21 October 1998
Union dues from some of Vancouver's poorest-paid
union members were squandered by leaders of the Hotel Employees
and Restaurant Employees International Union, a U.S. investigation
The money, collected from the 12,000 union
members in the Vancouver local and 230,000 other members throughout
North America wound up paying for a fleet of Cadillacs for union
bosses, a private jet for the union's former president and questionable
payments to consultants and organizers who apparently neither
consulted nor organized.
The report was prepared by former U.S. federal
prosecutor Kurt Muellenberg, who said in an interview from Washington,
D.C., that it wasn't feasible to send copies of his 85-page report
to all union members. But he said he asked all locals to inform
their membership about his findings.
"I can't force anyone in Canada to do
anything," Muellenberg said, adding that his office has received
at least one call from a concerned Vancouver union member who
was trying to learn the report's contents.
Nick Worhaug, president of Local 40 of the
Hotel, Restaurant and Culinary Employees' and Bartenders' Union
and a vice president of the international union, said the report
has not been posted in his Burnaby office.
"No one has asked me, Local 40, for
a copy of the report," he said. "If somebody comes to
me and says they want a copy of the report, they're quite welcome
to have it."
The report found union leaders paid themselves
extra for attending conventions -- Worhaug received a $2,500 "allowance"
for attending a board meeting in 1996 -- allotting $478,150 US
in allowances during fiscal 1996-97. But Worhaug said the extra
money should just be viewed as part of his over-all remuneration.
Documents filed with the U.S. department
of labour showed Worhaug received an extra $49,480 US in 1996
in salary, allowances and travel expenses for his role as vice-president
of the international union. That was on top of his $80,000 Canadian
The results of Muellenberg's three-year investigation
were made public in the U.S. last month.
The report led to the resignations of more
than a dozen top union leaders, several of whom were determined
to be tied to organized crime rings, although it makes no mention
of any criminal ties in Canada.
Muellenberg noted that Vancouver union members
pay an average of about $20 in monthly union dues, $10 of which
goes to the international union, whose officers are based in Chicago
The dues are collected mostly from low-level
hotel, resort and restaurant employees -- some of whom are paid
little more than the minimum wage.
But instead of being spent on union business,
the report found, the money was used to pay for such things as
a luxury condominium in Washington for the exclusive use of then
president Edward Hanley and his family, a $3-million private jet
for Hanley's use, "consultants" who performed little
or no work, and union "organizers" who received salaries
but do not appear to have done much, if any, organizing.
There was a fleet of Cadillacs for union
bosses and a $100,000 motor home parked near Hanley's house.
Hanley and his personally- appointed union
leaders spent union funds on lavish travel, union-issued credit
cards, entertainment and seemingly artificial jobs for friends,
family members, politicians and people associated with organized
Hanley's wife had her own Cadillac convertible
leased by the union, bearing vanity plates inscribed with her
"Union funds are to be held in sacred
trust for the benefit of the membership," the report said.
"The membership is entitled to assurance that union funds
are not dissipated and are spent for proper purposes."
Hanley stepped down from his job as part
of a deal in which he did not agree to any of the charges but
also did not contest any of the allegations.