The Fabulous Life of Unions: Designer Golf Courses, Luxury Resorts, and Taxpayer Dollars for Union Business

by Jay Batman | September 2, 2013 7:53 am

The United Auto Workers Union, with $1.25 billion in assets, owns one of the top 100 golf courses in America. Designed in 2000 by golf course architect Rees Jones, the: Black Lake Club: lost: $23.5 million: between 2004 and 2008. : Nevertheless, the UAW kept it open, because nothing advances the interests of union members like an immaculately groomed golf course. : The UAW made $39 million in loans to Black Lake and its parent organization, the Walter and May Reuther Family Education Center, between 2001 and 2010. : Then again, while the UAW listed the loans as assets in its filings, its own Secretary-Treasurer: acknowledges: that the UAW won’t collect a dime back:

The loans are listed on the UAW’s books as assets. In a statement, the UAW said the funding for Black Lake is only considered to be a loan in accounting terms for the purpose of its filings.

“I don’t even know why we call them loans,” UAW Secretary-Treasurer Dennis Williams said in an interview in July. “I mean, it isn’t like they pay them back.”

The union says Black Lake was never intended to make money and its spending on the complex represents an investment in education for its members.

The UAW has a tendency to make loans to non-profits when it sells its old local buildings to those organizations, as it did when it loaned out $205,000 in member money to a Detroit non-profit, Making the Finish Line, to purchase the Local 235 building in Hamtramk, Michigan. : Then there’s Local 1853, in Spring Hill, Tennessee, sitting on 13 acres, with a swimming pool and banquet hall decked out in chandeliers.

Federal labor and tax laws require that the unions use their funds for the benefit of members, but that didn’t stop the Plumbing & Pipe Fitters Union of the U.S. and Canada from taking $44 million of their members’ retirement money: to purchase the Westin Diplomat Hotel: in Hollywood, FL. : The union purchased the hotel from a union-owned life insurer, and then proceeded to spend $800 million in pension funds to tear down the Diplomat and replace it with a 39 story resort, renaming it the Westin Diplomat Resort and Spa.

The: original budget: for the hotel was $400 million, and it opened eighteen months behind schedule. Trustees had put up $100 million in pension fund assets for the development of the Westin Diplomat without first getting the Labor Department’s approval as required by law. Union president Martin Maddaloni and Secretary-Treasurer Thomas Patchell took their wives to Italy to personally inspect the marble; presumably, Maddaloni, Patchell, and their spouses were experts on marble.

Unfortunately, it’s a violation of federal law to accept trips on a contractor’s dime, and the Italian trip was paid for by two contractors. : Maddaloni and Patchell were forced to repay the expenses for their trip out of pocket.

A call to the: Westin Diplomat: yielded the following information: some departments are unionized, others are not. : A 998 room hotel built by union pension money and owned by a union is not fully unionized. Moreover, so egregious was the mismanagement of the Westin Diplomat’s construction that the Labor Department: sued the pension fund trustees: for failure to prudently manage investment of their members’ money in the resort.

Maddaloni and Patchell were removed as trustees, and the Department of Labor: recovered $10.98 million: for the pension fund. : It was a small victory for the Labor Department; remember, the Westin Diplomat, originally budgeted at $400 million, cost twice as much to complete at $800 million and opened 18 months behind schedule.

The hotel did not perform well; by 2006, the union was attempting to attract more customers by buying a hotel across the street and rebranding it as the Diplomat West, and by 2010 the union was attempting to procure city council approval to expand that purchase by constructing a golf course. The city council refused to approve the plan, even though the union: spent $25,250 contributing to the re-election campaign: of Hollywood Mayor: Mara Giulianti, who accused the Sun-Sentinel of conducting a witch hunt on her for pointing out the contributions.

A significant portion of the Westin Diplomat’s business comes from other unions. The Diplomat hosted a $1.7 million conference for the AFL-CIO, and a labor and management conference where the International Machinists and Aerospace Workers Union brass attracted attention for flying in on the union’s Learjet. In 2011, the union spent more than $1.25 million to operate the jet, and its officials were on the plane about 14 days out of every month from February to June 9, 2012, according to public filings.

The unions have ample money to invest in real estate purchases for “education” and Learjet travel because they externalize the costs of their business in certain cases. : One of the examples of this externalization is the IRS, where: 200 employees spend their entire workday: focusing on union business.

Known as official time, the use of IRS employees on the taxpayer dime is perfectly legal under the 1978 Civil Service Reform Act. 40 of the employees make over $100,000 a year, and they are paid by taxpayers to handle union business year round. : Senator Tom Coburn (R-OK) pointed the absurdity of the arrangement out in a letter to the IRS:

While the IRS continues to request more funding to further close the more than 14.5 percent tax gap, especially under the current budget crunch and sequestration, it makes little sense to use taxpayer resources to pay for union work. : This kind of practice takes place only in the government-in the private sector, union work and staff are paid for by union dues.

Coburn’s scathing letter went on to note that while the IRS insisted it was requiring employees to take unpaid furloughs due to sequestration cuts, it was also paying out $70 million in bonuses and paying more than 200 employees to work for the union. : Other issues highlighted by Coburn included the 311,566 federal employees: who owed $3.5 billion in delinquent : taxes: while the IRS paid over 200 workers to do union work instead of going after federal employees who cheated on their taxes.

The House: rejected a bill: that would have allowed those tax cheats to be fired. : : 36 of those tax cheats are aides to President Obama, and they collectively owe $833,000 as the IRS retains over 200 employees to go after union business instead of tax cheats on the federal payroll.

It’s all part of the fabulous life of unions, where the golf courses are lush, the luxury resorts are plush, and the taxpayer gets to foot the bill for union business on the IRS’s dime as federal employees go unpunished for cheating on their taxes.



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