#union corruption

On April 5, 1956, the labor columnist of the Daily Mirror, Victor Riesel, and his secretary left Lindy's restaurant at 3:00 in the morning. As they walked to Riesel's car, parked in front of the nearby Mark Hellinger Theater, a small-time hood named Abraham Telvi materialized out of the shadows and threw a vial of sulphuric acid in Riesel's face. It got him straight in the eyes.

Riesel was a hard-hitting foe of organized crime, Communists, and toughs in labor unions (his father had been crippled for life by ILGWU goons), and his column appeared in 193 newspapers. In 1956 he was working closely with the New York Attorney General in an ambitious assault on the city`s rackets.

His blinding created an uproar. "It is a return of the Al Capone era" thundered the Mirror. "It is the simple, bald determination on the part of the underworld to have its own way and maintain its fabulously profitable rackets by terror and death, and in defiance of the law." It concluded, "The scum who plotted this cruel attack may rob a man of his eyes but not of his vision."

It was eventually determined that New Jersey racketeer Johnny Dio, a prime target of Riesel and the Attorney General, had hired Telvi to make the attack. He was never prosecuted, but in July, Telvi was found shot dead on Mulberry St. He had been paid a few hundred dollars for the acid attack but had later decided it was worth $50,000.

Riesel's column continued to be written by his staff until he was able to return to work. He continued to report on labor for decades.

“T. W. Jaggard Sentenced to Two Years,” Hamilton Spectator. July 8, 1919. Page 13. --- Two years and three months less one day at the Ontario reformatory was the sentence meted out by Judge Gauld in the criminal court this morning to Thomas W. Jaggard, who pleaded guilty to stealing $1,335 from the Brotherhood of Railway Trainmen. Rev. A. H. McGillivrary and W. Clarkson testified to his former good behavior and character, and made a plea for leniency.

Judge Gauld in passing sentence laid stress on the fact that the prisoner held a position of trust and had not only stolen the money, but used his position to enable him to do so, thereby making the crime more serious.

The recent strike-wave that hit Baja California took the world of business by surprise, especially because production in Baja California has grown incredibly in the last several decades.  The northernmost Mexican state is idyllic because of its proximity to the United States but more importantly, the prime southern Californian market with its competitive business climate.  However, in order to foster such a climate, wages in border Mexico have to be kept low; production output, additionally, has to be tightly controlled due to the inflexibility of “just-in-time” production models. This, in turn, has meant that labor unions have been sedated and immobilized in order to ensure products reach their destination markets in timely and scheduled manners. Recent massive strikes in San Quintin – a town south of the U.S.-Mexico border – revealed that time is an incredibly important factor for Baja California’s industry.  The rotting strawberries and other fruit left on the dusty fields sent a clear-cut message.  

However, what made this strike even more incredible was that official unions did not participate. In fact, mobilization caught them off guard because they had no idea the strike was coming. It is no surprise that over recent years, throughout Mexico, we have witnessed an increase in worker participation in self-created organs outside of unions. There are many reasons for this, but a primary factor has been the prominence of corruption within unions. Indeed, union corruption has negatively affected many workers in Baja California. Rather than represent workers, unions have largely operated for the interest of well-paid bureaucrats, and this is due largely to the way unions have been structured in Baja California. As elsewhere in Mexico, unions have largely been influenced by PRI statecraft, which is defined by its ability to hold power through co-option. Without addressing this entangled relationship, corruption is unlikely to end.

The Mexican Union: a dominant structure

In Mexico, it is not only the Labor Law that secures the right of every worker to organize in a union, but the very country’s constitution. In fact, the country was one of the first that recognized unions as a central element of civil society.

Mexican labor law gives every union member the right to have full insight on the financial activities of the union as well as its political engagement. Additionally, the law defines the function of a union as a collective organ of workers/employees with the task of protecting the workers and their rights in general. It does not, however, give any regulations regarding the union’s structures, ideologies, or tactics.

Theoretically a group of at least 20 workers of the same profession can found a union and be registered with the Department of Labor as soon as these workers elect leadership and agree on a constitution and by-laws. The structure can be developed by founding members and is not regulated by law, although a secretary general has to be elected as a public representative of the organization.

Each union can be autonomous but as indicated by historical development, the majority of local unions are organized in federations. The reason was in the beginning rather a practical one: After the Confederación de Trabajadores de México (CTM) was founded in 1936, it quickly became the most powerful workers organization of the country. The PRI, which was developing its system of incorporation at that time, worked closely with the newly founded labor confederations and supported the development of union supra-structures. The interaction between the PRI and the CTM led to a fast bureaucratization of the CTM (some researchers argue that the bureaucratization of the CTM led to the involvement of the PRI). In contrast to other attempts of union network building, the CTM formalized its structures far beyond annual meetings and information interchange and became a full organization.

To some degree, it seems that this additional bureaucratic layer is particularly open to corruption. Furthermore, by taking advantage of the concept of autonomy, union leaders extend their power in the organization. By denying any external observation, any given union leader can become a very powerful actor – if not the principal one – in the entity.

What is visible today is that a long history of pro-union politics and explicit legal protection do not lead to a strong workers representation: the country’s labor organizations failed over the years in protecting its workers and many organizations that call themselves “unions” only serve its own leadership through a net of corruption and blackmailing.

Since the abuse of union structures is not limited to a specific organization or region, the problem must be seen as a structural one. As shown, the labor law itself offers relatively good protection but the amount of abuses inflicted on workers proves that this protection mainly exists on paper. Some of the problems are based on the described legal frame, such as the potentially uncontrolled power of union leaders in the legally autonomous organizations.

Other issues are rooted in the support of nationwide bureaucratic networks that make-up union confederations. These networks create a variety of new positions – on federal, state, and local levels – whose tasks are poorly defined. Their main functions are to create relations between the unions they represent and the political elite. This puts the CTM leadership itself in a very powerful position. They’re almost like gatekeepers for union demands: they exercise influence over each union, favoring the interests of few, but they are also spokespersons for large quantities of workers, which gives them a kind of power over political elites.

Beyond that, some unions are abusing the part of the labor law that limits the right to strike to situations in which negotiations failed and after the employer received the information about an upcoming strike. Especially workers in the maquiladora industry: they are frequently represented by these so called “yellow” or” white” unions – which are not fighting for the employees but rather the employer – that keep the workers from negotiating for their rights.

The blackmailing of employers, for example (the offer to suppress strikes if the employer pays money to the union leadership) as well as the widespread corruption is not addressed at all by these legal gaps.

Unions in Baja California, Historically

In order to understand union corruption in Baja California in particular, it is necessary to provide some breadth regarding its historical development of unionism. Early union formations in Baja California were premised on the necessity of self-organization for the direct purpose of protection from exploitation. In Baja California, many of the original business owners were American. It goes without saying that explicit racism was a dominant notion held by many.

It could be said that Tijuana functioned similarly to Las Vegas – it was a commercial hub that attracted tourists and gamblers alike, allowing, for the sake of capital accumulation, the fulfillment of desires premised on vice. Hence, Tijuana functioned in its early day as a legal and commercial haven for business owners. But still, given the popularly held conceptions of race at the time, American business owners did not want to employ Mexican workers – despite the supposedly sovereign land in which they found themselves.

Hence, business owners principally employed American managers and hired Chinese workers to conduct work that necessitated subordinate interactions with customers – all the while Mexicans were only allowed to work in warehouses or in backrooms where they were invisible to clientele. Given these practices were established during and after the Mexican revolution, unions thus formed as a basic response to incredibly poor working conditions.

In the 1920s, radical nationalist and anarcho-communist unions thus formed in Tijuana and Mexicali. Tijuana became home to an increasingly militant base of workers around tourism and services, while in Mexicali, agrarian workers mobilized against landowners. But with the end of revolution, came the political monopoly of the Partido Revolucionario Institucional (PRI). The PRI came into being when fascism was sweeping across Western Europe.

Since the revolutionary fervor that swept Mexico was based on specific demands placed by a largely agrarian and heterogeneous society, what ever government came after would have to address such radical desires for which the revolution was fought for. The PRI, which was the political party that came to monopolize the government after the initial formation of the PRN, established a radical, revolutionary discourse while maintaining a corporatist structure that mimicked elements of Italian and German fascism, hence conserving bourgeois relationships to private property, while conceding basic demands to labor. Though unions were allowed to be established, under the post-revolutionary relationship, the Mexican government was meant to act as arbiter between labor and capital.

The previous unions that existed in Tijuana were thus consolidated under the new structures that permitted state control. Unions and civil organizations were attached to the PRI as semi-autonomous organs of the party, primarily under umbrella federations such as the CROC, CROM, CTM, CNOP, and so on. Meanwhile, on the side of business, as unions grew so too did the role of chambers of commerce and business associations. Hence, by making organizations that channeled energies and disputes to the State, the PRI could effectively wield control from the top-down. Union members that supported the State agenda obviously received PRI support, while those that ran counter-current were marginalized by the State. This is not to say that the relationship between State and union was one that was fixed; these observations note tendencies, not law. Militancy and conflict with the State and the status quo did occur, but PRI co-option was constant.

By the 1980s, under the necessity of reform due to the changing global economic order, unions were forced to undergo a series of transformations. Some fought this, but many took the side of the State, which having to undergo structural adjustment, took aim at the social welfare state and those vehicles that protected it. Unions with high levels of bureaucracy (such as the CTM, which is also one of the unions with the greatest number of members) quickly conformed to the new regime of social organization. What became increasingly common was the establishment of contratos de proteccion (protection contracts), wherein union representatives make contracts directly with employers in order to protect the firm from any worker actions as well as staving off militant unionism. Under such cases, it is even common that union representatives not even inform the employees at the site they are represented by unions. Though such cases are prominent, it must once again be noted that this tendency rather than rule, as Chris Tilly points out. It depends on local tradition and history whether the unions offer a genuine form of worker representation and protection.

However, in the last couple of decades, Tijuana and most of Baja California has increasingly rid itself of union militancy. This has lead to a notable trend: workers prefer to organize outside of union channels, fearing co-option and corruption within the unions. This is precisely the reason that farm workers in San Quintin recently organized independently from unions, catching them off-guard when the strike was called earlier this year. Due to large scale co-option throughout Baja California, workers looking to organize, few as they are, hardly look towards union confederation.

Union Organizations Currently Operating in Baja California

Due to the conflicts in San Quintin, where day laborers organized a revolt against their employers without the involvement of official unions, the Confederación Nacional Campesina (CNC) got international media attention. Their absence in the areas of conflict – their unwillingness to get involved – was explained by saying the conflict is "too political". They made it very clear, then, that the organization had no interest in fulfilling its duty to protect the workers from exploitation. Among other things, it was the international critique that led to severe internal conflicts in the CNC of Baja California.

The Confederación Revolucionaria de Obreros y Campesinos (CROC) is relatively passive in the field of labor law in Baja California, on the other hand. The Confederation is, however, strongly involved in local politics. Jorge Alfredo Guadalupe Escobar Sánchez, head of the confederation, is a city council member of Tijuana – the state’s biggest city – and member of the Infonavit counseling group in Mexicali. The CROC representative for Tijuana – Jesús Javier Merino Duarte – is also a member of the city council, as well as being head of several smaller unions in the city. Raymundo Estrada Ortega, another representative of CROC, is the head of a construction worker union and seems to have close relations to the Hank government.

What becomes clear, however, is that single individuals are holding a variety of power positions that are usually meant to exercise a certain control over each other.  The unions, on the one hand, via public protest; the government, on the other, via corrective legislation.

Similar to CTM and CROC, Confederación Regional Obrera Mèxicana (CROM) is criticized for their lack of support in the case of the labor conflicts in agriculture (San Quintín, Oaxaca, etc.). Together with the CTM, the CROM was accused by the workers to actively undermine the strikes and protests in San Quintin. The reason for this total lack of support can be seen again in the strong relations between the confederation and the PRI. On a federal level, the Secretary General is also a congressman; on a local and state level, the connections are less obvious but the CROM representatives in Tijuana and Mexicali are involved in the consulting committee of Infonavit in both cities. Furthermore, the CROM openly supported the PRI during the elections in 2012, something which should not be too surprising as nearly all the major unions throughout Mexico claim a direct relationship with the PRI.

Union Corruption in Baja California Socially and Culturally

In the first half of 2015, Tijuana became a prime example for the role that corruption plays not only in the unions but also in Mexico's society in a whole. A case that made headlines beyond the city's borders was a report on an internal investigation that claimed more than 150 officers were and/or are involved in organized crime, excessive violence, blackmailing. The problem about this situation was not only a completely dysfunctional police force but that fact that these crimes were known to the city government for years. It is this silence, the acceptance that creates the basis for widespread corruption in the unions.

The cases touch all parts of everyday life. One example is the taxi/public transportation driver union. A taxi in Mexico has to be registered as such. Aside from taxation purposes, this strategy is intended to prevent an oversupply of taxis in a specific region or city; hence, it does protect drivers' income.

A problem the drivers (as well as the state) are confronted with, however, is the illegal reproduction of taxi licenses. The city of Tijuana attempts to battle this fraud through concentrated police actions. These actions come with a remarkable lack of success. In may 2015, the CTM accused the local union of informing the drivers about time and date of police checkpoints so that they can be avoided by drivers with false licenses. Even though this is a problem, the CTM is criticizing the wrong end of the chain: Yes, it is very likely that the local union informs its drivers, but it is the police that informs the union and it is the government that decides to have single dates of “taxi checkpoints”.

At least four parties are involved in this circle – and none of them loses profit (although the biggest and at the same time poorest group of people is paying the major part). And it has to be said: “at least” the taxi union in Tijuana is a member of the CTM – even though CTM released a statement against corruption, it is more than likely that at least some of its members are actively involved in the case. Especially because the secretary general of the CTM in Tijuana is at the same time a member of the city council.

A look at the statewide leader of the organization, Eligio Valencia Roque, speaks further against the CTM as a force that works against corruption. When he was accused of Fiscal Evasion and fraudulent real estate deals, he miraculously avoided jail by taking an oath of office for the seat of representative, which includes immunity – despite the presence of federal agents. This episode alone makes clear how low the CTMs interest in legal control over administrative activities is. The fact that his son – as well as his son-in-law – are in power positions within the CTM and/or the PRI further strengthens the assumption of the organization’s involvement in the corrupt structures that lead to mentioned protection of fraudulent taxi registrations in Tijuana.

Another field that is heavily affected by the consequences of corruption is education. Since 2013, the teachers union Sindicato Nacional de Trabajadores de la Educación (SNTE) became infamous when their long-time leader, Elba Esther Gordillo, was arrested for embezzlement of union money. During the month following her arrest, a variety of union leaders in different states were arrested for quite similar offenses. During these arrests – and in combinations with a wave of big strikes in Mexico City – it was confirmed that the union consisted of a very rich leadership that was representing very poor workers. Whereas most of the legal consequences already happened, the social effect of a union that did not work for its workers but rather stole from them was striking in last April Baja California. The scandals around the SNTE strengthened alternative organizations, such as the Coordinadora Nacional de Trabajadores de la Educación (CNTE) which is currently calling for strikes to finally fight for a better income for rural teachers and a change in union leadership resulting from the broad indignation towards Elba Esther Gordillo, thus spurring a mobilizing effect on the members of the SNTE.

But it is society at large that loses most – since the taxi union covers all kinds public transportation, the money paid to police and government is put on the drivers and they have to give the financial burden to their customers – the vast majority are within low-income social groups. The damage done by the corrupt leadership of the SNTE goes even deeper. The educational system in Mexico is very weak, resulting in the fact that the country is not able to compete on an international level and in some areas, such as Oaxaca, Guerrero, and Chiapas, around 20% of the population is illiterate – a rate more than twice that of the Latin American average. The unstable payment given to those who work in the educational system is a main factor for this weakness. Therefore, the current fight for higher wages might have the potential to actually better not only the teachers’ lives but also the students’ future. The current downside is that schools remain closed and students receive poor-quality education largely due to systemic corruption and exploitation, executed by an organization that is supposed to safeguard their rights.

What is interesting about this deeply embedded corruption is the public’s reaction to it.  Corruption is not only widespread but also popularly recognized as an issue. Transparency campaigns as well as open accusations are found on a regular basis: The CTM claimed to battle corruption in May 2015, the federal government just released a new anti-corruption law in June, and the Mexican Employers' Association (Coparmex) implemented anti-corruption rules in February.  These are only the most recent allegations of the last four months. Yet, none of this is new: anti corruption laws and campaigns have been implemented for quite some time.  Such measures, simply, have not rendered considerable positive results. 

Mexico's biggest union, the teachers' union, is currently under fire. The Sindicato Nacional de Trabajadores de la Educación (SNTE) is the biggest and, therefore, one of the richest unions in Mexico – so far, its even the biggest union in Latin America. The trouble started in February 2013 when Elba Esther Gordillo, the president of the union, was arrested under allegations of embezzlement of union money. “La maestra,” as she is called, was the head of the organization since 1989, and could have kept this position for the rest of her life if this investigation would not have happened. But that was just a first step in the Mexican state’s current attempt to change the union's structure.

While in April 2013, Jesús Salomé Rodríguez Manjarrez, leading member of SNTE Sinaloa was arrested for stealing 14 million pesos from the union (about 962,250 dollars); in August 2014, the head of SNTE Hidalgo was arrested for stealing 123,928,265 pesos from the union (about 8,517,850 dollars).  Yet the most recent case happened in November 2014 when the leader of SNTE-Nayarit was reported for financial irregularities. He is suspected of employing his four sons with an impressive salary for very little work, and this list goes on. Most of the money was stolen over longer time periods of time.

Such cases are typical in the SNTE. Gordillo, especially, was known for her almost obscene lifestyle: not only plastic surgery but tremendous shopping bills as well as a one million dollar house in Coronado, San Diego, another one in La Jolla, California — all of it paid with union money. What this shows is that it is not the irregularities that are new, but the attempts to investigate and punish them.

Under the new union leader, Juan Díaz de la Torre, it became visible how deep corruption and mismanagement are entangled with the union structure. One of his first activities was the implementation of a new law that, amongst other things, prohibited the inheritance of union positions and replaced this system with a regular application process. The law, created in November 2013 by the Peña Nieto Administration, was presented as a strong attempt to reform the corrupt system of the teachers union and to help (re-) build an organization that actually serves the workers as well as the education system. And on the organizational level, it is an important step in direction to a more democratic organization to no longer allow the inheritance of positions in the union or positions like “life-time presidency” which was held by “la maestra.”

Additionally, the law identifies a clear relation between the education that people receive and the conditions the teachers work in. Therefore the law does not just reform the teachers union but attempts to reform the educational system as a whole. Furthermore, a central element of the reform is a strict observation system over the teachers work, an element that is criticized by various teachers, but in this context, it makes clear that the union and the educational system are in the focus of the government and clearly thought of as directly related.

But is this an attempt from the government to actually better the working condition of the teachers and by this the education system? Is this the “New PRI” that was sold to the public during the elections campaigns in 2011/12?

To answer these questions, it is necessary to understand how an apparatus could develop that is basically stealing money from the workers and placing it in the hands of its very rich leaders yet remaining under the guise of a “union.” The explanation can be clearly found in the history of SNTE and the very beginning of the PRI’s domination in post-revolutionary Mexico.

It must be said, first of all, that the teachers in Mexico were traditionally involved in political activism such as protests against Porfirio Díaz, the dictator who was leading Mexico before the revolution. During the 10 years of revolution, between 1910 and 1920, the teachers remained a significant political force that was capable of influencing national politics.

In the 1930s and 40s the Party of the Institutionalized Revolution (PRI) began to stabilize its position as leading party by including political and social institutions on various levels into the party's apparatus. In doing so, the PRI basically nullified any separation between the government and the state in the meaning of a 'collection of institutions'. Unions and other activists who were not willing to participate in this system were simply replaced by organizations that were founded by the government itself. The SNTE is a result of exactly this strategy: In 1943, the organization was founded with a presidential decree after a longterm conflict between existing teachers unions and the state. The state created a replacement for the politically active and critical unions and therefore became employer and voice of the employees all at once. In fact, the founding of the SNTE in itself makes clear that it was never meant to represent the teachers – for a good reason, it is usually illegal for the employer to found the union that represents the employees (the key expression is “conflict of interest”).

With this history, it is not surprising that the SNTE was, over decades, an integral part of the PRI state and, due to its size, one of the government's most important power tools. Instead of representing the workers, the organization functioned to control the workers but, at the same time, managed to orchestrate the impression of worker participation. Actually, most of the money the state pumps into its education system goes through this union. (This might actually explain, why Mexico has one the highest rate of spending on education from all OECD countries while having the worst outcome).

Even though the PRI lost the federal elections in 2000 and needed 12 years to get back in power, the structure of the state did never really change. Too comfortable was the possibility of an almost total control over society, and especially control of the workers was needed to implement NAFTA regulations. A short view at regions that did develop a limited amount of self-organization, such as Chiapas, makes very clear that NAFTA, in the form the governments agreed on, would have been confronted with major problems in the case of a functional workers representation. Wherever the structures allowed it, the protests against the agreement began even before 1994 and the newly elected party of 2000, PAN, with its neoliberal orientation had no interest in a workforce with a democratic corpus of representation. A union that was basically part of the government was just too perfect to be reformed.

It is this background that has to be taken into account for an understanding of the current conflicts between the state and the SNTE. Knowing how important the SNTE had been for the PRI over seven decades, the question if the Peña Nieto Government is really working on a reform has to be asked again, and for various reasons it has to be answered with “no”.

First of all, the history of the organization shows that it was never meant to represent workers or to be their tool in labor-conflicts. The SNTE has no legitimation to speak for the workers. Even worse, it is exactly this organization that was created to wipe out the unions that fought successfully for their members. A reform of such an organization can solve minor problems but it is unlikely, if not impossible, to transform it into a real worker's organization.

Linked to this argument is the fact, that it was the PRI that created this organization and also set its goals over decades. It is questionable whether this party is really willing to give up its own tools for some kind of greater good. In contrary, the current reports on the President and his family as well as the other members of his administration and party show that the country's elites keep on profiting from corruption, money laundering, and embezzlement. What are the odds that this elite will, all of a sudden, change the system that gives them wealth and power?

And there are more signs that clearly signal against the government's desire to really change the union's structure. The beginning of the current unrest is directly related to the questions debated here. The 43 students who were kidnapped in Ayotzinapa were studying to become teachers. They were protesting against parts of the described law, such as the centralized organization of the planed observation of their work, and the low income that is planned to be paid to them. These students did not only mobilize by themselves, they were able to refer to a network, built by the Coordinadora Nacional de Trabajadores de la Educación, CNTE – a leftist teachers union in which the majority of the members are from Guerrero, Oaxaca, Chiapas — all states that are poor and largely rural, on the one hand, but that do have a tradition of resistance and self-organization on the other. CNTE was founded in opposition to the Sindicato Nacional de Trabajadores de la EducaciónSNTE and therefore never included in the PRI system of the 20th century. The union has a broader political program and is for example active in movements against the privatization of PEMEX, and demanded an investigation regarding the violent actions against demonstrators in Oaxaca. It is this union that was prominently involved in the organization of the protests in Ayotzinapa, before the 43 students were kidnapped.

An honest attempt to develop a union for the teachers that is worth the name of a union would be based on strengthening an existing organization that already reached credibility amongst the workers of the education system. But to almost suppress an investigation of a kidnapping, presumably attempted by the police, a local mayor, and a drug cartel is clearly an attempt to weaken such an organization.

The question remains, what is happening with the Government and one of its favorite power tools?

If the reform does not aim to really better the educational system, what might be the reason to begin such a conflict with this big organization? One important factor is that already short after the elections, Peña Nieto's popularity was not exactly skyrocketing. As there is a broad agreement in society that the education system needs to be reformed and that the SNTE has to be part of such a reform, it might have looked like an easy step to better the reception of the newly re-elected PRI — especially because “la maestra” already had been a symbol for corruption in general. Going after her was clearly helpful for Peña Nieto to get the public opinion at least for the moment on his side.

Additionally, it seems like arresting Elba Esther Gordillo and passing the law on the educational system gave the Peña Nieto administration a new strategy to keep the workers under control. The discourse he developed around the arrest and the following reform of the SNTE was not that this union is extremely problematic due to its specific history but that unions – in general – are not the right way to represent workers. This discourse included the CNTE. The protests against the reform are coming from various sides. The CNTE is very active against bad salaries and a centralized observation that does not include the specific local conditions. The SNTE is very active for the protection of their system of inheritance. Clearly these are two very different demands and clearly the first one aims to better education, while the second one aims to protect elitist interests. But by investigating the SNTE, the PRI's own child, so to speak, Peña Nieto is trying to create a general anti-union atmosphere that might help him to get rid of oppositional voices as well.

A final reason for the current attack against the SNTE might be that the system the PRI developed after the revolution (in which every bigger organization was at the same time a party organization) does not work out that easily any longer. Already the presidential election campaign in 2012 showed that despite the difficult conditions, a variety of social and political organizations developed and they were very willing to speak out against the PRI. At least the last part can also be said for “la maestra.” Despite from profiting largely from the PRI system she left the party in 2006 and became an active member and leader of the New Alliance Party (PANAL). With a lifetime president of the SNTE not being a party member, the whole organization lost its main function in the perspective of the PRI.

January 26, 2011

Life and Death in McCarron's Union

Dying to be a Carpenter

By DAVID CORREIA

Las Vegas has always been a dangerous place to be a carpenter. By the summer of 2008, workplace accidents at the $10 billion CityCenter project cost six carpenters their lives. As if the constant threat of injury on the job wasn't enough, it turns out unemployment is even more dangerous for carpenters. According to Local 1977, eight members of the carpenters union—desperately unemployed and underwater in the mortgages— committed suicide between November 2009 and February 2010.

Las Vegas, you see, is the suicide capital of the United States and the carpenter suicides have revealed another dark side of the spreading economic panic. Over the past 12 years, according to the local coroner, an average of more than one visitor a month comes to Las Vegas to end their life. But this sad surprise of sin city tourism has taken a local turn since 2008 as economic misery settled in for a menacing Las Vegas holiday. Ten violent deaths, nearly all linked to economic anxieties, followed the carpenter suicides and marked August of 2010 as the crash of the colossal crest of "a wave of murder-suicides in the Las Vegas Valley." One homicide detective told a local paper of the deaths, "It appears that maybe the economy is starting to take effect."

The storm started in 2007 when Las Vegas became home to the hardest-hit zip codes in the country when it comes to home foreclosures. At the close of 2007, 741 default notices and bank repossessions made North Las Vegas (89031) the worst in the Country. An adjacent zip code, 89131, was a close second with 665 foreclosure-related filings. While the mammoth CityCenter project kept the economic wolves at bay, at least for carpenters, the bottom finally fell out in 2009. By the summer of 2010, the unemployment rate in Las Vegas hit 14.5%.

This is Las Vegas, the home of Douglas McCarron's United Brotherhood of Carpenters and Joiners. Surely there's help for desperate carpenters in the city that drives the union. How has McCarron's carpenters union reacted to these dire circumstances? What has the union done to deal with this growing anxiety? What could, or should, they do? After all, according to Mark Furman, the president of the Southwest Regional Council of Carpenters, this is all just the cost of doing business. "It's the business we're in," Furman told a local newspaper discussing the high levels of unemployment and stress among carpenters. "If you want to work all the time, become a public employee." (Anywhere but Las Vegas of course, where cuts in the public sector cost 3,000 jobs in August 2010 alone.)

If this is their position—it's just business—it seems useful to consider exactly what business Furman and McCarron think they're in. Is it the business of defending and protecting the interests of workers? No, not for McCarron. His business is the business of Wall Street.

Furman's comment is less a function of the cluelessness of the carpenters union leadership regarding local economic conditions than an illustration of the extent to which McCarron has turned the UBCJ into his own personal vehicle for Wall Street speculation. Much has been written about how his authoritarian leadership has undermined union democracy, but the real legacy of McCarron may well be the way in which he has contributed to the economic anxiety of rank and file carpenters. Throughout his reign at the helm of the UBCJ, he has squandered millions of pension dollars paying Wall Street advisors, invested millions more in dubious financial instruments and all the while lined the pockets of his Wall Street friends.

His most notorious schemes are the stuff of legend now. He joined the board of directors of the Union Labor Life Insurance Company (Ullico) after becoming President of the carpenters in the 1990s. There he played a central role in a massive financial scandal when Ullico officers and directors purchased shares in the telecommunications company Global Crossing based on insider information. Ullico board members gobbled up 33 million preferentially priced shares and enjoyed a $1 billion windfall when Global Crossing went public.

Global Crossing of course eventually tanked, but the Ullico board members got out. The union pension fund was left to pay the price. One thousand union members of the Communication Workers of America lost much of the value of their 401(k) savings when Global Crossing went bankrupt. "They lost everything they worked thirty, thirty-five years for, they're devastated," said one local member.

So, what exactly is McCarron? Is he an union leader or is he a corporate CEO? According to Securities and Exchange Commission filings, he is the President of the Inland Empire Hotel Corporation, President of the RPS Resort Corporation, President and Chairman of the Santa Nella Hotel Corporation and President of the THMI Motel Corporation.

He also has been on the board of directors of the Tutor-Perini Corp., one of the largest general contractors in the United States with nearly $6 billion in annual revenue, and the board of PB Capital Partners, a derivative-trading firm owned by Senator Diane Feinstein's husband Richard Blum.

In 2000, three retired carpenters sued Blum, claiming that he, Tutor and McCarron conspired to invest $2 billion in union pension funds. The suit claimed that Tutor and McCarron, both trustees of the Carpenters Pension Trust for Southern California, invested $27 million with Blum, who in turn used the money to invest in Perini. Blum, who was paid $54 million in consulting fees from the carpenters union pension fund, then appointed Tutor and McCarron to the board of the Perini Corporation, which eventually changed its name to Tutor-Perini.

In retaliation Blum countersued one of the plaintiffs in the lawsuit, Horacio Grana, for libel. The lawsuit ended, however, with Grana's death.

In the years since McCarron has consolidated his control of the union while he and his corporate crowd have grown richer and richer. Meanwhile unemployed carpenters in Las Vegas are shooting themselves in the head. "Every time I turned around," said the local union secretary "somebody was coming into my office to say that someone just popped themselves in the head with a 9 mm or some other thing,"

Such is life and death in Douglas McCarron's carpenters union.