April 18, 2005
More on [Non-existent] Union Corruption
Having noted how pathetic are the examples of union corruption cited by the Bush administration to justify their witchhunt audits of unions, at least one conservative bloggers at Pajama Pundits tried to jump in with an example sure to quiet us union defenders, namely the cost overruns at the Florida Westin Diplomat, a hotel owned by the International Plumbers Union.
I'll spend a little time on this example, since each time conservatives try to dig up an example of union corruption, they demonstrate how minor it is compared to corporate corruption in our society.
The first problem with the Westin Diplomat example: it has nothing to do with the union audits in question, since pension funds are governed by a completely different set of financial rules. The DOL did bring a lawsuit for mismanagement of union funds under the federal ERISA pension law, and in 2004, some of the pension trustees agreed to pay an $11 million settlement in compensation to the pension fund and fines to the DOL, but once again, this example-- an $11 million fine out of the hundreds of billions of dollars managed under union pension funds -- just shows how hard it is for union critics to find any serious corruption in the union movement.
Not to sneeze at $11 million, but it is an insignificant amount compared to the amount of corporate corruption.
And let's talk about the investment itself. The DOL never proved any personal corruption by the trustees. No one has been charged with any crime. All the DOL ever charged was poor management. And while the union trustees have been attacked for investing in the hotel convention complex, the hotel industry itself has been rather impressed with the facility (link from Miami Herald article):
The Labor Department's harsh assessment of the Diplomat's planning contrasts with the generally warm words industry watchers have had for the hotel since its opening.In fact, the DOL has had to admit that nowhere in their lawsuit does the DOL say "that it was a bad investment."
A massive convention facility facing the Atlantic Ocean, the Diplomat has emerged as a strong draw for business groups needing large amounts of meeting space. In 2003, the resort made Conde Nast Traveler magazine's list of the 75 best North American hotels.
"In terms of measuring it against industry benchmarks and its competition, it's doing very well," said Scott Berman, a hotel analyst with PricewaterhouseCoopers in Miami.
So all you have is a charge that the union officials could have been more efficient in their management of the project. Geez-- if corporate officials had to fork over fines every time they made bad business management decisions, 99% of the dotcom companies would be facing fines by the US government. Which just goes to the double standard facing union versus corporation leaders under the law.
Posted by Nathan at April 18, 2005 08:53 PM