Forde Associate Indicted

BY MICHAEL GARTLAND

The Record

Finbar O’Neill, a developer connected with the Soldier Hill tract in Paramus, has been indicted in New York on charges of racketeering conspiracy, wire fraud and unlawful acceptance of a payment.

O’Neill pleaded guilty to felonies in two New York cases in 2004, including one in which he admitted falsifying business records in a scheme that resulted in a guilty plea by New York state Sen. Guy Velella, R-Bronx, on one count of bribery.

The latest indictment, which was unsealed Thursday by the U.S. Attorney’s Office in New York’s Southern District, also names nine carpenters union officials and a contractor’s representative. O’Neill is a contractor and developer based in Hackensack and the South Bronx. He is named in four of the indictment’s 29 counts, including conspiracy, racketeering conspiracy, wire fraud and unlawful acceptance of payment by a labor representative.

If found guilty on all counts, O’Neill, who remained at large Friday afternoon, could face up to 50 years in prison.

O’Neill did not return a request for comment. Louis Kaufman, a spokesman for O’Neill and the Soldier Hill project manager, declined to comment.

The fate of the Soldier Hill tract has been a source of controversy and legal dispute since developers first proposed building on it six years ago. The 35-acre tract is easily the largest undeveloped piece of land in Paramus.

The Paramus Borough Council opposes the plan, and council members say that O’Neill's past is also a concern. Councilwoman Maureen O’Brien described the most recent indictment as “frightening.”

“This is someone who is not trustworthy, so you have to wonder how trustworthy the development is,” she said.

O’Neill also may be connected with the Northern Park development in Rochelle Park. The development company, Northern Park LLC, is based at the same Hackensack address as several of O’Neill’s business interests, including Shamrock Creek LLC, the O’Neill Group, the Gabriel Group and Dutchess Landing LLC. Shamrock Creek is the company involved in developing the Soldier Hill property in Paramus. According to Kaufman, the O’Neill Group is an umbrella organization for the other businesses at that address.

Rochelle Park Administrator Michael Mariniello said the township has sued Northern Park LLC to halt development in an area prone to flooding and that building permits for the project are pending Zoning Board approval.

One concerned resident, Heather Lum, questioned how permits were obtained from the state Department of Environmental Protection.

“We always felt these permits should never have been issued,” she said.

The indictment unsealed on Thursday charges that O’Neill was involved in a scheme in which carpenters union officials accepted bribes in exchange for allowing contractors to pay lower-than-scale wages and benefits at various job sites in New York City.

O’Neill is accused of delivering bribes to Michael Forde, the head of the Carpenters Union District Council in New York City.

Forde is charged with accepting payments from contractors that defrauded the union by employing non-union labor and paying union members below-union rates.

Tainted Carpenters Union Boss Michael Forde still fave with Pols

BY Benjamin Lesser and Brian Kates
DAILY NEWS STAFF WRITERS

Six weeks ago, carpenters union head Michael Forde gave Mayor Bloomberg a warm embrace - and his powerful group's support for mayor's reelection bid.

Michael Forde, the indicted boss of the city's carpenters, is a tough-talking union chief with Teflon skin and friends in high places - and low.

The beefy, $273,000-a-year union chief, born in the Bronx and raised in Queens, was elected head of the 25,000-member District Council of Carpenters in 1999 on the promise he'd clean house after his predecessor was convicted of stealing union money.

He's been in prosecutors' sights ever since.

All the while, politicians have gripped and grinned and kissed Forde's ring in pursuit of his endorsement - and his council's campaign cash.

Six weeks ago, a smiling Mayor Bloomberg embraced Forde, 54, at a rally where he received the group's endorsement.

"I don't know whether any of the charges...are true or not," Bloomberg stammered Wednesday after learning the Manhattan U.S. Attorney indicted Forde on 29 counts of racketeering and bribery.

"I'll leave that to the courts," Bloomberg said.

Among Forde's co-defendants are two mob associates, a mob-linked contractor, and seven union officials.

Nevertheless, the mayor said he was "thrilled" to have the endorsement of the council, which the feds have monitored since 1994 under a decree in another racketeering case.

Hillary Clinton happily accepted the carpenters' endorsement of her Senate run in 2000, four months before the Manhattan DA indicted Forde for taking bribes from mobsters. His conviction was tossed after some jurors admitted reading news accounts of the case. He was acquitted last year in a retrial.

When Clinton left the Senate, the carpenters pushed Caroline Kennedy as her replacement. Kennedy later dropped out.

As probes of Forde rolled forward, politicians continued to hold out their hands - and not just for handshakes.

The group has given out $3 million to politicians since Forde took over. It swelled Gov. Paterson's campaign chest by $40,000. His potential rival, state Attorney General Andrew Cuomo, has taken $61,500, including $10,000 in June. Neither has received a formal endorsement.

The council's largesse is bipartisan. The group endorsed Republican Gov. George Pataki for reelection in 2002 and Democrat Eliot Spitzer in 2006.

In the last 10 years, it has lavished $232,250 on the state Senate Republican campaign committee and $216,000 on the Assembly Democratic committee.

Councilman Bill de Blasio, running for public advocate, has taken $11,200 from the carpenters and Councilwoman Melinda Katz received $4,950.

Former Assemblyman and union leader Brian McLaughlin, got $10,600 in carpenter loot before he was sentenced to 10 years for stealing millions from Little Leaguers, contractors and union members.

And why not? Forde's philosophy is basic: "We are going to work with the people who will work with us," he often said.

The $273,000-a-year union boss, released on $75,000 bond, reported for work yesterday as usual, his lawyer said.

Position Is Uncertain for Indicted Leader of Carpenters’ Union

By WILLIAM K. RASHBAUM

On Thursday, a day after his indictment on federal racketeering and bribery charges, Michael J. Forde, the head of the carpenters’ union in New York City, went to work.

Mr. Forde, who was indicted on state bribery charges in 2000 and tried twice, has never relinquished his position in the union. (The first trial ended in a conviction that was later overturned, and the second in a mistrial.)

Now a lawyer for the union, the New York City District Council of Carpenters and Joiners, which represents 20,000 carpenters, said it was weighing what to do about Mr. Forde’s continued stewardship.

“The matter is under review,” said the lawyer, Gary P. Rothman of O’Dwyer & Bernstein. “Right now he’s not out.”

Mr. Rothman could not say when the union would make a decision on whether Mr. Forde should be suspended, take a leave of absence or remain in his position.Mr. Forde’s lawyer, Andrew M. Lankler, declined to comment.

The union represents one of the largest construction trades in the city, a work force that has long struggled with leadership that prosecutors say has been tainted by mob influence and corruption.

Mr. Forde, who was at a union conference in Nova Scotia on Wednesday when a 29-count indictment was unsealed, flew back to New York to surrender to agents of the F.B.I. and the Department of Labor Inspector General’s Office of Labor Racketeering and Fraud Investigations.

Mr. Forde was charged with, among other crimes, taking bribes and helping contractors avoid paying fees to the union’s various funds, which finance pensions, health care, vacations and other benefits for union members.

At his arraignment on Wednesday afternoon in United States District Court in Manhattan, Mr. Forde, along with nine other defendants, pleaded not guilty.

The assistant United States attorney prosecuting the case, Lisa Zornberg, said that Mr. Forde, 54, tested positive for cocaine and marijuana use. (Of the nine other defendants, seven either tested positive for drugs or admitted using them; two refused the tests, she said.)

The lawyer for the union, Mr. Rothman, said, “I’m sure that Mr. Forde still enjoys a broad base of support from his membership and that people have empathy and sympathy for someone who might have a personal problem.”

The District Council, an umbrella organization comprising 11 carpenter unions in the New York City area, will consult with its parent union, the United Brotherhood of Carpenters and Joiners of America, about how to proceed with Mr. Forde, Mr. Rothman said. “We shouldn’t rush into something without careful consideration,” he added.

The United Brotherhood of Carpenters has a storied place in the history of organized labor. But the New York City District Council has for several decades been tainted by corruption and mob influence, with leaders who routinely sold out their work force for their own gain.

Pocono Residents Named in NYC Union Corruption Indictment

NEW YORK – Two men who reside in the Poconos are named in an a federal indictment charging the head of the Carpenters Union District Council, seven union officials and two others with corruption.

Michael Brennan, 53, of Bushkill and Joseph Ruocco, 49, of East Stroudsburg, are shop stewards of Local 608. Brennan was among several arrested Wednesday. Ruocco remains at large.

They and the others are accused of unlawfully receiving money, loans, or other things of value from contractors, in a total amount of approximately one million dollars. In exchange for the bribes, the defendants allowed and helped certain contractors to defraud the union and its benefit funds out of millions of dollars by permitting the contractors to, among other things, pay union members cash at below-union rates, without benefits; employ illegal aliens and non-union workers on their job sites; and avoid payment to the union benefit funds in violation of applicable CBAs.

Not all of the defendants are named in all of the charges, but Brennan and Ruocco both face 20 years in prison if convicted of some of the crimes they are accused of committing.

Carpenter Bigs Nailed for Bribes

BY Barbara Ross and Brian Kates
DAILY NEWS STAFF WRITERS

The city's top carpenters union official and nine others - including two mob associates - were charged Wednesday with taking $1 million in bribes to let contractors cheat workers of wages and benefits.

Michael Forde, head of the District Council of Carpenters and a major Democratic Party fund-raiser, took bribes for nearly 15 years to let contractors hire undocumented workers and pay some of them below the union rate, prosecutors said. He faces 20 years behind bars, if convicted.

The charges came just six weeks after Mayor Bloomberg hugged Forde at a rally where the 21,000-member district council endorsed him for a third term.

Bloomberg said the indictment was a "surprise" to him.

"It's sad and I don't know whether it's true, but you know, it's the men and women of the carpenters union that have endorsed me, and I'm thrilled to have it. We'll see what the courts say," he said.

Forde delivered the district council's endorsement to Hillary Clinton in her 2000 Senate run, four months before he was indicted for taking bribes from mobsters. He was acquitted in a retrial last year after his earlier conviction was tossed.

Also indicted was Finbar O'Neill, 44, of Paramus, N.J, is accused of delivering the cash payments to Forde, 54, of Queens. O'Neill, a reputed Luchese crime family associate who was sentenced to probation in a money-laundering scheme that led to the conviction of ex-state Sen. Guy Velella (R-Bronx) in 2004.

Joseph Olivieri, director of the Association of Wall-Ceiling and Carpentry Industries, also was charged. Olivieri reputedly has ties to the Genovese crime family.

Also charged were John Greaney, president of Carpenters Local 608; Brian Hayes, Local 608 business agent, and shop stewards Michael Brennan, Brian Carson, Joseph Ruocco, John Stamberger and Michael Vivenzio.

Forde was released on $750,000 bond and ordered to undergo drug testing after testing positive for cocaine and marijuana. Eight other defendants arraigned yesterday were released on bond.

Acting Manhattan U.S. Attorney Lev Dassin said the indictment shows "continuing corrupting at the highest ranks of the union's leadership."

The scheme involved five unnamed crooked contractors. The corrupt union officials let contractors pay carpenters in cash and off the books at below union rates, prosecutors said. The schemers were not above threats of violence. When a contractor worried Greaney might rat them out, prosecutors said, Brennan told him that wouldn't happen.

If it did, Brennan said, "We'd ... have to kill him," according to the indictment.

Carpenters’ Union Chief and 9 Others Indicted in Corruption Inquiry

By William K. Rashbaum

Nearly two decades after the federal authorities moved against New York City’s carpenters’ union to loosen the mob’s grip and end a culture of contractor bribery, they have leveled corruption charges against the union’s leader and nine other union officials and contractors. The charges, announced on Wednesday, include racketeering, bribery, fraud and perjury.

The men were named in a 90-page indictment [pdf] that alleges crimes similar to some set out in a civil racketeering lawsuit that Manhattan prosecutors brought against the union, the New York District Council of Carpenters and Joiners of America, in 1990. That case led to a 1994 consent decree and, years later, a court-appointed corruption monitor; both are still in place, and the charges seem to raise questions about the effectiveness of the current monitor.


The 29-count indictment was unsealed in Federal District Court in Manhattan hours after a predawn roundup in which many of the officials were arrested on their way to work. It charges that in exchange for bribes valued at about $1 million, they helped corrupt contractors steal millions of dollars more from the union and its benefit funds by allowing contractors to pay members cash wages below union scale without benefits, hire illegal aliens and nonunion workers and skip contributions to the union’s benefit funds.

The 21,000-member district council, which oversees 11 locals unions around New York City, has remained not only a major player in the city’s labor movement but also a major force in its politics, despite a history of mob influence, labor racketeering and bribery.

Indeed, just six weeks ago, Mayor Michael R. Bloomberg’s re-election campaign put out a news release announcing that the union had endorsed his bid for a third term.

The release included a video clip showing Michael J. Forde, the district council’s executive secretary-treasurer, who is now indicted, giving the mayor a rousing introduction at a union event and sealing his support for Mr. Bloomberg with a hug.

The federal charges unsealed on Wednesday, a result of a lengthy investigation by Manhattan prosecutors, the F.B.I. and the Department of Labor Inspector General’s Office of Labor Racketeering and Fraud Investigations, were not Mr. Forde’s first brush with such accusations. He and another district council official went to trial on bribery charges involving the union in state court in Manhattan twice in recent years, with the first case ending in a conviction that was later overturned, and the second in acquittal.

Lev. L. Dassin, the acting United States attorney, who announced the charges in a news release, said that the union’s leaders had failed to protect the rank-and-file members they were sworn to represent.

“Instead of protecting the financial interests of union members and their families, corrupt union officials and the contractors who bribed them are charged with betraying the carpenters’ union and its benefit funds to enrich themselves,” he said.

Among the others charged in the new indictment with Mr. Forde and the other union officials was Joseph Olivieri, a benefit funds trustee and executive director of the Association of Wall, Ceiling and Carpentry Industries of New York. F.B.I. reports and law enforcement officials say Mr. Olivieri has a long history of ties to the Genovese crime family, the powerful Mafia clan that for generations has held sway over the union.

But while the indictment makes only passing mention of another Genovese family figure, it does not charge that organized crime wielded any influence over the district council. But several law enforcement officials said the investigation was continuing.

Seven of the 10 defendants were arrested on Wednesday morning, and two remain at large, officials said. Mr. Forde, who several people briefed on the case said was attending a conference in Canada, was said to be returning and was expected to surrender to the federal authorities Wednesday.

“Rather than doing what they were elected to do — safeguarding wages and benefits for union members — they took cash and other bribes to turn a blind eye on contractors’ schemes to cheat the rank and file,” Joseph M. Demarest Jr., the head of the New York F.B.I. office, said in the news release.

Gary Rothman, a lawyer for the District Council, said he was reviewing the indictment. “We understand that the charges are serious, but we also believe in the presumption of innocence and we will have a further statement as the situation becomes clearer,” he said in a brief statement.

The conduct charged in the indictment seems to give credence to criticism expressed by federal prosecutors in recent yeas about the effectiveness of the current court-appointed corruption monitor, known as the independent investigator, who is paid by the union.

Indeed, the Manhattan United States attorney’s office sought to oust the monitor, William P. Callahan, in 2007, saying he investigated fewer corruption cases than his predecessor and calling his work “superficial and incomplete.” But the federal judge overseeing the consent decree, Charles S. Haight Jr., ordered him kept him in place.

In contrast, the work of his predecessor, Walter Mack, a former federal prosecutor who specialized in organized crime cases and later headed the New York Police Department’s Internal Affairs Bureau, won widespread praise for his aggressive approach. Several enforcement officials acknowledge that his work led to some of the charges in Wednesday’s indictment.

But the union, exeercising its option under the consent decree, fired Mr. Mack in 2005, after his two-year term ran out, a decision that was upheld by Judge Haight.

Among other things, the consent decree, which was signed in 1994, barred union officials from associating with organized crime figures and imposed job referral rules, Mr. Mack was appointed under the consent decree in 2002 to investigate wrongdoing in the union, including bribery and off-the-books payment of wages.

In addition to Mr. Forde and Mr. Olivieri, also charged were: John Greaney, the business manager and president of Local 608, the largest local in the district council, and a benefits funds trustee; Brian Hayes, a business agent and officer of Local 608; and Michael Brennan, Brian Carson, Joseph Ruocco, John Stamberger, and Michael Vivenzio, union shop stewards.

Also charged was a contractor, Finbar O’Neill, who is accused of helping to deliver illegal cash payments to Mr. Forde.

Mr. Forde, Mr. Greaney, Mr. Hayes and Mr. Brennan were all charged with racketeering and racketeering conspiracy and other crimes. Mr. O’Neill was charged with racketeering conspiracy, wire fraud and other charges.

Lawyers for the men could not immediately be reached for comment.


Related:
Press release issued by United States Attorney's Office.

• Carpenter bigs nailed for bribes

• LABOR HONCHO IN 'MOB' BU$T

• NYC labor union officials charged in bribery probe

  
  

Carpenters Turn Up the Volume Atlantic Yards

The public hearing Wednesday afternoon on the proposed revisions to the Atlantic Yards project plan was prefaced with a protest staged by Develop Don’t Destroy Brooklyn outside the Klitgord Auditorium at New York City College of Technology on Jay Street. It turned into a pep rally filled with boos and cheers inside once the hearing began.

The gathering was noteworthy for the number of politicians and political hopefuls who turned out to speak against Atlantic Yards. The anti-AY bandwagon seems to be getting more crowded.

“I think the safe political position in these neighborhoods is to be opposed to it,” said DDDB’s Daniel Goldstein, who was later removed by security for heckling pro-Yards Assemblyman Alan Maisel. “It’s a mix of people who are trying to get that crowd, and people who are from that crowd,” he said, but no candidates running in the surrounding districts support the project.

About 75 people attended the hearing at the New York City College of Technology on Jay Street, the second of two days of hearings held by the Empire State Development Commission, which is to vote in September on proposed changes to the original plan.

“I’m not sure exactly what the project will bring, but I am hoping that it will bring jobs to the community for people like me,” said Shiler Gelin, 41, a resident of Canarsie who has been unemployed for two years.

Proposed modifications to the 22-acre, $4.9 billion project include dividing it into phases and extending the time line for construction and for developer Forest City Ratner to pay for the land. The project, if completed as planned, would bring an 18,000-seat sports arena and more than 6,000 units of housing to Brooklyn.

Several union carpenters spoke, including Derrick Taylor, 41, of Carpenters Local 926, who compared the debate over the plans to crabs in a bucket.

“If you have 20 crabs in a bucket, none of them will ever get out because they will naturally pull each other down. This is the crab with buckets, and Ratner is a crab — let him out.” Mr. Taylor said that Ratner is offering the community an opportunity to flourish.

Though outnumbered, those against the Atlantic Yards project also stated their case.

“I think that the plans are filled with delusions of grandeur,” said Bleu Liverpool, 26, a resident of Fort Greene who went on to say that she doesn’t think it will help the community as much as people think.

Here are some highlights from the hearing, held under the auspices of the Empire State Development Corporation, Atlantic Yards’ state sponsor. The hearings continue on Thursday.

In The Opposition Corner

Mayoral Candidates Tony Avella and Rev. Billy Talen; City Council candidates Brad Lander (39th), Evan Thies (33rd), David Pechefsky(39th), Ken Diamondstone (33rd), Ken Baer (33rd), Bob Zuckerman (39th), Josh Skaller (39th) and Doug Biviano (33rd); Norman Siegel, running for Public Advocate; SEIU local 371; Municipal Arts Society; Councilwoman Letitia James; Assemblyman Jim Brennan; State Senator Velmanette Montgomery; activist and sometime-candidate Kevin Powell.

* Assemblyman Brennan testified that the city and state would “never get the money back” that they put into this, citing the arena’s 40-year tax break and up to $300 million in bonded funds for infrastructure costs. “It’s not even a credible proposal,” he said. “The arena isn’t even an economic proposal — it’s a financial loss for the city and the state,” he said. “It’s ridiculous.” The project could be complete by now, he said, “if the state had agreed to undertake a rational project.”

* Councilwoman James declared the near-death of the project. “It’s time to put Atlantic Yards out of its misery,” she said. “The end is near.” She predicted that the ultimate fate of the project would be “the arena, and the arena only, and it will be a fraction of the affordable housing — that’s what [Bruce Ratner] will get away with.”

* Michael Rogers, a writer and journalist from Fort Greene, likened the battle to a terrible “scene” in a dark comedy about the abuse of public money. (He noted he would have set it in China or the Soviet Union.) “We’ve been told fantasy after fantasy,” he said, adding that Forest City Ratner needs, “to describe what’s really going to be built — no fantasies.”

* Rev. Billy Talen (mayoral candidate), called the development “anti-neighborhood” and decried any large development that removed public spaces where people congregate, like “On the stoop. At the bodega. Walking down the street.” He capped his speech with “Changelujah, we will win!”

* Activist and writer Kevin Powell noted the affordability promises were for higher-than-average families, not families headed by single moms, like the one he grew up in. “If you’re making less than $150,000, this is not affordable housing,” he said.

In the Pro-Yards Corner

Assemblyman Alan Maisel; State Senator Marty Golden; Borough Presdient Marty Markowitz; Congressman Edolphus Townes; City Council hopeful Anthony Herbert (41st); Ironworkers Local 580; Carpenters Local 79; Junior’s Restaurant; Downtown Brooklyn Alliance; BUILD; ACORN; New York Building Trades Council; Long Island University; Brooklyn Academy of Music.

* Long Island University’s Annette Fuentes said the arena would be valuable to LIU’s students and, specifically, the school’s sports management program. Echoing a point made by BAM, she said, “The presence of the Atlantic Yards will increase the visiblity of Downtown Brooklyn, which will clearly benefit LIU and the other academic institutions.”

* Junior’s Restaurant’s third-generation owner Alan Rosen noted that his longtime eatery may benefit from the surge of interest in the downtown area. “It will re-establish Downtown Brooklyn as a hub for economic activity large and small.”

* Sal Zarzana of Carpenter’s Local 79 noted that it would provide a good portion of his membership, of which he estimated 2,500 live in Brooklyn, with local construction jobs.

* New York State Assemblyman Alan Maisel called the project “vital for our future” and said those who spoke against it were a small group. “Most of the people that do the complaining are people who are not doing any developing.” Update | 5:58 a.m. DDDB leader Daniel Goldstein took issue with Mr. Maisel’s contention that the opposition was small, calling out that it was the supporters who were in the minority. For this, he was escorted from the premises.

* State Senator Marty Golden thanked Bertha Lewis of ACORN for her advocacy, and said the project promised economic development in what he called an otherwise fallow area. He added that Brooklyn needed the sports team.

* City Council hopeful Tony Herbert advocated for the project to proceed so it could keep local business thriving. He called the arena, “Brooklyn’s very own Madison Square Garden” and urged Brooklynites to “keep our money in Brooklyn and not go spend it in Manhattan. Let’s do it here, let’s keep it here, let’s move it forward.”

* Brownsville high school junior Troynel Andrews, 16, said she looked forward to using the space in the arena for community recreational activities and wanted to see her unemployed family members get work there. “They couldn’t pay me to talk about the arena,” she stated in her testimony, in which she detailed the plight of her aunt on welfare. Later she told The Local she is presently working a paid summer internship for BUILD, the community group leading the hiring efforts with Ratner. She hopes to work for them full time when she’s finished with school.

The hearing continued with an evening session. There will be two more sessions today, from 2 p.m. to 5 p.m. and from 6 p.m. to 8 p.m., at Klitgord Auditorium, 285 Jay Street.

Union Pensions in the Red

Labor chiefs are doing better than the workers.

We’ve all read about underfunded corporate pensions, but here’s an unreported story: Union pensions are even more in the red, and it’s one reason union chiefs are so eager to rig organizing rules to gain more dues-paying members.

Only last week, the country’s largest union local re-opened the contract for its 145,000 members two years early and gave up raises and reduced retirement benefits for future hires. The SEIU’s United Healthcare Workers East struck this unusual deal so employers could instead plug a gaping pension hole.

In April, the SEIU National Industry Pension Fund—which covers some 101,000 rank-and-file members—announced that its pension has been put into what the feds call “critical status,” or “red zone.” In other words, it lacks the cash to pay promised benefits and may have to cut them. As of 2007, the last year for which it reported results to the government, the fund had 74.4% of the assets needed to pay its benefits.

Thirteen of the bigger plans operated for the Teamsters have, together, a mere 59.3% of reserves necessary to cover obligations. Or consider that 26 pension funds at the food workers union, the UFCW, are at 58.7%. Seven locals at the United Brotherhood of Carpenters fare better at 67%. As a rule of thumb the government considers a fund to be “endangered” at below 80%, and in “critical” status at below 65%, and requires them to come up with a plan to get off probation within a decade.

You don’t hear labor leaders touting this kind of performance in their organizing riffs, and not many workers are patient enough to review the Form 5500 filings submitted to the IRS and Department of Labor that track these retirement savings. But the data show a steady decline in recent years that can’t be explained merely by the stock market.

For example, Unite HERE’s National Retirement Fund stood at 115% in 1998 and dropped to 83.4% by 2007, well before the crash. The SEIU fund that was put into a “red zone” in April was at 103.4% as recently as 1998. On average, the asset to liability ration at so-called multi-employer plans, which union funds make up the bulk of, stood at 66% in 2006, according to the Pension Benefit Guaranty Corporation. By contrast, single employer plans, basically most company-provided pensions, were funded at 96%.

Poor management probably deserves a lot of the blame for the union decline, but the exact causes are a mystery. An even bigger mystery is that the unions do a far better job with funds created for their officers and employees than for mere workers. The SEIU Affiliates, Officers and Employees Pension Plan—which covers the staff and bosses at its locals—was funded as of 2007 at 102.2%. The plan for the folks at SEIU international headquarters was funded at 84.8%.

Union officer benefits are also far more generous than anything dues-paying workers enjoy. Consider again the SEIU, probably the country’s most powerful union. Their officers and employees get a yearly 3% cost of living increase, but SEIU members get none; officers qualify for an early pension at 50 or after more than 30 years of service, but workers can’t retire early with a pension; officers qualify for disability retirement after a year’s service, but workers need 10 years. In the land of union retirement, some workers are more equal than others.

We suspect most current union members would be surprised to learn how their leaders are handling their hard-earned retirement money. The 93% of the private workforce that doesn’t belong to a union, but that might have little choice if Big Labor’s agenda becomes law, would be even more interested.

N.Y. Labor Leaders May Drop Support of Paterson

By RAYMOND HERNANDEZ

Leaders of some of New York’s most influential unions are discussing abandoning Gov. David A. Paterson as he prepares to run for a full term next year, a sweeping defection that could prove lethal to his hopes of winning his party’s nomination.

The leaders, who represent a broad cross section of labor groups, expressed concern, in a series of interviews, about whether Mr. Paterson, who has been troubled by low job-approval ratings and a loss of confidence in his ability to tackle the state’s financial problems, can rebound in time for next year’s election.

That such conversations are taking place among a constituency that plays such a crucial role in New York Democratic politics signals the tenuous position that Mr. Paterson finds himself in, particularly as Attorney General Andrew M. Cuomo considers the possibility of challenging him in a Democratic primary next year.

Some labor leaders made it clear that time was running out for Mr. Paterson. Without a dramatic improvement in Mr. Paterson’s standing, they said, many labor groups would rally behind another candidate, possibly Mr. Cuomo.

“Time is his enemy,” said Stephen McInnis, the political director for the New York City District Council of Carpenters, who nonetheless reiterated that his 21,000-member organization still worked very closely with the governor. “He and his guys are going to have to pull this together.”

Arlea J. Igoe, the secretary-treasurer of the Public Employees Federation, a 59,000-member organization whose endorsement is up for grabs, expressed a similar view. “Is he going to be a viable candidate in the future?” Ms. Igoe asked. “The sense right now is that he has a long way to go to come back up.”

Tracy Sefl, a spokeswoman for the Paterson campaign, dismissed the idea that labor leaders would desert the governor next year. “The governor has enjoyed strong labor support in every election he has been in,” she said, referring to his years as a state senator. “And he looks forward to working with labor in the 2010 campaign.”

While labor has long been a critical part of the Democratic coalition, some unions have supported Republicans in the past and may do so again under the right circumstances.

But many labor leaders said in interviews that they were committed to keeping the governorship in Democratic hands and were feeling pressure to act much sooner than normal, and to try diplomatically to get Mr. Paterson out of the way before endorsing someone else.

Many contend that taking overt steps to elevate a strong Democratic candidate for governor as early as this fall might discourage a big-name Republican, like former Mayor Rudolph W. Giuliani, from entering the race. Based on recent surveys, Mr. Paterson would lose badly to Mr. Giuliani, while Mr. Cuomo beats the former mayor.

And underscoring Mr. Paterson’s weakened status, nearly 7 out of 10 voters approved of the job Mr. Cuomo was doing as the state’s top law enforcement official, while only 3 out of 10 approved of Mr. Paterson’s performance, according to a poll in late May and early June by The New York Times, Cornell University and New York 1 News.

The possible abandonment of Mr. Paterson by some labor leaders reflects a larger anxiety among Democrats, not just over their chances of maintaining control of the governor’s mansion, but also over the prospect that his problems will hurt other Democratic candidates on the ballot in 2010.

One powerful labor official said he felt it was a matter of time before leaders in the party asked Mr. Paterson directly to step aside for the sake of the party.

“There will be pressures from many quarters, not just labor,” said the official, who did not want to be identified for fear of antagonizing the governor. “Nobody wants a failed Democratic Party in New York — or a Republican governor.”

The power that labor unions have in city and state politics stems from the resources that they can bring on behalf of a candidate or party. The groups can crank out mass mailings, deploy legions of campaign volunteers, set up phone banks and organize rallies — all without any direct cost to the candidates they back.

Labor has also shown itself to be pragmatic. Although former Gov. George E. Pataki was a Republican, many unions either remained neutral or supported him in his 1998 and 2002 re-election efforts, calculating that it was pointless to declare war on a popular incumbent who was favored to win both elections.

This time around, even union officials who defended Mr. Paterson did so in surprisingly measured language.

“I think it’s much too early to write off David Paterson,” said Randi Weingarten, president of the American Federation of Teachers, who recently announced that she is stepping down as president of its New York City local, the United Federation of Teachers, and is perhaps the governor’s best union ally.

Asked directly if Mr. Paterson should step aside in order to potentially pave the way for Mr. Cuomo, Denis M. Hughes, the president of the 2.5 million-member New York State A.F.L.-C.I.O., responded simply, “I don’t know.”

Since taking office in March 2008, Mr. Paterson has spent much of his time in heated battles with union leaders, most recently over his efforts to reduce pension benefits for public employees. The bitterness is a stark reversal from Mr. Paterson’s days as a senator, when he and labor enjoyed a warm relationship.

Relations with the governor have become so damaged, in fact, that Richard C. Iannuzzi, president of New York State United Teachers, said the 600,000-member union’s endorsement was still up in the air. “There’s no question that the governor needs to re-establish a record that shows a commitment to labor,” he said.

Any chance for Mr. Paterson to turn things around was severely hampered, labor officials said, by the power struggle in the Senate, which dragged on for more than a month and re-enforced the perception that the governor is too weak to take control of the agenda in Albany.

Mr. Paterson sought to take control of the Senate impasse by appointing Richard Ravitch, a former chairman of the Metropolitan Transportation Authority, to the vacant lieutenant governor’s position, which could allow him to cast the tie-breaking vote.

But the deadlock in the Senate ended when Pedro Espada Jr., who had allied himself with the Republicans, returned to the Democrats, giving them a 32-to-30 majority.

Now Mr. Ravitch’s role is unclear, after a State Supreme Court issued a preliminary injunction on Tuesday blocking him from carrying out the duties of the office.

Ms. Igoe, of the Public Employees Federation, said the “debacle in the Senate is not helping him at all.”

Carpenters Union Agrees on Pay Cuts

by Matthew Schuerman

NEW YORK, NY June 26, 2009 —Thousands of the city's unionized construction workers have agreed to accept lower wages for the promise of more work. The latest concession goes further than a labor agreement from last month that froze wages and limited overtime.

The Building and Construction Trades Council wouldn't give out any information before deadline on which unions would be affected, but WNYC's Matthew Schuerman has details on one union.

REPORTER: Union officials confirmed that the 21,000 member carpenters union has reduced hourly wages from about $43 to $41, and taken an additional $2 hit off of their benefits package.

The lower wages only apply to a handful of projects that were in danger of stalling. One example is Frank Gehry's Beekman Tower in Lower Manhattan, where developer Forest City Ratner was even contemplating building only half of the original height.

Other trade unions say they will take similar action if it means preserving their members jobs.

CARPENTERS UNION ENDORSES BLOOMBERG FOR MAYOR

Looks like they're coming out of the woodwork to support Mayor Bloomberg.

The New York City District Council of Carpenters, which has over 25,000 members, announced this morning that it is endorsing Bloomberg for re-election this November.

"Mayor Bloomberg has the skill and experience to lead New York City through difficult times," Michael Forde, the union's Executive Secretary Treasurer said in a statement.

"Over the last four years, Mayor Bloomberg has been a fighter in our corner. He has made job creation ... a priority issue, and because of that, members of the carpenters' union -- and their families -- have been able to weather this difficult economy far better than our counterparts in other parts of the country."

Judge Finds District Council in Contempt - Request System Abolished

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED, as follows:

1. The District Council and Peter Thomassen, its president, are adjudge and held in contempt of this court for violating the 1994 Consent Decree by bargaining away the job referral rules.

2. The current Request System, under which contractors have the unfettered right to "request" anyone they want from the out-of-work list, is abolished.

3. Allow the contractor to select particular carpenters for a job up to but not in excess of 67 percent of the total carpenter work force. That percentage is made up of the contractor's 50 percent under the 50/50 Rule, and an additional 17 percent, representing one-third of, and to count against, the Union's 50 percent. The remaining 33 percent of the carpenter work force will be assigned by the Union from the OWL.

4. Restore the six-month provision contained in Job Referral Rule 5(B), so that a contractor cannot request a carpenter and have that carpenter count against the Union's 50 percent unless that carpenter has been employed by that contractor during the previous six months. But under no circumstances may carpenters chosen under Rule 5(B) count against the 33 percent assigned by the Union directly from the OWL.

This resolution is fair and equitable because it recognizes contractors' economic and competitive concerns by allowing them to select most of the carpenter work force on any particular project, while restoring the Out-of-Work List as a meaningful source of employment for carpenters seeking work.

To read judge Haight's full order below.

District Council Remedy Order-1(2)

Related:

History Lesson 101.

Memorandum click here.

Union Members Don’t Even Trust Union

by Publius

The New York City carpenters union has been in trouble with the law for many decades. Organized-crime has been endemic with the union for a long time and union chief after union chief has gone to jail over the ties and other corruption. Even shop stewards have gotten into the corruption game with four recently convicted on charges of fraud, conspiracy or bribetaking.

It’s so bad that even the rank-and-file member doesn’t trust the union to legally carry out union business. That distrust was seen again recently with a dispute arising between union members and union leadership over a plan to withhold quarterly benefit checks from members that refuse to sign away greater power to union officials who want to fine members that refuse to fall into line.

The union has a convoluted scheme of taking workers’ vacation pay and placing it in a welfare fund to provide life insurance, hospitalization, medial care, pension and vacation benefits to members. Instead of receiving vacation pay upon returning from a vacation, members are disbursed a quarterly vacation fund check each year. It happened that union chiefs wanted members to sign authorization cards to allow the union to fine any members found not paying into the welfare fund by working jobs off the books.

Many union members, however, are refusing to sign the cards giving the union power to take unspecified and vague “fines” out of their pay.

“That card was a threat,” said a carpenter who agreed to be interviewed this month only on condition of anonymity because he said he feared retribution. “It was like signing a blank check to let them take out whatever they want, whenever they want.”

Since many union members were either reluctantly signing or refusing to sign the cards, the union leaders upped the ante by halting benefit payments to any member that wouldn’t sign the card.

The dispute escalated in March, when the union’s welfare fund trustees voted to stop sending vacation-pay disbursements to anyone who had not signed the authorization card, infuriating rank-and-file members.

The legal basis for withholding vacation-fund payments is unclear. The fund’s trustees, comprising five union officials and five employer representatives, voted to stop distributing vacation checks without seeking the consent of the fund’s lawyers, said Stuart GraBois, the welfare fund’s executive director.

Yet, these same leaders that have repeatedly been thrown in jail for cheating the union, stealing union funds, working with the Mob, and any manner of other corrupt practices are claiming the moral standing to fine members for working jobs off the books? It’s these thug union bigwigs that members fear giving the power to begin “fining” members without defined restrictions on what those fines are for. Many members rightly fear that the power once given to the union chiefs will later be misused for any and every reason that those union leaders can imagine.

But, this incident really does show what a union is made of. It proves pretty starkly that union “leaders” don’t care a whit about what the workers want. Even worse, if shows that the workers themselves are afraid of the union itself. These workers are afraid of “retribution” from the leader’s thug armies and from the union’s scorched earth practices.

What sort of “voluntary” organization is it where the members are afraid of the very organization that claims to be speaking for them? Unfortunately, this is the ultimately logical end of any powerful union effort. Eventually, given enough power, all unions end up treating friend and foe alike in an effort to increase its own power.

New Fines Pit Carpenters Against Union Leaders

By PAUL von ZIELBAUER

The union representing New York City carpenters, one of the area’s largest construction trades, continues to be roiled by turmoil after years of investigations into corruption and organized-crime influence and, since 2007, the federal convictions of four shop stewards for fraud, conspiracy or bribetaking.

The latest dispute has pitted many carpenters against the union leadership over a plan to withhold quarterly benefits checks from workers who refuse to grant the trustees of their welfare fund a new power to levy fines against them.

Leaders of the union, the District Council of Carpenters and Joiners, say the fines are necessary to deter carpenters from working off the books. Many carpenters say they are reluctant to give the union additional, and vaguely outlined, authority to fine workers.

The increasingly bitter dispute began last summer, after carpenters, joiners, timber workers and other union members were asked by the welfare fund trustees to sign a deduction-authorization card that would allow fund administrators to levy new but unspecified “fines or penalties” on workers’ accrued vacation pay.

The welfare fund provides life insurance, hospitalization, medical care, pension and vacation benefits to union members.

Vacation pay is contributed by employers. Workers pay taxes on the money, but they authorize the welfare fund to collect and to disburse it to them four times a year.

Union leaders tried to calm the waters in October with a letter explaining that the new fines or penalties were meant to deter “cash hounds” — members who illegally work for cash. Still, many members declined to sign the cards out of distrust of the trustees, a panel that includes employers’ representatives as well as the union’s top elected leadership, carpenters said.

“That card was a threat,” said a carpenter who agreed to be interviewed this month only on condition of anonymity because he said he feared retribution. “It was like signing a blank check to let them take out whatever they want, whenever they want.”

About 1,000 of the union’s 18,000 or so working members have not signed the card, a lawyer for the union said on Thursday. Many others signed it reluctantly, several union members said, because they needed the thousands of dollars that accrue each quarter.

“The average guy in this business has a family; he counts on the income from that vacation fund,” said Michael Power, 37, a carpenter and 19-year union member who has refused to sign. “I talked to a lot of guys who said they feel cornered. They didn’t want to sign the card, but they felt like they had no choice.”

The dispute escalated in March, when the union’s welfare fund trustees voted to stop sending vacation-pay disbursements to anyone who had not signed the authorization card, infuriating rank-and-file members.

The legal basis for withholding vacation-fund payments is unclear. The fund’s trustees, comprising five union officials and five employer representatives, voted to stop distributing vacation checks without seeking the consent of the fund’s lawyers, said Stuart GraBois, the welfare fund’s executive director.

Gary Rothman, a lawyer for the carpenters’ union, said, “Trustees have the authority to make reasonable rules as to the distribution of those benefits.” But Mr. Rothman added that since they voted to withhold the checks, the trustees have asked for a legal opinion, to be given at the next trustees’ meeting, on May 14.

Many union members say they have good cause to resist their leaders. Since October 2007, four union officials have been convicted of either taking illegal payments from union employers or cheating their own union’s benefit funds. The carpenters’ union has operated under federal court supervision since 1994.

Herman Benson, the founder of the Association for Union Democracy, a nonpartisan advocacy group based in Brooklyn, said the union leadership’s idea to withhold vacation pay was troubling.

“There’s something particularly outrageous about it, because the money that they’re withholding is not theirs; it’s the workers’,” Mr. Benson said.

See below for more... Blue Card Letters

Carpenter Outrage Over Blue Card Signing

Douglas J.McCarron
Carpenters National Headquarters
101 Constitution Avenue NW
Washington, DC 20001


Dear Douglas J. McCarron,

I’m writing you today to report unfair labor practices by the NYCDCC and its fund manager. The NYCDCC is withholding monies that belongs to the rank and file members who refuse to sign their blue card (a card that lacks transparency) and agreeing to assessments/or fines or penalties as designated, or as hereafter designated by the NYCDCC and their Local Unions.

The NYCDCC grossly violated their fiduciary responsibilities toward its members when they resulted to extortion to get us to accept an unpopular policy that they imposed on us from their board of trustees. Also our title I (Landrum – Griffin Act) rights may have been violated as well.

This is why a dictatorship within our Union does not work for the Carpenters best interest. It doesn’t work for our own federal government (we have the Executive, the Legislative and the Judicial) and it doesn’t work for our Union as well. Our forefathers set up the way that we are governed to keep our government honest; therefore they created a system of checks and balances. Our leadership is not greater than that of our country, therefore the NYCDCC should not be allowed to rule with an iron fist to impose policy on its membership without first giving us the opportunity to accept or reject whatever they are purposing.

We the rank and file members of the NYCDCC have a right to a democratic union and a right to have a leadership to work for our best interest according to the Union bill of rights under title I of the LMRDA. I purpose, that a letter be sent to every member of the NYCDCC in good standing, to inform them of a secret ballot vote to see if they want the right to vote on rates of dues, fees and assessments, as well as the right to accept or reject collective bargaining agreements that are negotiated by the board of trustees. Mr. McCarron, our trustees simply cannot be allowed to impose policy on its membership without conferring with its membership for approval. This fiduciary malfeasance has got to stop now.

Peter J. McGuire, a man whom the UBC models itself after, sums it up best when he said: “We organize to assist each other to secure employment for mutual aid in case of sickness or disability, to protect each other’s rights and redress our wrongs, to obtain adequate legislation that will secure our wages from the unscrupulous sharks that infest our trade…”

We the rank and file members of the NYCDCC are not mindless drones Mr. President, we want a voice in our union and a change in the way we are governed; I’m sure a man of your position will champion our cause and right our wrongs. Please Google and monitor this online petition: “Carpenters unite against unfair labor practices by the NYCDCC.”

This ongoing petition represents the rank and file members who want change in the way that we are governed, and a true democratic union amongst other things. Thank you in advance for your consideration and what I hope to be a satisfactory support in rectifying this matter.


Respectfully,

Sheldon Johnson


CC:
NLRB
OLMS
United States Department of Justice
New York State Attorney General
New York City District Attorney Office
U.S. Senate Committee on Health, Education, Labor & Pensions
Rep. Jerrold Nadler
Assembly member, Deborah J. Glick
Assembly member, Richard N. Gottfried
Mayor Michael R. Bloomberg
Governor David A. Paterson
Rank & File Members of the NYCDCC
Various Media Outlets
Board of trustees of the NYCDCC

Construction Unions Agree To Cut Labor Costs

By Theresa Agovino

After six months of discussions, building contractors and unions have reached an agreement to slice labor costs. The problem is that developers estimate the deal will only save them no more than 15%—far less than the 25% they had sought when negotiations began.

Developers had hoped lower labor costs would help bring down a project’s total price tag, making financing easier to achieve amid the credit crunch and recession. Labor accounts for 45% to 60% of a project’s costs. But there are doubts about whether the negotiated cuts go deep enough to make a difference in getting new or stalled projects off the ground.

“It doesn’t seem to go far enough to deal with the problems of today,” says Steven Spinola, president of the Real Estate Board of New York.

The contractors and unions are expected to present a deal that they say will lower costs between 15% and 20%. Developers, however, estimate the savings will only total between 8% and 15%.

“You don’t know how big the savings will be until you bid out the contract,” says Mr. Spinola.

The vast majority of the savings stem from efficiencies from work rule changes, sources say. Unions have agreed to work an eight instead of a seven hour day. They have also agreed to honor a common list of holidays. However, sources said there are few if any wage or benefit concessions.

Many unions were unwilling to take pay or benefit cuts because their members are still working even though construction activity has slowed as projects are completed and there is a dearth of new ones to replace them. Some wondered why unions weren’t more flexible in the face of a dim employment outlook and a real threat from nonunion labor.

For example, the New York Building Congress, a trade group, reported that residential building permits in the first two months of the year reached 576 units in 133 buildings citywide. That is just 20% of the total reached in the same period in 2008 when permits were issued for 2,878 units in 344 buildings. Those figures represent just 13% of the total during the same time frame of 2007, when permits were issued for 4,476 units in 621 buildings throughout the five boroughs.

However, corralling the unions is difficult. The deal covers 25 different unions with 72 different labor agreements. Few of the union leaders were willing to step up and cut their members’ pay without real assurances their sacrifices would lead to more jobs, sources said.

Developers were also disappointed that the agreement won’t be automatically applied across the board. Sources say that instead developers will have to apply to have their project covered by the new work rules. One source says the owners of 14 developments have made applications and that requests will be granted depending on whether the unions believe their concessions will really benefit the project.

The timing of the announcement by the contractors and the unions is still being worked out. Local union officials had traveled to Washington D.C. in recent weeks to have their national organizations sign off on the deal but it is unclear if it has the official okay. Additionally, unions, contractors and developers would like Mayor Michael Bloomberg to attend the press conference they are planning to announce the deal. That means waiting for the Mayor to fit the event into his schedule.

A spokesman for the mayor had no immediate comment. Louis Coletti, president of the Building Trades Employers’ Association didn’t return a call and a spokesman for Gary La Barbera, president of the Building and Construction Trades Council of Greater New York, an alliance of union, declined comment.

In the past, Mr. Coletti has said there are roughly $4 billion to $5 billion worth of construction projects that have been stalled or haven’t started in recent months because of difficulties in obtaining financing. He has said that union concessions could help spur at least some of them forward.

However, building costs are falling even without labor concessions. Construction costs across the city have fallen anywhere from 5% to 15% since just last summer as prices for everything from structural steel to plumbing subcontractors sag along with demand.

Construction Industry Partnership Addresses Threats to Union Construction

Union World Edition: Mar 2009

Developers, owners, labor and management attending the Construction Industry Partnership Conference held in Hollywood, Florida, February 9th & 10th participate in the panel, “What will unionized construction in NYC look like in 2009?.” Moderating the discussion is NYS Building and Construction Trades Council, AFL-CIO President Ed Malloy. Participating in the panel is Local 3 Business Manager Christopher Erikson (4th from right).

At a contentious meeting of the Construction Industry Partnership (CIP) held February 9th & 10th, parties from labor, management and developers openly discussed a plan to combat the threats to unionized construction in New York City.

The event opened discussions regarding the effect the economic downturn has had on the construction industry in New York City and the projects that are threatened. Among the keynote speakers was Larry Silverstein, developer of Ground Zero. He outlined the difficulties being confronted by developers and the need to work together to overcome the economics of development so that construction can continue at Ground Zero and other areas throughout New York.

According to Silverstein, 10,000 construction jobs are in jeopardy at Ground Zero alone. At 7 World Trade Center, 3,000 workers were involved in its construction. “It was the last to fall and the first to be rebuilt,” boasted Silverstein, “however, we need to insure that all of Ground Zero is rebuilt in a timely fashion. It is projected 60,000 families live in downtown Manhattan. The area needs new office space for when the economy rebounds.”

Silverstein estimates that Tower 2 will consist of 3.1 million square feet of space and that Tower 3 at an estimated 1,100 feet tall will consist of 2.9 million square feet and Tower 4 at 975 feet will consist of 2.5 million square feet. “Each will connect with the Fulton Street Transportation Hub,” stated Silverstein.

The construction of Towers 2, 3, and 4 remain at risk according to Silverstein. Funding is drying up due to the economic downturn and slow progress on the public infrastructure is causing cost increases. “Billions needs to be borrowed in order to build; banks are not financing WTC projects. Projected rents are down 30 to 40% which cause banks to reevaluate the terms of their loans to developers,” stated Silverstein.

“We need to reestablish the bottom line on labor costs for banks to be willing to lend. Failure to produce a cost structure will result in not being able to build these jobs. I have been a union builder my entire life,” declared Silverstein. “Presently, Towers 2 & 3 are stopped and Tower 4 is about to stop. We need to work together to obtain whatever cost savings are necessary in order for the financing numbers to work so that the banks will lend to developers in NY.”

NY & NJ Port Authority Executive Director Chris Ward addressed the conference and reiterated many of the concerns ­expressed by Larry Silverstein. He also ­committed the PA to utilizing Building and Construction Trades affiliated workers on all PA work.

Developer Albert Kalimian expressed his need for $120 million in savings to complete the interior of his project at the former Red Cross Building on Amsterdam Avenue with union workers. The veiled threat to go non-union was met with much opposition by participants of the Conference. Many union officials objected to such veiled threats to go non-union as anti-productive at developing the necessary cooperation to combat the effects of the economic downturn.

Panel

One panel entitled, “What will unionized construction in NYC look like in 2009?” brought many of the issues confronting the industry to the front. The panel was moderated by Ed Malloy, president of the NYS Building and Construction Trades and included Local 3 Business Manager Christopher Erikson, ­Executive Director of the General Contractors Association Denise Richardson, Executive Director of the District Council of ­Carpenters Mike Forde, Building Contractors Association President Steve Alessio, Plumbers Local 1 Business Manager George Riley and General ­Counsel Building Contractors Association of NY Ray McGuire.

Local 3 Business Manager Christopher Erikson (center) along with Executive Director of the District Council of Carpenters Mike Forde (left) and Steve Allessio, President of the Building Contractors Association, participating in the panel “What will unionized construction in NYC look like in 2009?”

The panel at times had heated discussions regarding the present circumstances the building trades are confronting regarding the demands of employers and developers for a 25% cost reduction.

Denise Richardson reported that the general contractors she represents are presently busy but that work is scheduled to finish within a year and that projected work has dropped off significantly. She pointed out that out of the Federal stimulus package, only $3 billion is going to New York State with less than $1 billion to New York City. Eighty percent of her members’ work is government funded and that it is questionable, with the loss of tax revenue, if infrastructure work presently projected will go forward.

Business Manager Erikson pointed out to those in attendance that unlike many of those present who have not experienced unemployment recently, Local 3’s members have not experienced full employment since the terrorist attack on the World Trade Center. “We have a furlough program that shares the work opportunity among our membership. Our members are more productive than at any time in our history. He reminded everyone that the union cannot create the work yet we are being asked to do just that today by imposing upon ourselves up to 25% reductions in our costs. Perhaps rather than an across the board PLA, we need to pick one project and develop a PLA that will make it a success and then use that as a prototype for ensuring the success of other projects.

Steve Alessio stated that unless he sees a change he will not be present next year. “I will no longer walk away from the $100 million of work that was lost to non-union in 2008. I will use open shop if I must to stay in business.”

George Riley of the Plumbers Local 1 was optimistic, stating “that by working together we can and will meet the challenge. We can’t just agree to wage cuts and other adjustments. The Union movement is a democratic movement which requires the assent and cooperation of our members. Change takes time. We are all willing to embrace new construction techniques, technology and increased organizing activities to confront the present threat.”

Ray McGuire of BCA, unlike Riley, was pessimistic citing historical trends that indicate trade unions in decline. In response, Local 3 Business Manager Erikson stated over the last eight years his members have worked over 20 million man-hours annually and he finds it difficult to believe that there is an additional 20 million-man hours annually being performed non-union.

Developer Larry Silverstein addressed the participants of the CIP Conference.

Commitment to PLA

On the second day of the Conference the leadership of labor, management and developers announced they are committed to working together to confront the challenges expressed during the previous day. The tone changed markedly to one of mutual cooperation to overcome the present obstacles.

Announced by all was the intent to select six (6) projects presently threatened, to go forward and develop a project labor agreement that would hopefully become a prototype for a city-wide PLA for threatened projects.

Gary LaBarbara, president of the New York City Building and Construction Trades Council (BCTC) and Lou Colletti, executive director of the Building Trades Employers Association (BTEA) committed their organizations to work in cooperation in ­developing the project labor agreement.

Denis Hughes, president of the New York State AFL-CIO outlined the situation in his address. “We are in difficult economic times. We must make meaningful accommodations to succeed. I would suggest the industry identify 4 to 6 projects where financing is threatened, where a PLA could be agreed to by the end of February 2009 and become the prototype for future projects in need of help.

In addition the BCTC and BTEA must commit to one another their intention to work together and eliminate any lack of trust that may exist that one is not as committed as the other.
We should adopt a code of excellence that will build confidence among the developers, lenders and customers in their usage of BCTC and BTEA members.

We must insure that non-productive work practices will not be tolerated. Non-productive workers will be pressured by their peers and urged to be productive.”

Lou Colletti stated that “survival is what is at stake. Our world is collapsing; we have no new work! If we have no work there is no work for our Union partners to work on. We must take drastic action in order to survive. The demands being made for cost reduction is not coming from the employers of union labor but from the banks. As Larry Silverstein stated, banks are not lending monies to developers/builders. Equity in property is less than the financing needs on new projects and banks are looking to take back funding on existing projects due to re-evaluation of the original financing commitments. Labor equals 50% of total cost of construction and some relief must come from that sector of the industry.”

Local 3 Assistant Business Manager Raymond Melville poses a question to NY&NJ Port Authority Executive Director Chris Ward at the CIP Conference.

“There are no guarantees,” stated Colletti, “The contractors are not making the decisions, the banks are. In response to the concern that only union labor is taking the brunt of the cost reduction it is important that everyone understand that contractors have laid off 10 to 15% of their project managers and support personnel. Profit margins have evaporated and no longer exist. Many projects are done at cost. Contractors have forgone salaries and those who remain employed have seen their wages frozen, salaries reduced and reduced contributions to 401(k) plans.

The problems being confronted are industry-wide and industry-wide solutions must be developed. The commitment to a PLA to address the needs of the industry is the first step in the right direction.”

Alan Keyes: Stop Obama or U.S. will Cease to Exist

Strikebreakers

Deal to Cut Costs Is Close For Builders and Unions

By CHARLES V. BAGLI

Reeling from the real estate downturn in the city, construction unions and builders are edging closer to an agreement that they say will reduce labor costs and enable at least some of their projects in Manhattan to proceed despite the weak economy.

The stakes are high for both sides. Developers, who paid record-breaking prices for land during the boom years, are now desperately seeking ways to cut their costs and keep projects alive.

The unions, in turn, are eager to keep their members employed and to retain their traditional dominance over large-scale projects in New York. Yet many are reluctant to give up hard-won wages and benefits.

Some construction managers and union officials involved in the negotiations say that the pending agreement on work rules, wages and benefits would cut labor costs by 15 to 20 percent, but not the 25 percent originally sought by builders. Many involved are loath to discuss it publicly for fear of blowing up the fragile talks with the union construction trades, all of which are covered by contracts. The carpenters and the electricians have been much more willing to bend, union officials and contractors say, than the steamfitters and the operating engineers, the highly paid operators of cranes, bulldozers and other heavy equipment.

Some developers, however, are skeptical that any agreement will translate into substantial savings. Some doubt whether even a 25 percent reduction would be enough to salvage a residential project when rents have dropped by a third or more.

“A lot of my developers are concerned that it doesn’t go far enough,” Steven Spinola, president of the Real Estate Board of New York, said of the proposed agreement. “But we’re grateful discussions are taking place.”

Among the developers pushing for a deal are Larry Silverstein, who is building at ground zero, Stephen M. Ross, who has a slow-moving project on 42nd Street at 10th Avenue, and the Milstein family, which has a project under way at Battery Park City.

The three people at the center of the negotiations — Raymond G. McGuire, president of the Contractors Association of New York, Louis J. Coletti, president of the Building Trades Employers Association, and Gary La Barbera, president of the Building and Construction Trades Council of Greater New York, an alliance of unions (replacing Edward J. Malloy) — did not return calls requesting comment.

“Industry leaders,” said James A. Parrott, chief economist at the union-supported Fiscal Policy Institute, “should be seeking help from Washington to retain construction jobs and maintain wages, benefits and safety standards.”

“Our national economic recovery depends on labor and management working together to expand and not weaken the middle class,” he said.

Construction employment in New York City climbed to roughly 130,000 during the boom years. But a report by the New York Building Congress predicts that that number could fall by 23 percent to 100,000 next year.

Nonunion projects are showing up in what has been a union bastion: Manhattan. The Atlantic Development Group is putting up an 89-unit apartment house at 10th Avenue and 23rd Street in Chelsea with nonunion contractors. And at a union job on the Upper West Side, the Chetrit Group and Stellar Management took the highly unusual step of asking contractors for new bids on three 15-story buildings already under construction on Columbus Avenue, between 97th and 100th Streets. Developers and union officials expect nonunion contractors to take over the project.

“Our main goal was to continue with the project and keep as many people working as possible,” said Jeff Gdanski, a vice president at the Chetrit Group.

Bruce Ratner, a developer who traditionally builds with union contractors, recently stopped at the 38th floor of his planned 76-story Beekman Tower in Lower Manhattan, threatening to cap the building at 40 stories if construction unions did not accept concessions on wages and work rules.

Mr. Ratner, who is not involved in the current negotiations, stopped work for three months early last year while he scrambled to obtain $680 million in construction financing. At that time, he decided to switch from condominiums to rentals. In another cost-cutting move, he modified the design by the architect Frank Gehry, using a standard curtain wall instead of one that would seem to be undulating, on one of the tower’s eight sides.

It was not so long ago that major Manhattan developers and their lenders worried little about these things, figuring that rents and sale prices would gallop well ahead of the surging cost of land, concrete and steel.

But the cityscape is now littered with half-finished towers that have run into financial problems. Construction managers say that developers are stuck with land costs of $400 a square foot or more, up from $200 five years ago.

In January, developers and construction managers who often use union contractors began talking about a citywide agreement on wages, work rules and benefits. Developers and managers say they prefer union contractors, despite their higher wages, because they provide highly skilled workers.

“This year is not too bad,” said one union official who insisted on anonymity because he was not supposed to discuss the talks. “But 2010 is looking like we’re going off the ledge.”

But many unions have balked at wage cuts, particularly those who have not suffered layoffs, like cement workers and operating engineers. Some contractors have also questioned the value of the concessions that some unions have agreed upon, even ones that have been verified by consultants. There was talk of a compromise for a select group of six projects, including those owned by Mr. Ross, Mr. Silverstein and the Milstein family.

Executives and labor officials who have been briefed on the latest discussions say the unions may agree to consider projects on a “case-by-case” basis for a special “project labor agreement” that would save developers whose projects are otherwise not viable up to 20 percent on the current labor contracts.