The Trash Translator

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.

CHICAGO CARPENTER'S new SCREW-YOU Investment Plan

Now, I knowingly admit that the construction industry has taken a hell of a hit in this recession. I also know that many hard working men and women are out of work because of it, leaving many regional councils within the United Brotherhood of Carpenters scrambling for ways to increase their market share. One of these is The Chicago Regional Council of Carpenters in our very own Windy City. Needless to say, their impetus is not the economic recovery of its staggering membership, but more to protect the offensive salaries of the appointed leadership. 

After ridding itself of the organizers in a massive layoff early last year, Chicago’s Regional Council was left to rely on its remaining staff to find ways to generate capital for the region. Not surprisingly, they found it impossible to do that from their lofty downtown office. Most unions utilize their members in promotion and retention, but not Chicago. Chicago’s approach to its membership is that union business has nothing to do with them, especially since McCarron in his profound wisdom eradicated the vote, and therefore the voice, of union carpenters. Chicago carpenters are left to watch powerlessly as benefits are whittled away, from pension to health care. 

Most of the time, members aren’t even aware of changes being made until they receive an announcement in the mail, since executive boards at local meetings are careful to avoid these topics. Last summer they proclaimed that contributions to the ten year old supplemental annuity plan would be reduced by $1.50, which would be redirected to the pension fund. Okay, but weird since every meeting included proclamations that though other unions were struggling, the carpenter union’s pension fund was stable. As if that wasn’t enough, the labor gurus of the Chicago Regional Council’s leadership put their heads together, if you can imagine that, and decided that the best way to invest the remaining dollar contributed toward a members retirement is *drum roll*….with the CONTRACTORS!!!

Now, I know what you are thinking, probably the same thing most of the members are thinking and what the first paragraph stated-the construction industry has taken a hell of a hit in this recession. Nevertheless, in December the Regional Council of Carpenters sent out the summary booklet for the new Supplemental Retirement Fund Plan of Benefits, which it implemented in October. Overall, it’s the standard rhetoric that we usually skim over and file away for the day when our bodies tell us its time to retire, but it was the perfect opportunity to introduce The Trash Translator, which takes all of the propaganda and spits it out in plain English for better understanding of what exactly is being shoveled out by the powers that be. I would be remiss if I didn’t ask that the reader take a seat before beginning, but we’re going to go through some of the highlights of this ingenious endeavor.

LET’S BEGIN!

The Trash: What is the Supplemental Retirement Plan? “a defined contribution profit sharing plan where your employer makes a contribution” blah, blah, blah, “although it technically qualifies as a ‘profit sharing’ plan your employer’s obligation to contribute…does not depend on its profits…your employer must contribute for service you perform under its collective bargaining agreement.”

The Translation: Whether or not you or your employer make a profit, they give us a dollar an hour on your behalf and we’re going to pool it in with some contractors that are good buddies of ours to make us a profit.

The Trash: Who administers the Plan? “A board of Trustees, which serves without compensation, acts on your behalf and…your fellow employees in managing all aspects of the Plan’s operations. An equal number of Regional Council and Employer representatives comprise the Board of Trustees…the Board…may appoint a person, or persons, to act as plan administrator on its behalf as to certain matters (and they have) the power and discretionary authority to interpret the Plan…(and ) the plan administrator’s interpretations and decisions are binding on all participants, employees, former employees and their beneficiaries.”

The Translation: Remember those contractor buddies we mentioned? Well, we’re going to take your money and hold it for you. Don’t worry, we’re not going to charge you for that, but what we’ll do is invest it in some of our common interests on your behalf. One of our other buddies is going to oversee this here operation and we can always give some more buddies a job if he don’t work out so good.

The Trash: How are the assets of the Plan maintained? “All contributions are deposited into a Trust Fund for the exclusive benefit of Plan participants and their beneficiaries.”

The Translation: Technically, it’s your money, we’re just holding it for you.

The Trash: How will I know if my application for benefits is denied? “The fund office will send you notice…in writing within 90 days of (receipt of) your application. If the trustees need an extension…within the 90 day period the fund office will mail you a notice that sets a date no later than 180 days after initially receiv(ing) your application. You may assume your application was denied and you may appeal…if you do not receive any notice…within the 90 day period.”

The Translation: Ehh, maybe we’ll tell you, maybe we won’t. But if you haven’t  heard from us, assume the answer is no.

The Trash: How do I appeal a claim that has been denied? “You may appeal a denial decision by submitting an appeal request to the appeals committee of the Board. You will receive a full and fair review of the determination. You must submit your appeal request in writing…the fund office must receive your appeal request  within 90 days of the denial notice…if you fail to file a written request…within the time frame…you…have waived your right to appeal.”

The Translation: You don’t have the same luxury of not responding. You lose your rights if you don’t, it is not assumed that you are appealing. The time frame for you stands even if you never receive the notice. However, when we get your appeal in a timely fashion, us and our buddies will look it over and get back to you.

The Trash: What happens after my request for appeal is received? “The Trustees have appointed an Appeals Committee to review and take action on appeals. The Committee shall meet quarterly to render determination…any appeal filed within 30 days preceding a meeting will be decided at the next quarterly meeting. If special circumstances require a(n)…extension of time…a decision shall be rendered no later than the third meeting…following…the request for review. The Appeals Committee’s decision…is binding on all parties…however, legal action may not begin more than 90 days after…the determination on appeal.”

The Translation: Well, we appointed some of the Board’s buddies who needed work to a committee to handle things like that. If they haven’t gotten to your appeal in a few months, don’t worry. They’ll get to it before the year is out, trust me. They’ll let you know that we made the right decision, and we’ll hold you to that. Now, if you want to make this messy, you got 90 days to do it. Although, you probably won’t be able to come up with the money for an attorney after we’ve dragged this out for 18 months.

The Trash: Who is authorized to interpret the Plan and make benefit eligibility decisions? “The Board of Trustees, as the Plan Administrator, is responsible for these functions. Benefits under the Plan will be paid only if the Trustees (or their delegate) decide in their discretion that the applicant is entitled to them.”

The Translation: You’ll get your money only if we say you get your money. Period.

The Trash: Plan Sponsor and Administrator. “The Board of Trustees is both the Plan Sponsor and the Plan Administrator,…has discretionary authority in interpreting the Plan…prepares, distributes and files legally required reports and other information…has delegated certain ministerial administrative duties to other organizations and individuals who work in the Fund Office.”

The Translation: We have complete control over your hard earned retirement investments, if there’s any left when you retire. If you gotta problem with that, we hired some people to give you an impartial  determination, but in the end it’s still up to us. Isn’t that hilarious? 

THE COUP DE GRACE IS THE DISCLAIMER ON THE COVER!!!

The Trash: “Nothing in this booklet is meant to interpret or change in any way the provisions expressed in the official Plan document. If discrepancies exist between the wording in this Summary Plan Description and the Plan document, the Plan document will govern. Only the full Board of Trustees has the discretion and authority to interpret the Plan described in this booklet. No employer, union or any representative of any employer or union, in such capacity, has authorization to interpret the Plan, nor can any such person act as agent of the Trustees. The  Trustees reserve the right to amend, modify or discontinue all or part of the Plan whenever, in their judgment, conditions so warrant. The Trustees will notify you of any material change in the Plan.”

The Translation: Now, this may or not be the Plan. Only we know what the Plan is, the Plan is whatever we tell you it is and nobody else.  Besides, who knows what the Plan will be tomorrow, or the next day, or even if there will be a Plan. But hey, don’t worry, we’ll let you know.

Can anyone tell me how having the supplemental retirement invest of every worker in the Region in the hands of ten appointed members of a Board and the cronies who benefited through the new positions they created is a good thing for the working membership of the Chicago Regional Council of Carpenters?