The UTU's June 30, 1998, financial statement claimed assets of over $43 million; however, only 18% of that total - less that $8 million - was in the Union's General Fund. The remaining 82% is either: 1) held in trust for subordinate units, like General Committees or State Legislative Boards; 2) dedicated funds, such as UTU's Strike and Convention Funds; or 3) the assets of UTU's Job Benefit Fund (more about this fund below). According to its 1998 LM-2, the UTU's total assets had shrunk to $34.6 million by the end of last year.
For years, the UTU's operating expenses have been heavily subsidized by the UTUIA and the UTU's Job Benefit Fund (JBF). The JBF is a program through which some - but not all - UTU members pay premiums for unemployment benefits related to discipline. However, the UTU has used the $16+ Million JBF as a cash cow. Interest earned by JBF investments are diverted to defray the UTU's operating expenses. JBF money was used to purchase the "Membership I" and 11 busses the UTU uses for Union organizing, and also may have been used to purchase the building housing the UTU's new Washington office. In 1995, the JBF made an "interest-free" loan of approximately $8 million to the UTU, to pay off a commercial loan taken out to satisfy a $17 million legal judgment against the Union. More recently, JBF funds were used to pay another million-dollar legal settlement. Each of these transactions was made on behalf of all UTU members, regardless of whether they had contributed to the JBF or not.
During merger talks between the BLE and the UTU, a concern arose over the legality of the use of JBF funds by the Union. The BLE obtained two separate legal opinions, both of which stated that, based on the information made available by the UTU; the JBF is covered by the federal Employee Retirement Income Security Act (ERISA). ERISA requires that funds be used for the payment of benefits and reasonable administrative costs only; the transactions detailed above clearly do not fit into these two categories. Obviously, the UTU leadership disagrees with these legal opinions. The U.S. Department of Labor - and, perhaps, the Justice Department - is currently investigating the UTU's handling of the JBF. The UTU's membership may end up liable for repayment of $10 million or more to the JBF.
UTU President Little argued that UTU delegates would never support an increase in dues in order to fund a proposed new union. Ironically, he convinced the delegates to increase dues by $5.00, the majority of which is to raise a "war chest" for a "fight to the finish" with the BLE.