The Comeback Council

By Roger M. Williams

Battered by financial and electoral frauds, and faced with a dispirited membership, DC 37 has taken a giant step toward renewed good health.

NEW YORK CITY

When an overwhelming majority of the members of DC 37 ratified a new contract with the administration of Mayor Rudolph Giuliani in mid-May, they had a lot more to celebrate than a good deal. For them, the agreement also marked a milestone on the long road back from a labor union nightmare: thefts by local officials; a fraudulent vote count on an earlier unfavorable contract; and the deluge of negative publicity and battered member morale that accompanied both.

It's not the last milestone. More work remains to be done; more reforms may need to be put in place. In the words of DC 37 Administrator Lee Saunders, the assistant to the International president who has orchestrated the organization's comeback, "We're still looking at structural changes that may need to be made. In addition, elections for mayor and other citywide races are coming up, and we need to position DC 37 for them.

"But the key has been empowering our members, enabling them through every possible avenue to be involved in their union. I think that has been accomplished."

Reactions from rank and filers and leaders suggest that DC 37 is on the right track. "The drum major — Lee Saunders — has done a superb job, especially in bringing home the bacon and the ham," says James Butler, the longtime, colorful president of Local 420 and an International vice president. "His administration has been like a strong antibody that's healed the wounds. So DC 37 is still here, Giuliani is on the way out and we have the best contract I've seen since I've been at DC 37."

Elsewhere across the city, the word that best captures what members feel is R-E-L-I-E-F. A group of workers at Bellevue, the city's famed municipal hospital, expressed it succinctly. Asked about the bad old days, they responded as one: "They're over!" Proclaimed Marion Fusco, a clerical associate and member of Local 1549, "We can't change the past. We're just grateful that the International has been doing what it can for us."

BIGTIME PLAYER. DC 37's 125,000 members, who range across a wide spectrum of job categories, make it the largest public-employees union in New York City. And its influence exceeds its size: The actions of high-profile DC 37 often make news, especially because it has long been a prominent player in New York politics. So when fraud descended on DC 37, the shock waves traveled far.

A serious lack of internal controls and systems helped the perpetrators. Notes Deputy Administrator Zachary Ramsey, "Budgets were approved in secret, and spending decisions were made by the officers and local presidents with little or no review by the executive board or membership."

In amounts ranging from small to huge, a number of officials ripped off the union treasury. They included the presidents of the council's two largest locals, Charles Hughes of 372 and Albert Diop of 1549. The funds were misappropriated in ways that ranged from standard to bizarre: padded and retroactive expense accounts and bogus consulting fees; retroactive overtime; unwarranted severance pay, deferred compensation and vacation-day payments; kickbacks from caterers and other vendors; and gifts and trips purchased by officers for themselves using locals' funds. There was even a turkey scheme: charging the locals inflated prices for Thanksgiving birds that were given free to members, with kickbacks going to the officers.

Eventually, some 40 people and firms, including 27 union officials, would be indicted for those capers, with 16 of them going to jail. The scandal sapped the strength and faith of countless thousands of DC 37 members.

"What those people did was very disheartening," says Michael Hood, president of Local 1505. "DC 37 had always been a diamond within AFSCME — a lot of other councils and locals looked up to us. Then, all of a sudden, our members were left thinking everybody here was a thief."

RIGGING THE VOTE. At about the same time, DC 37 took a serious blow in another area — the integrity of its contracts and ratification procedures. The trigger was a five-year wage pact between Mayor Giuliani and the council. It was modeled on a rejected teachers' agreement that included "double zeros" — no raises in the first two years — and did not offer job security to hospital workers.

Council leaders might have been able to persuade the membership to ratify such a contract, but it was never put to the test. Instead, several officials of the council rigged the vote, using such methods as steaming open sealed ballots to replace "no" votes with "yes" votes.

Member morale plummeted even lower. "People were just duped," says Jim Tucciarelli, president of Local 1320, the sewage treatment workers. "Your most sacred right as a member is to vote on the economic package that's being offered to you, and we were denied that."

PRESIDENTIAL EMISSARY. Faced with the biggest scandal in its history, the International took action. In November 1998, it dispatched Saunders from his regular job to become administrator of DC 37. A number of locals were then placed under administratorship because of wrongdoing. Observes Deputy Administrator Dennis Sullivan, "Sending Saunders, who works directly for President McEntee, showed that the International meant business."

Soon thereafter, McEntee issued statements calling "even a single incidence of financial impropriety ... deplorable" and proclaiming a "zero-tolerance policy toward wrongdoers." Saunders, the president made clear, would have AFSCME's full authority to clean up the mess. The International commissioned two independent investigations: one to audit the financial records of the council and its 56 locals, the other to investigate the vote tampering.

"Our goal was not to run away from the problems," McEntee says, "but to rebuild an institution that would once again be honest, effective and a force to be reckoned with."

INSIDE/OUTSIDE. For the past two-plus years, as the union was helping the Manhattan district attorney weed out the thieves, the rebuilding process has been in full force. Much of the process has been internal. A council that traditionally had not disclosed financial information suddenly opened its books wide. A code of ethics was drawn up for the council and its locals, and an ethical practices officer hired to enforce it. The use of outside consultants and contractors was subjected to more stringent scrutiny.

A number of the key reforms involved DC 37 election procedures. All council-wide contract-ratification votes must now be conducted by secret mail ballot under the supervision of an independent, outside party. Although that practice is not required of locals, many of them have adopted it.

Also in the contracts area, the council's negotiating committee was expanded to include the president (or president's representative) of each of the 56 locals. In addition, a 300-member bargaining caucus was created; its job was to receive members' opinions and concerns, and pass them on to the negotiating committee.

The executive board was supple-mented with a monthly Presidents' Meeting that helps bring the local presidents up to date on matters of common interest. That furthers AFSCME's goal of attempting to actively involve more people in all aspects of the rebuilding effort. So does an expansion of the amount of training available to DC 37 stewards (see "Contract 2000: Stewards Lead Fight," May/June 2000).

In putting all of that into place, the administratorship also put the council on a stronger financial footing. A $2 million deficit inherited in 1998 became a small surplus in 2000, even after paying the cost of the outside audits and investigations.

HILLARY PLUS PHONE BANKS. A surge in political activism has accompanied the internal reforms. DC 37 played a major role in a union coalition that defeated Mayor Giuliani's efforts to change the city charter; if successful, the initiative could have imperiled the jobs of many AFSCME members. The union worked fervently for the election of Hillary Clinton to the U.S. Senate; phone banks contacted the entire membership, and the council leadership put volunteers on the streets to help the Clinton cause on Election Day.

Legislative efforts in Albany and New York City produced historic gains. In July 2000, DC 37 lobbyists, working with a coalition of New York AFSCME and AFL-CIO lobbyists, got the state to provide permanent cost-of-living (COLA) adjustments. In addition, the DC 37 legislative team worked closely with the union's negotiators to implement the terms of a pension agreement. Enabling legislation reduced pension contributions by 3 percent for most members and provided pension-service credit improvements, buy-backs of previous service, and improved death benefits and fairness for workers suffering from pension inequities in the tier system.

This past spring, after a massive phone and card campaign by DC 37, New York's city council passed legislation permanently reimbursing retired city workers for the full cost of Medicare Part B coverage.

"Members made thousands of phone calls, rallied, and sent thousands of post cards to achieve those gains," says Deputy Administrator Eliot Seide.

Not everyone is completely satisfied with what has happened at the new DC 37. Some members worry that structural change will not go far enough; others, that the "culture" that produced the corruption still remains. "I wanted more changes, like the adoption of one person, one vote balloting," says Ray Markey, president of Local 1930, the librarians' guild, referring to the existing delegate-voting system. "But on the whole, the administrator and his deputies have done a very good job."

As another Bellevue worker, Jamaisa Johnson of Local 1549, puts it, the council's interim leaders have "stuck to their guns and kept their word."

DOUBLE FOURS. To a rank-and-file wage earner, reforms and political activism are important. But higher pay and better benefits are crucial, even moreso when they follow a contract that did not yield the first of those. If DC 37 had to produce a major win in the 2000-01 negotiations, it came through big time.

The new contract calls for double fours instead of double zeros, with retroactivity. Further, both increases are compounded, adding to their total value. Improved benefits raise the pact to 9.87 percent, and the pension gains mentioned earlier bring it above 12 percent. The victory was all the sweeter because Giuliani had proclaimed that there would be no across-the-board wage increases. His big item was merit pay, and he squeezed into the contract a couple of sentences giving municipal managers the right to exercise it. Council officials point out, however, that the city already had that right, so in effect gained little or nothing.

As a final touch, the health and hospital workers, who had been left out of the no-layoff provision of the previous contract, won job security in this one. "Without job security," says Contesso Arroyo, a patient-care associate at Bellevue Hospital, "they were running through us like water. No more of that."

In a sense, numbers spoke louder than words in behalf of the new contract: Almost three out of five DC 37 members returned their filled-in ballots, and a stunning 97 percent of them voted "yes." Gratifying as it was, the contract only capped a decisive turnaround in the council's fortunes: financial and electoral integrity restored; political and legislative victories achieved; whopping gains in pay and benefits negotiated. No wonder Local 1549's Johnson declares, "DC 37 is back!"