Unions: Ever wonder what they are doing with their funds when not seeking to buy political influence and change the course of elections? (Updated)


From the Los Angeles Times ...

"A nonprofit organization founded by California's largest union local reported spending nothing on its charitable purpose -- to develop housing for low-income workers -- during at least two of the four years it has been operating, federal records show. The charity, launched by a scandal-ridden Los Angeles chapter of the Service Employees International Union, had total expenses of about $165,000 for 2005 and 2006, and all of the money went to consulting fees, insurance costs and other overhead, according to its Internal Revenue Service filings."

"The primary mission of the charity -- the Long Term Care Housing Corp. -- is to provide affordable homes for the local's members, most of whom earn about $9 an hour caring for the elderly and infirm. But SEIU officials declined to discuss the charity, saying it is a separate legal entity from the union, even though its board is dominated by officials from the local. The charity is located at the local's headquarters."

"Tyrone Freeman, then president of the 160,000-member United Long-Term Care Workers, helped start the charity in 2004. Freeman and the local are the subjects of a federal criminal probe and a congressional inquiry because of his spending practices. After an internal investigation, the SEIU accused Freeman and another former union officer of receiving improper payments from the nonprofit."


According to the Los Angeles Times ...

"The Service Employees International Union's top California officer has taken a leave of absence, and her former boyfriend has been ordered to return tens of thousands of dollars he received from the state council and Los Angeles local that she heads."

"Annelle Grajeda is the third major SEIU leader to step aside following reports in The Times about the union's financial practices. The SEIU acknowledged Saturday that Grajeda was on leave as president of the L.A. local and the union's state council, and as an executive vice president of the national organization, because of allegations that she was improperly involved in the payments."


According to the Los Angeles Times ...

"House committee joins other federal officials investigating six-figure payments made to firms owned by relatives of the chapter's president."

"A congressional committee has opened an inquiry into a financial scandal enveloping the Service Employees International Union's biggest California local because of six-figure payments made to firms owned by relatives of its president."

"Rep. George Miller (D-Martinez), chairman of the House Education and Labor Committee, announced Thursday that the panel would examine the union's spending practices, which were reported this month by The Times."

"The SEIU contributed about $10,000 to Miller's election campaign during the last annual reporting cycle, according to the Open Secrets website on political contributions."

Perhaps Representative Miller should recuse himself from the investigation to avoid the appearance of impropriety and assure other government agencies investigating the matter that there will be no Congressional interference with their probes.


According to the Los Angeles Times ...

"In the statement, [SEIU President Andy] Stern's office accused the Oakland local of improperly setting up a nonprofit and a legal defense fund with members' dues, misappropriating an internal database and retaliating against workers who criticized its leadership. The statement said that the union found significant evidence that the Oakland chapter's leadership 'engaged in a pattern of financial malpractice and fraud. Under a trusteeship, the union's national office would take control of the Oakland local's finances and administration, as it has at the Los Angeles union.'"

Fallout involves Michigan Local ...

"Rickman Jackson, former official in Los Angeles chapter, takes leave of absence from Michigan local. Action comes after Times reports of payments to firms owned by L.A. leader's family. Jackson, whose Michigan local has 55,000 members, said in his e-mail that he had been based there since 2005. But the Los Angeles local paid his $133,000 annual salary through last year, when he also received about $45,000 in unspecified disbursements from the union here, Labor Department records show."


According to the Los Angeles Times ...

"The Service Employees International Union on Friday removed all elected officers of its biggest California local amid an inquiry into the financial practices of the labor group and a related charity, including payments of hundreds of thousands of dollars to firms owned by its president's relatives."

"In placing the 160,000-worker local in trusteeship, the union formally relieved Freeman, the local's secretary-treasurer, Amanda Figueroa, and its 55 board members of their posts."

Original Blog Entry ...

Perhaps we are witnessing the beginnings of a turnaround in the newspaper of record for the far-left liberal democrats, no not the New York Times, the other Times: the Los Angeles Times.

In an investigative report by the Los Angeles Times, the Times has allegedly uncovered what looks suspiciously like some insider hanky-panky by the head of California’s largest labor union, the SEIU.

What is the SEIU?

According to Wikipedia

Service Employees International Union (SEIU) is a labor union representing more than 2 million workers in over 100 occupations in the United States and Canada. The main divisions are health care (around 50% of the union's membership), including hospital, home care and nursing home workers, public services (government employees), and property services (including janitors and security officers).”

First, the denial …

In a press release issued in reaction to the Los Angeles Times’ story, the union has invited its International to review its books. 

“SEIU 6434 Invites International Union to Review Its Books”

“SEIU 6434 says today's Los Angeles Times story regarding expenditures of SEIU 6434 and its vendors was not only misleading but also failed to mention that ALL expenditures are approved by the union's 55 member Executive Board and vendor contracts are approved by the Executive Committee - which are solely comprised of long-term care workers who are members of the union.”

" ‘SEIU 6434 is an organization run by its members for its members,’ stated Tyrone Freeman, President of SEIU 6434. ‘We take these mischaracterizations by the LA Times seriously and have invited our International Union to review our books at its earliest convenience. We are confident that the findings of this review will reinforce the integrity of our organization.’"

The Los Angeles Times story … 

“Union, charity paid thousands to firms owned by official's relatives”

“California's largest union local and a related charity have paid hundreds of thousands of dollars to firms owned by the wife and mother-in-law of the labor organization's president, documents and interviews show.”

Living large or business as usual?

The Los Angeles-based union, which represents low-wage caregivers, also spent nearly $300,000 last year on a Four Seasons Resorts golf tournament, a Beverly Hills cigar club, restaurants such as Morton's steakhouse and a consulting contract with the William Morris Agency, the Hollywood talent shop, records show. 

“In addition, the union paid six figures to a video firm whose principals include a former union employee. And a now-defunct minor league basketball team coached by the president's brother-in-law received $16,000 for what the union described as public relations, according to the union's U.S. Labor Department filings and interviews.”

Trickle-up economics …

“Most of the 160,000 people represented by the union, a local chapter of the nation's fastest-growing labor organization, the Service International Employees Union, earn $9 an hour or slightly more tending to the infirm and disabled in private homes under taxpayer-funded programs. The workers, whose dues fill the local's coffers, often are described as ‘the poor caring for the poor.’”

“In its Labor Department filings, the local, headed by Tyrone Freeman, has reported more liabilities than assets for each of the last three years.”

Fighting poverty …

It has always amazed me that so-called charitable and “good works” organizations seem to fight for their causes with lavish fundraisers and perks for those who donate large sums of tax-deductible money. While some donate out of a true sense of charity, most of the contributions coming from the wealthy are replete with usage restrictions, naming opportunities and widespread media exposure as a “philanthropist.” In some cases it is a win-win situation that benefits all. However, I have also observed that when ordinary people with a modicum of official power are in close proximity to people of true wealth, their entire modus operandi begins to change. They seek out the perks and privileges of the wealthy as the significantly upgrade their personal lifestyle; sometimes at the expense of the organization they are leading. And this is by no means confined to the charitable world as it is also an everyday manifestation in the corporate world where CEO’s pay themselves and their friends outrageous sums of money while cracking the whip on ordinary wage slaves.

“Freeman, who leads the United Long-Term Care Workers, said he and his union have done nothing wrong. ‘Every expenditure has been in the context of fighting poverty,’ he said.”

“A rising star in labor circles, Freeman, 38, said the union's members have benefited from the money spent on the video production and day-care companies that his wife and mother-in-law operate at their homes, because of what he termed the high quality of the services.”

“The union and the charity have paid those firms at least $405,700 since January 2006, not counting any outlays this year.”

The “high quality” dodge that is often used by charlatans to justify “no bid” contracts and other “special” arrangements.

Excesses of the past?

"Nelson Lichtenstein, director of UC Santa Barbara's Center for the Study of Work, Labor and Democracy, said the local's spending recalls the excesses of organized labor's past. 'It's very important for unions not to do this kind of thing,’ he said. ‘Union leadership is a public trust -- all the more so when the people being represented are among the lowest-paid in America.’”

Some of the examples according to the Times …

* Payments to the company owned by Freeman's wife were among the local's largest single expenses last year. Payments by the charity, the Homecare Workers Training Center, to his mother-in-law's firm represented more than 10% of the nonprofit's total annual expenditures.

* A housing corporation that Freeman helped found as a nonprofit has not been granted the IRS tax-exempt status it sought and was suspended from doing business in California. It also has claimed on its website to have a "strong relationship" with the prominent California Community Foundation, which says it has no such relationship.

* The union spent at least $123,000 more on the fund-raising tournament at the Four Seasons Resort in Carlsbad than it received in reimbursements, according to Labor Department filings and interviews. Freeman said the event made money for the charity. The union's expenditures included $100,000 in payments to entities associated with former professional football star Eric Dickerson, which have been suspended from doing business in California. The payments were listed as donations to nonprofits, not as fund-raising expenses.

* The local's nearly $10,000 tab at the Grand Havana Room, a cigar lounge known for its celebrity clientele and invitation-only memberships, was for ‘lodging,’ according to the union's annual financial report. A Grand Havana spokeswoman said the club does not provide accommodations. Freeman declined to characterize the expenditure, and after The Times inquired about it, he said he had refunded it.

“Freeman's wife, Pilar Planells, 28, was a union staff member until 2006, earning more than $50,000 as an executive assistant. She left the local to pursue an entertainment industry career, according to another former employee. That year, Freeman's local paid roughly $36,000 to Planells' firm, Lotus Seven Productions. In 2007, the local paid the company about $178,000, annual financial reports filed with the Labor Department show.”

Retroactive immunity …

As with most public officials who are caught in outright wrongdoing or participating in dodgy enterprises, they seem to be allowed to “return” the money or file “retroactive” forms to cure the problem. And most are sanctioned with a slap on the wrist by being forced to pay a small penalty. 

“Labor Department officials said they have no record that Freeman filed a 2006 disclosure form that requires union officers to reveal payments to entities in which a spouse has an interest.”

“The officials said Freeman filed the 2007 form more than four months after the deadline, on July 17, about a week after The Times raised questions about the payments to Lotus Seven. He also did not identify his wife on the financial reports as the owner of the firm.”

Defending the deal …

“Freeman said Lotus Seven has produced 10 videos that promote the local's work and have been shown on lease-access cable channels. He said that the company won the contract through a competitive bidding process and that his wife did not personally profit from the payments to her company.”

Further details on the twisted relationships can be found using the Los Angeles Times link in the reference links section below.

More dodgy deals?

“Carmen Planells, Freeman's mother-in-law, provides day care at her Los Angeles home. Her business had been receiving more than $90,000 annually for the past several years from the training center that Freeman founded as a separate nonprofit and chairs, according to IRS filings and interviews. Freeman's wife and brother-in-law, Hernando Planells Jr., are listed in state documents as officers in the mother-in-law's business.”

“Hernando Planells Jr., listed in state records as one of three officers of the day-care service, was also coach of the Hollywood Fame, a former American Basketball Assn. franchise, according to the team's general manager, Carl Williams. The team received $16,000 from Freeman's local in 2006, the union's financial report shows.”

Affordable housing?

“Another sports undertaking was the Four Seasons golf tournament last year, which Freeman said netted $80,000 to $100,000 for the training center and the housing group. The Long-Term Care Housing Corp. is a separate entity from the local, but its ‘primary goal’ is to help union members obtain affordable housing, according to its website.”

“The local's financial report shows that it spent $418,000 on the event, not counting about $7,000 in unspecified lodging costs at the Four Seasons. That was at least $123,000 more than the local received in return. Some reimbursements may still be outstanding, Freeman said.”

“In addition, the tax board suspended Long Term Care Housing Corp.'s right to do business because it had not filed tax returns since Freeman founded it in 2004. After the Times inquired about the suspensions, a law firm for the housing entity said in a memo that tax-exempt status had been ‘delayed’ because the IRS had made a ‘routine’ request for additional information. The memo did not say when the request was made. The memo said the housing organization has filed its tax returns. As a result, the Franchise Tax Board lifted the suspension Thursday, a spokeswoman said.”

“On its website, the corporation says it has ‘a strong relationship with the California Community Foundation, and they are currently building 13 new homes’ in Lancaster. It said the foundation was ‘helping us purchase land.’

"’No one here has ever heard of the group,’ said California Community spokeswoman Namju Cho. She said the foundation asked the corporation to remove the statement from the website, and the corporation did so this week.

“The site lists a Bell Gardens address for the corporation. County property records show that the address is that of a home owned by Freeman's former chief of staff, Rickman Jackson, who now heads a local in Michigan.”

What is simply amazing is that nobody in their right mind would be building affordable or any other type of housing in the Lancaster/Palmdale area due to the plethora of cheap housing that is available from foreclosures. Banks and other lenders probably would jump at the chance to convert some of their REO (Real Estate Owned) property into a low cost sale with the remainder being written off as a charitable donation rather than a dead net loss.

The purpose of this blog entry is not to expose any potential wrongdoing on the part of a union, but to illustrate that the union’s funds often are spent on things which do not directly concern the union’s members or confer some benefit to anyone other than its leadership.

It is much the same way with unions who automatically support far-left liberal causes such as campaigns to legalize illegal aliens even though the union knows that their member’s current employment is illegal under current law and that they may be using forged or stolen identities to skirt the law.

In many cases and what members may not recognize is that by bringing in hordes illegal aliens, the union is actually expanding the workforce and driving down total wages. Apparently, the union thinks of itself first and will do almost anything to increase the amount of money in its coffers and political control over those who set salaries and work rules.

What can YOU do?

If you are a union member, vote for an honest leadership who will look out for your interests rather than feather their own nests first. While we have no objections to the rather large salaries of these union officials, we often take exceptions to perks which may include chauffeured limousines, private aircraft, party boats and other plush facilities which remain “off limits” to the rank and file members.

If you are a union member, make your opinion on illegal aliens known. You hospital workers and others in the healthcare field know what a staggering burden illegal aliens place on our healthcare, educational, judicial, social and cultural infrastructure.  Same for janitors and other service employees.

My objection to most unions is that they no longer support work rules and policies which reward merit and initiative, but reward seniority and cronyism. Treating the socialist “collective” over the rights of the “individual.”

I also strenuously object to the unions position on democrat entitlements which are slowly strangling our country with an ever burgeoning debt. Just the payment of interest on this borrowed money is a significant drag on our present-day economy.

Vote for elected officials who will hold public service unions in check and restrict their rights to massively inconvenience the public with their periodic work stoppages and strikes. Especially those which are later ruled illegal.

Demand policies which preserve a “secret vote” when organizers are attempting to unionize a corporation or municipal function. Not preserving this right leads to intimidation, coercion and thuggery.

It is highly suggested that you read the rest of the Los Angeles Times’ article to see what the SEIU local’s leadership has apparently done with their funds and follow the story as it develops.

-- steve

Quote of the Day: “For the ordinary man is passive. Within a narrow circle (home life, and perhaps the trade unions or local politics) he feels himself master of his fate, but against major events he is as helpless as against the elements. So far from endeavoring to influence the future, he simply lies down and lets things happen to him.” – George Orwell

A reminder from a large improvement can result from a small change…

The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius

Reference Links:

Union, charity paid thousands to firms owned by official's relatives - Los Angeles Times

“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS