Examination of Financial Activities and Labor's Oversight of Selected Union-Affiliated Organizations in Hawaii

Pursuant to a congressional request, GAO commented on the activities of the Hotel Employees and Restaurant Employees International union (HERE) and the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America union (IBT) in Honolulu, Hawaii. GAO made financial analyses of Unity House, Inc., Unity Council, and the Waikiki Marina Hotel, Inc., to determine their relationship with the unions and with the owner of the hotel. GAO also reviewed the Department of Labor's oversight of Unity House and Unity Council. GAO was not able to make a complete financial analysis, because many of the records subpoenaed by the subcommittee were not provided. GAO found that these organizations, as well as the hotel owner and his family, had close and complex interrelationships and that Unity House has been used as a conduit for moving funds between union locals and several affiliated entities. At two of the organizations, GAO found that deficient financial management contributed to two apparent embezzlements, one uncovered by GAO, totaling about $282,000. GAO also reported that, as far back as 1961, officials of the Labor-Management Services Administration (LMSA) and its predecessor agency questioned both the operation of Unity House and Unity Council by the owner of the hotel and their relationship to HERE Local 5 and IBT Local 996. LMSA officials believed that Unity House and Unity Council were subject to the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) and suggested that Labor audit the organizations. However, to date, Unity House and Unity Council have not been audited. GAO believes that the problem has been a lack of decision on the part of Labor's Office of the Solicitor to make a determination as to whether Unity House and Unity Council are labor organizations under LMRDA, and thus subject to the act's requirements. GAO noted that Labor plans to initiate such an investigation in 1982.