Who's Bankrolling the UFW?
A story of fraud and illegality involving Cesar Chavez's union and people in power
Just east of Bakersfield, California, on an isolated 200 acres formerly owned by Kern County and then used as a tuberculosis sanitarium, lies La Paz, national headquarters of the United Farmworkers of America, AFL-CIO. Chain link, barbed wire, and patrolling security guards discourage intruders. No one gets in without precise permission—not even a taxpayer who would like to see some of the sophisticated equipment his money is buying for Cesar Chavez's union.
In 1978 the spun-off organizations of the United Farm Workers were awarded nearly two million of the taxpayers' dollars. What the money is being used for, it turns out, is shrouded in mystery, sometimes as carefully guarded as the grounds at La Paz. And that $2 million is just the tip of the iceberg, just one part of the political wheeling and dealing in which Chavez and the UFW are engaged.
Last spring, Dave Kelley, a freshman California assemblyman who is a friend of mine, sent me a copy of a grant application submitted to the federal government by the UFW's National Farmworker Service Center (NFSC). "What do you make of this?" he asked. Some preliminary checking turned up more questions than answers. What was that money being used for? Thus began a six-month effort to collect pieces of the puzzle and figure out how they fit together.
Central to the mystery is Cesar Chavez. Many people will be reluctant to believe anything that could cast a shadow over this man. He is a durable folk-hero. As he tours the country giving speeches and raising money for strikes or boycotts, Chavez wins favorable headlines and warm interviews. Everywhere, he is sympathetically heard. Everywhere, emotions run high. Not unusual is the reaction when he visited the boycott picket lines at a supermarket last March: "Cries of 'Viva Cesar Chavez!' drowned the noise of traffic," reported the Los Angeles Times. "Some fought tearfully through the crowds for a chance to shake his hand or just touch him on the shoulder." Could this revered man, behind the scenes, be involved in the misuse of federal funds, and possibly in fraud? And to what end?
A crucial link in the intrigue and secrecy is the network of nonprofit, tax-exempt organizations set up and run by Chavez and other UFW officials, all headquartered at La Paz (see chart on p. 21). These organizations are variously funded by contract-mandated employer contributions, by private donations, by government grants, and by employee investments or contributions. There is no proof that these funds are comingled, because the UFW has steadfastly refused to divulge financial details. In a current suit brought against the union by members, the UFW is trying for an out-of-court settlement rather than comply with a subpoena for all of its financial records. In another case, growers have taken the UFW to court over its refusal to provide actuarial data, cost-benefit ratios, and other information about employer-financed medical and pension plans. Why the secrecy? Is it because some of these funds come from the taxpayers, with stringent conditions on their use? Or because some of the funds are being poured into union activities rather than the purposes for which the organizations were set up?
In 1978 one of these organizations, the National Farmworker Service Center, was awarded $1,950,908 in five separate federal grants. Whether as a measure of his full confidence in Cesar Chavez or to earn political points, Jerry Brown, when it came to these grants, waived his right as governor to see and sign federal grants to anyone in the state of California. Thus he gave to Chavez—the man who nominated Brown for president at the 1976 Democratic convention—carte blanche approval of anything requested.
Well-placed friends round out the cast of characters in this story. Not only Gov. Jerry Brown but Sen. Edward Kennedy, other ambitious politicians, and activists like Jane Fonda and Tom Hayden all are regularly photographed at Cesar Chavez's side and regularly take a part in the Chavez drama. Federal bureaucrats have joined in with marked eagerness to come up with taxpayers' money for his organizations. Is it Chavez's widely remarked magnetism that explains all this? Is it genuine support for a genuine cause? Or is it that Chavez, as spiritual leader of one of the largest minorities in the United States and countless sympathizers with his cause, commands hundreds of thousands of votes? And perhaps millions of politically directed dollars?
HOOKING UP THE UNION In 1978, in two separate grants, federal agencies awarded three-quarters of a million dollars of taxpayers' money for the construction of a "Farmworkers Telecommunication System," a complex microwave network to extend from northern California to the Mexican border. It is to be one of the largest and most elaborate systems in California, if not the whole country, with capabilities including private-line telephone, television, FM, and two-way radio. The Community Services Administration (CSA, successor to OEO and its War on Poverty) approved $601,692 toward it, and the Department of Health, Education and Welfare (HEW) another $195,315, for a combined total of $797,007, to go almost entirely to the purchase of equipment and leasing of mountain-top sites. Such grants are renewable two times, so the amount of money involved could top $2 million.
According to the grant application, submitted by the UFW's National Farmworker Service Center, 14 mountain-top relay towers are to form the spine needed to connect 28 of their regional Campesino Centers and all of their farmworker clinics. The application was submitted both to the CSA and to HEW and was the basis of their funding. Cesar Chavez signed the grant award. Gov. Jerry Brown waived his sign-off authority. But apparently no one checked out whether those Campesino Centers and clinics really exist.
The application clearly states: "At present [August 1978] there are now in existence some 18 Campesino Centers, with ten more to be opened by mid-1979. These centers are located along every major farm worker migration route and in every major agricultural area in the state (see map in Figure I)." The wording is precise; the map specifically shows 18 cities.
Throughout the grant application there is continual reference to the current existence of these centers: "Campesino Centers, which provide a variety of social services"…"unable to find any other means to effectively link our centers together" [telephones?]…"a system servicing regional Farmworker Service Centers located throughout California"…"Campesino Centers have established mobile teams".…Over and over again you read about these centers and what they do for farmworkers (help them deal with the forms and agencies connected with welfare and unemployment benefits, immigration, income taxes, housing, etc.). Connecting these centers and NFSC clinics by a microwave telecommunication system is the sole point of the grant.
Except for La Paz itself and two other places, the phone company carries no listings in 1978 or in 1979 for any Campesino Center or any Farmworker Service Center in any of the locations listed in the application. (The Delano directory lists a Campesino Center at the UFW's number; San Ysidro shows a center at the union's address but with a separate number). Yet the application states that this telecommunication system is to provide "low cost communications between farm worker centers—savings in telephone costs which now exceed $150,000 annually."
So what is at the sites listed as Campesino Centers in the grant application?
Installation of microwave equipment requires an FCC license, and a trip to the FCC's San Diego office showed that the NFSC had obtained licenses for the installation of dish antennas at 7 of the 28 Campesino Center sites. With the longitudes and latitudes from the licenses, and using US Geological Survey 7½-minute maps, I plotted the exact locations where equipment would be placed. There are only union office-hiring halls at these locations. Except in San Francisco, where there is a building owned by the Delancey Street Foundation. And except in Los Angeles, where there is a vacant lot. That Campesino Centers are located at union office-hiring halls is never mentioned or in any way even implied in the grant application.
One of the conditions signed by Cesar Chavez before funds could be released for this grant required compliance with two pages of minutely detailed regulations regarding the prohibition of using "equipment or facilities, purchased or leased, with Federal Funds, in whole or in part," for any union activity. In no way can equipment purchased with this grant money legally be used by the UFW labor union. Perhaps that prohibition explains the UFW's evasiveness surrounding any question about the exact location of these centers.
When I called Ann McGregor, director of the Campesino Centers, requesting a listing of their street addresses, I received an evasive denial. "We cannot give this information out over the phone. If you will write us…," she said, talking from La Paz. Since the addresses of union offices are known, it seemed unlikely that this was a concern for security. And when I asked her why, she vaguely answered that the centers are "operated on a temporary basis based on where the current need is most demanding." The obvious question is how large, cumbersome, relatively permanent microwave dish antennas can be attached to offices that move from place to place.
McGregor, when pressed, stated that there are a number of permanent centers. Pressed again: "There is one in Calexico." Address? "Second Street and Imperial."
The phone company has no listing for a Campesino Center in Calexico. An onsite visit to Second Street and Imperial showed nothing but a small, windowless office with the union's name and flag symbol on the front door and a large antenna on the roof.
A few weeks later I made another call to La Paz, again requesting the exact addresses of the centers. This time Marc Grossman, Chavez's press secretary, did the evading.
MG: Well, I don't mind telling you where they are—but I don't understand why you need the street addresses.
PN: We [I was working with another reporter at the time] would like to visit one of them.
MG: Oh, I see. Well, that could be arranged.
PN: All right, fine. But in the meantime I'd like to know how many centers there are and their street addresses.
MG: Uh huh—[pause]—well, there are quite a few of them.
PN: Okay. I can take the info down over the phone very quickly.
MG: I—I can give you quite a few just from my own memory.
PN: Okay.
MG: Well, we have them in Watsonville and Salinas.
PN: Can you give me the street addresses? Are they listed in the phone book?
MG: They're probably not listed. You know, you would have to go through us here at La Paz if you would want to go to one. If you just call them directly, they would just refer you to me.
PN: Okay, we'll call you. But you have a center in Watsonville? Can you give me the street address for that one?
MG: I don't have it with me. I'd have to look it up.
PN: Would you look it up for me? I'd appreciate it.
MG: Again, I'm just a little hazy why you want the address. It's just not the usual request, you know.
PN: Yes, but I don't understand why you are so hesitant to give them to me. I know you have union offices in certain places, and those addresses are known.
MG: Well, most of the Campesino Centers are located at the union—at the same place as the union offices. Well, most of them, at least. At least in California.
PN: Do you know which are not located at union offices?
MG: Uh, I don't know. There might be some out-of-state.
PN: All right, but isn't the main purpose of the Farmworkers Telecommunication System to link up these centers?
MG: Right. The main purpose of the Farmworker Telecommunication System—the microwave—is the linking of the Farmworker Service Centers from northern California to the Mexican border.
PN: All right, now what I want is a specific list of those centers and their street addresses.
MG: I just—it's—it's just such an unusual thing to want the exact addresses.
And it went round and round in the same manner with the ending agreement being that he would get back to me. He never did. But the repetitious conversation did confirm that what service centers there are have their location in UFW union office-hiring halls.
An HEW memo summarizing the telecommunication grant confidently states: "Both non-union and non-Chicano farmworkers would have access to the services provided by this system. Our understanding with the project director, Ken Doyle, is that this is the case." Yet it becomes less than academic to wonder how comfortable a farmworker who belongs to a competitive union, or who refuses to join any union, or who is employed as a farmworker by a company the UFW is striking—how comfortable he would feel about seeking services from a UFW hiring hall.
In fact, the Campesino Centers were set up to serve UFW members. The Martin Luther King Fund, which operates these centers, is financed by contract-mandated contributions from employers, and the trustees of the fund are instructed by its Declaration of Trust "to give preferential consideration to charitable purposes which may be related directly or indirectly to the welfare or needs of the agricultural laborers employed by the Employers [that is, growers who have signed contracts with the UFW]." In the course of the telephone conversation, Marc Grossman acknowledged that the benefits from these service centers "probably would" go basically to UFW members. Contacted by letter on this issue, he stated that "the Campesino Centers do service farm workers who are not members of the UFW," but he ignored the request for an estimate of what percentage this might be.
The grant application also puts heavy emphasis on using the Farmworker Telecommunication System to link up farmworkers' clinics. Again, there is continual reference to the current existence of these clinics: "doctors and nurses in the clinics operated by the Farmworker Service Center"…"visiting nurses to remain in constant communication with the doctors at the clinic"…"transportation of a patient by ambulance to the clinic"…"facsimile machines will speed copies of patient records from one clinic to another".…Four consecutive pages are devoted exclusively to the need to link up these clinics to one another and to La Paz, to metropolitan hospitals, and to mobile units in the field and labor camps.
July 25, 1979—phone conversation with Marc Grossman at La Paz:
PN: How many medical—health—clinics does the UFW or any of the organizations at La Paz currently have in operation?
MG: One.
PN: One? Where?
MG: Coachella.
PN: In the past how many have you had?
MG: About four or five.
He explained that it was difficult to get doctors to work in these clinics and something about moving them around to peak harvest areas. I asked if they plan to continue this mobile approach.
MG: No, because in those days we didn't have a medical plan. Now a worker can receive medical benefits under this plan—the Robert F. Kennedy Plan. He can go to his own physician. There's just not much need for them to have their own clinics. Also, we have a program in Mexico—Mexicali, developing one in Tijuana and San Luis—where workers can receive medical benefits where they live. They don't need to come to this country.
PN: But in the States there really isn't the need for you to spend money on clinics because now you have the medical plan going? So clinics here in California aren'f going to be active any more?
MG: No. Not anywhere in the near future.
Note: That medical plan was established in 1969, nine years before the filing of a grant application that repeats time and again the need to link these clinics together. (The 1976 IRS annual report from the Robert F. Kennedy Medical Plan shows net assets of $4.8 million at the end of 1975 and $5.3 million at the end of 1976. Obviously, the plan is well established.)
About that one clinic in Coachella. A phone call to the clinic, which is listed in the phone book as a UFW health clinic, yielded a hesitant denial that it is a UFW clinic. So I called Grossman again. After confirming that I had the right number in Coachella, he said he would call me back in a few minutes, which he did.
MG: I placed a call down there. This health clinic is not associated with our clinics. [What clinics?]
Later, I confronted Grossman with the emphasis on clinics in the telecommunication grant application. When I read some of the paragraphs emphasizing these clinics, he asked where those quotes came from. From a copy of the application, obtained from Washington, D.C., I assured him.
MG: We didn't give them those examples.…We never intended to have the clinics be the primary purpose of the—or even a substantial purpose of it. We certainly wouldn't say that when, at the time the application was made, there was only one or two clinics in existence.
PN: That's precisely the point.
MG: All right. I don't know what some PR man in HEW thinks up.
He did point out that the telecommunication system would be used to give hospitals and doctors immediate clearance on the eligibility of farmworkers under the medical plan, that (as the grant application also states) "the influx of calls has inundated regional service centers and La Paz, where central records are kept." I called four hospitals in the major farming areas. Each said they have had no trouble with verification—they call either the union hall or La Paz directly, and there have never been any delays. The average was about 20 patients a month, mostly pregnancies and children's illnesses (worker's compensation covers any work-related illness or accident).
I also asked Grossman how their telecommunication system was progressing. (The 15-month CSA grant terminated on August 31, 1979; the 12-month HEW grant runs until December 15,1979.) They were not only on schedule but "ahead of schedule," he said. They expected Phase I (the completion of 14 mountain-top relay towers and link-ups among five Campesino Centers, two major urban centers, and La Paz) to be transmitting by December.
Again using 7½-minute maps and the longitudes and latitudes from the FCC licenses, I charted the location of each mountain-top site, then contacted the owners of the property. Of the seven scheduled mountain-top sites south of La Paz, no leases have been consummated. Of the seven sites north of La Paz, two have just recently been leased and equipment installed. (Yet on September 5, 1978, CSA director Grace Olivarez received a memo from her assistant director, Robert N. Smith, stating that "the mountain-tops [14] are leased by the NFSC for 99 years.") The telecommunication grants have been in effect for 15 months, only two sites have even been leased, and Chavez's press secretary declares that all 14 will be transmitting by December.
Effecting the project as outlined in the grant application seems to be a pervasive problem. One mountain-top property owner commented that he had warned the "UFW man" that his site could only be reached by helicopter in the winter, but "that didn't seem to worry him." The CSA grant provides for the purchase of a 4-wheel-drive 3/4-ton pickup with #8000 winch, a light pickup truck with equipment shell, a snow vehicle, an AC generator, and a 24-volt battery bank (total cost to the taxpayer: $19,970). Perhaps the purchase of a helicopter will come with the grant's renewal.
Experts in the field of telecommunications, asked to look at the detailed specifications of this vast system, raised serious criticisms. All doubted that it could be built for the initial grant amount (one expert put a $2 million estimate on the job—a figure quite close to the amount that could come through with the allowable renewals of the grants). All questioned the length of some of the mountain-top jumps (one—from Loma Prieta to Mt. Bullion—exceeds 100 miles, considerably over the recommended 30-40 miles). And most disapproved of the specified two-man crew working out of La Paz to maintain a state-wide system.
It is interesting, then, to note an HEW statement:
The selection of [telecommunication] projects was made painstakingly.…Some 30 panelists, representing expertise drawn not only from HEW agencies, such as the National Institute of Education, the National Institute of Health, and the Rehabilitation Services Administration, but also from such Federal agencies as the National Science Foundation and the National Telecommunications and Information Administration, reviewed the proposals.
The farmworker project particularly impressed our panel.…
Effecting the project in accord with federal regulations also seems to be a problem. One of the special conditions of the CSA grant was that no contract involving the expenditure of more than $5,000 in grant funds to any individual or firm "be entered into without the prior written approval of the CSA project manager." Yet one company, when contacted, stated that delivery had been taken on over $100,000 worth of equipment, which is reportedly being stored at La Paz.
Under the Freedom of Information Act, I requested from CSA copies of contract approvals under the grant's special conditions. "Please find enclosed all documents which exist in CSA files at this time [July 23,1979]," said the reply. There were no copies of any contract approvals included in the small packet sent to me. Yet a Federal Cash Transactions Report showed that $175,652 had been spent on equipment as of the end of March.
Taking in the whole picture of the circumstances and events surrounding these grants, it would seem that there has been little concern for some of the technical details of the project, for compliance with requirements, or even, from the very beginning, with whether the project is needed for the stated purposes. There are currently no health clinics to use this microwave system, and none planned for the future; and if there really are Campesino Centers, they are all but exclusively for union members' use and are admittedly located in union office hiring halls. So it seems obvious that this telecommunication system is to be nothing more than the United Farm Workers' publicly financed private phone, television, FM, and expansive two-way radio system serving union headquarters and regional union facilities.
If a union building is hooked into a microwave telecommunication system, it is impossible to determine whether calls are made on it for union activities unless every single call is monitored. Would the UFW be willing to submit to such a loss of privacy?
Use of this federal grant's monies for union activities is strictly forbidden. HEW apparently had no qualms:
…the CSA grant for the larger part of the system includes prohibitions against use for various union activities which we felt would adequately cover the overall system, including the part we funded, against this type of activity.
Yet a novice, given the facts, would conclude that union use of this system was inevitable. A skeptic would conclude that it was designed that way.
Thinking as a labor union organizer, it would be most convenient to have at no cost instant communication from field to local union hall to union headquarters. Strategy, instructions, maneuvers, would be private, instantaneous, and for free.
UNDERWRITING CREDIT The federal government is spending $349,115 of taxpayers' money to bail out the UFW's allegedly floundering credit union. Although only UFW members and their families are eligible for credit union membership, the grant was applied for not in the name of the UFW or the Farmworker Credit Union but in the name of the nonprofit, tax-exempt National Farmworker Service Center.
In its 17-year history the Farmworker Credit Union says it has loaned out about $4 million. Yet in all this time it has been unable to reach economic self-sufficiency—according to CSA, the granting agency.
Figures from the California Department of Corporations reveal that the Credit Union has a considerable bad-debt problem. In 1975, loans more than 24 months delinquent totaled $39,484, some 14 percent of all loans. Although $26,000 of these uncollectible loans were written off the next year, the total began climbing again, reaching nearly $32,000 by the end of 1978. At the same time, membership and loan activity have been declining. Membership slipped,from 2,151 in 1975 to 1,658 in 1978, while the number of loans granted each year plunged from 134 to 70. Yet the average amount loaned climbed from $514 in 1975 to $1,881 in 1978.
A casual reader of the grant application would assume he'd spotted the reason for the Credit Union's economic woes: not mismanagement, but essentially giving away money. "All of these loans have been made at the low interest rate of 1%," says the grant application. And Chavez has referred with pride to the one percent loan rate, so that "farmworkers can borrow at little cost." One member of the CSA Project Review Board had the temerity to bring up the subject at a review meeting:
There's no discussion as to how the credit union will sustain its funds. They will be making their loans at 1%, but presumably will have to give out 5 or 6% on their savings, in order to get people to join the credit union. They'll be losing money. How will they get around that?
No answer—the discussion just went on as if the question had never been raised.
Judging from the minutes of the review meetings, nobody at CSA ever bothered to obtain the Credit Union's annual reports to the California Department of Corporations. Nor did anyone ask rudimentary questions regarding the Credit Union's history, its bad debt rate, its source of funds ($4 million obtained from 1,600 poor farmworker members?), or expenses versus revenues. And they never took seriously the question how any lending institution could hope to be financially sound making loans at one percent.
Had they telephoned the Credit Union office at La Paz and asked, as I did, they would have learned that the UFW's Farmworker Credit Union charges borrowers, not one percent per annum, but one percent per month (12 percent per year). And 12 percent is certainly no bargain for the farmworkers, especially when most credit unions have been charging between 9 and 10 percent. In fact, until last year 12 percent was the legal limit under California law (it's now 15 percent).
But more astonishing still is the fact that the Credit Union is paying nothing to its hard-pressed depositors for the use of their money. On the reports to the Department of Corporations there's a zero entered under the category "Dividends [interest] paid during the year" for each of the past four years (the only years for which records are available).
The same reports show net "profits" averaging over $10,000 per year for the same four years. But that is not to say that the Credit Union is financially sound. It's easy to show an excess of receipts over expenditures—despite a 14 percent bad-debt rate—if you don't list any expenses for staff, rent, or utilities, which the Credit Union doesn't (until it came to a grant application, that is). What the Credit Union clearly needed was an honest financial analysis to back up a plan to turn it into a businesslike operation.
But this, it becomes clear, is not what the grant is all about. Although the application acknowledged the need for some kind of plan, it promised to develop one during the project—after the money had begun flowing in. When a senior staffer on the Review Board recommended having a planning stage first, before pumping in money, the project director replied:
No, I don't think so. Doing this project in stages would lead to some problems we don't really need. 1 feel very strongly that this money needs to get out to the UFW right away, with no phasing.
Why, one wonders, the haste?
A review of the budget for the two-year "technical assistance" grant reveals that only $80,935 of the total—only 23 percent—is for one-time improvements like facsimile equipment, adding machines, computer software, and the like (see Table above). The vast majority of the money is going to pay operating expenses—salaries, rent, utilities, travel, etc.—with no advance indication that two years of heavy subsidization will lead to an economically viable operation thereafter. (That's why sound practice would have been to require a financial plan up front.)
Throughout the whole approval process, the union's claims were taken on faith. True, the CSA project director did say she had visited La Paz and seen their current operations. "The Credit Union that exists now is very primitive," she said. "Basically Helen Chavez does everything by hand." (That everything- done-by-hand statement is also in the grant application.) Yet just a little digging would have revealed that La Paz has had computers since 1972. "We use several kinds," Marc Grossman told me. "We had a big computer that was too big for us and we got rid of it and got another one. We have financial management computers, word-processing computers, membership-computing computers where membership records are stored—and benefit records for the medical plan and other employee benefit plans."
The grant application states that many of the other "farmworker components" at La Paz have funds invested in banks and savings institutions and are prepared to invest "whatever amount of this money is necessary for as long a time as is necessary" to make the Credit Union effective. So if the Credit Union needed help, why didn't the Review Board go to Chavez for these monies, rather than using taxpayers' funds?
One final point removes any doubts about the purpose of the grant. Not only are these tax dollars being given to a private organization—a credit union to which only UFW members can belong—but they're also helping to pay the costs of running the UFW itself. Returning again to the minutes of the Review Board's meeting:
C: Can you discuss the six offices mentioned in the proposal?
B: These are the outreach offices which also serve as union halls. Communication will be through the microwave system.
So the taxpayer is footing a good-sized portion of the bill for utilities, equipment, facsimile machines, CRT terminals, and computer software for six of Cesar Chavez's union office-hiring halls.
LEARNING AT LA PAZ The most publicized federal grant to Chavez's organizations is one from the Department of Labor using $683,861 of CETA funds. Being the first such grant, it was evidently decided to send it off with aplomb and fanfare. Long before final negotiations had been completed, Secretary of Labor Ray Marshall and UFW president Cesar Chavez held a well-publicized grant-signing ceremony. This was on January 11, 1978.
Along with the grant's publicity came controversy. Chavez is the controversial leader of a social movement and a union, and this grant was filled with questionable uses of taxpayers' money. Thirty-two congressmen immediately asked the General Accounting Office to investigate. Evidently a lesson was learned, because there have been no more celebrity-studded grant announcements.
The GAO report was not completed until a year later. Meanwhile, in May 1978, the grant was finalized. The 16-month project, begun in August of that year, has two components: an English-language program and a job-skills program.
According to the grant award, "Recruitment and selection of the students will be performed through 13 Campesino Centers in California." Translation: Participants will be recruited from UFW hiring halls throughout California and, for obvious reasons, will probably consist entirely of union members.
English-language teachers are being trained during the first four months of the grant period. Then every eight weeks 16 students (ranging in age from 22 to 45 years) are brought to La Paz for in-residency learning, at a total cost of $347,529.
The job-skills program has 16 participants living at La Paz for 48 weeks at a total cost of $336,332, or $21,000 per participant. Four are to be trained as "offset press persons, camera persons, binders, strippers, typesetters, layout and art specialists," working in La Paz's printing plant, which produces the union's printed materials. Six participants in the auto-diesel mechanics program are gaining experience repairing the equipment at La Paz. Four trainees in maintenance and landscaping are learning "carpentry, electrical, plumbing, painting and similar skills": "The farmworker community of La Paz, many of these structures date back to the old TB sanitarium, requires adequate building maintenance." Two participants are learning how to cook in the La Paz kitchens.
In other words, the taxpayer is paying to have the buildings at union headquarters repaired and maintained, the grounds kept up, the vehicles repaired, the food cooked, and union communications printed. The budget?
Again, the taxpayer is buying all sorts of equipment for the union's headquarters. A van for $8,680 (plus gasoline, maintenance, and insurance at $3,750), four typewriters for $3,600, minor equipment at $3,770, and just a lump sum of $50,000 for "equipment."
Salaries for a 48-week period include a cook instructor, a printing instructor, and a diesel mechanic, each at $21,600, and a master mechanic at $29,000. An "instructor allowance" at $4,200 and a "consultant fee" at $4,000 take care of building and maintenance.
There is $61,451 for language instructors, but the exact number is not specified. With 16 students every 8 weeks, more than two would seem inappropriate, and that means a salary of $30,752 for 48 weeks of teaching 8 students. These are the instructors who had to be trained at taxpayers' expense during the first four months of the grant.
Salaries for the administrative staff—executive director, project director, fiscal specialist (?), secretary, and language school coordinator (some are only part- time)—total $83,080. Participants in the program live at La Paz, but there is a $7,800 travel allowance for the administrative staff. The "participant intake/ counselor" has a salary of $21,575 and a travel allowance of $4,800.
The participants are paid, too. The 96 English-language students take home $928 at the end of 8 weeks, and each of 16 job-skills participants is getting $5,557 for 11 months of learning. Plus room and board, transportation, and entertainment.
La Paz gets $107,520 for providing room and board, $4,055 for recreation, and $8,400 for emergency/medical. Then there's $15,609 for classroom and administrative use of La Paz space and use of La Paz computers and copying machines. Utilities, telephone, printing and advertising (for a $21,575 participant in-take/counselor to recruit through union hiring halls?), postage, and insurance account for the rest of the budget.
The GAO report on this grant was released in January 1979. According to the report, the grant's approval had been marked by dissension within the Department of Labor. The director of farmworker programs had expressed concern about "activities proposed related directly to supporting unionization efforts." Not only would this grant set a precedent for direct funding of union activities, he objected, but "it would be impossible for Labor to determine through some monitoring activity whether unionization activities or union-related indoctrination was actually occurring during the program."
It's not an idle worry. In a recent article in the Christian Science Monitor, one of its editors was favorably impressed with the fact that La Paz is providing "a school for future union organizers." But the concerns of that DOL official were dismissed by a higher administrator as "mere efforts to protect himself in case the grant came under heavy political fire because of the grantee's identity."
So it seems that it was quite clear from the beginning: although this grant was in the name of the nonprofit, tax-exempt National Farmworker Service Center at La Paz, in actuality it was a grant to the United Farm Workers union—and everyone involved knew it.
The GAO report found many other questionable aspects that should have been investigated before funding was approved. For every charge made, Secretary of Labor Marshall shot back a defensive denial.
The GAO objected that the National Farmworker Service Center did not have experience with this sort of program and did not have the qualified staff for it. Marshall admitted that the NFSC scored "relatively lower than some other applicants in this area" but, quoting from the GAO report, cited their "considerable experience operating farmworker programs generally and a strong technical assistance linkage with the Human Resources Development Institute." (The HRDI, explains GAO, is an AFL-CIO nonprofit, tax-exempt organization that is given taxpayers' money—in 1979, $4.4 million from DOL—to help and advise affiliate unions on how to acquire taxpayers' dollars—federal grants.)
The GAO observed that California's school system was already providing English-language programs, some after work and in labor camps, with the number of programs based on the number of farmworkers interested. "The enrollments for Kern County (where La Paz is located) have been about 2,000 a year." Marshall stood his ground: "The program structure and methodology currently employed do not impact significantly on many workers."
The GAO report goes on—as does Secretary Marshall—but it is much of the same yes-it-was, no-it-wasn't exchange. The report ends with an account of the Labor Department's system of monitoring the grant. The NFSC is required to submit monthly progress reports within 10 days of the end of each month and to submit quarterly fiscal/progress reports. And someone from DOL is to visit the center every quarter.
On May 4—the grant had become effective nine months earlier—I called the Department of Labor to find out about the program's progress. A very cooperative person tried her best to answer questions regarding NFSC's mandatory progress reports. But apparently there was little information to relay. There was one report for the period ending in December, and for the participant phase of the program there had only been one report—telephoned—stating how many were enrolled so far (as of April 16, in the English-language program, 24; in the job-skills program, 13). Almost apologetically, she assured me that was all she had.
That same day, to double-check, I sent a Freedom of Information Act request for all progress and fiscal reports from the NFSC to the DOL, as well as reports of all quarterly on-site visits. Six days later (May 11), I received a form letter: "Your requests are under review and you will be hearing from me on or about May 25." (By law, an FOIA request for information involving a tax-supported organization must be complied with within 10 working days, with one 10-working-day extension.) On June 5, another FOIA letter requesting the same things and asking why the May 4 letter had not been answered. Still no response. Periodic calls to the Department of Labor result in: "We will look into this and see what the problem is."
Some people are beginning to get an idea of what the problem is.
The fifth 1978 grant, for $120,925, also went from the Department of Labor to the National Farmworker Service Center, to develop an agricultural apprenticeship program. The one-year termination date of July 31, 1979, is now past, yet the DOL will not answer requests for progress reports or final results.
The same GAO report, however, contained some revealing information. "It appears that Labor has wanted to fund or in some way assist the union in apprenticeship for some time. The Secretary [Marshall] and the president [Chavez] met at a March 1977 meeting…[resulting in] an understanding that Labor would be willing to work with the president to explore the idea of apprenticeship in agriculture."
The GAO's criticism centered around the DOL's awarding this grant on a sole-source basis (no competition) and its contention that only a union could successfully establish such a program. The GAO pointed out that one such nonunion project had been considered quite successful in California and that another, funded to the California Department of Industrial Relations, Division of Apprenticeship Standards, would have been successful if the UFW had cooperated as they were supposed to. It seems that Labor had insisted upon UFW union involvement in that grant because of Secretary Marshall's understanding with Chavez and because "the Governor's Office in California also wanted to assure the union's participation."
But the union failed to actually participate in that program—until the Department of Labor came through with $120,925 for the UFW.
CITIZENSHIP CASH Why this deference in high places to Cesar Chavez? He repeatedly charges government agencies with injustice, yet politicians and bureaucrats seem to stumble all over themselves to please him. And he quietly goes about the work of making sure they will continue to do so. Part of that work centers around the UFW's Citizenship Participation Day Fund, which he is now fighting to maintain against legal challenges.
In UFW contracts, one day a year is declared an extra paid holiday, named Citizenship Participation Day (CPD). Union members are to instruct their employers to give their holiday pay for this day to the UFW's CPD Fund, whose purpose is to support "citizenship education, voter registration, legislative advocacy, and political action," according to Marc Grossman. Most of these funds (78 percent for 1974-77, the latest reported years) have in the past been turned over to the UFW's Political Action Committee (PAC), which in turn contributes to political candidates and ballot-measure campaigns. Chavez has called this political slush fund "critical" because it "helps us to deal with the political power of growers and their friends."
Until 1978 union members were encouraged but not required to donate their CPD pay. Then an August 1977 UFW convention made it mandatory. Now if a union member does not contribute, the union can declare the member "not in good standing" and can force his employer to fire him.
Federal labor laws define "good standing" as timely payment of initiation fees and dues. But the UFW has been given carte blanche to define good standing by California's controversial Agricultural Labor Relations Act. (The Christian Science Monitor recently praised this 1975 piece of legislation as "a major Chavez achievement." That it was "orchestrated by UFW and supporting groups, with the backing of Governor Edmund G. Brown, Jr.," seems to be a widespread assessment.) No other labor law in the country gives such power to a union. The UFW has used this power to say to its members, "Contribute to CPD or get fired."
Chavez alleges that the vast majority of union members contribute to CPD voluntarily and the new mandatory requirement is aimed at a small minority. How to check this out?
A search of the files of California's Fair Political Practices Commission, which requires all political action committees to report their income sources and how this money is spent, turned up no records for the CPD nor for the UFW. Finally, filed under the National UFW Political Action Committee, I found a February 22, 1979, report covering the years 1974-77. Here, the CPD Fund turns up as an "intermediary organization." (But, one wonders, why does the union have two organizations funding political action? Marc Grossman says, "For organizational purposes. They serve different functions." But note this: Because it contributes to politicians and ballot-measure campaigns, the UFW's PAC must register with the state, declaring all expenditures and all income, including the source. On the other hand, the UFW's CPD Fund—even though its primary purpose, according to a union brochure, is the achievement of political power—is not required to report to any state agency what it does with the workers' pay it collects.)
The UFW's PAC report to the Fair Political Practices Commission contains some revealing data. An amendment to the report, according to a covering form, lists the sources of funds for that "intermediary organization," the CPD Fund. And so follow all of 98 pages showing, worker by worker in most cases, all the CPD monies collected between 1974 and 1977. Spot checks with major growers confirmed the amounts.
Using Chavez's own data, one can estimate the percentage of UFW union members contributing to CPD. The average contribution from 1974 to 1977 turns out to be $57.00. So I took the reported total amount for 1977—the latest year reported to the FPPC, and a year in which CPD contributions were still voluntary—divided by $57.00 (one day's pay), and derived the number of union members contributing for that year.
In 1977, CPD contributions totaled $84,149.15. That means 1,476 union contributors—1.6 percent of the 90,000 UFW members repeatedly claimed by Chavez in early 1978 in public statements and in the application for the Credit Union grant. Suppose we give Chavez the benefit of the doubt and assume that, because of the seasonal nature of farm work, only half of his union's members were working on the CPD holiday in 1977. That's still only 3.7 percent. Suppose only a quarter were working. Still only 6.6 percent.
Reversing the approach, let's assume that "the vast majority"—say 90 percent—in 1977 did voluntarily give to the CPD slush fund. With 1,476 contributors, the 90 percent assumption yields a total union membership of only 1,640. Or only 3,280 if we add the only-half-are-working assumption.
Mr. Chavez appears to be in the position of either admitting to a very low voluntary participation in CPD (which could hurt his position in pending judicial and legislative action on CPD) or admitting to an extremely low union membership (which most certainly would hurt his image and his power). Or the report he filed with the state of California could have understated the amount of CPD funds collected.
Chavez has much at stake in this fund. Recent UFW contracts have designated a different CPD holiday in northern and southern California, so as to hit the peak season and as many workers as possible in both areas. If the courts back him up in the legality of compulsory contributions, and if he really has 90,000 members, then we are talking about a political slush fund of over $5.1 million a year. That's attractive to any politician.
Legal proceedings have been initiated, however, on behalf of union members fired as a result of not contributing to CPD (Cervando Perez, et al. v. United Farm Workers of America, AFL-CIO). The plaintiffs are objecting to their money going into the fund because of the various political candidates and causes to which the UFW (PAC) has contributed CPD money. Case arguments in the class action suit are based on constitutional rights to freedom of speech and association.
Union spokesmen have called this a "right-wing fetish" but nevertheless quickly amended union contracts so that members who do not wish to contribute to the CPD Fund can contribute to any one of three designated charities (all UFW La Paz-headquartered organizations: the Martin Luther King Jr. Farmworker Fund, the National Farmworker Medical Group, or the National Farmworker Service Center). This action paid off in a June 18 preliminary hearing on another, similar suit. A hearing officer of the Agricultural Labor Relations Board issued a 188-page opinion ruling that the CPD mandatory contribution is legal because of the designation of alternative charities. Despite the ruling in this case,the Perez case is heading for the courts on the grounds that CPD is unconstitutional if these monies are used for any purpose other than collective bargaining, contract administration, and grievance adjustment.
But the "good standing" issue has on its own been a major roadblock in contract negotiations, prolonging the most recent strike in California. Growers don't want to allow the union that kind of power over the operation of their farms—the power, for example, to pull workers off their jobs in nonstruck companies and send them out to picket, attend rallies, and participate in marches, or lose their good standing.
As the 1975 Agricultural Labor Relations Act stands, the UFW in effect has the right to force the firing of employees for any reason it deems appropriate. The union's constitution lists 33 offenses for which a member can lose his good standing—many ambiguous ones such as "conduct detrimental to the welfare of the Union" and "committing an act calculated to embarrass or impair the dignity of the Union." A union striker put it this way: "If we don't picket, we won't get our jobs back when a contract is signed."
Recently, California senator Robert Nimmo sponsored legislation to make the ALRA's good-standing provision conform to that of the National Labor Relations Act, whereby a union may secure the discharge of an employee only for failure to pay dues and initiation fees. But as the Watsonville Register/Pajaronian editorialized in June, "The union is fighting fiercely against it, understandably, because its hold on its members would seem to depend on its control over their jobs." The bill narrowly passed both houses of the legislature, but Governor Brown vetoed it on September 7.
WHY CESAR CHAVEZ? After months of investigation, and turning up as many facts as the secrecy of the UFW apparatus and the recalcitrance of government agencies would allow, mystery remains. Is this a politics-as-usual story? Is there a master plan? Or is it catch-as-catch-can?
One conclusion seems inescapable: taxpayers are bankrolling Cesar Chavez's United Farm Workers union. With $797,007, and potentially $2 million, of the taxpayers' money, the UFW is building itself a sophisticated microwave system that will provide instant, virtually free (to the union) communication among union headquarters and regional hiring halls. With $349,115 of taxpayers' money, the UFW is operating its credit union for two years—and purchasing furniture and equipment for union headquarters and union office-hiring halls. With $683,861 of taxpayers' money, the UFW is bringing language and job trainees to headquarters at La Paz—and sprucing up the facilities, printing union materials, and purchasing more equipment for headquarters. Add a small grant, $120,925, for an apprenticeship program, details unrevealed, and it all adds up to $1,950,908—for starters.
The grants exposed here are small-time compared to the vast amounts of tax monies squandered on senseless projects and lining the pockets of professional scam artists. So why single out Cesar Chavez and the UFW?
A microwave system is a modern, efficient means of communication. Credit unions do provide services to their members. Laborers can benefit from expanding their skills. But whatever the grants' benefits to union members, the United Farm Workers of America, AFL-CIO, is itself aggrandized by the use of these funds for union activities. And that, at taxpayers' expense, is illegal.
Yet it's apparently not the only union to be taking in tax dollars. It may be a particularly significant one, since it has signed contracts with many of California's growers, and California supplies at least half of America's produce. But it's not the only one on the federal take—otherwise the AFL-CIO's grant-advising Human Resources Development Institute wouldn't be in business. So why Cesar Chavez and the UFW?
Chavez is evidently a hard-working man, dedicated to a social cause. There appears to be warmth, a loving care for the poor and the exploited, a commitment to openness and honesty. The United Farm Workers struggled through its share of opposition to unionization and probably faced the adversity of discrimination in its attempt to represent workers predominantly from a minority group. There can be no question that it has contributed to union members' improved wages and benefits. But should the taxpayers—or concerned supporters—put up with anything in the name of Cesar Chavez and the United Farm Workers?
Should they countenance deception? UFW officials, with Chavez's signed approval, said there are Campesino Centers; the ones that actually exist are union hiring halls—unacknowledged as such. They said there are health clinics; there aren't any. They said the credit union makes loans at one percent; it makes loans at 12 percent. They agreed to conditions prohibiting the use of funds for union activities; the UFW is directly benefiting from the salaries paid, space rented, and purchases made with these funds. Isn't it clear that fraud is involved?
Or is it? Perhaps unfamiliarity with bureaucratic procedures and sophisticated accounting systems explains these staggering discrepancies. Or a docile UFW may have followed the lead of a more savvy arm of the AFL-CIO, its Human Resources Development Institute—the General Accounting Office pointed to a "strong link." Or maybe Marc Grossman, backed into a corner, put his finger on the culprit—"I don't know what some PR man in HEW thinks up"…and in the CSA, and in the Department of Labor. Still, Chavez and other UFW officials signed the documents.
And there are other discrepancies. There is the overstated union membership or an exaggerated claim for voluntary CPD contributions. Chavez frequently rails against big business, but some of his nonprofit organizations' investments are, according to IRS reports, safely tucked away in such capitalistic giants as Bank of America, IT&T, Bell Telephone, and General Motors. There is the union constitution's prohibition of violence, and Chavez's abjuring violence, but UFW strikers' use of violence. It just doesn't add up to an unblemished picture.
Whether the deceptions are deliberate or careless, they raise another mystery—why government complicity in the sham? If I could bring to the surface the gross disparities involved in these grants, couldn't government agencies have unearthed the difference between truth and fiction? Interdepartmental criticisms and GAO investigations after the fact are all well and good; in the end, these grants were approved. From the beginning, Gov. Jerry Brown felt it unnecessary to see and sign them.
Is it bona fide concern for poor farmworkers that explains the eagerness to dole out taxpayers' money—and explains the enthusiastic support of the Jane Fondas and Tom Haydens? But then, what about the concerted attempt to retain dictatorial control over those farmworkers: Contribute to CPD, or get fired. March, or get fired. What about those farmworkers investing in the Credit Union but not being paid any dividends and not being charged that "low rate of one percent" on loans? Would all the good will Chavez has generated be so forthcoming if his ardent supporters knew all this, knew the whole picture that adds up to duplicity—or raises even more mystery?
Perhaps the pieces fall together into an old-fashioned story of power. Sitting atop the United Farm Workers, Cesar Chavez has considerable control over California agriculture and thus over the nation's produce. As leader of one of the largest minorities in the United States, he has undisputed sway over many, many voters. And as the highest decisionmaker in the UFW, he has at his disposal politically available CPD monies potentially totaling in the millions each year. "Don't make the mistake that these farmworkers don't have the power to launch strikes, boycotts, and everything else that is necessary to win," declared Jerry Brown at a Chavez rally in August.
Does Brown—do other politically active figures—want in on a political machine? Are they helping to construct it by funneling taxpayers' money to Chavez?
As I was finishing this story, Chavez was waging an all-out effort to organize a nationwide boycott against United Brands' Chiquita bananas (United Brands being the parent company of one of the largest lettuce growers, Sun Harvest, struck by the UFW in a walk-out in California begun last January). The August 1979 scenario included a four-day, 150-mile march from San Francisco to Salinas, a Chavez fast, and a rally. Gov. Jerry Brown marched along and called on the growers to settle, making his "farmworkers' power" declaration. Jane Fonda, flanked by her husband, Tom Hayden, announced that she would carry the boycott to 50 cities.
Then, on August 31, Sun Harvest capitulated. Chavez called off the boycott of United Brands/Chiquita bananas—but not of lettuce.
A boycott is a powerful weapon, in more ways than one. In 1976, when Jerry Brown suddenly began campaigning for the Democratic presidential nomination, who should show up as his tireless campaign workers—Brown's "shock troops," a recent Los Angeles Times report called them—but recently unemployed Chavez boycott staffs? Rallied by Gilbert Padilla, UFW executive board member, they flocked to Brown's cause, first on the East Coast and then in Oregon. Political observers are whispering that this time, too, a nationwide boycott network could provide the ground floor of a presidential campaign by Brown or Sen. Edward Kennedy. And when Fonda and Hayden vowed to carry the boycott across the nation, it was as part of a pre-primaries, anti-Carter drive.
But even political machine building doesn't answer the nagging question about who's behind it all. Are the eagerly awarded federal grants and public curtsies to Cesar Chavez part of a carefully orchestrated plot in which he is being used by politically ambitious power seekers? Does he sign on the bottom line, in spite of misrepresentation, for benefits accruing to the farmworkers in his union? Or are the federal grants, the public contradictions, the secrecy surrounding his operations, all part of his own power play? Is Chavez, to all the world a peace-loving, honest, simple man, behind the scenes quietly building an empire, constructed on fraud, and financed by growers, well-meaning supporters, farmworkers, and taxpayers? With all the fences surrounding the empire, would we ever know?
Patty Newman is a graduate of Mills College with a bachelor's degree in English. For many years she was director of program development at San Diego's Campus Studies Institute. Copyright © 1979 by Patty Newman.