We all have opinions about the unions, some are good some are not, but given they are a fact of life it is good to know something about them. One of the biggest unions was the Teamsters and you might have heard Jimmy Hoffa and know something about the union. One of the books about The Teamsters was written by Steven Brill published by Simon & Schuster, NY, 1978. The book highlights the workings of the union and for all the good work it did, one connection was to organized crime. They shared the fight on the street, Teamsters was (or is) the union for truckers and for many truckers the work came with an increasing pay. There are multiple stories but two will be highlighted – one about real estate and the other about governance. It terms of real estate – the unions had their members enroll in a pension plan which is a good thing, the not so good thing was one part was invested through investment managers and insurance companies which kept the fund solvent. The other part – the Central States Pension Fund decided to invest in real estate. In 1974 the fund had over a billion dollars invested in real estate which was 20% less than Chase Manhattan Bank – the US second largest bank. That might have fine if most mortgages received the same attention as the Chase, but in reality many of the loans were twinned with mob money. It can easily be said, those two funds built Las Vegas and other leisure centers across the US.

Another story revealed around governance – when Jimmy Hoffa went to jail, he pick a successor – Frank Fitzsimmons. At first the reason was considered Mr. Fitzsimmons was supposed to offer a caretaker government for the return of Mr. Hoffa. However 3 months into the job, Frank liked it and started to make changes He started to feel comfortable with the power, to look as if he knew how to handle it and like it enough to want to keep it. When positions have respect – the people in them tend to rise to the demands of the position, although everyone will do it a little differently – be it more delegation or less.

Linking to dividend paying stocks, with the union one of its strengths was the size of the pension plan. However, the union really did not use the pension plans resources to further their fights. When a group owns a pot of money and every month more is coming in, there are responsibilities and abilities to effect whatever their cause is. In the Teamsters case they spent the money on themselves and organized crime figures, things could have been different if different management and skills were managing the money. Pools of money represent choices

There are more questions than answers, till the next time – to raising questions.