Something Smells

According to the San Francisco Weekly:

[I]n the 1990s some $76 million was siphoned from union worker benefit funds under the influence of San Francisco labor boss Larry Mazzola. More than $50 million of that money was used to prop up Konocti Harbor Resort, a Lake County concert venue abutting and near more than 100 acres privately owned by Mazzola and his family.

Last year, Mazzola cut a deal with a real estate investment firm owned by Democratic Party lobbyist Darius Anderson in hopes of pulling political strings that might turn the resort into a much more valuable Indian gambling casino complex. While Mazzola, business manager of Plumbers union Local 38, and his agents were pursuing the gambling deal, Mazzola’s personal attorney attempted to re-zone Mazzola’s own land near the resort so that the entire area might become a condominium, housing, and commercial development with a gambling mecca at its core. Local opposition stalled the re-zoning and gambling plans. But had they succeeded, the escalation in property values could have personally enriched Mazzola by millions of dollars. And these schemes wouldn’t have even been conceivable had Konocti Harbor Resort not been kept afloat with vast amounts of money that was docked from workers’ pay.

By docking workers’ hourly pay to finance an ambiguously named “convalescent trust fund,” then causing $50 million to disappear into the worthless investment that was Konocti Harbor Resort, Mazzola and union officials under his control deprived workers of benefits money they paid for out of their own union dues. By attempting to leverage that “investment” in a way that would increase his own net worth, he was engaging in the sort of apparent attempted sweetheart dealing that gives union bosses a bad name.

Indeed! That’s $50 million in workers’ retirement funds that Mazzola is treating as his own personal candy store. And, since California doesn’t have a Right to Work law, these are workers that are also forced to pay dues and fees to Mazzola as a prerequisite for getting or keeping their jobs.

The Weekly continues:

Yet, appallingly, regulators will not punish Mazzola in any meaningful way. Despite years of federal investigations and lawsuits pertaining to the funds diversion, Mazzola is poised to get off without so much as a slap on the wrist. . . .

According to a new settlement agreement between Mazzola and the Labor Department described in court proceedings earlier this month, Mazzola emerges from a three-year legal ordeal stemming from the funds diversion allegations unscathed.

Mazzola won’t be removed from his union leadership role. And he will continue to help overseeing some union benefit money. As a concession Mazzola will be required to step down as a member of a board of trustees overseeing worker benefit funds, perhaps by the end of the year. Mazzola will be allowed to remain for two years on a board overseeing a worker training fund. And Mazzola’s son, Larry Jr., will be allowed to sit on the board of trustees overseeing the union local’s various pension and other benefit funds.

As part of the settlement, Larry Mazzola Jr. will be required to take a course on the concept of fiduciary duty.

WOW! Even understanding that the Department of Labor’s budget is now controlled by a Democratic majority beholden to Big Labor’s largess, the distinct odor coming from this decision is too obvious to ignore.