Two building-trades unions in southern California will be prohibited from making below-market-rate loans to builders in exchange for agreements to employ union workers, under the terms of a potentially far-reaching consent agreement reached with the Labor Department.
The Southern California Foundation, a consortium of unions formed to promote union construction work, has made $82 million in loan commitments from their pension funds, much of it at interest rates ranging from 2 to 5 percentage points below market rates.
This example of the increasingly popular use of "social investing" to promote a particular goal ran afoul of federal pension law, the department charged in a suit filed last month. Pension fund trustees are obligated to seek the highest income for beneficiaries, and the department, after a two-year study of the issue, last month sued the pension plans of the carpenters' and pipefitters' unions.
"We don't care if it is social investing, antisocial, or asocial -- only whether it is a good investment," a department spokesman said. The agreement provides for $1.5 million in restitution and appointment of an independent fiduciary to oversee investments. ROOM AT THE TOP? . . .
House Democrats are considering holding hearings to study whether the Sept. 24 indictment of Secretary Raymond J. Donovan has created a leadership void at the Labor Department that is damaging its programs.
"We continue to get complaints about the nonenforcement of labor laws," said a staff member of the House Education and Labor Committee. He cited repeated complaints from within the department and from unions about enforcement of laws involving occupational safety and health, mine safety, and health and fair labor standards.
But decisions on whether to hold the hearings won't be made until House Democrats pick the new chairmen of the labor subcommittees.
Rep. George Miller (D-Calif.) is expected to leave the labor standards subcommittee and will probably be succeeded by either Austin J. Murphy (D-Pa.) or Dale E. Kildee (D-Mich.). At the employment opportunities subcommittee, Matthew G. Martinez (D-Calif.) is expected to succeed Augustus F. Hawkins (D-Calif.), who took over the chairmanship of the full committee last year. William L. Clay (D-Mo.) and Joseph M. Gaydos (D-Pa.) are expected to remain as chairmen of the labor-management relations and health and safety subcommittees, respectively.
Regarding possible hearings, department spokesman Michael Volpe said, "The Labor Department is continuing to function in a responsible and timely fashion under Undersecretary Ford B. Ford, as it had under Ray Donovan. Anyone who denies this is ill-informed." RUNNING AFTER RACKETEERS . . .
A group of textile firms in Massachusetts hired a "labor consultant" to help in their negotiations with the Amalgamated Clothing and Textile Workers Union, and that labor consultant, in turn, hired Eleuterio (Larry) Marzilli of Providence.
The consultant, according to the Labor Department's Office of Labor Racketeering "employed Marzilli for the purpose of beating the [union's general manager] with a baseball bat." Although the consultant was acquitted, Marzilli was convicted last July under the "Antistrikebreakers Act" and is serving six years in federal prison.
The Marzilli case was among those cited in the semiannual report of Inspector General J. Bryan Hyland, which also noted that since 1978, the racketeering office has won 322 convictions in racketeering cases involving both labor and management. CRASH LANDING . . .
Falling down stairs results in an estimated 33,000 disabling work-place injuries a year, accounting for 1.3 percent of all lost work time, according to the Bureau of Labor Statistics. The BLS surveyed the problem in 24 states and got responses from 1,007 workers. They reported that in most cases, the stairs were wet and "nearly two-thirds of the workers were not using handrails when they fell, most often because of a lack of railings."