L.A. Transit Authority Accuses Striking Union of Mismanaging Pension Fund

As a transit union strike wreaked havoc on rush hour transportation in Los Angeles, transit officials insisted on increased control over the union’s insolvent pension fund.  Local 1227 of the Amalgamated Transit Union (ATU), representing 2,200 Metro. Transportation Auth. Mechanics, began their strike on Oct. 14.  The union representing some 6,000 MTA drivers and train operators refused to cross the ATU’s picket line, and an estimated half-million commuters have had to find alternative transportation since.


At issue is a trust fund that pays for the employees’ insurance and medical expenses.  The fund is currently losing $5 million a month.  Local 1227 president Neil Silver is demanding that the MTA increase its financial support for the fund, which is currently $16.8 million.  MTA officials have offered to contribute an extra infusion of $2.6 million for one time only in exchange for gaining temporary control of the fund.


MTA officials point to an independent audit they commissioned of the union health fund that concluded the union had wasted millions of dollars through duplicative coverage, poor record keeping and other problems.  For instance, the auditors found that union officials had transferred $36,000 a month from the joint trust fund into the union’s operating fund, while refusing to document how they spent the transferred funds.  The auditors also questioned why the ATU has paid a consultant $15,000 a month for 5 years, supposedly to computerize the union’s record-keeping, but is still keeping its records manually, so that the union has no current information on the fund’s financial condition.


“Union leaders basically ran the trust fund into the ground, and now they want the taxpayers to bail them out  and are threatening a devastating work stoppage to strike if they don’t get their way,” said MTA CEO Roger Snoble on Oct. 13, before the strike began. [Los Angeles Times, 10/11/03, 10/15/03: PR Newswire, 10/13/03]


Right to Work Cmte. Asks Pres. Bush to Withdraw DOL Solicitor

Holding him responsible for the weakening of the new LM-2 union financial disclosure forms, the Natl. Right to Work Committee asked President George W. Bush on Oct. 16 to withdraw his nomination of Howard Radzley to the position of Solicitor of Labor.  Radzley is already the acting solicitor, and reportedly oversaw the final issuing of the new disclosure form on Oct. 3.  The new LM-2, for the first time, requires unions with at least $250,000 in annual revenue to report how much they spend on political and lobbying activities. 


But at the last minute, union organizing was removed from the list of new categories that union officials would be required to account for.  Instead, it was lumped in with “representational activities.”  In his letter to Pres. Bush, Right to Work president Mark Mix said that in Ellis v. Railway Clerks, the U.S. Sup. Ct. held that union organizing had only an “attenuated connection with collective bargaining” and was “roughly comparable” to political activities, for which unionized workers cannot be forced to pay under Ellis and Communications Workers v. Beck.


According to Mix, the identification of organizing as a supposed “representational activity” badly undercut Pres. Bush’s “commitment to enforcement of the Beck decision,” which allows the payment of forced union dues only for those expenses which union officials can prove are related to collective bargaining. [NRTWC, 10/16/03]