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|Articles - September 2011|
|Wednesday, August 24, 2011|
Page 2 of 5
Union officials say the exploitation of undocumented Latino labor to cut building costs has become increasingly commonplace amid the desperation. The union that has taken the most aggressive stance on the issue locally has been the carpenters union, using tactics that are not popular with some other unions. The carpenters union was founded in 1881 and has about 520,000 members nationally with 4,600 in Oregon and 19,600 in the Northwest.
Sanchez and his union colleagues have labor disputes with a half dozen local contractors for allegedly shepherding undocumented workers to job sites, cheating workers out of their pay, refusing to pay overtime, threatening those who complain, and running various schemes to evade taxes, win bids through payroll fraud and collect undue unemployment checks. One Oregon contractor they recently targeted, Stephen Nagy, pleaded guilty on July 29 to antitrust and racketeering charges for rigging the bid process for a $24 million Pearl District construction process, fraudulently altering pay stubs and ripping off the state for more than $100,000 in unemployment funds. One of Nagy’s companies, ASM Drywall, was forced by the Bureau of Labor and Industries in June to pay $36,519 in back wages to 40 workers with Hispanic surnames, plus $89,280 in penalty wages and $36,720 for civil penalties. Nagy has been banned from the construction industry in Oregon for 20 years.
Both the criminal prosecution and the back wages judgment against Nagy resulted from underground investigations by local members of the carpenters union. According to a key affidavit filed in the Nagy case, an undercover union member serving as a confidential informant collaborated with an investigator from the Department of Justice to document the wrongdoing. The informant even set up a company with Nagy to bilk the government for $45 an hour in labor while paying workers $15 per hour in cash.
The Nagy investigation followed the 2008 conviction of a Marion County labor broker named Maurilio Vega for racketeering and ducking $8 million in taxes. Vega received $25 million in checks from drywall contractors and paid crews of mostly undocumented Latino workers in cash, to launder money and enable contractors to evade taxes and save on workers’ compensation and labor costs.
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