UFCW’s Six Million Dollar Scheme

By The Sacco and Vanzetti Research Collective

Over the span of 4 and a half years, the UFCW International Union’s top leadership has managed to siphon at least 6 million dollars in members money to a fund of questionable legitimacy.

Historical Context

Since its creation in 1979, the merger of the Retail Clerks and the Amalgamated Meat Cutters unions has been a problematic marriage. It is well known in the labor movement that the meat cutters were a militant organization, while the clerks were known for their conservative stance. The disproportionate numbers between the two groups also meant that the clerks always felt more entitled to power and sought to make sure it was reflected in the leadership composition of the UFCW. An old inside joke within the UFCW says that the acronym stands for U F@#ing Clerks Won.

In the aftermath the Southern California strike that lasted from October 2003 through February 2004, which devastated thousands of families from San Diego to Camarillo, a new leadership emerged. The fiasco of the Southern California strike made patently evident the lack of strategic planning, improvisation, and flat out negligence of UFCW leadership leading to that point. This reality check made it possible for a meat cutter to take the helm of the UFCW for the first time in its history.

Shortly after the end of the strike, Joseph T Hansen, a former meat cutter, was elected International President after some political maneuvering. At that time, Organizing Director and member of the Executive Committee, Anthony M Perrone, saw himself as the rightful successor to the throne from the clerks’ group. A compromise left Joseph T Hansen as President, Anthony M Perrone as Secretary Treasurer, Patrick J O’Neil as Collective Bargaining Director, and William T McDonough as Organizing Director. Hansen and O’Neil were from the meat cutter side, Perrone and McDonough from the clerk side. Those four, plus the UFCW Canada Director (a position later elevated to UFCW Canada National President) Michael J Fraser, constituted the newly elected Executive Committee of the UFCW International Union, the most powerful group of people within the UFCW universe.

Hansen’s first order of business was to establish a vision for his years ahead, a legacy for his tenure. Within months he convened meetings with local union presidents around the country to analyze the situation and agree on a path forward in the face of the crisis revealed by Southern California strike. Something called the Committee On the Future was established.

Embraced by some and scoffed by others as the “flavor of the month”, the 5-point COF sought to create concrete directives for the whole union moving forward, 3 of those directives were the most relevant:

1) Focus on core industries, where union density and market share could make a difference to raise living standards for workers in those industries, while avoiding unnecessary turf wars with other unions.

2) Focus on growth. The decline in members numbers was accelerating the erosion of working conditions for members in UFCW industries. At the peak of Hansen’s push for his vision, the local unions adopted a resolution at convention committing to spend no less than 20% of their operating budget to organize workers.

3) Focus on coordinated bargaining. The Southern California fiasco had made it evident that, as a union, the UFCW locals behaved like regional warlords looking only after their own interests, and just sending a few bodies to help on picket lines as a show of “solidarity.” The companies on the other hand, coordinated efforts to withstand the worker pressure and managed to impose some of the most aggressive benefit cuts and two-tier compensation disparities between newer and older employees.

Organizing was, by far, the most important aspect of the new vision. Within months, several campaigns were set up with mammoth budgets to make a splash. In grocery, Arizona’s chain Bashas’ was the chosen target, mostly because the new Organizing Director McDonough and his protégé, UFCW Local 99 President James McLaughlin, had a personal vendetta with their once ally Eddie Basha, owner of Bashas’ Inc., and one-time Democratic primary governor candidate endorsed by Local 99. In meatpacking, Smithfield Foods in Tar Heel, North Carolina, a massive pork processor with around 5,000 workers was also chosen. There was history with that plant from previous organizing attempts that elevated the plant to the “must do” rank.

In October of 2007, Smithfield filed a RICO lawsuit against the UFCW, but their frivolous lawsuit was actually a conduit for open dialogue which, paired with smart campaigning, resulted on settlement and an agreement for a new election, under better rules. The Tar Heel plant successfully won a union in December of 2008.

In December of 2007, Bashas’ followed the Smithfield lead in filing a lawsuit, but in Arizona court, where friendly judges gave the company’s owner great advantage.

Bashas’ claimed that McDonough and McLaughlin held a meeting with Eddie Basha, at which they allegedly threatened with driving the grocer to bankruptcy if he did not submit to unionization. Coupled with the lack of escalated tactics (the union actually started the campaign claiming that Bashas’ sold expired baby formula, which, truthful or not, became a personal afront to Mr. Basha and his many allies in the Arizona community), the campaign resulted in a major waste of millions of dollars when, in 2009, UFCW had to accept a less than honorable retreat. However, since the tactical mistakes were revealed in 2007, it was well known the campaign had been born dead.

The gorilla in the room, however, was Walmart. Ever since UFCW realized the tragic mistake of not taking Walmart’s growth and encroachment into grocery seriously, the union had maintained some sort of isolated campaign. McDonough’s great idea was to hire a cadre of unemployed political operatives, mostly from the failed Howard Dean and Wesley Clark presidential campaigns, to run an “air campaign.” Paul Blank, was campaign director, Chris Kofinis was director of communications as an outside consultant, and Buffy Wicks and Jeremy Bird their “deputies” (this last two would become successful operatives at the Obama campaign in 2008).

The Wake-Up Walmart campaign never pretended to have the interests of workers in mind. Their sole purpose was to smear the company with as many embarrassments as it could possibly create. The extinct WakeUpWalmart.com website had a section for every type of misdeed Walmart committed against communities, workers, and other stakeholders. Notably, under the “Immigration” section of the website, Walmart was accused by WakeUpWalmart.com of increasing cases of sexual harassment against young girls at the store’s construction sites, harassment committed by the “illegal immigrant workers” Walmart contractors employed at those sites. WakeUpWalmart was a pioneer in the “Mexican rapist” scare tactic later deployed by Trump.

Eventually, the upper echelons realized spending millions to create a few snippets of bad press, and the occasional jab at the company in pop culture wasn’t a winning strategy. The campaign was renamed Making Change mid 2006 and the team largely disbanded. However, Chris Kofinis managed to remain a consultant for UFCW until 2009.

Late in 2007, after several fiascos that included Bashas’ and Walmart, McDonough was removed from the Organizing Director position, switching places with Patrick O’Neil. That was an afront to the clerk side of the union that they would never forget.

Take Over

With Wake-Up Walmart defunct and the team disbanded, there were toned down versions of the Walmart campaign from 2007 to 2009. O’Neil wanted to make sure any campaign dealing with Walmart would be worker-centered, and with a path to organizing. This, of course, would be the source of sneer for so many of the good-old-boy clerk guard unhappy with the meat cutters leadership.

By 2010, there had been several successful meatpacking campaigns growing union density in pork and beef processing adding thousands of new members in meatpacking plants. UFCW had also established itself as a progressive force in the immigrant rights fight after being thrown in the middle of ICE raids the Bush administration carried out between 2006 and 2008. A sustained effort to fend off the incursion of Tesco’s Fresh and Easy continued in the west, but the winning formula for organizing grocery workers continued to evade the UFCW.

In 2010, Making Change at Walmart rolled out its sub-campaign Our Walmart (Organization United for Respect at Walmart), a campaign centered around issues faced by Walmart workers and driven strongly by Walmart workers. The arrival of experienced campaigners also meant cutting ties with Kofinis for good. But from the beginning Hansen had a major problem facing all his plans for aggressive organizing: the lack of talent capable of undertaking such gargantuan projects.

The UFCW has always been run by white families that hire their younger generations to maintain the status quo. The UFCW has never known how to develop an army of organizers capable of thinking beyond the NLRB election, much less with the gift of abstraction to design and plan a multipronged campaign. Then came another afront to good-old-boy club: the constant influx of outsiders, more experienced organizers taking over positions of leadership traditionally reserved for the cronies of the controlling families or their adulating sidekicks. While the usual line was that SEIU was taking over the union, the truth is that senior organizers, campaign directors, and coordinators were arriving from many union experiences.

By the early 2010s, the dissent was growing louder on two specific issues. 1) the perceived SEIU-takeover of the UFCW by some arrogant, unkept, baby-faced campaigners who came to bark orders at the legacy reps who were passed over for promotions. And 2) the “waste” of money, spent in a campaign for Walmart workers. Many of those who criticized the effort to organize Walmart were also experts at sabotaging the campaign. And the discontent permeated down well into the ranks of field staff. Nevertheless, by late 2013, Our Walmart actions all over the country were highly profiled as examples of the struggle of workers for a decent living wage and Walmart undertook several policy changes in favor of workers after facing constant public pressure and scrutiny.

Since around the 2013 convention in Chicago, it was known that Perrone and his allies were growing impatient and were anxious to run the show. It was around those days when it was known his group retained the services of a consultant to launch an open attack for succession. The consultant was no other than Chris Kofinis, the once burrowed UFCW consultant, now an MSNBC talking head and known for his conservative, business-style positions.

Their efforts proved fruitful in the fall of 2014, when aided by Esther Lopez, Director of the Civil Rights and Community Action Department, and Stuart Applebaum, the power-hungry leader of the RWDSU, a UFCW affiliate of inconsequential importance within the union, managed to tilt the scales in Perrone’s favor. Ironically, it was Joseph Hansen who hired Lopez, a former schoolteacher with no organizing experience who rose to prominence as deputy chief of staff for disgraced governor Rod Blagojevich, to make the UFCW leadership less “pale, male, and stale” back in 2006. And it was Hansen as well who kept appointing RWDSU presidents to the International’s Executive Board, giving the affiliate a lot more power than their insignificant numbers deserved. With its 57,000 members, RWDSU has 6 members to the International Executive Board, far more than any other UFCW local or affiliate and the same number as the 250,000-member UFCW Canada.

The Rake

In the Fall of 2014, a unity compromise was reached for Perrone to be President and O’Neil Secretary Treasurer. But unlike the Hansen compromise, O’Neil was alone in the Executive Committee, which now was made of Applebaum and Lopez as Executive Committee, with a leadership group also composed by the new Organizing and Collective Bargaining Directors Warren S Barclay and Kevin Williamson, two of the most loyal Perrone former Region Directors in the UFCW. In reality, it was Barclay the real number two from the beginning.

As soon as Perrone got helm, the purge of any Hansen-O’Neil ally began. And simultaneous to the massacre, the checks for Park Street Strategies, the newly created business entity of Chris Kofinis, began flowing at the cumulative tune of 100,000 dollars a month.

Of course, if that is the real price for Kofinis services, it is very unlikely that is also the sum Perrone and his group paid him during their efforts to take power. Perrone’s salary at the time was not much above $200,000 per year. It is hard to believe Perrone investing his entire yearly salary for two months of Kofinis services, and even if he and his allies passed the hat around, it is an amount hard to sustain for the time Perrone’s campaign for power lasted.

It is not uncommon in the relationship between the union leader and consultant to arrive to a gentleman’s agreement: I will work for a very reduced fee, practically volunteer for your campaign, and when you win you will throw some BS contracts my way to recoup my investment. This is a likely scenario that could have taken place between Perrone and Kofinis. The major difference: the already outrageous amount per month has not stopped for a moment since Perrone’s arrival to the UFCW presidency.

O’Neil lasted, if anything, one year as Secretary Treasurer. By law, all checks issued by the union must have the signatures of both the President and the Secretary Treasurer. One can only hope that O’Neal felt frustrated at being but a rubber stamp for such a bad deal and chose to retire. If only he knew this was just the beginning.

Per the UFCW’s DOL filings, this is the money paid to Kofinis so far:

Total Amounts Paid to Kofini’s Park Street Strategies 2015-2019 (DOL Filings):

20152016201720182019
$779,793$1,415,845$1,168,569$1,232,554$1,357,708
Total= $5,954,469

Pandemic or no pandemic, there is no reason to believe Perrone and Kofinis have decided to stop in 2020. At an average of 100k per month, at least another $700,000 should be added by the time of publishing this article.

The amounts are piecemealed in small payments, under different labels. They are sometimes classified as “Representational Activities,” “Political,” or “General Overhead” for the purposes of disclosure at the US Department of Labor’s Office of Labor-Management Standards. The thing about “Consulting Services” is that, unlike goods, the product is an intangible that doesn’t have to show anything for it.

Three Secretary Treasurers have lent their signatures for those checks in the four and a half years since Perrone took over. Patrick O’Neil, as mentioned before, left soon after the new administration begun, then Esther Lopez took over as Secretary Treasurer. From February 2016, to her sudden and mysterious departure in the Spring of 2019, Lopez was the merry accessory signing Kofinis’ checks. Finally, Warren Barclay was elevated to Secretary Treasurer after Lopez’s departure, a true Perrone loyalist and the real second-in-command since his appointment to Organizing Director in 2015.

The Product

It is unfair to criticize very expensive advice without proper context. If that advice will result in organizing 50,000 new members or give a competitive advantage to union negotiators to significantly improve working conditions of the membership, the six-million-dollar tag is a fair deal. But the evidence of the value of that advice is scarce in Kofinis’ case.

For perspective, it is useful to compare Park Street Strategies billing to other itemized payments made to UFCW payees in 2016, the year Kofinis received 1.4 million:

2016 DOL Filing — Top Expense Items in Descending Order by top payees (first 2 columns), top type of payment (middle 2 columns), and top purposes (last 2 columns).

PayeeAmountTypeAmountPurposeAmount
RWDSU District Council$14,662,929Affiliated Chartered Body$14,845,307Representational Expense Reimbursements$10,763,272
Park Street Strategies$1,415,845Chartered Body$7,718,336Organizing Subsidies$6,801,391
UFCW R8 Council$1,291,645Consulting Firm$3,496,296General Overhead$2,445,966
Willis of MD$1,063,739Advocacy Group$2,280,662Airfare for Representational Activities$1,767,441
Joe Trippi & Associates$1,010,791Airline$1,903,563Union Administration Expenses$1,459,160
270 Strategies$843,452Hotel$1,842,301Professional Services$1,201,870
American Airlines$702,246Insurance Broker$1,063,739Insurance Premiums$1,161,889

In 2016 Park Street Strategies was second only, as individual payee, to Stuart Applebaum’s District Council of the RWDSU. It ranked above UFCW Region 8 Council (CA, NV, NM, UT, HI), Willis of Maryland (car insurance for the vehicle fleet), Joe Trippi & Associates (yet another consultant), 270 Strategies (Kofinis was not the only former Wake-Up Walmart to come back for his cut, Jeremy Bird was ready to cash out too), and anyone else receiving payment from the UFCW. When analyzed by type or class of expense it ranks just below all airlines and hotels, and way above insurance brokers. When analyzed by purpose, the amount was only slightly below the entire expense on union administration. In 2016 legal expenses amounted to just over half a million dollars. In 2016, Perrone’s salary was $298,003, followed by Barclay’s $284,565. Esther Lopez, on paper the second top officer, made only $242,121.

So, what kind of advice was worth such amounts?

From the beginning, Kofinis set out to run focus groups around the country to find new and better ways of communicating with members and workers in general about the value of a union. Most of these, however, took place between 2015 and 2016. There was hardly an attempt to find out what workers really wanted. Instead, it was an effort to confirm the theories Kofinis had been pushing for a while, namely that workers hate collectivism and the union has to show the monetary value of being union member.

An early internal memorandum to local union presidents recommended them to rid their communications off words like “collective,” “solidarity,” “strike,” and few others that would evoke a conflict between the ruling class and the working class. The UFCW International acted on its own advice promptly by renaming the Collective Bargaining Department into the National Bargaining Department. Presumably, the UFCW no longer wants to be associated with bargaining collectively, even if from a legal and policy standpoint they still have to.

Then there is the thing about “communicating value.” Kofinis likes to explain it like this: when you buy a car, you know exactly what is that you are getting for the money you are spending. Therefore, when you buy a union membership, you should be able to see the actual value in dollars of that membership. Kofinis/Perrone genius move then was ordering the quantification of union contracts’ value, that is, if you get 5 paid holidays at 10/hr for eight-hour days you are getting $400 value, and so on. There are fundamental flaws with this approach. For one, the “value above non-union workplace” theory has a very murky baseline. What is the specific contract being compared to? The prevailing working conditions of similar non-union employers in the market area? Or the prevailing working conditions of the same employers in non-union locations nationwide? Either way, the comparison often results in marginal advantages to union workers if any, and not always because there are no real differences. Union sites are often more costly for employers in varying degrees, and in many cases, a 15-20 dollar per worker per hour cost to the employer includes 5 or more dollars in benefit contributions to either pension, healthcare, or both. Then you have the intangibles like “just cause,” a typical union provision that precludes the arbitrary effect of the “at will” employment laws and extends “due process” to the workplace. Worse yet, the entire approach turns an ideological movement into a business transaction.

Using Kofinis’ own analysis, the value bought by 1.2 million dollars in average yearly payments has not translated into any gains in membership nor improved working conditions for the members. In fact, since taking over in 2015, nothing has stopped the steady decline in membership of the UFCW for a net loss of 40,000 members realized under Perrone’s tenure.

Perrone is like Trump is so many ways. His penchant for snake oil and silver bullet remedies is just one of them. Chris Kofinis’ six-million-dollar scheme is hardly his only grandiose project. The Reflective Engagement program is another one.

Since his days as Director of Organizing in the early 2000s, Perrone promoted and implemented a door-to-door sales method called SPIN, purportedly for organizing. It was a useless waste of money that resulted in no significant organizing and that turned organizing into a sales-pitch. While most unions battled the union-busters portrayal of organizers as “membership sales-people,” Perrone embraced the idea fully. Now as President in 2015, he wasted no time in calling his new business partners at Vantage Point Performance, Inc., to do a rerun of the used-car-salesman routine, this time branded Reflective Engagement. Bear in mind that organizing has been the staple of all labor organizations in the American labor movement. A lot can be criticized about their effectiveness, the appropriateness of the message, the methods, etc., but if one thing is clear is that they all approach organizing for what it is: building an ideological movement of the working class to create power and change the gradient between the worker and the bosses. Vantage Point repackaged the already existing methodology into corny nomenclature that includes “pain questions,” for the process of learning the workplace issues and agitating around them, and “gain questions” for the process of creating a vision and urging action. The “new” program had a licensing cost for using Vantage Point’s lingo of over one million dollars, $1,168,569 just in 2017 ($664,180 in 2018, and $628,594 in 2019) according to DOL filings.

No great organizing gains have materialized under Reflective Engagement either, even after the systematic push by the likes of Jeffrey Fiedler, another highly paid charlatan prone on inflicting hours of torture by recounting his experience as a military interrogator in Vietnam as credentials for organizing the American working class. The roll out of Reflective Engagement was done under the supervision of Kofinis and touted as the result of extensive research through focus groups.

Crystal Balling

It is hard to think that the UFCW International President, with his $300,000 yearly salary, is fine with the idea of paying four times that amount to one single consultant. Chris Kofinis’ own billing while retained by the UFCW between 2005 and 2009 was never above $90,000 per year. The entire amount billed for consulting services during all of his first five years providing services to UFCW was not even a quarter of the amount billed each year in the last four years.

Totals Paid to Chris Kofinis 2005-2009 (DOL Filings):

20052006200720082009
$15,000$64,500$85,000$30,000$90,000
Total= $284,500

To make educated guesses about the true dimension of the scheme, it is necessary to put in context many other factors, like the pension rules.

The UFCW Pension Plan for employees has suffered the same adverse hits from the financial markets like many funds in the country. Years of pillaging by local union presidents who had only to convince their local union executive boards of deserving quarter to half a million dollar salaries contributed to defund the Trust, and in the early 2000s the UFCW International Executive Committee (which is also the Board of Trustees for the pension fund) took steps to shore up the finances of the plan. Among other things, they imposed a cap on the raises when calculating the benefit amount for the last 10 years of salary history (5%). Also, no matter how high an employee or officer’s salary is, the maximum salary used for calculation of benefits is $150,000 per year, and the maximum benefit assuming they reach 45 years of service or more, is 75% of that. Now, Perrone’s current monthly salary comes down to $25,788. Assuming he retired with the maximum benefit possible, he would be eligible to 75% of $12,500 or $9,375 per month.

If anyone asks a grocery worker or meatpacking worker if they would like to retire with $9,375 per month for life, hardly any of them would find it insufficient. That might not be necessarily the case for UFCW leaders. If history is an indication, corrupt schemes in the ranks of UFCW are a recurrent thing. And we are not only talking about Joseph Talarico, former UFCW International Treasurer sentenced for stealing $925,000 with the help of family members over the span of 13 years.

It didn’t go unnoticed in some media outlets when William McDonough walked out of the UFCW Executive Committee with $540,000 at the end of 2014 after tapping out of the newly constituted inner circle that took over the reins from the Hansen administration (in fairness, about $88,000 was expense reimbursements, which we have not considered as income in this article, but an amount that is more than double the average travel expenses and reflects his expensive taste in meals, hotels, and other travel items). Never mind that McDonough was helped by his protégé, James McLaughlin, to the lucrative position of running Southwest Administrators Services, a Phoenix-based firm administering Taft-Harley plans for several unions. Warren S Barclay, still active, cashed out over $300,000 between 2015 and 2017 on top of his yearly salary, ostensibly, for moving costs from California to Washington, DC.

Generally speaking, UFCW leaders, particularly in the white ruling families, feel entitled to greater compensation for their sacrifices for members, and the current compensation structures do not provide enough.

Draw Your Own

The irony is unescapable. Perrone and his (mostly) men campaigned denouncing the waste of money the Hansen administration engaged in when trying to organize Walmart workers. In reigning in the expenses, policy changes were implemented regarding rental cars, meal reimbursement, and in many other areas. Money got tight, albeit for the lower ranking field staffers only. The 2020-2023 field staff agreement with FAIR, the highly ineffective company union representing the field staff, had the biggest loses in decades.

Nobody has to agree with the contextual backdrop for the central thesis of this research team. Reasonable people can differ in their views about the history between clerks and meat cutters and about the value and reach of the Walmart campaign. What cannot be debated is two things: the amount of money Kofinis has taken is outrageously high and the product bought by it is questionable in the least.

The explanation could be one or several of a few, ranging from Perrone just being very bad at buying advice, to he and his close collaborators building a nest egg outside of the pesky inquisitive eye of union overseers. Anything in between is possible, like the noble funding of a charity for the benefit of working people.

Almost 5 years later, Anthony Perrone has failed to articulate a vision to move forward the UFCW. There is no visible plan for facing the erosion of working conditions of the membership and its declining numbers. The business unionism practiced by today’s UFCW has ignored current racial justice struggles like Black Lives Matter, except for the isolated actions of few locals, mostly in the northwest. The UFCW seems more interested in playing darling with the Democratic Party establishment than in building a militant base capable of fighting for better working conditions beyond the electoral politics. Political operatives outnumber organizing staff with the delusional hope of becoming kingmakers in the American political establishment and pinning the union’s hope of survival to the Democratic party rule, no matter how conservative and anti-worker they might be.

The reshuffling of the upper echelons caused by the departure of Esther Lopez in the Spring of 2019 resulted in the anointment of yet another white male to the inner circle. Todd Crosby, former president of Local 21 in Seattle arrived riding the coattails of the organizing powerhouse built by David Schmitz. One can only assume Crosby’s ascent was meant to placate dissenting voices in the self-proclaimed progressive wing of the UFCW. A year and change since his promotion, there is no strategy or plan in place for organizing, much less an indication of any attempt at stopping the bleeding of UFCW members money. The only one sure thing is that everyone involved is significantly richer than before.

–Any and all portions of this article can be reproduced for any purpose, including, but not limited to, expansion or rebuttal of topics, or publication. The Sacco and Vanzetti Research Collective is a decentralized group of union activists and waives any copyrights on this article. —

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