UNION LEADERS' EXTRAVAGANCE LAID BARE
Rick Ouston
21 October 1998
Union dues from some of Vancouver's poorest-paid union members were squandered by leaders of the Hotel Employees and
Restaurant Employees International Union, a U.S. investigation has found.
The money, collected from the 12,000 union members in the
Vancouver local and 230,000 other members throughout North America wound up paying for a
fleet of Cadillacs for union bosses, a private jet for the union's former president and
questionable payments to consultants and organizers who apparently neither consulted nor
organized.
The report was prepared by former U.S. federal
prosecutor Kurt Muellenberg, who said in an interview from Washington,
D.C., that it wasn't feasible to send copies of his 85-page report to all union members.
But he said he asked all locals to inform their membership about his findings.
"I can't force anyone in Canada to do anything,"
Muellenberg said, adding that his office has received at least one call from a concerned
Vancouver union member who was trying to learn the report's contents.
Nick Worhaug, president of Local 40 of the Hotel,
Restaurant and Culinary Employees' and Bartenders' Union and a vice president of the
international union, said the report has not been posted in his Burnaby office.
"No one has asked me, Local 40, for a copy of the
report," he said. "If somebody comes to me and says they want a copy of the
report, they're quite welcome to have it."
The report found union leaders paid themselves extra for attending
conventions -- Worhaug received a $2,500 "allowance" for attending a board
meeting in 1996 -- allotting $478,150 US in allowances during fiscal
1996-97. But Worhaug said the extra money should just be viewed as part of his over-all
remuneration.
Documents filed with the U.S. department of labour showed Worhaug
received an extra $49,480 US in 1996 in salary, allowances and travel expenses for his
role as vice-president of the international union. That was on top of his $80,000 Canadian
salary.
The results of Muellenberg's three-year investigation were made
public in the U.S. last month.
The report led to the resignations of more than a dozen top union
leaders, several of whom were determined to be tied to organized crime rings, although it
makes no mention of any criminal ties in Canada.
Muellenberg noted that Vancouver union members pay an average of
about $20 in monthly union dues, $10 of which goes to the international union, whose
officers are based in Chicago and Washington.
The dues are collected mostly from low-level
hotel, resort and restaurant employees -- some of whom are paid little more than the
minimum wage.
But instead of being spent on union business, the
report found, the money was used to pay for such things as a luxury condominium in
Washington for the exclusive use of then president Edward
Hanley and his family, a $3-million private jet for Hanley's use,
"consultants" who performed little or no work, and union "organizers"
who received salaries but do not appear to have done much, if any, organizing.
There was a fleet of Cadillacs for union bosses
and a $100,000 motor home parked near Hanley's house.
Hanley and his personally- appointed union leaders spent union
funds on lavish travel, union-issued credit cards, entertainment and
seemingly artificial jobs for friends, family members, politicians and people associated
with organized crime.
Hanley's wife had her own Cadillac convertible leased by the
union, bearing vanity plates inscribed with her initials.
"Union funds are to be held in sacred trust for the benefit
of the membership," the report said. "The membership is entitled to assurance
that union funds are not dissipated and are spent for proper purposes."
Hanley stepped down from his job as part of a deal in which he did
not agree to any of the charges but also did not contest any of the allegations.