FoundationFoundation The bi-monthly newsletter of the National Right to Work ActionAction Legal Defense Foundation, Inc. Vol. XXII, No. 5 8001 Braddock Road • Springfield, Virginia 22160 www.nrtw.org September/October 2002

almost exclusively presidents and other Union Bosses Face officials of major unions, are already the targets of a federal grand jury investiga- tion in Washington, DC, which is inves- Federal Charges tigating possible criminal activity. During the late 1990s, ULLICO In Enron-Style bought significant holdings in Global Crossing, which skyrocketed in value. Scandal In late 1999, before ULLICO’s annu- ally adjusted stock price was to be increased, ULLICO President Robert AP/Wide World Photo AP/Wide World Georgine sent a confidential letter to Pension fund scam While union lap dogs like Hillary ULLICO board members encouraging pickpocketed Clinton carry on about corporate responsibility, they have hung millions them to purchase up to 4,000 shares of stock at $53.94. Georgine knew the rank-and-file workers of workers out to dry whose pensions were raided by union bosses. stock’s value would increase significant- ly at the next revaluation. Then, in May WASHINGTON, D.C. — With numer- 2000, ULLICO’s board raised the ous accounting scandals plaguing Wall would only allow larger shareholders— price of company stock to $146 per Street, union power brokers like AFL- such as individual union pension funds share, knowing that the new price was CIO President John Sweeney have set up for the benefit of union members well above its true value, because claimed Big Labor’s high command is and compulsory fee payers—to sell a the best watchdog of corporate corrup- small portion of their stock during the see ULLICO SCANDAL, page 6 tion. However, the union presidents same period. These transactions were who run Union Labor Life Insurance kept secret for nearly two years until Company (ULLICO) have their own they came to light in April. version of Enron on their hands in a “The self-dealing of ULLICO offi- IN THIS ISSUE recently exposed stock fraud scheme cials reveals the corruption that results that may be the biggest union scandal from the numerous special privileges exposed in years. conferred upon union officials by feder- 2 Ban on Discriminatory Union- Last month, National Right to al law,” said Gleason. “While union offi- only PLAs Upheld Work Legal Defense Foundation attor- cials have been talking about corporate 3 Bay State Teachers Win 13-year neys, on behalf of Foundation Vice corruption at firms like Enron, they Legal Battle With NEA President Stefan Gleason as charging have been similarly exploiting rank-and- party, filed federal charges at the file workers.” 4 Graduate Student Sues MSU National Labor Relations Board for Violating Privacy Rights (NLRB) against ULLICO for secretly Public Employers Must Protect and illegally enriching top union offi- ULLICO bosses turn Workers From Union Abuse cials at the expense of ordinary union profits under the table members and compulsory fee payers. 5 Foundation Often Wins The federal unfair labor practice Without Going To Court charges allege that ULLICO directors ULLICO was established in 1925 used their positions to allow themselves and today invests funds from unions, 7 Spotlight On John C. Scully, to sell their entire personal portfolios of labor pension funds, and individual Staff Attorney company stock at a dramatically higher stockholders. It has assets totaling over price than their stock was worth, but $4 billion. ULLICO’s directors, who are 2 Foundation Action September/October 2002 Ban on Discriminatory Union-only PLAs Upheld National Right to Work Foundation helps to defend Presidential Order

WASHINGTON, D.C . — In a stinging February 2001, a coalition of union rebuke of the arguments made by Big officials filed Building and Labor’s top lawyers, the U.S. Court Construction Trades Department, AFL- of Appeals for the District of Columbia CIO v. Allbaugh to challenge it. Circuit unanimously upheld Presidential Executive Order 13202, which bans federal agencies and other Unions use federal entities doling out federal funds from dollars to corral workers requiring discriminatory union-only contracts known as project labor agree-

ments (PLAs) on federally funded con- Photo AP/Wide World Big Labor was able to score a tem- struction projects. After taking a small step to prohibit porary victory when a U.S. District The three-judge panel agreed with union-only federal construction projects, Court issued an injunction to block the arguments set forth in the the Bush Administration enjoyed legal implementation of the Executive Foundation’s Amicus Curiae (Friend of assistance from Foundation attorneys. Order. After thousands of Foundation the Court) brief that the executive supporters signed petitions to President order was not preempted by the Bush, the Administration appealed the National Labor Relations Act and that ees work for non-union companies. court’s decision. This decision to appeal President George W. Bush acted within “PLAs are nothing more than a was made before the White House his constitutional authority. shakedown—union officials use them to embarked on its overt strategy in recent “The court’s decision is a tiny, but nec- demand taxpayer handouts and govern- months of cozying up to union officials essary step toward protecting workers and ment-granted special privileges in by compromising its policy positions. taxpayers from higher costs and other exchange for not ordering strikes or caus- Rather than accept defeat, union abuses that flow from compulsory union- ing other disruptions,” said Gleason. bosses are expected to appeal the case ism,” said National Right to Work The appellate court’s ruling is the to the U.S. Supreme Court. If the case Foundation Vice President Stefan Gleason. latest phase of a legal “tug of war” that is heard by the high court, Foundation Big Labor has been waging to protect attorneys will file another amicus brief PLA set-asides. Immediately after the to support the Executive Order. PLAs used by Big Labor president issued the Executive Order in see PLA BAN, page 8 to harm workers and rip off taxpayers Foundation Action A PLA is a scheme that requires all contractors, whether they are unionized or not, to subject themselves and their Rev. Fred Fowler Chairman, Board of Trustees employees to unionization to work on Reed Larson President government-funded construction pro- Mark Mix Executive Vice President jects. PLAs usually require contractors Stefan Gleason Vice President and Editor in Chief Ray LaJeunesse, Jr. Vice President, Legal Director to grant union officials monopoly bar- Alicia Auerswald Vice President gaining privileges over all workers, use Virginia Smith Secretary exclusive union hiring halls, pay above- market prices resulting from wasteful work rules and featherbedding, and Distributed by the force workers to pay union dues as a National Right to Work Legal Defense Foundation, Inc. 8001 Braddock Road, Springfield, Virginia 22160 condition of employment. www.nrtw.org • 1-800-336-3600 PLAs effectively exclude the vast majority of contractors and employees The Foundation is a nonprofit, charitable organization providing free legal aid to employees from government-funded construction whose human or civil rights have been violated by abuses of compulsory unionism. All contributions projects, as more than 80 percent of to the Foundation are tax deductible under Section 501(c)(3) of the Internal Revenue Code. American contractors and their employ- September/October 2002 Foundation Action 3 Bay State Teachers Win 13-Year Legal Battle With NEA Labor commission rules in favor of 350 Massachusetts teachers

BOSTON, Mass. — The militant defend his constitution- Massachusetts arm of the National al rights. Teacher union Education Association (NEA) union officials had Belhumeur, has suffered a setback in its attempt to a former president of finance political activities through the Springfield American forced union dues. Federation of Teachers, As a result of a thirteen-year, suspended for refusing Foundation-funded legal battle that to pay union fees. He reached the Massachusetts Supreme then turned to Judicial Court twice, the Massachusetts Foundation attorneys, Labor Relations Commission (MLRC) led the challenge on ordered the Massachusetts Teachers behalf of hundreds of Association (MTA) union and parent Massachusetts teachers, NEA union to allow the return of con- and thus averted being fiscated union fees that union officials suspended each demanded illegally from 350 teachers following year. across the Commonwealth. “It’s definitely a win The MLRC ruling—which ultimately for us,” said Belhumeur resolves the teachers’ long-running in the Springfield Union-News. “We employees and a steady flow of forced case—returns $87,000 in union fees have made our point...” union dues. seized from 1987 to 1992. According to the U.S. Supreme “The decade-long hassle the teachers Not protected by a Right to Work Court, the teacher unions’ actions endured in fighting for their rights law, teachers within the Commonwealth denied constitutional rights recognized proves the great problem workers have who choose not to in the Foundation- stopping unions from using their money join the MTA are won decisions of for politics and other non-bargaining required to pay a fee Abood v. Detroit activities where no Right to Work law that covers collective Board of Education exists,” said Stefan Gleason, vice presi- bargaining activity, “Teacher unions are and Lehnert v. dent of the Foundation. or be suspended all about politics — Ferris Faculty Union barons have learned from expe- or fired. Association. These In the course of they constantly take rulings stated that see TEACHERS WIN, page 7 this thirteen-year a union may not struggle, stands on hot spend compulsory Foundation attor- dues on politics, Newsclips Requested button issues,” said neys were able to lobbying, organiz- The Foundation asks supporters show that the ing, public rela- the Foundation’s to keep their eyes peeled teacher union was tions, or any other for news items exposing cooking the books activity unrelated Dan Cronin. the role union officials and charging an to collective play in disruptive strikes, inflated fee for the bargaining. outrageous lobbying purpose of collective and political campaigning. bargaining, and the union was forced to Please clip any stories lower its fee demand by a third. Union hierarchy resorts that appear in your local paper to delay tactics and mail them to: Teachers assert NRTWLDF Indifference of union bosses toward Foundation-won rights Attention: Newsclip Appeal the rights of those they supposedly 8001 Braddock Road represent flourishes in states like Springfield, VA 22160 In 1989, Springfield teacher James Massachusetts, where compulsory Belhumeur embarked on his journey to unionism gives them control over 4 Foundation Action September/October 2002 Graduate Student Sues MSU for Violating Privacy Rights Administrators illegally handed union officials confidential information

Over Howerton’s explicit discloses to the GEU the amount of written objections, the forced dues deducted from each teach- University handed over his ing assistant’s paycheck, which inherent- confidential information to ly also discloses confidential information the Graduate Employee such as the student’s work history and Union (GEU), thereby violat- background. ing the Family Educational Rights and Privacy Act (FERPA) which stipulates that Academic freedom student education records can- further threatened not be released to third parties without their written consent. “By jumping into bed with Howerton is asking the federal Union organizers are working to force graduate the union, MSU administra- government to investigate MSU’s teaching assistants into union collectives, further tors are making it even easier role in providing the GEU with con- solidifying union control over America’s for union officials to abuse stu- fidential information. In addition, educational system. dents and threaten the Howerton is asking to have any con- principles of academic free- sent obtained from teaching assis- EAST LANSING, Mich. — With the dom,” said Reed Larson, President of tants who were not informed of their help of attorneys from the National the Foundation. rights declared invalid, the university Right to Work Foundation, teaching Howerton is also challenging the to discontinue the dues deduction assistant Samuel Howerton filed a com- university’s and GEU’s agreement to authorization/membership program, plaint against Michigan State University have every teaching assistant sign dues and to have MSU officials provide (MSU) with the U.S. Department of deduction authorization/membership written notice to all graduate stu- Education for illegally disclosing confi- cards that effectively operate as a waiver dents as to what their rights are dential information to union operatives. of confidentiality. The university’s policy under FERPA.

Public Employers Must Protect Workers From Union Abuse Appellate decision bans certain collusion between union and government officials

ALBUQUERQUE, N.M. — The U.S. ties unrelated to collective bargaining. “Union officials should not be Tenth Circuit Court of Appeals has In fact, Foundation attorneys discov- allowed to induce employers to do ruled public employers and unions ered evidence that the union had their dirty work by promising to reim- both have an obligation to safeguard knowingly demanded fees above and burse all legal costs that arise out of the First Amendment rights of public beyond what it was legally entitled to violating employees’ First Amendment employees who object to supporting collect. rights,” said Ray LaJeunesse, vice union political and other non-collec- The collective bargaining agree- president and legal director of the tive bargaining activities with their ment included an “indemnification Foundation. “This ruling is a small compulsory dues. clause” whereby the union promised step toward curtailing the power of The ruling came in Wessel v. City of the city that it would pay to defend union officials to shake down workers Albuquerque, a case brought by suits filed by employees whose consti- for political and other non-bargaining Foundation attorneys for city govern- tutional rights were violated. activities.” ment employees against the city and Commonplace in many states, these The court ruled these indemnifica- the American Federation of State, agreements remove the incentive for tion agreements used in hundreds of County and Municipal Employees the government employer to ensure jurisdictions nationwide are void as (AFSCME) Local 624, after the city that the union is observing employees’ against public policy. deducted union dues used for activi- substantive and due-process rights. September/October 2002 Foundation Action 5

Foundation Often Wins Without Going To Court Workers exercise rights with guidance of foundation attorneys, web site

SPRINGFIELD, Va. — Workers across Religious objector dues as a condition of employment. the country are taking matters into Reacting to the threatening notice, their own hands when confronting overcomes teacher Inter-Con employee William Gaughan union tyranny. Through consultation union defiance consulted with Foundation staff attor- with Foundation staff attorneys, and neys, who advised him of his rights. When with the aid of the Foundation’s web Foundation attorneys threatened a law- site, workers are learning their rights Last Fall, California teacher Rick Still suit against UGSOA, the union dropped and standing up to abusive union officials. learned that his union, the San Jacinto its attempts to collect dues from Virginia Education Association (SJEA), and its employees and quickly backed down. affiliates were advocating policies he con- “Foundation attorneys have a reputa- Grocery workers throw sidered morally objectionable, including tion for effectiveness, the mention of public funding of abortions and special their involvement often forces union out unwanted union rights for homosexuals. Still asked SJEA lawyers to run for cover,” said Larson. officials to divert his compulsory dues to Christine Scanlon of Worcester, a mutually agreed upon charity. Massachusetts is a good example. When union officials refused his Web site critical to Crediting information obtained request, Still consulted Foundation educating employees from the Foundation’s web site, attorneys, who helped him file religious Christine decided to distribute decertifi- discrimination charges with the Equal cation petitions to hundreds of cowork- Employment Opportunity Commission. Because union officials routinely lie ers at Shaw’s Supermarkets’ eleven Under Title VII of the 1964 Civil Rights to employees about their rights, the Boston-area stores that were fed up with Act, union officials must attempt to Foundation’s web site has proven to be a the United Food and Commercial accommodate sincere religious objectors vital resource for workers who labor Workers (UFCW) union hierarchy. by allowing employees to make charitable under forced unionism. Foundation Scanlon also contacted Foundation contributions in lieu of paying union fees. attorneys report that employees often attorneys directly, who advised her of Rather than pursue litigation, the use the web site to request free legal aid, her right under the Foundation-won union hierarchy has now agreed to learn how to stop the use of their union Communications Workers v. Beck deci- allow the San Jacinto Unified School dues for politics, print out deauthoriza- sion to resign her union membership District teacher to divert his forced fees tion petitions, and distribute informa- from UFCW Local 1445 and reclaim to a local college scholarship fund, tion to their coworkers. the portion of union dues spent on pol- instead of funding the union. With the help of its supporters, the itics and other activities unrelated to Foundation is able to battle on many collective bargaining. fronts. Simply providing information has Upon hearing the news that a vast Virginia Right to Work empowered thousands of employees to majority of employees signed petitions fend off compulsory unionism abuses indicating their opposition to union law enforced without actually going to court. affiliation, Shaw’s management with- drew recognition of UFCW Local 1445 Virginia employees of as the exclusive bargaining agent. Inter-Con, a D.C.-based secu- Scanlon’s actions allowed Shaw’s rity company, were outraged employees to reclaim their right to when they received notice negotiate individually with their from the Union of employer and to be rewarded on the Government Security Officers basis of their own merit. of America (UGSOA) inform- “Informed employees are Big ing them that they had to pay Labor’s worst nightmare,” said Reed four months in back union Larson, president of the Foundation. dues or face termination. The “As more workers come to our web state’s Right to Work law, site, union bosses will be less able to enacted in 1947, specifically hide behind lies and misinformation.” protects its workers from being forced to pay union 6 Foundation Action September/October 2002 ULLICO Scandal Results from Compulsory Unionism continued from cover

Global Crossing’s stock value had been directors made significant person- plummeting dramatically in 2000. al profits to the detriment of oth- In November 2000, ULLICO’s ers who had invested in ULLI- board authorized a stock repurchase at CO. In Spring 2001, ULLICO the inflated price of $146 a share stock was revalued at $74 through an arrangement which permit- a share, and only then were union ted directors to sell back their entire pensions, set up for employees, personal holdings. The scheme did not free to sell all of their ULLICO permit larger stockholders, like union stock. pension holders, to sell back more than Public reports indicate that a small portion of their ULLICO stock. among those who personally

By allowing themselves to liquidate profited from these secret trans- Photo AP/Wide World their entire personal holdings at an actions were Douglas McCarron, Hypocrisy exposed: AFL-CIO Boss John inflated price, ULLICO’s board of President of the United Brotherhood Sweeney denounces corporate corrup- of Carpenters, Martin Maddaloni, tion while participating in self-dealing President of the United Association of and insider trading. Plumbers and Pipefitters, and Morton Bahr, President of the Communications they otherwise would have been. Workers of America. In recent months, the White House has made deliberate attempts to Foundation’s charges cozy up to McCarron, raising concerns that the Department of Justice may seek NLRB prosecution soft pedal its investigation into crimial misconduct at ULLICO. The budding The Foundation’s NLRB charges relationship with the carpenters union aim for the return of any illegal profits, president has already affected the the combined sum of which totaled The Foundation is working to expose selection of Bush’s recent NLRB nom- over $6.5 million. the shady self-dealing by the union inees who, as a whole, are more sym- The NLRB can do little more bosses that run ULLICO. pathetic to compulsory unionism than than order a return of the stolen funds and issue a fine to the guilty board members. But the underhand- edness of the union bosses on the ULLICO board plainly demonstrates Support your Foundation its lack of accountability to the through Planned Giving employees they supposedly represent. Compulsory unionism invites such mismanagement by allowing union Planned Giving is a great way to support your National Right to Work officials to take for granted the hard- Foundation. Some of the ways you can help the Foundation are: earned workers’ wages that fuel the officials’ power. As long as union ✔ Remembering the ✔ Charitable Trusts bosses can force the payment of dues Foundation in your Will ✔ Gifts of Appreciated as a condition of employment, work- ✔ Gifts of Stocks/Bonds Real Estate ers have no choice but to pick up the tab for rampant union corruption. “The only way to prevent future For more information on the many ways you can ensure that your scandals like ULLICO is to end the support of the Foundation continues, call the Foundation at (800)336-3600 system of compulsory unionism that or (703) 321-8510. Please ask to speak with Alicia Auerswald. traps millions of workers,” said Reed Larson, president of the National Right to Work Foundation. September/October 2002 Foundation Action 7

Spotlight on… A vital part of the Foundation’s IAM, where he represented legal team since 1983, John C. Frederick Pusey, a mechanic working Scully has thrived on the challenge at a NASA facility who was fired at John C. Scully of handling a wide variety of topics the demand of International Staff Attorney and clients. Association of Machinists (IAM) Scully has helped hundreds of union officials for refusing to sup- teachers, public employees, workers port the union. Scully obtained a on federal enclaves, and religious $135,000 judgment and expanded objectors stand up for their rights. the reach of Virginia’s Right to His diverse caseload has led him to Work law. make arguments in scores of court- Scully earned his law degree from rooms, including the state supreme the University of Missouri School courts of Michigan, Vermont, of Law in 1978 and a Masters degree Massachusetts, and New Hampshire. in Labor Law from George Scully is most proud of his efforts Washington University in 1987. He to help employees who have been and his wife Lisa have been married illegally fired upon union demand. for 17 years and have three children, One case that stands out is Pusey v. Connor, Joseph, and Libby.

Teachers Win Protracted Court Battle continued from page 3 rience that if they attack workers’ social agenda that supports publicly teachers, curriculum, textbooks and Foundation-won rights head on, they will funded abortions on demand, special standards, hiring, firing, discipline, lose. Instead, they now employ a different rights for homosexuals, a nuclear and promotions. strategy: long, drawn-out procedures and arms freeze, and U.S. participation in endless delays. If left unchallenged, the the International Court of Justice. result would be the same: effective denial Regardless of the merit of these posi- Compulsory unionism of workers’ constitutional rights. tions, observers question why the That’s why Foundation attorneys are union hierarchy spends its resources ruins education quality working toward eventual Supreme Court pushing for such causes, especially review of the notion that compulsory union- using the compulsory union dues of This sweeping control over the ism is unconstitutional, especially because teachers who often do not agree. educational process protects the low- of the manner in which it is applied. “They [NEA and MTA unions] est common denominator of perfor- are all about politics — they con- mance. Under a union monopoly sys- stantly support candidates and take tem, good teachers are penalized with NEA agenda ignores stands on hot-button political issues,” lower pay, and bad teachers rewarded. said Dan Cronin, Director of Legal Because teachers have little incentive the “Three R’s” Information at the Foundation. to do a better job, education quality “Teachers shouldn’t be forced to plummets in any environment where a As a result of compulsory union- compromise their beliefs to do a job union hierarchy calls all the shots. ism privileges, the NEA union has they love.” transmogrified into a political What is little understood is the full machine that seems to have every- extent to which union militants exert thing on its agenda except teaching. control over almost everything that On the laundry list of its causes goes into the schools — compensa- are resolutions advocating a radical tion and assignments given individual 8 Foundation Action September/October 2002 PLA Ban Message from Reed Larson continued from page 2

“This is an important lesson for the Bush administration: they can win when they stand up to Big Labor and America will support them,” said Reed President Larson, president of the National Right National Right to Work to Work Foundation. Legal Defense Foundation

Bush faces more battles Dear Foundation Supporter: Have you ever spent $460,000 at a single restaurant? If so, you’re with Big Labor either very rich—or you’re a union boss.

Big Labor’s lawyers are also busily The foul stench of union corruption is back in the news with trying to bury another Bush Executive federal investigators finding that Ironworkers union boss Jake West Order that would make it less difficult for and his cronies spent $460,000 in workers’ dues at Washington’s employees working under federal con- exclusive Prime Rib restaurant. That’s in addition to another million tracts to learn about their Foundation- bucks spent for prostitutes and other “entertainment,” booze, and won Beck rights to reclaim the portion country club golf outings. of their compulsory dues that is spent The outrageous details of this forced-dues-funded debauchery for activities unrelated to collective bar- are still a little hazy because the nation’s premier union accounting gaining, such as politics. firm, Thomas Havey LLP, helped the union bigwigs hide these By all accounts, Big Labor will spend expenses on federal reporting forms. unprecedented levels of compulsory union dues on its largest political opera- That led to Frank Massey, a top partner with the Thomas Havey tion ever this fall, with the goal of elect- firm, pleading guilty to federal criminal charges that he participated ing their hand-picked, puppet candidates in a conspiracy to help the Ironworkers union shield more than $1.5 who are hostile to employee freedom. million from disclosure. It also raises a red flag about the veracity of “As the fight over union-only PLAs all the 700 unions that Havey audits. has shown, the only way to deal with Big Labor is to fight fire with fire,” said This bombshell hits just as AFL-CIO boss John Sweeney and his Gleason. “Rather than trying to cronies are struggling to escape the fallout from the ULLICO scandal, appease union czars like the Teamsters’ which has been called “Big Labor’s Enron.” (See the full story on page 1.) Jimmy Hoffa, the White House and its The result is another black eye for the union hierarchy just as allies in Congress should stand on prin- it professes outrage at corporate malfeasance in the Enron and ciple and oppose union power grabs — WorldCom affairs. just as those who put Bush in office expect him to do.” In the wake of this latest union corruption scandal, some are proposing stiffer financial reporting requirements for union bosses. That’s all to the good, but the real solution is to attack the compulsory Free Newsletter unionism privileges that are the root of Big Labor’s power and corruption. With your support, that’s exactly what the National Right to If you know others who Work Foundation is doing. would appreciate receiving Foundation Action, Sincerely, please provide us with their names and addresses. They’ll begin receiving issues within weeks. Reed Larson