Convoluted Corruption War Rages in Texas

A convoluted corruption case revolving around American Federation of Government Employees offical Joe Palazzolo may have entered its final stage on Jul. 27 at a Federal Labor Relations Authority hearing in Forth Worth, TX to determine if Palazzolo is eligible to continue holding his 2 union jobs, which he holds simultaneously, representing General Services Administration employees in an 11-state region. The probe has the attention of federal investigators in Dallas, Denver and Washington, as well as top AFGE union bosses. A decision is expected in Sept.

The case which has seen Palazzolo removed from and subsequently returned to office earlier this year began in Mar. 1997. A union mailbox has been seized; a union office has been locked-out; and several counter lawsuits have been filed — 2 by Palazzolo. Palazzolo has been forced into an extended leave from his GSA job and has been threatened with disciplinary action from GSA for using AFGE stationery and a union title on his correspondence with the agency. He has even been hit with a $50 parking ticket in a federal garage for parking in a space reserved for union officials.

Palazzolo asserts in his lawsuits that GSA management is in cahoots with the old-guard union and behind efforts to oust him from the bargaining unit. Management looked the other way, he alleges, as labor leaders misused union funds and squandered agency-funded hours meant for union business. In return, he says, GSA officials got a weak union that rarely challenged them on workplace issues. “For years, the local union leadership here and the agency have had an intimate and incestuous relationship going beyond what would be considered proper in any kind of labor-management arena,” Palazzolo argued. “This is the first credible challenge to this illicit partnership in 15 years.”

After Palazzolo took office, the number of unfair labor practice charges and grievances filed against the GSA shot up. He filed 33 in 1997 and 81 so far in 1998. Under Palazzolo, the local also brought internal charges against several longtime union officials, including Harry Dawson and Derrell Chandler. Before Palazzolo, Dawson and Chandler were the focus of a 1989 federal criminal investigation into comments about roughing up a superior at GSA. Both were tried in federal court on charges of perjury and obstruction of justice and were acquitted. They then successfully sued the government for malicious prosecution. Palazzolo brought new allegations against the two for using union funds for legal bills without the membership’s approval. Among the proof cited: 10 checks totaling about $8,500 signed by Dawson and Chandler and made out to themselves and people associated with their criminal and civil cases including an attorney, a court reporter, even a psychiatrist who testified for Chandler. Another attorney was paid $500 for defending Dawson in an unrelated and pending harassment suit.

Dawson and Chandler were convicted of embezzling funds and expelled at the local’s Oct. 1997 internal trial. But national AFGE President Bobby L. Harnage threw the convictions out in Nov., saying the trial had been conducted unfairly. He barred the local from retrying the two and said that he would select an independent arbitrator to do so. They have not yet been retried. Dawson led the union in a variety of posts for 16 years and now holds a paid staff position as a national representative for AFGE in Washington, D.C. The local said union dues-payers, who contribute $230 annually, weren’t the only ones cheated. They assert that taxpayers were defrauded because Dawson helped his son, Tim, run a sandblasting business on union time. Taxpayers paid for Dawson’s time under a labor-management agreement that allows some elected union officials to work full-time on union business while still collecting their government paychecks.

Palazzolo’s own corruption troubles began soon after he took office, when a union member questioned his eligibility. The member alleged that the position Palazzolo held at GSA was a supervisory/management post and, therefore, not in the bargaining unit. Palazzolo was assigned to “special projects,” including emergency planning and agency parking, said his former supervisor, Dennis Armon, who retired in Dec. 1997. “At no time to my knowledge did he ever work in a supervisory capacity,” said Armon. The GSA initially agreed. “Mr. Palazzolo is in the AFGE bargaining unit and a dues-paying member of the [AFGE],” Charles Fernandez, the GSA’s director of human resources, wrote in a Feb. 25 memo. But at some point, the GSA changed its position. In a series of memos last spring, Fernandez warned Palazzolo against union activity, citing, among other things, his use of union letterhead for correspondence to the GSA. Palazzolo could be fired if he continued to participate in union affairs, Fernandez asserted. “Your actions have harmed the independence of the labor organization,” wrote Fernandez.

Harnage removed Palazzolo from his regional position in March, a year after his election. But he was returned to office Jun. 1 after a rerun of the election supervised by the U.S. Labor Department. That, however, didn’t end the matter. “We do not intend to recognize Mr. Palazzolo as a representative of AFGE,” Edward Denney, director of the GSA’s Labor Relations Division wrote the day after his reelection. [Fort Worth Star-Telegram 07/26/98]