has learned that the federal Department of Labor is investigating the finances of the union that represents 2,000 TriMet employees.
An investigator from the department's regional office in Seattle recently came to Portland seeking information about financial issues at Amalgamated Transit Union Division 757. The visit follows a contentious election in June, in which challengers highlighted several unusual aspects of 757's operations, including loans made to members of the union's executive board.
According to union financial records, the mass-transit union made no-interest loans of $15,000 to 11 individuals—all officers, board members or employees of its office—in 2004-05. Federal law allows unions to loan individual members up to $2,000. But according to Michael Duvall, director of the Labor Department's Seattle office of labor management standards, it's an increasingly rare practice.
Duvall confirmed the identity of the DOL investigator who visited Portland recently, but declined to comment on what that person was doing or confirm whether there is a pending investigation. Speaking generally, Duvall added, "A lot of unions think making loans to officers is a poor practice. Many of them prohibit loans in their bylaws."
Loans to officers and other aspects of the union's finances were central issues in an ATU officers election in June. Two dissident members, TriMet employees Art Winslow and Evette Farra, challenged a slate allied with the group that has long controlled the local. (See "Crony Express," WW, Jan. 10, 2001.) Winslow and Farra, who did not return phone calls for this story, lost.
ATU 757 has long been split into at least two major factions. The dominant group consists of members aligned with ex-president Ron Heintzman, a former TriMet cop who now works for ATU's international union but continues to negotiate TriMet contracts. Various critics, many of them bus drivers and operators, have long opposed Heintzman and his followers, claiming they've run the union for the benefit of a few.
The union's financial records show several loans were made to officers, board members or union employees for the purchase of computers. Others, including a $1,500 loan to Melissa Heintzman, an administrative secretary and niece of Ron Heintzman, are listed as "personal."
At the end of 2005, eight loans remained outstanding. No loans were made to rank-and-file union members.
The union's financial position has weakened dramatically over the past five years. In June of 2000, for instance, ATU reported having $808,000 in cash and marketable securities on hand. That total has declined steadily. At the end of June 2005, the remaining balance was only about $69,000. Meanwhile, ATU suffered a blow to its dues-paying membership in March, when more than 400 American Medical Response paramedics and emergency medical technicians voted to leave the union.
A big reason for the decline in assets is that total compensation paid to union officers and employees has increased about 45 percent, while revenues have declined slightly. Last year, ATU 757 President Al Zullo's salary was $84,988, up from the $65,443 then-president Heintzman received in 2000.
Board member compensation increased much faster. In 2000, the 15 executive board members received a combined $105,345 for their work; last year, they got $214,405—an increase of more than 100 percent.
Again speaking generally, DOL's Duvall says a scenario in which assets are declining but officer and employee compensation is increasing would be of concern. "Officers of a union have a fiduciary duty to handle funds in a responsible manner," Duvall says. He says federal law provides union members a legal avenue to pursue leaders who misspend union funds.
In response to written questions from WW, Jason Reynolds, a spokesman for the Portland union, says local 757's books are in good order and were given a "clean bill of health" by a representative from the ATU International after concerns raised during the recent elections. (He adds that the union is unaware of any federal investigation into its affairs.)
Reynolds says the loans to officers and employees are for computers, and are an attempt to put union officials on an equal technology footing with management. The computers are union property until the loans are repaid.
"Loans are not available to members because they do not receive a monthly stipend and are not elected union officers," Reynolds says.
As for the outflow of funds over the past five years, Reynolds says that until this year, the union had not raised dues for 17 years and recently engaged in an exceptionally expensive bargaining fight and arbitration.
The reason that so many board members receive compensation, Reynolds says, is that they frequently miss work—and paychecks—to deal with labor-management issues. "The union doesn't believe that it is in its best interest for its officers' families to lose income because they want to assist their co-workers, especially when their opponents are being paid enormous salaries to fight them on these issues," Reynolds says.