Did Local 11 Skirt the Rules on PPP Funding?
In March 2020, Congress passed the Paycheck Protection Program (PPP), unleashing billions in emergency loans for COVID-affected businesses – loans meant to help them keep their workers employed. When PPP loans were originally introduced, labor unions were not allowed to apply. But, there was a loophole that allowed a union’s 501(c)(3) linked organization to apply for relief. (We have previously reported that several Local 11-linked nonprofits–included LAANE and CLUE–received nearly $900k in PPP support.)
According to a new investigation, Local 11 used a creative workaround to skirt federal prohibitions on union PPP receipt, laying off key organizers and then rehiring them at the union’s PPP-supported nonprofits–even as they continued to do organzing work for the union. In other instances, the union appears to have used the nonprofits to subsidize the salaries of its organizers.
Consider the case of Local 11’s Hospitality Training Academy (HTA). Its self-described purpose is to place “students in jobs in union hotels.” Once they’re employed at the hotel, the student must then pay an initiation fee and monthly dues to Local 11. The HTA applied for and received nearly $260,000 in federal loans in May 2020, during the first round of PPP loans.
Around the time that the HTA received hundreds of thousands in federal loans, many Local 11 employees had a sudden career change. Consider the case of Sean Glynn. Glynn spent years working as a union representative for Local 11, and since 2008, Local 11 has paid Glynn a steady, annual salary totaling more than $570,000. However, in 2020, Local 11’s LM-2 report states Glynn was only paid around 40 percent of his regular salary – likely because he was caught up in Local 11’s WARN Act layoffs. Glynn himself claims he parted ways with Local 11 in March 2020, only to join HTA as a project manager the next month. Sometime around June 2020, Glynn and many other former Local 11 staff were suddenly added to HTA’s website as employees.
A similar story emerged with Vicky Beza, a former probationary organizer for Local 11, who in 2020, was paid 37 percent of her normal union salary. In June 2020, around the time Beza was added to the HTA’s website as an employee, she wrote to Los Angeles County’s Board of Supervisors as “a proud member of Unite Here Local 11” and argued hotels should not be allowed to reopen. In February 2021, the HTA publicly thanked Beza for helping Local 11 members during the COVID-19 pandemic.
Then there’s Eva Gil, a Local 11 employee who was only paid 62 percent of her normal salary in 2020, and who was also added to the HTA’s website in June 2020. The next month, in July 2020, Gil was identified in a pro-labor publication as an HTA employee. Ms. Gil worked alongside Aaron Greenberg, a Local 11 researcher who was also added to HTA’s website around June 2020, but whose LinkedIn omits any mention of the career change.
Another Local 11 employee who chose a good time to join the HTA was Danielle Jones, a probationary organizer for Local 11 who received only 39 percent of her regular salary in 2020. In June 2020, around the time Jones was added to the HTA’s website as a “case manager,” she became a new Executive Board member for Local 11.
Most insightful of all is the example of Juan Munoz. In April 2020, Juan Munoz, a Local 11 “lead canvasser,” joined the HTA for a brief stint of only three months as a “case manager.” In May 2020, the HTA itself thanked Munoz for his work “on the HTA/Local 11 Team.” Even the nonprofit itself does not recognize the distinction between the two organizations.
The HTA experience is not an isolated one. Another Local 11-backed organization that successfully applied for PPP funds was Central Arizonans For A Sustainable Economy (CASE), an Arizona nonprofit that is allied with Local 11 and that received more than $150,000 from the union in 2019 alone. In May 2020, CASE received a PPP loan for nearly $52,000 as part of the first round of loans. The next month, in June 2020, Magdalena Acosta listed herself as a relief coordinator for CASE. Acosta is also a probationary organizer for Local 11 who received less than 70 percent of her regular salary in 2020.
This is not the first time we have profiled the creative use of PPP funds by Local 11 – back in September, we featured Jonah Breslau, a union organizer who was similarly offloaded onto LAANE, another Local 11 appendage. We could write this off as just another “creative” union tactic, were it not for Local 11’s aggressive criticism of hotels for taking PPP funds themselves. In fact, our hats are off to the union for taking its hypocrisy to a whole new level.