The Mob and Members’ Money
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.
Married to the Mob?
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 Brokers
Hoffa 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 Point
In 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 Watchdog
Until 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.
After Largest Dues Increase in History...Why Is the IBT in the Red?
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.
Official Testifies that IBT Approved Mid-Contract Concession in New England
February 17, 2005: Boston Local 25 President Ritchie Reardon told Joint Council 10 that the IBT Parcel Division approved a mid-contract giveback to UPS that violates language in the New England supplement. Reardon’s statement was part of his testimony in a hearing on internal union charges over the concession. The testimony marks the first time that anyone has put on the record that the IBT approved the contract concession. Reardon said the approval was not issued in writing.
Sunday to Thursday Without Premium Pay
Local 25 negotiated a side agreement with UPS management, after the company threatened to move some jobs, that allowed the company to establish a Sunday to Thursday workweek with no premium pay for Sundays. The New England supplement recognizes only a Monday to Friday or a Tuesday to Saturday workweek. The UPS contract requires that all mid-contract agreements be approved by the Joint National Negotiating Committee.
The giveback quickly spread to locals 42, 191, 340 and 671.
Other local unions voted the giveback down or refused to hold a vote—even though UPS threatened some locals that they would lose work if they did so.
Members have argued that the change to the regional supplement should have been put to a regional vote—rather than allowing UPS to pit local against local for the best deal.
The impact of this giveback continues to be felt. Recently UPS management at the Worcester hub posted a notice stating that the a.m. sort would be shut down and that the volume would be “moved to other hubs.” Worcester Local 170 was one of the locals that resisted the side agreement.
If the IBT and all New England locals had stayed united it would be impossible for management to pit members against each other in this manner.
Lawsuit Dismissed
A lawsuit filed by members to reverse the concession was dismissed on a technicality Jan. 13. The judge hearing the case ruled that the suit needed to be filed within six months of the change at Local 25, rather than within six months of the date that Local 25 refused to process members’ grievance against the change.
According to Local 25 member David Whitney, the New England Supplement Protection Committee will continue pursuing the issue through charges that are under investigation at the National Labor Relations Board. Also, internal union charges have been filed against officials of all the local unions that made the change without a proper vote of the members
Election Won—Again—in Local 639
November 4, 2004: For the second time in a year the Members United Slate has been elected the officers of Washington, D.C., Local 639. Their election victory on October 27 put an end to one of Hoffa’s more desperate attempts to undermine a local union election.
Members United won their first election last fall, beating out IBT Trustee John Steger and his Concerned Members slate.
While Local 639 members got on with the job of strengthening their union, Steger and Hoffa maneuvered in the background to have the election overturned. This was after the ballots were counted, and later tampered with, while in the Steger group’s custody.
Hoffa ordered a rerun of the Local 639 election and gave Steger another leg up by imposing a temporary trusteeship and reinstalling the old officers.
It didn’t work. When the votes were counted the 10,000 members of Local 639 elected all fifteen officers and business representatives of the Members United Slate. They expect to be installed and working for the members by mid-November.
Newly elected Local 639 Business Agent Anthony Smith, of the Members United Slate, spoke to the TDU Convention on October 23 a few days before his slate’s victory in the Local 639 rerun election. Here are excerpts from his remarks:
I bring greetings from Washington D.C. slate members, 15 strong officers, agents, and trustees—the duly elected officers, agents, and trustees of Local 639. Another story of ‘Vote Till You Get it Right.’
We’re the second largest local in the East with over 10,000 members. Four of the incumbent BA’s split off to form a coalition slate. We came from diverse backgrounds within the union: some leaning Hoffa, some TDU sympathizers, others less familiar with International politics.
As a group, our slate was not running to become a reform local in the Teamsters, in the broader picture of the Teamsters. We were just looking to reform the local, to make the local better for the members.
[Incumbent President] John Steger is on the International General Executive Board. He’s one of the people we beat.
Steger commented on a number of occasions that they would be invincible because after they merged-in Local 246, the local would be too large for anybody to be able to take them on.
But a funny thing happened on the way to the dance—members took a look at their date and rejected them.
As you heard we’re doing ‘Vote Till You Get it Right.’ We ran a stronger, less conservative campaign the second time around, even more face-to-face, out there in the streets, meeting the people. We’re quite confident that we’ve won again.
TDU has earned great respect in our local and I was told to bring thanks from some of those people who would not have even talked to TDU in the past.There will be no support in 639 for Hoffa in this next campaign, there’s no doubt about that anymore.
Local Officials Order Election Rerun—During the Vote Count!
November 4, 2004: When the votes were counted on October 16 in 12,000-member Chicago Local 743, TDUer Richard Berg of the New Leadership Slate had upset incumbent President Robert Walston by seven votes. There were 188 unresolved challenged ballots, but many of them came from workers at Silver Capital, a shop that was solidly behind New Leadership, so the outcome looked clear.
On October 18, the day before the challenges were to be resolved, local officials sprang their trick: They suddenly decided the election was flawed, and ordered a new one just as the final votes were to be tallied.
“We had filed numerous protests,” Berg told us, “but they dismissed all of them. But when we won despite all their violations, they decided to grant one of our protests and order a new election.”
James Hoffa upheld the “vote till you get it right” trick. Hoffa has used this dirty trick often, but so far it has failed every time; members react against having their democratic vote tampered with. This is a new version of the undemocratic move, actually stopping the vote count to prevent a challenger from winning.
It will be up to the members of Local 743 to make sure that democracy prevails. They are up against wealthy incumbents who are spending tens of thousands of dollars and are experienced at dirty tricks. The ballots in the second election will be counted on Dec. 4.