Even shrunken from its high point, the Teamsters union is a major force in the American labor movement--for both good and ill. On the plus side, building on its celebrated UPS strike of 1997, the union just negotiated respectable wage increases for full-time workers, though as BusinessWeek concluded, the agreement "doesn't deliver for part-timers." On the downside, Teamsters' failures to organize effectively hold back organized labor's drive to grow. In any case, much of the credit for the rise from its nadir under mob control goes to a 1989 consent decree with the Justice Department, which has removed hundreds of mob-influenced or otherwise corrupt leaders and given members the right to elect major officers directly. Now Teamsters president James Hoffa Jr. has made ending the consent decree and its institutions--like the Independent Review Board (IRB), which investigates and punishes corruption--his top priority.
That would be a bad move. It would risk undoing the good that pressure from federal oversight has wrought, including gains in formal democracy that surpass those at many other unions, such as last year's revision of the constitution to mandate direct elections by members. But neither the IRB nor internal union efforts at reform have yet succeeded in establishing "a culture of democracy within the union," which the judge overseeing the Teamsters identified as one of the two main goals of the consent decree. Hoffa's internal structure to investigate and punish corruption, RISE (Respect, Integrity, Strength and Ethics), so far has only codified rules and done historical research, and Hoffa plans to put it in action only after government oversight ends. Union democracy experts, like professors Clyde Summers of the University of Pennsylvania Law School and Michael Goldberg of Widener Law School, as well as the Association for Union Democracy, argue that RISE is not sufficiently independent to do the job and that top Teamsters brass could easily override it. The Teamsters are certainly not the only union lacking a robust democratic culture, but the Teamsters' unique history makes it crucial that reforms are solidly secured.
The risks of backsliding are not just theoretical. In May the IRB permanently barred from the union two of Hoffa's closest associates, William Hogan Jr., president of Chicago's Joint Council 25, and Dane Passo, Hoffa's former Midwest campaign manager and special assistant. They were disciplined for trying for two years to force the Las Vegas local to permit a mob-linked labor broker (of which Hogan's brother was vice president) to provide low-wage, nonunion workers for convention setup work, thus threatening to undermine the Teamsters contract and displace union members.
Although the IRB did not reprimand Hoffa, he was distressingly close to the corrupt deal-making. He knew the character of Hogan, who was Hoffa's initial pick as running mate until the IRB charged Hogan with nepotism and corruption. Passo had a history of physically attacking dissidents. Hoffa also admitted receiving a "general overview" of the proposed deal in a Chicago lunch meeting with Hogan and the broker's president. He agreed to Passo's requests to put the local into trusteeship and later to fire the assistant trustee and then the trustee when they resisted the deal. But in March 2001 Hoffa rebuffed Hogan's bid to negotiate the Teamsters' convention-industry contract in Las Vegas "because of the background of all the things that have happened with the IRB," he told investigators. Attorney Matt Lydon, who is appealing Hogan's expulsion, said, "I don't know of anything that was kept secret from Hoffa or anyone else about what [Hogan] was doing."
Union spokesman Brian Rainville argues that the initial aim of the consent decree has been accomplished, and that continuing it simply costs too much. But much of the expense would have occurred under any regime that conducted democratic elections and investigated internal wrongdoing. The Teamsters must demonstrate that RISE can do the job and establish a final review board independent of Teamsters officialdom before the IRB can be eliminated. "Of course, the Teamsters should become a union like other unions," said Teamsters for a Democratic Union organizer Ken Paff. "Rather than just complain about the IRB, prove you can do it. Clean up your own house."
IRB decisions have not been beyond criticism. Supporters of former president Ron Carey, for example, say that Carey's acquittal last October on federal charges that he committed perjury in denying that he knew about the scheme to embezzle union funds for his election raises questions about the IRB's decision to expel him from the union. But without some independent outside force, there would have been less progress in reforming the Teamsters.
Ultimately, democracy should make the Teamsters and the labor movement stronger. The union's desperate focus on ending the consent decree is doing the opposite. It has partly driven their courtship of Republicans, from their full-throated but failed support for Bush's plan to drill in the Arctic National Wildlife Refuge to Hoffa's recent vote against funding the AFL-CIO's successful political mobilization, because he wants to give 30 percent of his support to the GOP. Also, unlike unions such as the letter carriers and utility workers, Hoffa supports Bush's controversial Terrorism Information and Prevention System (TIPS), which would try to turn UPS workers into government informers. Although a new dues increase will boost funds for organizing and strike pay, members have more reason to worry about proliferating multiple salaries for officers and about the decline in organizing victories and expenditures than about the costs of federal oversight. Ending the consent decree wouldn't have salvaged a failed organizing strike against the ruthlessly antiunion Overnite, but it might have let a sweetheart deal undermine Las Vegas Teamsters. Democracy, including ferreting out corruption, is worth the price, and democracy in the Teamsters still needs outside help.
The Enron "outrage," AFL-CIO president John Sweeney told a rapt crowd of several hundred workers at Milwaukee's Serb Memorial Hall, is "not the story of one corporation's abuses, but sadly it's an example of business as usual in boardrooms and executive suites all across the country." Over the coming months, at a series of town-hall meetings around America, the AFL-CIO will warn workers that they, too, could be "Enroned," and it will call for "no more business as usual."
In an unprecedented way, argues AFL-CIO corporate affairs director Ron Blackwell, the Enron scandal "opens up a channel of public discourse on issues of retirement security and corporate accountability." In the booming nineties nobody wanted to hear why corporations and capital markets had to be better regulated, and reformers were left pleading for corporations to be "socially responsible." But today, "new economy" job-hoppers as much as steelworkers have good reasons to listen to union warnings about deeply flawed 401(k) plans and Social Security privatization.
The labor movement helped win millions in severance pay for laid-off Enron workers, provided legal counsel for workers battling Enron's creditors, sued Enron executives (through union-affiliated Amalgamated Bank) on behalf of pension funds that lost hundreds of millions of dollars in Enron's collapse and helped ex-Enron workers--both union and nonunion--tell Congress and the public how they were misused. The AFL-CIO requested new Securities and Exchange Commission rules and forced four Enron directors to withdraw from renomination at other corporate and public boards. Now labor is challenging Enron director Frank Savage's renomination to Lockheed Martin's board, sending the message that independent directors have a public trust.
Besides supporting auditor reform, the AFL-CIO is promoting legislation to strengthen the rights of workers in 401(k) plans--to a point. Senator Jon Corzine, backed by the Pension Rights Center, initially proposed prohibiting employees from holding more than 20 percent of their employer's stock in their plans. But after complaints from unions representing some workers who had bet big with their employers' stock, like pilots and GE employees, the AFL-CIO backed Senator Ted Kennedy's legislation, which places a less stringent limit on the employees' 401(k) holdings of their employers' stock but which, quite importantly, would require equal worker and employer representation in governing the plans. Enron worker Dary Ebright, who lost $300,000 from his 401(k), argues that limits make sense. "If that had been in place," he said in Milwaukee, "I wouldn't be here today."
Sweeney hopes that unions can use votes on Enron-related reforms to draw lines in this year's elections showing what candidates put first--corporations or workers. The AFL-CIO attacked Republican Representative John Boehner's legislation, passed in April, for "wip[ing] out existing retirement protections for workers under the guise of responding to" Enron. The House bill would permit investment firms to advise workers about financial products, like mutual funds, from which those firms profit--precisely the kind of 1990s conflict of interest that is under investigation at several Wall Street brokerages. While providing limited protections for workers and preserving executive privileges, the House bill would also make it easier for corporations to exclude most employees from retirement plans. Labor's advocacy for Enron workers and retirement security could also strengthen organizing, including efforts among white-collar workers, by sparking a more "enlightened" view of a collective voice at work, as it did with former Enron vice president Dennis Vegas, now a union enthusiast.
But a budding labor scandal threatens the movement's credibility on corporate accountability. It appears that a few labor leaders, sitting on the board of ULLICO, parent of Union Labor Life Insurance Company, personally profited from privileged deals in the Enronlike boom and bust of telecommunications upstart Global Crossing, while their unions' pension funds were denied the same opportunity. Robert Georgine, president of ULLICO and former president of the AFL-CIO's building and construction trades department, former Iron Workers president Jake West, Plumbers president Martin Maddaloni and Carpenters president Douglas McCarron are among those who got windfalls of several hundred thousand dollars. In March Sweeney, who did not take part in the deal, called on ULLICO, like Enron, to appoint an independent committee and counsel to investigate, but in mid-April Georgine said he would take a "somewhat different" approach. "We're not going to ask Enron to live by one set of standards and ULLICO to live by another," Sweeney insisted. Many union officials say they were shocked and disgusted by the news, a reminder that "no more business as usual" is a widely applicable slogan, even within union ranks.