Mark Flatten

Phoenix Labor Union Targets Former Trustee Who Questioned How Taxpayer Money is Spent

Posted on October 27, 2011 | Type: Investigative Report | Author: Mark Flatten
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Natasha Nimer had a simple question: As a trustee in a local labor union representing City of Phoenix employees, did she have a duty to check the books of a taxpayer-funded insurance account it managed?

So she asked the executive board of AFSCME Local 2960. The response was an emphatic “no.”

She dropped the matter and thought it would end there.

She was wrong.

In the months that followed, union officials tried to strip Nimer of her duties as a trustee and steward. They tried twice to force her out of AFSCME, only to have the international headquarters order her reinstated.

Eventually union executives went after Nimer’s job as a civilian employee in the Phoenix Fire Department. They demanded her city phone records, personal and work-related emails, disciplinary files and performance evaluations; even a list of all of the Web sites she had visited. They wanted her computers seized and the hard drives searched for evidence she was doing something wrong.

Watch the accompanying video Phoenix Labor Union Targets Former Trustee here

 

Read Money for Nothing: Phoenix Taxpayers Foot the Bill for Union Work here

 

The insurance fund Nimer asked about is one of many taxpayer-funded benefits worth millions of dollars that Phoenix provides to the seven labor unions that represent city workers with no accountability. The salaries of top union officials are paid by taxpayers. So are other cash benefits paid directly to the unions. Yet the city does not audit union accounts or require union officials to document how the time and money is spent.

As a trustee in AFSCME 2960, it was Nimer’s responsibility to monitor union spending. But she says her attempts to do so only led to retaliation from union officials.

Nimer eventually quit the union, saying she “felt beat down” by the board’s bullying.

Unions are supposed to protect workers. But Nimer says her battle with AFSCME 2960 shows they can also turn against their own members who challenge the union’s power or question its finances, even to the point of interfering with the worker’s job.

“I felt like I was being attacked,” Nimer said of her nine-month ordeal. “I just felt like every day was a fight. I felt I’ve worked really hard for this union, and now I’m being beat down and attacked because I raised a question. I put up with it because I care about people, I care about the membership. I care about the union. To have it turned around, it really hurt a lot.”

Nancy Gray, the former president of Local 2960, said there was no attempt to retaliate against Nimer for asking about the insurance account, something that she had a right to do under the AFSCME International constitution. What triggered the attempts to expel Nimer from the union were subsequent statements she made to fellow members, questioning whether money in the accounts was being misspent and whether union officials were paying taxes on money they received for managing the fund, said Gray, president of the local at the time the dispute with Nimer arose.

“That was such a falsehood and she was putting that out there to members and publicly,” said Gray, who left the union earlier this year. “So that’s why she had to have charges filed against her, so that she would stop that.”

Current officials at Local 2960 and the AFSCME International organization did not return repeated phone calls seeking comment.

 

LUCRATIVE BENEFITS

The life insurance is a relatively new benefit for AFSCME 2960. About $219,000 in taxpayer money is paid annually directly to the union to provide the employees it represents with life and long-term care insurance to supplement the coverage already provided by the city.

The only other unions with similar insurance accounts are those that represent police and firefighters, which provide post-retirement health benefits that are partially financed by taxpayer dollars.

The insurance fund for the firefighters’ union is managed by a board made up of two union representatives, two members appointed by city management, and a fifth person selected by the other four trustees. The city and individual firefighters contribute equal amounts to the fund. The money is paid directly to the trust company that manages the plan, according to city records. The city’s share is about $1.1 million per year.

The police union’s retirement health plan, financed entirely by the city, is managed by an outside company. It costs taxpayers about $405,000 annually.

But the insurance account for Local 2960 is managed internally by the union, which contracts with a private company to underwrite the policies. Union executives are allowed to pay themselves a fee for their management of the insurance fund, according to AFSCME documents related to Nimer’s case.

There is no independent board, as the firefighters have, and the city does not audit the account, said Lori Steward, Phoenix labor relations administrator.

The benefit was added in 2008 because it was demanded by union negotiators, Steward said.

“It was something they felt strongly about in bargaining,” she said of the insurance fund provision, which took effect in January 2009. “It was their priority for the terms of bargaining, so that’s less that could have gone into wages or less that could have gone into some other kind of benefit for its membership.”

The city already provides – at no cost to the employee – life insurance to workers represented by Local 2960 equal to their annual salary. If they die on the job, there is an additional $75,000 death benefit. In addition, if they die while they are commuting to or from work, their survivors receive a $200,000 life insurance benefit.

Other taxpayer-financed benefits Phoenix pays to the unions are even more costly.

A Goldwater Institute investigation published in September shows Phoenix lavishes the unions with benefits worth millions of dollars every year. The most lucrative concession granted to the seven unions that represent city employees is release hours, time for the top union executives, who are employed by the city, to be released from their regular duties to do union work. More than 73,000 hours of release time are allowed in the contracts, costing Phoenix taxpayers more than $3.7 million per year.

AFSCME Local 2960’s contract is typical.

Three top officers in the local are released full time from their regular government jobs to do union work. That means their full salary and benefits are paid by the city, but they work exclusively for the union. The union also receives more than 4,500 hours of additional release time that can be allotted to other members to do union work.

Aside from the other benefits, the city pays Local 2960 $14,000 annually to send its members to schools, conferences and workshops.

As with the insurance funds, the unions do not have to document to city officials how the time and money is spent.

 

A SIMPLE QUESTION

Nimer said she had no reason to believe the union board members who managed the insurance account were doing anything wrong when she asked about the fund in April 2010. Even today, she has no evidence of mismanagement. What made her suspicious was the reaction of executive board members, as well as their determination to drive her out of the union and interfere with her job at the fire department, she said.

“The most alarming aspect of the situation was their reaction to the question, a simple question, which was ‘hey are we supposed to look into this account?’” Nimer said. “Their behavior from this was abrasive, aggressive. How I felt and the term I used to them was ‘suspect.’”

Nimer has been a city employee since 1998. She joined AFSCME the following year and soon became a union steward, the on-the-job point-person for other workers. Her fellow union members elected her as one of three trustees of the AFSCME local in 2008. When she was re-elected in 2010, the announcement published on the union local’s Web site praised her as an “outstanding leader,” and laid out the duties of Nimer and her fellow trustees:

“They are responsible for conducting an audit of the financial records for the Local 2960 affiliate of the AFSCME union,” the announcement stated. That same release quoted the duties of a trustee, as defined by AFSCME International, the parent organization that governs how local chapters operate.

“The Trustees are thereby charged with the responsibility to see that an audit of all of the funds of the affiliate is performed, either by an independent auditor or the Trustees themselves.”

When Nimer became a trustee, she was not shown a copy of those duties as defined by the international AFSCME organization, she said. Rather she was told that her job was largely ceremonial, and her primary responsibility was to match the check register against a printout of the local’s bank statement and make sure all payments had cleared, she said.

In April 2010, Nimer was approached by a fellow union member who asked if she had ever looked into the insurance account. She had not, but agreed to ask members of the executive board if she was supposed to during a general membership meeting the following day.

The local is governed by the executive board. The AFSCME International financial standards code requires that trustees be elected separately, and not be board members or have any other ties to the local’s management that could compromise their independence.

That night Nimer researched the issue by going on the AFSCME International Web site. There she found the section of the financial code outlining the responsibilities of trustees.

“The sole purpose for Trustees is to audit or to see that an audit is performed,” the AFSCME rules state. “An arms-length relationship between the Trustees and Executive Board must be preserved to ensure the most objective possible audit.”

The code allows the trustees to choose whether to bring in an outside auditor, or to conduct the audits themselves.

During the membership meeting the following night, Nimer asked the board if trustees are supposed to “look into” the insurance account, she said.

“It was an emphatic ‘no’ from the board,” Nimer said, adding she accepted the answer and dropped the matter. “I raised the question. I got the answer and I was done.”

 

FORCED OUT

Initially there was no indication of a problem, Nimer said. The meeting ended normally and there was no further discussion of auditing the insurance fund. But the next day, Nimer was told by a co-worker that executive board members were upset at her for asking about the fund. Over the next few weeks, Nimer was called into two separate meetings with Nancy Gray, president of the local, and other executive board members who demanded to know why she was asking about the insurance fund. By then, Nimer was suspicious. She’d researched the AFSCME rules and knew trustees were supposed to audit all accounts. Yet she was being told that was not her responsibility and “bullied” for even raising the question, she said.

“I told them to their face, I said ‘this is suspect. Why are you behaving like this?’” Nimer said.

During a Cinco de Mayo party in May 2010, Nimer discussed her concerns with a fellow trustee, calling the board’s behavior “shady.” She also provided him with a copy of the trustee’s duties as outlined by AFSCME International.

In early June, the executive board suspended Nimer’s membership in Local 2960, and removed her from her positions as a trustee and steward. In a letter from Gray, Nimer was told her conduct was “imminently dangerous to the welfare of Local 2960 and AFSCME International.”

No specific allegations were listed.

Nimer knew she was in a battle with the union, the very organization she would normally turn to for help. Feeling she had no place to turn, Nimer sought help from an unlikely ally, the Maricopa County chapter of the NAACP.

 

UNLIKELY ALLY

The NAACP and labor organizations have a longstanding, tight bond, said Rev. Oscar Tillman, president of the local chapter of the civil rights organization. Tillman said he regularly marches in union rallies, and has worked closely with Local 2960 officials for 25 years.

Tillman said he agreed to help Nimer because she clearly had the right to ask about the insurance fund, both as a trustee and as an individual member. It quickly became clear that he would get no cooperation from members of the executive board, who in his view were trying to keep Nimer quiet and use her to make a point that their management of the local should not be questioned, he said.

“In Natasha’s case, I felt that there was a message being sent that shouldn’t be sent to anyone in any organization, which is if you speak up and you speak out against us, we are going to crucify you,” Tillman said. “They wanted her out of there. They wanted to make an example.”

Tillman initially contacted Gray to try to discuss Nimer’s case, but those discussions eventually grew heated and he was ultimately told to leave the union hall, something he says has never happened to him before.

With help from the NAACP, Nimer challenged her suspension from the union in a complaint to AFSCME’s international headquarters filed in July 2010. Nimer alleged the union board retaliated against her for asking about the insurance fund, and violated the AFSCME constitution by trying to expel her without citing specific charges. She also raised the specter that union funds may have been misspent, citing comments made to her by another union member with knowledge of payments to the board.

About the same time, the Local 2960 board filed its own complaint against Nimer with the international headquarters, claiming she “has been accusing the local’s officers of misuse of union funds to other members and in public.

“She has also defamed the officers of Local 2960 by making statements accusing them of misusing union money,” according to the complaint that was signed by the top five officials in the local. “She has no substantiation for these allegations. They are being made in malice and as outright lies.”

The complaint also noted Nimer had signed previous trustee’s reports and violated union rules by contacting Tillman rather than handling her complaints internally.

Gerald McEntee, international president of AFSCME, ordered Nimer reinstated in August 2010, at least until a union hearing officer could sort out the complaints. A week later, the board tried to suspend Nimer’s membership again on the same grounds, and was ordered to reinstate her a second time.

 

“BULLIED”

On August 30, 2010, Local 2960 officials filed the first of five public records requests with the city asking for all documents on her work computer that were unrelated to her duties with the fire department, as well as her personal emails. Records requests filed by the union asked that the hard drive of her work computer be pulled and searched, and that all copies of text messages she had sent or received on her city-issued cell phone be turned over. Nimer’s disciplinary records also were sought.

The only negative action Nimer has received in the last five years was a “counseling” for downloading music onto her work computer, which is not considered discipline, according to city records.

The stress became overwhelming, Nimer said. Not only was she being accused by the union of misconduct for doing what she believed was her responsibility as a trustee, the constant public records requests were disrupting her work and, she feared, putting her job at risk.

“I was so stressed out,” Nimer said. “I don’t know how far they’re going to take this. It was that sense of unknowing. I’m just trying to stand up, do the right thing and try to protect the members and the organization, whatever may come of it.

“I’m sorry. I have a responsibility. And after they treated me this way, you think I’m going to be quiet? No. I’m not going to be bullied.”

 

VOLATILE ALLEGATIONS

Gray, the former president of the Local 2960, said Nimer’s troubles with the union did not come because she asked about the insurance account. The bill of rights in the AFSCME International constitution says all members “have the right to a full and clear accounting of all union funds.”

But after the board meeting, Nimer made inappropriate remarks to other union members suggesting the insurance fund was being mismanaged, that union executives were being paid inappropriately, and that they were not paying taxes on money they received for managing the account, Gray said.

Union executives also heard from one of Nimer’s co-workers that she had reported her suspicions to the Internal Revenue Service, Gray said. That is what triggered the public records requests with the city.

“We needed to get in her computer,” Gray said. “I wanted to know for myself what she was saying to the IRS. They can audit me all they want. I paid a good buck every year and I took no deductions.”

At one point, after Nimer was suspended from the union, she was allowed to come to the union hall to look at the financial records in the presence of board members.

Nimer says she was given access to the books for less than two hours and was intimidated by having to conduct her review in the presence of a half-dozen top officials of the union. Nimer requested a representative from the NAACP be allowed to accompany her, but that was rejected by union officials, she said. The brief time she was given access to the books was useless, Nimer said, adding she has no background in accounting. What she wanted at that point was an outside review by an independent accountant.

Gray said she offered to schedule more time for Nimer to review the books, but she refused.

“The books are open to any member,” Gray said.

 

WITHIN HER RIGHTS

Eventually the AFSCME International headquarters sent a judicial officer to hold hearings on the complaints Nimer and the Local 2960 board had traded against each other.

John Seferian, judicial panel chairperson of AFSCME, concluded in November 2010 that Nimer was within her rights under the international’s constitution when she asked about the insurance fund and made negative comments about the board members. Nimer did violate union rules by taking her complaints to outsiders, Seferian ruled, citing an unsigned referral to the Internal Revenue Service that was found on her work computer in response to a records request filed by the union.

“It was irresponsible for her to seek outside remedies before attempting to resolve the issues internally,” he wrote.

Seferian ordered Nimer reinstated with a reprimand and warning not to complain outside of union channels again.

As to Nimer’s charges against the executive board, Seferian determined in a separate ruling that Nimer had no proof that any union funds had been misspent. The executive board had voted to manage the insurance fund internally, and the stipends paid to board members for managing the account were properly approved, he wrote. The board was cleared of any wrongdoing.

Board members of Local 2960 continued filing public records requests with the city seeking information about Nimer even after both of Seferian’s orders were issued and the complaints were resolved.

The current president of Local 2960, Frank Piccioli, did not return repeated phone messages left at the union hall. Officials at AFSCME’s International headquarters would not comment.

Gray said that when she left the union, she recommended the board use an outside accountant to audit its books, rather than relying on trustees.

“My suggestion was that we have it go out to an independent auditor instead of being handled internally so we don’t have to face these allegations of wrongdoing,” Gray said, adding she does not know whether her recommendation was implemented.

 

A ‘SERIOUS QUESTION’

Less than a month after Seferian cleared the executive board of any wrongdoing, Nimer resigned from the union, saying she had been “a target and relentlessly attacked” by officials at the AFSCME local.

“Nothing’s going to change,” Nimer says now of her decision to leave the union. “With my knowledge of what’s really going on now, I don’t want no part of it. It’s not worth it. I don’t want my name on it to say I support it.”

Since battling with AFSCME, Nimer has been elected to the board of the Maricopa County NAACP.

Tillman said other city employees have sought his help when the union turned against them. Nimer’s experience with Local 2960 and willingness to stand up to the tactics of intimidation have made her a strong advocate in the civil rights organization, he said.

“Natasha’s case sent a lot of messages to a lot of people,” Tillman said. “The question was asked ‘why should we continue to support the union if the union can turn so harsh against us?’ It’s a serious question.”

Mark Flatten is an investigative reporter for the Goldwater Institute.

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