In New Jersey politics, it isn’t just governors who have come to feel embattled. Take a look at the longtime head of the state’s largest public employees’ union, Carla Katz, a former girlfriend of current Democratic Governor Jon Corzine. Katz very recently was removed from the presidency of Local 1034 of the Communications Workers of America following years of suspicion that she had misused her post for personal and political gain. In a unanimous vote on July 7, the CWA national executive board dismissed her and the rest of the local board, asserting she had misappropriated union funds and violated federal labor law. Up until that point, the focus was on an unusual financial arrangement she had with Corzine prior to his initial run for governor in 2005. The new CWA allegations go a standard “he said, she said” face-off.
In August 2005 Union Corruption Update laid out the details of an ethically delicate situation. New Jersey had just seen one governor – Jim McGreevey – leave office the previous fall in a cloud of a conflict-of-interest scandal. The state’s director of homeland security had threatened to file a “harassment” suit against McGreevey based on a homosexual relationship between the two years earlier. The state hardly needed a heterosexual version of this. And that’s what it appeared to be getting with Corzine, elected to the U.S. Senate in 2000 and running for governor, and Carla Katz. Ms. Katz, now 49, a divorced mother of two, headed the Trenton-based CWA Local 1034, which primarily represents New Jersey state employees. When elected that November, Corzine knew that he and Katz would be at opposite sides of the bargaining table and that their prior romantic relationship might come back to haunt him. Corzine, who made a fortune with Goldman, Sachs prior to embarking on his political career, lived with Katz during 2002-04. She’d just gone through a divorce and he was going through one himself. Records showed that in December 2002 Corzine loaned Katz $470,000 through a company he controlled so she could buy her home from her estranged husband. A couple years later, with the romance over, Corzine converted the loan into a gift and then paid the federal gift tax on the property transfer. The arrangement produced substantial protest, especially from New Jersey Republican Chairman Tom Wilson.
But this was only the surface, argues the Communications Workers of America. Apparently, Katz was an autocrat with her fingers in the cookie jar. The CWA national leadership’s statement explained her removal this way: “An extensive internal review revealed probable cause to believe that the local is engaged in ongoing financial malpractice, the misappropriation of union funds, a failure to comply with state and federal law, as well as the CWA constitution, and the suppression of dissent. The CWA national executive board has determined that it has no choice but to take this action to protect the rights and resources of the members of Local 1034.” According to the statement, Katz engaged in the following improprieties: 1) spent more than $70,000 in union dues in support of travel and lodging for herself and persons working for her re-election; 2) authorized, with little or no oversight, the diversion of more than $700,000 in local funds for political donations, some of which went to candidates in areas where the local has few members; 3) illegally threatened to fire a critic within the local and otherwise retaliated against members in violation of federal law and the CWA constitution; 4) failed to keep a log of her working hours; and 5) improperly spent at least $135,000 in legal fees to fight a court-ordered disclosure of e-mails between her and Governor Corzine during contract negotiations.
Ms. Katz is fighting fire with fire. “This action by the national union is appalling and the charges against our local’s leadership are completely false,” she said in a prepared statement. “It is a travesty that the retaliation against me, and my fellow union leaders, for our opposition to the bad state worker deal, continues in full force.” She added that the CWA’s move “trampled the democratic rights of the members of our union.” Katz sued the Communications Workers of America and its top officials in May to prevent the parent union from taking over the local. And she’s also indicated a strong possibility of running for a fourth term as local president. Is she blowing smoke? It may come down to her word versus that of the governor – and some potentially embarrassing e-mails. (Newark Star-Ledger, 7/8/08, 7/11/08; other sources).