Feds Raid IAU As Strike Drags On

by John Marino

October 22, 2004
Copyright © 2004 THE PUERTO RICO HERALD. All Rights Reserved.

. The federal raid on Independent Authentic Union headquarters Wednesday threw a major monkey wrench into government efforts to end the three-week strike by public water utility workers.

An army of Internal Revenue Service and the Federal Bureau of Investigations agents seized documents related to the union's health plan, which has been the catalyst for the current strike. Citing a preliminary report by the Commonwealth Insurance Commissioner's Office finding that millions were misspent in IAU administration of the plan, Aqueduct and Sewer Authority chief Jorge Rodríguez stopped funding it, contracting a private insurer to offer similar coverage to union members. That came on top of a year of failed negotiations for a new collective bargaining agreement that expired in 2003.

There's probably little doubt that acting on a legitimate search warrant, the federal agents had good reason to come hunting for the documents. After all, commonwealth authorities were already investigating union leaders for tax evasion, and local news reports indicated that IAU chief Héctor René Lugo allegedly paid $400,000 cash this month to clear up a past tax debt.

But even Rodríguez, who referred the allegations of mismanagement to federal authorities, called the timing of the raid "lamentable." It's unclear when negotiations can resume, as Lugo said the fallout from the raid would have to be cleared up before talks could move forward. And for Puerto Rico, the best thing that could happen would be for the work stoppage to end before Election Day.

The Feds' bad timing (why not have acted before the strike or wait until an agreement is reached that was expected this week) will only magnify suspicions about the motivations of the federal authorities in Puerto Rico.

Even the pro-statehood New Progressive Party has accused the local U.S. Attorney's Office of persecuting its members on political grounds. And Popular Democratic Party supporters only need remember back to the final days of the 2000 electoral campaign, when federal agents, acting on an order from a local federal judge, froze party funds to resolve a payment dispute. The Puerto Rican Independence Party can point to federal complicity over decades on the compiling of dossiers on independence supporters in raising questions of its over the motivations of federal agencies.

The raid also comes on the heels of a federal prosecution of two top officials of a police union who embezzled over $2 million from its membership. While Puerto Ricans, as a whole, want the feds to fight crime wherever they find it, even if it's inside a political party or union, people are starting to suspect that the island's labor movement may be the target of federal prosecutors.

The upshot -- the most damaging aspect of the raid -- is that it will likely put off a resolution to the current conflict. It immediately weakens the government's hand.

Make no mistake: The government, regardless of the party in power, needs to confront the union over the current labor-management relationship which has made it seemingly impossible to bring about too much improvement at the utility, regardless of who is in control. After all, two of the world's largest water companies tried their hand at running ASA but could only do so much. The union, they both said, was in charge at the public corporation and made managing impossible.

If the utility were a private concern, no way the union would be demanding what it is in terms of pay hikes and other benefits, which ASA officials claim will cost an extra $350 million over the life of the four-year contract.

It would know the company would go bankrupt. But that does not matter when the concern is a public utility, which loses over $100 million a year.

Not only does the government need to scale back on the ASA workforce, straightjacket job classifications and out- of-control benefits, it also must raise water rates, among the cheapest in the nation, to pay for needed improvements at the utility.

The timing of the federal raid, however, will only serve to undercut these sound arguments. The ASA administration will likely be undercut by suspicions of complicity in the federal action. Already, union leaders are blaming Rodríguez for the raid.

None of what needs to be done to turn around the troubled water utility is likely to happen during an election season. That is why the best thing would be for ASA negotiators to put off issues such as pay hikes until after the elections, and do what it takes in the meantime to end that strike.

After the raid, that difficult proposition may have just become impossible. But political leaders need to resolve this crisis. They are the ones, from both the PDP and NPP, who over the years have showered the union with goodies in their ceaseless hunt for votes.

John Marino, Managing Editor of The San Juan Star, writes the weekly Puerto Rico Report column for the Puerto Rico Herald. He can be reached directly at: Marino@coqui.net

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