California Union Uses Loophole To Pocket COVID Relief Funds, Labor Experts Say

UNITE HERE Local 11's nonprofit affiliate took PPP loans as it hired 
union staff

Labor experts say a top California union used its affiliate 
nonprofit to pocket over $250,000 in federal relief funds it was 
ineligible for.

Labor unions were not eligible for Paycheck Protection Program loans 
in 2020. But the Hospitality Industry Training and Education Fund, a 
501(c)(3) affiliated with the UNITE HERE Local 11, received a 
$258,265 PPP loan in May 2020. The nonprofit is technically separate 
from the Los Angeles-based union, but the groups often operate as 
one entity. The nonprofit trains Local 11 workers and hired several 
Local 11 employees between May and July 2020. The hirings came after 
a series of layoffs at Local 11 that spring. Members of both groups 
often speak of them as one entity.

"So happy you are on the HTA/Local 11 Team," the nonprofit commented 
on the Facebook page of one of the employees it hired from Local 11. 
Several of the Local 11 employees who joined the nonprofit promote 
the union and identify as members.

Union watchers say arrangements like this allow unions to circumvent 
restrictions and line their pockets.

"Tricks like these allow unions to hide suspicious transactions in 
plain sight, evading the intent of laws designed to increase 
transparency, bring accountability, and curb corruption," the Yankee 
Institute’s Frank Ricci told the Washington Free Beacon.

Labor unions are struggling financially after decades of declining 
membership. In an attempt to capture dues in the face of right to 
work laws, unions have restricted the window during which members 
can opt out of paying dues. President Joe Biden is looking to roll 
back a Trump administration rule that prohibits third-party payments 
of Medicaid funds, which previously went to unions through 
membership dues.

In order to receive PPP loans, the Small Business Administration 
requires an organization to prove it needs federal funds to keep 
staff on payroll. But tax forms reviewed by the Free Beacon show 
that the union's nonprofit had a banner year.

The nonprofit received an unprecedented $34 million worth of 
government grants in 2020. Staff salaries rose by 33 percent across 
the board, while executive director Adine Foreman’s salary grew 75 
percent. At $314,611, Foreman’s salary exceeds the total of the 
group’s PPP loan.

Neither Local 11 nor the Hospitality Industry Training and Education 
Fund responded to a request for comment.

Charlyce Bozzello, communications director for the Center for Union 
Facts, noted that Local 11 organizers have criticized hotels for 
using PPP loans during the pandemic closures.

"Instead of embracing the help for its-out-of-work members, Local 11 
criticized hard-hit hotels for utilizing PPP," Bozzello told the 
Free Beacon. "Now, we learned that the union hypocritically made use 
of PPP funding for its own related entities, and may have even 
skirted the rules."

Labor unions were unable to receive PPP loans in 2020 but were 
approved for the program in March. Local 11 received a $1,851,872 
loan in April.


https://freebeacon.com/coronavirus/california-union-uses-loophole-
to-pocket-covid-relief-funds-labor-experts-say/