March 9, 2004, 10:15PM
City, employees differ on pensions
Officials say workers shouldn't fret if referendum passes
By KRISTEN MACK
City employees fear their pensions will be gutted if the city chooses to opt out of a state constitutional amendment that guarantees their generous benefits.
But city officials say that even if the City Council approves an opt-out referendum today) and voters pass it in a May election, city employees should not be worried about the benefits they've already earned being cut.
The council is expected to set a May 15 election that will allow the city to opt out of Proposition 15, a statewide initiative that says no city can reduce or impair pension benefits that have already been promised and earned by vested employees and retirees.
City officials say the amendment reduces their flexibility to combat a massive funding shortfall, even with such minor adjustments as reducing an automatic cost-of-living increase.
City employees see it differently. Passage of Proposition 15 is the best thing that has happened for them in years, said Kimbal Urrutia, executive director of American Federation of State, County and Municipal Employees, Local 1550.
The union is spoiling for a fight.
"Why should they give it up?," Urrutia said. "This is not our fault. The union is going to have to run an active campaign to get people to support the current pension plan. This is our last stand."
Mayor Bill White wants the city to opt out because it is facing an expected $1.5 billion shortfall in its main municipal pension fund over the next 18 years. The major cause of the shortfall, according to a consultant hired by the city, is the benefits increase bestowed in 2001.
They give 90 percent of salary in retirement to anyone who works 25 years. With Social Security, those employees will make more in retirement than they earned while working. If their years of service and age equal 70, they start receiving payments immediately.
That's not the only benefit. Retirees also get a guaranteed annual 4 percent cost-of-living increase, though city employees recently have gotten none. They get payment of full benefits to spouses after a retiree dies, and a lucrative deferred-retirement program.
"Without a doubt, there is some anxiety out there," Human Resources Director Lonnie Vara said of city employees fearful of losing such rich benefits. "We've set expectations."
"You don't easily change something you promised to people. But without (the ability to opt out) the city doesn't have as much room to maneuver."
White said his job is making sure the city has flexibility to deal with the problem. He planned to send a message to all employees as soon as today in a question-and-answer format.
"Employees should know I am trying to make a fair and balanced decision so we do not have to slash employment to make pension benefits," he said.
Employees see the retirement benefits as a trade-off for low pay. Kendall Baker, who has worked for the city for 19 years, said if the opt-out measure gets put on the ballot, "the public will eat us alive."
"Proposition 15 provided employees with a sense of security," Baker said. "Now, our benefits are at the danger of being lost."
Mary Ross, who reached her 25th year with the city last month, said she does not want to be perceived as a "monster who plans to leave the city broke."
Twenty percent of city employees are eligible for retirement now, Vara said. Within the next five years, there will be another 20 percent who can retire.
U.S. Rep. Sheila Jackson Lee attended the council's public session Tuesday to say that she is against the city opting out of Proposition 15.
"They have a problem to solve. I respect that," she said of the council. "But let us not scapegoat city employees."
Councilwoman Pam Holm said that the city is simply looking for an equitable response.
"This is not an attempt to abandon or abolish the pension fund," she said. "But to explore carefully what we can or cannot do."
Chronicle reporter Dan Feldstein contributed to this story.
Copyright 2004 Houston Chronicle
March 27, 2004, 4:43PM
Hearings to delve into fray at union
By L.M. SIXEL
Federal investigators will be there Monday when members of the largest Teamsters local in Houston finally get a chance to find out what led to the ouster of their local president and secretary-treasurer.
The court-created Independent Review Board will begin hearing testimony concerning allegations that Chuck Crawley, the suspended president of Teamsters Local 988, and Dennis Bankhead, its suspended secretary-treasurer, used thousands of dollars in union funds for their own benefit.
The U.S. Department of Justice and the U.S. Department of Labor will be monitoring the proceedings, according to Nancy Herrera, executive assistant U.S. attorney.
The FBI has been investigating allegations of corruption in the local for more than a year.
One disgruntled former Teamsters official said Ed Gallagher, the assistant U.S. attorney who oversees the organized crime section in Houston, has been assigned to work on a case against Teamsters officials. Johnny Johnson said he spoke to Gallagher about three weeks ago about his plans to work on the Teamsters case after he completes another labor case. Johnson, who worked as a business agent for Crawley until he was fired in 2001, is now a member of Corruption Out Of Local 988 and helped bring these allegations to light.
While federal officials have confirmed that there is an investigation, they won't say whether Gallagher will be involved.
Herrera, the spokeswoman for the U.S. attorney's Houston office, said she could neither confirm nor deny Johnson's statement.
Crawley and Bankhead were suspended from their jobs in October by Teamsters General President Jimmy Hoffa after the board alleged the pair inflated invoices, purloined barbecue pits and demanded vendor kickbacks.
Several of the allegations stem from the construction of a $2 million union hall in 2002. The new hall drew widespread attention when members discovered it was built with nonunion labor because union leaders believed union labor cost too much.
The panel, an oversight board created to monitor the Teamsters as part of a court-ordered effort to rid the Teamsters union of corruption, includes former FBI and CIA director William Webster; Benjamin Civiletti, the attorney general under President Carter; and Joseph diGenova, a former U.S. attorney.
Charles Carberry will present the case on behalf of the three-member board. Carberry, a former U.S. attorney with the Southern District of New York, is the board's chief investigator as well as a partner with the Jones Day law firm.
The hearing is expected to focus on allegations outlined in a 92-page report the review board issued last fall.
The report alleges:
• Crawley demanded and received $20,000 from the contractor who installed a new telephone system.
• Crawley wrote checks for more than it cost to buy union logo T-shirts and stickers and pocketed the extra $2,995.
• Crawley and Bankhead each ordered an $800 mobile barbecue pit and altered the receipt to hide the fact that they received them.
• Former union employee Marie Espinosa charged the local $3,237 for drinks she did not supply during a three-day grand opening party she catered.
Washington, D.C., lawyer Robert Baptiste, the former general counsel of the International Brotherhood of Teamsters, will represent Crawley, Bankhead and Espinosa. He did not return a call for comment.
Crawley could not be reached for comment. In the past Bankhead has declined to comment.
Some members of Local 988 are also hoping the Independent Review Board will investigate allegations Crawley was collecting $400 a month from his employees so he could curry favor with Hoffa in order to win the job of southern region vice president.
Crawley was trying to raise $75,000 for his campaign to win the job when international Vice President Tyson Johnson retired, according to depositions of Crawley's former secretary and former business agents.
They testified before oversight board investigators that Crawley gave them raises of about $800 a month in 2001, but they were required to kick back half of the money in cash when Crawley instructed his ex-secretary to "take up the collection."
In depositions, Crawley said he did not ask his employees for kickbacks nor was he trying to buy Johnson's job.
"It's nonsense," said James Hicks Jr., an attorney in Dallas who is representing Johnson, the principal officer of Teamsters Local 745 in Dallas until he resigned several months ago.
"Those positions aren't for sale," Hicks said, adding that they're elected.
Copyright 2004 Houston Chronicle
23, 2004, 6:24AM
By JO ANN ZUÑIGA
About 65 teachers not included in job cuts previously announced by the Houston school district are getting termination notices despite the district's assurances that no classroom teachers would be affected directly by budget cuts.
School nurses, psychologists and other specialists are already on the chopping block as the district tries to shave $39 million from its $1.3 billion budget.
But Gayle Fallon, president of the Houston Federation of Teachers, said the classroom teachers began receiving notices of termination this month.
Fallon said the union will appeal the classroom teachers' layoffs on the grounds they violate the Houston Independent School District's "reduction in force" policy, which requires a vote from the school board.
HISD announced earlier this month that it would eliminate 124 positions but that no classroom teachers would be affected. The positions targeted were mostly administrative and clerical, the district said.
The teachers who are now receiving notices of termination are listed as "probationary," which means they have worked for the district less than three years, Fallon said.
"We're going to grieve (appeal) each and every one of them" before the school board, Fallon said.
HISD spokesman Terry Abbott defended the district Monday, arguing that these types of teacher terminations occur every year and that most of these teachers get rehired for the next school year.
"This is the legal and appropriate way to do it," Abbott said. "We hire about 1,000 new teachers a year. Those getting the letters will be placed back in the pool to be rehired."
He pointed out that the 65 teaching positions being terminated represent only a half percent of HISD's 12,500 teachers.
Fallon said the district's previous claim at this month's board meeting that "no classroom teachers" are directly affected by budget cuts is untrue.
Abbott agreed that there is an "effect" depending on how the situation is viewed.
"Yes, teachers are always affected when schools reduce staff to fit their budget needs and their enrollments, but no, no one has yet lost their employment with HISD," he said. "That won't happen unless for some reason they don't get hired into another position before they go off the payroll on Aug. 2."
Although terminated in May at the end of the school year, teachers who are awarded one-year contracts are paid through Aug. 2.
Teachers affected either could not be reached or declined to comment publicly. Fallon said this stemmed from a fear of not being rehired in the fall.
But the teachers' union has received several copies of letters written by school principals notifying teachers they were being terminated.
Copyright 2004 Houston Chronicle