Union-owned Amalgamated Bank loses Bruce Raynor as its chairman after the apparel workers chief is accused of fibbing about $2,300 in meals with a female union executive.
By Daniel Massey Crain's New York Business April 5, 2011
Bruce Raynor resigned as chairman of the board of labor-owned Amalgamated Bank late Monday afternoon, a week after the Service Employees International Union filed internal charges accusing him of misappropriating union funds.
Mr. Raynor, who is president of the more than 100,000-member Workers United apparel union, an SEIU affiliate, will retain his seat on the New York City-based bank's board and on its executive committee, his spokeswoman said.
Noel Beasley, a longtime director at the bank, will take over as chairman, a banking industry source said. Mr. Beasley, an ally of Mr. Raynor, is an executive vice president of Workers United and heads the union's Chicago and Midwest Regional Joint Board.
Mr. Raynor resigned his chairmanship despite denying he misappropriated any funds. SEIU has accused him of failing to properly account for $2,300 in spending on meals and is seeking to oust him from both his presidency of Workers United and his position as an executive vice president of SEIU. The union said Mr. Raynor wrote on expense reports that he ate 10 meals with a male union lawyer and not the female executive vice president of Workers United with whom he had actually been dining.
"There was absolutely no misappropriation of one penny of union funds," Mr. Raynor said, in a statement. "This is the flimsiest of charges and an ugly exercise in political retaliation." Mr. Raynor said the attempt to oust him was payback for his support of Anna Burger over Mary Kay Henry in the race last year to succeed Andy Stern as the union's president, a battle won by Ms. Henry.
An SEIU spokeswoman insisted the charges were about holding staff to the highest ethical standards.
Through his spokeswoman, Mr. Raynor declined to elaborate on his resignation. But it's possible Mr. Raynor did not want the bank to be dragged into any forthcoming internal union battle. He has been increasingly sidelined within SEIU in recent months, with last week's charges the latest indication his power is severely limited inside the union.
Last year, the bank was caught in the middle of a protracted civil war after the labor marriage between Mr. Raynor's garment workers union and the hotel workers union failed miserably. Mr. Raynor led a breakaway group of garment workers to affiliate with SEIU, which was headed by Andy Stern at the time. A divorce agreement with the hotel workers allowed Mr. Raynor's group to hang on to the bank, which has $4.5 billion in assets.
Amalgamated is also in the midst of a transition to a new chief executive. Edward Grebow, a private equity banker was chosen last month to replace outgoing head Derrick Cephas, who resigned under pressure from Mr. Raynor.
The bank posted a net loss of $1.2 million last year, compared to net income of $7 million in 2009, due to growing losses from soured loans, according to a regulatory filing. Charge-offs nearly doubled last year, to $48 million, weighing heavily on 2010 results, and problem loans appear to be growing. The amount of real estate and loans on Amalgamated books that are no longer accruing interest rose to at least $118 million last year, from $71 million in 2009.
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