The Justice Department announced a $3.85 million settlement with an embattled union and several of its affiliates over allegations they improperly pocketed millions in COVID-era hardship funds.
The International Union of Journeymen and Allied Trades (IUJAT) and the Home Healthcare Workers of America (HHWA), as well as two other affiliates and the unions’ welfare fund, allegedly applied for millions in Paycheck Protection Program loans — even though they knew that their status as labor unions made them ineligible for the taxpayer-funded benefits, the U.S. attorney’s office for the Southern District of New York said Monday.
Many small businesses, including some nonprofit organizations, were eligible for the funds — but labor unions, despite their nonprofit status, were explicitly carved out of the program, which was meant to prevent widespread layoffs during the COVID lockdown.
But the journeymen’s union and its affiliates applied for the funds anyway, even over the objections of a federal representative who was in contact with their bank, according to DOJ. The unions unlocked more than $3.3 million in federal loans, which were eventually fully forgiven.
“The Paycheck Protection Program was created to help eligible small businesses weather the economic strain of the pandemic through forgivable loans,” U.S. Attorney Jay Clayton said in a statement. “The defendants here applied for and received millions of dollars in taxpayer funds for which they were not eligible. This Office is committed to protecting taxpayer dollars and recovering public funds that flow to those who do not qualify.”
Zachary Fink, a spokesperson for IUJAT and HHWA, said that the settlement “is not an admission of liability.”
“We chose to settle because it was the most responsible way to avoid the cost, distraction, and uncertainty of continued litigation,” Fink said. “We remain committed to preserving resources for our greatest asset, which is our membership.”
A Controversial Union
The Home Healthcare Workers of America is one of New York’s fastest-growing unions, its growth coinciding with a rapid expansion of Medicaid-funded care for the elderly and people with disabilities at home in New York.
A 2024 investigation by The City Reporter found that the organization circumvented union elections in order to fuel its massive growth; has direct ties with anti-regulation lobbying efforts; and that the family that controls it and its sister unions amassed substantial compensation packages off the dues of some of the lowest-paid workers in the city — with one union officer taking home $1.4 million a year.
The Home Healthcare Workers’ parent union, the International Union of Journeymen and Allied Trades, and its affiliated unions are notorious within the labor movement for cutting in on other unions’ organizing drives and signing workers to management-friendly contracts.
Established by Congress as part of a $5 trillion COVID-19 relief package, the Paycheck Protection Program, administered by the Small Business Administration, offered full forgiveness for eligible borrowers. The program has been rife with abuse and fraud since its inception in April 2020.
Our nonprofit newsroom relies on donations from readers to sustain our local reporting and keep it free for all New Yorkers. Donate to THE CITY today.
The post Embattled Unions to Pay Feds $3.85 Million Over Pandemic Loans appeared first on The City Reporter.
