It's the Same Old Song For DC 37, AFSCME

It is said that on his way out of District Council 37 in early 2002, after providing some cosmetic surgery for the scandalscarred local without ever getting to the cancer within, Lee Saunders expressed regret that he hadn't used his power as administrator to require direct election of union officers.

It is likely that sentiment didn't translate to action for the same reason that DC 37 once again finds itself under a cloud of financial irregularity: for those with power over its operation, political considerations always outweigh the best interests of the union's 125,000 members.

It's why the Sept. 4 press release from the American Federation of State, County and Municipal Employees announcing it had placed DC 37 Local 2054 into administratorship should have been accompanied by a recording of Levi Stubbs leading the Four Tops in singing "It's the Same Old Song." All that has changed are the names of the local presidents charged with malfeasance and the executive director who tolerated them despite glaring evidence of wrongdoing. And as usual, AFSCME, where Mr. Saunders is the top aide to President Gerry McEntee, intervened too late and for reasons that seem less pure than advertised.

TERMITES IN THE HOUSE THAT MAC BUILT: The laissez-faire attitude of American Federation of State, County and Municipal Employees President Gerry McEntee (left) toward financial wrongdoing by political loyalists, and the failure of his top aide, Lee Saunders, to change the governance system at District Council 37 a decade ago to require direct election of union officers, have come home to roost in the form of new scandals involving two of the union's locals.

Delayed Despite Risky Business

The international union's press release noted that its action was coming six weeks after its own audit had found major problems with Local 2054's operation, including the loss of more than $1 million "due to risky investments" that violated its regulations and "no program or mechanism in place to protect against depletion of the local union's remaining assets."

Given that kind of loss and the lack of financial controls, it would have seemed urgent to act sooner than that, particularly since the head of the AFSCME Judicial Panel, John Seferian, on Aug. 17 had found the Local 2054 president at the time, Colleen Carew-Rogers, guilty of two counts of unauthorized spending.

But fiscal mismanagement is so much a part of DC 37 tradition largely because by itself it has rarely been grounds for decisive action by AFSCME. Two other factors probably had a greater role in rousing Mr. McEntee and his minions from their usual torpor: a coup within the local Sept. 1 that led to Ms. Carew-Rogers's ouster and the retainer of attorney Arthur Schwartz by the local's executive board, and inquiries by the New York Times about the developments.

Mr. Schwartz is a well-known advocate for union dissidents, and earned the wrath of Mr. McEntee by bringing a lawsuit a decade ago accusing both DC 37 and the International of being part of a racketeering conspiracy. The fact that there was more than a grain of truth to the charge, given AFSCME's having turned a blind eye to massive corruption until the Manhattan District Attorney's Office set up a branch office inside DC 37 to deal with the malefactors, made the charge particularly tough to stomach even though the suit eventually vanished without a trace.

And when the Times in November 1998 reported that not only had a cavalcade of cronies of DC 37 Executive Director Stanley Hill looted their locals under his nose, they had also rigged a union wage-contract vote, it took the scandal beyond the local embarrassment it had been when the transgressions were being reported primarily by this newspaper and the Daily News and made it a national story. That forced Mr. McEntee to fake meaningful action by deputizing Mr. Saunders to clean up the union and set a tone of "zero tolerance" for wrongdoing.

Most people think of "zero" as a fairly absolute concept, but the folks at AFSCME seem to apply it on a sliding scale, with loyalty or lack of it considered a mitigating factor.

A Clear Double Standard

Thus Roy Commer, a president of Local 375 who not only criticized Mr. McEntee but raised questions about the union's contract with a prescription-drug supplier that employed the AFSCME leader's daughter in a ranking position, was yanked from office at the first possible opportunity based on unauthorized spending on membership mailings of less than $11,000 and his failure to speedily make reimbursement when he was ordered to do so. On the other hand, Helen Greene, a top DC 37 officer who was also president of Local 768, would have gotten off scot-free for making thousands of dollars of personal charges on her union credit card— and publicly lying about it—if she hadn't been criminally convicted in Manhattan Supreme Court.

Ms. Carew-Rogers spent more without the authorization of her board at Local 2054 than the amount for which Mr. Commer was stripped of not just his leadership post but his union membership. Yet Mr. Seferian, who constantly reminds us of why his nickname is Kangaroo John, cleared her of the biggest expenditure despite finding her justification for it "dubious," and did not require her to make restitution for the two charges on which he deemed her guilty, letting her off with a decidedly limp reprimand.

Given the fact that Mr. Commer's local was in no financial turmoil at the time of his ouster, while AFSCME had already flagged Local 2054 for being in dangerous waters, prudence—if not even-handedness—would have seemed to require Mr. Seferian to act strongly against her. It was his failure to do so that led her subordinates on the local's board, at Mr. Schwartz's direction, to remove her from office two weeks ago.

But a day after the change was made, the man who had been chosen by the board as her replacement, Carlton Berkley, came to the local's offices along with his vice president, Linda Bowman, to discover Ms. Carew-Rogers shredding documents, and their attempts to stop her were blocked by a DC 37 official. When Mr. Berkley appealed to Ms. Roberts, according to Mr. Schwartz, she told him, "I'm waiting for a directive from the international."

A Weekend Surprise

By the following day, a Thursday, Steve Greenhouse, the Times labor reporter who broke the 1998 vote-fixing story, was making calls to DC 37 about the Local 2054 situation and getting the kind of non-response that the union's press office seems to strive for. At some point, someone there apparently concluded that they should at least contact their international union's spokesman, Chris Policano, about the situation. Shortly before 6 p.m., on the Friday that began the Labor Day weekend (after this newspaper had already gone to press), Mr. Policano issued a statement saying that AFSCME had imposed a trusteeship.

The timing was interesting, to put it mildly. The press release cited just one new detail that prompted swift action: while it noted the Local 2054 board was within its rights to remove Ms. Carew-Rogers, it stated that choosing someone other than the local's vice president to replace her violated the local's constitution.

Was this supposed to be more alarming than AFSCME's own discovery, in an audit it issued on June 22, that Ms. Carew-Rogers had either failed to impose or disregarded appropriate financial procedures, in the process losing more than a million dollars in member assets through risky investments that violated AFSCME's own Financial Standards Code?

Mr. Policano, asked those questions last week, apparently decided not to try to explain the inexplicable and did not call back with a response.

Suit: 'A Bad-Faith Act'

Mr. Schwartz filed a lawsuit in U.S. District Court in Manhattan Sept. 8 charging that imposing the administratorship was "a wholly bad-faith act [because] AFSCME has known of the financial deficiencies in Local 2054 for a long time and has taken no action," claiming the international union stepped in primarily because it was worried about the effect he might have on the future course of the local.

It seems at least as likely, however, that the Times's interest in the story was what moved AFSCME to once again fake meaningful action. National coverage of a new scandal in a union wracked a decade ago by similar shenanigans would have brought the same kind of outcry about negative publicity by the heads of other district councils that led Mr. McEntee to finally cashier Mr. Hill long after it became obvious he was either indifferent to or powerless to stem the crime wave overwhelming the union and draining its assets. Until then Mr. McEntee ignored the warning signs— from a written demand by one prominent local president that he investigate whether the 1996 wage-contract vote had been fixed to the looting of DC 37's largest local by its president —that Mr. Hill was the wrong guy to lead his flagship district council.

Calls Roberts Soft on Allies

Mr. Schwartz contended last week that Ms. Roberts was also the wrong person to lead DC 37, and for many of the same reasons. He noted that she had not even acted to strip Ms. Carew-Rogers or Michael Hood—the deposed president of Local 1505 who has acknowledged some financial irregularities and withheld the local's books for more than three years from the woman who eventually unseated him—of their DC 37 vice presidencies, which pay each of them $18,000 a year. The reason, he said, was as simple as it is mortifying: they may be grossly incompetent at the very least, but they are reliable "yes" votes for Ms. Roberts at the DC 37 executive board.

"It's like Lillian World 2009 is similar to what existed in 1998: 'if you're my friend, I won't bother you,' '' Mr. Schwartz said. " 'And I'll give you release time,' " meaning the officials involved can get paid while not reporting to their city jobs because they are purportedly conducting union business.

Those who cross Ms. Roberts, however, find that retribution is swift. Local 375 President Claude Fort said last week of his onetime ally that "if she is challenged or you ask questions about expenditures," retaliation soon follows.

Five years ago, when Ms. Roberts asked Mr. Fort not to seek an AFSCME vice presidency in deference to the then-head of Local 2054, Joan Reed, he obliged, even though his local has nearly 2,000 more members. When she died, however, he sought the spot again and did not step aside when Ms. Roberts told him that Local 372 President Veronica Montgomery- Costa, her most-powerful supporter on the executive board, wanted it as well.

Questioned $300G Dinner

His decision to run unsuccessfully earned him bad will, Mr. Fort said, but it was not until he began asking questions last summer about a party at the AFSCME convention in San Francisco on which DC 37 reportedly spent $300,000 that Ms. Roberts wanted to "kill" him politically. He said trumped up charges soon followed that a close aide of his had a no-show job and that Mr. Fort was enabling him.

Cuthbert Dickerson, the president of Local 374 and a Roberts supporter, challenged Mr. Fort's narrative and his chronology, claiming the charges were prepared against him before he pressed for how much had been spent on the dinner at the convention. But when asked whether the figure had been in the neighborhood of $300,000, Mr. Dickerson said, "That sounds about right."

The fact that DC 37 is still partying like it's 1998 should be troubling to anyone familiar with that dark decade in the union's history. Back then, the large expenditures on holiday parties and education conferences reflected not just extravagance with members' dues money but, as the later prosecutions made clear, kickbacks in which local presidents split the proceeds of the inflated bills with vendors and, in one case, a local may have laundered a payoff to the president of another in return for having his members rolled into the larger local.

No Confidence But No Challenge?

Although more than a few union officials shake their heads and roll their eyes when discussing Ms. Roberts's leadership and the decline of DC 37 during her seven-plus years in office, she may not face serious opposition when she seeks her third full term next year at age 84. This is largely due to an election system in which DC 37's officers are not really accountable to their members, since they are elected by union delegates rather than a rank-and-file vote. Aside from the fire officers' union, where nine board members directly elected by the rank and file choose among themselves for president, DC 37 is the only municipal union where the membership does not vote for its leader.

The problems inherent in this system became clear with the 1998 scandal. The two men who were eventually convicted of stealing the most from the union, Charlie Hughes of Local 372 and Al Diop of Local 1549, represented about 40 percent of DC 37's members and exercised tight control over their delegates. This meant that they could make or break an executive director, since they needed to enlist the presidents of no more than a handful of DC 37's 56 locals to provide a majority in the delegate voting. Mr. Hill was not possessed of the kind of political courage that would lead him to ask questions about the two men's activities that might trouble either one, unless, as in Mr. Hughes's case, a local president's ambition suddenly posed a threat to his own power.

Could Swing Board Majority

That dynamic may also have played a part in Ms. Roberts's lack of response in recent months when Local 2054 board members came to her with their growing concerns about Ms. Carew-Rogers's spending and her autocratic behavior. Local 2054 is one of the largest of the 51 locals that are not part of the "Big Five" that each represent at least five percent of the union's members. If it were led by someone not tied to Ms. Roberts, it could swing the balance of power on the DC 37 executive board, so that her next term would be beset by checks on her authority similar to what she endured when she first defeated challenger Charles Ensley but did not have a majority on the board.

The basic flaws of the governance system have left not only her and Mr. Hill but Victor Gotbaum, the last truly strong DC 37 executive director, forced to tolerate varying degrees of knavery by local presidents as the price for continued control over their boards.

Yet when Mr. Saunders became DC 37 administrator and was granted sweeping powers by Mr. McEntee, he opted not to change this election system. It was generally believed that he shied away for political reasons of his own: he hopes to succeed his boss someday, and diluting the power of the heads of the two largest DC 37 locals might have eventually cost him important support if he faced opposition.

Change of Heart on Democracy

He went away, but the potential for a recurrence of corruption because of the governance structure lingered. It was summed up concisely in an article in this newspaper in December 2003 written by a veteran union official who had seen DC 37 at its best and worst.

"We still need to do more to make sure that corruption can never return to DC 37," that official wrote. "More democracy is the answer. We need to amend our constitution to provide for direct election of DC 37's officers by the members. We must truly make the leadership fully accountable to the membership."

The author of those noble words was Lillian Roberts. It's possible that she put her name behind them only because she was seeking a full term as executive director the following month and faced a tough challenge from Mr. Ensley, then the reformminded Local 371 president whose warning about contract vote-fixing had been ignored nearly eight years earlier by Mr. McEntee. But if she believed them then, she changed her mind soon after her narrow victory. By the latter part of 2004, she had backed away from her position in support of direct election, saying she would leave it to union delegates to decide.

Delegates Reap Loyalty's Rewards

The delegates themselves are not exactly unbiased observers, however. Just as local presidents who side with Ms. Roberts have been rewarded financially, delegates who Mr. Ensley thought he had locked up in the 2004 election wound up voting for her instead and received committee assignments that were accompanied by stipends as rewards. There are other perks for those whose votes and loyalty can be counted on: in 1998, the last AFSCME convention for many DC 37 officials before their fancy hotel accommodations at union conferences gave way to prison cells, Mr. Diop took a delegation of more than 300 from Local 1549 to Hawaii with him.

That's an awful lot of member dues money being spent to keep union officials happy. It doesn't cost the local presidents or the DC 37 executive director anything, though, and helps guarantee that the delegates will vote the right way, which has nothing to do with whether members' interests are being served.

And as long as he can count on DC 37's votes when he runs for re-election, Mr. McEntee sees nothing wrong with this arrangement. Mr. Saunders may be less of a political hack, with more concern for the people AFSCME represents, but his decision to back off from taking action he knew was necessary to reform the union a decade ago does not foster much hope that he will play any role in meaningful reform whenever Mr. McEntee finally packs it in. Which means that there is no assurance that whoever succeeds Ms. Roberts when she bows to reality and retires will, even if more capable, govern any differently.

An Unearned Honor At Parade

Last Saturday, amid the turmoil at Local 2054 and questions about whether there are locals beyond Mr. Hood's where similar problems are just waiting to surface, Ms. Roberts served as Grand Marshal of the Labor Day Parade. The press release from the AFL-CIO New York City Central Labor Council, rather than citing any accomplishments she had to justify the honor, noted that the choice coincided with DC 37's 65th birthday.

It was an appropriate if unintended commentary on a ceremonial union leader playing yet another ceremonial role, just as she and her superiors in Washington dress up actions that are a pretext for the political machinations that are the only thing they do with much skill.