suffolk county legislator kevin mccaffrey is president of teamsters local 707 which represents nassau otb employees and others who await the supreme court decidion in janus. mccaffrey is a hoffa henchman
How union construction privileges bleed taxpayers dry
Suffolk, Nassau OTB probe ethics conflict
by David Winzelberg
Published: November 24th, 2013
At least one employee of Nassau County Off-Track Betting is questioning whether the head of his employee union, a member-elect of the Suffolk County Legislature, should have a say in Suffolk OTB business.
Teamsters Local 707 President Kevin McCaffery, whose union represents about 200 Nassau OTB workers, was elected earlier this month to serve as a Suffolk legislator representing the 14th District. In a letter last week, Nassau OTB cashier Jackson Leeds alerted the Suffolk County Ethics Board to McCaffery’s possible conflict of interest.
“As a Suffolk County legislator, his duties are to the people of Suffolk County,” Leeds wrote. “He cannot simultaneously represent the interests of employees of Nassau OTB, a Nassau County public benefit corporation.”
McCaffery told LIBN he doesn’t think the two counties’ OTBs are in competition with each other and he doesn’t see his role as union leader for Nassau OTB workers as a conflict with issues surrounding Suffolk OTB.
“If anything, I have the background of dealing with Nassau OTB, which gives me more insight on the subject than any other legislator out there,” McCaffery said.
When asked if the legislator-elect’s union job appeared to be a conflict of interest, Nassau OTB chief Joseph Cairo said, “If you really want to stretch it. But I don’t see anything that’s apparent to me.”
Cairo added that he’ll instruct the Nassau agency’s counsel to review the situation.
Leeds, a 10-year veteran of Nassau OTB, complained that both union officials and county OTB management have been too focused on the 1,000 video lottery terminals planned for each county’s OTB and they’re not paying enough attention to current operations.
“They never worked behind a window,” Leeds told LIBN. “They’re out of touch with the bettors of Nassau County.”
Internet wagering and dwindling handles – the overall money being wagered – have prompted a consolidation in Nassau OTB’s operations in recent years; there were 15 betting offices in Nassau in 2003, and now there are eight. Suffolk OTB, which has seven branch offices, filed for bankruptcy last year.
These days, according to some analysts, OTB offices exist largely for political patronage – another reason, according to Leeds, that the Nassau union chief shouldn’t mix one business with the other.
“Union leaders should not be politicians,” he said. “OTBs are run by politicians. Being political and doing public good aren’t always incompatible, but they often are.”
This isn’t the first time a Long Island legislator’s OTB ties have become an issue.
In May 2000, Gregory Peterson, then-president of the Nassau OTB, sued to prevent Nassau County Leg. Roger Corbin from voting on appointments to the Nassau OTB’s board of directors. Because Corbin was employed as a branch manager for New York City OTB and a member of Teamsters Local 858, which then represented all employees of Nassau OTB, Peterson alleged Corbin’s legislative role posed a conflict of interest.
A New York Supreme Court judge issued an injunction preventing Corbin from voting on OTB appointments, but Corbin appealed and the lower court’s decision was reversed. The Nassau County Board of Ethics also chimed in, determining by a 3-2 vote that voting on OTB appointments didn’t create a conflict because Corbin didn’t influence policy or engage in labor negotiations.
With McCaffery, some observers say it’s best to proceed with caution.
Anthony Figliola, vice president of Uniondale-based government relations firm Empire Government Strategies, said the legislator-elect may want to recuse himself from any votes concerning Suffolk OTB until the Suffolk County Ethics Board offers an opinion.
“OTB is a political football,” Figliola said. “It’s better to stay out of it, especially if you want to get things done in the Legislature.”
At a recent campaign rally, Gov. Andrew Cuomo renewed his promise to New York City construction-union bosses and members, who just so happen to be among his biggest backers: “There will never be a state project that isn’t built with union labor” while he’s governor.
Sadly, this pay-to-play set up, where elected officials protect laws that help unions in exchange for their political and financial support, has long held an iron grip on taxpayer-funded construction projects in New York and driven their price tags through the roof.
The Empire State isn’t alone. Schemes to funnel public projects to unionized contractors and union labor, known as government-mandated project labor agreements (PLAs), needlessly boost construction costs and prevent Americans across the nation from building their communities.
PLAs typically force contractors to recognize unions as the representatives of their employees; use the union hiring hall; hire union apprentices; follow union work rules and pay into union benefit and multi-employer pension plans. Employers also must pay “double benefits” into existing plans and union plans, putting them at a significant competitive disadvantage.
PLAs also typically force construction workers to pay union dues and/or join a union if they want to receive union benefits and work on a PLA project.
Such sweetheart deals are extremely costly to taxpayers because they eliminate competition from nonunion contractors and their employees, who comprise 86 percent of the US private-construction workforce. Multiple studies of taxpayer-funded school-construction projects, from California to the Northeast, have found that PLA mandates jack up the cost of construction by 12 percent to 18 percent.
Under President Barack Obama, the Department of Labor imposed a PLA on a planned Job Corps center in New Hampshire, but it was removed after a local contractor filed a legal action against it. The result: Three times as many bids came in, at prices as much as 16 percent lower — saving taxpayers $6 million. And the job, done by a local contractor, came in on time and on budget.
Meanwhile, the demand for new projects is higher than ever, even as the industry faces a skilled-labor shortage of 500,000 workers. Associated Builders and Contractors’ Construction Backlog Indicator, which reflects the amount of construction work under contract but not yet completed, expanded to 9.67 months during the fourth quarter of 2017, its highest level ever and a 2.25 percent increase from the prior quarter.
Now factor a potential federal infrastructure bill and $1 trillion worth of construction spending into the equation, and the industry could need to fill an additional 1 million jobs as early as 2020. Amid this workforce shortage, it makes no sense to continue pushing PLAs, which artificially restrict the vast majority of skilled American labor and qualified contractors from competing to deliver the best possible product at the best possible price.
For Cuomo and New Yorkers, PLAs are likely to remain because of a pro-PLA policy in place since the Pataki administration and the unhealthy, symbiotic relationship between unions and lawmakers.
But President Trump has an opportunity to champion free markets and build on the positive economic ripple effects from his tax and regulatory reforms. His next step could be to rescind an executive order by Obama that encourages anti-competitive and costly PLAs on federal and federally assisted construction contracts.
Trump should replace that with a new order banning PLAs on all federally assisted contracts for public-works projects. Such a move is permitted by the National Labor Relations Act and has been used by past administrations.
A total of 24 states have similar rules to ensure that the free market — and not government — determines prices to complete a project safely, on time, on budget and with the best-trained workforce.
Such an order would curb pay-to-play politics and level the playing field for taxpayer-funded construction contracts through the magic of competition. It would also help small businesses grow and spread their job-creating benefits more fairly throughout the entire construction industry.
Making America’s infrastructure great again begins with fair and open competition and new opportunities and career pathways for the entire US construction workforce.
As a former builder, Trump surely knows that.
Brian Sampson is president of the Empire State chapter of the Associated Builders and Contractors.
Brian Sampson is president of the Empire State chapter of the Associated Builders and Contractors.
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