Graft at the UAW golf course?
There’s an interesting report at Outside Lansing and research at Labor Pains scrutinizing the UAW’s numbers on its Black Lake black hole golf course. (You’ll recall that I pointed to the union’s LM-2 forms in my column from last week.)
Taking a closer look at the ledgers, Chetly at Outside Lansing writes:
The question becomes – what is the real value of the property? We don’t begrudge anyone the right to challenge taxes when the government overvalues a property – but here the union itself has asserted the higher value. As County drain commissioner Lennox pointed out – these taxes fund local roads and education – and as LaborPains calculated, the taxes on the $19 million difference translate to $770,000. That’s a big chunk of money.
Discrepancy in Pension/medical insurance ratios between golf subsidiary and education center.
Here’s where our eyebrows really go up.
The International United Auto Workers is a 501c3, non-profit. Such entities are allowed to organize separate c2 (chapter 2) “title holding companies”. UAW has had a title holding company since 1949, called Union Building Corporation (UBC). In addition to the $33 million in Black Lake property, it has another $90 million in property (see here for the UBC 990 form utilizing Guidestar.com). It is UBC that filed the petition against the township in the Michigan Tax Tribunal. Neither UAW or UBC have filed “unrelated business income tax” (UBIT) forms (990-Ts), but UBC has formed two for-profit subsidiaries (a valid alternative to the 990-T). One is UBG (think G for golf course) and one is UBE (education center). Naturally, if you’re running for-profit business and don’t make a profit, you won’t pay taxes. Both organizations have “carryover” losses now exceeding $25 million, not including the losses on this year’s LM-2s.
Laborpains.org notices that the “biggie” in terms of UBE’s losses is pensions (again, photo from laborpains.org). The two key documents, already published by laborpains.org here and here, contain a clip.
Yes, its clear that pensions are the largest reason for the losses, which laborpains.org suggests (paraphrasing) “isn’t unusual for UAW pensions” which have been in “disarray” even for the larger union itself and with GM and Chrysler, which recently went through a pension buyout among the rank-and-file.
But its not JUST that the pension fund above is the largest part of the UBE losses – that in itself isn’t a surprise. Pensions are a big cost any large business – particularly when they are the old defined-benefit pensions which are not funded on a pay-as-you-go basis.
It’s that the pension fund expenses appear to be really out-of-line with overall wages. So far out of line that you have to wonder exactly who is doing the work to get pension fund contributions. There’s a key piece of context here – the $5.91 million in pension fund contributions compares $3.25 million in wages (above the page not pictured by laborpains.org’s graphic). Normally, you’d expect the wages to be much higher than the pension contribution – 10 times or perhaps as little as 5-6 times. But not the other direction. And of the 3.25 million, 2.6 million is “general labor” – there is no way the room custodians and general labor are getting that gold-plated of a pension deal. The other half million is “administrative” wages – but even the hotel administrators are unlikely to be able to get away with such a self-dealing (unless they are something more than that to the union leadership).
The only explanation in my mind for this kind of pension fund investment is that the pension contributions are for SOMEONE ELSE other than the workers at the hotel. Just who might be receiving the long-term benefit of those contributions? It’s not big enough to pay the pension debt of any serious number of rank-and-file union members – but it is big enough to sauce up a few individual’s or union leadership. Or perhaps the UAW is using multiple vehicles like this one to cover larger pension fund problems.
Read the whole thing.
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No freaking way! Who says!
Go directly to jail. Do not pass Go; do not collect $200.
A dishonest union, and a legal system that looks the other way? Lets just throw the TARP over them and pretend none of this is happening…
A dishonest union? Using graft and mafia like tactics? NNNNOOOO that NEVER happens.
The truth now comes out. The correct question to ask is “What did Jimmy Hoffa know, and when did he know it?” Obviously, the head of the Teamsters was about to rat out the UAW to the Feds.
Nothing to see here … move along. Go on! Get moving.
Not to rain on the parade here, but there was a movement a few years back to create “associate memberships” among US unions. Depending on the type of membership structure, there might be associate member buy ins to pension activity, or there may be a separate institutional buy in to the pension fund.
Not denying that the UAW doesn’t deserve to fade into the sunset, but pension funds are so heavily regulated and audited, that they are really not the place to be doing much graft anymore.
My new years prediction? Nobody asked, but it’s that big labor goes under the Democrat bus. Now that the Dems are pulling huge money from the nouveau-riche titans of the service and non-industrial sectors, who needs the albatross of of big private-sector labor? As for public sector, the teachers and such; jettisoning big labor will only raise some half-hearted howls, since what makes public sector unions tick is a far different set of concerns.
What is that odor?
501c3’s are being used all over the land to hide fraud. They provide make work “jobs” for family and crony’s at the very least. I learned all about them when I investigated the college I work for Foundation. The now EX-president was siphoning college bucks into the foundation where it would vanish. This rat b’tard president referred to the foundations finances as being “murky”. I reported what I found but nobody seems to give a damn.
501c3’s are a protected species where you can commit all the fraud you can get away with. Our country is being looted.
Isn’t this the sort of potential crime that would warrant a Federal RICO investigation? Hmm?
And, I for one am shocked. Shocked I tell ya!
I can’t even figure out why the UAW would be a (c)3. They’re not a charitable organization, they’re more akin to a civic organization.
I’m not a fan of the Gestapo (the IRS) but these people are just socialists. I say we get the IRS to jump down their throats with a microscope. A full and rigorous audit may solve this problem.
No, a civic organization is like the Lions Club or the Rotary Club.
A union is a political organization, plain and simple. I don’t care what they try to tell anyone.
I don’t disagree, but I was thinking in strictly financial terms.
Anyway, I think the article is wrong. Labor Organizations are supposed to be 501(c)5.
If it really is a (c)3, that’s insane. That’s a charity designation.
Graft and fraud involving a union ? I’m shocked I tell you, shocked !!!
File under more democraps acting as if they are above the law.
Next we shall hear the Mafia, Bloods, Crips and the 19th Street Gang are 501(c) and immune to Federal Taxes and such.
Guess who already is 510(c)-National Council for La Raza. Can the Klan and Aryan Brotherhood be far behind?
Play golf tax free AT NIGHT under the burning cross! Lindsay Graham guest speaker.
Good idea, just applied to the wrong end of the beastie.
Oh, and how you folks can say “Union Pension Fund” and “Graft” in the same sentence without laughing at the absurdity of that idea is, well, just beyond me. No way that any union pension funds have ever bee used improperly. Look at all the oversight and regulations! Just ask the folks at Freddie and Fannie, ask Mr. Madoff. Worldcom, Enron, Countrywide. Oversight cures all.
You bet.
I’ve seen a bit in my 63 yrs and I cannot believe there are so many corrupt people in the America…the Land of Plenty and it appears most are out to steal all they can…business owners, politicians(goes without saying I guess), doctors, neighbors, on and on…unF#$%^&g believable. It’s nothing new, I’ve come to the conclusion mankind is inherently dishonest and greedy…matters not how far back in time you go, you’ll always see it.