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Does Trump Build Union?

Monday, July 11, 2016

This article originally appeared in IBEW Media Center

At the height of the real estate boom in 2005, Donald Trump announced a colossus would rise in central New Orleans. The 70-story Trump Tower would be the tallest building on the Gulf Coast outside of Houston and the highest point in the state of Louisiana.

The development ultimately failed. But before it did, New York City Local 3 Business Manager Chris Erikson hosted a meeting in Donald Trump’s office to talk about the job. In Manhattan, Trump’s home and the site of many of his developments, the building trades are strong and nearly every steel beam and electrical wire was put in place by union hands.

Former Local 3 business representative Austin McCann – who was the shop steward on the original Trump Tower-- arranged the meeting with Trump not for Erikson, but for New Orleans Local 130 Business Manager Robert “Tiger” Hammond.

“We were pitching Trump on using the same union in New Orleans that he has been using for decades in New York City,” Hammond said. “I went with good intentions and thought we had an honest chance.”

Trump, Erikson, McCann and Hammond met in the executive suite of the Trump Tower on Fifth Avenue, and Hammond made his pitch. Local 130 did all the work on Harrah’s $1.6 billion casino on the waterfront and every electrical job in the city over $1 million. He had a stack of letters from customers saying Local 130 did its work on time and on budget. Would Trump consider a project labor agreement?

Trump’s response: Why me?

“He said ‘There are 10 projects on that block. Why do I have to be union? Why are you picking on me?’” Hammond said.

Trump, Hammond said, thought unions only did 10 percent of jobs in New Orleans.

“I told him that was a myth and a fallacy and I asked him to talk to our customers,” Hammond said. “Then Trump says it isn’t his job, it is his son’s and he turns to Erikson and said, ‘You know I work union.’”

“It looks like you work union when you have to, but when you don’t, you don’t,” Erikson said.

Trump’s son, Donald Jr., was called into the meeting and said he would ask the general contractor to look into it and the meeting was over.

“I am glad Chris said what he did — what I was thinking and couldn’t say,” Hammond said. “We expected more, he pawned me off on his son and we left with a bad feeling.”

Trump reportedly took 175 condominium deposits on the property before Hurricane Katrina in 2005 and the real estate collapse and recession of 2008. In 2011 the lot was foreclosed on and was sold to a parking lot company.

Why are You Picking on Me?

According to thousands of lawsuits filed against him and his companies, when union contractors were hired, Trump developed a reputation for stiffing some, delaying payment to others and shorting workers on overtime and even minimum wage.A review of the presumptive Republican presidential nominee's projects reveals that he hires union when project labor agreements or dominant market share force him to. But more than 60 percent of his projects developed outside New York City and Atlantic City – which includes most of his recent projects – were built nonunion. When you exclude developments with project labor agreements, that jumps to nearly 80 percent built nonunion.

The lawsuits included 60 for not paying his bills, 24 violations of the Fair Labor Standards Act and four corporate bankruptcies that left hundreds of contractors with dimes, nickels, even pennies on the dollar. He has been sued for hiring undocumented workers, presided over thousands of layoffs and acquired tens of millions of dollars in personal wealth while companies he owned failed. At least five of the companies he has owned have terminated health insurance for employees, ended retiree health insurance, canceled their pension plans or some combination of all three.  

Like all politicians, Trump has made statements, issued campaign promises and taken positions on policies. Trump has also been clear about his support for policies that have historically led to weaker unions.

He told the South Carolina Radio Network, for example, that he is “100 percent for right-to-work” and in December he said right-to-work states have an “advantage” because “you have the lower wage.”

But Trump is the first major party candidate for President of the United States whose business is also the IBEW’s business: construction.

Trump and his companies own dozens of developments in 11 states and two provinces that tell their own story about his position toward labor, small business and working people. It begins in New York City.

New York City

New York Local 3 and Donald Trump go way back. More Trump owned and developed buildings are in Local 3’s jurisdiction than anywhere else. All 18 – from the massive Trump Place on Riverside Drive to the modest Trump Park Residences, a senior-living development in Yorktown, N.Y.— were built with IBEW members.

“There is a relationship that goes back to [former Local 3 Business Manager] Harry Van Arsdale and Trump’s father,” said Erikson, who is also chairman of the International Executive Council. “But it was not such a great relationship.”

Most of the work done on Trump owned or developed sites was done by members of the Building & Construction Trades Council of Greater New York. While most work was done union in the NYC area, not all of it was.

Trump Tower, where he announced his presidential campaign, was built on a site cleared by undocumented immigrant laborers from Poland.

After eight years in the court, the U.S. District Court for the Southern District of New York wrote, “No records were kept, no Social Security or other taxes were withheld, and they were not paid in accordance with wage laws. They were told they would be paid $4.00 or in some cases $5.00 an hour for working 12-hour shifts seven days a week. In fact they were paid irregularly and incompletely, sometimes with [the subcontractor’s] personal checks, which were returned by the bank for insufficient funds.”The tower was built on the site of Bonwit Teller, a landmark stone fortress that for decades was a filled with fur coats, French dresses and fine jewelry. But in 1980, a platoon of 200 undocumented immigrants from Poland worked round the clock, seven days a week tearing it down in preparation for the black glass and marble tower to rise. Three years later, a member of the Demolition Workers Local 95 sued Trump for trying to avoid paying union wages and benefits.

One of the workers told the New York Times they often worked in “choking clouds of asbestos dust without protective equipment.”

Under oath, Trump denied that he ever visited the construction site and said he had no idea what was going on. But it was a claim contradicted by sworn testimony and the court found that Trump’s account was not credible.

Trump, the court wrote, “knew the Polish workers were working ‘off the books,’ that they were doing demolition work, that they were nonunion, that they were paid substandard wages with no overtime pay, and that they were paid irregularly if at all.”

Trump litigated the case for eight more years, turning it into one of the longest in the court’s history, ultimately settling with the workers 19 years after they had finished work.

In a Republican primary debate last February, Trump said it was “something from 30 years ago, it worked out very well. Everybody was happy.”

‘The Money I Took out of there was Incredible’

After New York City, Trump is most closely associated with the three casinos he built in Atlantic City. In 1976, New Jersey voters passed a referendum approving casino gambling for Atlantic City. Six years later, Trump broke ground on the Trump Plaza and Casino.

The construction business in Atlantic City was dominated, like in New York, by the building trades, and all of Trump’s hotels and casinos were built using union contractors, said Folsom, N.J., Local 351 Business Manager Dan Cosner.

The Plaza was quickly followed by the openings of the Trump’s Castle in 1985 (later renamed Trump Marina) and the Trump Taj Mahal in 1990. At 42 stories and more than $1 billion, the Taj was the tallest building in New Jersey and one of the largest construction projects in the state’s history.

“Every wire was our work, and there was a lot of work,” Cosner said.

The glory days were short for Trump in Atlantic City, and when Cosner recently spoke to contractors about working with Trump, they didn’t think the glory days reached down much farther.

“They didn’t have much good to say,” Cosner said. “He has a bad name.”

Trump got a reputation, Cosner said, for failing to pay his bills on time, and some cases, at all.

“It isn’t enough to ask if unions got Trump’s work,” Cosner said. “You also have to ask if they got paid.”

Cosner said nearly every contractor he spoke to called Trump a “slow pay” and full payment only came “after a long process.”

“We controlled the city, so he built union, but he stiffed a lot of contractors and didn’t pay others what they were due,” Cosner said. “And that is not usual. We don’t run into that here.”

One contractor in particular, Cosner said, had a story. Resorts International began construction on the Taj Mahal in 1983, but the company founder died three years later before the project was complete. Trump bought a controlling interest in Resorts International in 1987, renamed it Trump Resorts International and called in Taj Mahal contractors to sign new contracts with him.

“Our guy had $5 million in material -- switchgear, lighting, all for the Taj-- already in the warehouse,” Cosner said. “He said no. ’I know your reputation. I already bid this job and if you don’t want to like it, you can buy all this stuff somewhere else.’”

Trump let the contract stand.

“That guy and our electrical contractors got paid, but everyone else got stuck,” Cosner said. 

The Taj Mahal filed for bankruptcy only a year after it opened. In 1993, Trump Plaza and Trump Marina filed for bankruptcy. The Trump World's Fair and Casino closed in 1999 and was demolished the next year. In 2004, Trump Hotels & Casino Resorts’ three casinos in Atlantic City and a riverboat casino in Gary, Indiana,stood at the bottom of $1.8 billion in debt. It filed for bankruptcy, Trump lost his title as CEO as well as majority control. Five years later, Trump left Trump Entertainment Resorts for good as the company stumbled into a third bankruptcy with $50 million in assets and $500 million in debt.

The New Jersey Casino Commission reported 253 Taj Mahal contractors were not paid in full or on time. USA Today found 60 lawsuits against Trump for not paying his bills on time, including by a dishwasher in Florida, a New Jersey glass company, a carpet supplier, plumber, painters, 48 waiters, dozens of bartenders and, a real estate broker, and, ironically, lawyers who represented Trump in lawsuits for non-payment sued for non-payment as well. Over 200 mechanic’s liens have been filed against Trump properties for nonpayment since the 1980s.

Former Trump Plaza president Jack O’Connell told the Wall Street Journal this was not an occasional oversight.

“Part of how he did business as a philosophy was to negotiate the best price he could. And then when it came time to pay the bills,” O’Connell said, Trump would say that “‘I’m going to pay you but I’m going to pay you 75 percent of what we agreed to.’”

It was known as the “Trump discount,” according to the Economist Magazine.

This also leaves out all of the contractors who saw their contracts torn up in bankruptcy court.

For example, it took three years for Pennsylvania-based Triad Building Specialites to get paid after the Taj Mahal went into bankruptcy and the business only received 30 cents on the dollar.

Reuters reported that low-level investors, contractors, and small-time vendors were paid one penny on the dollar as Trump Resorts International went bankrupt in 2009. 

When asked about it during a Republican primary debate last August, Trump said, “Let me tell you about the lenders. First of all, these lenders aren’t babies. They’re total killers. These are not the nice sweet little people that you think. OK? You’re living in the world of the make believe.”

“He put a number of local contractors and suppliers out of business when he didn’t pay them,” Steven P. Perskie, New Jersey’s top casino regulator in the early 1990s, told the New York Times. “So when he left Atlantic City, it wasn’t, ‘Sorry to see you go.’ It was, ‘How fast can you get the hell out of here?’”

In that same time period, The New York Times reported Trump took $160 million out of Atlantic City, often from refinancing he undertook in bankruptcy, paying off his personal debts and buying property in Manhattan with additional corporate debt.

In an interview with Forbes Magazine, Trump said “Basically I’ve used the laws of the country to my advantage and to other people’s advantage just as [1980s corporate raiders] Leon Black has, Carl Icahn, Henry Kravis has, just as many, many others on top of the business world have.”

At the end of August 2014 Trump tweeted “What is happening in Atlantic City, casino closures, is very sad – but does anybody give me credit for getting out before its demise? Timing.”

That same month, the Associated Press reported that 6,000 former casino workers filed for unemployment in Atlantic City. More than 8,000 people lost their jobs that year.

Union Workers: Only When You Have to

A building partly owned by Trump in San Francisco has a maintenance contract with Local 6.Atlantic City was a union dense city where Trump developments used IBEW electricians. This was not an anomaly.

A project labor agreement was in place for the Trump International Hotel and Tower in Chicago, and NECA signatory contractors had the job, said Local 134 Recording Secretary Frank Cunningham. Trades other than the IBEW had issues on the project that resulted in a lawsuit.

The Trump International Hotel Las Vegas was a joint project between Trump and Ruffin Entertainment. Las Vegas Local 357 Business Manager Al Davis said the job, like the vast majority of projects on the Strip, was done by IBEW members.

(Trump is, however, currently stonewalling unionized casino and culinary employees looking for their first contract.)

The Old Post Office building on Pennsylvania Avenue in Washington, D.C., is being renovated with the participation of members of Local 26, but in June, the Department of Labor announced an investigation after it was alleged that some workers on the project were being paid less than federal law requires and the Washington Post found multiple undocumented workers at the site of the $200 million project.

Trump Plaza Residences in Jersey City had a PLA because it received a tax abatement from the state. It was built entirely by members of the building trades including electricians from Local 164.Many of the buildings bearing Trump’s name were developed by other companies that licensed it in the hopes of boosting the ultimate sales price of the condominiums or hotel. Some of those buildings were also built with union contractors.

“It was really good for us,” said Business Manager Dan Gumble. “Trump had nothing to do with it, but it was a good project.”

The Trump International Hotel in Waikiki, for example, had a PLA because one of the main investors was Ullico, a union-run investment company that required the work be done union. But while signatory contractors for Honolulu Local 1186, built it, the hotel itself is nonunion and Local 1186 does not have a maintenance contract.

In all, 26 of Trump’s 45 buildings, were done with IBEW members, 18 by Local 3. 

Nonunion Preferred (Unless it is His Own House)

Where the laws are different, Trump’s choices have also often been different.However, most of Trump’s recent projects have been in southern strongholds that are historically antiunion and right-to-work.

For every union-built development outside of New York and Atlantic City, Trump built nearly two nonunion, and if there is no PLA, Trump has hired union workers once for every four projects that go nonunion.

In Florida, for example, where Trump developed, or licensed his name to eight projects, only one used IBEW signatory contractors: his palatial home and private club at Mar-a-Lago in Palm Beach. Trump renovated Mar-a-Lago in 1986 soon after he bought it, and Local 728 has had the maintenance contract ever since.

“For everything he sold to other people, he went nonunion. But for his house, he went with us,” said Ft. Lauderdale, Fla., Local 728 Business Manager Dan Svetlick.

Svetlick said Trump isn’t the first Florida billionaire developer that uses nonunion everywhere but at home. Business tycoon Wayne Huizenga built three stadiums in the state when he owned the Miami Dolphins, Florida Marlins and Florida Panthers. All three jobs were nonunion, but IBEW electricians have worked on all his houses, and the houses of his children, Svetlick said.

“They want that to last,” he said.

Further south in Miami, Trump has three projects. All nonunion, according to Local 349 Business Manager Bill Riley.

The same is true for Trump’s golf course in Charlotte, North Carolina. Local 379 signatory contractors have had no work. And for his two properties in Virginia.

But even on the pro-union West Coast, more often than not, Trump projects are nonunion.

The Estates at Trump National Golf Club in Rancho Palos Verdes outside of Los Angeles was built entirely nonunion.

“Not a bit of the work was built union and the unqualified workers that built the golf course went way over budget,” said Local 11 President Richard Reed.

The Trump International Hotel in Vancouver, another licensed property, was also built nonunion.

In total, outside of New York City and Atlantic City, nearly 65 percent of all Trump’s holdings were built nonunion.

Which World Does He Want?

This is how Trump has responded as a businessman to the situations where he has built. Now, as the GOP nominee for President, he is making it clear how he would lead on issues important to unions.

“I can live with unions in certain locations,” Trump told the South Carolina Radio Network, “My position on unions is fine, but I like right-to-work. My position on right-to-work is 100 percent.”

In Las Vegas, after hotel workers voted to join the Culinary Workers Union and Bartenders Union, the company refused to recognize the union and demanded a federal labor board throw out the vote. Trump then hired Lupe Cruz and Associates, a union-busting consulting firm that boasts of its ability to preserve "a union-free workplace."

His companies have applied for immigrant work visas more than 1,100 timessince 2000, according to Reuters, for low-skill jobs like waitresses, cooks, vineyard workers and models.

When asked by Mika Brzezinski on MSNBC’s Morning Joe how he would make America more competitive Trump said, “We can’t have a situation where our labor is so much more expensive than other countries that we can no longer compete. One of the things I’ll do if I win, I’ll make us competitive as a country.”

“This is not complicated,” said Miami, Fla., Local 349 Bill Riley. “Trump supports policies that are most common in those places where unions are weak, and where unions are weak, he hires nonunion. Except for his own house.”