The Honorable Kurt W. Muellenberg
Member
Public Review Board
Hotel Employees and Restaurant Employees International Union
1300 I Street, N.W., Suite 300 West
Washington, D.C.  20005
 

RE: Request for a Public Review Board Investigation of HERE’s Implementation of Reform Recommendations.
 

Dear Mr. Muellenberg:

This is a formal request that the Public Review Board (PRB) initiate an action -- under Article XXIV § IV of the Hotel Employees and Restaurant Employees International Union’s (HERE) Constitution -- into the apparent lack of integrity in HERE President John W. Wilhelm and other HERE officials’ implementation of the Recommendations made in the Monitor’s Report on HERE International Union Covering Sept. 5, 1995 to Aug. 25, 1998.

Research by the National Legal and Policy Center (NLPC), a union corruption watchdog organization, indicates that Mr. Wilhelm and other officials’ implementation of these Recommendations may have violated or may be in violation of the Ethical Practices Code under Article XXII of the HERE Constitution.  NLPC believes that these possible lapses of integrity should be investigated by PRB in order to “insure high moral and ethical standards in the administration and operational practice of [HERE].”  (HERE Const. art. XXIII, § I.)  Further, if PRB finds that such lapses in integrity occurred or persist, NLPC requests that PRB “remove, suspend, expel, fine or forfeit the benefits...of any officer” in accordance with PRB’s jurisdiction.  (HERE Const. art. XXIII, § III.)

NLPC has found the following three concerns in HERE’s implementation of the reform Recommendations:

1. Continuance of Midwestern Regional Office

One Recommendation stated: “Consider abolishing Midwestern Regional Office in Chicago, Illinois.” (Monitor’s Report, § III.I.)  The Report stated “that the office was maintained ‘as an accommodation to the [General President].’” Id.  Further, it reported that former President Edward T. Hanley “rarely visited that office” and staffers “could not recall ever seeing [Mr. Hanley] at the Midwestern Regional Office.” Id.  It also stated that all the staffers “seemed to have personal relationships with [Mr. Hanley] and, when interviewed, none could offer a plausible justification for...the existence of the office[] or for their own full-time salaries and fringe benefits...”  Id.  Thus, this Recommendation was aimed at preventing apparent corruption and stopping union funds from being used for the personal advantage of union officials.

In Mr.Wilhelm’s July 21, 1999, statement before Congress, he asserted that this Recommendation -- which he labeled #28 -- had been “completed.”  (Union Democracy, Part VII: Government Supervision of the Hotel Employees & Restaurant Employees Int’l Union, Before the Subcomm. on Employer-Employee Relations of the House Comm. on Education and the Workforce, 106th Cong. (1999) (statement of John W. Wilhelm, General President, HERE).)  However, Mr. Wilhelm did not abolish the office.  Id.  Wilhelm alleged that this Recommendation had been completed because he and HERE’s General Executive Board had “considered” abolishing it.  Id.

Such double-speak violates at least the spirit, if not the letter, of the Code.  First, the Code states that HERE “shall maintain adequate safeguards for the prevention of corruption.” (HERE Const. art. XXII, § I, cl. A.)  Second, it states that “[u]nion funds are held in sacred trust for the benefit of the membership.”  (HERE Const. art. XXII, § II.)  Third, it states that HERE “shall not permit any of their funds to be [used] in a manner which results in the personal... advantage of any officer or representative of the Union.” (HERE Const. art. XXII, § II, cl. B.)  In light of the Report’s rationale for recommending the abolition of the Midwestern Regional Office, Mr. Wilhelm’s continuance of the office does not appear to meet the high standards of the Code.

2. Hansen Responsible for Implementing Recommendations

Ted T. Hansen was listed by Mr. Wilhelm as being responsible for implementing seven Recommendations.  (Statement of Wilhelm.)  Mr. Hansen is the HERE Secretary-Treasurer and has held numerous leadership positions within HERE since at least 1973. (HERE, About HERE: Officer Biographies (visited Aug. 30, 1999) <http://www. hereunion.org/about/bios/>.)  Mr. Hansen is also the son-in-law of Edward Hanley and the brother-in-law of former HERE Director of Organization and Local 1 President and Thomas Hanley.  (Eric Brazil, “Hotel Workers Union President to Retire,” San Francisco Examiner, May 21, 1998, at C2.)  Edward Hanley resigned pursuant to an agreement with your office and was granted immunity from certain criminal prosecution and civil liability.  (Michael Bologna, “Former Chief of Hotel Workers Union Granted Immunity from Criminal Prosecution,” Bureau of National Affairs: Daily Labor Report, Dec. 1, 1998, at A7.)  Thomas Hanley was barred from his HERE posts for a period of one year ending August 31, 1999.  (Michael Bologna, “HERE’s Chief Organizer Thomas Hanley Resigned to Settle Embezzlement Charges,” Bureau of National Affairs: Daily Labor Report, Sept. 10, 1998, at A-9.)

Mr. Hansen’s involvement in implementing Recommendations is a concern for two reasons.  First, how can an individual with such intimate ties to two corrupt former officials be trusted to implement reforms?  Further, how can an individual who has had a leadership role within this union for over twenty-five years be trusted to implement reforms when during those twenty-five years this union was alleged to be one of the most corrupt unions in America and had a consent decree imposed on it because of corruption?  The common sense answer would appear to be that such an individual should not be trusted to implement reforms.  This is especially true given the Recommendations for which Mr. Hansen was partially responsible, according to Mr. Wilhelm’s statement:

#5  Prepare budget for the next fiscal year.

#8 Define standard of compensation for all employees.

#15 Discontinue practice of providing leased vehicles for consultants.

#22 Require committee to work from an annual budget establishing maximum amount of money that can be donated to charity each year.

#24 Audit staff should be trained on current auditing techniques to detect fraud and waste in Locals; an auditor should be assigned full time to audit operations of the international union.

#37 The international union should cease the practice of leasing autos, which includes upkeep and insurance, for any consultant.

#41  Require that all propositions contain or be accompanied by adequate information to allow General Executive Board members to make informed decisions.

The second reason for concern is Mr. Hansen’s association with Edward and Thomas Hanley.  The Code states: “No current...officer...and persons holding positions of trust in [HERE] shall...knowingly associate...with any barred person [and/or] knowingly permit...any barred person to exercise any control or influence, directly or indirectly, in any way or degree, in the conduct of the affairs of [HERE].”  (HERE Const. art. XXII, § V, cl. A.2-3)   The Code defines “knowingly associate” as “the party knows or should know that the person with whom he or she is associated is...a barred person, and...the association is more than fleeting.”  (HERE Const. art. XXII, § V, cl. B.)  Further, the Code defines a “barred person”  as “any person prohibited form participating in union affairs pursuant to or by operation of the Consent Decree...or other court order.”  (HERE Const. art. XXII, § V, cl. C.)

If Edward and Thomas Hanley meet the Code’s definition of a “barred person” -- and it appears that they do -- then the opportunities for Mr. Hansen to violate § V, Clause A.2-3 (quoted above) are many.  Given Mr. Hansen’s power in his implementation of the Recommendations, as well as his everyday duties as Secretary-Treasurer, PRB should at the very least closely scrutinize Mr. Hansen’s actions so as to insure that he complies with the Code.  Further, if PRB finds that Mr. Hansen violated the Code, it should take appropriate action under Article XXIII, § III of the HERE Constitution.

3. Rotatori Responsible for Implementing Recommendations
 
Robert J. Rotatori was listed by Mr. Wilhelm as being responsible for implementing twelve Recommendations.  (Statement of Wilhelm).  Mr. Rotatori is HERE’s current General Counsel.  He has been an attorney for HERE and/or Edward Hanley since at least 1983.

He was Mr. Hanley’s attorney on May 14, 1984, when Mr. Hanley invoked the Fifth Amendment thirty-five times in refusing to answer questions in a Senate probe of union corruption.  (Charles J. Abbott, “Washington News,” U.P.I., May 15, 1984; Wallace Turner, “Hilton Pact Aids Suspect Union Fund,” N.Y. Times, May 5, 1984, at 1.12.)  The Senate subcommittee was investigating allegations that Mr. Hanley padded the payroll, made six million dollars in bad loans, that kickbacks were paid for the loans, that he arranged plush benefits for himself and other officers and that Chicago crime bosses arranged his selection as HERE President. Id.  In a half-hour appearance, Mr. Hanley answered only one question -- his address.  At one point a Senator asked, “Are you president of the international union?”  Id.  Mr. Hanley responded, “Senator, based on advice of counsel, I respectfully decline to answer in that an answer might tend to incriminate me.”  Id.

Before, or while, working for Mr. Hanley and HERE, Mr. Rotatori was a “lawyer and confidant” to the late Ohio Teamsters leader William “Big Bill” Presser, a convicted labor racketeer. (James Neff, Mobbed Up: Jackie Presser’s High-Wire in the Teamsters, the Mafia, and the FBI 38-39 (1989).)  Mr. Presser was the father of the late International Brotherhood of Teamsters President Jack “Jackie” Presser who was indicted for racketeering but escaped trial by dying. Id.

Mr. Rotatori’s involvement in implementing Recommendations is a concern for two reasons.  First, how can an individual with such intimate ties to two corrupt former union officials be trusted to implement reforms?  Further, how can an individual who been a leading attorney for this union for over fifteen years be trusted to implement reforms when during those fifteen years this union has been alleged to be one of the most corrupt unions in America and had a consent decree imposed on it because of corruption?  The common sense answer would appear to be that such an individual should not be trusted to implement reforms. This is especially true given the Recommendations for which Mr. Rotatori was and is partially responsible according to Mr. Wilhelm’s statement:

#1  Establish policies to be followed on salary increases/bonuses for local    union officers and employees.

#2 Establish uniform policy for use of credit cards by local union officials.

#3 International union to develop educational materials and training for locals    regarding fiduciary obligations to local and its membership.

#24 Audit staff should be trained on current auditing techniques to detect fraud and waste in Locals; an auditor should be assigned full time to audit operations of the international union.

#25 Research Department should maintain database of all individuals barred from union movement; public source information covering organized crime activity as it relates to labor unions.

#26 General Executive Board, international officers and local officers and other individuals holding position of trust should be required to certify annually that they have not knowingly associated with members of organized crime.

#27 General Executive Board, international officers and local officers and other individuals holding position of trust should be required to disclose to the General President when they are arrested/indicted on criminal felony charge.

#35 Contracts with consultants need to be more precise in describing duties.

#36 Consultant contacts should require periodic reports of activities.

#40 International union should cease hiring attorneys on retainer, other than the General Counsel now serving (i.e., Mr. Rotatori himself).

#42 Institute written procedure for imposition and monitoring of trusteed locals.

#44 Ensure that trusteed locals are removed form trusteeship at earliest possible date and that democracy is restored without unnecessary delay. Provision should be implemented to ensure that local does not remain in trusteeship longer than eighteen months, except in extreme cases.

The second reason for concern is Mr. Rotatori’s poor judgment and/or extreme favoritism of Mr. Hanley.  In February 1998, the Chicago Sun-Times identified Mr. Rotatori as “a lawyer representing Hanley” and not the union.  (Cam Simpson, “Hanley May Leave Union Job,” Chicago Sun-Times, Feb. 27, 1998, at 9.)  In that same article, Mr. Rotatori denied that Hanley had done anything inappropriate which turned out to be totally wrong according the Monitor’s Report.  Moreover, as recently as 1997, Mr. Rotatori said, in the New York Times, “I don’t believe there is any mob influence with this union.”  (“Hotel Workers’ Union To Stay Under Monitor,” N.Y. Times,Feb. 26, 1997, at A14.)  To be either so blind or so partisan to make such statements, calls into question Mr. Rotatori’s ability to implement the aforementioned Recommendations.

Conclusion

HERE has long been a union troubled by corruption.  With the end of the monitorship, there is hope that the historically high levels of corruption within HERE can be reduced.  Although the Monitor’s Report Recommendations are not binding on Mr. Wilhelm and HERE, the union has taken positive steps to implement these reforms.  However, troubling revelations about not abolishing the Midwestern Regional Office and placing Mr. Hansen and Mr. Rotatori in charge of many important Recommendations, indicate that little has changed at HERE.  Practices and individuals with links to the “old guard” should at the very minimum be investigated by PRB, and if violations are found, PRB should administer the appropriate penalties.

Thank you for your  consideration of this request.

Sincerely,
 

Kenneth Boehm, Esq.
Chairman
 

cc: U.S. Representative John A. Boehner
U.S. District Judge Garrett E. Brown, Jr.
Assistant U.S. Attorney General John C. Keeney
U.S. Attorney Faith S. Hochberg
 

Enclosure:

Union Democracy, Part VII: Government Supervision of the Hotel Employees  & Restaurant Employees International Union, Before the Subcomm. onEmployer-Employee Relations of the House Comm. of Education and the   Workforce, 106th Cong. (1999) (statement of John W. Wilhelm, General    President, HERE) (attached spreadsheet included).
 

Note:  NLPC is a nonpartisan, nonprofit foundation promoting ethics and accountability   in government through research, education and legal action. NLPC’s Organized   Labor Accountability Project which is investigating and exposing corruption in the Teamsters, LIUNA, HERE, AFL-CIO and many other union organizations.    NLPC publishes the fortnightly newsletter, Union Corruption Update.  For more  information, please visit www.nlpc.org.

Related Media Release

PRB's September 20, 1999 Response to NLPC

Organized Labor Accountability Project

NLPC Home Page