Union officials attempt to flout deal with city pension fund

Less than a year after labor leaders were forced to give up union pensions because they already were getting lucrative city pensions, their lawyer attempted to tap into union funds for retirement benefits again, according to documents and interviews obtained by the Tribune and WGN-TV.

The effort on behalf of electrical union leaders was unsuccessful, but the move raises more questions about whether city pension funds are able to ensure union leaders aren't double dipping.

Under a little-known state law, union officials who are on leaves of absence from the city can get municipal pensions based on their union salaries as long as they agree not to receive benefits from their local unions during the same time period.

The Tribune and WGN-TV reported this month that four officials from Local 134 of the International Brotherhood of Electrical Workers had violated state law by participating in a city pension and a union pension at the same time. Municipal pension fund officials last year stepped in and forced the union leaders to file affidavits that they would not seek the union money set aside for them.

Edward Hogan, who represents Local 134, brokered that deal with the city pension fund, which allowed the union leaders to keep their inflated city pensions.

Then in August, Hogan pushed a resolution at Local 134's executive board meeting that would allow about $300,000 to be moved out of the union's general fund and put into two other union pension funds on behalf of those officials, documents and interviews show.

Minutes from the meeting show that Hogan presented the resolution because the agreement that he cut with the city pension fund resulted in a "substantial loss of pension service credits to the employees."

Yet those union officials already received credit from the city pension fund for the time period the resolution covers. In fact, their city pensions are many times higher than what they would have received from the union pension.

Local 134 has at least three pension plans for its members. One of those plans is for union staff, and the others are for working electricians employed by private contractors. The contributions that the union leaders disclaimed last year were in the staff pension plan. Hogan's resolution sought to allow union staff to become part of the other two pension funds, thus allowing the union to make pension contributions on their behalf.

Union officials present at the Aug. 8 meeting say Hogan brought the resolution on behalf of business manager Timothy Foley, who landed a $105,000-a-year city pension after retiring in 2008 from a $47,000-a-year city job that he hadn't worked at in 13 years. The law allows his city pension to be based on his union salary and credits him for the years he worked at the union.

Three other local leaders were also covered by the resolution, sources say.

The resolution was tabled at the Aug. 8 meeting. Foley officially withdrew it at a board meeting held Monday night, after the Tribune and WGN-TV began asking questions about it, sources say.

Hogan and the union declined to comment for this story.

Taken together, the four officials covered under the resolution stand to receive about $9 million from the city pension fund. The Tribune has reported that, along with Foley, the other current and former Local 134 leaders receiving city pensions are business agent Michael Nugent, retried business agent Michael Fedanzo and Thomas Villanova, who is currently president of the Chicago and Cook County Building and Construction Trades Council.

Last year, municipal pension fund officials discovered that the four labor leaders had violated state law by collecting city pensions while also receiving contributions in a union pension plan covering the same time period.

They had filed applications and other paperwork with the city pension fund claiming that they had given up their private union pensions. Those statements turned out to be untrue. When the city pension fund found out, the union officials said they didn't understand the law and had made an honest mistake.

It's a felony to knowingly lie on a public pension application. The executive director of the city pension fund, Terrance Stefanski, said he declined to pursue charges against the union leaders because the fund had no way of determining whether the labor leaders deliberately made false statements.

So the city fund gave them a pass and allowed them to keep their city pensions.

Under an agreement hashed out between Hogan and the municipal pension fund, the labor leaders signed affidavits admitting that they had violated state law and vowing to "disclaim" the contributions in the union pension fund until the requirements "are reversed pursuant to action of the (city fund's) trustees or litigation by similarly situated participants."

No lawsuits have been filed, and the rules requiring them to give up their union pensions are still in place.

Producer Marsha Bartel and reporter Mark Suppelsa of WGN-TV contributed.


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