THE NASTY BATTLE INSIDE LOCAL 757
BY NICK BUDNICK
nbudnick@wweek.com
The president of Local 757 gets a $67,000 salary, plus benefits, an expense account and the use of a car. With territory that includes Oregon and part of Washington, Local 757 has members in Vancouver and Walla Walla, Wash., as well as Medford, Salem and Eugene.  For 12 years, Ron Heintzman, a former Tri-Met cop, has held sway at the ATU headquarters at the corner of Northeast 18th Avenue and Couch Street. There are 306 local chapters of the Amalgamated Transit Union in North America. They are largely autonomous, though the international headquarters offers assistance in dispute resolutions and collective bargaining. There have been three ATU strikes, all of them short-lived, under Ron Heintzman's leadership.  Bus drivers are Feist's (above) most fervent supporters, while Heintzman's power base is with the mechanics that keep them on the road. In 1994 Tri-Met agreed to take over the union's Health and Welfare trust on the basis of union representations that it contained $250,000 in assets, only to find it in arrears to the tune of $322,000.  Asked why someone would want the IRS to think they had a Tri-Met tax shelter, Tri-Met General Counsel Brian Playfair declined to speculate. "I wouldn't touch that one with a 10-foot pole," he said. Local 757 is in good financial shape. It owns outright its headquarters building and it has $750,000 in cash and investments. Many bus drivers supporting Feist contend that the union should be doing more to improve Tri-Met's customer service policy, which allows unverified rider complaints to result in a driver's firing. Heintzman claims the title "Tri-Met G.M" under Wallace's signature was removed by Morton before the trust document was sent to the IRS. Morton refused to confirm this, and the claim does not explain why Wallace signed under the word "Tri-Met." | This election season witnessed a lot of mudslinging, but by far the nastiest local campaign was one you never heard of. At stake was the title of president, as well as power over the men and women of Amalgamated Transportation Union Local 757--including light-rail operators, AMR paramedics, and bus drivers for Tri-Met and the company that shuttles kids for Portland Public Schools. At the center of the struggle to lead Local 757 should have been a benign question: Who can best serve these public servants? And yet in the attempt to answer it, allegations of death threats, misspending and tax fraud have been thrown around like confetti. "Any sense of fairness was out the window," says labor activist Jason Reynolds, who's been following the affair. Since June, the local's 4,500 members have been subjected to four elections and two electoral appeals--but judging by the harsh words still flying, the fracas is nowhere near finished. The incumbent, Ron Heintzman, is a "master of divide-and-conquer," says his challenger, Wally Feist. "Dazzle you with brilliance or baffle you with bullshit, he can do both. The bottom line is, I don't trust the man." Feist "is a lowlife," counters Heintzman. "He thinks he's smart but he isn't. He's the biggest bullshitter in the world. Unfortunate-ly, our people believe it." All the harsh words, the charges and counter-charges, have placed a cloud over the ATU's leadership--and its ability to serve the working people who are at the heart of the quality of life in the metro area. Particularly since the most damaging of those charges--whether Heintzman made fraudulent representations to the IRS--remains unresolved. To meet Ron Heintzman is to be immediately unimpressed. The first thing you notice is his stutter, which is severe. His thin mustache, extra girth, thinning hair and fondness for drab clothing don't exactly make him stand out. Beneath the surface of this former liquor agent and ex-Tri-Met cop, however, lurks a sharp mind and a reputation as one of the most successful, powerful and flamboyantly aggressive union leaders in Oregon. Nationwide, union membership has long been in decline. Since Heintzman took control of Local 757 in 1988, it has tripled in size. More important to its members is what the union has done for them. Tri-Met drivers, who represent a small minority of the local's membership, are among the best-compensated transit employees in the United States. "I don't care where you go," says Mel Schoppert, an ATU senior executive vice president who negotiates contracts all over the nation. "You don't find agencies where 100 percent of the premiums are paid for medical, dental and vision for retired employees and their families for the rest of their lives. Tri-Met is right up there on the top of the nation with the big guns." That's thanks in part to Heintzman's brinkmanship style. During a contract dispute in 1993, he had signs emblazoned with "Walsh Welches on Widows," ready to use in a picket outside the office of Tom Walsh, then Tri-Met's general manager. Walsh backed down. Heintzman's reach extends to Salem, where it's been able to both pass and block laws, he boasts. "We got a law passed making it a felony to assault a bus driver, even though it's not a felony to assault a policeman," Heintzman says. "That was in 1992. In 1995, we got it passed for paramedics." "I think he's very savvy, a strategic thinker," says Tim Nesbitt, president of the Oregon AFL-CIO. "He is somebody who has been moving his union forward." Yet, despite all this success, Heintzman, 47, has faced a tough challenger in three of his four reelections. This is because a number of his members think Heintzman is "a tyrant," says bus driver and former union board member Bob Hildebrand. "He would stand up in meetings and actually call members S.O.B's. He would say, 'You son of a bitch, sit down and shut up!'" "I've been a union man all my life," says bus driver Michael Oliver, "and I've never seen a union like this one. The first meeting I ever attended, this guy stood up and said, 'I just don't understand what's going on.' Ron stood up and said, 'That's because you're stupid!'" Former board member Jeff Kling says that, in his opinion, Heintzman "leads by intimidation.... Ron likes to gut people like a fish. It doesn't matter if it's a union member--or a Tri-Met manager." Heintzman laughs as these quotes are read to him. "My response to the first two is that they are lies, because I've never spoken like that at a membership meeting," he says. "Do I take tough positions with management? Yes. And do I tell a member when they're wrong, that they're wrong? Yes." In Heintzman's 12-year grip on Local 757, he has never faced a challenger as driven as Wally Feist, a Yakima-born bus driver who joined Tri-Met in 1977. The two actually served together in the union leadership for nine years, Heintzman in the top job and Feist as the financial secretary. In 1997 Feist left his post to challenge Heintzman, unsuccessfully. Balding, white-bearded and stout, Feist, 51, wields charisma, a priestly voice and a speaking style that's like a reasoned purr compared to the ragged bark of his opponent. This year, Feist ran a second time and led a scattered crew of disgruntled bus drivers into battle against the highly organized corps of Tri-Met mechanics who constitute Heintzman's power base. In the June 6 primary, neither Heintzman nor Feist got the 50 percent-plus-one-vote needed to win the election. That's because votes were siphoned off by the third-place candidate, Jay Frye, another Tri-Met bus driver. Frye says he is still taken aback at the nastiness of the election; among other things, he received an anonymous death threat. In addition, one day Tri-Met drivers reported to work to find copies of Frye's personal bankruptcy records sitting on every driver's seat on every bus. Frye believes a Heintzman supporter was behind the distribution of his records; Heintzman says he knew nothing about it. Frye threw his support to Feist, and three weeks later Feist won the runoff--by 21 votes. On July 5 Feist moved in to the union headquarters, a one-story brick building at Northeast 18th Avenue and Couch Street. To make sure Heintzman didn't come back, he'd had all the locks changed. New locks did not mean security for Feist, however. He was surrounded by enemies. Heintzman's niece is the union's receptionist. Much of the office staff, like Susan Stoner, the in-house union attorney, were long-time Heintzman fans. The day before Feist arrived, Stoner sent one of his supporters, Gerald "Red" Worland, an email saying, "I see that you are still doing the bidding of your master. Can you spell 'Chump?'... It appears the devil has taken up residence next to your soul." Tom Wallace, the union's financial secretary, was also a hardcore Heintzman ally. The 18-member union executive board, which acts like a board of directors, was made up mostly of Heintzman supporters. Asked what it was like to work in an environment surrounded by foes, Feist replied, "It's shit." Asked to elaborate, he said, "It's a sea of shit." On June 29, a Heintzman supporter challenged the election, claiming that a number of members were never sent ballots. On July 13, it was announced that 127 members had in fact not received ballots. Another election was called, and the dirt really started to fly. Heintzman supporters started an online news group, called "Wally Watchers." Virtually every day a new message appeared, ridiculing or attacking Feist. The postings, almost all of them anonymous, bore titles like "What's that smell?" and "How much damage can Wally do?" and "Alert, alert, Wally's world gets more dirt." The scrutiny of his every action got to Feist, who told WW, "I can't even take a crap without someone knocking at the door." The Feist camp responded with the Eagle Gazette, an email newsletter. One edition said of Heintzman, "Somewhere along the line he succumbed to the evils of hate, greed and oppugnancy." (Oppugnancy, according to Webster's, means "hostility; antagonism.") During the summer, Feist made a number of missteps. In July, he fired Stoner. But the move was promptly reversed by the executive board, which claimed he'd acted without cause or due process--a particularly potent charge in a union. In August, Feist signed an agreement that cut Tri-Met retiree benefits. In mailers, "Wally Watcher" postings and around the union, Heintzman and his supporters gleefully blasted the new president as a company stooge who'd handed Tri-Met a $3 million giveaway. Actually, according to Tri-Met operations director Robert Nelson, Heintzman had been the union leader who had negotiated the deal, six months before, in exchange for additional hours and benefits for part-time drivers. In October, Feist complained that his financial secretary, Wallace, was working against him--among other things, sending members birthday cards that still listed Heintzman as president. Feist's supporters tried to file charges with the international headquarters against Wallace, who is very popular among Tri-Met's mechanics. On Oct. 16 a nighttime vote on the charges took place in a Southeast Portland meeting hall. Members were expecting violence, and driver Dan Martin told WW beforehand, "I know one driver who's bringing a gun." Thanks to a meeting room overwhelmingly packed with Heintzman supporters, the charges were voted down. Charges continued to be lobbed like so many fireworks. Feist accused Heintzman of overspending, attempting to use members' grievance money on a car and overruling the members' will. Heintzman blasted Feist for plans to buy two minivans, racking up a $1,000 bill for six weeks of cell-phone use and other expenditures he characterized as extravagant. Both men say each other's charges were trumped-up or downright false. The most significant charge that Feist supporters have leveled against Heintzman hasn't yet been resolved; it involves allegations that he improperly tried to avoid taxes. The issue had to do with a $166,000 check Heintzman received from Tri-Met in 1997. Heintzman got the check after suing Tri-Met in Multnomah County Circuit Court over retirement benefits owed him for six years of work as a Tri-Met cop during the mid-'80s. When Heintzman received the settlement, he wanted to avoid paying income taxes, so he tried to set up a tax shelter, also known as a "rabbi trust"--so named because a rabbi set up the first one, tax experts say. The trust would have allowed Heintzman, then 44 years old, to defer paying taxes until he turned 50. By that time he could be retired and earning much less, dropping him into a lower tax bracket. According to several tax experts, a rabbi trust can only be set up if the employer providing the funds agrees to participate in setting up the trust. That's because the tax benefit is based on the money remaining in the property of the employer--and out of reach of the employee--until the time for payout and taxation arrives. On April 22, 1997, Heintzman's attorney, Mort Zalutsky, asked Tri-Met to cooperate in setting up a rabbi trust. Brian Playfair, the general counsel of the transit agency, refused. To do so would have been "inappropriate," he told WW, adding that Tri-Met could not legally participate in the rabbi trust Heintzman was trying to set up. Five months after Zalutsky was rebuffed, Heintzman hired a new lawyer, John Magliana, who Heintzman says drew up documents for a different rabbi trust that the union president today claims is safely in place. At an Oct. 23 interview at a Northeast Portland Denny's, Heintzman said of the documents, "These are all legal," adding that Tri-Met "cooperated" in setting up the tax shelter. Heintzman says he has not paid a penny of taxes on the $166,000, nor on the life-insurance annuity he purchased with it. The rabbi trust documents were somehow obtained during the campaign by bus driver Dan Martin, a Feist supporter, and given to WW. "Someone left them in my mailbox," Martin claims. Heintzman confirms their authenticity. One of the trust documents, labeled "Tri-Met Unfunded Deferred Compensation Trust," appears to be an agreement with Tri-Met for purposes of setting up the rabbi trust. The language in the eight-page document assigns tasks for Tri-Met to establish this trust. The most curious aspect of the trust document appears on the last page. At the bottom is printed, in capital letters, the word "TRI-MET." Underneath this is a line for a signature, bearing what appears to be that of Tom Walsh. Below the signature are the hand-written words "Tri-Met G.M." Last month, WW showed the document to Tom Walsh, who was general manager of Tri-Met in 1997, when the document was signed. "That's not my name and that's not my signature," said Walsh. When Heintzman was told by WW that the signature was not Walsh's and given a copy of Walsh's real signature, Heintzman paused and then conceded that the signature on the trust document was that of Tom Wallace, the Heintzman ally who is the financial secretary of Local 757. In an interview on Oct. 26 in the ATU offices, Tom Wallace said he did in fact sign the document underneath the words Tri-Met. He said that he was newly elected to his union position when Heintzman brought him the document to sign, and was "inundated" with new responsibilities. "There was no attempt to defraud, no attempt to impersonate Tom Walsh," said Wallace. Both Wallace and Heintzman say they didn't write the words "Tri-Met G.M." underneath but that it was Les Morton, Heintzman's insurance agent. Contacted at Standard Insurance, Morton declined to talk to WW. "I can't talk to anybody unless I'm represented by an attorney," said Morton. "My involvement in this thing is minimal--all I am is an insurance agent, OK?" Over at Tri-Met headquarters, general counsel Playfair is baffled. Playfair never saw the trust documents until WW gave him a copy last month, yet the trust documents represent an agreement between Heintzman and Tri-Met. "This is bizarre," Playfair said. "This document says that Tri-Met would establish the trust. That simply is not true.... These documents describe a plan and a trust [that] don't exist and never have existed." Asked whether such a tax shelter could be set up legally without Tri-Met's agreement, Heintzman's previous attorney, Mort Zalutsky, refused to comment, citing attorney-client privilege. His replacement, John Magliana, declined to answer any questions. According to two tax lawyers interviewed by WW, it would have been improper for the ATU to set up a rabbi trust for Heintzman, because the union was not the source of the funds. "I'm not a lawyer," said Tom Walsh. "I would guess that both the lawyer and the signers of these documents are going to be wondering what the next level of conversation is going to be with the Internal Revenue Service." Anthony Burke, Washington, D.C., spokesman for the IRS, refused to comment on any specific case, noting that the law forbids it. But when asked factual questions about the Internal Revenue Code, he said that applications for special IRS approval of tax shelters must be signed by the taxpayer under penalty of perjury. Under the Internal Revenue Code, perjury is punishable by fines of up to $100,000, three years in jail, or both. For his part, Heintzman says, "If anyone thinks there's anything wrong or inappropriate, I think they just ought to file with the IRS. Because there's nothing that we did, that we intentionally did wrong that we know of. But of course the IRS would be the one to make that ruling." Feist supporter Dan Martin, who has already sent the documents to the International headquarters with a complaint alleging that Heintzman made "fraudulent representation" to the IRS, says he plans to forward them to the federal agency as well. Meanwhile, the battle continues. Late last month, in the election that was called after the appeal of the June election results, Heintzman won by 400 votes. But this hardly signifies the end of the internal strife. Feist supporters are gathering signatures asking the International to take over Local 757. Says Feist, "I would say that some of the deals Mr. Heintzman has been involved in have been very questionable and should be investigated by the International in a full audit." Meanwhile Frye, the former third-place candidate, has formed a committee to explore whether Tri-Met's employees can pull out of Local 757 altogether. "I want a union where there's a democracy, where more people are involved, and where meetings are not so vile," he said. Throughout the campaigns, Rufus Fuller, the union's vice-president, has tried to stay neutral. His concern is that the continuing allegations and warfare will destroy the credibility of the union with its members and their employers, such as Tri-Met. "When you talk to the members, they ask: 'Rufus, what is all the fighting about?' And I laugh and say, 'I don't know.'" But Fuller says he believes that "it's an ego trip on both sides.... It's all 'me, me, me' and 'I, I, I.' And in the days that I came up, it was 'we,' it was 'us.' I think that's missing." |
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