EXCLUSIVE: Union head returns some of $1.2M pay

EXCLUSIVE:

The president of a maritime workers union - a labor organization dogged for years by declining membership and a federal racketeering lawsuit - reported receiving $1.2 million in compensation last year but abruptly gave back much of the money in April after his big payout was disclosed to the government, according to federal documents and interviews.

Even after giving back more than half his compensation, Richard J. Hughes Jr. of the International Longshoreman’s Association still earned $494,635 in salary and expenses in 2008, putting him among the top two dozen highest-salaried labor executives outside of professional sports, according to public records.

The longshoreman’s union filed a report with the government in March showing that Mr. Hughes was paid $739,729 in 2008 from the union’s “retirement equalization” plan, on top of his nearly half-million dollars in salary and expenses, according to interviews and records. But on tax day, April 15, Mr. Hughes returned the money to the union, officials said.

The union also filed an amended report with the Labor Department last week to show the return of the money within hours of being questioned by The Washington Times about Mr. Hughes’ $1.2 million compensation.

“When he saw the payment and matched it against the finances of the union, he turned it back in,” union spokesman Jim McNamara said of Mr. Hughes’ decision. “He was entitled to it, but he made a decision to turn it back in.”

Several labor analysts expressed concern about the union’s pay practices and the changes it made in its financial reports.

“I’d be concerned if I were a member, because the president is making a straight salary of almost a half-million dollars,” said Gary N. Chaison, professor of industrial relations at Clark University in Massachusetts. “That compensation seems very high.

“It always raises a red flag when someone returns part of their compensation.”

The union said that nothing improper occurred, but that Mr. Hughes had second thoughts about his seven-figure compensation package after reviewing a union financial report.

“It wasn’t really a mistake, because he was entitled to it, but he made a decision to turn it back in,” Mr. McNamara said. “If there was a mistake, the accounting figures were not clarified.”

Once Mr. Hughes returned the money, the union said, accountants filed amended payroll tax returns to recover the $330,071 in payroll taxes paid in connection with the equalization plan payout.

“It sounds awfully convoluted, to say the least,” said Marick Masters, a labor scholar at Wayne State University in Detroit. He said he did not understand why the $1.2 million figure was reported in the first place, since both Mr. Hughes and the union’s treasurer signed the federal disclosure document.

“Certainly that kind of salary should have raised many eyebrows before the report was filed,” Mr. Masters said. “You’d think you would pay attention to something as glaring as that.”

Still, University of Illinois labor analyst Robert Bruno said that, in general, the filing of an amended financial report by unions isn’t always cause for concern.

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