BY ROBERT P. MADER of CONTRACTOR’s staff
WASHINGTON — Martin Maddaloni has resigned as president of the United Association of Plumbers and Pipefitters along with UA secretary-treasurer Thomas Patchell. The resignations were effective Nov. 30, 2004.
The U.S. Department of Labor had forced the two to resign as trustees of the Plumbers and Pipefitters National Pension Fund last summer for imprudent management of the fund’s investment in the Diplomat Resort in Hollywood, Fla. (August 2004, pg. 5). The federal government had sued Maddaloni, Patchell and other trustees in 2002 in connection with the spending of $800 million of pension plan funds to build the Diplomat.
The UA board appointed William P. Hite as interim general president of the association. Hite is a member of Local Union 597 Pipe Fitters Association, Chicago.
Hite’s appointment was confirmed Dec. 5, 2004, at a special meeting of the UA’s Executive Board. He was elected to serve through the remainder of the current term, which ends Dec. 31, 2006. Patrick Perno was named as the new secretary-treasurer.
Former UA President Marvin J. Boede and former Secretary-Treasurer Randall Gardner, in an Oct. 8, 2004, letter, told the executive board that Maddaloni and Patchell should resign because of financial mismanagement.
Maddaloni and Patchell will be paid their salaries through the end of their contracts in 2006 and keep their UA automobiles, noted a Website run by union dissident Tommy Preuett (http://preuett.org/index.html). Preuett, a former sprinkler fitter, is running for UA general president for the term starting in 2006.
“Their current salaries are over $250,000 dollars each,” Preuett said in the Website article. “They will also be presented with the UA automobiles they currently drive. This deal will cost about $1 million of the membership’s dues money. There are no sanctions or penalties against them and they will receive their complete retirement benefits from the Officers Pension Fund.”
Kenneth F. Boehm, chairman of the National Legal and Policy Center, Falls Church, Va., ripped into Maddaloni during 2002 testimony before the Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises of the Committee on Financial Services of the U.S. House of Representatives.
Maddaloni, among other union bosses, had enriched himself, Boehm charged, through Ullico, an insurance company owned by unions and their pension plans.
“One of the more interesting Ullico directors is Marty Maddaloni, a director since 1998 and president of the United Association of Plumbers and Pipefitters union,” Boehm testified. “Maddaloni also heads one of his union’s pension funds which has been involved in one of the biggest real estate boondoggles in pension fund history. After purchasing the rundown Diplomat Hotel in Hollywood, Fla., for $40 million, renovation costs ballooned to $400 million, then $600 million and finally, when the hotel opened two years late, the final cost was in excess of $800 million. An independent appraiser valued the property as being worth $587 million, more than $200 million less than the pension fund paid for the project.”
Boehm also charged that Maddaloni had reaped a profit of $184,000 selling Ullico shares back to the company, a process that the Wall Street Journal called “insider trading.”
“A platoon of union chiefs responsible for serving their members used Ullico as a means of enriching themselves,” the Wall Street Journal reported in its April 5, 2002, edition.
A section of the UA Website about the pension plan states that bargaining units are expected to increase contributions to the pension plan by 25% by no later than Jan. 1, 2006. Another section that showed sample benefits for a hypothetical member states that benefits would fall from $1,060.53 per month under the previous computation to $942.66 now.
A link on UA’s home page entitled, “Martin J. Maddaloni and Thomas H. Patchell resignations explained,” is password protected and not accessible. Secretary-treasurer Perno did not return a phone call from CONTRACTOR for comment.
Hite is a third-generation pipe fitter and UA member. His grandfather who joined the union in 1901, preceded him in the trade, as did his father, who in 1937 became a member of the first apprentice class since the Great Depression. Hite became an apprentice in Chicago Local 597 on Jan. 1, 1968, and journeyman in 1972. After 14 years working at his craft, Hite was elected to the Chicago Federation of Labor. He served that position until he became business agent for Local 597 in 1986.
In 1993 Hite was named assistant business manager of Local 597. During this period he served in various capacities for 597 such as financial secretary, delegate of the UA Convention, and delegate for Cook, Will County and Dupage County Building Trades.
Hite was elected international representative for the state of Illinois in August 1996. Shortly afterwards he was appointed as administrative assistant to the general president in Washington. Two years later he was named the assistant general president of the UA.