Lawsuit Alleges Solis Failed to Report Free Jet Trips from Los Angeles-Area IUOE Local

hilda-solisFormer Secretary of Labor Hilda Solis readily admits it: She’s a union woman. But her affinity with organized labor is more than just a matter of shared views. On February 10, the Cerritos, Calif.-based Hews Media Group revealed that Solis, now campaigning for a seat on the Los Angeles County Board of Supervisors, had accepted thousands of dollars worth of free private jet travel more than five years ago, while still serving in Congress, from International Union of Operating Engineers Local 12, but without disclosing these trips, as required by federal law. This finding is cited as a material fact in a federal civil racketeering suit filed in January by four members of the Pasadena-based local against some two dozen people.  While Solis is not listed as a defendant, the details suggest her tenure as labor secretary during President Obama’s first term was seriously ethically challenged.

Organized labor long has had a friend in Hilda Solis. That’s why they give generously to her. Union-sponsored groups contributed a combined more than $900,000 to Solis for her successful runs for the U.S. House of Representatives during the last decade. Even prior to then, unions had donated to her campaigns for California state assemblywoman and senator. Her strong advocacy of union interests during her four-term tenure in Congress (2001-09) prompted President-Elect Barack Obama to nominate her for labor secretary on December 19, 2008 (she actually had been re-elected, unopposed, for a fifth term that November). It wasn’t as if Obama had run from his own union partisanship on the campaign trail. Speaking at an AFL-CIO gathering in Philadelphia in April 2008, he remarked: “We’re ready to play offense for organized labor. It’s time we had a president who didn’t choke saying the word ‘union.'” Upon her nomination, union leaders gave Solis sterling recommendations. AFL-CIO President John J. Sweeney stated: “We’re confident that she will return to the Labor Department one of its core missions – to defend workers’ basic rights in our nation’s workplaces…She’s voted with working men and women 97 percent of the time.” Anna Burger, then-secretary-treasurer for the Service Employees International Union and chairwoman of the Change to Win labor federation, also had words of praise: “Congresswoman Solis does not just work on behalf of workers; she is their unwavering and tireless voice.” Solis, now 56, wasn’t shy about her loyalties. In a March 2007 article for the Huffington Post, she wrote: “As the daughter of a union family – my father was a Teamster and my mother worked tirelessly for 25 years – I know that my seven siblings and I would not be where we are today without the wages and other protections my parents earned with the help of their union.” And in May 2012, while as DOL secretary, she assured delegates at the United Food and Commercial Workers convention in Chicago: “President Obama has your back, and so do I.”

Union leaders throughout the nation, elated over Solis’ nomination, wanted quick Senate confirmation. At least one union in Southern California was prepared to go the extra mile to secure it. That would be the Pasadena-based International Union of Operating Engineers Local 12. Some two dozen union officials, members and associates are defendants in a RICO class-action suit filed in U.S. District Court for the Central District of California on January 6 by local members Mario Salas, Melvin Chamberlain, Albin Watson and John Paxin. The 290-page lawsuit, which amplifies an existing suit, alleges “years of illegal activity and embezzlement which harmed both Local 12 and its members.” Among illegal activities, local bosses provided Solis with free travel to and from Washington, D.C. aboard its $8.6 million Cessna Citation XL private jet for her confirmation hearings and, later, her swearing-in ceremony. Solis, who at the time was a member of Congress, allegedly failed to submit required financial disclosure reports to the Federal Election Commission. The plaintiffs here, as in a separate active suit against IUOE Local 501 (in which former IUOE General Counsel and current National Labor Relations Board General Counsel Richard Griffin is a defendant), are seeking reimbursement of union funds and the appointment of a receiver to manage local operations. The Washington, D.C.-based International Union of Operating Engineers denies all wrongdoing.

IUOE Co-General Counsel Jack Leary terms “ludicrous” the idea that Solis was bought off by the union so that the Labor Department would back off from certain investigations. Yet the suit against Local 12, which represents heavy construction equipment operators in Southern California, cites a widespread pattern of self-dealing and favoritism; the unreported jet trips are but a small portion of the big picture. All roads, it seems, lead to William Waggoner, head of the local since 1976 and also first vice-president of the 380,000-member international union. Waggoner, along with his wife and son, plus about 20 rank and file members, are named as co-defendants. The suit is specific about Solis: “Ms. Solis flew on Local 12’s jet while serving in Congress, though it appears that she failed to report the in-kind contributions from Local 12.” It adds: “Waggoner bragged openly that he was flying Solis back to Washington, D.C. for this purpose.” Moreover, then-IUOE International President Vince Giblin allegedly proclaimed to other members of Local 12, “We finally have a friend in the Department of Labor.” After that, he lambasted other IUOE business managers for “failing to make similar investments in political candidates.”

When it came to Hilda Solis, Local 12 invested in air travel. Specifically, it provided her with several round trips from Southern California to Washington, D.C. on its private jet for her confirmation hearings. The union on several occasions also used the aircraft to transport her between commuter airports in El Monte (where she and her husband live) and Ontario, Calif., so “she could avoid freeway traffic,” even though those flights typically took only several minutes. According to the website of the Office of the Clerk of the U.S. House of Representatives, Solis did not file any Financial Disclosure Reports. She somehow was more punctilious when it came to other travel. Hews Media Group examined the website and found that she had declared 11 trips, none of which were provided by IUOE or any of its locals.

Operating Engineers support for Solis apparently didn’t stop once she took over at DOL. According to the RICO suit, Solis sought to protect labor organizations from criminal investigations when she reversed selected Bush-era initiatives to toughen union financial reporting requirements; her predecessor, Elaine Chao, had issued these rule changes to make it easier for union members and other interested parties to detect embezzlement and fraud. Union Corruption Update in April 2009 discussed these actions at length.

But who was Solis protecting? While the plaintiffs don’t specify anything, they do raise the possibility that IUOE Local 12 figured heavily in this. They allege that Waggoner late in 2012 flew union leaders Larry Hopkins and Ron Havlick to Washington “to meet with Ms. Solis over a Local 12 problem involving the Department of Labor when Waggoner believed that legal action was imminent.” Apparently, Solis played a role that year at an Obama campaign fundraiser. Moreover, sometime in 2012 she retained a lawyer to “address legal issues” involving the fundraiser and her possible violations of the Hatch Act. It may be that this is what triggered Solis’ January 9, 2013 announcement of resignation. Currently, as expected, she is running for a pending vacant seat on the Los Angeles County Board of Supervisors. Whether or not her opponents raise this issue – the primary is in June – one thing is for sure: Los Angeles-area unions  won’t. They’ve so far contributed around $500,000 to her campaign.

Operating Engineers Local 12 is feeling heat beyond its relationship with Hilda Solis. Last July, the Los Angeles Times, after analyzing class-action documents, alleged that local boss William Waggoner, whose title is “business manager,” had used union funds to pay for personal expenses and that he threatened those who complained. In one case, a union member, Rodney Karr, objected to Waggoner’s excessive use of the union jet, to which Waggoner responded, “If you don’t stop this…you’re going to get hurt.” Waggoner also pressured union members into making donations to favored politicians and to his own Local 12 re-election campaigns. And perhaps most egregiously, the union under his direction recklessly invested union pension funds with Amalgamated Bank (“America’s Labor Bank”), causing as much as $50 million in losses. Small coincidence: The bank’s Western Region senior vice president for marketing and sales is Waggoner’s wife, Patricia Waggoner. Such behavior may have been standard throughout Local 12, as the RICO suit alleges “massive graft and misuse of assets.”

Hilda Solis in all likelihood wasn’t directly involved in any of this. But this doesn’t mean she’s off the hook. Evidence suggests that Solis, at the very least, during her tenure as labor secretary ignored federal transparency rules regarding gratuities. At worst, she was bought off by Operating Engineers Local 12, and possibly other unions, to look past certain lawbreaking. The rollback of certain Labor Department anti-corruption rules may well have been a political gift. If true, this would constitute a major scandal. At that point, she might have to take a few additional, and unplanned, trips to Washington, none of which would be paid for by IUOE Local 12.


NLRB Member Griffin Named as Defendant in Racketeering Suit

Solis Resigns as Labor Secretary; Leaves Pro-Union Legacy

Solis Leads Cheers for Wisconsin Public Employee Unions

Obama Rolls Back Union Disclosure; Givers Green Light to Corruption

Obama Labor Secretary Nominee Is Outspoken Union Partisan