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  • authored by Hugh Finnamore

Union Governance Lacking in Ethics and Moral Turpitude

Ken Georgetti, Canada's corporate accountability zealot and Canadian Labour Congress president, publicly rails about losses suffered by "ordinary citizens" while high-paid CEOs cleaned up. He says, "It is past time for the government to bring in legislation to make corporate governance more democratic, accountable and transparent."

Mr. Georgetti has a right to be upset, as so many others are, about misdeeds of the corrupt and greedy. However, as he and his pals are frothing about what they figure is going on in corporate executive suites, they have the drapes drawn tight on the house of labour's windows-and for good reason.

Sid Ryan, the head of the Ontario branch of the Canadian Union of Public Employees (CUPE) cries Et Tu Brutus after CUPE National President Judy D'Arcy calls in the forensic accountants and the police to investigate alleged financial irregularities regarding Mr. Ryan's campaign to be elected CUPE's National Secretary Treasurer. Last month a former Kitchener, Ontario CUPE local union secretary treasurer was convicted of embezzling $271,800 from union members. The US Department of Labor lists over 200 union officers and staffers who have been charged and/or convicted over the past 20 months of crimes ranging from fraud and embezzlement to bribery, extortion and accepting kickbacks. A Washington DC grand jury is investigating a hoard of North America's most powerful current and former labour bosses who used their insider knowledge to line their pockets with more than $10 million CAD through special stock deals offered by a union-owned life insurance company.

In his defense, Mr. Ryan steadfastly denies any knowledge of wrongdoing and says, "While it is true that the campaign accepted donations from two CUPE suppliers, namely, a construction company and a technology company, I want to emphasize that this is not a violation of any CUPE rule, regulation, by-law or section of our Constitution, nor is it illegal in any manner shape or form." However, on September 18, Robert Fox, communications director for the 500,000-member national union said, "We're uncovering more things every day."

Others have come to Mr. Ryan's defense by alleging that he is a victim of a political smear campaign-and they may be right. Union politics can be dirty business, and some unions have used rules and regulations never before applied to rid themselves of those who no longer fit. They verbally advise you to breach rules, they record the transgressions, and if ever needed, use the record to fire you.

Even so, a major problem with unions today is that as long as there's no rule or law against an activity, it's okay. Ethics don't have to play a part in what is right or wrong.

In his statement, Mr. Ryan fails to mention that the "suppliers" are alleged to have billed the union for work that was never performed and then donated a similar amount to Mr. Ryan's campaign. Those allegations are similar to ones that convicted former Teamsters General President Ron Carey last year.

Since Mr. Carey's conviction, the Teamsters International Union has instituted "Project RISE" to draft a code of ethics designed to govern union officer and member conduct and root out crime within its operations. It isn't altruism that has driven the scandal-ridden Teamsters to embrace the concept of ethics. It is driven by their desire to rid themselves of the government appointed monitor who's job it is to expunge the influences of organized crime within that union.

Canadian unionists will respond to the foregoing allegations of corruption, greed and unethical practices with two arguments: (1) Corporate executives are criminally charged and convicted more often than unionists. In fact, the Ontario Federation of Labour's Wayne Samuelson has already use this trusty union argument when this month he was reported by the Associated Press to have said, "if you pile up all our people who've been fired for these kinds of things and put all the corporate guys (who've been fired) on another pile, their pile's thousands of times bigger than ours." (2) Most of the union criminal activity is reported in the US. Both are true, but those arguments are half-baked and misleading.

First, to hide behind the argument that you steal less often, so you're with the good guys is a preposterous bit of logic and a despicable defense. Second, the US places a high priority on rounding up union criminals and is better able to coordinate investigations because it has a national labour body. Likewise, it has strong legislation geared to rooting out union corruption. Conversely, in Canada monitoring union activity is delegated to the provinces, and investigating and stopping union corruption is not a high priority in any one of them. Third, Canadian unions have little if any regulatory or legislative scrutiny of their operations. Fourth, the laws that do apply to unions are not vigorously administered where unions are concerned.

In 1995, I handed rock-solid information to Canada Customs and Revenue (then Revenue Canada) detailing substantial income tax and GST fraud by one of Canada's largest unions. To my knowledge, they never followed up, but in referring to the case, an agent in Burnaby said to me, "we have a tacit understanding that we don't bother unions." At the same time, I provided information on criminal activities related to a union to the RCMP Commercial Crimes office in Vancouver. I was told that the information indicated criminal conduct, but that RCMP Commercial Crimes was too busy to bother. The RCMP sergeant in charge told me that the RCMP and "Revenue Canada" were still embarrassed about a then recent case where they had successfully charged, prosecuted and convicted the president of a Vancouver union for theft and embezzlement that his members had reelected him for another term as he was being sent to prison.

Therein lies the problem of unchecked union corruption in Canada. The police and other agencies don't or won't understand the concept of election rigging in unions. They don't understand how unions operate or what motivates some of their leaders. Of the Kitchener CUPE official mentioned above, Justice Colin Westman said, "I view this man much like a child in a candy shop... I see it more as an individual who succumbs to temptation, who gets into the stream and just doesn't have the fortitude to get out."

It's time the justice system got a grip on reality. Would the honorable judge have said the same thing if a lawyer had swindled clients out of more than one quarter million dollars? Unions are so loosely managed, secretive and unregulated that most crime goes unreported and undetected. The Kitchener crime was 10 years in the making before it was inadvertently discovered.

There are no Canadian laws to stop criminals from holding union office, nor are there any that require union leaders to provide an avenue of appeal against phony union trials, or to protect free speech, or to require fair union elections. There should be.

Perhaps as Mr. Georgetti says, we might be well served if we revisit the debate about the need for revision of our laws. However, before Mr. Georgetti can speak with authority, he must cast his net in his own pond and work to haul in legislation to make union governance more democratic, accountable and transparent.

Hugh Finnamore, a former union official, is now a senior consultant at Vancouver-based Workplace Strategies Inc.
E-mail: workplace@telus.net
© Hugh Finnamore 2002
Reproduced with permission

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