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MTA holding up arbitrator Zuccotti’s union donation

by Benjamin Kabak

When former MTA CEO and Executive Director Elliot Sander opted to head to arbitration with the TWU, apparently, he agreed via handshake to donate John Zuccotti’s salary to the TWU’s Widows and Orphans Fund. This revelation — a clear conflict of interests — did not come to light until after Zuccotti sided with the union in the arbitration dispute, and now, the MTA is holding up payment of the donation. According to Pete Donohue, new MTA CEO and Chair Jay Walder and the rest of the authority’s board have asked MTA Inspector General Barry Kluger to review the circumstances surrounding this handshake agreement.

I’m not really sure what recourse the MTA has here. There is a clear ethics issue here, and Zuccotti, a senior counsel at Weil, Gotshal, should have recognized that before proposing this deal with Sander. Yet, the MTA may not have much of a choice and could instead just be further antagonizing the TWU over something the current leadership cannot control. As always, stay tuned.

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Anon December 23, 2009 - 6:45 pm Reply
Niccolo Machiavelli December 24, 2009 - 1:48 pm

Maybe the reason you have no comments on this issue is the absolutist self-righteous nature of the way you present this issue. For example, “a clear conflict of interests”. When something is so clear, why debate it. Aristotle had it wrapped up pretty well, “Over matters certain no one deliberates.”

You hammer it home again later with “There is a clear ethics issue here” without saying exactly what the issue, apparently clear to everyone, is. The reader must conclude for himself several things that do not necessarily, and in fact probably don’t, follow. What precisely is the clear issue of conflict of interest here Ben; that Mr. Zuccotti’s apparent sympathy for the widows and children of transit workers who died in service to the MTA should have disqualified him as a neutral arbitrator? Does it necessarily follow that the only acceptable arbitrator to yourself and MTA would be someone who had no sympathy for transit workers killed in the line of duty?

And the scolding you give former Deputy Mayor Zucotti here, “Zuccotti, a senior counsel at Weil, Gotshal, should have recognized that before proposing this deal with Sander” is again entirely unsupported. Why should he have known that you and Pete Donahue would find this so unseemly? What was wrong with the guy, not seeing this clear conflict of interest plain as the nose on his face? Where did he go to College, where did he get his JD and how can someone so unethical practice law anyway? What an idiot. Clearly tabloid journalists and clever guys with computers are much more qualified than a former Deputy Mayor to draw ethical conclusions.

Could any reasonable person conclude that the Widows and Orphans Fund does not actually benefit TWU members? They are after all, dead. Do you and Mr. Donahue not sympathize with Transit workers who died on the job, or at least their survivors? Would that have disqualified you as a neutral? What about NYCOSH, New York Committee on Occupational Safety and Health? Is that on your list of charities that disqualify arbitrators as well?

The MTA appealed the arbitration award through the good offices of Skadden and Arps, flagship white shoe Manhattan Law firm. What is on Skadden and Arps’ list of charities? If you want to play journalist a good place to start would be to determine how much the MTA dropped on the fruitless appeal of the arbitration award. That would take some more work than these clear broad statements of undefined ethics. If Mr. Kluger wants to do a worthwhile investigation, that would be a good place for him to start. Many of the rest of us think that was a waste of money except for the PR value placating the likes of you and Mr. Donahue. Maybe Second Avenue Sagas and the Daily News would contribute a like amount to a charity of your choice.

And the final sneer is the “circumstances surrounding this handshake agreement.” You seemed shocked that some people make handshake agreements and then stick by them. That makes life difficult for Skadden and Arps billable hours but I’m thinking Mr. Zuccotti knew what he was doing in this circumstance and has probably concluded many charity donations with a handshake in his time.

The MTA, and the blogging and tabloid hounds have spilled so much ink and hard drive space blaming the labor agreements for the budget crisis it seems counter-productive to pursue a strategy of cheating the widows and orphans out of their charity money thereby rebuilding sympathy for the workers. Its like a PR strategy designed to compete with your own PR strategy. Brilliant.


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