BUSFELLAS TAKE '1181' FOR RIDE

Busfellas Take '1181' For Ride

By RICHARD STEIER

Imagine belonging to a union in which seniority is a drawback, retirees collect less than half of what they should in pension benefits, and a "defense" fund is missing at least $12 million. A health insurer who participating doctors and dentists say they can't count on for payment is chosen because one its executives is married to the union president's daughter, and the president puts his son on the executive board even though he lacks the basic qualification for appointment.

Then imagine that three of the union's top officers - the president, secretary-treasurer and pension fund administrator, who happens to be the secretary'-treasurer's girlfriend - are among those charged in a racketeering indictment whose marquee name is Matty "The Horse" Ianniello, the acting boss of the Genovese crime family.

You don't have to imagine those things if you're a member of Amalgamated Transit Union Local 1181, the private-sector local

The Chief-Leader/Pat Arnow 'A GUS BEVONA SITUATION': With fellow bus driver Cesar Renold looking on, Raymond LaRoche describes the ways in which Local 1181 of the Amalgamated Transit Union has exploited its members, from suspiciously low pensions to its failure to protect employee seniority rights. One veteran union member, noting the parallels with Local 32B-J of the Service Employees' International Union before a reform administration ended its unsavory practices, said, 'It's clear that we have a Gus Bevona-style situation here and it's clear there's something terribly wrong.'

responsible for student transportation services for the Department of Education.

Sweetheart Deals With Companies

Dissidents within the local describe sweetheart arrangements between the union leadership and

 

owners of the companies that provide the school buses, under which harsh discipline of employees goes unchallenged by the union and questionable sales of portions of a company's route to another firm lead to senior employees getting the least-desirable assignments.

When those employees have complained, says one leader of the dissidents, Raymond LaRoche, Local 1181 officials have typically responded, "You just follow the work."

Mr. LaRoche is part of a growing contingent within the 15,000-member union that believes the operative phrase for what's happened to the local is, "Follow the money."

Back in 1981, Local 1181 officials - who a couple of years earlier had led a strike in response to an attempt by the then-Board of Education to open up bidding on school bus contracts following a New York Magazine article alleging mob influence in the industry - started a defense fund. Each employee has $2 from every weekly paycheck sent to the fund by automatic deduction.

By now, that should have put as much as $30 million toward the fund (the local's membership has roughly doubled during the past 15 years, with the fund growing correspondingly). One union dissident, Thomas Nero, said it is his understanding that at least $21 million should be in the fund, but that it currently contains just $9 million. He said union leaders claim the missing money was spent on organizing efforts, some of them on Long Island.

Union members make pension contributions of $33 per paycheck for bus drivers, $23 for matrons, or a bit more than 3 percent of salary - more than a point above what's paid by their counterparts in two ATU locals whose members are employed by New York City Transit. Their pensions, however, pale alongside what members of ATU Locals 726 and 1056 are entitled to. Members of the NYC Transit locals are entitled to pensions equal to half their salaries once they complete 25 years' service and are at least 55 years old.

If they were making the same $50,908 at retirement that is the maximum salary for Local 1181 drivers, that would entitle them to a pension of $25,454. Local 1181 drivers with that service who are 55, Mr. Nero said, receive just about $15,000.

Way Short of Fair Payout

The discrepancy is a lot worse than that, however, considering that they are contributing more than 60 percent more of their salaries toward their pensions than the 2-percent rate for the NYC Transit ATU locals. One pension expert, asked to calculate what Local 1181 members should be entitled to figuring an average contribution over the past 25 years of $25 a week, responded that using an especially conservative estimate in which the money would have earned 3-percent interest during that period, their pensions should be $38,000 a year. If the interest earnings were 5 percent during that period, he said, the pensions should be $50,000.

Simply leaving the money in a shoebox for 25 years would produce enough money to afford a $12,500 annual pension.

Calls to Local 1181's president, Salvatore Battaglia Sr., and its attorney, Ronald Straci, were not returned. A call to the union's secretary-treasurer, Julius "Spike" Bernstein, elicited this response from a Local 1181 secretary: "I'm sorry, but there's no comment on anything right now."

Using Sons As Muscle

According to the dissidents, attempts to get financial information from the union's leadership are rebuffed, and intimidation is used when needed. During Mr. Battaglia's regime, Mr. LaRoche said, the Local 1181 president's two sons, Anthony and Salvatore Jr., have served as security guards at the union's Ozone Park headquarters, blocking union members from gaining access to any part of the building other than the credit union.

Village Voice investigative reporter Tom Robbins reported last month that Anthony Battaglia was paid $104,000 last year by Local 1181, which he serves as an executive board member even though, Mr. LaRoche said, he lacks the appropriate qualification to hold union office: "he never drove a school bus." Salvatore Battaglia Jr., Mr. Robbins reported, was paid $54,650 by the union's benefit funds, although, Mr. LaRoche said, his primary function appears to be blocking access to the part of the building where the union's medical office is located.

Intimidation is also allegedly deployed to prevent the wrong questions from being debated at union meetings. Some dissidents who raised unwanted questions later had the brake linings and starter wires on their vehicles cut, actions that would have placed the children they transport in potentially lethal danger if the sabotage had not been discovered.

'Shouldn't Threaten Us'

"We should not be threatened or insulted or intimidated when we go to a union meeting," said Brijida Pilgrim, a veteran bus matron.

The elder Battaglia was paid $194,100 last year and received more than $31,000 in expenses from the union. Mr. Bernstein, whom law-enforcement sources have identified as a long-time friend of Matty the Horse who over the past few decades has allegedly done some collection work for him, received $156,000 in salary and $19,000 in expenses. His girlfriend, Anne Chiarovano, was paid $135,000 last year for managing the union's funds.

"Their perks money comes from our pension," Mr. LaRoche asserted.

According to Mr. Nero, there is $284 million in the Local 1181 pension fund. He said the fund should contain more than $1 billion.

Seasonal Deaths

That is not the only area where he and his colleagues believe their union is cheating them. Some of the scams seem petty, but the money adds up. Mr. LaRoche and another dissident, William Dalley, said that it used to be common practice for union officials to announce they were taking up collections for the families of members who had died. Each fund-raising drive had an odd uniformity to it, the two men said: invariably there were 15 dead members whose families needed the money, and always at the same times of year: shortly before Christmas and Easter and in the early part of the summer.

Union members were asked to each contribute $1 per dead colleague. Multiply 15,000 members by 15 needy families and you get $225,000. The practice ended, the dissidents said, a couple of years ago after one 30-year driver took a look at the list of dead employees and recognized only one name on it.

Mr. LaRoche said even in cases where the deaths were legitimate, the money collected was not making it to the families intact. He said one acquaintance told him that the family of a dead colleague had received only $1,000 from the union.

Rights Not Defended

What is even more exasperating to the dissidents is the way in which they are pushed around by the bus companies with which they allege Local 1181's leaders have cozy arrangements. Mr. Dalley began working in the system in 1985, driving a bus for Varsity Transit. Three years later, he said, he dropped off a student who, rather than going into his house, decided to go visit a friend. Before the boy was located at 9:00 that evening, Mr. Dalley said, his worried parents had contacted the Board of Education.

The board, upon learning the details of the boy's disappearance, decided not to suspend Mr. Dalley, but Varsity fired him. A year later, Mr. Dalley said, he paid $80 to the union to gain reinstatement at Varsity. When the company sold part of its operation to another firm known as Hoyt, Mr. Dalley was given a new assignment and discovered that his seniority was credited only as far back as 1989 - the year he returned from the firing - rather than four years earlier, when he was first employed by Varsity.

Seniority Nullified

Most unions insist that employees' seniority be honored by the employer. Mr. Dalley and Mr. LaRoche said Local 1181 allowed Varsity, which retained part of its business while changing the company name to Varsity Bus, to transfer its most senior people to Hoyt. This sharply reduced Varsity's payroll and pension costs; it also made the more senior people the least-senior employees at Hoyt.

Mr. LaRoche said that when he questioned the practices that were employed during and after the sale process and the union's lack of response to them, a fellow driver tried to dissuade him from forcing the issue, saying, "You open that can of worms, you might not be able to close it."

Something similar happened last year at a school bus company named Jo Lo following the death of its owner, Richard Logan. Mr. Logan, who Mr. Robbins noted in his article had been identified as an associate of the Gambino crime family who worked closely with the late John Gotti's brother, Gene, was found by the Office of the Special Commissioner of Investigation for the public schools to be using uncertified matrons and paying them less than half the starting wage under the Local 1181 contract. Mr. Nero told Mr. Robbins that when he reported the underpayment to Mr. Battaglia, the union president replied, "Don't worry about it."

After Mr. Logan's death, according to another of the dissidents, Frantz Valere, his children split the company in two and "gave the senior people all the bad runs." But a call to Special Commissioner Richard Condon's Office about the dissidents' allegations of internal financial chicanery was referred to the Department of Education, and a spokeswoman, Margie Feinberg, said the school system would not get involved because the private bus companies are the employers.

"That's between the bus drivers and the companies," she said. "If anything out of line occurs concerning the kids, then we would step in and they'd get written up. But we don't even pay them. If they were our employees, it would be a different story."

"The Board of Ed. doesn't care," Mr. LaRoche said. "All they care about is the kids get picked up and dropped off at school. They're still paying Jo Lo even though it doesn't exist."

Last June the dissidents, under the banner of "Members for Change," ran a slate challenging Mr. Battaglia and the rest of Local 1181's board. The multi-racial challengers would have seemed to have had a decent shot of winning some positions running against the all-white incumbents in a union that is nearly three-quarters nonwhite, with roughly 55 percent of its members Haitian. In addition to complaints about pensions and working conditions, they had a nepotism issue to run on: besides Mr. Battaglia's two sons, two other board members had relatives in prominent positions.

Companies Took Sides

Members for Change quickly discovered, however, that the campaign wouldn't be conducted on a level playing field. The bus companies barred the challengers from putting campaign flyers on their employee bulletin boards. Candidates from the dissident slate also discovered, Mr. LaRoche said, that they were being given an increased number of bus runs, minimizing the down time when they could campaign.

Eddie Kay, a veteran union organizer best known for his work at Local 1199 of the Service Employees' International Union and Transport Workers' Union Local 100 who began helping the dissidents during that campaign, said they also encountered the kind of static that might be associated with a union where two organized crime families have held sway over the years.

"Prior to the election, they used to follow our guys home and say, 'You ain't getting home,''' Mr. Kay alleged. "This is really a crime scene. These are the real 'boys' - it's not just crooks."

Took Protest to Feds

On the day of the election, some union members arrived to cast their ballots only to learn that they were listed as having signed in and voted already, while 300 others who cast ballots were subsequently deemed ineligible to vote. The incumbents won re-election easily, but Members for Change filed a protest with the International ATU. When it was slow to issue a ruling, Members for Change took its case to the U.S. Department of Labor, which is still considering the matter.

The dissidents are not convinced they will get satisfaction from the Labor Department. One of them, bus driver Henry Auguste, said that a department representative told him that by reconstituting itself as Varsity Bus, the old Varsity Transit had negated its contract obligations regarding seniority rights for its employees.

Mr. LaRoche said one reason contract violations by the companies occur routinely without a union challenge is that there are no drivers on Local 1181's negotiating committee, which consists solely of board members.

Charged in Shakedown

The Federal indictment accuses Mr. Ianniello and some of his Genovese family associates of having infiltrated and influenced the activities of Local 1181 and its pension and welfare fund. Mr. Bernstein, the union's secretary-treasurer, is charged with having, at Matty the Horse's behest, extorted $100,000 in cash from the operators of the medical center based in the local's headquarters in return for extending their lease.

The elder Battaglia, Mr. Bernstein and Ms. Chiarovano are all accused of taking part in a loansharking conspiracy, and of having conversations with each other and the accused mob figures to ensure that the scams would not be uncovered by investigators. Mr. Bernstein and Ms. Chiarovano are accused of having made numerous false statements to investigators; Mr. Bernstein also allegedly assured Ciro Perrone, a captain in the Genovese family, that he would not become a "rat."

If convicted, Mr. Battaglia faces up to 40 years in prison, Ms. Chiarovano faces 45 years, and the 83-year-old Mr. Bernstein could be sentenced to 133 years behind bars.

ATU: Cautious or Cowed?

The International ATU has resisted calls by the dissidents to take over Local 1181 or remove its top officers, noting that indictments are not convictions. The hundreds of millions that Mr. Nero claims are missing from the pension fund might normally move a union to act long before the criminal case was resolved. The American Federation of State, County and Municipal Employees took deserved criticism for its slowness in acting on reports of corruption that infested District Council 37 during the late 1990s, but when it discovered that one local president, Charlie Hughes, had placed his organization $10 million in debt, it removed him and placed the local under administratorship months before he was indicted by the Manhattan District Attorney's Office.

Mr. Kay suggested that the aura of the mobsters who have long hovered around Local 1181 has left ATU International President Warren George afraid to step in before the criminal case, which is scheduled for trial this fall, is decided.

His sentiment was echoed by another veteran New York labor official, who said, "There've been some very bad connections between the local and the mob over the years. It's a public embarrassment; it makes the [International] ATU look bad."

ATU Leader Silent

An aide to Mr. George said he would not discuss even the allegations by the dissidents that are not part of the criminal indictment because they are under review. "If there's already something on file here, he won't talk about it," she said.

The dissidents are hoping that the shadow of Matty the Horse and his minions can be countered by pressure from local elected officials. Eighty-five of them, from city and state legislators to a half-dozen members of New York's Congressional delegation, have sent letters to Mr. George and his board at the ATU asking them to schedule a public hearing on the allegations and seize control of Local 1181. The involvement of Federal lawmakers in what amounts to an internal union dispute is unusual, and particularly impressive given that it's the product of a campaign by a small group of dissidents rather than a large union with a big political war chest.

'Living Off of Us'

At one point, Mr. LaRoche said, during a dispute with Mr. Battaglia he told the local president, "You see that nice suit you're wearing? We paid for it. You know that house of yours? We paid for it." Mr. Battaglia was not amused. Mr. LaRoche remarked, "He says I put his [blood] pressure high."

He and his colleagues are looking to pump it even higher as they try to bring some honest democracy to their union.