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.

But Winters never received the golden goose. Instead, the account was assigned to Karen Ortega. Winters filed a grievance with the union, which was not heard for more than a year. Ortega, ranking officer of the union local hearing the grievance, was ultimately affirmed as the proper salesperson for the account.

In the files of the NLRB, the Zukerman account now stands as perhaps the strongest evidence of how Ortega and other union officials manipulated records to enhance their own salaries and performance, and possibly harmed other advertisers who had no idea that corruption in the company was costing them business.

Turn to page 109 of the 1994/95 Yellow Pages that are now probably sitting under your telephone. You will see what appears to be a page with two advertisements on it--one for a company named Phoenix Service Center and the other for a company named Same Day Appliance.

Each company offers to fix whatever is broken in your dishwasher, refrigerator, washer, dryer or stove.

Look very closely, and you will see--in very small print--that the two companies are "affiliated" with each other. Between them, the two ads feature five phone numbers that someone in need of stove repairs might conclude are different businesses. A customer might call several of the numbers seeking different bids on the cost of a repair.

But all of the numbers connect you to phones that ring at the same place.
That place is the appliance-repair business once owned by Gerald Zukerman, which he says he has since sold.

The practice is not illegal, and does not violate the Yellow Pages company rules. There is no reason to believe the companies cannot repair your appliances or that they will in any way cheat you on a deal.

But the advertisements, according to documents now public at the NLRB, demonstrate how officers of the IBEW used their positions to place misleading advertising in the Yellow Pages.

Various U S West documents now contained in the public record indicate that Zukerman--when he owned the two businesses--was frequently behind in paying his bills, and probably should not even have been allowed to place advertisements in the book.

But he was allowed to, and his ads ran in front of other repair companies that were paying their bills.

Further, the government is arguing based on company documents, Ortega used the Zukerman account to skim extra commissions and bonuses from the company.

Zukerman admits that he frequently disconnected and reconnected various phone numbers as part of his business. He would, for instance, turn off the phone numbers he used in ads for heating repairs during the summer, and turn them back on again in the winter.

When he turned phone numbers off, Zukerman says, U S West would stop billing him for the advertisement. In effect, he would pay for his advertisements for only the few months of the year when they did him any good.

Because Zukerman was frequently disconnecting phone numbers, the government documents assert, Ortega was able to manipulate his account records to make more money.

The documents indicate that Ortega would move advertising records from one phone number to another, allowing her to make existing ads look like "new money," for which she was paid high commissions. These moves also lowered her total sales at the beginning of a book cycle so she could enhance her apparent performance, the documents allege.

One of U S West's attorneys in the case, in fact, all but admitted the manipulations in a memo that the company accidentally gave to the NLRB along with other subpoenaed documents.

As part of her preparation to defend U S West, attorney Janice Procter-Murphy last year drafted an "Account Summary" of the Zukerman account.

The NLRB records show that someone accidentally included the summary in a batch of records that was turned over to the government. Procter-Murphy and U S West asked the judge in the case to force the NLRB to give the document back, but the judge ruled against them.

Procter-Murphy's summary indicates that Ortega was overpaid on the Zukerman accounts and that, in at least one case, Zukerman was never even billed for some of his advertising.

The Zukerman account, the government alleges, is just one of many that were manipulated by Ortega, Wheeler or other union officials. In all, the NLRB is investigating more than 20 advertising accounts placed under various Yellow Pages headings, including attorneys, electrical-repair services and insurance companies.

To an outsider, the whole affair may seem like little more than an airing of one company's dirty laundry. But to the NLRB, the account manipulations are the underpinnings of a more sinister problem.

Labor unions, of course, are supposed to represent their members, protecting their rights, bargaining with management and making sure whatever contracts are signed are implemented fairly for all members.

When someone--either union or company--runs afoul of the rules, those who believe they have been mistreated can go to the National Labor Relations Board for help.

Nationwide, the NLRB handles tens of thousands of complaints each year. Only a minute fraction of those reach the point where the U S West case is today.

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