It found that for every $1 spent to help displaced workers in Montana, the AFL-CIO spent $4.01 on its own staff salaries for its Project Challenge: Work Again program.
“An ongoing audit review showed all the money was going out the door for all the salaries, but we're way behind in getting money to the participants,” said state Labor Commissioner Keith Kelly. “Holy smokes! We're upside down.”
The Labor Department told the AFL-CIO of the termination Friday.
“We thought we were going to meet with them to address the concerns we had with them for the past year,” McGarvey said. “They hit us with this letter. It was a total surprise.”
McGarvey called the Labor Department statistics “one-sided” and disagreed with Kelly, saying: “My answer to Kelly saying we're ‘upside down' is that's one school of thought and not a very well-thought-out one at that.”
The AFL-CIO had won a $552,000 contract with the state Labor Department for the year starting July 1, 2007, to staff a job retraining program. Because of past AFL-CIO accounting problems, Kelly said the Labor Department retained an additional $612,000 to serve as the program's bank account, paying the bills for the retraining costs submitted by the AFL-CIO staff. The entire $1.164 million total from both funds is federal money.
Through Feb. 8, with 42 percent of the fiscal year left, the AFL-CIO Project Challenge had only 16 percent of its budget remaining to pay staff salaries, or $90,500, the department said. In contrast, the budget to pay for services for laid off workers had 81 percent of its budget remaining, or $497, 535.
That job-retraining grant has fallen considerably from previous levels. In 2001, the Montana AFL-CIO had secured a $6 million grant for Project Challenge, said Don Judge, former executive secretary.
The Labor Department now will staff the job retraining program through its 23 Job Services offices around the state.
“We have a whole menu of things that hopefully will be more cost effective,” Kelly said.
It's the latest black eye for the Montana AFL-CIO's Project Challenge in recent years.
In April 2006, the state Labor Department ordered the AFL-CIO to pay back $47,515 in federal job training funds spent but not properly documented to laid off Flathead Valley workers. The AFL-CIO paid back that money, Kelly said.
In October, the Labor Department accused the AFL-CIO program of “gross fiscal irresponsibility” after Project Challenge's former program coordinator in Cut Bank used job-retraining money to pay for his stepdaughter's four years of college in Arizona with $35,111 job training money. The ex-program coordinator hadn't told his supervisors of the relationship. The AFL-CIO has appealed portions of the money owed.
In the 1980s, the Montana AFL-CIO's Project Challenge program won national awards for its successful efforts to help retrain hundreds of workers laid off when Arco closed its copper mine in Butte, its smelter in Anaconda, and its refinery in Great Falls.
Asked why the Labor Department would grant the AFL-CIO another job retraining contract after recent problems, Kelly said, “Decent people get caught up in things. We gave them another contract, but we've got our hands on the money. We threw them a lifeline. They're kind of pulling us over and swamping the boat. We terminated it Friday immediately.”
Instead of asking the AFL-CIO to return this money, Kelly said, he decided, “Let's break clear.”
McGarvey said the layoffs wouldn't affect the remaining four jobs at the AFL-CIO. These positions are involved in what he called “political action” and weren't involved in Project Challenge, and vice versa.
“We've got a good labor movement,” McGarvey said. “We've got a better labor movement than we've ever had. We've just had a lot of bumps in the goddamned road. We've got thousands of collective bargaining contracts across the state, 35,000 members.
“I thought we were doing what we were asked to do. I realize that there aren't as many eligible employees for Project Challenge as there once was. That's a good thing. We don't need or want plant closures.”
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