About 12 million U.S. workers have a stake in union welfare funds, totaling some $17 billion and theoretically set up to provide pensions, medical care and other benefits for members. Last week New York’s State Insurance Department, making a fast public audit of a dozen-odd union funds at hearings in Manhattan, proved that some union officials are firm in the philosophy that benefits should begin with the guardians of the funds. Samples:
¶Two leaders of a C.I.O. restaurant workers’ local tapped its welfare funds for $32,760 a year, plus two Cadillacs, a Packard, and gasoline for summer trips to the Catskills, winter trips to Florida.
¶Samuel Rosenzweig, president of the C.I.O. United Culinary, Bar and Grill Employees, Local 923, collected $477,401 from 350 luncheonette operators, gave the 1,200 workers only 26% for welfare, kept 35% for expenses—mostly his own pay. “Good administrators,” testified Rosenzweig blandly, “deserve good pay.”
¶Leaders of three different unions placed welfare-fund insurance through relatives, who kicked back part of their substantial commissions.
¶Two officers of a C.I.O. retail clerks’ union spent $52,000 from welfare funds to buy themselves lifetime annuities.
¶The A.F.L. Seafarers’ welfare fund put out $4,583 to pay fees at four clubs—including Westchester County’s Winged Foot Golf Club—for the fund administrator.
¶The trustee of an A.F.L. retail liquor clerks’ local drew $100 from the welfare fund every week or so for lunches, cigars and liquor.
¶One-third of the medical benefits paid by a C.I.O. shoe service workers’ fund went to fund officials who regularly visited California and Florida for their health.
¶An A.F.L. Teamsters’ leader made himself a fund trustee for life at $30,000 a year, paid $85,000 to a cousin for land assessed at $10,500, spent so much that (despite an annual take of $250,000 from employers) the welfare fund has no funds left for welfare.
After checking 135 union welfare funds, the Insurance Department found fault with 62, nearly half, and suggested state supervision for all. C.I.O. President Walter Reuther acted fast. “The C.I.O. cannot and will not tolerate crooks,” said he. “The union official who preys upon . . . funds . . . has no place in the labor movement, and should be sent to jail.” Six C.I.O. local leaders—including “Good Administrator” Rosenzweig—were suspended and physically barred from their offices. The A.F.L., for its part, called for annual audits of all A.F.L. union finances, including the welfare funds.
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