The Zuccotti Diversion

A brouhaha erupted in the tabloids last week after it was revealed that John Zuccotti, the neutral arbitration panel chairman who produced the award in the wage contract dispute between Transport Workers Union Local 100 and the Metropolitan Transportation Authority, charged $400,000 and donated the $115,000 of that sum that was his fee to a Local 100 fund assisting widows and orphans.

An MTA board member who declined to be named howled to both the Post and the Daily News about the amount charged, and both papers editorialized that Mr. Zuccotti’s contribution showed that he was biased in favor of the union.

All this, frankly, amounts to much ado about little of great consequence. It is a diversion from the real issue regarding the contract award, which is that the MTA, after agreeing to binding arbitration, is now challenging it in court.

Yes, the fee charged by Mr. Zuccotti’s firm is high compared with the rates set by other arbitrators. But it is based on a $900-an-hour charge for the services of himself and his firm that was agreed to in advance by the MTA and Local 100, which are splitting the cost.

And no, there is no reason to believe that Mr. Zuccotti donating his fee to the Local 100 Widows and Orphans Fund indicates bias. Mr. Zuccotti is a wealthy man who doesn’t need the money. The fact that he asked at the outset—rather than after negative publicity cropped up—that it be given to a fund benefiting the survivors of transit workers who lost their lives in the line of duty indicates nothing worse than a compassionate side. The criticism from two newspaper editorial boards that show no skepticism at all that Mayor Bloomberg’s private largesse toward institutions whose leaders have either supported his re-election or declined to support his challenger might have a political tinge to it suggests a very flexible standard for judging generosity, to put it politely.

The screaming and shouting amounts to a grasping at straws in trying to build a public-relations case against a contract award. It attempts to obscure the fact that the MTA, encouraged by Mr. Bloomberg, is whining for a do-over because its new management isn’t pleased that Mr. Zuccotti’s award didn’t depart very far from a proposed settlement that the Mayor headed off 13 months ago that would have granted three 4-percent raises.

The award kept two of those raises, but delayed their implementation dates to cut the cash cost in half to the MTA over the first two years of the pact, and granted a 3-percent hike in the final year. It also reduced the amount deducted from workers’ wages for health care –- by three-hundredths of a percent —and ended the practice of deducting from overtime earnings for that purpose.

It is hard to argue that the first two hikes are outrageous when they match what Mr. Bloomberg has given several unions for overlapping periods, and their short-term cash cost is actually cheaper.

A case could be made that the 3-percent hike is more than it had to be. And the lifting of the healthcare deduction on overtime pay essentially gave departing Local 100 President Roger Toussaint a pardon for the portion of his health-care giveback four years ago that went beyond questionable and into the realm of dumb.

But to fault Mr. Zuccotti for those latter aspects of the award, you have to believe that he imposed them without any encouragement from former MTA CEO Lee Sander. We don’t believe that, and neither do more than a few labor-relations professionals who have discussed the award.

One of them who was willing to go on the record on that was Al Viani, a former top official in the city Office of Collective Bargaining who was one of the mediators involved in ending the 2005 transit strike and bringing about a tentative settlement between the MTA and Local 100. (We should remind the tabloid editorial boards that the mediators on the panel were agreed to by a prior, hard-line MTA management.)

Mr. Viani, based on his own long experience, said it was “not a surprising outcome” that the award fell in the vicinity of what Mr. Sander and Mr. Toussaint were ready to sign off on last October before Mr. Bloomberg interceded. “Arbitrators don’t make revolutions,” was how he put it.

Translated, that means that—as several other professionals have speculated—at some point during the arbitration Mr. Sander probably indicated to Mr. Zuccotti that he could live with a slightly scaleddown version of what the two sides had come close to a deal on. There is simply no reason to believe that Mr. Zuccotti would risk a reputation gained over impeccable service as a Deputy Mayor during the mid-1970s fiscal crisis and as a lawyer and arbitrator since then by gift-wrapping an irresponsible award to appease the union.

It is far more likely that there was a strong difference of opinion between Mr. Sander—who has declined comment—and current MTA management about what it could afford and how important the award was in improving relations with Local 100. That, however, should not be a matter for the courts.

Mr. Viani echoed a view expressed by the union and others in wondering how the MTA, Mr. Bloomberg and the tabloids could excoriate Local 100’s leadership four years ago for going on strike rather than agreeing to arbitration yet think it appropriate, after the union this time agreed to be bound by an arbitrator’s decision, to appeal it in court.

“There’s a basic hypocrisy” to that stance, he said. And that, not Mr. Zuccotti’s fee, is the heart of the matter.