COOKING THE BOOK

A MASSIVE FEDERAL INVESTIGATION UNCOVERS EVIDENCE OF UNION CORRUPTION AT THE YELLOW PAGES. WHILE COMPANY MANAGENT DOES NOTHING, EMPLOYEES AND CUSTOMERS PAY THE PRICE.

"I'm going to follow up periodically and see what he's up to," Garcia said in her memo.

Despite Garcia's interest, however, Chen says nothing was ever done to answer her questions.

So last fall, she took them to the National Labor Relations Board. Ever since, she says, she has been vilified by company management and union officials, at one point even being required to sit at the company's reception desk and answer the telephones.

"They treat me as if I've done something wrong," Chen says. "If they had listened and been responsive, none of this would have ever happened. They were told there were millions and millions of dollars being removed from their pockets by union officials using illicit methods, but they didn't want to do anything about it."

What the company did not want to hear, the NLRB lawyers and investigators surely did. By then, both Smith and Seagraves had filed complaints against both the company and the union charging that they had been unfairly fired. The NLRB was preparing to argue that Smith and Seagraves had done nothing wrong and should be given their jobs back.

It would greatly strengthen the NLRB's case if attorneys could show that Smith and Seagraves were fired for alleged fraud they did not commit while the union officials who helped get them canned were engaged in widespread fraud of their own.

Willie Sutton said he robbed banks because that's where the money was. The Yellow Pages is an inviting place to commit fraud because that's where a lot of money is.

After the breakup of the national Bell-system telephone monopoly, U S West was left to service 14 states, and U S West Direct became the subsidiary that sold Yellow Pages advertising in that territory.

The advertising salespeople in those states, as well as some others who work for Pacific Bell in California, are represented by Local 1269 of the IBEW. Karen Ortega sits on the local's executive board, making her the highest-ranking union officer in Phoenix.

The Phoenix Yellow Pages, according to an internal company document obtained by New Times, is the crown jewel of the 14-state region. The Phoenix metropolitan-area book makes more money--and charges higher advertising rates--than any other book in the U S West Direct system.

As of March 1994, U S West Direct was selling over a billion dollars per year of advertising in its various Yellow Pages directories. The Phoenix books that landed on doorsteps and business desks in March of this year led the pack in generating revenue for the company.

The Phoenix book--two books, actually--came up lucky sevens, with total published revenue of $77,777,000, the document shows.

But if the NLRB lawyers are right, some percentage of that estimated revenue was mythical, because IBEW officers allowed delinquent businesses to continue advertising in the Yellow Pages.

One clear example of the machinations taking place at the Yellow Pages is the advertising of an appliance-repair company formerly run out of Scottsdale by a man named Gerald Zukerman. For the past few years, the account was handled by Yellow Pages salesperson Karen Ortega.

Zukerman, according to current and former company employees, was one of the largest advertisers that the Phoenix Yellow Pages office dealt with. He ran companies in many states, providing repair services for air-conditioners, heaters, dishwashers and almost any other appliance you can name.

Whichever Yellow Pages salesperson had Zukerman's account was assured of tens of thousands of dollars in commissions each year, because he placed ads in so many of the company's books. Zukerman's sales representative drew commissions on ads he placed in Phoenix, Seattle, Omaha and all the other places he did business.

In the late 1980s, Zukerman says and current and former U S West salespeople confirm, his advertising orders became so big--involving so many different cities and directories--that he moved his account to the national Yellow Pages sales office.

The national office, based in Maryland, handles huge accounts--like truck-rental firms or moving companies--that advertise in many books across the country and want to coordinate their advertising, instead of dealing with dozens of salespeople in myriad markets.

In 1991, Zukerman says, he was pulling back, selling his various businesses off as franchises. That meant his advertising would return to the Phoenix office of U S West Direct.

When the Zukerman account was rumored to be returning to Phoenix from the national office, current and former salespeople say, the salespeople in Phoenix began salivating. Zukerman meant a lot of money in commissions for somebody.

But Zukerman, according to documents in the NLRB case, also had a bit of a problem paying his bills. In fact, he had fallen behind far enough that the U S West Direct credit department had decreed Zukerman had to pay 12 months worth of bills in advance to place advertisements in any of its directories.

When the Zukerman account arrived back at U S West Direct, court documents indicate and salespeople who watched the situation say, there seemed little question that company policy dictated the lucrative account be assigned to Roxie Winters. She had handled the Zukerman account before it moved from Phoenix to the national sales office.

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