Results of IBT-DOJ Talks Uncertain

Int’l Bhd. of Teamsters officials continue to press the federal government to end its 12-year supervision of the union, but IBT president James P. Hoffa said May 15 that he did not expect any change in the consent decree until after IBT’s election this fall at the earliest.  Hoffa said that “we’ve had negotiation meetings with the Justice Department” about lifting the 1989 consent agreement, which settled the government’s civil racketeering suit against the union. But DOJ has not said what it intends to do, he said. “We don’t know what the government is thinking; we don’t know where they are going with this,” he told BNA. [BNA 5/16/01]

SEC Wins Injunction Against Oregon Union Fund Mangers
The Securities & Exch. Comm’n has obtained a permanent injunction against former Capital Consultants executives Jeffrey and Barclay Grayson, the first step toward barring Jeffrey Grayson for life from the money management business. Jeffrey Grayson is ex-CEO of Capital Consultants, the Portland, Or., money management firm that has reportedly lost more than $200 million of client money. Most of the losses came from union pension plans, including the Laborers’ Int’l Union of N. Am. The Dep’t of Labor continues an effort to recover money from Capital Consultants and the Graysons to defray the union trust funds’ losses. SEC is not seeking money damages against the Graysons, although SEC has reserved the right to enforce a financial penalty against them.

In suits filed Sept. 2000, SEC and DOL claimed that the Graysons engineered a complex Ponzi-like scheme to disguise the fact that $160 million in loans to the former Wilshire Credit Corp. had actually failed. Dozens of union trust fund clients have sued the Graysons and others in connection with Capital Consultants’ meltdown. Those suits are scheduled to go into confidential mediation where the various camps will attempt to reach a settlement May 29. [Oregonian 5/10/01]

More Fallout from UBC’s Departure; IUOE Bolts Division
The Int’l Union of Operating Engineers withdrew from the Heavy & Highway Div. of the AFL-CIO’s Building & Construction Trades Dep’t, citing concern that the division’s ability to respond to industry issues is impaired by the United Bhd. of Carpenters’ departure from the federation. IUOE president Frank Hanley, in a May 7 letter to BCTD president Edward Sullivan, said his union will continue to honor existing agreements but will not approve any new agreements negotiated by the division.

“[T]here is tremendous potential for decent, stable employment for the members of all building trade unions,” Hanley wrote. “But, quite frankly, I don’t think the building trades have capitalized on these opportunities.”

Hanley’s main concern is that UBC’s withdrawal from the AFL-CIO in Mar. 2001 “will restrict or stymie any efforts to maximize the potential of the heavy and highway operation.” Efforts by Hanley to mediate a settlement of UBC’s problems with the federation have not been successful, he said. Hanley predicted that, “barring some unforeseen developments,” these efforts will remain unsuccessful. “Without the UBC participating, the heavy and highway operation has no chance of succeeding,” Hanley said.[BNA 5/9/01]

Members Seek Contempt Ruling Against New York Local
U.S. Dist. Judge Robert L. Carter of the S. Dist. of N.Y. ruled the individual union members may proceed in their efforts to hold Int’l Ass’n of Bridge, Structural & Ornamental Iron Workers Local 580 in contempt of a 1988 consent judgment that enjoined the local from engaging in discriminatory practices in its apprenticeship programs and job referral procedures. Carter rejected the local’s contention that only the EEOC, the original plaintiff in the case, had standing to enforce the judgment. The union members filed timely charges with the EEOC, Carter noted, and 18 months later the EEOC had neither filed an order to show cause, nor issued a right to sue letter. Because of EEOC’s inaction, Carter ruled the union members could proceed without a right to sue letter.

Carter also rejected the union’s contention that individual union members should bring allegations of ongoing discrimination directly to the court-appointed special master and not to the court. Language in the consent judgment empowering the special master to monitor the union’s compliance does not limit the right of aggrieved third-party beneficiaries to bring claims directly to the court. [BNA 5/7/01 (citing EEOC, Bennet v. Int’l Ass’n of Iron Workers Local 580)]