Local Union 1456

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Local Union 1456

the 1456 umboðsmaðr
General President Douglas McCarron should immediately place Local 1456 under emergency supervision
The former Executive Board Members, "CURRENT TRUSTEES", Audit Committee Members, Finance Committee Members and former Advisory Board have CAUSED THIS PROBLEM.


You want to support the "Current Trustees" to continue and become the Executive Board?

Local Union 1456 Executive Board, Current Trustee and Advisory Committee Members, Audit Committee Members, Finance Committee Members who where part of all this should resign immediately!

Read the following;

The copy below is from the second semi-annual report by Review Office Dennis Walsh, Pages 32 - 39

See URL: http://www.scribd.com/doc/57040287/RO-Second-Interim-Report-Text

Local Union 1456

Late last year, my office began an investigation of the governance and administration of Local Union 1456 (the “Dockbuilders”). The investigation has revealed various improprieties relating to the expenditure of union funds and deep flaws in its business practices. After his veto, Michael Koballa settled certain outstanding issues with this office pursuant to the terms of an agreement executed on February 24, 2011. The President of the Local, Charles Harkin, resigned his position effective April 27, 2011; resigned as a trustee of the Benefit Funds effective April 29, 2011; and resigned as a business representative and “withdrew” his membership in the Union effective April 30, 2011. Olaf Olsen, the treasurer of the Local, resigned his position and his employment as a business representative of the District Council pursuant to the terms of an agreement with this office executed on May 10, 2011.

The investigation of Local Union 1456 is discussed in detail at 32-39. The Harkin resignation letters and the settlement agreements with Koballa and Olsen are attached hereto as Exhibits 12, 13 and 14, respectively.

Local 1456 Investigation

My office has investigated aspects of the finances and administration of Local Union 1456 (often referred to as the “Dockbuilders”). The investigation has led to the resignation or removal of individuals from high-level positions. As described below, my office continues to investigate practices of Local 1456.

a. Leadership

Charles Harkin was the President and Business Manager of Local 1456. He was also a District Council business representative. Harkin was interviewed on January 13, 2011, about dinners at Marinella restaurant in New York City.

Harkin said that the Executive Board and guests he invited would eat at Marinella restaurant once a month between the board and general membership meetings of the local union. There was no log kept of Marinella dinner attendees. The cost of these dinners ranged from $1,500 to $3,000. There was no limit to the amount of food and drink an attendee could order. The bill for the dinners was paid for by the local union. Harkin admitted that the amount, location, and list of dinner attendees, was never divulged to or approved by the general membership from at least 2006 through 2009.7/

(7/  The expenses for two Marinella dinners in particular were the subject of a veto and was fully briefed in the District Court. The veto was upheld. See Exhibit 7.)

Based on Harkin’s interview, a deposition was scheduled for April 15, 2011. The afternoon before the deposition, we received a facsimile indicating that Harkin would be unable to attend. On April 20, 2011, I issued a Notice of Possible Action. See Exhibit 20. Effective April 27, 2011, Harkin resigned as President of Local Union 1456; effective April 29, he resigned as a trustee of the Benefit Funds; and effective April 30,he resigned as a business representative and “withdrew” his membership in the union. See Exhibit 12.

The investigation revealed a trail of unapproved (that is, not presented to the membership for consideration) credit card expenditures by Harkin and other board members. Based on a review of American Express credit card bills and meeting minutes, it appears approval by and notice to the membership was neither sought nor given for any of these credit card expenses between 2006 and 2009. Unauthorized expenditures between 2006 and 2009 paid for, among other things, Marinella dinners, stipends, airfare and accommodations for certain officers and others; fine dining at New York restaurants; services purchased at a spa; and a 2009 Cadillac DTS (which cost $1,300 per month).

The practice of awarding Christmas “bonuses” to select board members was also uncovered. Between 2006 and 2009, Charles Harkin, John Harkin, Michael Koballa and Gary Shelton were given checks in the discretion of Charles Harkin. The amount given to John Harkin, Koballa and Shelton each year was $5,080.46. Charles Harkin received $5,615.20. Local union meeting minutes contained only vague references to “usual and customary Christmas bonuses” without specifying the amounts or the recipients.

There is no approval in meeting minutes for an expense of $1,258.24 for “Christmas Meeting-Drinks-12/11/07,” as noted in the digest of the operating account.

Former business agent John Harkin also used an American Express card. Meeting minutes from 2006 through 2009 contained no record of approval by or notice to the members of John Harkin’s credit card expenditures for fine dining, beverages, limousine services, and golf green fees totaling over $20,000. John Harkin retired last year.

Gary Shelton, the former Financial Secretary of 1456, District Council business representative and member of the local union executive board, incurred expenses from 2006 through 2009 for fine dining and limousine and rental car services. There is no record in the meeting minutes that these expenditures were considered and approved by the members. Shelton retired in 2010.

Michael Koballa, former Vice-President of Local 1456, District Council business representative and board member, also used an American Express card to pay for fine dining, cigars, wine, spa services and Home Shopping Network merchandise, for which there is no record of disclosure to the members.

Olaf Olsen, former Treasurer of Local 1456 since 1999, was deposed on May 2, 2011. He admitted that he did not provide detailed itemized reports on any of the unapproved expenditures for 2008. The investigation revealed that he did not prepare any itemized reports from 2006 through 2009. After the first day of testimony, the deposition was adjourned. On May 10, 2011, before the deposition was to resume, Olsen entered into a settlement agreement, which is attached as Exhibit 14.

b. Stipends

Stipends for meetings of the Executive Board, Finance Committee and Audit Committee and for travel were given to favored members without the membership’s knowledge or approval.

Undisclosed Executive Board meeting stipends of $356.88 were given to the President and Business Manager, Vice-President, Treasurer, Financial Secretary, Recording Secretary, and Executive Delegate. Based on statements by board members, the meeting usually lasted for approximately one hour. Immediately following the meeting, board members, members of the Advisory Board and select guests of Charles Harkin attended dinner at Marinella restaurant.

The Local 1456 Finance Committee also comprised the President and Business Manager, Vice President, Treasurer, Financial Secretary and Recording Secretary. Monthly stipend payment totals for this purpose ranged from slightly less than $7,000 to almost $9,000 for 2009. According to Article 5 Section 3 of the Constitution and By- Laws of Local 1456, the duties of the Finance Committee include, “...the reviewing of all bills and financial matters referred to them by the Executive Committee or the Local Union and reporting their findings thereon.” According to Olaf Olsen, no one from the Finance Committee ever gave the general membership an itemized report of the unapproved expenditures.

The Local 1456 Audit Committee consists of the Finance Committee and the local union trustees. From 2006 through 2009, members of the Audit Committee were paid a stipend of $356.88 for each meeting. According to Article 5 Section 4 of the Constitution and By-Laws of Local 1456, the duties of the Audit Committee include quarterly meetings wherein they would “audit the books and report the results of the audit to the membership at a regular meeting.” The Audit Committee never made an itemized report of the unapproved credit card expenditures to the membership. Further, it appears that the Finance Committee, Audit Committee and trustees, at least in theory, performed the same functions. It is difficult to understand how - with three levels of financial oversight for which fiduciaries were compensated - there was not one report of the unapproved expenses to the membership.

The Advisory Board consists of members and retired members of Local 1456. Based on interviews of current and newly appointed Advisory Board members, appointments to the Advisory Board were made by Charles Harkin. Shortly before his resignation, Harkin appointed six new members to the Advisory Board. With the exception of the husband of the Local 1456 Office Manager, all new appointees were related to former Local 1456 board members. The RO staff interviewed four of the five new appointees. Those interviewed stated they did not know they were being considered for the Advisory Board until announcement of their appointments. All accepted their appointments but were unclear of the duties of the position. Advisory Board members received a $100 stipend and an invitation to the Marinella monthly dinner.

A $200-a-day stipend was typically given to certain board members for travel. According to Olaf Olsen, such stipends were granted in the sole discretion of Charles Harkin. In February 2008, Charles Harkin, John Harkin, Michael Koballa and Gary Shelton traveled to Florida for 18 continuous days. The Harkins each were given $3,800 and Koballa and Shelton each was given $3,600. The Finance Committee, the Audit Committee and the trustees never reported this fact to the membership.
According to Michael Koballa, the H column in schedule 11 of the LM-2 forms reflected the aggregate amount of stipends received by the officers of Local 1456 during the year. According to the LM-2 forms, the officers of Local 1456 received total stipends of $216,654.00 in 2007; $217,877.00 in 2008; and $221,633.00 in 2009.

c. Conferences

During the period between 2006 and 2009, few of the conferences attended by certain board members and others were approved in the general membership’s meeting minutes. Certain associated expenses in the form of stipends, airfare, hotel accommodations, and lavish dinners paid for by union credit cards were never reported to the members.

The choice of labor conferences attended by board members is also questionable. For instance, members of the board attended the Public Employee Conference (“PEC”) in San Juan, Puerto Rico, each year between 2006 and 2009. It is difficult to see the benefit to members of Local 1456 from the board’s attendance at this conference. Fewer than 30 of the over 1,400 members of the Dockbuilders are civil service employees. William Lacey, Civil Service Employee Representative for the District Council, could not identify any reason why Local 1456 officers would attend the PEC. Nonetheless, in 2007 and 2008, board members arrived in Puerto Rico two days before the start of the conference. They enjoyed two vacation days paid for by the members, plus their salary, stipends and credit card expenses.

Each year between 2006 and 2009, one of the winter conferences attended by Local 1456 board members was the Wall-Ceiling Association Conference, held to discuss matters pertinent to the dry wall industry. Local 1456 does not perform work in this industry. Nonetheless, credit card expenses, airfare, hotel accommodations, and stipends were incurred by fiduciaries at the expense of the membership of the local union.

In 2008, there was a gap of four days between two winter conferences. Instead of returning home, some board members with their wives chose to remain in Florida and, in essence, enjoy a four-day vacation paid for by the membership. Salary, stipends, first class accommodations, rental cars and lavish dinners were subsidized by the membership. According to Olaf Olsen, the wives’ expenses were paid for by Local 1456. None of the 2008 winter conferences were mentioned in any of the Executive Board or general membership meeting minutes. Olsen also stated that none of these expenditures were disclosed to the membership after they were incurred either.

d. Whole Life Insurance Policies

In November 2009, Terry Mooney, an accountant assisting the District Council while under supervision, reviewed certain LM-2 reports filed by Local 1456. He discovered that certain board members had purchased whole life insurance policies with local union funds. The policies were purchased from Metropolitan Life Insurance Company (“Met Life”) for Charles Harkin, John Harkin, Michael Koballa and Gary Shelton, who were also the beneficiaries of the policies. When Mooney discovered the policies, he told the board members to cash out the policies and return the money to the general fund.

While the investigation is still ongoing, based on conversations with employees from Met Life, it appears that each policy that was cashed in was assessed an early cash out penalty of nearly 80 percent of the value of the policy. For instance, Charles Harkin’s policy had a cash surrender value of $9,251.83 as of November 30, 2009. The policy was cashed out on November 30, 2009. However, due to an early cash surrender penalty, only $1,596.86 was returned to Harkin .8/  The result was a net loss to the membership in the amount of $7,654.97. It appears that there is a comparable loss on each of the other policies, for a total loss of over $30,000.

(8/    Harkin returned the $1,596.86 to the general fund of the local.)

e. Trustees

Section 40 (c) of the Constitution of the United Brotherhood of Carpenters states, “The Trustees shall audit all books and accounts of the Financial Secretary and the Treasurer, audit all receipts and accounts of any other person authorized to collect funds, examine the bank books(s) monthly, and shall report to the Local Union monthly in writing....” Based on our review of Local 1456’s general meeting minutes, the testimony of Olaf Olsen and interviews of the trustees, it does not appear that from 2006 to 2009, such written reports were presented to the membership.

In 2009, the trustee stipends were $356.88 for each meeting. Despite receiving substantial stipends, the trustees failed to perform their required duties and in fact participated in generating unapproved expenditures by attending conferences and meals and collecting travel stipends.

f. Diver Safety

My office received calls from Local 1456 divers alleging that certain companies that are signatory contractors with Local 1456 are not following rules and regulations related to diver safety. The callers alleged that certain signatory contractors are not employing a full dive crew with a proper tender to monitor the safety of a diver when he is underwater.

Three accidents have occurred on union sites in the last two years, one of which resulted in the death of a union diver. Based upon the callers’ allegations, my office and the IG’s office made visits to four locations at which divers were employed. We have also performed interviews of union members and made inquiries with government agencies that have jurisdiction over diver safety. This matter remains under investigation.
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Re: Local Union 1456

concerned dock builder
this may be the case but mcarron is about to dissolve us. we need to forget the past and try to come together to help us out of this mess. pionting fingers is not going to help our  cause. try to have something constructive to say that may help us.
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Re: Local Union 1456

this is also true, but befor we rebuild if were alowed,the rotten shit has to go!
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Re: Local Union 1456

In reply to this post by the 1456 umboðsmaðr
"Local Union 1456 Executive Board, Current Trustee and Advisory Committee Members, Audit Committee Members, Finance Committee Members who where part of all this should resign immediately!"

Or be removed if they do not resign.

Then and ONLY THEN can we attempt to resolve the situation.

"Insanity: doing the same thing over and over again and expecting different results." ~Albert Einstein

All who where part of this MUST leave!