevent them from being investigated at all.”
Stier warned, “If the current shutdown of IBT anti-racketeering efforts is allowed to stand, the reason for it will be obvious to both Teamsters and outsiders: the continued influence of the Chicago Outfit [organized crime] and the culture of corruption that has flourished in that area for as long as the union has.”
Rank and File WatchdogUntil now, the only Teamsters with access to Stier’s confidential report were Hoffa and the General Executive Board.
TDU obtained the report and is making this information available to the members because the allegations of widespread organized crime influence stretching from Chicago to the General President’s office have to be dealt with decisively and not swept under the rug.
The truth is that the International Union is millions of dollars in the red. Don’t take our word for it. This data comes from the IBT’s own audited reports and financial reports filed with the U.S. Department of Labor. These reports are signed by Hoffa and Keegel.
International Union Net Assets Are Below Zero
The IBT’s LM-2 financial report revealed net assets of minus $8.5 million. That’s right, the IBT has a negative balance sheet.
So why do Hoffa-Keegel claim in the February 2005 Teamster magazine that the IBT has net assets of $148 million? Are they lying to the Department of Labor—or are they lying to the rank and file?
Hoffa even brags on page 16 that “we have the largest net assets in the labor movement.” When Hoffa claims the “highest net assets” of any union, he must mean highest negative assets! By way of comparison the United Auto Workers has net assets of $1.128 billion. And the UAW is half the size of the Teamsters.
Two terms of Hoffa-Keegel and our net assets have dropped by more than $10 million. They have taken us into the red.
In July 2002 we had the largest dues hike in the history of the Teamsters, enacted by the Hoffa “No Dues Increase” slate. Dues went from 2 hours pay to 2.5 hours pay for Teamster members. The bulk of this new money went to the IBT, not local unions. The International Union’s income nearly doubled.
How Could their Big Dues Hike Lead to Deficit?
Ten percent of the IBT budget goes to organizing and fifteen percent to our strike fund. The rest is for the unrestricted use of the leadership. With IBT income up 79%, salaries and appointments have ballooned.
The IBT also has obligations for special officials-only pensions and retirement health plans, that have put the union into debt. According the IBT’s own LM-2 report, the IBT owes unfunded obligations of $55 million in retiree health benefits for IBT employees and also for IBT officials and appointees.
This is a special health plan, not available to working Teamsters. It provides 100 percent coverage for life, for retirees and their families.
No premiums to pay, ever.
No Cuts for Hoffa Appointees
Does that sound better than your health plan? What happened when health costs went up for your retiree coverage? For Central States Teamsters, retiree coverage for a Teamster and spouse has gone from costing $50 per month to an average of over $1000, under Hoffa’s leadership.
Central States Union Chair, Fred Gegare, says that is necessary due a “perfect storm.” But notice that Gegare has free health care for life for his family.
The IBT could lower that obligation, and get our union out of debt, by instituting cost savings and having Gegare and other retired officials pay some co-pays or premiums for their health care. But they won’t do that.
There is an additional $59 million deficiency owed to the pension plan for employees, appointees and officials of the IBT. Do you think they will cut pension accruals in half for highly paid officials? That would help our balance sheet. Central States cut your pension accrual in half.
Will Gegare cut his own?
Old Lies Smell Bad
Once again in the February Teamster magazine they continue to blame the previous leadership of Ron Carey for their own greed and mistakes. Carey left the union in late 1997, nearly eight years ago. At that time, our union had better net assets than it does now, by more than $10 million. Even after all liabilities were accounted for, our union was in the black.
Isn’t it time for Hoffa and Keegel to quit playing the blame game and take responsibility for their own mismanagement?
Hoffa and Keegel recently signed checks for 34 consecutive months to Executive Assistant Carlow Scalf, money that Scalf was embezzling from the IBT. No wonder we are in the red.
The IBT will eventually get out of the red, with that 79 percent increase in income pouring in over $140 million a year. But the money is not being used to build Teamster power as we were promised.
No Teamster should resent paying dues: our union needs money to take on corporate greed. But we have a right to expect our money to be used to build union power, not pork. And, we deserve the truth—not spin or lies—from the officials who manage hundreds of millions of our dues dollars.