16 minute read
TRANSITION COMMITTEE
Canceled by coronavirus
New York City Mayor Eric Adams didn’t have an inauguration and had to refund $800,000 to his big-time donors.
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By Jeff Coltin
NEW YORK CITY Mayor Eric Adams’ transition committee returned more than $800,000 to donors after he canceled plans for a formal inauguration ceremony earlier this year due to the continued spread of COVID-19.
Adams raised more than $1.9 million in two months for his transition and spent roughly $1.2 million of that in the months following his November election. Financial disclosure data posted on the New York City Campaign Finance Board’s website showed the mayor’s team returned the remaining money to donors – $800,236 of it – to 246 people.
Some prominent New Yorkers will be getting their money back, including former American Express Chair and CEO Kenneth Chenault and his wife Kathryn, who each gave the limit of $5,100. Ditto for Daniel and Margaret Loeb – though it’s not much compared to the $1 million the prominent hedge fund manager gave during the primary to a super PAC that supported Adams. Loeb is now courting the mayor to show more support for charter schools, CNBC reported. Others getting their $5,100 back included 2017 mayoral candidate and Rao’s dining buddy Bo Dietl, political consultant Stu Loeser and Edward Mermelstein, a real estate attorney Adams appointed to serve as commissioner of the Mayor’s Office of International Affairs. But it wasn’t clear how the transition committee determined whose money got spent and whose money got returned. For example, Mets owner Steve Cohen and his wife Alex Cohen each donated $5,100 to the transition committee on the same day, Nov. 23. But the transition committee only reported processing a refund for Steve Cohen. Hedge fund manager Paul Tudor Jones also wasn’t so lucky – his $5,100 donation got spent, rather than returned. (Though he, too, had already given $600,000 to a pro-Adams super PAC.) A spokesperson with the mayor’s office could not explain how those refund determinations were made.
Vito Pitta, co-managing partner of Pitta LLP, which does campaign fundraising compliance work for Adams, told City & State in an emailed statement that the committee raised more funds than were needed for the costs of the transition. “All unspent funds were returned to donors appropriately and in accordance with CFB rule §13-03(c)(ii),” Pitta wrote. However, that rule merely states that unspent funds should be returned to donors and does not provide any further guidance.
That means that, unlike with other campaign committees, Adams could not legally transfer money raised for the transition committee to another account. He had to use it or lose it.
Adams had his 100-day speech at the Kings Theatre, left, but no inauguration meant Mets owner Steve Cohen, above, had his check refunded.
While a lot of money is being returned, even more was already spent. The biggest recipient of transition committee funds was iDEKO Productions, an event production company that got nearly $389,000. A City Hall spokesperson told City & State that was to put on the executive budget address at the Kings Theatre in Brooklyn on April 26. The event also served as a pseudo-inauguration, with much of the city’s political community gathered to see the mayor on stage. Adams, along with New York City Comptroller Brad Lander and Public Advocate Jumaane Williams, initially planned to have an inauguration event at the Kings Theatre but postponed it indefinitely amid rising COVID-19 case counts at the end of 2021. In January, the city Campaign Finance Board gave Adams until April 30 to hold an inauguration, or find another way to spend down his transition and inauguration committee’s money.
Much of the committee’s spending went to staff salaries for those who were helping Adams screen and hire people for his administration before taking office on Jan. 1. The executive director of the transition, Katie Moore, was paid a total of $28,000. Red Horse Strategies, the political consulting firm where Moore now works as a partner, was paid a little over $20,000. Abrams Fensterman, the influential law firm where Adams’ chief of staff Frank Carone previously worked, was paid a total of $6,678. Of that, two payments of $561.09 and $317.16 respectively were labeled as “office space.” Politico previously reported that Adams’ campaign rented space at Abrams Fensterman’s office at MetroTech in Downtown Brooklyn. However, the politically connected firm apparently did not bill the campaign for the use of the space until Politico began reporting, and when it did, charged an extremely low rate – as little as $1.80 per hour. A receptionist at Abrams Fensterman told City & State that the office manager was not available for comment on the arrangement with the transition committee. Other expenses raised some questions. The committee reported a $50,000 expenditure to Kitamba Management for a “program” on Jan. 31, 2022. Kitamba is a public education consulting firm, and it isn’t clear what service they would provide to the Adams transition. Kitamba did not respond to a request for comment.
Officially known as a Transition and Inauguration Entity, the transition committee’s final financial disclosure filing was due on May 6 and was posted online on the morning of May 9. It is expected to be spent down and closed out soon. Adams has already opened a fundraising committee for his 2025 reelection campaign and is thought to have been raising money on recent trips to Chicago and Los Angeles. Onetime campaign spokesperson Evan Thies declined to comment on the mayor’s fundraising activities, but more information should be available in July, when the first disclosure statement is due. ■ – with reporting by Annie McDonough
RAISING A RED FLAG
By Amir Khafagy
This story is published in partnership with New York Focus.
Black and Latino nonunion flaggers on public construction projects report being paid just a third of wages they’re legally entitled to.
VICTOR BALLAST WAS looking for a job. It was January 2018, he had four children and a wife to support, and he’d had trouble finding work since moving back to the Bronx from Florida. A friend suggested he look into becoming a flagger, a worker who helps keep construction highway projects safe by directing traffic around work sites. Another friend said he was making $42 an hour as a flagger and was in a union. Ballast enrolled in a flagger certification course and jumped into the industry with both feet.
Ballast started working on Con Edison construction sites for the Manhattan-based Griffin Industries LLC. At just $13.50 an hour, the pay was far lower than he’d expected, and he received no benefits. But he had ambitions to grow with the company. He completed two courses for construction workers adding up to 46 hours of training and set his sights on joining a union. “My thing was to make it to the union. My thing was not to sit at $13 or $15 an hour,” he said.
But Ballast’s enthusiasm for the job soon faded as he came to realize that higher pay was nearly impossible to secure, and he says he – like thousands of nonunion construction workers around the state, including many flaggers – was a victim of wage theft. Although he didn’t know it at the time, state labor regulations require flaggers working on government projects in New York City to be paid at least three times what he was making.
Until June 2018, Ballast said, he would often work 12 hours a day, six days a week, often without any breaks or overtime, standing in traffic to direct pedestrians and cars away from active construction sites. “You know how New York is, so imagine in the winter cold, you got to tell someone that they have to wait to go down a block, cursing you out, taking trash from people. Rain, sleet, or snow, you’re the only one who got to stand there,” he said.
ROBERT NICKELSBERG/GETTY IMAGES Since flaggers work at the edges of construction sites near traffic, it is one of the most dangerous jobs in the country, with death rates 10 times higher than the national average.
UNION AND NONUNION: A TWO-TIER SYSTEM
Flagging is one of the most dangerous jobs in the country, with an on-the-job death rate more than 10 times higher than the national average. “You in charge of everybody’s safety, so the responsibility and the risk you’re taking don’t even match up with what you’re making,” Ballast said.
He would spend up to two additional hours a day, for which he was not paid, driving between the Griffin office and job sites to pick up and return his timesheet and equipment, he said. The pay was so low, he said, that he could not make his rent, was evicted from his apartment and was forced to live in a family homeless shelter for a time.
At the job site, Ballast, who is Dominican, began to notice a two-tier system. All the flaggers he worked with were Black or Latino – and nonunion. The other construction workers on the site seemed to be mostly white and all part of a union. “(Unionized workers) can go to lunch, they could leave, they could stay in their cars. And the flaggers got to be out there until the hole is closed,” he said.
Unionized construction workers make 22% more than nonunion workers. While construction unions have become far more diverse in recent decades, a recent analysis of the New York City construction industry found that non-Hispanic white people still accounted for 45% of unionized workers and only 25% of nonunionized workers.
There are two ways to join a union: organize a nonunionized workplace, or get into a union apprenticeship program. Originally conceived in the 1990s to help unions boost diversity, apprenticeships can offer marginalized workers a pathway to good-paying jobs. But the slots are limited. The state Department of Labor regulates the number of new apprentices that can join construction unions, and union hopefuls have to enter competitive lotteries. As a result, many subcontractors actively recruit new workers like Ballast, who can’t afford to wait around to win a lottery.
When Ballast told a few of the union workers – who, unlike him, were employed by Con Edison directly – how much he made, he said they laughed in disbelief and told him he was getting ripped off. Confused, he did some digging and learned about something called a “prevailing wage.” New York law requires that construction workers working on public or government-funded projects be paid a prevailing wage rate, which is usually significantly higher than minimum wage and mirrors what a union worker would make. The state Department of Labor sets the prevailing wage schedule, which Ballast learned entitled most flaggers in New York City to $42 an hour. He was furious.
“I’m telling my coworkers when I’m at Griffin, ‘Yo, they robbing us man,’” he said. “Ain’t no way that we here working with Con Edison workers and construction union workers and we making this money. This ain’t right.”
MILLIONS IN LOST WAGES
Ballast figured it was time to seek representation. In July of 2020, Ballast and several of his co-workers, represented by attorney Brent Pelton, filed a class action suit against Griffin and Con Edison to recover unpaid prevailing wages, daily overtime and supplemental benefits.
Pelton’s firm is currently engaged in several active lawsuits against companies hiring flaggers, including Griffin and Con Edison, that are subcontracted by city and state agencies. A Con Edison spokesperson said the company does not comment on ongoing litigation. An attorney for Griffin, Michael DiChiara, declined to comment. In legal filings, both companies have both denied all allegations.
Similar suits have been successful: In 2016, after a lengthy investigation by the U.S. Department of Labor of wage theft at a federally funded construction site in lower Manhattan, 63 flaggers were awarded about $1.2 million in back wages. In April, in a class-action case that Pelton has been involved in for five years, a judge found that although the same contractor – Judlau Contracting Inc. – had been classifying the workers as “pedestrian crossing guards” rather than flaggers, the nature of the work that they performed required payment of prevailing wages. Judlau declined to comment for this piece.
According to recent data compiled by the U.S. Bureau of Labor Statistics, there are currently 10,040 New Yorkers working as crossing guards or flaggers – more than in any other state. Many make under $40,000 a year. Meanwhile, subcontractors are raking in millions from taxpayer-funded projects.
At Griffin, Ballast was not the only worker to feel he was being exploited. For years, Luis Simone, a 54-year-old Cuban man from the South Bronx, had run a van service driving women to upstate prisons to see their loved ones. He couldn’t afford to repair the van when it broke down, and so transitioned to work as a flagger in 2018. At Griffin, he was paid just $13 an hour, he said. He knew the pay was low, but he was married and had two kids to support, so he kept his head down.
“It’s very difficult, he said. “You have to deal with traffic. When bulldozers come, you have to guide these trucks, flagging, making sure nobody is crossing the street and no cars are passing by. It was really dangerous.”
Simone began to feel the company was taking advantage of him. “Sometimes you have to stand up and eat your lunch,” he said. “Sometimes you by yourself flagging, and the other person got to take lunch, and mind, you got to flag a two-way street. It was really difficult and it just wasn’t fair.”
And like Ballast, he began to notice the racial disparity at the job site. “A lot of the flaggers are Black and Latino,” he
Most flaggers are entitled to $42 per hour under the prevailing wage set by the state Department of Labor. But not everyone earns such a high rate.
led the Manhattan district attorney’s Construction Fraud Task Force until 2020, said that far too little is being done to rein it in.
“Wage theft is not a crime of necessity, it’s a crime of opportunity. And frankly, the government is complicit in allowing it to flourish,” she said. “There is an enforcement gap, and so unscrupulous companies make a business decision that they say, ‘Why would I pay a prevailing wage … when no one is checking?’”
Pervasive wage theft among flaggers in the construction industry goes back at least a decade, workers say. Joseph Hemans, a 31-yearold African American man from East New
York, worked as a flagger for MECC Contracting Inc. and Rojac Watchman in 2012 and 2013. He was 22, and it was his first real job as an adult. MECC was the contractor for several Con Edison worksites, and in turn subcontracted flagging jobs out to Rojac Watchman, which paid Hemans $12 an hour, he said. (Chains of subcontractors can enable construction industry employers to hide wage theft in jobs beyond flagging.) Hemans never sued. Rojac Watchman could not be reached for comment.
In 2017, Pelton’s firm brought a class action lawsuit against MECC for failing to pay workers prevailing wages on Con Edison sites. MECC settled the suit in 2019 for $825,000, denying all allegations of wrongdoing. Last year, another wage theft suit was brought against MECC seeking to recover allegedly unpaid prevailing wages, overtime, premium time and supplemental benefits. MECC has denied all allegations in court filings, and the case is still ongoing.
Hemans routinely worked between eight and 16 hours a day and barely received meal breaks, he said. When he got home from work, his clothes would be covered in sweat and his muscles would often be so sore he could barely move. On the job, his foreman told him he was making three times as much as Hemans’ salary. “I said, ‘How could you be making so much?’” Hemans recounted. “And he said it was because he was in the union.”
After a year, he quit to pursue a career with Local 79 as a general laborer, where he now makes a comfortable living wage. He said his advice for flaggers would be to organize for better pay: “If the flaggers were some type of organization, I think they will be paid a lot better,” he said. “They would have a better future, something to build on rather than living day by day.”
Lowell Barton, union organizing director with Laborers’ Local 1010, said the exploitation of nonunion flaggers brings down the wages of unionized flaggers as well. Unions lose their negotiating leverage if contractors are able to pay workers below prevailing wages without repercussions. Barton faults city agencies like the Department of Design and Construction, which did not respond to questions for this article, for failing to adequately regulate the industry.
“If you’re able to go rogue on prevailing wage jobs, why should they (contractors) negotiate with a union?” he said. “That’s the problem, DDC is allowing contractors to go rogue when it comes to people of color and women, who traditionally do the flagging jobs because there is a prevailing wage and it should be paid according to the task that they are doing.”
Ballast, for his part, moved to Rhode Island and now drives a truck for a living. Since filing his lawsuit against Griffin, he has filed others against Out Look Safety, Vali Industries, Inc. and WorkForce7, which are all still pending. In court filings, the latter two companies denied the allegations. Ballast hopes his efforts will inspire other flaggers to realize they deserve more.
“They would work like 100 hours a week, and at the end of the week, they would get $1,300. They were happy with it, but they were not even counting the hours they were spending at the job,” he said. “A good job is when you work less than 40 hours and you could go home and take care of your family.” ■
said. “The majority of Con Edison workers were blanquito, having a great job with the union, getting paid good.”
Eventually, Simone and Ballast quit Griffin. “I left them because I knew I was getting ripped off,” Simone said. “I’m not going to stay for no $15 an hour, that doesn’t pay nothing. Plus I had to pay for my own gas to travel. Are you kidding me? I wasn’t making no money.”
In 2019 and 2020, both Simone and Ballast said they bounced around several flagging companies, including Out-Look Safety, CE Solutions, Vali Industries Inc, and WorkForce 7 Inc, hoping to find a workplace that was not exploitative. Each company paid them minimum wage or just a few dollars above the minimum wage; not a single company paid the prevailing wage, they said. (None of the companies responded to requests for comment.)
At one company, CE Solutions, Ballast tried to respond by unionizing his co-workers. He said he collected 400 signatures from co-workers who expressed interest in joining a union and contacted Laborers’ Local 1010. A strike seemed like the only way to get the company to pay fair wages: “If we don’t go to work, things will change. They need us, they can’t start working without us there,” he said. But many of his co-workers weren’t willing to risk losing their jobs, and the union effort ultimately sputtered. CE Solutions declined to comment for this story.
‘WHY WOULD I PAY A PREVAILING WAGE … WHEN NO ONE IS CHECKING?’
Wage theft is rampant in the construction industry as a whole. Diana Florence, who
