City workers union taken over by National Parent after audit finds irregularities
The union local representing New York City public sector clerical workers has been placed under administration by its international union, the American Federation of State, County and Municipal Employees (AFSCME), following allegations financial mismanagement, THE CITY has learned.
District Council 37 Local 1549 has announced that the local’s day-to-day operations are under the control of the international union “with immediate effect” following an audit which revealed “serious deficiencies and numerous violations of the AFSCME Financial Standards Code,” according to a September 19 letter to rank and file members.
A draft version of Audit obtained by THE CITY revealed questionable payments to a former local union employee working as a consultant, gift cards given to union staffers that were not properly tracked and $45,500 in car service charges per the ousted president of Local 1549, Eddie Rodriguez, who should never have been covered by the union.
Also reported: $257,000 in American Express fees, where “in many cases the union business purpose of the fees was not explained.” Listeners said, “The practices of Local 1549 here are very concerning.
The audit lasted from January 2020 to April 2022. Henry Garrido, executive director of DC 37, said union members took the complaint that triggered the audit directly to AFSCME.
The administration is the latest financial scandal for Local 1549, whose members are among the lowest paid workers in the city. In 2001, Al Diopthe former president of the local which now has 12,000 members, has been condemned up to four years in prison for rigging a union election and stealing union funds.
DC 37, the city’s largest public sector union, is preparing to negotiate with the Adams administration for a new contract covering about 100,000 workers. Negotiation is expected to begin in the coming months – even as the city faces massive budget deficits. Unions meanwhile are trying to make a difficult transition to a new privatized health insurance plan in an effort to save money.
“We are committed to getting the best deal possible for our members, and we are focused on addressing a difficult issue with health care,” Garrido said in an interview with THE CITY on Wednesday. “So to me, while we may maintain a zero-tolerance policy for any type of misconduct or anything like that, our goal is to provide service to our members. It’s not going to be a distraction or anything. either for what we must do to obtain and offer our members in the best possible way.
AFSCME spokeswoman Tracey Conaty confirmed the content of the letter, adding that the matter is pending an internal court hearing by the international union next month. She declined to comment further.
“In my opinion, a contingency exists in Office Administrative Employees, New York, New York Local 1549, AFSCME, AFL-CIO, in that the dissipation or loss of funds or assets of the local is under threat and that the local is acting in violation of the International Constitution,” AFSCME President Lee Saunders wrote in a Sept. 19 suspension notice to union leaders cited in the statement to members of the base. “Therefore, pursuant to Article IX, Section 37 of the International Constitution, I place AFSCME Local Lodge 1549 into administration, pending notice and hearing, effective immediately.”
Rodriguez and the rest of Local 1549’s senior management were immediately removed from their positions. The local — which has 12 full-time employees — is now led by James HowelAFCME Eastern Regional Director, who earned $271,093 in 2019.
Rodriguez declined to comment. “I don’t want to talk about it,” he told THE CITY before hanging up.
Proponents argue that the audit findings described financial practices at many other DC 37 establishments. 56 inhabitants. They also argue that the AFSCME takeover is politically motivated.
In January 2019, Rodriguez, who had served as DC 37 president since the early 2000s, was defeated by Shaun D. Francis IPresident of Local 372. It is the largest local in DC 37, representing over 23,000 school staff, including school crossing guards and school lunch attendants.
School crossing guards win $15.45 per hour and an average of $19,500 per year, according to Intuit, which calculated the data based on 133 TurboTax users. School meal aid earns $33,944 a year, according to ZipRecruiter.
Garrido runs all union operations with an executive council, while the DC 37 president has a lesser role – chairing meetings of shop stewards, presidents, and the executive council.
“I think it’s political because the issues they noted persist in most locals,” said Arthur Schwartz, an attorney who has represented many members who have opposed DC 37 leaders.
“I have no idea what he’s talking about,” Garrido told THE CITY in response.
“This behavior does not occur in other locals,” he added. “That is patently untrue.”
A group of people who challenged Francois’s re-election as leader of Local 372 last year have alleged he was paid $296,015 in abusive overtime on top of his salary, according to The Chef. Overtime has long been prohibited for local presidents at DC 37.
Francois did not immediately respond to a request for comment.
Schwartz, who represents Francois’ opposition, noted that the local’s cash flow has declined by an average of about $1 million a year since 2015. Francois asked AFSCME to audit the chapter’s finances local.
Payment not verified
As for the Local 1549 audit, the 10-page assessment was based on a “review of policies, minutes, financial statements and a sample test of the Local’s accounting records.”
The review first challenged the salary paid to Ralph Palladino, the local’s second vice-president, who retired in December 2021. In total, he received $170,470 to cover 71 days of unpaid vacation. used, 43 compensatory days and 14.3 years of severance pay. Other DC 37 locals have similar packages, including a so-called severance package for retiring officers, according to labor insiders.
The audit questioned Palladino’s stored compensation time and noted that there was no evidence that the union’s executive board approved overall “cashouts” for him.
“We were presented with no evidence that full-time officers come in and out of work on the clock or have a set number of hours per day or week that they work,” the audit said. “We cannot verify that the time off accrued and paid has been properly documented and paid or even the basis for the claim that time off should be awarded for work performed.”
Local leaders should also create a “clearly defined policy” for pension payments, the audit added. “The Local should consider whether maintaining these substantial retirement benefits for its officers is in the best interest of the membership,” the Financial Review said.
Palladino, who for years was one of the local’s loudest cheerleaders and activists, said he was unaware of the audit and declined to comment.
The audit also found that the local used Executive Charge Inc., a black car service, to provide rides for officers and staff.
In total, the union spent $51,301 including $45,500 for the use of Rodriguez’s car service from January 2020 to April 2022, according to the audit. Rodriguez was driven about 109 times to get from home to office or vice versa, according to the review.
“That averages out to $288 for each commute trip,” the audit says. “Travel is a personal expense and should not be paid for or reimbursed by the local unless it is declared as… taxable wages. »
Rodriguez did not report the use as taxable compensation and it was not included in his annual W-2s, the review noted. “This is a serious shortcoming,” the audit said, noting that there have been “several” times the union has been hit with extra “waiting time” for car service for Rodriguez ranging from $42 to $168.
The audit also revealed that the union was using Dan Persons, a former union employee, as a consultant. He was paid $2,000 a month for an annual total of $24,000. As part of this agreement, he provided monthly invoices detailing the work performed. “But our review of the invoices indicates that it copies the same work done across multiple monthly invoices,” the audit said.
Renee Gainer, a former division manager at DC 37, was also paid $2,000 a month as a consultant for the local, according to Financial Review. There was no formal consultancy agreement and her invoices also indicate “that she also copies the same work performed on multiple monthly invoices”, the audit said.
A labor expert said the local takeover by the international union was significant.
“It’s a serious thing,” said Joshua Freeman, labor historian and author of the book “Working Class New York.”
“It’s an indication that the local cannot solve its own problems and really needs to bring in some new leadership and an outside team to try and get things back on track, financially, democratically, whatever. either way,” he added. . “So that’s a big deal.”
Saunders, the current international president of AFSCME, was the DC 37 trustee administrator from 2001. He was named in charge after the vote-rigging scandal rocked the union under the former mayor’s administration Rudolph Giuliani.