Long before Shaun Francois I became the first leader of School Employees Local 372 of District Council 37 to have a roman numeral as part of his name, the local had a pair of presidents who fancied themselves monarchs.
Charlie Hughes ruled for 30 years as a benevolent if emotionally troubled rogue before his removal in 1998 by the American Federation of State, County and Municipal Employees for plunging Local 372 $10 million into debt. It was a prelude to his indictment and conviction for embezzling $3 million—$2 million of it from his members' dues, the rest from DC 37—and a three-year state prison sentence.
Lee Saunders, then a top aide to AFSCME president Gerry McEntee, came in and cleaned up the union's finances and imposed new spending controls, symbolized by the setting of the president's salary at $99,000, a whisper of the $241,000 Mr. Hughes had paid himself while also bamboozling DC 37's leadership into overtime and unused-vacation payments to which he was not entitled.
Mr. Hughes's successor, Veronica Montgomery Costa, waited just four months after she won election in mid-1999 to persuade board members to bump her salary $36,000, claiming that she, rather than Mr. Saunders, had gotten the union's fiscal house in order. When a column here stated she had played Mr. Saunders for a sap, he persuaded her to refuse the pay hike. After the DC 37 administratorship ended in 2002, she got even, persuading her board to bump her pay by $76,000. By 2008, the local's financial filings listed her salary at $239,346; questioned a couple of years later about how much it had risen since, she responded by laughing.
It was a rare moment of public mirth for her: where Mr. Hughes had been gregarious and hard to dislike, she trafficked in nastiness while lamenting that she was misunderstood. But her idea of participatory democracy was to confine elections to in-person voting at the local's headquarters in DC 37's lower Manhattan building—a lengthy after-school commute for members who worked far from there, keeping turnout around 2 percent of the union's membership.
Francois Takes Over
After she retired abruptly in 2011, citing health reasons (she had previously suffered a stroke, but union sources said an AFSCME check of several locals' books may have induced a panic attack), she was succeeded by a top aide, Santos Crespo, who expanded voting to 11 sites throughout the city. He was unseated in 2014 by Mr. Francois, who had Ms. Montgomery Costa's endorsement.
His election attorney, Arthur Schwartz, had been a key player in the drive to reform DC 37 in the late 1990s that gathered particular momentum after Mr. Hughes became the first of more than two dozen DC 37 officials to be charged and convicted of wrongdoing, ranging from thievery to the rigging of a 1995-96 wage-contract vote. When Mr. Francois took office, he became Local 372's counsel.
Mr. Schwartz said during a Sept. 30 phone interview that he first felt a shiver of the bad old days when Mr. Francois in 2015 had the local's conference room at 125 Barclay St. named in memory of Mr. Hughes. Shortly after he was elected, Mr. Francois had said in an interview that the late Local 372 leader had been a neighbor of his in Queens who had served as a kind of mentor from the time he was 7 years old. But as warm and charismatic as Mr. Hughes could be, honoring him after the shame he brought upon himself and the local struck Mr. Schwartz as a potentially ominous sign.
In 2017, Anthony Gordon, who had unsuccessfully pressed Mr. Francois to release union financial statements, brought charges of unauthorized expenditures against him while challenging his re-election. The case went to the AFSCME Judicial Panel, and Mr. Francois opted to retain Roger Archibald to represent him in the case for $60,000 rather than use Mr. Schwartz, whose $100,000 annual retainer would have required him to handle it at no additional charge.
When Mr. Schwartz questioned the move, he said Mr. Francois told him he had been advised that unless he chose another lawyer, he would lose the case. Mr. Schwartz concluded this had to do with the bad blood he created with AFSCME's leadership as lawyer for the reform wing of DC 37, when he brought a Federal lawsuit accusing it of being a Racketeering Influenced Corrupt Organization and one of his clients, then-Civil Service Technical Guild President Roy Commer, accused Mr. McEntee of not getting the best value from its health-benefits provider because his daughter was employed by the firm. Under Mr. McEntee's stewardship for 30 years, the Judicial Panel became known for favoring his allies and ruling against his opponents, in one case protecting Ms. Montgomery Costa from an election challenge by misquoting the AFSCME constitution to justify its decision.
A History With Saunders
Mr. McEntee retired in 2012, but his successor, Mr. Saunders, also had past brushes with Mr. Schwartz that extended beyond the attorney's criticism of his failure to move on the reform wing's call for direct election of DC 37 officers while Mr. Saunders was the administrator of the union for a 40-month period beginning in late 1998.
When Mr. Saunders ran for AFSCME secretary-treasurer in 2010 and then for president in 2012, Mr. Schwartz was the campaign attorney for his opponent in both races, Danny Donohue, the longtime leader of the Civil Service Employees Association.
With Mr. Archibald representing him, Mr. Francois had the charges against him dismissed by the AFSCME Judicial Panel, and he subsequently defeated Mr. Gordon to gain a second term. Mr. Schwartz lost his job as union counsel to Mr. Archibald, who he said was given a $200,000 retainer.
Mr. Gordon continued to raise issues about spending at Local 372, and he was joined by Paul Brathwaite, who became the dissidents' candidate for president in the election that has been the subject of a court battle for more than a month. The two of them late last month told this newspaper's Crystal Lewis that after a nominations process that normally would have been held in May was delayed by the coronavirus's impact on union operations, on Aug. 15 a notice was mailed to members that nominations would close Aug. 25, with ballots to be mailed out Sept. 3.
Mr. Schwartz sued on behalf of Mr. Brathwaite and Mr. Gordon and got State Supreme Court Justice Louis Nock to issue a temporary restraining order against the process going forward prior to an Oct. 1 hearing in Manhattan. He also filed a separate lawsuit on behalf of the dissidents seeking disclosure of Local 372's finances.
He said of Mr. Francois, "He's got a lot of dissent in his union, and that's why he wanted to have this snap election and why he's paying his lawyer $100,000 to keep these records from being turned over."
Mr. Francois, who several weeks ago told Ms. Lewis that Mr. Schwartz was "bitter" and that the lawsuit was "all about delaying the election and disrupting the process," did not return an Oct. 1 call seeking a response to Mr. Schwartz's comments and to financial details about his salary and the union's declining assets that were available through 2018.
Minutes from a 2015 Local 372 meeting show that the local agreed the previous August to pay Mr. Francois $175,000 in salary plus a "president's stipend" of $21,600. Future raises, according to the minutes, were to be based on pay raises won for union members by DC 37.
The local's 2018 filing with the Federal Government indicated Mr. Francois had received $221,579 in salary, without distinguishing what portion of that compensation was the "president's stipend." A year earlier, he had listed $229,427 in salary—also with no breakout as to what portion was the stipend.
Campaign literature put out by Mr. Francois said his opponents claimed he was making "over $400,000. BIG LIE...He makes $175,000, which [is] less than any union president makes with a membership of 20,000+ and it is certainly less than any Local 372 President who held the same position before him. It's public information." (Mr. Schwartz said his clients had never claimed Mr. Francois was paid more than $400,000.)
But besides being contradicted by the union's own financial filings for 2017 and 2018, that contention doesn't account for the added $52,000 that Mr. Francois makes from his salary as president of DC 37 since January 2019. That total compensation of nearly $273,579 based on the most-recent union filings places him behind only DC 37 Executive Director Henry Garrido, who in 2018 was listed as receiving $352,683 in salary while overseeing 125,000 members, and DC 37 Treasurer Maf Misbah Uddin, who in 2018 was paid $279,948.
Local 372's members have long been among the city's lowest-paid, and Mr. Schwartz said they haven't been helped by a shortage in the retiree health-benefits fund that three years ago required Mr. Francois to relinquish 1.5 percent of a wage increase to secure city money to prop up its finances.
And while the local's assets exceed its liabilities at a time when DC 37 is deeply in the red, the balance sheet is down several million dollars in recent years. At the start of 2016, according to its financial filing, it had more than $15,617,000 in assets and $1,802,000 in liabilities, a positive balance of $13,815,000. By the end of 2018, the local's assets had dropped to $11,995,819, with assets exceeding liabilities by just $10,069,757—a reduction of more than $3.7 million in that balance.
Despite that decline in available cash, last December Mr. Francois closed a deal on a condominium at 20 West 33rd St. in Manhattan that is supposed to serve as a future headquarters for Local 372, which is currently occupying office space at 85 Broad St. while DC 37's 125 Barclay St. headquarters undergoes an extensive renovation.
The purchase price was $9,289,821, with $5 million of that coming from a mortgage from Flushing Bank. But the cash outlay consumed close to half of what Local 372 had available, Mr. Schwartz said, at a time when its assets had been dropping by more than $1 million a year.
Mr. Francois told Ms. Lewis last month that it was a good long-term investment that would have the local "paying less in mortgage than rent that has no value. That is going to be my legacy."
That description provoked incredulous laughter from one veteran of the past turmoil at DC 37 who questioned the wisdom of staking a legacy on an expensive real-estate purchase for offices that have not yet been built. There is a parallel in the parent union's past that would argue against such boasts: the purchase 25 years ago by then-Hospital Workers Local 420 President James Butler—who like Mr. Hughes held office for 30 years—of a Harlem building on West 124th St. that formerly housed a meat-packing plant to serve as offices for his local after years of being tenants of DC 37.
Offices Never Materialized
The building was never renovated because of construction issues and the local's financial problems, leading Mr. Butler to move the union into office space elsewhere in the neighborhood. Soon after he was unseated in 2002 by Carmen Charles, she shifted the local's operations back to 125 Barclay St. The old meat-packing plant, still undeveloped, was sold in 2005, the same year that Mr. Butler died.
Until his final years in office, he commanded fierce loyalty from union members for his willingness to fight for them, particularly in heading off then-Mayor Rudy Giuliani's efforts to privatize several city hospitals. When Mr. Giuliani forced DC 37 to accept the contract—later tainted by the vote-rigging operation—that began with a two-year wage freeze, he excluded Local 420 members from a no-layoff guarantee he extended to all other DC 37 members. Mr. Butler balked at a last-minute deal in 1998 under which a couple of thousand Local 420 members would have lost their jobs but been placed in positions in other city agencies.
Mr. Schwartz said Mr. Francois, while sharing Mr. Butler's intolerance for dissent in the ranks, hadn't been able to muster the same kind of visceral support from his rank and file, but had used intimidation to maintain control of Local 372.
"Shaun will denounce you, verbally beat you up, put you down," he said. "And he'll do it with an incredible smile."
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