Union, Charity Paid Thousands to Firms Owned by Official’s Relatives


By: Warner Todd Huston

The L.A.Times had a great investigative story this week about typical union corruption. Before going into the story, I’ll remind you that Barack Obama is promising the unions that he will gut the Office of Labor Management Standards responsible for rooting out and prosecuting union corruption. It seems Obama thinks unions are innocent until their corruption is ignored later.

Now, as to the Times story, what he have is typical union cronyism and corruption writ large. Paul Pringle of the Times give us “Union, charity paid thousands to firms owned by official’s relatives” in which we discover the sort of union cronyism that we find in nearly every union everywhere, especially in the Service Employee International Union (SEIU).

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.

Bad enough that union chiefs are setting their spouses and other family members with businesses ready made to take union contracts that might be giving the union legitimate services, but it isn’t just about favored companies getting favored contracts. It’s also about waste of union members’ dues.

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.

Naturally, the union head is giving the wide-eyed “who me?” response saying that he did nothing wrong. But, check out the improprieties the Times notes in their story.

  • 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.

Of COURSE its legitimate to pay your family members such tremendous sums for “poverty fighting” when the members of your union paying you the dues to make these expenditures make average $9.00 and hour!

They man in charge of this profligate spending is a union chief named Tyrone Freeman and he makes $215,000 a year as union chief. He also racked up $41,500 in restaurant expenses last year, too — far more than the largest number of his union members make in a year. And I’ll bet he says that corporate heads make too much, eh?

Anyway, there’s a lot more to this tale of waste and avarice. The Times did a great job of raising questions and reporting the lavish spending. Go on over and read this disgusting story of normal union behavior. And remember, Barack Obama wants to assist unions to do more of this sort of wasteful spending and wants to help union officials stuff their pockets with poor members’ dues money.

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