PROLOGUE
Even though I have taken every step to
maintain accuracy, some errors and omissions may be found. The
applicable law that appears throughout this document is in many
cases simplified and expressed as I perceive it.
Interpretations and opinions appearing in
this instrument are mine alone and may not reflect the depiction's
and decisions of Federal regulatory agencies and courts of law.
Before implementing remedies contained herein please consult with
the General council for explanations about their use and other
available laws.
GENERALLY
In order to fully understand the Cosa Nostra's
direct and indirect control of Labor Organizations and regional
offices, district councils and locals of the Laborers International
Union, one must appreciate the laborers place in the building
trades and its history.
BUILDING TRADES AND THE CONSTRUCTION INDUSTRY
The Building Trades are traditionally those
labor organizations involved in the construction industry which
is to say: Road and Bridge building and repair, construction,
repairing and demolishing of any structure, including tunnel's,
subways, electrical and transmission lines, etc.,
In the 1970's, the building trades were subject
to sister union's such as the UAW, United Mine Workers Atomic,
Oil and Gas Workers, United Steel Workers, etc., invading its
domain and performing the construction, repair and demolition
at the facilities it represented as the bargaining agent.
The building trades attempted to stem the
loss of its work by having the American Federation of Labor, Congress
of Industrial Organizations (AFL-CIO) mediates and enforces the
no raid clauses that were in existence. Some successes were made
but a new enemy arose and the building trades were forced to refocus its energies.
The rise of non-union companies and union
companies operating under the guise of setting up a new company
to circumvent the Collective Bargaining Agreement (alter-ego's)
started taking advantage of the building trades weaknesses.
This included show-up time, hiring restrictions,
paid holidays, inflexibility of workers (carpenters must do carpenters
work, only engineers can operating rolling machinery, etc.) hiring
of unneeded workers, higher wages on non federal and state required
projects.
With even innovative concepts such as financing
its projects, easement of work and hiring rules, lower wages on
housing and non posted projects, individual unions could not bring
about the change needed to ebb the ever increasing non-union worker.
Visionary labor leaders realized that the
problem of an individual union was tied to all the other trades
that performed work on the same project. To this day, the building
trades as a whole have not been capable of coming up with a design
and the necessary bylaws for its membership.
In the 1980's because of the clamor and
concern with the environment, some trades including the Laborers
noticed that skilled workers would be needed to perform the services
necessary for cleaning up our years of negligence.
Taking a lesson from other trades, (Operating
Engineers, with the crane and the electricians and plumbers) the
lobbying of the Federal and State government for licensing of
asbestos and other waste cleanup, workers did not pose a problem.
Of course, if the trade was capable of having its own training
and licensing ability, it could control to a large measure who
was trained and narrow down the ability for the non-union worker
and his employer.
LABORERS INTERNATIONAL UNION, HISTORICALLY
The Laborer's Union (through years of amalgamations
and absorbing work that when work was plentiful other trades
did not want it or felt it was below the dignity of a plumber
to lay and plumb a pipe outside of a building subject to the elements
or a carpenter to carry away his debris.) has become one of the
largest trade unions in the building trades and is quite capable
of addressing the manpower needs and ever changing technology
of the future.
Even though the laborer was at the bottom
rung of the ladder of skill in the building trades, some of its
more talented officials expanded craft jurisdiction by organizing
landscaping, utilization of the laser in surveying, blasting, racetrack workers, golf
course employees and the above mentioned hazardous waste cleanup.
Of all the unions affiliated with the building trades, the laborers
are diverse and adaptable and very seldom will you find a union
construction project that does not start with a laborer nor finish without one.
Some of the job functions of the laborer's
is to provide the carpenters with lumber drywall, scaffolding
and all necessary supplies. The operating engineer's equipment
is directed on how deep to dig or where to place its crane load.
Brick, block, mortar and masonry supplies are delivered to the bricklayer. Concrete is poured, then leveled
and prepared for the cement finisher's trowel.
Outside the building the laborers are even
more present. On road construction, you will find laborers utilizing
jackhammers to bust and remove concrete, directing heavy equipment
and trucks, guiding and maintaining traffic control, grubbing,
cutting and discarding of trees and underbrush, distributing traffic cones, barrels
and lights, guardrail, and curbs.
On utility line installation the laborers
handle, install and align all sewer, sanitary, transmission and
water lines up to the building. On hazardous waste projects they
are (just about dominant) the only trade involved in waste removal
loading and unloading toxins including spent and radioactive fuel and it's by products.
On tunnel work, the only other trade that
is normally found working in the tunnel area would be the operating
engineer who runs the boring machine and the surface equipment.
The same holds true on most demolition projects
where the structure is to be discarded. The laborer's cut, torch,
lance and size all the ferrous and non ferrous materials, all
hazardous waste is bagged, barreled, and packed as well as located
when it is submerged in creek beds or rivers by scuba clad laborers.
In many areas the laborers have organized
municipal employees, convention and trade show centers, and together
with the teamsters provide transportation for celebrities, traffic
control, and props for the motion picture industry.
COSA NOSTRA, ITALIAN-AMERICAN ORGANIZED
CRIME
Even though the first recognized Italian-American
organized criminal activity was the Black Hand Society of New
Orleans, organized in the late 1800's, it was New York City that
hosted the fledging arcane movement. Ellis Island and other U.S.
ports of entry were considered the portals to freedom, an escape from oppression for many of our
ancestors.
Italian immigrants were no different. One
major problem arose that was perplexing, the ability to communicate
with other nationalities. Anglo-Saxon immigrants spoke fluent
English and were better equipped to find and procure employment.
Also, the Italian-Americans, fearing the
Irish-American police were forced to rely on each other for safety.
They eventually developed the Cosa Nostra to combat
and protect their community from Anglo-American interference.
The Cosa Nostra, modeled after the Italian
Mafia became a force to be reckoned with. Its beginnings were
due in part to the resistance of many Italians against the French
who were in control of many of the peninsulas Italian City States.
Limited success for the Italian-American movement turned altruism into apathy.
The very people it was supposed to protect
became the victim. The shoemaker or the corner grocer were forced
to pay homage and the hard earned wages were turned over to the
shadowy figure that would pop in the place of business from time
to time.
By the 20's, with prohibition a reality and
the realization that organization and discipline would be necessary
to prevent the numerous gangsters from making forays onto already
claimed territory and killing each other off.
As we know it, the modern day Cosa Nostra
was born and with it what has become probably the most powerful
and ever present secret society to menace the world.
Based largely on the structure of Roman Legions,
the at first Sicilian-American sons, organized New York
City, then spread north to Boston, south to Philadelphia and west
to Chicago. Hijacking trucks, peddling home brew or smuggled alcohol
from Canada and Britain spreading fear and terror in its wake.
These were the talons of corruption of the Cosa Nostra.
Ironically, at the same time, the Cosa Nostra
was spreading its wings, so was another group, Organized Labor.
This group armed with the teachings of Mother Jones, Samuel Gompers
and Eugene Debbs preached and rallied, the wanting toilers and
workers of United States. Better wages and work conditions was
the cry heard in the sweatshops and employment lines of America.
The Cosa Nostra made its services available
to the business leaders that beckoned the mobsters to become strike
breakers and head busters. Acting on their behalf, the mob dished
out punishment and fear throughout the rank and file of the wanting
strikers.
Many legitimate business' were required to
maintain a life long association and contribute company assets
to the Cosa Nostra as the price for strike-breaking. By 1935,
with the creation of the National Labor Relations Act (Wagner
Act), labor finally had the vehicle that was needed to make a
significant impact on America.
Little by little the Cosa Nostra started
realizing the importance of the labor movement and by the end
of World War II, it realized that its future lay with the now
peaking contrivance of American workers .
The rise of union problems also increased
with the blossoming memberships.To assist in stopping other unions
from raiding territory and potential insurrectionist from making
waves and winning support with the rank and file.
The Union Leader turned to his past enemy
the Cosa Nostra for help. Little did the union official know,
the price for help would be a life long control of the local union.
The eventual replacement of his position and direct control to
a Cosa Nostra associate or relative would be the next step in
the takeover process.
By the late 1940's, it became so paramount
to the mob that advisers such as John Dio Guardi of the New York
city Luchesee family, would visit other Cosa Nostra bastions around
the country and explain how a takeover can be accomplished. Realizing that by controlling
the Teamsters, Longshoreman and the Laborers, (who were
then known as the International Hod Carriers and Common Laborers)
many other unions would automatically come indirectly under Cosa
Nostra influence.
Cosa Nostra leaders were also subject to
insurrection and the control of union activity would prove to
be most helpful in maintaining authority over Cosa Nostra members.
Unions and the employers provided the Don
and his Capo's with plush jobs for the family soldiers. Millions
of dollars of membership dues and benefit fund contributions were
siphoned off for personal gain, and the ability to manipulate
Collective Bargaining Agreements so that favored employers were
not bound by the same regulations as the other signatory companies.
Political influence, the ability to elect
the vote and financial asset wanting politician to office became
commonplace. Influencing legislation at all levels of government
and in many areas, even deciding who will be placed in Federal
judgeships, and United States Attorneys was quite the norm.
This unseen government within a government
was and is so powerful; the American public still remains skeptical
on how much of their life is controlled and the financial burden
that it carries because of its existence.
Even armed with the revelations of Joe Valachi
and other surfaced Cosa Nostra members and RICO statues, the extraction
of mob influence remains quite difficult. Evolution and change
has also changed the Cosa Nostra.
Knowing that direct exposure on influence
peddling and criminal activity will lead to a life of incarceration
and place its membership in a position of capture and possible
cooperation with investigative authorities, the Cosa Nostra membership
has burrowed itself into communicating and exercising control
through well paid attorneys and legal business representatives,
fully cognizant of the difficulty in implementing investigations
and prying into everyday businessmen and legal council.
LABORER'S INTERNATIONAL UNION OF NORTH
AMERICA
The Laborers International Union is controlled
by an Executive Board that consists of a President, General Secretary
Treasurer, and Vice President.
General President
The General President is the Chief Executive
Officer and spokesman of the Laborers International Union. According
to the constitution, he is responsible for almost all general
activity. He recommends to the General Executive Board the filling
of vacancies, the appointment of international representatives and organizers, supervises
the activities of regional office's and its officers.
This hiring and utilization of this position
was the exclusive domain of the Chicago Cosa Nostra (Outfit) and
any requests of the General President and all of his activity
had to go through the Chicago Family.
The control of this position did not give
the Chicago family exclusive authority over LIUNA activity.
The General President could not implement more than general policy
over other family dominated regions, such as New York state and
New Jersey or Cleveland, Ohio. In order for a national agreement to be utilized in another controlled
area, the union official or regional manager would send word to
the local Cosa Nostra and then convey the approval or denial.
This, of course, caused factions within the international
and national policies such as the National Political Action Committee operated by Jack Curran, until
recently off limits in New England, New York and New Jersey. The
same held true with the national pipeline agreements.
General Secretary Treasurer
The General Secretary Treasurer is the Chief
Financial Officer. He is responsible for the finances. His position
is not supposed to be subject to Cosa Nostra approval, but it
is important for the Secretary Treasurer to not cause problems
with the Cosa Nostra, such as the one caused by Terrence O'Sullivan
at the wake of Peter Fosco in Chicago, when he echoed his wanting
to be the next General President. This action led to his ousting
and Vernie Reed becoming his successor.
Vice Presidents
Up until the middle 1980's, there were eight
Vice Presidents regionally located through out the United States
and Canada. The major function of the Vice President is that they
together with the General President and Secretary Treasurer comprise
the General Executive Board which is the ruling body of the Laborer's International Union.
Normally, a rubber stamp for LCN policy and
somewhat titular in nature, this position can become quite powerful
when the Vice President is also a regional manager. Case in point
would be Michael Lorello and his successor, Sam Coivano and the
ever present behind the scene power of the New York City LCN families.
Others, like the now deceased Ugo Rossini had extremely limited
say so any were installed for purely political reasons.
The 1980's brought a split in the hierarchy
of the Laborers International Union into two camps. One supporting
the then General President, Angelo Fosco and the other supporting
the late Arthur Coia Sr.
Even though the Chicago Cosa Nostra supported
Fosco, their were many in the family that thought he was weak
and didn't like him. They also felt Coia was more capable than
Fosco. Coia, on the other hand was a more proficient
earner and a close associate of his late mentor Raymond Patricaccia,
Tampa, Florida boss Santo Traffacante, the New York City families
and Anthony Accardo of the Chicago family.
When Coia made a decision he kept in mind
all the families and even on the smallest policy making decisions
informed the various LCN families prior.
In an effort to quell a potential uprising
by the black minority membership over the discharge of Robert
Powell, who was the 1st Vice President, it was decided to increase
the membership of the Vice Presidents to ten.
In an effort to keep harmony, the ruling
body of the Cosa Nostra, the Commission decided to allow Fosco
to select one Vice President and Coia the other.
Fosco chose Louis Bravo, a California based
Latin American. Coia opted for Verrie O Haynes, a Caribbean born
black American.
Coia would berate Fosco for not addressing
the Powell replacement problem by stating that Fosco was supposed
to choose a black person not a Hispanic.
Fosco would counter by stating that American
blacks do not like and respect Caribbean born and English accented
blacks.
Coia joined by Mike Lorello would publicly
voice their disapproval of Fosco and his associates. The bitterness
became so public that the LCN commission decided to put an end
to the bickering. Arthur Coia and Mike Lorello were told to cease and desist their remarks about
Fosco and that only the Chicago family can decide who is the General
President.
Even though favoring Coia over Fosco, Chicago
was worried about the future and letting an outsider succeed to
the position, plus John Serpico was being groomed to become the next president. Within months of the commission
decision, Arthur Coia had a massive stroke that left
him incapable of resuming his duties. He requested that his son
be placed in his position.
The early 1990's brought the Federal Investigation
of LIUNA and its control by the Cosa Nostra. With the Chicago
Cosa Nostra in disarray over Federal convictions and investigations
and New York City still reeling from the commission case, better
heads in the Cosa Nostra decided to change policy and place less
suspicious and more qualified associates in leadership roles.
With the death of Angelo Fosco, Arthur Coia
Jr. became the General President and James Norwood, the brother
in law of St. Louis LCN crime boss, and an LCN associate became
the General Secretary Treasurer. Circling the wagons and preparing
for the Federal onslaught was the order of the day.
The LCN was not about to give up control,
but it was attempting to insulate itself and maybe this change
in policy could save the day. Learning from the Teamsters and
its leaderships ouster would be necessary in order to prevent the International Union falling into unwanted
hands and the vehicle where by regional offices, district councils
and local unions would be attacked by a hell bent on cleaning
up its image International Union.
REGIONAL OFFICES AND OFFICERS
Regional offices and officers are the people
who handle problems in their geographic areas and usually have
international representatives making sure that the district councils
and local unions in their area are adhering to International Union policy and conforming
with inter-trade agreements.
In some areas, the regional manager is also
a Vice President.
The Chicago regional manager has the largest
geographic area and that region may still encompass vast tracks
of Canada, as well as stretching over most of the mid-west. Besides
encapsulating all of New England, the regional manager authority takes in the Maritime states of
Canada and the province of Quebec.
This, of course, caused problems for the
Canadian membership of the International who wanted a regional
office of their own. Until recently, Ugo Rossini was the Vice
President representing the Canadian provinces, but without a regional
managers position.
At a loss on how to address this problem
to the Canadian membership, eventually he was given the title
of dupe and fell out of favor with his American sponsors.
Sub-Regional Offices
Some regions may establish satellite officials
to expedite and handle problems more readily.
The local union elected officials and members
of its Executive Board consist of the President, Vice President,
Recording Secretary, Business Manager, Secretary Treasurer, and
two additional Board Members.
President
The President together with the Secretary
Treasurer signs all checks and presides over all membership meetings.
Because the position is titular, the President is in many cases
appointed by the Business Manager with Executive Board approval
as a field representative (business agent).
Vice President
The Vice President signs checks and presides
over meetings in the absence of the President.
The Recording Secretary drafts and maintains
a record of the union meetings and Executive Board sessions.
Business Manager
The Business Manager is the most important
position in the local union structure. He is the spokes man and
Chief Operating Official. The Business Manager is responsible
for recommending and overseeing field representatives who are
selected by him and are then approved by the Executive Board.
All shop stewards are selected by the Business
Manager. He is responsible for all negotiations and enforces all
Collective Bargaining Agreements.
The Secretary Treasurer is also a very important
position. He handles the finances and together with the President
signs all checks.
Two additional Executive Board Members
Two additional Board Members are elected
to meet the seven member board requirement. They meet with the
other members to approve or disapprove pending matters that are
to be presented to the membership for approval.
In some locals, they may also be appointed
as field representatives or as shop stewards.
ELECTED OFFICIALS WHO ARE NOT MEMBERS
OF THE EXECUTIVE BOARD
Sergeant of Arms
The person elected as Sergeant of Arms is
responsible for making sure that only union members enter the
union meeting (unless the non member has been invited) and in
keeping order. This position is not part of the Executive Board.
The Auditors are elected by the rank and
file. They are only utilized in the smallest of locals to audit
the financial books and records of the local union.
Field Representatives
(Business Agents)
Even though Field Representatives are not
elected, next to the Business Manager and Secretary Treasurer,
they are the most sought after position.
They are directed by the Business Manager
to visit job sites and report back on jurisdictional problems
(craft jurisdiction) noncompliance by the employer with the Collective
Bargaining Agreement and sometimes unsafe working conditions.
Shop Stewards are the on the job union representative,
handling craft jurisdiction, safety, hours of work, noncompliance
with the Collective Bargaining Agreement and reporting to the
union the hours of work of the laborers working for the general
contractor and the sub-contractors.
DISTRICT COUNCILS
A district council is a consortium of more
than one local union uniting and acting in concert to take advantage
of the combination in negotiations and to increase the benefit
funds paid to the membership.
It can prove to be quite beneficial when
operated properly. Unfortunately many district councils are formed
purely as a ploy to wrest control from locals not controlled by the LCN.
It is comprised of delegates from local unions
who become executive members of its board. They
elect a President, Vice President, Secretary Treasurer, Recording
Secretary, Business Manager and additional members of the Executive
Board.
Similar in responsibility to the local union,
the Business Manager becomes the Chief Representing Official of
the council, appointing field representatives and overseeing all
business in the realm of the council.
COLLECTIVE BARGAINING AGREEMENTS
International Agreements
An International Agreement is an agreement
reached between an International Union and an employer group or
an individual employer. The advantages to the employer are that
normally the contractor has the ability to bring key employees
to work in local union jurisdiction and grievances are handled
at the international level.
The advantage to the local union is that
the employer is already signatory to the Laborers and bound by
the local wage and benefits distributions protected by language
in the agreement. The agreements also generate stability for the
International and its affiliates.
Association Agreements are considered the
cornerstone for the local union, binding a large number of employers
to a Collective Bargaining Agreement.They become the vehicle for
the posting of wage rates and benefit contributions and many outline
the work jurisdiction of the signatory trade.
On Federal and most State and Municipal funded
projects, contractors are required to pay its workers what is
known as the prevailing scale.
The Labor Organization-Contractor Association
pays a major role in making sure that the posted rate and the
increments for job classifications are the rate that the governments
utilize when funding projects. This is known as the Davis Bacon
Act and its continuance is paramount to union survival.
One problem that the associations and unions
are encountering is that when the Davis Bacon Rates are utilized
on a project. The rates apply for the duration of the project.
The Union Signatory Contractor is bound by
wage and benefit fund increases that may occur during the
life of the Collective Bargaining Agreement.
The non-union employer is not and takes full
advantage of this loop hole. Recently, some creative unions have
introduced what is known as a carry over clause, which means the
Union Employer has the right to complete the project not having
to pay any wage and benefit fund increases that may occur during
the life of that project.
Independent Employer Agreements
An Independent Employer Agreement is reached
between the union and a single employer. This opens the door
for a lot of abuse by the employer and the union. Some legitimate
reasons for this type of agreement are that the employer may not
want to employ some of the union trades that may be required if
he became signatory to the association agreement.
The contractor may not like a controlling
segment of the contractor association because he feels there representation
is more favorable to a given segment. He doesn't want to be locked
in to the time restraints and other possible sections of the association
agreement.
The union may enjoy additional benefits,
such as spelled out craft jurisdiction, flexibility in hiring
and of course more ability to get its way. The mischievous union
and employer can use this agreement to create better conditions,
less restrictions and flexibility under its guise.
A One-liner type of agreement is normally
reach for a given project and is limited to wages and benefits
for union members. When a union official and an employer cannot
agree on work rules and other contract conditions this approach
is enacted. For the local union or district council this approach
is quite disastrous and self defeating.
The union has lost the ability to organize
and as a last ditch effort to collect union dues and benefit funds
agrees to the one-liner. Other union contractors who have been
bound by the more stringent contract, approach this procedure
with a "what a about me" feeling and enter the next
contract negotiation session armed with the union's acquiescence
to this concept.
These type of agreements are self defeating
for the union and their existence is quite telling on a local
unions future. Of course, they are also utilized by the wayward
to allow a pet employer normally through an alter ego
to take advantage of this agreements flexibility.
Legally A union cannot accept dues withheld
from an employee by an employer without contractual language.
This holds true with benefit fund withholdings.
The union must have the employee sign a dues
withhold form acknowledging that the employee has given permission
for the union to accept a percentage of his wages or a fixed amount
as union dues and the same with the benefit funds. The employer
must also receive a copy.
THE COLLECTIVE BARGAINING AGREEMENT STRUCTURE
The agreement is the result of collective
bargaining and the local or district council subject to the constitution
of the International, its agreements, enactment's and inter-trade
pacts. It is also subject to governmental laws and regulations.
Normally, an agreement commences with stating
its affiliation with the Laborers International Union and the
geographic area covered by the agreement.
Definitions are usually incorporated in the
opening section outline the definition of an employer. the union
and the employees covered by the agreement. This section or later
on you will find the definition of the sub-contractor and contractual
language binding any contractor operating as a sub-contractor and performing work and
craft jurisdiction.
The sub-contractor will be bound by the terms and conditions of the signatory contractor. This is known in the industry as a down clause.
In many Collective Bargaining Agreements
you will find language that bins the employer to not accept a
contract and work form an employer who is acting as a General
Contractor unless that employer is also signatory to the Collective
bargaining agreement. This is commonly referred to an up-clause.
Foreman's clauses when needed, how many
and the pay differential are also included.
Steward clauses when needed, how appointed
by the Business Manager and that they normally are first craft
employee hired and the last to be laid off.
Many agreements will state that the steward
will be given time from his employer to check the project for
safety violations, to see that other trades or non-union employees
are performing work that is the work of the union he or she is
representing. Call the business agent if contractual violations
are taking place etc.
This position is subject to abuse by both
the union and the employer. The contractor does not want the shop
steward making waves and usually awards him with a plush work
assignment and in some cases allows him to leave the project and
even become a no show.
The specious union official will use this
position to place friends, relatives and schemers in this position
as a reward or in a no-work position with an un-objecting employer
who is utilizing cost saving remedies on the project.
Union Dues and Benefit Fund Withholding
Language
Each agreement contains some language defining
the dues and withhold process including how much is to be withheld
and that those payments are made by the employer in a timely manner.
Contractual Contract Violation Remedies.
Most Collective Bargaining Agreements usually
establish five part remedies for violations.
Step 1.
Between the Employer Representative (project superintendent) and
the Shop Steward.
Step 2.
The Union Field Representative and the Employer Representative
or the owner of the company.
Step 3.
The Union Business Manager and the employer or his representative.
Step 4.
A grievance meeting between the Employer Association and the Union
officials.
Step 5.
Normally, arbitration. In some agreements where arbitration is
not listed as a remedy, Federal Court or other governmental remedies
are included or available.
In many agreements, unions are allowed to
strike or pull its employees off of a project for violations of
the employer by not paying benefit fund contributions in a timely
manner or emergency safety violations without wildcating.
(A wildcat strike is when a Union is signatory
to a collective bargaining with an employer and pulls its employees
off of a project.)
If a union or an employer does not adhere
to the remedies available, when it comes to contract violations
and either attempts to bring the matter to a governmental agency
or other remedies available under law, the matter is usually rejected
because the charging party has not exhausted all remedies.
(This is known in the business as Collerization,
or the Collier Wire Products Case.) The same holds true for union
members, even when the charge is filed against the union or one
of its officials or representatives. (This language will be found
in the Uniform Local Union Constitution.)
Craft Wage Classification tells the employer
how much he has to pay for a tradesman when that individual is
performing that type of work, (such as burning may be an additional
fifty cents and hour, or asbestos removal workers may be paid
an additional 50 cents an hours).
Special conditions and wages may apply to
hazardous work and many specialized areas of construction, such
as sandhogs working in compressed air requiring recovery time
necessary to recover and adjust to the respiratory problems of
compression.
Favored Nations Clause
Favored Nations clause, commonly referred
to as "the me too" clause, which means that if the union
grants or concludes an agreement with another employer or group
of employers performing the same type of work that contains more
favorable or beneficial conditions. The contractor can enact and
enjoy those more favorable conditions.
Savings Clauses
Savings clauses protect the integrity of
the contract if any portion of the agreement is found to conflict
with governmental laws and regulations then only that section
of the agreement shall be null and void.
Many unions and employers utilize different
procedures when concluding language and processes for procuring
employees. Some procedures commonly used are Seniority, Geographic
Seniority, Union Seniority, and Past Seniority.
By law when an employer who has not been
signatory to a Collective Bargaining Agreement wants his current
employees to remain and not discharge them, then the union must
accept them as members.
As a condition of there union membership
and a condition of employment, they must accept reasonable rules
established by the union, and refrain from conduct detrimental
to the union.
There have been numerous cases involving
unions and reluctant dues and benefit fund paying employees over
that being a condition of employment.
In the construction industry, most states
allow for what is commonly referred to as "closed shop operations",
However, 13 states do operate under what is commonly referred
to as "right to work" laws banning dues, benefit paying
and union membership as a condition of employment.
Seniorityy
You will find at least some seniority language
in most Collective Bargaining Agreements. Total seniority is
when the employer must recall those workers who have been previously
employed by his company as the first employees called when starting a project
and the last to be laid off.
In many of the Building Trades, this is not
feasible because many workers float from employer to employer.
The employer must give preference to those
employees living in a geographic area. This is called Geographic
Seniority.
Union Seniority
The employer must employ employees of the
local union in which the project is located, unless the union
has reached full employment and has exhausted all hiring remedies.
Past Employee Seniority (Recall List)
The employer must recall and place to work
those employees (if capable of performing the work available)
that previously worked for the company before the employer asks
the union to submit new employees.
This is commonly referred to as the recall
list and many union officials and employers violate this section
of an agreement when it is included in a Collective Bargaining
Agreement.
A case in point is when a contractor has
a plush project and the opportunity for better conditions and
overtime may be available. The union official may refer favored
employees to the project instead of past employees.
Hiring Hall Arrangements
Many local unions utilize what is referred
to as a hiring hall for the selection and placement of employees
for the filling of jobs. Normally they include classes of workers
who are categorized in groups such as:
Group 1
Union members who have worked for the employer
in the past and are not working for another employer and have
registered with the union that they are unemployed and available
for work.
All union members who are currently unemployed
and available for work
Group 3
All applicants who have filled out an application
for employment with the union who are seeking employment through
the union.
When an employer, who is already signatory
to the union Collective Bargaining Agreement, needs employees
and calls the union hall for employees. the union representative
looks into the employers recall list book.
This book is maintained by the local and
contains the names of employees who previously worked for that
employer. He or she then cross references the name or names with
the out-of-work list in Group 1 and then reaches out for that
worker.
If the employee refuses to accept the job,
the union can remove that person from the out-of-work list unless
the employee is incapable of performing the work for some valid
reason. This procedure continues until Group 1 is exhausted,
then Group 2 and onto Group 3.
When an employer, who is signatory to the
Collective Bargaining Agreement and has never worked in the geographic
area needs employees, the union must refer those members who have
registered for unemployment and have been unemployed the longest.
Starting with Group 1, the union official
starts with the longest unemployed member and exhaust
that list before turning to the Group 2 list and so on.
Many Collective Bargaining Agreements contain
language covering the selection and submitting of shop stewards
and foreman's.
This language usually states that the union
may refer stewards and foreman's to any given job without having
to utilize the out-of-work list and their standing in the out-of-work list.
Some hiring hall procedures include language
that spell out ability for employees to hire workers without regard
to their standing in the out-of-work list.
This language usually is referred to specialized
skill needs and the employer may, in writing, request a certain
employee because the employee has special skills, such as burning,
blasting, welding, etc.
Hiring halls procedures are routinely violated
by LCN controlled unions.Favored employees and relatives are given
slips out the back door instead of through the established hiring
procedures.
The term back door originated with the Seafarers
International Union and the Seafarers Union Pacific who for practical purposes maintain and operated
hiring halls. When a ship needed a deck hand or another ship working
member, the union who maintained a large chalk board listing the
ship, its destination, cargo and its needs those seaman who were unemployed the longest
and capable of filling the request would have the first opportunity
to fill the job.
When a plush job request came into the mischievous
union official, he would not post it on the board and give the
slip for a financial reward or as a favor to a friend or to the
highest bidder outside the view of the wanting workers.
Many union officials are reluctant to allow
to many people into the union because of flooding the union with
members at times of good employment and subjecting themselves
to potential members who may become uncontrollable and potential opponents.
The non-union workers are allowed to work
on the union project by stipulating and signing dues and
benefit fund withholding authorization forms. This is referred
to an adobe fee. Most International Unions shun this practice
and list it as a violation of the International Constitution,
but many local unions continue to practice it.
Apprentice employees.
Some Union-Employer Contracts allow for the
hiring of apprentices at lower wages and limited where they do
not overwhelm the project work force.
Because Federal and State rules may come
into play, especially if a Taft Hartley jointly administered training
fund, allows for apprenticeship programs and its minority placement
requirements. Many locals and district council training funds
are established as retraining programs greatly narrowing governmental scrutiny and exposing
the union to an influx of unwanted potential members and troublemakers.
An employer may become a party to another
association, or have more than one contract or a special arrangement
with a local union. A Superseding clause is implemented and states
that this agreement supersedes any and all other agreements that
have been reached.
Duration and Contract Re-opener Language
Duration and Contract language states the
duration of the contract and what procedures come into play as
far as future bargaining and Taft Hartley requirements for future
contracts.
You may find additional sections and sub-sections
to fit the needs of the employers and the union.
COSA NOSTRA-LABOR UNION ACTIVITY
The first and foremost rule of the Cosa Nostra
is the perpetuation of the family and the labor union is the perfect
vehicle for achieving this.
The controlled union official makes sure
that LCN members, relatives and associates are rewarded with plush
jobs either in the union hall itself by creating field representative
positions, clerical and secretarial appointments and even janitorial
situations for the recipients.
The best stewardships, foreman positions
and plus little or no-work positions are the reward on the job
site.
Benefits are subjected to administrators,
training directors and instructors, collectors of delinquent accounts,
legal, investment advisors and health insurance providers who
have an agenda that does not benefit the membership.
Contractors who kick-back wages, and allow
no show employees are given preferential treatment.
Demolition and hazardous waste removal employers
are allowed to illegally remove and dump toxins and debris and
contaminate our eco system. Some of this activity is unrecognizable
to an investigator or examiner because of not knowing what to
look for.
In attempting to list common practices and
violations that you can find in most LCN controlled unions, keep
in mind that the investigator is limited to what he or she can
discover on his own because of the lack of cooperation that will
be given by the membership.
It is important that you understand that
the traditional LCN controlled union local and district council
have been subjected to years of Cosa Nostra dominance and the
years of failure on the part of justice to correct the problem
have galvanized the good non-LCN connected member against cooperating.
The membership of a union have had to go
along with hiring practices. Knowledge of his or her benefits
may be lacking and having to watch LCN favored employees receive
the best jobs and stewards who are more interested in collecting
last nights bookmaking receipts then staying on the job and looking
after the workers needs and safety.
To speak or take any action against these
practices would leave the outspoken worker without a job and incapable
of finding one or at the bottom of a river.
Many investigators will find the lack of
cooperation and ability to generate violations quite difficult
and lacking success. Federal Investigators who have been indoctrinated
into the utilization of Title 18 violations, will be limited and
success may be placed out of reach. Title 29 (Federal Labor law)
and State Labor laws are necessary, as well as Title 42 and its
environmental laws and rules to achieve in the cleansing.
It is also essential that the investigator
have a working knowledge of the local Collective Bargaining Agreement
and utilize its violations as an instrument of achieving success.
Many violations are taking place in front
of the investigators' eyes. It's in knowing what to look for. How can you remedy a problem if you do not know what the problems are.
Hiring Violations
Cooperating witnesses or informants, that
are known to the investigator, are a good source and can assist
in locating employers and some workers willing to talk off the
record. Visit the job site and ask the steward for the workers
on the job list, or just ask the workers their name.
Then compare the list with their standing
in the out-of-work list located in the union hall or its seniority
list. You will also find relatives of LCN members and union officials
on some of the projects who were brought into the union and placed to work over long time workers who
are unemployed.
Union employers operating as alter egos or
allowed to engage the services of non-union employees.
This is quite common especially in the demolition
industry. The union company is allowed to utilize non-union workers
to aid in keeping the cost of the project down. Very often they
work on a different shift and illegally remove asbestos and other
toxins when no one is looking and discard the waste in dumpsters.
This practice is prevalent in New York City.
These workers are referred to as the sneaker
brigade.
Wage and hour violations are quite commonplace,
even when Federal and State inspectors are present on prevailing
work rate projects. An employer full knowing that the hourly work
rate is subject to scrutiny and the reporting requirements, lists
the proper hourly wage scale, just less hours for the employee then what was really worked. An
example of this is a worker puts in 52 hours and his paycheck
reflects that he worked 30 hours.
Benefit Fund Remittance Violations
Benefit fund remittance violations amongst
LCN favored employers and is an ever present tactic by favored
employers in the construction industry. The employer tells an
employee or a group of favored employees that the hours of work needed to cover his or their insurance
needs have already been fulfilled and that the necessary hours
and hourly contributions needed to achieve the full credit for
his or their pension fund have peaked and any more contributions
well not aid or improve the coverage, so, how about working under
the table with a portion of your time.
This means the employee may work 40 hours
and the remittance forms and necessary payments may be for only
24 hours. The employer than pays in cash or other remuneration
half or a portion of the saved moneys to the employee.
A phantom employee is normally a non-working
employee that never or very seldom visit the job. This is practiced
in LCN controlled areas where a LCN member or associate needs
hours of work to aid in achieving a pension or needed other benefits.
The contractor is normally rewarded by the union allowing non-union
employees and or less compliance with the Collective Bargaining
Agreement.
INSURANCE FRAUD
Union Officials and Fiduciaries
As a matter of law, Union officials are required
to maintain an insurance bond that is necessary in case the official
is charged and found guilty of illegal practices and fiduciary
responsibility violations.
In many LCN dominated union locals and district
councils, the insurance agent is a relative or an associate and
is allowed to inflate the bond costs.
The money either remains with the agent as
a favor, or is kicked-back to the LCN or favored LCN associate.
Normally, the insurance is awarded to the agent without allowing
the insurance to be bid competitively.
In many locals, this expenditure is not brought
before the Executive Board for approval and the membership of
the local for ratification. (When this mistake is exposed by the
Dept. of Labor, the normal defense is that the matter was approved
and that in the financial report is read before the local membership
for approval, it mentions the payment to XYZ Insurance.)
In the Construction Industry, the person,
group or entity looking to have worked competitively bid by a
contractor, require that the employer that is bidding the work
is a stable and competent business.
To make sure of this, the developer or letter
of work in the bidding process notifies all interest contractors
that a bid bond equal to a portion of the bidding contractors bid or equal to the whole amount is required.
When a contractor is successful in the bidding
process, the bid bond is turned over to what is known as a performance
bond, whereby the insurance company guarantees that the contractor
will finish the job at the bid rate.
(There are some variations of this process,
such as cash bonds for contractors not capable of securing insurance,
but because they can tie up large amounts of cash are very seldom
implemented except on small projects.)
The ability to find an insurance company
to bond an employer is quite restrictive. Only those employers
with a long history of successful business or vast cash and asset
resources are eligible for the insurance and the better rates that follow success and
asset gain.
With these restrictions, if someone wants
to start a construction company they normally start out as a sub-contractor
and work on only a portion of the project. Their work is guaranteed
by the general contractor's insurance bond.
The LCN and its captive local know how to
circumvent this problem and reach out for a scheming insurance
agent and company. This by the way, includes some of Americas
largest companies.
In concert with the direct or indirect controlled
trustees of the benefit fund, they offer to either loan the insurance
company through what is known as bullet contracts, bonds or stock
purchases at needed times or, of course, higher commission rates.
In return, they may only require that the
insurance company take care of the insurance bonding requirements
for a favored company or a start up fledging LCN company equal
to or even lower then major companies.
In many cases, the insurance company does
not have to kick-back any moneys, just take care of the wanting
LCN employer. The LCN will then reap its reward out of the requesting
company or just use it as a job creator.
Another scheme that the LCN is using to
alleviate the bonding requirements is through the establishment
of offshore insurance companies or utilizing foreign companies.
This procedure may not work on federally
funded projects and most state funded projects, but it is
used for industrial in plant work and corporate let projects.
The LCN and its cohorts will travel to the
Cayman Islands or another less restrictive country to establish
their own insurance company. Utilizing assets from drug operations
for laundered moneys and even fraudulent bonds, they set up a
business. The company establishes an American subsidiary, hires
a good printer and a blossoming business or bust out operation
is a reality.
Corporate blackmail comes in all shapes and
forms. Everything from a corporate cheating, physical threats,
having OSHA fire, and other regulatory agency inspectors breathing
down the back of unwilling employers to exposure of sexual compromise.
Salting and Windy Day Operations
Salting is the method where carbon and graphite
dust is placed into the hydraulic system and the engines of a
non-union contractors equipment by a evening foray by local union
loyalists.
Windy day operations are when a building
is in the erection stage and the support bolts of the steel beans
are removed or loosened and lumber support braces are removed.
If properly done, a strong breeze will bring down the structure.
Purchasing and supplies
Automobiles
The automobiles are purchased from a favored
dealer at higher costs or when traded in at a lower than value
price. Sometimes, the cars after being traded are made available
to family members or associates at less than value costs.
Normally, they are purchased without competitive
bidding, or if put up for bid less stringent bidding requirements
are implemented to make sure that the favored dealer is successful.
Supplies
Everything from computers to toilet paper
are purchased from LCN favored suppliers at inflated rates.
The soda and the cigarette machine located
in some union halls, are in many LCN captive locals, are the property
of a favored vendor and the cleaning service that enters after
hours are also recipients of this relationship.
Building and Repair Construction
When the local union decides to move to new
facilities, build a new officer or make repairs when necessary,
the contractors hired are in many LCN dominated locals hand picked.
Normally, if the project is a major project
a phony bidding process will be implemented. Plans and specifications
will be sent to a number of employers and the favored employer
will not have to adhere to the requirements that are listed.
Such as the specs may call for certain products
to be installed and the LCN or its representative tells the favored
employer "don't worry about it, you can use cheaper products
or just paint the existing walls or you don't have to remove the
existing one and install a new one. When painting is required,
just use one coat not two or skip the upstairs painting needs." In some cases, no-work
may be required at all.
Front companies are established to take
advantage of Federal and State laws. Requirements that state
a certain percentage of a given project that has Federal or State
funding must sub-contract a certain portion of that project to
a minority owned company or supplier.
The LCN has the local union promote the use
of this company to general contractors who have a Collective Bargaining
Agreement with the local.
By law, in order to qualify the minority business must have 51% of the company and its corporate assets beneficially owned and controlled by a minority or a group of minorities.
Minorities do not have to be of Afro-American,
American Indian or Latino decent.
This can also include women and many LCN dominated
union officials have been involved in this practice
Worker Transfers
In some small locals and when faced with
opposition, local union leaders have turned to the Cosa Nostra
or controlled union officials for help. A larger local may tell
a number of loyalist to transfer their union book to another local
to assist the local union official who has asked for help.
They convince many potential negative voters and turn them into supporters or just keep them away from the polling area. In many cases these votes carry the day and another local falls victim to the LCN and its relentless pursuit of controll.
Political Action Committees
Political Action Committees are necessary
and a legal vehicle for the LCN and its dominated locals and district
councils. The PAC funds are used to support favored candidates
and even where spending caps are regulated, creative circumvention
is introduced.
If it becomes vital that a certain political
candidate be elected, the LCN and or the local union will reach
out for sister locals in other states or regions to get money
for the candidate. They will also send PAC money to another controlled
PAC and have that PAC send money to the candidate.
Even though stock purchasing is legal, many
union officials purchase stock in a company that is listed in
some exchange and is signatory to the Collective Bargaining Agreement
or whose performed services are the same as covered under the
craft jurisdiction of the union, in many instances this is illegal.
This automatically gives them an advantage
over other investors and the controllers of the gain or loss of
the giving value of the stock. If the company is uncontrolled
they may play the down side option game. That is to say that they are wagering their money that
the stock goes down.
The company and its affiliates are subjected
to all kinds of mischief and the losses result in the stock value
plummeting. They could also have inside knowledge on future profits
or losses of the company and other insider corporate information.
Of course, the companies stock value can benefit tremendously
from the union granting favored working and turning its head
when it comes to the Collective Bargaining Agreement.
Another stock scheme you may not see, but
happens quite often, is when a stock is normally purchased it
is purchased by the trading firm. A brokerage company that enjoys
and benefits from its representation of benefit funds and wants
to keep the relationship may illegally get involved.
Many purchasers of stocks and bonds have
a couple of weeks in which to pay for their purchase and if the
value of the stock or bond goes down over that period one of the
benefit funds is the purchaser. However, if the stock goes up
in value, the cousin or best friend of the union official is the
owner of the stock.
Another scheme, that is quite difficult to
discover and can happen with any unknowing company, is the union
official and his LCN backers finds a stock not that costly and
in need of funds.
The LCN and or the union official arrange
for a cousin or best friend to purchase a number of shares in
that company. After a couple of weeks or months go by LCN controlled
unions through the benefit funds purchases stock in the given
company.
After the benefit fund purchases have been
completed the cousin or friend sells his stock at a profit.
Legal Defense Funds
Legal Defense Funds have been around for
a number of years now and remain a pet of the LCN and controlled
union. At first they were established as a means of keeping the
LCN members legal costs down, Today, they still do that, but also
take care of relatives and associates of the LCN. Normally, they provide the union member with house
closings, wills, and general representation. With regard to the
high cost criminal defenses that may be required or potential
unrewarding civil suits they may only provide for, a small portion
of the costs. In too many cases, accident and good civil suits still require that a percentage of the claim
receipts be turned over to the attorney and his or her firm. Besides
creating substantial funds for the attorneys and LCN sponsors,
it also acts as a steering vehicle for the union membership and members relatives.
Hazardous Waste
Today, hazardous waste has become one of
the largest money makers for the LCN. The local union is relied
upon to make sure that the favored waste remover and transporter
is capable of completing its projects and avoiding detection.
Toxic waste removal is taking place in every
corner of America and the paper trail and the availability of
potential witnesses needed in the pursuit of LCN-labor complicity
is there.
I believe that each and every investigator
should include this area in any investigation. The results will not only prove rewarding but a service to
mankind.
In-Plant Demolition
In-plant demolition is a type of work very
seldom publicly advertised. Steel plants, refineries, chemical
plants etc., know of the toxins present inside the property line
of their facilities and they are aware of the burdensome cost
of pubic scrutiny.
Normally, contractors with proven records
are allowed to bid on the project. When bidding the project, some
unwanted bidder usually slips into the bidding process but almost
always unsuccessful. The ferrous and non-ferrous steel and other
metal and its value are included in the bid.
You may see a contractor actually pay the
plant owner for the project. The structures being demolished are
normally quite old and when erected did not come under environment
laws and regulations.
In order to protect process lines from heat,
they were covered with asbestos. Today's methods of heating the
oils in electrical transformers were not and place so PCB's were
added. Solvents, Benzene's and waste was regularly discarded on
plant property and so on.
The successful LCN employer starts by having
a reliable foreman or superintendent tear a placard off the transformers
so that no one can read its contents.
The workers come in to remove the transformers
and send them to a preparation area where steel is cut into sizes
and ready for shipping to a steel processing plant by ship, truck
or rail.
The steel contains PCB's, Redlead (a toxic
paint used to prevent corrosion) or asbestos laden steel is either
shipped to China, Korean, an American or a Canadian company willing
to over look its contamination.
Ironically, because many of these jobs are
labor intensive, almost every employer reaches out to ex-plant
workers or anyone that is willing to take a crack at lighting
a torch and cutting steel.
The wages are normally not above the minimum
scale for many of the workers and when asked why they did the
work when they know it was dangerous to their health. Almost everyone
will answer with the need for employment or that this is the only
type of work they know. The turnover rate for many of these employers
is usually quite large.
The next step is to remove the asbestos
from the steel. By law the employer is supposed to be licensed
to remove asbestos and the employees involved in the removal and
bagging operations are also required to be licensed,
One way of avoiding scrutiny is to hire a
licensed company for a small portion of the asbestos removal and
that contractor may or may not file the required notification
to State and Federal authorities.
The contractor does attempt to remove the
small portion of the project by encapsulating the removal work
area, then set up a containment measures including negative air
to prevent the asbestos fibers entry to non-capsulated areas.
The asbestos is removed and the work area
is vacuumed and scrubbed to make sure all asbestos is
removed. Air monitors check to see if any air transmitted fibers
are present and the asbestos is securely bagged and shipped to
a certified landfill.
The remainder of the ubiquitous asbestos
is illegally stripped off of the steel and illegally discarded
into rivers, or buried some where near the removal area. The steel
is then cut and moved over to the preparation where it is also
sized and prepared for shipping.
Copper, brass, stainless steel and other
valuable metals are closely watched and are sold to what is commonly
known as the Jewish Mafia. These operators are willing to pay
cash for the valuable product and the cash is used to pay off
the operation letting union officials and their LCN sponsors.
The funds received from the steel that is shipped overseas usually
ends up in an offshore bank account that can be tapped if additional
funds are needed as kick-backs.
As an investigator looking into these illegal
practices, they are not hard to find. You can start with any
plant in any town. Ask a cooperating witness or worker about
the plant and recent demolition work that may have taken place there.
Find a friendly demolition company or legitimate
asbestos removal company about the project. Soon, you will find
a disgruntled company or worker that may be
aware of what companies may have bid on a demolition project or
a discharged employee willing to tell all.
Each company that bids on a project that
contains hazardous waste is required to maintain and preserve
the companies bid for each and every project, even if the bid
was unsuccessful. Check the amount of hazardous waste that was
present and designated for removal, then cross check those records
with the State and Federal records for how much asbestos and other waste was actually removed and manifested.
You will probably find major discrepancies
in the recorded amounts. Armed with this information, check with
the unemployment office to find out workers who were discharged
by the employer or laid off. Many of those workers will be willing
to talk about the illegal practices and union complicity.
Check to see if the company has a signed
Collective Bargaining Agreement with the union, or are working
under an alter-ego. On many of these projects, you will find union
employees or even there relatives working and business agents
stopping by to collect their kick-backs. Most favored companies
do have agreements with the union to take advantage of the all
union employee required projects.
It has always proved successful and the
contractor or employees almost always implicate some union official
and LCN member when the FBI followed this method of investigation.
The case of Chester Liberatore of Cleveland Ohio, Cuyahoga Wrecking
and Republic Steel is a good example.
Even though the investigator is not armed
with the legal remedies available to the FBI and the Subpoena
power, it will still prove quite successful. Many employers would
rather talk than losing there livelihood and ability to make a
living. The same holds true for employees because many of them
have worked for cash and do not want to become a victim of the
IRS.
Building Demolition
Many of the same practices taking place in
plants also takes place in buildings though some asbestos discarding
procedures may differ. One common removal scheme is that after
successfully bidding on a building scheduled for demolition or
gutting and before the job is awarded. The low bidder well send in a sneaker brigade to illegally remove
as much asbestos as possible and either discard it in dumpsters
or wash it into the sewer system.
Then once the project is awarded the contractor
does not have as much asbestos to remove legally. The second way
is after receiving the award for the demolition, the contractor
legally starts removing asbestos on one floor and having the sneaker
brigade come in at night then illegally remove and discard asbestos on another.
Investigating this area is easier than in
plant work because of the availability of public records. Find
a building that was demolished and is owned by a credible owner
and check with him or his representative about the job.
The engineering department or construction
department will have documentation listing the contractors who
bid on the project and may even have their own estimates of how
much asbestos was present. Cross check with the State and you
will find the discrepancies.
The same holds true for the employees and
you will find many willing to talk. The job of extracting the
LCN controlled union official will be a lot easier, even if the
fiduciary violations of allowing union employers to employ non-union
workers were added to existing or stand alone charges. With all
the clamor over the environment, the State regulatory agencies
will probably start their own investigations.
Purchase of Union Books
In many LCN controlled unions, the purchasing
of union books still continues and wanting workers are will willing
to pay the union official for the right to become a member. This,
of course, is quite difficult to prove unless the person is willing
to comfort and cooperate.
Excess Travel Expenses and Reimbursements
Legally, this is quite difficult to prove
but from a fiduciary violation standpoint it can be added to charges
for misuse of union funds. Many LCN dominated officials will pick
up the tab of LCN members dinners and expenses.
This is quite difficult to prove and the
only witnesses available are those LCN members and Union officials
who because of being caught in some criminal activity have become
informants.
One area worthy of exploration is the use
of first class travel to and from destinations and excess hotel
expense. By itself, this would nor be enough to remove someone
from office, but coupled with numerous other fiduciary violations
a total disregard for the unions coffers can be proved.
Membership Approval for Expenses, Disbursements,
Travel and Cost Related Activity
By law, union officials are required to pre-approve,
except in cases where it is absolutely necessary to attend a meeting
or other membership beneficial requirement, any and all expenses.
The matter is first presented before the
Executive Board which meets once a month and then the membership meeting which also meets one a month for
approval of the expense.
Some expenses may not require prior approval,
such as the purchase of tires, or travel to meet with the International
Union or another union for business matters. It is required, however,
that those expenses be presented or at least approved at the next
regular meeting. This is normally done under the financial report when it is read
and then approved.
In the examination of the unions disbursements,
the investigator may find exorbitant expenses for dinners, golf
outings and so on.
Even though they may be legal and proper
expenses, a thorough examination may also reveal abuse. I have
seen union officials charge gambling losses to union credit cards
and home expenses and purchases billed to the union.
Personal Use of Union Employees
Personal use of union employees is quite
common. Many union officials have used union workers to work
around his home or property for littler or no money. Concrete
trucks destined for a project may find itself changing course
and becoming a union officials new driveway.
In many LCN controlled locals, the union
official is required to find employment for bookmakers, so that
they can take advantage of the number of workers present on a
given job. Normally, they are coffee men or placed in jobs that
allow them to canvas the job site.
Benefit funds are comprised of programs established
to meet the retirement and health and welfare needs of the union
employee. They may also include unemployment, vacation and training
programs. The creation of these funds are a result of collective
bargaining and by law must be jointly administered by the union
and employer. Each fund stands alone. is separate and distinct.
The funds can never be commingled and transferred from one fund
to another.
Trustees are appointed or elected by the
union and the employer to establish written trust agreements procedures
for the employer's contributions, finances and guidelines that
are necessary to fund a program and disburse benefits to the participating
member are included.
By law, a trustee who is receiving a pay
check from their respective union or employer cannot be financially
reimbursed or paid by the fund(s.)
A trustee can be reimbursed or compensated
by the fund(s) for travel, meals, entertainment and other fund
related activity, provided that the activity was performed for
the betterment of the funds.
Benefit fund programs may have separate trustees
or group of trustees may represent all the funds in the program.
In LCN captivated locals and district councils, the union and
employer trustees, invest and disburse the funds in a manner that
generates finances for the LCN and its membership.
Many employers who are not controlled by
the LCN or the union may not know that the misuse is taking place.
Some acquiesce to the illegal practices and avoid union retaliation,
others take advantage of better conditions that they may be the
recipient of.
The very nature of the construction industry
plays a major role in how a union member becomes eligible for
a pension fund. The change of seasons, the nature of the work
and the constant moving from company to company by many workers
creates a different process from that of a factory worker who
spends his whole career for the same employer.
Even though there may be some flexibility,
most unions follow similar guidelines and the worker receives
a quarter of a credit for 250-500 hours of contributed work in
a year, a half a credit for 500-750 hours of contributed work,
three quarters of a credit for 750-1000 of contributed work and
a full credit for 1000 or more hours of credited work.
In some unions, those members that work 1500
hours or 2000 hours of work may also receive additional credit.
In most, however, they don't and the excess moneys are used at
the desecration of the fund and the trustees.
The ERISA amendments only establish minimum
standard guidelines and substantial fraud takes place in the excess
funding of a pension plan.
There are a couple of procedures that ERISA
allows in credited years and the percentages of the members contributions
that qualify him or her for a partial or full pension. This process
is called vesting.
Some plans are allowed to establish 5 year
vesting plans, but most have established 10 year fully vested
plans.
What this means is, if a given worker stays
with the union or a sister union where a reciprocity agreement
exists and works for 10 years and contributions were made on his
or her behalf for the ten years, then this worker becomes fully
vested.
That is to say that in case of death or taking
work outside the scope of the Collective Bargaining Agreement,
that worker or the beneficiary will be entitled to the contributions
made on his or her behalf to the pension fund.
Most collective bargaining pension funds
are based on twenty years of service and 62 years of age for a
normal retirement plan. Some allow for a reduced pension payment
if the worker has twenty years of service and not 62 years of
age. Some even have what is known as 25 and out plans.
That is the member has worker for twenty
five years and the age requirement has been lifted and the pension
payment remains whole.
Break in Service Rule
A loop hole in the ERISA requirements allows
a pension plan from considering past pension payments. If an
employee has found employment elsewhere and left the bargaining
agreement area, that employee returns to the union, his previous
pension contributions are not included in the vesting requirement of ERISA, and the employee
has to start all over.
The previous contributions will be included
and considered when the employee reaches his or her 62nd birthday
and the previous and future contributions are equal to twenty
or more contributed partial or total credits.
ERISA requires that the pension fund investments be diverse. When this is achieved, then the fund has what is known as a balanced portfolio.
A balanced portfolio is normally an equal
distribution of income investments (bonds, blue chip stocks leaning
toward security, mortgages, long term money instruments, etc.),
growth investments (more volatile stocks and that may return a
larger gain), or any legal investment that has more risk, but
can be more rewarding), and liquidity for immediate needs.
These investments may be in the form of short
term CD's, savings and checking accounts. The ratios for these
investments are quite flexible and ERISA does not address how
much should be where.
ERISA does require that no more then 10%
of the pension portfolio be invested in any one individual stock
or bond, for example, a real estate loan.
This does not hold true to a mutual fund
company where that transaction is, in most cases, encompassing
many diverse investments. The law is quite flexible on how a fund
invests its resources. Even where flagrancy is quite recognizable
and millions of dollars have been lost, prosecution is next to
impossible.
Under the guise of "well at that time
we thought it was a solid investment and in the best interest
of the fund response," trustees have been able to avoid being
charge with a criminal and misuse charge or when charge, acquitted.
As you can see, even with ERISA laws present
there is substantial room for manipulation and many creative plan
administrators and other responsible parties who when held captive
can utilize to generate financial fallout.
Many illegal practices can take place with
the pension funds and some of the more prevalent practices besides
those already mentioned include churning, commission rates, and
real estate investment fraud.
Churning
Churning is quite common and it refers to
a stock broker or investor who constantly buys and sells stocks
and bonds to increase the purchasing and selling commissions that
are included in those transactions.
The fund has to pay a higher commission rate
than what is available.
Some real estate investment fraud schemes
usually include front-end and long-term financing kick-backs.
When A real estate developer requests a loan from a pension or
another benefit fund it is normally structured into two phases:
1. the
construction loan and the financing for the actual construction.
As a condition of loaning the money to the developer, the trustees
mandate that the project must be constructed by union labor only.
Percentages of the loan normally around 3
% is paid to the benefit fund attorney and a benefit fund appointed
real estate agent who makes sure the project is being constructed
according to the specifications. In LCN controlled unions The
lawyer or agent or both share their commission with the LCN;
2. once
construction is completed, the construction loan is rolled over
to what is known as the loan term financing. 3-5% is again paid
to the lawyer and the agent who in turn kick-back the additional
financial fall out to the LCN.
Another scheme that may be used in concert
with the above scheme is:
By law trustee's are required to maximize
the fund assets and that also includes real estate investments.
In order to loan a favored developer trust fund moneys and avoid
governmental scrutiny the trust loans the developer the funds
at lets say 5% and the going best rate available is 7%.
The developer believes that the construction
and operation after completion cost of that project is going to
cost him 3 million dollars a year. He has projected that the projected
business is going to bring in 5 million dollars a year. Before
taxes a gain of 2 million dollars.
The developer puts together a projection
by doing ten million dollars a year business and telling the trustees
that he will give the trust 50% of all proceeds of business over
7 million dollars. This is known in the lending business as a
kicker.
The developer and the LCN controlled trustees
know that the 7 million dollar level of business is never going
to become a reality, but it places a blanket of protection over
the trust for making the loan at a lower than bank interest rate.
Of course, the trustees could argue that the union and benefit
fund contributions made by the workers on the project would not
have been there if the job was not financed by the fund and would
have been done by non-union workers.
Positions
Unneeded secretarial and support help are
quite common in fund offices and you will find these positions
held by relatives and cronies of the LCN and the union official.
Many funds have established positions for collectors of delinquent accounts.
The responsibility and the remedies for collecting delinquent accounts are with the union and
the Collective Bargaining Agreement. Many funds utilize the ERISA
laws and its requirements to operate its own collection procedure
and create unneeded positions.
5500 Reports
Each fund must file an annual report which
is commonly known as a 5500 Report. This report contains information
reflecting the assets, liabilities, employees, expenses, funding
periods, gains and losses of a fund. The report does not contain
each and every purchase and sale transaction of the fund.
Creative and even unknowing accountants,who
compile the information, paint a picture of a fund well run and
void of misuse. Besides revealing general information, this report
is quite useless when a fund is subject to scrutiny.
Most investigators will find this perusal
a waste of time and futile. To really find out if any churning
and misuse of a fund is taking place, it is important that reports
made to trustees by brokerage firms and investors be made available.
Each union and employer trustee will have
in their possession periodic reports. These reports will list
the purchasing, selling and commissions of the investors
transactions.
Pension funds have what is know as actuaries
working on behalf of the fund. The actuary will examine the investments,
assets and liabilities. The actuary then interpolate the results
and a report will follow explaining.
If the fund is over-funded with increases
in benefits available, or under-funded and in need of additional
contributions, by law a pension fund is required to achieve fully
funding within a given period of time.
The problem for the union trustees in achieving
fully funded status is that it narrows down future negotiated
fund demands and control over employers who by law are responsible
to achieve fully funding status. Many games are played by the
actuary and his control is necessary to the LCN and its captive.
The Legal Councils in the pension plan is
also vital to the LCN. He or she makes sure that the trustees
are protected and have a defense when subjected to membership
and regulatory agencies ask questions.
Many of these legal representatives have
been placed in LCN controlled benefit funds as either a reward
for low or no cost representation of an LCN member or associate.
Or, he makes sure that the illegal use of the funds and the manipulators
are protected.
The Fund Administrator is appointed by the
trustees and essential to the LCN captive. It is vital that this
position be filled by a lackey or collaborator who is willing
to aid and abet any and all sponsored and money making activity.
The glossing of shady investments or other schemes are, in most captives, the work of the administrator
and her or her cohorts.
Many past and favored members are not eligible
for becoming the recipient of a pension. The administrator fraudulently
creates past hours for work, even though not worked in a given
period, showing the recipient working at a time prior to the introduction
of the pension fund and where credits are awarded for union membership, commonly called
past service.
Or, the recipient's name is listed with the
employees of a contributing employee for hours of work and contributions
made on his or her behalf even though the employee was not working
for that employer.
Some administrator's will utilize a company
that has ceased to exist or one that has filed for bankruptcy
to create hours of work for a favored member.
The favored members name is added to the
remittance forms that were submitted by the defunct employer.
Many Taft Hartley established funds will honor uncollected funds
and allow those members working for that company to receive pension
credit anyway. In many cases, the administrator may just add
the name of the favored member to a remittance form that was created
by him and listing a made-up name with created hours of work.
Health and Welfare funds are also jointly
administered and subject to ERISA and other applicable laws, but
the ability to siphon off funds is even greater. Besides utilizing
the same investment and crediting employee requirements, health
and welfare programs have some distinct and additional methods
available to the LCN and its lackeys.
Controlled Dental, Optical and Medical
Provider Plans
A physician, dentist or optician establishes
a program where the union membership, through the health and welfare
plan, are required to utilize the physician, dentist, or optician
or its established group when care is needed.
Normally, the service is made available at
a reduced rate, presented to the trustee's and union membership
as a cost saving vehicle. The union membership doesn't approve
these plans, nor do they have any authority to do so.
ERISA only requires that the members be supplied
a copy of what benefits are available and the hours of work needed
to qualify. The only due process available to the membership is
to vote out of office those union officials.
As a rule, most unions are informed of the
necessity of such a plan and the savings that the membership are
enjoying. In reality, the service provider, as a reward for the
increase in business, is kicking-back cash or other valued commodities
to the LCN or wayward fund trustee(s) or union official.
Following the restrictive HMO or health provider
concept paves the way for substantial abuse in the medical field
and even ancillary services such as X-ray facilities, pharmaceutical
supplies and pre-surgical procedures may be included in the schemes.
Provider Kick-backs
Many insurance providers, including some
major carriers have been willing to pay LCN members and captive
union officials an annual fee for allowing their company to provide
the health coverage needs. This is normally done through inflated
commissions, which are shared, laundered and disbursed.
A vehicle for making sure an LCN favored
insurance provider is selected. Costly conditions and requirements
are found in the unwanted carriers bid request and the favored
company is given a substantial advantage.
Inflated Costs
A physician or provider may submit a fraudulent
bill for insurance reimbursement or may inflate the actual cost
of service.
A member in concert with a medical provider
may inflate the actual services and spilt the profits or the fund.
Besides all the others mentioned, the administrator
may provide the contributions and qualifications made on behalf
of a union member and make them available to a LCN favored person.
The recipient utilizes the name and social security number of
the member for his or her medical needs.
Training Fund
Training funds are also a vehicle for misuse
and in LCN controlled unions are method for taking care of relatives
and favored members. Many training fund administrators and teachers
are the recipients of this relationship and are not qualified
to instruct and pass on the information to the membership.
Training Fund Fraud
Some of the more prevalent illegal practices
that they are involved in include:
Supply Fraud
The purchase of steel and welding classes
is either recycled or purchased in the amounts or quality listed.
plastic encapsulation sheeting, filters, hepa vacuums, respirators,
tivac clothing used for teaching asbestos cleanup are purchased
from LCN favored suppliers at inflated cost and not in the quantities
reflected in the purchase order. The list of supply fraud goes
on and on.
Fraudulent Work at Training Sites
The training fund instruction includes concrete
pouring, mason tending, blacktop laying and all related craft
jurisdiction. Much of the actual construction of a training facility
is being performed by the trainees and involving limited labor
cost. A scheming training fund administrator may create a fraudulent
bill stating the work was performed by the John Doe construction
company.
Vacation and annuity funds face the same
problems as the other funds.
Supplemental Unemployment Benefit Funds
The Supplemental Unemployment Benefit (SUB)
funds are designed to create additional funds for unemployed members.
In order to become a recipient a worker must be eligible for state
unemployment insurance. The schemes are similar as the other
funds and in LCN controlled unions become advantageous for favored
employees.
The list of violations and misuse of union
funds goes on and on. No report or book could cover all the ingenious
mistreatment schemes available and being exercised in LCN enslaved
unions. Even though, I have not covered them all, I have attempted
to incorporate some of the more common ones that will be found.
It is quite important that the investigator
develop a game plan when delving into the irregularities of the
LCN controlled local union and its officials.
Asking members to discuss these areas without being pre-armed with necessary information will be an effort in futility. One must always remember that the membership fears the LCN more than you, and any conversing or complaining will lead to his or her being blackballed.
Besides Title 18 and its sub sections known
to most of those involved in labor racketeering perusals. Labor
and Environmental Laws should also be utilized when investigating
a LCN captive union local and district council.
The representations made are guidelines only
and any application and interpretation should be made by a qualified
legal council.
Labor Management Relations Act of 1947
(Taft Hartly)
As a result of the passage and enactment
of the Labor Relations Act of 1935. Many employers and citizens
not wanting to be forced into labor organizations were. The Labor
Management Act was passed after survived a Truman veto.
It pared down much of the labor organization's
ability to impose its way and advanced Federal authority
over unions that affected interstate commerce.
As a result the National Labor Relations
Board was established to oversee this act, but the exhaust all
remedies doctrine has narrowed down the NLRB's input until all
contractual and union bylaw procedures have been implemented and
used up.
In a LCN captive union many violations of
this Act can be found and this section and its sub sections may
prove to be helpful. However for the sake of brevity, I have omitted
most of the language contained in this law, so my interpretation
and opinions will have to suffice. It is quite important however
that you review the many sections and subsections as a follow
up to what is written and contained in this document.
Article 29 USCS § 141. Short title;
Congressional declaration of purpose and policy
(a) This
Act may be cited as the "Labor Management Relations Act,
of 1947" Industrial strife which interferes with the normal
flow of commerce and with the full production of articles and
commodities for commerce, can be violated or substantially minimized
if employers, employees, and labor organizations each recognize
under law one another's legitimate rights in their relations with
each other, and above all recognize under law that neither party
has any right in its relations with any other to engage in acts
or practices which jeopardize the public health, safety, or interest.
It is the purpose and policy of this Act,
in order to promote the full flow of commerce, to prescribe the
legitimate rights of both employees and employers in their relations
affecting commerce, to provide orderly and peaceful procedures
for preventing the interference by either with the legitimate
rights of the other, to protect the rights of individual employees
in their relations with labor organizations whose activities affect
commerce, and are inimical to the general welfare, and to protect
the rights of the public in connection with labor disputes affecting
commerce. Some of the areas of illegal practices covered by this
Act include:
Violence, threats, interference with workers
rights, negligence, mass picketing, Federal funded projects, construction
sites, secondary activity, picketing, boycotts, activity for union
security, union breach of fair representation, wrongful expulsion
or exclusion, wrongful union discipline, etc.
Labor, Management Reporting and Disclosure
Act of 1959 (Landrum-Griffin Act)
When the Labor Management Act of 1947 was
passed it did not address many internal union problems regarding
the rights of members to oppose current officials, receive union
documents and be informed of union practices.
Prior to 1959, many union officials even
owned their own construction companies and would benefit from
the lack of restrictions. What I feel was the most important area
addressed by this amendment was the area of fiduciary responsibilities.
I have included some area of Landrum Griffin
for use as a guide only. I have included some personal comments
which are mine alone and may not reflect the opinions and decisions
of the courts and governmental regulatory authorities.
Article 29 USCS § 431 Reporting
of Labor Organizations, Officers and Employees of Labor Organizations,
and Employers
(a) Adoption and filing of constitution and bylaws: contents of report.
Every labor organization shall adopt a constitution
and bylaws and shall file a copy thereof with the Secretary,
(of Labor) together with a report, signed by its president
and secretary or corresponding principal officers, containing
the following information-
(1) the
name of the labor organization, its mailing address, and any other
address at which it maintains its principal office or at which
it keeps the records referred to in this title (29 USCS §§
431 et seq,);
(2) the
name and title of each of its officers;
(3) the
initiation fee or fees require from a new or transferred
member and fees for work permits required by the reporting labor
organization;
(4) the
regular dues or fees or other periodic payments required to remain
a member of the reporting labor organization; and
(5) detailed
statements, or references to specific provisions of documents filed under this subsection which contain such statements, showing
the provision made and procedures followed with respect to each
of the following
(a) qualifications
for or restrictions on membership,
(C) participation
in insurance or other labor benefit plans,
(D) authorization
for disbursement of funds of the labor organization,
(E) audit
of financial transactions of the labor organization,
(F) the
calling of regular and special meetings,
(G) the selection of officers and stewards and any
representatives to other bodies composed
of labor organizations, representatives, with a specific statement
of the manner in which each was elected, appointed, or otherwise
selected, (H) discipline or removal of officers, or agents for
breach of trust,
(I) imposition
of fines, suspensions, and expulsions of members, including the
grounds for such action and any provision made for notice,
hearing, judgment on the evidence, and appeal procedures,
(J) authorization
for bargaining demands,
(K) issuance
of contract terms,
(L) authorization
for strikes and
(M) issuance
of work permit. Any change in the information required by
this subsection shall be reported to the Secretary (of Labor)
at the time the reporting labor organization files with the secretary
the annual report required by subsection (B).
(B) Annual financial report; filing; contents. Every labor
organization shall file annually with the
Secretary (of Labor) a financial report signed by the president
and treasurer or corresponding principal officers containing the
following information in such detail as may be necessary accurately
to disclose its financial condition and operations for its preceding
fiscal year-
(1) assets
and liabilities at the beginning and end of the fiscal year;
(2) receipts
of any kind and the sources thereof;
(3) salary, allowances, and other direct
or indirect disbursements (including reimbursed expenses)
to each officer and to each employee who during such fiscal year,
received more than $10,000 in the aggregate from such labor organization
and any other labor organization affiliated with it or with which
it is affiliated, or which is affiliated with the same national
or international labor organization;
(4) direct
and indirect loans made to any officer, employee, or member
which aggregated more than $250 during the fiscal year, together
with a statement of the purpose, security, if any, and arrangements
for repayment;
(5) direct
and indirect loans to any business enterprise, together with a
statement of the purpose, security, if any, and arrangements for
repayment; and
(6) other
disbursements made by it including the purposes thereof;
all in such categories as the Secretary (of
Labor) may prescribe.
(C) Availability
of information to members; examination of books, records and
accounts. Every labor organization required to submit a report
under this Title (29 USCS §§ 431 et seq.) shall
make available the information required to be contained in
such report to all of its members, and every such labor organization
and its officers shall be under a duty enforceable at the suit
of any member of such labor organization in any State court of competent
jurisdiction or in the district court of the United States
for the district in which such labor organization maintains its
principal office,to permitsuch member for just cause to examine
any books, records, and accounts necessary to verify such report.
The court in such action may, in its discretion,
in addition to any judgment awarded to the plaintiff
or plaintiffs allow a reasonable attorney's fee be paid by the
defendant, and costs of the action.
Opinionn
Many labor organizations do not comply with
each and every notification requirement, such as letting the
Department of Labor know many of the work rule changes that have
resulted from the collective bargaining process and or procedures
for appointing shop stewards.
When the DOL is made aware of this, they
normally notify the union and tell them to comply with the law
from now on. As far as utilization of § 431 violations they
should be coupled with other violations when applied against a
LCN controlled union.
Article 29 USCS § 432. Reports of
Officers and Employees of Labor Organizations
(a) Filing;
contents of report. Every officer of a labor organization and every employee of a labor
organization (other that an employee performing exclusively clerical
or custodial services) shall file with the Secretary a signed
report listing and describing for his preceding fiscal year-
(1) Any
stock, bond, security, or other interest, legal or equitable, which he or his spouse or minor
child directly or indirectly held in, and any income or any other
benefit with monetary value (including reimbursed (expenses) which
he or his spouse or minor child derived directly or indirectly
from, an employer whose employees such labor organization represents
or is actively seeking to represent, except payments and other
benefits received as a bona fide employee of such employer;
(2) any
transaction in which he or his spouse or minor child engaged directly or indirectly, involving
any stock, bond, security, or loan to and from, or other legal
or equitable interest in the business of an employer whose employees
such labor organization represents or is actively seeking to represent;
(3) any
stock, bond, security, or other interest, legal or equitable, which he or his spouse or minor
child directly or indirectly held in, and any income or any
other benefit with monetary value (including reimbursed expenses)
which he or his spouse or minor child directly or indirectly derived
from, any business a substantial part of which consists of buying
from, or selling or leasing directly or indirectly to, or otherwise
dealing with such labor organization.
(4) any
stock, bond, security, or other interest, legal or equitable,
which he or his spouse or minor child directly or indirectly held
in, and any income or any other benefit with monetary value (including
reimbursed expenses) which he or his spouse or minor child directly
or indirectly derived from, a business any part of which consists
of buying from, or selling or leasing directly or indirectly to,
otherwise dealing with such labor organization;
(5) any
direct or indirect business transaction or arrangement between
him or his spouse or minor child and any employer whose employees
his organization represents or is actively seeking to represent,
except work performed and payments and benefits received as a
bona fide employee of such employer and except purchases and sales
of goods in the regular course of business at prices generally
available to any employee of such employer; and
(6) any
payment of money or other thing of value (including reimbursed expenses) which he or his spouse
or minor child received directly or indirectly from any employer
or any other person who acts as a labor relations consultant to
a employer, except payments of the kinds referred in section 302
(c) of the Labor Management Relations Act, 1947, (Taft Hartly)
as amended (29 USCS § 186 (c).
(b) Report
of certain bona fide investments. The provisions of paragraphs
(1), (2), (3), (4), and (5) of subsection (a) shall not be construed
to require any such officer or employee to report his bona fide
investments in securities traded on a securities exchange
registered as a national securities investment company registered
under the Investment Company Act of the Public Utility Holding
Company Act of 1935, or to report income derived therefrom.
(c) Exemption
from filing requirement. Nothing contained in this section
shall be construed to require any officer or employee of a labor
organization to file a report under subsection (a) unless he or
his spouse or minor child holds or has held an interest, has
received income or any other thing with monetary value or a loan,
or has engaged the services of an employer as defined therein.
Title 29 USCS § 436. Retention of
Records
Every person required to file any report
under this title (29 USCS §§ 431 et seq.) shall maintain
records on the matters required to be reported which will provide
in sufficient detail the necessary basic information and data
from which the documents filed with the secretary may be verified,
explained or clarified, and checked for accuracy and completeness
and shall vouchers, worksheets, receipts, and applicable resolutions,
and shall keep such records available for examination for a period
of not less then five years after the filing of the documents
based on the information which they contain.
Title 29 USCS § 501. Fiduciary responsibility
of officers of labor organizations
(a) Duties
of officers; exculpatory provisions and resolutions void.
The officers, agents, shop stewards, and
other representatives of a labor organization occupy positions
of trust in relation to such organization and its members as a
group.
It is, therefore, the duty of each such person,
taking into account the special problems and functions of a labor
organization, to hold its money and property solely for the benefit
of the organization and its members and to manage, invest, and
expend the same in accordance with its constitution and bylaws
and any resolutions of the governing bodies adopted thereunder,
to refrain from dealing with such organization as an adverse party
or in behalf of an adverse party in any matter connected with
his duties and from holding or acquiring any pecuniary or personal
interest which conflicts with the interest of such organization,
and to account to the organization for any profit received by
him in whatever capacity in connection with transactions conducted
by him or under his direction on behalf of the organization.
A general exculpatory provision in the constitution
and bylaws of such labor organization or a
general exculpatory resolution of a governing body purporting
to relieve any such person of liability for breach of the duties
declared by this section shall be void as against public policy.
(b) Violations
of duties; action by members after refusal or failure by labor
organization to commence proceedings; jurisdiction; leave of court;
council fees and expenses.
When any officer, agent, shop steward, or
representative of the labor organization is alleged to have violated
the duties declared in violation (a) and the labor organization
or its governing board or officers refuse or fail
to sue or recover damages or secure an accounting or other legitimate
relief within a reasonable time after being requested to do so
by any member of the labor organization,such member may sue such
officer, agent, shop steward, or representative in any district
court of the United States or in any State court of competent
jurisdiction to recover damages or secure an accounting or other
appropriate relief for the benefit of the labor organization.
No such proceeding shall be brought except upon leave of the court
obtained upon verified application and for good cause shown, which
application may be made ex parte.
The trial judge may allot a reasonable part
of the recovery in any action under this subsection to pay the
fees of council prosecuting the suit at the instance of the member
of the labor organization and to compensate such member for
any expenses necessarily paid or incurred by him in connection
with the litigation.
(c) Embezzlement
of assets; penalty. Any person who embezzles, steals, or unlawfully
and willfully abstracts or converts to his own use, the use of
another, any of the moneys, funds, securities, property, or other
assets of a labor organization of which he is an officer, or by
which he is employed directly or indirectly, shall be fined not
more than $10,000 or imprisoned for not more than five years,
or both.
Opinion
Because of the numerous 501 violations that are committed in
LCN controlled locals and district councils,
These areas should be explored and incorporated
into any investigation. some of these violations include:
1. Officers
who expend union funds without membership approval.
2. Failure
to correct effects of past denials of rights guaranteed union
members.
3. Mismanagement, secrecy, failure to disclose,
failure to process grievances, and failure to conduct union affairs.
4. Failure
to pay international union dues, adobes are considered a circumvention.
5. Mismanagement
of pension funds
6. unauthorized
payments of attorney fees.
7. Unauthorized
salary increases
Article 29 USCS § 502. Bonding of
officers and employees of labor organization, amount, form, and
placement of bonds; penalty for violation
(a) Every
officer, agent, shop steward, or other representative or employee
of any labor organization (other than a labor organization whose
property value and annual financial receipts do not exceed $5,000
in value), or of a trust which labor organization is interested,
who handles funds or other property thereof shall be bonded to
provide protection against loss by reasons of acts of fraud or
dishonesty on his part directly or through connivance with others.
The bond of each person shall be fixed at
the amount mot less than 10 per centum of the funds handled by
him and his predecessor or predecessors, if any during the preceding
fiscal year, but in no case more than $500,000. If the labor
organization or the trust in which a labor organization is interested
does not have a preceding fiscal year, the amount of the bond
shall be, in the case of a local labor organization, not less
then $1,000, and in the case of any other labor organization,
not less than $10,000. Such bonds shall be individual or schedule
in form, and shall have a corporate surety company as surety thereon.
Any person who is not covered by such bonds
shall not be permitted to receive, handle, disburse, or otherwise
exercise custody or control of the funds or other property of
a labor organization or of a trust in which a labor organization
is interested.
No such bond shall be placed through an agent
or broker or with a surety company in which the labor organization
or any officer, agent shop steward, or other representative has
any direct or indirect interest.
Such surety company shall be a corporate
surety which holds a grant of authority from the Secretary of
Treasury (T- Listed) under the Act of July 30, 1947 (6 U.S.C.
6-13), as an acceptable surety on Federal bonds: has made
other bonding arrangements which would provide the protection
required by this section at comparable cost or less, he may exempt
such labor organization from placing a bond through a surety company
holding such grant of authority.
(b) Any
person who willfully violates this section shall be fined not
more than $10,000 or imprisoned for not more than one year or
both.
Article 29 USCS § 504. Prohibition
against certain persons holding office
(a) Membership in Communist Party or conviction
of crime. No person who is or has been a member of the Communists
Party or who has been convicted of, or served any part of a prison
term resulting from his conviction of, robbery, bribery, extortion,
embezzlement, grand larceny. burglary, arson, violation of narcotics
laws, murder, rape, assault with intent to kill, assault which inflicts bodily injury, or a violation of title II or III of
this act, any felony involving abuse or misuse of such person's
position or employment in a labor organization or employee benefit
plan to seek or obtain an illegal gain at the
expense of the members of the labor organization or the beneficiaries
of the employee benefit plan, or conspiracy to commit any such
crimes or attempt to commit any such crimes, or a crime in which
any of the foregoing crimes is an element, shall serve or be permitted
to serve-
(1) as
a consultant or adviser to any labor organization
(2) as
an officer, director, trustee, member of any executive board
or similar body, business agent, business manager, organizer,
employee, or representative in any capacity of any labor organization,
(3) as
a labor relations consultant or adviser to a person engaged in
an industry or activity affecting commerce, or as an officer,
director, agent, or employee of any group or association of employers
dealing with any labor organization, or in a position having
specific collective bargaining authority or direct responsibility
in the area of labor-management relations in any corporation
or association engaged in an industry or activity affecting commerce, or
(4) in
a position which entitles its occupant to a share of the proceeds
of, or as an officer or executive or administrative employee of,
any entity whose activities are in whole or substantial part devoted
to providing goods or services to any labor organization,
(5) in
any capacity, other than in his capacity as a member of such
labor organization, that involves decision making authority concerning,
or decision making authority over, or custody of, or control of
the moneys, funds, assets, or property of any labor organization,
during or for the period of thirteen years
after such conviction or after the end of such imprisonment, whichever
is later, unless the sentencing court on the motion of the person
convicted sets a lesser period of at least three years after such
conviction or after the end of such imprisonment, whichever is
later, or unless prior to the end of such period, in the case
of a person so convicted or imprisoned,
(A) his
citizenship rights, having been revoked as a result of such
conviction, have been fully restored, or
(B) if
the offense is a Federal offense,the sentencing judge or, if the
offense is a State or Local offense, the United States district
court for the district in which the offense was committed pursuant
to sentencing guidelines and policy statements under section 994(a)
of title 28, United States Code, determines that such person's
service in any capacity referred to in clauses (1) through (5)
would not be contrary to the purposes of this Act.
Prior to making any such determination the
court shall hold an administrative hearing and shall give notice
of such proceeding by certified mail to the Secretary of Labor
and to State, county and Federal prosecuting officials in the
jurisdiction or jurisdictions in which such person was convicted.
The courts determination in any such proceeding
shall be final. No person shall knowingly hire, retain, employ,
or otherwise place any other person to serve in any capacity
in violation of this subsection.
(b) Penalty.
Any person who willfully violates this section shall be fined
not more than $10,000 or imprisoned for not more than five years,
or both.
(c) Definitions.
For the purpose of this section-
(1) A
person shall be deemed to have been "convicted" and
under the disability of "conviction" from the date of
the judgment of the trial court, regardless of whether the judgment
remains under appeal.
(2) A
period of parole shall not be considered as part of a period of
imprisonment.
(d) Person
barred from office of labor organization during appeal of conviction;
salary placed in escrow. Whenever any person-
(1) by
operation of this section, has been barred from office or other
position in a labor organization as a result of a conviction,
and
(2) has
filed an appeal of that conviction, any salary which would be
otherwise due such person by virtue of such office or position,
shall be placed in escrow by the individual employer or organization
responsible for payment of such salary.
Payment of such salary into escrow shall
continue for the duration of the appeal or for the period of time
during which such salary would be otherwise due, which ever period
is shorter.
Upon the final reversal of such person's
conviction on appeal, the amounts in escrow shall be paid to such
person.
Upon the final sustaining of such person's
conviction on appeal, the amounts in escrow shall be returned
to the individual employer or organization responsible for payments
of those amounts.
Upon final reversal of such person's conviction,
such person shall no longer be barred by this statue (section)
from assuming any position from which such person was previously
barred.
Opinion
Until recently this section of the law did not apply to union
clerks and custodians.
In LCN controlled locals and district councils,
those not capable of meeting these standards would be rewarded
by placement into those positions.
Normally when the DOL learns of these violations
they notify the union that they have employed a barred individual
and the matter is corrected.
In LCN captive locals you will find many
of the shop stewards with the acquiescence of the business manager
have committed offenses as listed above.
When the available information proves a complete
lack of regard for this section. Then these violations should
be made part of any charges filed against the business manager,
business agents. and involved officials.
ERISA (Retirement Income Security Act)
Title 29 USCS § 1082. Minimum funding
standards
Note: ( Because of the length of section
1082, I have placed the minimum funding standards text into highlights
and explanations).
(a) Avoidance
of accumulated funding deficiency
(1) Every
benefit fund subject to this part shall satisfy the minimum funding
standard (or the alternative minimum funding standard under section
305 (29 USCS § 1085) for any plan year to which this part
applies.
A plan to which this part applies shall have
satisfied the minimum funding standard for which this part applies
shall have satisfied the minimum funding standard for such plan year the plan does not have an accumulated
funding deficiency.
(2) For
the purposes of this part, the term "accumulated funding
deficiency" means for any plan the excess of the total charges
to the funding standard account for all plan years (beginning
with the first plan year to which this part applies) over the
total credits to such account for such years or, if less the excess
of the total charges to the alternative minimum funding standard
for such plan years over the total credits to such account for
such years.
Opinion
What this and the language that follows in 1081 means, is:
Every Taft Hartly fund (pension) must from
the first year of the commencement of the plan should become fully
funded under this language within the period of time required
under this section.
Time tables and formulas for achieving this
are also spelled out in this and related sections. Fully funded
means that if all contributions from employers ceased, the fund's
capital resources would be in a position of self sufficiency and
benefit payments to participants and beneficiaries would not have
to be reduced.
The fund actuary is responsible for projecting
what contributions and modifications may be needed to meet these
requirements.
In LCN captive locals and district councils
his role is paramount and his acquiescence is necessary.
In order for the fund to remain above suspicion
the captive actuary will fudge the true return on investments
or the percentage of interest he is utilizing for
fund growth.
This is quite easy to accomplish and all
he has to do, is reflect in his opinion the projected costs of
participant benefits are higher then what they really are.
Another scheme is to show that the funds
investment account which may have received only a 3% growth
in a given year is not really out of line even though the Dow
Jones average may be 8 % for that year.
The actuary and shady investment broker check
and find a another investment barometer such as say the Standard
and Poors whose annual growth average may be only 4%. Still another
ploy is to include what is known as future contributions into
the actuarial growth formula and in the process hide any realized
fund losses. In every ongoing pension plan, monthly payments are
received by the fund from the employer.
These contributions are called future funds.
Many plans annually receive more in these contributions, then
they include them in interest and gain of the fund investments.
Even another scheme is implemented and that
is, contributions made on behalf of employees that do not meet
the crediting standards.
When an employee only works say 230 hours
in a fiscal year, that employee is not entitled to a partial credit.
The employee's contribution is not listed in the funding requirements
and the moneys are reflected as investment growth. As you can
see, there are many methods available to the actuary to cover
the real investment growth of the pension fund and how the moneys
really entered the fund.
Title 29 USCS § 1104. Fiduciary
duties
(a) Prudent man standard of care. (1) Subject to sections 403 (c) and (d) (29 USCS § 1103), (c) and (d), 4042 (29 USCS § 1342), and 4044 (29 USCS § 1344),
A fiduciary shall discharge his duties with
respect to a plan solely in the interest of the participants and
beneficiaries and-
(A) for the exclusive purpose of:
(i) providing benefits to participants and their beneficiaries;and
(ii) defraying
reasonable expenses of administering the plan
(B) with
the care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise
of a like character and with like aims.
(C) by
diversifying the investments of the plan so as to minimize the
risk of large losses, unless under the circumstances it is clearly
prudent not to do so; and
(D) in
accordance with the documents and instruments governing the plan
insofar as such documents and instruments are consistent with
the provisions of this title or tile IV.
(2) In the case of an eligible individual
account plan (as defined in section 407 (d) (3) (29 USCS §
1107 (d) (3), the diversification requirement of paragraph (1)
(c) and the prudence requirement (only to the extent that it requires
diversification) of paragraph (1) (B) is not violated by acquisition
or holding of qualifying employer real property or qualifying
employer securities (as defined in section 407 (d)(4) and (5)
(29 USCS § 1107 (d) (4) and (5).
(b) Indicia
of ownership of assets outside jurisdiction of district courts.
Except as authorized by the Secretary by
regulation, no fiduciary may maintain the indicia of ownership
of any assets of a plan outside the jurisdiction of the courts
of the United States.
(c) Control
over assets by participant or beneficiary. In the case of a pension
plan which provides for individual accounts and permits a participant
or beneficiary to exercises control over assets in his account,
if a participant or beneficiary exercises control over the assets
in his account (as determined under regulations of the Secretary)-
(1) such
participant or beneficiary shall not be deemed to be a fiduciary
by reason of such exercise, and
(2) no
person who is otherwise a fiduciary shall be liable under this
part for any loss, or by reason of any breach, which results from
such participant's or beneficiary's exercise of control.
Violations of 1104 are also quite prevalent in LCN controlled unions. In many cases, benefit fund misuse may be difficult to address because the Benefit funds are jointly administered and may not be subject to internal union investigations. If witnesses and discovery implicate the union and its officials of misconduct and theft then they can be incorporated under 501 violations.
1. Disclosure to participants and beneficiaries
of, theft of funds, plan features and changes
2. Diversification of investments
3. Conflicts of Interest
5. misuse of expenses
Title 29 § 1106 Fiduciary benefits
and compensation that are prohibited.
Section 1106, which is not incorporated in
this report, defines and explains prohibited transactions. Utilization
of the assets of the fund for direct and indirect personal use
and the payment of wages or capital distribution to trustees is
prohibited.
I have included section 1106, because it
reflects how benefits and remuneration can be made to trustees
and others.
Many LCN controlled union officials who serve
as fund trustees take advantage of this section.
They reward themselves with high cost vacations
under the guise of benefit fund business and pick up the dinner
tab of LCN members and numerous other misuse expense reimbursement
schemes.
Cases have been made that the funds have
been misused when a LCN captive trustee brings his spouse, sons
and daughters and their spouses to benefit conventions and meetings.
However many cases have been lost under the
defense that the trustee provided a better service to the fund
by having his family with him.
29 USCS § 1108. Fiduciary benefits
and compensation not prohibited by 29 USCS § 1106.
Nothing in section 406 (29 USCS § 1106)
shall be construed to prohibit any fiduciary from-
(1) receiving
any benefit to which he may be entitled as a participant or beneficiary
in the plan, so long as the benefit is computed and paid on a
basis which is consistent with the terms of the plan as applied
to all other participants and beneficiaries;
(2) receiving
any reasonable compensation for services rendered,or for reimbursement
of expenses properly and actually incurred, in the performance
of his duties with the plan; except that no person so serving
who already receives full-time pay from an employer or an association
of employers, whose employees are participants in the plan, or
from an employee organization whose members are participants in
such plan shall receive compensation from such plan, except for
reimbursement of expenses properly and actually incurred; or
(3) serving
as a fiduciary in addition to being an officer, employee,
agent, or other representative of a party in interest.
(d) Owner-employees;
family members; shareholder employees. Section 407(b) (29 USCS
§ 1107(b) and subsections (b), (c), and (e)of this section
shall not apply to any transaction in which a plan, directly or
indirectly-
(1) lends
any part of the corpus or income of the plan to;
(2) pays
any compensation for personal services rendered to the plan to;
or
(3) acquires
for the plan any property from or sells any property to; any person who is with respect to the plan
an owner-employee (as defined in section 401(c)(3) of the Internal
Revenue Code of 1986 (26USCS § 401 (c) (3) a member of the
family as defined in section (2) USCS § 267(c)(4) of any
such owner-employee, or a corporation controlled by any such owner
employee through the ownership, directly or indirectly, of 50
percent or more of the total combined voting power of all classes
of stock of the corporation.
For purposes of this subsection a shareholder
employee (as defined in section 1379 of the Internal Revenue Code
of 1954 (26 USCS § 1379) as in effect on the day before the
date of the enactment of the Subchapter S Revision Act of 1982
(enacted October 19, 1982) and a participant or beneficiary of
an individual retirement account or individual retirement annuity
described in section 408 of the Internal Revenue Code of 1986
(26 USCS § 408) or a retirement bond described in section
409 of the Internal Revenue Code of 1954 (26 USCS § 409)
(as effective for obligations issued before January 1, 1984) and
an employer or association of employers which establishes such
an account or annuity under 408(c)of the Internal Revenue Code
of 1986 (26 USCS § 408(c) shall be deemed to be an owner-employee.
(e) Acquisition
or sale by plan of qualifying employees securities; acquisition,
sale or lease by plan of qualifying employer real property.
Sections 406 and 407 (29 USCS §§
1106 and 1107) shall not apply to the acquisitions or sale by
a plan of qualifying employer securities (as defined in section
407(d)(5) (29 USCS § 1107(d)(5) or acquisition, sale or lease
by a plan of qualifying employer real property (as defined in
section 407(d)(4) (29 USCS § 1107(d)(4))-
(1) if
such acquisition, sale, or lease is for adequate consideration
(or in the case of a marketable obligation, at a sale price not
less favorable to the plan than the price determined under section407(e)(1)
(29 USCS § 1107(e)(1),
(2) if
no commission is charged with respect thereto, and
(A) the
plan is an eligible individual account plan (as defined in section
407(d)(3) (29 USCS § 1107(d)(3), or
(B) in
the case of an acquisition or lease of qualifying employer real
property by a plan which is not an eligible individual plan,
or of an acquisition of qualifying employer securities by
such a plan the lease or acquisition is not prohibited by section
407(a) (29 USCS § 1107(a).
Title 29 USCS § 1109. Liability
for breach of fiduciary duty
(a) Any
person who is a fiduciary with respect to a plan who breaches
any of the responsibilities, obligations, or duties imposed upon
fiduciaries by this title shall be personally liable to make good
to such plan any profits of such fiduciary which have been made
through use of assets of the plan by the fiduciary, and shall
be subject to such other equitable or remedial relief as the
court may deem appropriate, including removal of such fiduciary.
A fiduciary may also be removed for a violation of section 411
of this Act (29 USCS § 1111).
(b) No
fiduciary shall be liable with respect to a breach of fiduciary
duty under this title if such breach was committed before he became
a fiduciary or after he ceased to be a fiduciary.
Title 29 USCS § 1111. Persons prohibited
from hold certain positions
(a) Conviction or imprisonment.
No person who has been convicted of, or has
been imprisoned as a result of his conviction of, robbery, bribery,
extortion, embezzlement, fraud, grand larceny, burglary, arson,
a felony violation of Federal or State law involving substances
defined in section 102 (6)of the Comprehensive Drug Abuse Prevention
and Control Act of 1970 (21 USCS § 802 (6), murder, rape,
kidnapping, perjury assault with intent to kill, any crime described
in section 9 (a) (1) of the Investment Company Act of 1940 (15
USCS 80a-9(a)(1), a violation of any provisions of this act, a
violation of section 302 of the Labor-Management Relations Act,
1947 (29 U.S.C. 186), a violation of chapter 63 of title 18, United States Code (18 USCS §§ 1341 et seq.), a violation
of section 874,1027, 1503, 1505, 1510, 1951, or 1954 of title
18 United States Code, a violation of the Labor-Management Reporting
Act of 1959 (29 U.S.C. 401, any felony involving abuse or misuse
of such person's position or employment in a labor organization
or the beneficiaries of the employee benefit plan, or conspiracy
to commit any such crimes or attempt to commit any such crimes,
or a crime in which any of the foregoing crimes is an element,
shall serve or be permitted to serve-
(1) as
an administrator, fiduciary, officer, trustee, custodian counsel,
agent, employee, or representative in any capacity of any employee
benefit plan,
(2) as
a consultant or adviser to an employee benefit plan, including
but not limited to any entity whose activities are in whole or
substantial part devoted to providing goods or services to any
employee benefit plan, or
(3) in
any capacity that involves decision making authority or custody
or control of the moneys, funds, assets, or property of any employee
benefit plan,
during or for the period of thirteen years
after such conviction or after end of imprisonment, whatever is
later, unless the sentencing court on the motion of the person
convicted sets a lesser period of at least three years after
such conviction or after the end of such imprisonment, whichever
is later, or unless prior to the end of such period, in the case
of a person convicted or imprisoned (A) his citizenship rights,
having been revoked as a result of such conviction, having been
fully restored, or (b) if the offense is a State or Local offense,
the United States district court for the district in which the
offense was committed, pursuant to sentencing guidelines and policy
statements under 994 (a) of title 28, United States Code, determines
that such person's service in any capacity referred to in paragraphs
(1) through (3) would be contrary to the purposes of this title.
Prior to making any such determination the court shall hold a
hearing and shall give notice to(of) such proceedings by certified
mail to the Secretary of Labor and to State, county, and Federal
prosecuting officials in the jurisdiction or jurisdictions in
which such person was convicted.
The courts determination in any such proceeding
shall be final. No person shall knowingly hire, retain, employ,
or otherwise place any person to serve in any capacity in violation
of this subsection.
Notwithstanding the preceding provisions of this subsection, no corporation or partnership will be precluded from acting as an administrator,fiduciary, officer, trustee, custodian, counsel, agent, or employee of any employee benefit
plan or as an consultant to any employee
benefit plan without a notice, hearing, and determination by such
court that such service would be inconsistent with the intention
of this section.
(b) Penalty.
Any person who intentionally violates this section shall be fined
not more than $10,000 or imprisoned for not more than five years,
or both.
(c) Definitions.
For the purposes of this section-
(1) A
person shall be deemed to have been "convicted"and under
the disability of "conviction" from the date of the
judgment of the trial court, regardless of whether the judgment
remains under appeal.
(2) The
term "consultant" means any person who, for compensation,
advises, or represents an employee benefit plan or who provides
other assistance to such plan, concerning the establishment or
operation of such plan.
(3) A period of parole or supervised release
shall not be considered as part of a period of imprisonment.
(a) Requisite
bonding of plan officials. Every fiduciary of an employee benefit
plan and every person who handles funds or property of such a
plan (hereafter in this section referred to as "plan official")
shall be bonded as provided in this section; except that-
(1) where
such plan is one under which the only assets from which benefits
are paid are the general assets of a union or of an employer,
the administrator, officers, and employees of such a plan shall
be exempt from the bonding requirements of this section, and
(2) no
bond shall be required of a fiduciary (or of any director,
officer, or employee of such fiduciary) if such fiduciary-
(A) is
a corporation organized and doing business under the laws of the
United States or of any State;
(B) is
authorized under the laws to exercise trust powers or to conduct
an insurance business;
(C) is
subject to supervision or examination by Federal or State authority;
and
(D) has
at all times a combined capital and surplus in excess of such
a minimum amount as may be established by regulations issued by
the Secretary, which amount shall be at least $1,000,000.
Paragraph (2) shall apply to a bank or other
financial institution which is authorized to exercise trust powers
and the deposits of which are not insured by the Federal
Deposit Insurance Corporation, only if such bank or institution
meets bonding or similar requirements under State law which the
Secretary determines are at least equivalent to those imposed
on banks by Federal law.
The amount of such bond shall be fixed at
the beginning of each fiscal year of the plan. Such amount shall
not be less than 10 per centum of the amount of funds handled.
In no case shall such bond be less than $1,000 nor more than $500,000,
except that the Secretary, after due notice and opportunity for
hearing to all interested parties, and after consideration of
the record, may prescribe an amount in excess of $500,00, subject
to the 10 per centum limitation of the preceding sentence.
For purposes of fixing the amount of such
bond, the amount of funds handled shall be determined by the funds
handled by the person, group, or class to be covered by such bond
and by their predecessor or predecessors, if any, during the preceding
reporting year, or if the plan has no preceding reporting year,
the amount of funds to be handled during the current reporting year
by such person. group, or class,estimated as provided in regulations
of the Secretary.
Such bond shall provide protection to the
plan against loss by reason of acts of fraud or dishonesty on
the part of the plan official directly or through connivance with
others.
Any bond shall have as surety on Federal
bonds under authority granted by the Secretary of the Treasury
pursuant to sections 6 through 13 of title 6, United States Code.
Any bond shall be in a form or of a type approved by the Secretary,
(T-Listed) including individual bonds or schedule or blanket forms
of bonds which cover a group or class.
It shall be unlawful for any plan official
to whom subsection (a) applies, to receive, handle,
disburse, or otherwise exercise custody or control of any of the
funds or other property of any employee benefit plan, without
being bonded as required by subsection (a) and it shall be unlawful
for any plan official of such plan, or any person having authority
to direct the performance of such functions, or any of them, to
be performed by a plan official, with respect to whom the requirements
of subsection (a) have not been met.
(c) Conflict
of Interest prohibited in procuring bonds. It shall be unlawful
for any person to procure any bond required by subsection (a)
from any surety or other company or through any agent or broker
in whose business operations such plan or party in interest in
such plan has any control or significant financial interest, direct
or indirect.
(d) Exclusiveness
of statutory basis for bonding requirement for persons handling
funds or other property of employee benefit plans.
Nothing in any other provision of law shall
require any person, required to be bonded as provided in subsection
(a) because he handles funds or property of an employee benefit,
to be bonded insofar as the handling by such person of the fund
or other property of such plan is concerned.
The Secretary shall prescribe such regulations
as may be necessary to carry out the provisions of this section
including exempting a plan from the requirements of this section
where he finds that
(1) other bonding arrangements or
(2) the overall financial condition of the
plan would be adequate to protect the interests of the beneficiaries
and participants.
When, in the opinion of the Secretary, the
administrator of a plan offers adequate evidence of the financial
responsibility of the plan, or that other bonding arrangements
would provide adequate protection of the beneficiaries and participants,
he may exempt such plan from the requirements of this section.
Opinion
Many LCN controlled unions do not meet the required bonding needs
and invest fund assets to coax the insurance company to meet bonding
requirements. Many of the bonds procured by LCN captives are not
T-Listed.
As a result of conviction or by agreement
many local and district council unions have been placed under
trusteeship by either the International Union or Federal and State
authorities.
The final goal of reestablishing union democracy
and stopping the misuse is fraught with danger.
In too many instances, the appointed trustee
is not aware of the daily problems encountered by a local union
and the need to enforce the existing collective bargaining agreement.
Most government trustees are ex-judges or
law enforcement officials who have never worked in the construction
industry and are incapable of handling daily problems.
Other trades or non-union forces take advantage
of the imposed trusteeship and either raid or enjoy this time
period.
Under international union imposed trusteeships,
the individual named as the trustee, is not aware of local conditions
and the different agreements, and special conditions that may
appear in the collective bargaining agreement.
Many of these international trustees are
also officers in another local or for the international union
as a international representative with other work responsibilities.
Many of these trustees call for new elections
before the LCN, and its control of the local union has been eradicated.
Too many times when this happens the relatives
and cronies of the removed or incarcerated officials become the
new officials of the union.
The biggest mistake made by the trustee is
to under estimate the vast control that the LCN has of the captive
local.
Through the years, the LCN has made the union
and the jobs gained by collective bargaining available for its
friends, relatives, and associates. These people may even constitute
a majority and control the elective process or control the other
members. It becomes even more important to identify these people.
The appointed trustee must an untainted member
of the local union to assist in this endeavor. This achievement
may prove to be quite difficult by is absolutely necessary.
Fear or lack of understanding of due process
is wide spread and not easily overcome and the union membership
is overly suspicious of the trustee and his goals. To overcome
this distrust, the election process should be delayed until creative
and untainted members realize that they have the ability to seek
office and meet the needs of the union and its membership. Every
person acting as a trustee should become well versed with the
different collective bargaining agreements and the local unions
craft jurisdiction. Always keep in mind that even though the bad
union officials have been removed, the LCN is ever present and
still involved.
Advise from friendly members may be coming
from someone unfriendly. In many instances LCN activity continues
for years in benefit funds because of plan designs and requirements.
Plans should be redesigned to create competition between brokers,
insurance companies and other service providers.
Find out more about the membership and who
may be LCN controlled. Don't rush to democracy, it takes time
to bring about change. Talk to democratically elected union officials
about what should be done.
The UAW and most Electrician unions are well
run and can offer some good advise. Talk to the membership and
keep then informed of progress and of incurred problems.
Definitions and Terminology
Adobe
A payment made by a non-union worker pays the union a fee for
being allowed to work on union jobs.
Against the wall
A physical threat from a LCN member.
Alter-Ego employer
An employer who looks to circumvent the collective bargaining
agreement, beneficially owns and operates another company in the
same industry and engages the service's non-union personnel and
utilizes inferior work conditions.
Advertisement Picketing
The type of picketing used where the employees have never been
organized or the union had no prior collective bargaining relationship.
Typical picket signs state that the employees of an employer are
not receiving the wages and work conditions enjoyed by the labor
organization.
B
BA A
business agent, field representative or the business manager of
a union.
Basic Trades
Consisting of the Bricklayers, Carpenters, Cement Finishers,
Ironworkers, Laborers, Marble-Tile and Terrazzo, Operating Engineers,
and Teamsters Unions. (The Plasterers, Lathers and Pile Drivers
are part of the Carpenters Union. The surveying engineers are
part of the Operating engineers union.)
Backdoor jobs
jobs that are not presented to the general union membership and
are usually plush or better in nature or the recipient of such
a job is not eligible to go to work because of seniority or other
union hiring rules.
Blue Flu
Started by police unions, it is sometimes used in the white collar
unions and means numerous members call the employer and tell
them that they are to sick to come to work.
This is done when an agreement exists between
the union and employer. The membership is attempting to change
a condition and cannot bargain until the termination of the Collective
Bargaining Agreement.
Broom
A laborer that is responsible for cleaning the shanties that the
workers may change their clothing and eat their lunch.
Building Trades
See Basic and Mechanical trades.
Buster
A hydraulic or electric jack hammer used to break concrete
Calvin Klein Employee
An employee that is well dressed and not wearing work clothing
.
Cheater
A union employee working for a non-union employer or a union
employee that reaches a private deal with an employer.
Check-off
The process where union dues are withheld from a members paycheck
Closed Shop
A company that by contract cannot employ non union workers.
Connected Employee
Any employee that is a relative or associate of a union official
or LCN member.
Cover
An employee that has to do the work of two men so that a connected
worker can leave the job, or not have to work as hard.
Davis Bacon Act.
The section of the Wage and Hours law that pertains to what wages
should be paid on Federally funded construction projects. As a
matter of policy these wage rates are the same as those of the
local unions, and for the same geographic area covered by the
local union collective bargaining agreement.
Degenerate
A worker that is a habitual gambler
Dodge Report
A daily publication that lists job listings and is published throughout the United States.
Doublebreasting
The same as alter-ego.
Drop Zone
An in-plant area that is designated for the illegal disposal
of hazardous waste.
Electrician tagalong A worker who follows
the electricians around and gathers the unused or discarded cuttings
of electrical wiring for its copper content.
EEOC Reports
Equal Employment Opportunity Reports. These reports are filed
annually by a labor organization and list the amount of workers
the union represents and how many are classified minorities.
ERISA
Employee's Retirement Income Security Act.(see Title 29)
F
Family Operation
An employer that uses only relatives to perform work.
Favored Nations Clauses
Contract language installed to allow the signatory employer or
employer group to be afforded and favorable conditions bestowed
on another employer or employer group.
Featherbedding A condition where the Collective Bargaining Agreement or intimidation cause the employer to employ unnecessary employees.
It also means where Federal and State Laws
place more employees on a job then are necessary.
5500 Report
An Annual Federal Report filed by the Board of Trustees listing
the assets, receipts and disbursements of a benefit fund.
G
General Foreman
On larger projects and a number of foreman have crews, many local
union Collective Bargaining Agreements require that a general
foreman is needed.
Gumbo
A watery clay that is quite difficult to work in and remove.
normally found in sewer, water line and transmission line installation
projects.laying projects
H
Heavy and Highway
Work encompassing road, utility line and most construction outside
the confines of a building.
Hob knocker
A type of hydraulic jack hammer
Hod
A hod is a small metal or wooden box at the end of a pole and
was used in early construction projects by mason tenders who delivered
bricks, mortar to the brick mason prior to elevator and mechanical
hoist equipment.
HUD Project
Federal Funded Housing Projects, They do not Come under the
Davis Bacon Act wage Scale. Substantially lower wages have caused
this work to be lost by the building trades.
Job Killer
A hard worker or labor saving device
Kick-back
The process where the union official or LCN member is rewarded
for allowing favored conditions on the job site or any of a number
of favored business ventures.
L
Labor Faker
A non-working employee
Landrum-Griffin Act.
Or the Labor-Management Reporting and Disclosure Act of 1959
(see title 29 laws)
LM-2 Report
A required Annual Department of Labor form that is lists the
union officers names and titles, wages and union expenses.
Marathon sessions
Long and tedious negotiations.
Market Recovery Plan
A program where labor unions allow flexibility of manpower, ease
restrictions and wage rates in order to combat non-union contractors.
Maritime Trades
Consist of Many building trades that perform work in the water
or on the docks. They also include Longshoremen, Seafarers,
Grain Handlers, United Auto Workers, Steelworkers, United Mine
Workers, Railroad Workers, Rubber Workers, Chemical Workers, etc.
They are open for most AFL-CIO unions to
participate, normally for lobbying purposes.
Meat
A naive worker or employer
Mechanical Trades
Asbestos workers, Boilermakers, Electricians, Elevator Constructors,
Glazier's, Painters, Plumbers, Roofers, Sheetmetal workers, and
Steamfitters unions and together with the basic trades comprise
the building trades. (The Plumbers, Sheetmetal workers, and Steamfitters
are also known as the United Association.)
Monkey Hole man
A laborer that brings dynamite into a tunnel area
Necessary Worker
Also known as a bullshit worker, who is union employee that
is not connected and is A non-connected member of a LCN controlled
union
No-Show
An employee who is paid by an employer even though he is seldom
on the job site.
O
On the carpet
A berating by a LCN member to another LCN member or connected
associate
One Liner
An agreement between an employer and the union that is limited
to wages and Benefit payments.
Open Shop
An employer can hire both union and non-union workers
OSHA
Occupational Safety and Health Administration
Palm Springs mobster
A reference to a want to be, or a low level LCN member.
Pinkie ring
What workers call a LCN member behind his back.
Quarter
250 hours, the minimum time needed to qualify for health and
welfare benefits and a partial pension benefit.
R
Raid
When a trade claims and performs the traditional work of another
union.
Rainy Day Delivery
The illegal method of dumping liquid hazardous waste on the roadways.
A vale is partially opened and the wastes leaks out of the tanker.
Rear Guard Action
When a job is coming to an end some workers slow down or destroy
portions of the project so that they can get more time on the
job.
Reserved Gate
Established to prevent site picketing. The targeted company and
replacement workers can only use this area for leaving and entering
the work area. The picketing employees can only strike or advertise
at this designated area.
Right to Work Laws
State Laws in 13 states that make closed shop practices illegal.
Sandhog
A laborer that works in a tunnel
Sanitary Landfill
A landfill that is licensed to accept sanitary trash and waste.
Scab
A non-union employee that replaces a union employee and may
cross a picket line.
Secondary Boycott
Picketing or boycotting of an employer who may be a supplier
or vendor with the primary organizing target.
Shit job
A difficult unwelcome job
Show-Up time
When an employee shows up for work and inclement weather or
another condition prevents him or her from working they are paid
normally two hours of pay. If an employee starts work and inclement
weather or another condition prevents him or her from completing
the normal days work they are paid an additional two hours of
pay. This can vary from agreement to agreement.
Sit-down
A meeting of senior LCN members to listen to and resolve problems.
Site picketing
Many projects may have more than one General contractor on
a project and not involved in the organizing effort
This type of organizing can shut down there
operation as well.
Sneaker Brigade
Non-union employees who are hired by a union contractor to perform
services after the union workers have gone home.
Street cleaner
A LCN loan shark who visits a job site to collect owed moneys.
Sympathy Strike
Workers of a sister union or another trade, walk off the job
or refuse to cross a picket line in support of the striking
or picketing union members.
Strike
Can only take place where the employees had a prior employment
relationship with the employer or the union had a prior Collective
Bargaining Agreement that has expired. were working.
Sweetheart Agreement
An employer receives better working conditions from the union
then other employers who are signatory to the Collective Bargaining
Agreement.
T
Taft Hartley Laws
Labor-Management Relations Act of 1947 amended the National
Labor Relations Act of 1935. This law established guide lines
and procedures for dealing with employer (section 8-A) and Union
(8-B) grievances and violations.
They included craft jurisdictional remedies
(10-K) and laws and guidelines for negotiations and Benefit Funds.
Targeted job
A project slated for picketing
Temporary Injunction
A back to work order by a Federal or State official or a court
that compels a striking union to go back to work during the
strike phase of collective bargaining.
Thousand Hours
The annual time needed to receive a full pension credit.
Twenty Weeker
A job that is going to last. The time needed to be eligible
state unemployment insurance.
Wildcat Strike
A union pulls its members off of a job when a collective bargaining
agreement exists.
Y
Yellow Dog Contract
An agreement between an employer and an employee or group of
employees, whereby the employee would agree not to become a member
of a union.