Big Labor's serial scandals

Discussion in 'The Archives' started by my2cents, Sep 2, 2002.

  1. my2cents

    my2cents Guest

    Joel Mowbray
    Published 9/2/2002

    As we celebrate this Labor Day, we should take a look at the state of labor today and how we got to where we are. Never before has the work force held as much skill, flexibility, and individual power and never before has there been less of a need for labor unions.

    Labor unions are desperately clinging to life at a time when they are 70 years past their prime and their continued relevancy. Labor unions no longer fight for the big issues such as minimum workplace protections. The big fights almost always revolve around the unions trying to keep their members from enjoying tighter relationships with employers.

    Remember the UPS strike a few years back? The main dispute behind the massive work stoppage was control over workers' pensions. The union wanted to maintain the old-school status quo, and UPS wanted workers to have the same 401(k)s that are desired by almost everyone. The union, of course, sold its members a red herring, and it prevailed in the end.

    In the past few months, a far more disturbing trend than mere irrelevancy has developed. Big Labor has notched two major sets of scandals, which taken together, interestingly mimic, respectively, the messes at Enron and Arthur Andersen.

    Big Labor's Enron occurred at ULLICO formerly Union Labor Life Insurance Co. where the fat cats on the board of directors were allowed to sell shares at a dramatically high price that they themselves set, while the rank-and-file workers were locked out from selling those very same shares.

    ULLICO began investing in high-flying telecom stocks, primarily Global Crossing, as part of its transformation from its roots as a life insurance provider for blue-collar union workers into a financial services company, investing the money of pension funds from unions around the country.

    ULLICO's metamorphosis included making ULLICO itself an investment vehicle for various union pension funds, as well as for those sitting on its 32-member board of directors all of whom are heads of major unions. In 1997, ULLICO changed its longstanding policy of offering its privately held shares for a nominal, fixed price of $25 each. Share prices were adjusted annually a seemly infinite amount of time in the roller-coaster financial world with new prices decided each May based on an independent audit of the books of the previous calendar year.

    The individual members of the board took advantage of this huge time lag to both secretly buy shares when the price of Global had soared but before the new price for ULLICO shares had been set, virtually guaranteeing a tidy profit and to sell ULLICO shares after Global's stock had tanked, but before ULLICO's then-higher share price had been adjusted back down to reflect the large decrease in value of ULLICO's investments.

    Because the price of ULLICO's privately held shares was only set annually, it was the equivalent of reading the stock market results in the newspaper a month or more in advance, because you buy when you know prices will rise, and sell when you know the prices will fall. But since ULLICO couldn't afford to be a free-money ATM for everyone smart enough to game this obviously flawed set-up, it chose to strictly limit the ability of union pension funds to sell their shares back when those shares were at an inflated price even though members of the board could sell their entire stakes.

    Members of ULLICO's board reaped $6.5 million in profits, leaving rank-and-file workers to foot the bill.

    Big Labor has also had its very own Arthur Andersen, where a partner at the accounting and auditing firm of choice among unions, Thomas Havey LLP, pleaded guilty last month to a federal felony count of helping the iron workers union to conceal more than $1.5 million in expenses at country clubs and fancy restaurants. The top brass at the union racked up get this $460,000 in charges over six years at one restaurant, the Prime Rib, right here in Washington. Havey helped the union classify these lavish meals under the category "Education & Publicity" on federal disclosure forms.

    The only answer to stopping this ridiculous corruption is to rob Big Labor of its artificial power base. Compulsory unionism is at the heart of these scandals because of the arrogance that results, leading union bosses to believe they are above the law. Union bosses should not be able to have their way with the law or with workers who might want the freedom to choose whether or not to join a union in the first place.
  2. wkmac

    wkmac Guest

    Nice Op/Ed piece. This article IMO shows something that most people overlook and that is Unions are nothing more than businesses themselves who've commoditized people under a noble banner of protecting workers.

    The real truth of this article is we union members have done a very poor job of overseeing our unions and demanding better performance. We should have threaten to mass withdraw from the union for example over the policy of "No Facts On the Contract Until it's Over". I understand from one point the reason for this but I think it's a poor one and this "No Word" policy breeds some of the very accusations of "sell out" "in bed with the company" and "we're screwed" comments I've seen of late. You ask a person to vote for a strike and you know not for what reason. It's like telling a car salesman you will not buy a car before he has the chance to tell you what kind of car, what color, what options and what the price is.

    Like the article pointed out, the union needs to come into the 21st century because the issues important to our fathers and grandfathers especially aren't there anymore but the real important issues of today lie unresolved. I also believe unions are too "Collective" and should work towards broadening to aid the individual in his or her own needs. I also think unions should be at the forefront of Socail Security reform and eliminating the present income tax system and going with a system that does not punish achievement and growth. JMHO and I admit a very minority one.

    Thanks for posting the article my2cents!
  3. my2cents

    my2cents Guest

    No problem wkmac. Unions should function like businesses once their special privileges are stripped away. As it stands now, compulsory unionism and corruption go hand in hand. The ultimate responsibility for changing archaic labor union laws rests with Congress. Politicians on both sides of the isle turn a blind eye to compulsory unionism because they are either afraid of sticking their neck out or they are dependent on big labor's political contributions to stay in office. Anyway, I totally agree with the conclusion of the editorial -- compulsory unionism has gotta go!
  4. robonono

    robonono Guest

    Good intelligent discussion of a current and continuing problem at UPS (and other union companies). Thanks for the positive use of this discussion board. Let's keep the thread going.

    Union leaders could, if they chose to expend their energy, spearhead a whole new effort to improve the economic potential of the worker. They could easily be the driving force that would be needed to force the Congress to take up and approve meaningful legislation on pensions, Social Security, tax policy, Medicare, etc.

    If they were to take up this challenge, there is no doubt in my mind that union membership would rise, the Congress would definitely feel the pressure to act, and real meaningful reform could be achieved.
  5. my2cents

    my2cents Guest

    Sounds good robonono, but today's unions are champions of big government. They typically love high taxes and bureaucracy. Don't see this culture changing anytime soon.
  6. wkmac

    wkmac Guest

    First thing that has to change is the ability for unions to use dues money for political purposes without the members approval. 40% of union members vote Republican but the overwhelming amount of money goes to Democrats. The Democrats will tow the party line for the money and Republicans in some cases will bend backwards to get at it.

    The job of the gov't is to stop the violation of life, liberty and property (happiness if you will) through force or fraud not hand out political favors that protect an individual or entity that otherwise the market itself would not support on it's own.

    Until the Congress has the political will to stop this type of system, IMO the only outlet is for the members themselves to become educated and stand up at the locals and demand answers and action for change! From my political viewpoint, we the union members should stop this rather than the gov't pass some law with loopholes anyway.

    Again, JMMO! (Just My Minority Opinion) LOL or [​IMG] depending on your position.

  7. my2cents

    my2cents Guest

    Agreed wkmac. Its one of the reasons why I became a Beck objector. The National Labor Relations Act is an unconstitutional abomination.
  8. robonono

    robonono Guest

    Will making demands of the locals really work? I don't think so, unless it is a nation-wide grass roots effort, with a groundswell so strong that the local bosses can't refuse to react.
  9. upsdude

    upsdude Guest

    Remember the UPS strike a few years back? The main dispute behind the massive work stoppage was control over workers' pensions. The union wanted to maintain the old-school status quo, and UPS wanted workers to have the same 401(k)s that are desired by almost everyone. The union, of course, sold its members a red herring, and it prevailed in the end.

    Carey fought hard to keep control of the H & W billions, yet he fully endorsed Hillary Care. A plan that would have turned control of my Health Insurance over to the Feds. Another example of Labor being in love with government programs and the taxes to pay for them.
  10. wkmac

    wkmac Guest

    I guess Ron trusted Hillary more than UPS management! What an idiot![​IMG]

    Hillary and her Village idea[​IMG]

    I understand what you're saying but I remember when the General President was choosen by an elite few but then Teamsters around the country united and the rules were changed to elect the President by majority vote of the membership but this all started at the local level. It's not an easy task for sure but IMO the gov't is not responsible for this area and I doubt if they will do it anyway because they will cut off the very thing that drives them. $$$ for re-election.

    The late Congressman Larry McDonald(D) 7th District of Georgia once told my wife and I that a politician has a very simple formula to doing the job.

    TAX, TAX, TAX!

    I'd say that hits it right on the head if you ask me!
  11. robonono

    robonono Guest


    All good points - especially the quote from the horses's mouth.

    So, how do you start such a grass roots uprising?
  12. wkmac

    wkmac Guest

    As people get fed up they start talking and expressing a viewpoint. The election of General President was easy but I must be honest and say getting members excited over stopping the union from using dues money for political purposes is like climbing Mt. Everest without O2. When you look at the Teamsters' they have to their credit been a little more reserved in throwing their total support behind one party. Remember, the Teamsters have in recent past supported Republicians so the problem is not as bad here as with other unions but there is still a problem.

    Would UPS for example fore go it's own PAC in order to get the Teamsters to stop funding politics? I know the answer, a big NO and I don't blame them but the union has the right to protect their political interests also so it's a never ending cycle. I believe one solution is for gov't to stop the long established policy of making Corporations and other paper entities under law as persons. The courts have long ruled because of this legal standing that persons (read Corporations here) have rights including free speech which makes it hard to limit Corporations, etc. Look up person in Title 26 (Tax Code) for example. A Corporation is a person but that is established by a broader precept of Law rather than the tax code itself.

    If Congress limits unions there will be a court challenge for sure based on free speech rights. The more interesting question will be did the members volunteer into this fudciuary relationship or was force used? For open shop states, you have the choice but for the closed shop states the argument of required membership is moot IMO. The employee could have sought employment elsewhere so I think regulatory control by Congress has little chance in the end and therefore the reason not much has happened on this front.

    Will the members rise up on this issue. When you consider the issues important to the individual member I doubt it very seriously but who knows? Even though I don't like my dues money going to Democrat and Republician candidates and officals that I don't like I see no change in this for now.
    JMO. Enjoying the dialogue!

    Do you think there's any hope of the Teamsters giving money to a Libertarian Candidate?[​IMG]
  13. robonono

    robonono Guest

    Not a chance until hell freezes over. As you have said, it is not in their interest to finance someone who does not support their agenda. Libertarians, as you well know, are for less government intrusion into the lives of the individual. Less is More so to speak. This is antithetical to the concept of buying influence in the Congress in order to have the Congress support your agenda.

    Neither the union nor UPS is going to disarm unilaterally. Both spend significant sums getting the ear of those that are sympathetic to their cause, and both, I'm sure, earnestly believe that the money is well spent - meaning that they are getting their money's worth in return.

    I do believe that the unions have a better opportunity to lead in these reforms than do the corporations. This may be a bias on my part, but I think that if realistic, reasoned reforms were presented by the unions to the Democratic party leadership, that they would support it (since they generally bend over backwards to support their largest constituency), and that the Republicans, once convinced of the legitimacy of these reforms would fall in line.

    I don't believe that the same could be said for a Corporation effort to legalize the identical reforms. I'm sure that the Republicans would support the reforms, but I'm am not so certain that the Democrats would support them without union support.
  14. my2cents

    my2cents Guest


    Unions should be free to use their political capital if they were true voluntary associations. Under current law, they are not. Simply put, it is forced association. In New Zealand for example, an employee has the free choice of joining the union or has the free choice of negotiating one's own employment contract. This is the way the law should work. The NLRA should be scrapped in favor of the New Zealand model, where one's right of free association and freedom of contract are truly respected.
  15. wkmac

    wkmac Guest

    I live in a Right to Work State so from my perspective it is a voluntary association although I'm still locked into the various obligations and conditions of the contract whether a member or not. From that standpoint you are absolutely correct.

    I like what I hear of the New Zealand model and that is worth further study but not sure if companies like UPS would like this. Having to bargain with 300k plus employees individually would not be my idea of fun. LMAO!!!!!!!

    Funny you mentioned New Zealand because I've spoken on numerous occassions to my wife about moving there after I retire. The more I hear about this place, the more I like.
  16. deliver_man

    deliver_man Guest

    New Zealand is absolutely beautiful, I spent a couple weeks there last year and just loved it. The people are great, the pace of life is sooo laid back, and the country is so unspoiled its almost unreal. The biggest problem with going there is you don't want to come back, it's pretty high on my list of retirement options as well.