Two separate investigations into alleged problems at Local 183 of the Universal Workers Union have resulted in significantly different findings.
Both reports commissioned as a result of allegations
By Grant Cameron
staff writer
Two separate investigations into alleged problems at Local 183 of the Universal Workers Union have resulted in significantly different findings.
One report, a forensic audit requested by Local 183 and conducted by Grant Thornton LLP, clears the union and its officials of any wrongdoing.
The report is marked private and confidential, however, it was posted in early December on the Local 183 Web site.
The other report was requested by the Canadian general executive board counsel of the Labourers’ International Union of North America (LIUNA), and was conducted by Ronald Pink, a lawyer from Halifax, and The Inkster Group, a highly regarded investigations firm.
The report alleges that Local 183 has failed in its responsibilities to members. It also questions the conduct of some of the executive of the union.
The LIUNA report, a 153-page-document, has not been publicly released although it has been given to the executive at Local 183, the Ontario Labour Relations Board, and a number of contractor associations.
The LIUNA report is important because it is the basis on which Local 183 was recently placed in trusteeship.
Daily Commercial News has obtained copies of both reports, along with a letter that was sent to Local 183 by Terence O’Sullivan, general president of LIUNA.
Both reports were commissioned as a result of allegations made against Local 183.
The LIUNA report, often referred to as the Pink report, recommends that a temporary trustee be appointed to take charge of the affairs of Local 183.
The report focuses on allegations in a number of areas, such as exploitation of undocumented workers, acquisition of pension credits, failure to enforce collective agreements, and exercising proper control of union funds.
Questions were also raised about collective agreements, donations to various charities, and expenditures on projects.
In all, the report looked at a total of 16 different allegations against the union.
The allegations and findings of the investigation are explained in more detail in 117 pages of the report, however, those details are not reprinted here because they have not yet been proven in a court of law.
As a result of the investigation, however, the report concludes that Local 183 and its executive officers have committed and continued to commit serious breaches of the constitution of LIUNA and the Canadian Ethical Practices Code of LIUNA, and that the general president of LIUNA should appoint a trustee to take charge of the local.
LIUNA general president O’Sullivan has acted upon that request and in a letter dated Dec. 6 ordered that Local 183 be placed into an emergency trusteeship. The next step in the process will be a hearing before a Canadian independent hearing officer to determine whether Local 183 should, in fact, be under trusteeship. That hearing was slated to begin Wednesday.
In the letter to Local 183, O’Sullivan stated that, “an emergency situation exists at Local Union 183 that warrants immediate intervention by the international union.”
The investigation, he said, disclosed a number of instances where officials and representatives of Local 183 have failed to serve or protect the best interests of the membership or have failed to carry out their constitutional responsibilities in administering the affairs of the local.
The forensic audit of Local 183, however, came to a much different conclusion.
As part of its investigation, Grant Thornton, an accounting, tax, and business advisory organization, looked not just at the local, but also at the personal lives of its three top officers to ascertain whether they were living within their means.
The report found that Local 183, which grew from 11,000 members to 31,000 in six years, has certain systemic problems that need to be addressed as it moves forward but it cleared senior executive board members of any wrongdoing and concluded that allegations against them are unfounded.
“We found Local 183 to be effectively managed and in excellent financial condition,” the report states. “Its customized computer programs and controls over bank accounts provide a solid structure for administering the local.”
The report did identify areas where Local 183 might not have complied with the constitution of LIUNA, and where controls or processes require improvement.
The financial implication, according to the report, is that payments to LIUNA might have been under-remitted by an amount in excess of $1 million. The report notes that Local 183 has sufficient funds on hand to pay any amounts potentially owing to LIUNA.
The report says there were few details regarding some of the matters alleged to be occurring at Local 183.
As part of its probe, Grant Thornton examined financial transactions in Local 183’s books and records.
They also looked at properties in Portugal owned by two executive board members. In both cases, they found no improprieties.
As a result of its probe into other areas of the local, however, the report did make several recommendations, one being that the union should create a chief financial officer or equivalent position, another being that the union should establish an internal audit function with a third party.
The report also suggested that Local 183 report all charitable donations from any accounts containing union funds and retroactively report donations made in 2002, 2003 and 2004.
On the operational side, the report found Local 183 to be well managed and operating under sound business practices, however, it also noted that the local has a tendency to follow prior practices which have, on occasion, resulted in the union not adopting changes in practices on a timely basis or fully implementing changes across the union.
The report says, for example, that some undocumented workers incorrectly believe they are not entitled to member benefits despite the fact that premiums have been paid on their behalf. The report recommends that Local 183 communicate clearly the rights of members to benefits, despite their immigration status.
Local 183 has more than 30,000 members working on construction sites across southern Ontario.
LIUNA represents 65,000 construction workers throughout Canada and approximately 850,000 members throughout North America.
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