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International Boilermakers: Labor Union Or Business Tycoons?

The International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers strikes again -- with a slap in the face to its members.

The Boilermakers Union, which represents some 59,000 workers in the U.S. and Canada, is one of only a handful of labor organizations that own and operate their own bank; on the backs of the rank and file when it suits them.  Union leaders borrowed $5 million from Kansas City’s local 83 chapter, apparently to buy under-performing loans from the union’s bank, Brotherhood Bank and Trust. The funds were borrowed in 2010 as a 10 year unsecured loan with an interest rate of 2.75 percent. Union members are furious and wonder how their money could have been spent -- without their consultation- on bank loans.

A clue: Top union officials; including President Newton Jones, the union’s secretary-treasurer, and two international vice-presidents all sit on the bank’s board. Conflict-of-interest much? In fact, “President of International Boilermakers” is not Jones’s only title; he is also the acting chairman of the board for the union’s bank, pulling in two hefty salaries. As the Kansas City Star notes:

In the union’s 2009 fiscal year, Jones received total disbursements from the union of $524,052, which includes salary and expenses. He also received nearly $340,000 from Brotherhood Bank in calendar year 2009 as interim president and chairman of the board.

In fiscal 2010, Jones received total disbursements of $730,657 from the union and $52,945 in pay as bank chairman in calendar 2010, records show. In 2011, Jones received total disbursements of $607,022 from the union, along with bank pay of $50,790.

If unions are consistent in anything it’s that they never change; never stop using member dues to fund their own interests. (Maybe we could find out why if union leaders were talking…which they aren’t.) Leaders of the Boilermakers union are only interested in an increased profit margin for the union. They aren’t even shy about it; speaking to a crowd of 3,000 at an April AFL-CIO annual conference, Jones bragged how his bank offered the labor movement “a new and better approach to how labor invests its capital.”

Sounds like a good deal. Unless you are a poor or working class member of the unions. Ray Gorham, a former member of the union who recently retired, unloaded his feelings to The Star on the union leaders' recent dubious dealings:

They weren’t designed to be a bunch of loafer-wearing, argyle-sweater-wearing SOBs that are in the banking business. They were designed to go out and negotiate contracts and protect the membership. How does any of this protect the membership?

They’ve become exactly what they were originally designed to protect us against, and that’s big business.

A union’s responsibilities are pretty straightforward: protect workers from being underpaid and overworked. How does running and operating a bank (with union workers’ money) factor into the equation?

What’s more, Randy Cruse, who was then local 83 business manager and instrumental in securing the loan, subsequently “retired” from his union career to become a vice president of Brotherhood Bank and Trust! A coincidence? We can only guess, as union leaders are practiced at keeping their machinations under wraps.

But at least their loyalties are clear.