The union representing New York City’s retirees was placed under emergency administratorship last week by its international union over years of failed paperwork for nonprofit status — and following retiree rebellion over a much-loathed new Medicare plan.
The Retirees Association of District Council 37 failed for years to file the required 990 form with the Internal Revenue Service detailing basic salary and expenditure information, said the parent union, the American Federation of State, County and Municipal Employees (AFSCME).
The international takeover of day-to-day operations comes as the Retirees Association is helping lead opposition to Mayor Eric Adams’ push for a cost-saving health care plan for retirees known as Medicare Advantage that many worry would reduce their access to care.
The retirees association has contributed $2,000 a month toward lawyer fees for an ongoing legal battle that has so far stopped City Hall from making the switch to Medicare Advantage, according to Neal Frumkin, the vice president for interunion relations of the retirees association.
“We believe that’s the real reason AFSCME came down on us like a ton of bricks,” he told THE CITY, noting there’s no allegation of any financial impropriety.
In August, Frumkin led a group of nearly two dozen municipal retirees who crashed a planned press conference by Adams to protest the plan.
On Monday, he said he’s “furious” by the takeover and described it as “retaliation” for the group’s outspoken opposition to the Medicare Advantage plan.
As for the international takeover, the association — which represents approximately 25,000 retirees who choose to join voluntarily and pay $36 a month in dues — is now being run by Ann Widger. She earned $203,358 in 2021 as director of AFSCME retirees.
In a Feb. 22 online missive to members, Widger acknowledged the ongoing dispute over the Medicare Advantage plan but insisted the international takeover had nothing to do with that fight.
“I realize that some will say this is about the current debate around retiree
health care for New York City,” she wrote. “Make no mistake: It is not. It is about
serious violations of AFSCME’s Financial Standards Code and the International
Constitution.”
The retirees association also has not conducted an outside audit since at least 2017, according to Widger.
“These are serious failings,” she said, noting there is “no evidence of any individual financial wrongdoing.”
Long Legal Battle
Some retirees and labor advocates called the international takeover “alarming” and argued it was a blatant attempt to weaken the push to block the Medicare Advantage plan.
“It’s an outrageous anti-democratic and anti-union power grab,” read an online statement by an activist group led by Gregory Heires and Ray Markey who support the push to block the healthcare switch.
Bill Henning, a veteran union activist and labor academic, agreed — while conceding the paperwork lapse.
“Seven years without filing their tax forms?” he asked in the Labor for Traditional Medicare Facebook group. “But the timing of this takeover is no coincidence. It’s absolutely related to the Retiree Association fighting this misguided attempt by AFSCME leadership to jam Medicare Advantage down our throats.”
The international takeover — first reported by The Chief-Leader — will last for an undetermined amount of time.
In September 2021, AFSCME placed Local 1549 of District Council 37 under administratorship after it said an audit revealed financial mismanagement. That local which represents New York City’s clerical workers is still being run by an administrator.
The fight over the Medicare Advantage switch has been going on since the end of the de Blasio administration.
In 2018, the city and the Municipal Labor Committee, an umbrella group of the city’s municipal unions, agreed to switch to the private plan. The deal was expected to generate $1.1 billion in savings for the city from fiscal years 2019 to 2021.
At the time, those savings were expected to help fund salary increases and benefit boosts for the city’s current workforce.
But a group of retirees opposed the plan and sued.
Judges have ruled against the negotiated new health care on three separate occasions but City Hall has continually appealed those decisions.
Widger declined to comment aside from her letter to members.
The retiree association was not aware that its accountant didn’t file the right 990 forms, according to Frumkin. The accountant did not immediately return a call seeking comment.
“We thought we had given our accountant all the necessary information,” he said. “We were blindsided by this. We were taking steps to correct that.”
As part of the takeover, Frumkin noted AFSCME right away revamped the labor’s group’s website and it now says little about the Medicare Advantage legal challenge.
“Retirees now wont know that there’s a court date on March 21 in the appellate court,” he said. “That’s something our members want to know about all the time. It’s gone.”
“They removed our ability for our board members to speak to our members,” he added. “We don’t have our listserv. They canceled our monthly meeting set for tomorrow. We are outraged.”