November 26, 2012: A report uncovers an embezzlement scandal by Teamster officials.
It's a new chapter in an old story. Why can't Hoffa kick the corruption habit?
The Independent Review Board has issued an exhaustive 139-page report detailing scams to divert union funds to Minnesota Local 120 officials and their family and friends. Click here to download the report.
The corruption occurred right under the nose of the Hoffa administration, which turned a blind eye.
Until recently, Local 120 was headed by Tom Keegel, who was the General Secretary-Treasurer of the Teamsters, and in charge of the IBT auditors who are supposed to safeguard union finances.
Keegel turned the local over to Brad Slawson, Sr. and Brad Slawson, Jr., who the IRB report exposes as the architects and beneficiaries of a web of embezzlements schemes.
During the period that the Slawsons were robbing Local 120 blind, Hoffa named Slawson, Sr. to the General Executive Board.
It's the latest chapter in an old tale. The details change but the story remains the same.
In Southern California, it was Paul Kenny using $154,929 in Local 630 funds to buy high-priced food and wine.
In Boston, it was IBT Trade Show Director John Perry cutting sweetheart deals and employing goons to assault and intimidate members who complained to Hoffa.
In Chicago and Las Vegas, it was Hoffa's first running mate Billy Hogan and Hoffa's special
assistant Dane Passo cutting sweetheart deals that undercut Teamster contracts.
In every case, Teamster corruption undermines members and weakens our union's power–not least because anti-union employers seize on these scandals to undermine union organizing drives.
When he first came into office, Hoffa hired former federal prosecutor Edwin Stier to put together the RISE anti-corruption program. But when Stier looked into Teamster corruption in Chicago, Chicago Joint Council head John Coli had Hoffa halt the investigation. Stier resigned, and Hoffa’s costly RISE program went up in smoke.
Protecting members' dues and our union's integrity sometimes requires running afoul of Teamster power brokers. Hoffa won't do that. And that's why after 14 years in office Hoffa still can't kick the corruption habit.
TDU will continue to organize members for a corruption-free Teamsters Union.
The first "$100,000|
Club" in 1976.
(Copies of this
historic book are
available from TDU.)
November 26, 2012: It started in the mid-1970s, with an organization called PROD, the Professional Drivers Council. PROD collected hundreds of LM-2 financial reports on Teamster locals, joint councils and the International and began to analyze them, tracing all the multiple salaries, family connections, and more.
The "$100,000 Club" was born.
In 1979 PROD and TDU joined hands in one organization. TDU has published "The Club" annually ever since.
A look at the history shows how this research has changed Teamster financial priorities for the better.
By the mid-1980s, top Teamster officials were pulling down salaries of up to $609,000. Indexing this to the cost of living, that would be $1.28 million in today's dollars!
|Teamster President Jackie|
Presser makes an entrance
at the 1986 IBT Convention.
It was obscene. Along with that, they had private jet planes to ferry them to resorts.
TDU was exposing all of it with hard facts, and members were mad.
Then, on March 14, 1989, we won the Right to Vote for International officers. The plan adopted by the court tracked what TDU had proposed to settle the racketeering case filed by the Justice Department against top Teamster officials. The settlement came the day before the trial was to start.
TDU went to work, hard and fast. "Wanted" posters were issued, detailing top salaries of the incumbent members of the General Executive Board, such as Arnie Weinmeister, who pulled down $502,276 in 1989.
|These posters of high-living|
Weldon Mathis forced him
to withdraw from the 1991
Weinmeister then withdrew from the election. So did Weldon Mathis, General Secretary Treasurer of the IBT. TDU's "club" report took on new power.
Members were not going to vote for people pulling down these salaries. So the insiders picked R. V. Durham to run for president, an officer from North Carolina who had not yet reached those inflated salaries.
But TDU was on the move. TDU, along with Ron Carey, who was running for General President, proposed to limit salaries, especially multiple salaries. The Carey campaign grew.
So, Durham tried to head off our momentum. He proposed a watered-down version of the TDU proposal for the IBT Constitution, and it was passed at the 1991 IBT Convention. It set the General President's salary at $250,000 (plus a cost of living bump for every year an incumbent stays in office) and a ceiling: no International official could make multiple salaries totaling more than the General President's salary.
The corporate jets were sold. And Carey, after winning the election, sold the limousine they rode around in.
Ron Carey then made other reforms to change the union's priorities. He closed down the "area conferences" which paid 63 multiple salaries. A fresh wind was blowing.
But TDU continued to publish the "$100,000 Club" every year, without fail. Ron Carey was listed, just like everyone else. No salary has ever been left-out or altered.
The Club changed with the times and inflation. At first, the "$100,000" included expenses and allowances. But later, the line was change to $100,000 salary. Later still, it was changed to $150,000.
The Club makes a big difference in how Teamster dues money is spent. But still, too much of it goes to multiple salaries and to cronies, when it could be better spent on organizing, winning better contracts, and educating Teamsters.
TDU provides this information for members, because an informed membership makes a stronger union. It is nonpartisan. It is not an attack on those listed; many are hard working officers.
Click here to download this story as a leaflet.
Click here to download the 2012 $150,000 Club Report.
Click here to download TDU's Annual Teamster Salary Report. This longer report includes all officials who made over $120,000 in salary.
"TDU gives Teamsters information they can't get anywhere else. Knowledge is power, and TDU gives members their power. That's why Hoffa and certain officials hate TDU."
Phil Richards, Unified Grocers
Local 630, Los Angeles
November 21, 2012: Hundreds of members from every Teamster industry attended the three-day 2012 TDU Convention in Chicago, October 26-28.
New activists attended workshops on union rights and grievance handling to build union power. Stewards, officers and local reform committees led and participated in sessions on running for office, contract campaigns and defending healthcare and pensions. UPS and freight members met throughout the weekend to lay out plans for winning stronger contracts in 2013.
Karen Lewis, President of the Chicago Teachers Union, headlined the Saturday banquet with a speech on how she helped build a small reform group into a force that won the most significant strike to hit the labor movement in years.
Members and guests were there from Transport Workers Union Local 100, the New York State Nurses Association, Warehouse Workers for Justice, Labor Notes, and the Pension Rights Center.
TDU members voted to adopt an ambitious strategic organizing plan to grow TDU and build Teamster power through local and national contract campaigns, strengthening local TDU Chapters, and educational programs for new activists.
Members Elect New TDU Steering Committee
Those at the Convention elected the TDU Steering Committee for 2013. The International Steering Committee (ISC) is charged with overseeing the work of the organization–everything from legal and educational work to finances and fundraising–between Conventions.
The 2012 Convention elected 15 members and three alternates to the ISC, a diverse group of Teamster leaders and activists from across North America.
We are proud to welcome four new members to the Committee: Claudette Begin, a long-time leader from Local 2010 in California, and a delegate to the 2011 IBT Convention; Kangela Moore, from Local 237, New York, the largest local in the IBT; Leonard Stoehr, a union rep in Oregon Local 206, and a delegate to the 2006 and 2011 IBT conventions; and Nick Williams, a new TDU activist and hospital worker from Rhode Island Local 251.
November 21, 2012: The biggest Teamster dairy in New York, Elmhurst Dairy, has been trying to cut costs by dumping higher-paid senior workers for years. This fall, the company offered Teamsters a buyout, but few members took the offer.
So management turned to union-busting instead. Last month, the company laid off the 42 highest seniority Teamsters at the Dairy and replaced them with new hires who start at just $10 an hour.
"Elmhurst thinks they can do anything and they're trying to break the union," says Hammey Boureima, a Local 584 member who has worked at Elmhurst for 15 years. "If the union doesn't stand up and fight, all the companies will do the same thing." Hammey has five children and is not sure how he's going to cover rent this month.
The diary workers set up their own pickets outside the plant and were discussing plans to reach out to the public and major Elmhurst customers to win support for their reinstatement. Political officials spoke out against the firings, and Local 584 and Joint Council 16 issued a call for a rally scheduled for October 24th.
But the company responded by filing for a temporary restraining order against any work stoppage, strike or other interference in the company's normal operations (but not prohibiting leafleting or other outreach to the public or Elmhurst customers.) The Joint Council cancelled the rally and the Local backed off the plans to reach out to Elmhurst customers.
"After they cancelled the rally, the union told us to meet the following Monday and that we'd be leafleting customers and reaching out to the public," says Chester Rodman, who has worked at Elmhurst Dairy for 7 years and has 20 years as a Teamster in the industry. "That Monday happened to be the day Hurricane Sandy hit. Since then, and it's been more than two weeks, we’ve heard nothing about the leaflets or plans to reach customers and demand we be brought back."
The union and company are entering into arbitration over the layoffs and the Local has filed NLRB charges against Elmhurst Dairy for breaking the union contract.
Members voted overwhelmingly to contribute an hour's pay per week to assist the Elmhurst Dairy Teamsters. But none of the Elmhurst workers has yet received any financial assistance from these contributions.
Local 584 members are discussing possible actions and asking what the union's plan is.
"We can't just sit around and leave it up to the courts," said TDU member Shermon Connor, a delivery driver at Tuscan Beyer Farms. "We need to be reaching out to customers and the community to demand Elmhurst bring these guys back to work."
November 21, 2012: Skimming union money. Sham contracts. Non-union contractors. Misusing credit cards. The whole ugly story is in a 139-page report issued on November 9 by the Independent Review Board (IRB). Click here to download it.
The deals have been going on in the 11,000-member Local 120 for years, but the Hoffa administration either couldn't find it or didn't want to.
The IRB report details a series of long-running schemes to divert union funds to Brad Slawson Sr., Brad Slawson Jr., and their family and friends, who ran Local 120, at the expense of Local 120 members in Minnesota, North Dakota, and Iowa.
The report calls for a trusteeship of Local 120. Upon receipt of the IRB report, James Hoffa imposed a trusteeship, ousting the Slawsons and the executive board, and sending in a trustee to run the local temporarily.
The schemes and scams found by the IRB include: skimming money from construction of a new union hall; turning a union-owned bar and gambling hall into Slawson's own family cash machine; fabricating a sham labor contract for personal gain; and diverting union funds to pay off personal debts, pay bar bills, and buying tickets to professional sports events. The sums of money involved are staggering.
Click here for a good summary as well as the entire 139-page corruption report produced by TDU.
Hoffa: Tolerates and benefits from corruption
The IBT couldn't find the problem here, when it was about as hard as finding a whale in a bathtub. The IRB found it–perhaps that is why Hoffa wants to abolish the IRB.
The Hoffa administration has a record of tolerating corruption in our union. That's why Ed Stier, who was hired by Hoffa to set up Project RISE to replace the IRB, quit in 2004 and stated, "The problem is Hoffa," because Hoffa's office was blocking his investigations.
That wiped out Hoffa's chance to end the IRB, because he refused to set up an effective, independent structure to deal with corrupt practices and individuals within our great union.
Hoffa protects corrupt Teamster officials because he depends on their political support.
The report called on Hoffa to put Local 120 into trusteeship, so Hoffa appointed Bill Moore, of Topeka, Kansas to run Local 120. Moore was removed from office by the IRB in a one-year suspension during 2009 for lying under oath about his association with Dane Passo, who was banned from the union for making sweetheart deals.
That is Hoffa's idea of the right man to clean up corruption.
Teamsters for a Democratic Union is working to not just clean up the bad spots in our union, but to create a new culture of zero tolerance of misuse of the members' trust.
"For years, we've heard reports about stuff going on at the hall. It's about time something's finally being done. But a trusteeship will not change much if we can't find ways for working Teamsters to get more involved in our union. Members need to make that happen."
Eric Buchloz, Local 120
Super Valu, Minneapolis
Teamster Money Should Build Teamster Power
In a tough economy, many Teamsters are taking concessions. But top Teamster officials are riding high.
In the worst recession of our lives, many Teamsters are being hit with concessions, pension cuts and layoffs.
Our union has been hit hard, too. The Teamsters have lost 100,000 members in just three years according to union reports filed with the Department of Labor.
But one group of Teamsters has not felt any belt-tightening at all: James Hoffa, International officials and their appointees.
Thirty-six Teamster officials made over $200,000 in salary last year, and 135 made over $150,000–more than any other time in Teamster history.
These figures are part of the $150,000 Club Report, a comprehensive study of Teamster finances by the Teamster Rank and File Education and Legal Defense Foundation (TRF).
The report provides nonpartisan information to Teamster members about where our dues money is going.
Key findings in this year’s report include:
- The highest paid Teamster is Patrick Flynn of Chicago Local 710. He resigned as an International vice president, because the IBT constitution prohibits a VP from having a higher aggregate salary than the General President. Flynn pulled down $465,002 in salary from his local union.
- Hoffa paid himself $372,489 in 2011, including a lucrative "housing allowance." When Hoffa first ran for Teamster president, he promised to "cut n cap" salaries at $150,000.
- 129 officials on the International payroll made multiple union salaries–some taking home three Teamster salaries, one each from the International, a Joint Council and a Union.
In 2002 the Hoffa administration called a special convention to raise dues to 2.5 hours pay. The dues hike was supposedly for two purposes: to establish a strong strike fund and to fund organizing.
Hoffa's slogan in promoting the dues hike was "A nickel an hour for Teamster power." But few members are feeling the power.
Take organizing. While nonunion competition is on the rise, the Hoffa administration has actually shrunk the organizing department.
Today, there are just 40 full-time IBT organizers and about 40 project organizers, for a total of 80. A few years ago, that number was 140.
If everyone in the $150,000 club took a 10% cut, and that money was put into organizing, it would boost the organizing budget by $2.5 million per year, putting dozens of more organizers in the field.
The Bottom Line
Many Teamster officials work hard and they deserve to be compensated for their long hours. But when top officers are telling members to accept concessions because of the economy, those same officers should lead by example.
Teamster resources should go first and foremost to building Teamster power.
Do you agree? If so, contact Teamsters for a Democratic Union, the movement of Teamsters working to make it all happen.
Click here to download a history of TDU's $150,000 Club report.
Click here to get your Local's financial report.
"Starting pay for UPS part-timers is just $8.50 an hour and hasn’t gone up in 15 years. With contract negotiations going on right now, we need to make them remember the 250,000 UPSers who pay their salaries, including 125,000 part-timers. Show us the money!"
Dave Fischer, UPS
Local 413, Columbus, Ohio
"Freight Teamsters like me took a 15 percent wage cut and saw our pensions cut. Times are lean. It's time to cut the fat at the International Union and put our money into organizing the nonunion competition and rebuilding our power in trucking before it's too late."
Tim Pagel, YRC
Local 988, Houston
November 21, 2012: The Teamster National Negotiating Committee has met with UPS four times, Sept. 27, Oct. 15-18, Oct. 22-25 and Nov. 12-15, to negotiate over language and operations issues.
The Union has put forward key proposals on harassment, excessive overtime, and technology. The company has countered with concessionary proposals–including more ability to subcontract out jobs.
Contract negotiations are moving slowly and are suspended until after the second week of January.
Negotiations are expected to get more serious at that time. That's also when bargaining will begin over critical economic issues including wages, healthcare, full-time jobs and pensions.
President Hoffa has promised that pension increases, full-time combo job creation, and benefits will be key contract issues.
UPS Teamsters need to be ready to hold our negotiators' feet to the fire.
TDU's Make UPS Deliver network is about just that. Click here to get involved today.
Subcontracting and SurePost
Protecting Teamster jobs at UPS is a sticking point in negotiations. The company is looking for flexibility to subcontract Teamster work.
SurePost ReDirect will return a bit of work to Teamster drivers, but leaves other subcontracting to the Post Office in place.
The Union has yet to put forward specific proposals to reduce subcontracting and require full-time job creation as a condition of continued Union cooperation with SurePost.
UPS has proposed having an integrated over-the-road network where feeder and road work could be done by UPS, UPS Freight or UPS CSI drivers. This would pit Teamster drivers who make different wage rates against each other and open the door to subcontracting that would be impossible to police.
Harassment and Excessive Overtime
The Union submitted proposals to the company to deal with harassment and excessive overtime, including new language on 9.5 and 8-hour requests.
On 9.5, the union has proposed making the 9.5 list "opt-out" instead of "opt-in." All drivers would automatically be eligible for triple-time penalties for 9.5 violations unless they signed an opt-out list which would cover a five month period.
The union is also proposing protections to stop management from retaliating against members who exercise their 9.5 rights.
"Ken Hall says there will be no contract unless UPS deals with production harassment and excessive overtime. That's something every UPSer can unite behind. We need a game plan beyond the bargaining table to beat UPS on these issues. Hoffa and Hall need to give members a chance to show we support the union's demands. Closed-door bargaining won't win us the protections we need."
Zach Pfeiffer, Local 89, Louisville
Unfair Discipline and Technology
The IBT put forward a key proposal that would change Article 6, Section 8 so that members cannot be disciplined based solely on information from GPS, telematics or other technology.
The IBT put forward the same proposal when the last contract was bargained, but dropped it and accepted a company proposal that allows UPS to use GPS and telematics to fire drivers in cases of "proven dishonesty."
Ever since, the company has abused this 'dishonesty' loophole to terminate drivers.
"I’m 100 percent behind the Union's proposal to ban UPS from using information from technology to discipline drivers. The Company has abused the contract and stretched 'dishonesty' beyond all reason. Human error is not dishonesty. DIAD mistakes are not dishonesty. We've got to restore fairness and common sense to discipline."
Ralston Boswell, Local 804, New York
Increase Substandard Pensions
"We need an increase in the UPS-Teamster pension for those of us who came out of the Central States. It's covered under Article 34 of the contract, so if we don't get an increase, we would be stuck for another five years."
Local 90, Des Moines, Iowa
Protect Jobs. End Subcontracting.
"There's subcontracting language in our contract but when is it enforced? Ken Hall came to visit our terminal and management made sure to have all the non-UPS trailers moved off property. That's the kind of shell game they play. We need to play hardball. We need far stronger language, and real cash penalties, to get the contract fixed and put a stop to it."
Local 688, St. Louis
End the Information Brownout
"Members have to be informed and involved if we're going to win a decent contract. That means we need to hear what's happening at negotiations and a real campaign beyond the bargaining table if we're going to get some real changes. Tell Ken Hall to lift the "Brownout" and mobilize members to win."
Local 413, Columbus, Ohio
End Part-Time Poverty
"We are generating billions in profits for UPS. Part-timers deserve a wage increase.
"With this contract we are asking for our fair share, and for dignity and respect in the workplace. Let's stand together to end part-time poverty at UPS."
Local 344, Milwaukee
November 21, 2012
Brownout Hits Local Unions
The International Union's information brownout is even keeping local officers in the dark.
The International has not given Local Unions a copy of the company's bargaining proposals or the Union's own proposals on production harassment and 9.5, which Ken Hall says are priority issues.
It's tough for members to back our bargaining committee when we don't even know what's being negotiated.
Last time, the Information Brownout ended with Hoffa and Hall giving UPS a concessionary contract even though the company was making record profits.
TDU makes sure UPS Teamsters get information about what's happening in contract negotiations so we can stand united for the improvements we need.
UPS Forecasts Higher Profits
UPS has upgraded its projected profits for the year.
The company's third-quarter profits met Wall Street expectations. UPS said its overall profit for the third quarter would have been about $1.66 billion, down just a fraction from $1.67 billion last year. This comes to after-tax profits of $1.03 billion.
Once again, UPS Teamsters drove the company's revenue. International package volume dropped by 3.7% or 400,000 packages a day. U.S. package revenue increased $94 million over last year, driven by a 3.7% gain in daily volume.
On a conference call with investors and analysts, UPS's chief financial officer, Kurt P. Kuehn, said the company was raising its profit projections for the year.
"Given our performance and greater confidence in fourth-quarter execution, we have enhanced our full-year earnings guidance," Kuehn said.
November 21, 2012: Part-time wages are at an all-time low at UPS. How much do part-timers deserve a raise? Consider these facts:
- The starting rate of $8.50 is less than minimum wage in some states.
- Before 1982, part-timers made the same wages as full-timers. That year, the starting rate was cut to $8. It has gone up just 50¢ in 30 years.
- If part-time wages had just kept up with inflation, then the starting wage for part-timers today would be $19.18.
- Today's starting wage of $8.50 is worth just $3.71 in 1982 dollars.
- In the last contract, UPS part-timers went backwards. New employees now have to wait one year to get medical benefits, 18 months for family coverage.
- UPS will make more than $4 billion this year. Half of UPS employees are part-timers. It's time to end part-time poverty at UPS.
Send UPS management a message!
Click here to order "End Part-Time Poverty at UPS" T-shirts online, or call 313-842-2600.
T-shirts are $15 each plus $2 shipping.
When you order more than 5 at a time, you save $3 per shirt.
End Part-Time Poverty decals are available too. Click here to order.