Shake-up in Leaders of Union for Carpenters

By Matt Glynn

Financial fallout from the Bernard L. Madoff investment scandal has resulted in a leadership shake-up at a statewide unionized-carpenters organization that lost money in the Ponzi scheme.

The United Brotherhood of Carpenters, based in Washington, D. C., has placed the statewide organization, the Empire State Regional Council of Carpenters, under supervision.

The UBC said its investigation continues into how losses stemming from the Madoff scandal were allocated to members of the Empire Council and what can be done for individual carpenters who have felt the financial impact.

Among several changes, it removed Patrick B. Morin as the Empire Council’s executive secretary and treasurer, and appointed the UBC’s Eastern District vice president, Frank Spencer, to supervise the council.

The UBC in late March held closed-door hearings in Albany on allegations that the Empire Council unfairly burdened its upstate members with millions of dollars in investment losses stemming from Madoff’s Ponzi scheme. An investment adviser working with the Empire Council had placed money with Madoff.

The total losses to the Empire Council’s pension, annuity and health funds were estimated at more than $160 million.

Controversy erupted over how those losses were distributed. Upstate members complained they were disproportionately saddled with the losses, even though Upstate New York Carpenters’ annuity, pension and health funds had been merged with the Empire Council’s funds before the fraud

was uncovered.

The Empire Council says it has 15,000 members in a statewide territory that excludes New York City. Its affiliates include Cheektowaga-based Local 289, which has 1,400 members.

“I want every Carpenters member throughout the state to know that we understand the devastating financial impact that this situation has had on them and their families,” Spencer said. “We are exploring every avenue possible in getting this resolved.”

Along with Morin’s removal, all labor trustees of the Empire funds were removed, and the Empire Council’s executive board was dissolved, said Scott Widmeyer, a UBC spokesman. The law firm representing the Empire Council was removed and replaced by a firm that works with the UBC.

Widmeyer said the changes at the Empire Council were enacted “because of the inappropriate nature of what developed with respect to the Empire Council and its trust funds.”

As for what might be done about unionized workers’ diminished pension, annuity and health funds, Widmeyer said work continues on that issue.

Additional teams of actuaries and accountants have been brought in to take a “deeper look” at the situation and explore potential solutions, he said. “The analysis and the investigating is ongoing,” he added.