Published July 05, 2012
Besides the tens-of-millions of dollars big labor spent buying luxury resorts, country clubs or Learjets, labor unions are also spending millions of dollars in tax-free union funds on conferences at lavish hotels and resorts - including junkets at resorts owned by the unions themselves.
This may be a stretch of federal labor and tax laws, which stipulate that union officials have a fiduciary duty to use union funds solely for the benefit of the union and its members -- not for junkets benefiting certain union members, or on playgrounds like hotels and country clubs (see "Big Labor, Big Money," the first part in this series on union spending.)
Government documents don't show whether the unions invited the rank-and-file like teachers, firemen and cops, much less gave them the chance to vote on the junkets. Government documents also don't spell out exactly what liquor, food and entertainment unions spent union tax-free funds on. But the documents do show a union predilection for swanky digs in an age of teleconferencing and layoffs.
The unions declined repeated calls for comment.
"At some point the benefit to unions of these junkets become secondary and instead, the personal benefit to the union officer becomes an inurement that is essentially an unreported part of their compensation package," says Nathan Paul Mehrens, general counsel for Americans for Limited Government.
For example, the "Labor-Management Reporting and Disclosure Act of 1959" says it is the duty of each union official "to hold its [union] money and property solely for the benefit of the organization and its members."
Separate from federal labor law, tax law says nonprofits like unions "are not allowed to use their money to inure to the benefit of officers, so the practice of union officers spending massive amounts on lavish travel is suspect," Mehrens adds.
FOX News analysts Michael Daniels, John Gallagher, Brian Murphy, Steve Carlson, Andy Ryan and Chris Yablonski dug out information about union-owned bling and junkets from government documents called LM-2s at the Department of Labor, IRS tax documents, along with property records and annual reports. FOX Business reporter Kathryn Tuggle also added to the rundown of union-owned bling and luxury travel.
While unions don't have to detail in government documents exactly how much union money they spent on resort junkets, the Labor Department documents do yield plenty of info:
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), run by Richard Trumka, is the largest umbrella federation of unions in the U.S., with 56 unions representing more than 12 million. Its officials have been living large at member expense.
AFL-CIO unions spent at least $2.6 million in union funds on junkets to nine conferences at places like the Flamingo Hotel or Golden Nugget in Las Vegas, including more than $1.7 million at the swanky union-owned Westin Diplomat resort and golf club in Florida, from 2010 to 2011, government documents show. Specifically:
• International Longshoremen's Association, AFL-CIO of North Bergen, N.J., spent nearly $1.2 million total in tax-free union member dues on two conventions in 2011 at the Westin Diplomat Resort & Spa in Hollywood, Fla., government documents show. Rooms go for an average $159 a night.
• Atlantic Coast District, International Longshoremen Association, AFL-CIO union in North Bergen, N.J., spent more than $507,200 in tax-free union member dues on three conventions at the Westin Diplomat Resort & Spa in 2011, government documents show.
• American Federation of Government Employees-AFL-CIO in Washington DC spent more than $64,600 in tax-free union member dues at the Salishan Spa & Golf Resort in Gleneden Beach, Ore., for an "11th District Training & Caucus," government documents show. Rooms go for an average $169 a night.
• New York Teachers AFL-CIO spent more than $317,000 in tax-free union member dues on four conferences between September 2010 and February 2011 at the Gideon Putnam Resort & Spa in Saratoga Springs, N.Y., government documents show. Rooms go for $220 a night.
• Teachers AFL-CIO National Headquarters in Washington, DC spent more than $175,400 in tax-free union member dues on five "member-related" meetings at the Flamingo hotel and resort in Las Vegas in 2011, government documents show. Rooms go for an average $155 a night.
• Machinists AFL-CIO District 141 in Burlingame, Calif., spent more than $120,600 in tax-free union member dues on a convention at the Golden Nugget in Las Vegas in 2010, government documents show. Rooms cost an average $139 a night.
• Steelworkers AFL-CIO Pittsburgh spent more than $80,100 in tax-free union member dues on golf cart and other "equipment rentals" in 2011, government documents show.
• In 2011, UAW Local 7777 of Detroit, Mich., spent more than $25,600 in tax-free union member dues at the Detroit Greektown Casino, government documents show.
• Auto Workers AFL-CIO of Detroit spent more than $9,600 in tax-free union member dues at Senica's Oak Ridge Golf Club on "meeting food" for a golf outing in October 2011. It also spent more than $71,600 at the Thousand Hills Golf Resort for a variety of meetings in 2011, government documents show.
The American Federation of State, County and Municipal Employees (AFSCME) "is the nation's largest and fastest growing public services employees union with more than 1.6 million active and retired members," mostly in local and state government as well as health care, its website says. And like the AFL-CIO, AFSCME officials have been doing lots of traveling, government documents show. It spent at least $2 million on 10 conferences at resorts in Las Vegas, Palm Harbor, Fla. or Puerto Rico in 2010 and 2011, among other destinations:
• AFSCME National Leadership Council spent more than $208,400 in tax-free union member dues at the Planet Hollywood Resort in Las Vegas for their convention in 2011, government documents show. Rooms average $189 a night.
• AFSCME National Headquarters also spent more than $177,500 in tax-free union member dues at the Hilton Hotel in Houston in 2011, government documents show. Rooms average $99 a night.
• In 2011, the AFSCME Leadership Council 13, Pennsylvania's largest union, spent more than $410,850 in tax-free union member dues at the Boston Park Plaza Hotel in Boston.
• In 2011, the AFSCME Leadership Council 13, with more than 65,000 members, also spent well over $500,000 in tax-free union member dues at Hershey Entertainment & Resorts in Hershey, Pa., government documents show.
• AFSCME Leadership Council 13 had already spent more than $319,700 in tax-free union member dues at the Hershey Entertainment & Resort in 2010.
• AFSCME Leadership Council 31 in Illinois, which represents more than 75,000 employees, spent more than $254,400 in tax-free union member dues at the Crowne Plaza Hotel in Springfield, Ill., in 2011, government documents show.
• AFSCME's Leadership Council 1 in New Jersey and Leadership Council 13 in Pennsylvania spent nearly $88,000 total at the Tropicana Casino and Resort in Atlantic City, N.J. in 2011. Rooms cost $250 on average per night.
• AFSCME Local Union 2 in Washington State spent more than $51,600 at the Tulalip Resort Casino in Tulalip, Wash., in 2011.
• AFSCME Leadership Council Local 79 in Florida spent more than $48,200 at the Innisbrook Golf & Spa Resort in Palm Harbor, Fla., in 2011.
• AFSCME Local Union 1000 spent more than $46,200 at the Gideon Putnam Resort in Buffalo, N.Y., in 2011.
More Union Junkets
• Teamsters San Francisco spent more than $57,300 in tax-free union member dues for a "golf fundraiser" in Rancho Canada Golf Club in 2011, government documents show.
• In 2011, UAW Local 2110 of New York City rang up a more than $8,900 tab at the New York Museum of Modern Art for unspecified expenses.
• The UAW Local 862 of Louisville, Ky., spent more than $9,700 at a Six Flags Kentucky Kingdom, a Louisville theme park.
The New York State Public Employees Conference
The New York State Public Employees Conference is New York State's largest public sector union organization, representing thousands of policemen, firemen and transit workers, among others. It routinely attacks state officials as well as New York City Mayor Michael Bloomberg for not stopping government waste. However:
• It held its annual conference last year over six days at the luxury Caribe Hotel in San Juan, Puerto Rico, according to the New York Post, costing union members an undisclosed sum. Rooms cost more than $200 a night. About 300 bosses flew from New York to attend, the Post says.
"There goes our union dues!" fumed a furious Local 3 electrician, the Post reported. "They paid for that junket with union dues." Another electrician member said: "I've worked for 10 months in the last two years. I'm getting laid off at the end of the year," adding, "I have no use for the union. All I see is waste, corruption and hypocrisy."
The Post also quoted an Upper West Side fireman: "We're all based here in New York anyway, so why would they spend all that money on going someplace else? They could have just had it here."
"We're not making any comments," said two labor bosses the Post reported were lounging by the Caribe pool, one shirtless, the other wearing a New York Fire Dept. shirt.
The Post reported "a tanned Steve Melish, 'a bigwig in the union that represents municipal painters,' said the convention was 'absolutely serious business.'"
"If it was all sun and fun, I wouldn't be here," said Melish. "There is a lot of business that goes on down here."
When his tan was noted by a reporter, Melish quipped, "You're in Puerto Rico. You can't be in your room all day."
Unions also would get failing grades if they were held to the same standards as other nonprofits.
Unions get automatic dues sent to them by members, but union officials typically spend more than half of their union funds on overhead for things like officials' pay.
That's the finding from a 2008 study based on federal data by Paul Kersey, a director at the Illinois Policy Institute and former director of labor policy at the Mackinac Center for Public Policy from September 2007 to May 2012. He studied documents filed by six unions in Michigan, the Teamsters, the UAW, Service Employees International, AFSCME, the National Education Association/Michigan Education Association, and United Brotherhood of Carpenters and Joiners of America.
Kersey found that, on average, unions spent less than half of their funds on representing members for things like better pay at work.
"The picture that emerges" from federal data "is one of bloated, directionless union organizations with excessive overhead and administrative costs," Kersey said. Overhead costs for unions "are unusually high," he said.
Fat-Cat Labor Boss Compensation
Trumka, president of the AFL-CIO, has said: "CEOs should be paid as a member of a team, not as a superstar," and that "the further widening gap between CEO-to-worker pay to an astonishing 380 times is simply bad for our economy."
Government documents show the following:
• Trumka: $293,750 compensation
• Gerald McEntee, president, American Federation of State, County, and Municipal Employees: $479,300 compensation
• John T. Niccollai, president, United Food and Commercial Workers Union, Local 464A: $527,970 compensation
• Terence M. O'Sullivan, general president, Laborers' International Union of North America: $618,000 compensation
• Robert Scardelletti, president, Transportation Communications Union: $693,800 compensation
McClatchy Newspapers reports that Newton B. Jones, international president, International Brotherhood of Boilermakers, received compensation totaling $607,000 last year. Over the past six years, his salary has increased 67%.
FOX analysts dug out more detail from the union's Department of Labor filings, which back up McClatchy's reporting:
• Jones's brother, Charles, is director of the Boilermakers' History Preservation Department and assistant to Newton. His total compensation in 2011: more than $187,600
• His sister, Donna, earns $98,802 as an executive secretary
• His relative, Michael Peterson, is an aide to Jones and until last year worked for the Boilermakers National Apprenticeship Program, earning more than $132,700 in 2010, according government tax documents, as well as more than $127,250 from the union in fiscal 2011.
• Jones' 23-year old son, Cullen, a video communications technician living in North Carolina, earned more than $173,200 in compensation last year.
• McClatchy reports the union paid $43,000 in 2009 to send Cullen to the Vancouver Film School in British Columbia, "Canada's premier entertainment arts institution," the school says.
• The union's "International Secretary-Treasurer," William Creeden received more than $252,000 in salary from the Boilermakers union in fiscal 2010, McClatchy reports
• Several members of the Creeden family make a good living working for the Boilermakers, totaling $624,000 in salary, McClatchy says.