Building Trades

NYC In New Orleans To Push Lending Reform

May 5, 2015 
By Joe Maniscalco

LiUNA's Edison Severino leading a rally in NYC. The group is helping to push responsible lending.

LiUNA’s Edison Severino leading a rally in NYC. The group is helping to push responsible lending.

New York, NY – The Building and Construction Trades Council of Greater New York is in New Orleans, Louisiana this week, and although they may be far from home, the outcome of talks with the National Conference on Public Employee Retirement Systems [NCPERS] could have huge implications for industry workers back here in NYC.

 

In March, the Building and Construction Trades Council traveled to the nation’s capital to implore the biggest lenders in the construction industry to adopt new lending policies that would help safeguard workers from unscrupulous contractors with a history of employee abuses. 

Ironworkers reportedly shocked investors at the special D.C. forum with stirring testimony about what it’s really like working for non-union contractors who care little for the health and welfare of their employees. 

On Tuesday, the Building and Construction Trades Council engaged with NCPERS members at their 2015 Convention and Exhibition to once again urge new responsible lending policies — this time calling on the largest trade organization for public sector pension funds to take a closer look closer at the way participants’ money is being used to finance New York City construction projects. 

NCPERS is a non-profit network of trustees, administrators, public sector officials and investment professionals who collectively manage nearly $3 trillion in pension assets held in trust for approximately 21 million public employees and retirees throughout North America. 

Once again, as they did in Washington, D.C., the Building and Construction Trades Council planned to use the $390 million JDS Development at 626 First Avenue in New York City, as a case study in how irresponsible lending practices can negatively impact hardworking men and women. 

Contractors associated with the First Avenue development have a long history of minimum wage and overtime law violations, in addition to other many other workplace abuses. 

Back in 2009, then New York State Attorney General Andrew Cuomo sued Michael Mahoney, the principal of a concrete contracting firm doing work on the First Avenue project, for $4 million in back wages. 

In a letter sent ahead of this week’s NCPERS forum, Adam Downs, fund administrator with the Laborers’ International Union of North America, wrote to the head of RVK, one of the largest investment consulting firms in the United States, pointing out the “abject failure to properly vet the Subcontractors” on the First Avenue project. 

“These sad examples, and the avoidance of its repetition in the future, leads us to urge the Consulting Community as a whole and RVK specifically to take a leadership role in adopting, and by example leading the lending industry to adopt, the Model Responsible Contractor Lending Policy that has been developed by a group of public and union-affiliated institutional investors," Downs said. 

The Model Responsible Contractor Lending Policy would, in part, grant lenders the right to “review and approve the general contractor and all major subcontractors performing constructor services to be funded, in part or in whole, with proceeds of the loan.”

A probe by the Manhattan DA’s office last year, meanwhile, found that fraud in the Workers’ Compensation Insurance system — often involving the misclassification of workers — costs New York State nearly $500 million annually. 

May 5, 2015

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