Domenic Bozzotto should have known better. The tough and not always lovable leader of Boston's hotel workers union had been around long enough to know that, politically, he probably wouldn't get what he wanted. Everyone who mattered in Washington told him so, too.

But like a modern day Don Quixote tilting at the windmills of Washington's political machinery, the balding, bearded Bozzotto refused to believe his dream was impossible.

It turns out Bozzotto was right -- after an 18-month battle, he won a new employer-funded trust that can be used to help workers make down payments on homes, reduce mortgage interest rates, subsidize rental deposits on apartments and even provide emergency aid for rent. Through his efforts, Bozzotto also won a new and innovative benefit for American labor to take to the bargaining table.

Bozzotto's union, Local 26 of the Hotel Employees and Restaurant Employees International Union, represents 5,000 men and women who serve the food, carry the bags, make the beds and clean the bathrooms in some of Boston's most expensive hotels.

His political saga began in December 1988, when Bozzotto's union signed a new contract with 13 Boston hotels that set up a jointly run housing trust fund into which employers were to contribute 5 cents for every hour a union member worked. The union estimates that over the life of the three-year contract, the employers will have contributed about $1.5 million into the fund.

Both sides knew it was illegal to negotiate over the joint use of employer funds for any purpose that was not spelled out under the Taft-Hartley Act, the amendment to the National Labor Relations Act approved by Congress in 1947 to curb the powers of labor unions.

But they signed the deal anyway with the understanding that the fund would be set up only if Congress could be persuaded to amend the Taft-Hartley Act to make it legal.

The local's lobbying campaign began almost immediately. First, the union went to the Washington headquarters of the AFL-CIO, where federation President Lane Kirkland said he liked the idea but warned against any effort to tamper with the Taft-Hartley Act.

For more than 20 years, labor has jealously guarded against any attempts to amend the act out of fear that once the bill is opened up in Congress, all of labor's opponents would jump in with anti- labor amendments. Better not to gain anything than to run the risk of losing what they already had.

This was not a deterrent for Local 26. And a year later, the union won its first big step toward its goal when the Senate, in the dead of night late last year, approved the amendment allowing the housing trust.

By then, Bozzotto and his allies had not only lined up the traditional Democratic support at home in Massachusetts, but worked aggressively to win Republican support in the White House. When the bill reached the floor of the House early this spring, it had the protection of the leaders of both parties and sailed through without opposition or added anti-labor amendments. In April, President Bush signed the amendment into law, the first change to the act in nearly two decades.

Now that it's legal, the housing trust idea appears to be catching on among other unions. Bruce Marks, executive director of the Union Neighborhood Assistance Corp., which handles the trust fund for Local 26, said a number of other unions, particularly those representing many lower-income workers, have expressed interest in the housing fund.

He said most of the inquiries were from local unions such as the New York City municipal workers who are trying to cope with the city's requirement that its workers live in the city. He said the United Auto Workers has expressed some interest in the idea as a way to ease the cost of relocation in the event of a plant closings.

Marks, a former financial analyst for the Federal Reserve Bank of New York, calls the new trust fund "a model for service workers." Since signing the initial contract with the 13 hotels, Local 26 has included the housing trust in contracts with dozens of other employers in the Boston area. The fund has accumulated $500,000 and expects to issue its first loans within the next two months.

With the housing trust fund and other benefits -- such as legal services and tuition assistance for education -- Marks said his union is trying to do for service workers today what industrial unions did in the 1930s and '40s.