Douglass McCarron: Union Boss or Ponzi Schemer?
by DAVID CORREIA
In the aftermath of the police blitzkrieg that returned Zucotti Park to the bankers and brokers it may be useful to consider the
alliances forged and enemies revealed during the short occupation of
Liberty Park. If Occupy Wall Street has done anything in its relentless
critique of the human costs of the financialization of capital, it has
been to force the mainstream left to declare which side it is on. In
mid-October more than a dozen locals of various unions marched in
solidarity with Occupy Wall Street protestors to condemn a financial
system that has drained worker’s pensions while filling the pockets of
Wall Street bankers. AFSCME, Communication Workers of American, SEIU,
the United Auto Workers, United Federation of Teachers, National Nurses
United, and the Professional Staff Congress of CUNY among other unions
showed support and marched in solidarity with the protestors.
But one notable absence from the Occupy/organized labor alliance, the
Carpenters Union, offers another reminder that some leaders in the
labor movement are on the side of the bankers against working people.
While many rank and file carpenters have shown support, the union,
particularly Carpenter’s President Douglass McCarron has been silent.
There are a number of possible reasons for the silence. The
Carpenters union under McCarron’s leadership is without question among
the most conservative unions in today’s labor movement. Over the last
decade McCarron has dragged the Carpenters union into an malevolent
alliance with conservative Democrats and Republican politicians,
demonstrated most clearly by McCarron’s sycophantic courtship of George
W. Bush during both of Bush’s terms in office.
Even more, the anti-authoritarian, non-hierarchical structure of the
Occupy movement contrasts starkly with the consolidated leadership
structure of the Carpenters, a structure defined by McCarron’s
dictatorship over every facet of union life and administration.
But perhaps more importantly, the Occupy movement’s laser-like focus
on the social and economic costs of financialization on the lives of
working people has revealed McCarron for what he is: a fugitive Wall
Street ponzi schemer disguised as a labor leader. McCarron, it turns
out, has more in common with Bernie Maddoff than he does with the rank
and file members in his union.
The history is clear. For the past five years, members of New York
Local 370 have sustained a relentless campaign to oust its corrupt
regional union leadership. McCarron has long ignored their demands. It
got worse in recent years when it was revealed in January of 2009, that
three northern New York trade unions were among the legion of investors
that lost money in Bernard Maddoff’s massive $50 billion fraud by
Bernard Maddoff. McCarron, however, did nothing,
despite the fact that locals of the United Union of Roofers
Waterproofers & Allied Workers, Plumbers & Steamfitters, and the
Empire State Carpenters Fringe Benefit Funds lost money in the hundreds
of millions of dollars.
By March of 2010, however, McCarron could no longer ignore the
fallout from the Maddoff scandal. He placed the District Council in
trusteeship and acknowledged union leadership cost rank and file members
an estimated $160,000,000, a blow that has meant diminished pension,
annuity and health funds for unionized workers.
Far from resolving the leadership problems in New York, the
consolidation merely robbed local unions of meager resources. One
carpenter noted that McCarron’s restructuring “took $850,000 of our
local’s assets, they returned $50,000 of it, but all we could use it for
was a clambake,” he said. “In other words, they were going to
control everything.”
While various media outlets have covered McCarron’s decision to
declare trusteeship, none have asked why it took so long . An answer to
this question may explain why McCarron has kept the union at arm’s
length from the Occupy Movement.
Under McCarron, the carpenters have been transformed into an
institution that operates more like a bank than a union. After his
election as UBCJ President, Douglass McCarron became an influential
member of the Union Labor Life Insurance Company (Ullico). Beginning in
the late 90s, McCarron helped develop an investment strategy for Ullico
designed to enrich board members and Wall Street insiders at the expense
of its union subscribers.In one scheme, Ullico officers and directors
purchased 33 million preferentially priced shares in Global Crossing, a
telecommunications company. The purchase, based on insider information
offered by Global Crossing’s CEO, turned the board members into
millionaires (the 1%). When Global Crossing went public and the stock
soared to more than $60 a share in 1999, board members enjoyed a $1
billion windfall.
The scheme was merely a means to drive up the value of Global
Crossing. In an exit scheme of Ullico CEO Robert Georgine’s design,
board members dumped Global Crossing before the price tanked and shifted
money into Ullico in an even more ridiculously advantageous purchase
plan. Less than a year later, Ullico’s board established a new price for
Ullico stock nearly $100/share higher than the price they paid in the
exclusive purchase plan, making the board members even more money, $13
million according to one report. When the board later dropped the price,
the company started posting astounding losses: more than $20 million in
2001 and nearly $75 million in 2002. The unions and their members paid
the price of the collapse in Ullico.
McCarron jumped ship in March of 2003 and avoided the backlash that
hit many of Ullico’s board members. His presence on the board, however,
proved to be pivotal. The corporate-connected and Republican-friendly
McCarron had become an important political ally of the “bankocracy.”
Despite pressure from rank and file union members to fully investigate
Ullico and the scandal, The GOP-controlled Congress refused. As Roll Call
reported “party leaders didn’t want to embarrass Bush or United
Brotherhood of Carpenters and Joiners President Douglas McCarron, one of
Bush’s best friends in organized labor.”
And so as Occupy Wall Street marched with union allies through
October condemning the disaster of finance capital, McCarron kept his
mouth shut and his union out of the streets. His interests are with the
bankers and he no doubt smiles at the thought of a possible end to
Occupy Wall Street lest its focus turns to frauds like McCarron and
other enemies of working people.
David Correia is an Assistant Professor of American Studies at the University of New Mexico. He can be reached at dcorreia(at)unm.edu
Thursday, November 17, 2011
More Like a Bank Than a Union
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Douglas McCarron
2 comments:
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