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Former SEIU leader indicted (Read More…)

July 31, 2012

Not long ago, Tyrone Freeman was a rising young star in the national labor movement, already the head of California’s biggest union local and a force in Democratic politics from Los Angeles to Washington, D.C.

Freeman’s quick climb up the ranks of the powerful Service Employees International Union burnished his reputation as an effective advocate for the disadvantaged, a man who helped improve the lot of about 190,000 workers paid about $9 an hour to provide in-home care for the infirm.
On Tuesday, however, Freeman was indicted on federal charges of stealing from those workers to enrich himself, including by billing the union for costs from his Hawaii wedding.

The 15-count indictment secured by the U.S. attorney’s office in Los Angeles also alleges that Freeman violated tax laws and gave false information to a mortgage lender. If convicted on all counts, he could face maximum prison sentences in excess of 200 years.

The charges resulted from a nearly four-year investigation by the U.S. Labor Department, FBI and Internal Revenue Service that grew out of a series of reports in the Los Angeles Times on Freeman’s financial dealings as president of SEIU Local 6434. The resulting scandal spread through the 2-million-member SEIU and cost several other union officials their jobs.

Citing records and interviews, The Times reports showed that Freeman, 42, funneled hundreds of thousands of dollars of his union members’ hard-earned dues to his relatives and lavished similar sums on golf tournaments, expensive restaurants and a Beverly Hills cigar club.

Last month, his wife pleaded guilty to an income tax charge in connection with more than $540,000 she received in union consulting payments at Freeman’s direction.

Freeman has denied doing anything wrong.

Abel Salinas, the Labor Department’s special agent in charge in L.A., said the indictment of Freeman demonstrates the government’s “commitment to investigating allegations of labor racketeering in our nation’s unions.”

The SEIU ousted Freeman shortly after The Times disclosures and barred him from the union for life. In addition, it launched an internal inquiry whose findings were forwarded to the federal investigators.

The indictment largely focuses on an alleged scheme in which Freeman illegally directed Local 6434 funds to another organization he led, the California United Homecare Workers, to pad his salary by $2,500 a month.

He is similarly accused of stealing $17,000 from the local by pocketing funds he ordered paid to a union-affiliated nonprofit group devoted to providing housing for the poor.

At the time, Freeman’s total annual compensation was more than $200,000, making him one of the highest paid union leaders in the nation. He is charged with three tax counts for allegedly failing to report about $100,000 in income from 2006 through 2008.

According to the indictment, Freeman used his union credit card to cover more than $8,000 in expenses for his 2006 wedding in Honolulu. The count involving his mortgage alleges that he lied to Countrywide Bank by claiming the union paid his personal American Express bills and the leasing costs for his Land Rover.

U.S. attorney spokesman Thom Mrozek would not comment on whether Freeman could face more charges. Mrozek said the investigation was ongoing.
Sources close to the case said the indictment contains the most clear-cut allegations, but if Freeman is convicted, prosecutors could present at a sentencing hearing information about his use of other union funds.

Still pending in state court is a civil lawsuit the union filed against Freeman and his wife, Pilar Planells, that seeks to recover more than $1.1 million they allegedly pilfered. The money allegedly financed Freeman’s lifestyle of $175 glasses of cognac, $250 bottles of wine and a $3,400 trip to the NFL Pro Bowl.
The Times also reported that Freeman routinely ordered employees of a charity he ran to work on campaigns for political candidates—a practice barred by law—according to people who said they participated in such activities.

Freeman later denied to the Internal Revenue Service that the charity employees were required to do campaign work, said a person close to an IRS inquiry into the matter.

Because they are subsidized by taxpayers, charities are forbidden to take part in campaigns for public office, directly or indirectly. Violations can cost charities their tax exemptions and lead to other penalties.

Under Freeman, Local 6434 grew dramatically, largely because of a consolidation campaign spearheaded by SEIU’s then-president, Andy Stern, who had nurtured Freeman’s rise in the union. The local had 160,000 members during Freeman’s tenure—it now lists 180,000—and remains SEIU’s biggest California chapter, the second largest in the nation. It has more members than many international unions.

Freeman also represented 30,000 workers as president of the California United Homecare Workers.

Posted by Admin on 07/31 at 10:40 PM

Fight Over Immigrant Firings (Read More…)

July 27, 2012

MILWAUKEE — On May 27, about 150 workers from Palermo’s Pizza factory here, representing three-fourths of its production workers, met to sign a petition saying they wanted to unionize. They say they gave the petition to management two days later.
Around the same time, Palermo’s delivered letters to 89 immigrant workers, asking them to provide documentation verifying that they had the right to work in the United States. Ten days later, almost all of them were fired.

Labor organizers assert that Palermo’s, one of the nation’s largest producers of frozen pizza, was trying to snuff out a unionization drive in its infancy. The company says it was merely responding to warnings it had received from federal immigration authorities to fire unauthorized workers or face hefty fines.
Scores of Palermo’s workers have been on strike since June 1 to protest this immigration crackdown, as well as what they say were poor wages and working conditions. Day after day, the strikers picket outside the factory, often in 90-degree heat, chanting, “No justice, no pizza.” Labor unions across the nation have rallied behind them and called for a boycott of Palermo’s products.

At a time when labor leaders see immigrants as a group ripe for unionization, the conflict highlights how difficult it can be to organize workplaces that include unauthorized workers, who are entitled to certain labor protections despite working illegally.

The fight also demonstrates how the Obama administration’s campaign to toughen immigration enforcement in workplaces can increase employers’ leverage to derail unionization efforts.

After several labor leaders complained that the enforcement action at Palermo’s was undermining a unionization effort, United States Immigration and Customs Enforcement announced on June 7 that it was staying the enforcement, the first time it has ever suspended a crackdown that way, according to immigration experts. Although the agency’s move might have been too late to help the fired Palermo’s workers, labor experts say the government’s change of heart might affect future efforts to unionize immigrants. 

“There has been a history of the federal government not understanding how its enforcement can undermine union organizing drives,” said Janice Fine, a labor relations professor at Rutgers. “There is no question that this is a new moment.”

Amid strong public support for more immigration enforcement, the Obama administration has stepped up pressure on employers to dismiss or avoid hiring illegal immigrants. During President Obama’s tenure, federal inspectors have audited 8,079 companies suspected of hiring unauthorized workers, leading to tens of thousands of immigrant workers quitting or being fired.

Labor leaders say companies often taken advantage of workers’ illegal status to violate wage and safety laws or otherwise exploit them. When immigrant workers band together to protest or seek to unionize, union leaders say, companies sometimes invite in immigration officials to deliberately undercut them.
Unions cite enforcement actions at Smithfield’s huge pork processing plant in Tar Heel, N.C., and the Agriprocessors meatpacking plant in Postville, Iowa, as examples, although both employers denied that they had asked immigration enforcers to intervene. 

Still, unions have had some success organizing industries that employ many illegal immigrants, like janitorial companies, poultry plants and carwashes.
There is some irony in the Palermo’s dispute — a company that boasts that it was founded by immigrants finds itself in battle with its immigrant employees.
Palermo’s executives say their company is an inspiring, up-by-the-bootstraps story: Gaspare and Zina Fallucca, husband and wife immigrants from Sicily, founded a small Italian bakery on Milwaukee’s east side in 1964 that has since blossomed into a company that produces millions of pizzas yearly.

But dozens of Latino immigrants employed by the company assert that the couple’s descendants, who now run the company, paid and treated them so poorly that it prevented them from realizing their own American dream.

“It’s simple why we’re on strike: We want better pay and benefits, a safer work environment, and we want to be listened to on the job,” said Orlando Sosa, a Palermo’s worker since 2002. “What we really want is to be able to work hard to achieve our dreams.”

Palermo’s managers insist that it is they who are the victims of injustice. They say they face a boycott and a barrage of invective merely because they carried out their legal obligation to terminate unauthorized workers.

“We were put in an impossible situation,” said Palermo’s marketing director, Chris Dresselhuys. “ICE said these people can’t work in the United States unless they prove otherwise.”

He said Palermo’s fired the workers reluctantly, pointing to letters from the agency saying the company could face criminal penalties and fines for each unauthorized worker it employed.

Voces de la Frontera, an immigrant workers’ center based in Milwaukee that is working with the United Steelworkers to unionize the Palermo’s workers, has asked the National Labor Relations Board to rule that Palermo’s illegally intimidated and retaliated against employees for seeking to unionize.

“This wasn’t really about immigration enforcement — it’s all about union-busting,” said Christine Neumann-Ortiz, Voces’ executive director.

After Palermo’s turned down the workers’ request for union recognition, the N.L.R.B. called for a vote to determine whether a majority of Palermo’s workers wanted a union.

The election was originally scheduled for July 6, but it has been delayed twice. Initially, the vote was put off because the United Food and Commercial Workers Union, irked that the workers were seeking to join the steelworkers, pushed successfully to be put on the ballot as well. The labor board then ordered a further delay to weigh Voces’ claim that Palermo’s had illegally intimidated workers, making a fair election impossible.

Ana Avendano, the A.F.L.-C.I.O.’s director of immigration affairs, said ICE’s suspension of its enforcement action was the first time it had made such a move. She said it was consistent with a December 2011 agreement that ICE signed with the Department of Labor, promising to refrain from work site enforcement that interfered with labor disputes or wage investigations.

Despite ICE’s letter on June 7 staying enforcement, the very next day Palermo’s sent out more than 80 termination letters to workers suspected of being illegal immigrants. Mr. Dresselhuys said ICE’s letter was ambiguous and the company feared criminal penalties unless it acted. “Without any sort of clarity, what’s a little company like us supposed to do?” he asked.

Mr. Dresselhuys said ICE first contacted Palermo’s in February 2011, expressing concerns that some employees were unauthorized. Palermo’s officials said the agency followed up with a letter on May 10 of this year urging them to tell around 90 immigrant workers to reverify their work status or face termination.
Palermo’s officials says Voces manipulated the situation to make the company look as if it were retaliating against the union drive. They said Voces rushed to get workers to sign the pro-union petition in late May when the group saw that an immigration crackdown was imminent.

Voces “has manufactured the controversy where none existed in a shameful attempt to manipulate our employees into hurting the company,” the company said in a statement.

But Voces said the workers — with complaints about low pay, callous managers and injuries on the job — decided back in November that they wanted to unionize. For months, the group said, it held talks with the steelworkers and A.F.L.-C.I.O. about how to proceed.

Voces has now asked the N.L.R.B. for an unusual remedy: to order Palermo’s to reinstate the fired immigrants, at least until ICE decides to “un-suspend” its enforcement action. Voces said the fired workers’ immigration status had not been definitively determined because of the ICE suspension.

The group hopes a union election can be held soon afterward, before ICE resumes enforcement, with the union’s chances of winning greatly enhanced because many union-friendly employees will be back at work.

Palermo’s is trying to move on. It has hired dozens of replacement workers, 28 of them refugees from Myanmar, to keep the factory running during the strike.
The company says it would be awkward and illegal to rehire the fired immigrants. The Supreme Court has ruled that the N.L.R.B. cannot order reinstatement or back pay for illegal immigrants who were improperly fired for seeking to unionize.

Palermo’s maintains that it is an unusually good employer, providing health, dental and vision coverage, disability insurance, free meals and a 3 percent contribution to 401(k)’s.

But Esperanza Garza, a production line worker on strike, said she earned just $9.30 an hour after 10 years. She said the health insurance was hard to afford, many workers got hurt and managers often belittled workers.

“We want something better,” she said.


Posted by Admin on 07/29 at 05:28 PM