Financial scandal hits BBTK/SETCa trade union

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Since mid-2002, the Belgian socialist trade union confederation ABVV/FGTB has been hit by a financial scandal at the Brussels-Halle-Vilvoorde section of its largest affiliate, the Union of White-collar, Technical and Executive Employees (BBTK/SETCa). The scandal led to the dismissal of Albert Faust, the section's general secretary - who claimed that he was sacked because of his political views - and a long-running controversy, during which the courts intervened in an unprecedented way to appoint an external administrator to supervise the section.

The second half of 2002 and early 2003 have seen one of the bitterest disputes of recent years within the Belgian trade union movement.

Financial scandal

Inspections over recent years at the Brussels-Halle-Vilvoorde regional section of the Union of White-collar, Technical and Executive Employees (Bond der Bedienden, Technici en Kaders/Syndicat des Employés, Techniciens et Cadres, BBTK/SETCa) - the largest affiliate of the Belgian General Federation of Labour (Algemeen Belgisch Vakverbond/Fédération Générale du Travail de Belgique, ABVV/FGTB) - have allegedly revealed fraudulent payments to staff, dubious financial transactions, unjustified benefits to certain people and an enormous financial deficit, possibly caused by rather 'opaque' accounting.

On 8 July 2002, Christian Roland, the national chair of BBTK/SETCa, dismissed the general secretary of the Brussels-Halle-Vilvoorde section, Albert Faust, and the treasurer, Marc-André Verbeure. Mr Roland also placed the regional section under the supervision of the national BBTK/SETCa. He was supported in this measure by 13 of the regional section's 14 permanent secretaries. Accusations were made of fraud, personal enrichment and keeping opaque accounts. It was alleged that Mr Faust and his immediate colleagues managed the union's resources in an 'authoritarian' and 'uncontrollable' way. The section had built up a debt burden which, according to Mr Roland, was more than EUR 4 million.

Mr Faust immediately went on the counterattack, taking legal action to overturn his dismissal and asking the courts to place the Brussels-Halle-Vilvoorde section under supervision. He succeeded in having his dismissal suspended by the labour court, and stated he could refute all allegations against him. The left-wing Mr Faust claimed that his dismissal was the result of an 'ideological putsch' and he was the victim of the new, more pragmatic, line that ABVV/FGTB had taken since the election of Mia De Vits as chair of the confederation in May 2002.

A few days after the dismissal of Mr Faust and Mr Verbeure, it became known that Edouard Mommens, head of the administrative departments of the Brussels-Halle-Vilvoorde regional section, had also agreed to end his contract. He alleged that, under pressure from Mr Roland and Thierry Nollet, the permanent secretary of the section responsible for financial affairs, he had signed a document in which he accused Mr Faust of embezzlement. Mr Mommens said that he had been sidelined because he was ideologically too close to Mr Faust and because of his active membership of the Communist Party (Communistische Partij/Parti Communiste). Mr Mommens said that he had submitted a complaint to the courts against Mr Roland and Mr Nollet, accusing them of threats, intimidation and extracting statements under duress. In the meantime, Mr Faust also announced that he would take further legal action against the national leadership of BBTK/SETCa. Around one week after Mr Faust’s dismissal, there was an apparent break-in at the BBTK/SETCa offices, during which documents incriminating Mr Faust were shredded.

Court ruling

At the end of July 2002, the court of first instance found in Mr Faust’s favour on three points:

1. it ruled that the supervision of the Brussels-Halle-Vilvoorde section by the national BBTK/SETCa should end;

2. it appointed a provisional administrator for the Brussels-Halle-Vilvoorde section in the place of the national BBTK/SETCa - the first time in Belgium that a union section had been placed under judicial supervision. The administrator was a lawyer, Jean-Marie Verschueren (who, incidentally, had been involved in a dispute situation with the Brussels-Halle-Vilvoorde BBTK/SETCa in the past); and

3. it ruled that the section accounts had to be taken over by the provisional administrator.

At a press conference following this favourable judgment, Mr Faust reiterated his claim that, together with Mr Mommens and Mr Verbeure, he was the victim of 'ideological cleansing'.

While awaiting a press conference announced for 1 August 2002 by its chair, Ms De Vits, ABVV/FGTB responded with a sharp communiqué on the court of first instance’s judgment. The national union leadership described Mr Faust’s legal action as a creeping attack on the freedom of action of trade unions and their members, because it led to the judicial apparatus taking hold of the union movement's accounting, financial and political room for manoeuvre.

In an attempt to put matters in order, Ms De Vits returned early from a holiday at the end of July. At the press conference on 1 August, she hit out against the 'interference in union freedom' by the court ('this legal vaudeville'), which had led on 8 July to the appointment of an administrator to replace the supervision of the Brussels-Halle-Vilvoorde section by the national BBTK/SETCa. She said that it was for BBTK/SETCa to find an internal solution to the irregularities found. Moreover, she reiterated the accusations that gave rise to Mr Faust’s dismissal.

In mid-August, Mr Mommens withdrew his earlier accusations against the leadership of BBTK/SETCa and claimed that he had been put under pressure by Mr Faust’s lawyers to make false allegations. He alleged that irregular practices were commonplace at the Brussels-Halle-Vilvoorde section, claiming that in the past envelopes full of cash were regularly given out, over and above normal wages, allowing some senior officials of the section to more than double their official pay. After a financial embezzlement scandal had come to light in the Antwerp section of BBTK/SETCa in 1995, other ways were allegedly found to make additional payments at Brussels-Halle-Vilvoorde, for example through wage increases and (expensive) company cars. In response to Mr Mommens' claims, Faust alleged that 'under the counter' wage supplements were part of the union tradition, and that there are also similar practices at the Confederation of Christian Trade Unions (Algemeen Christelijk Vakverbond/Confédération des Syndicats Chrétiens, CSC/ACV).

Claims rejected

In early September 2002, the Brussels court of appeal rejected Mr Faust’s claims. The appointment of the provisional administrator was revoked so that the national BBTK/SETCa could again take over the supervision of its Brussels-Halle-Vilvoorde section and thus organise the clean-up of the section itself. The dismissal of Mr Faust was also confirmed.

The legal defeat was coupled with a gradual weakening of Mr Faust’s position, as he was ultimately able to substantiate few or none of his announced rebuttals and promises of information for the members of the section. His original supporters inside and outside the union almost entirely disappeared. In October, he announced that he was setting up a movement for union democracy which he believed would have around 50,000 members in 2003. There is little chance he will succeed. At the beginning of January 2003, Mr Faust was officially accused and imprisoned.

Commentary

A striking but not unexpected fact in the 'Faust affair' was the absence of responses from the other trade union and employers' organisations. It is indeed an unwritten rule in Belgian industrial relations that they do not react in public to one another’s internal problems. That the other unions had to restrain themselves from any comment is quite clear in this case: the 'legal vaudeville' was a threat to the entire union movement because the independence of the unions had been called into question by the appointment of an external administrator.

Trade unions want to deal confidentially with the material resources that they hold, for example in order not to show their cards in the event of a long strike. Because they are 'de facto associations', they are not legally bound to make their financial and accounting operations public, in contrast to other organisations and companies. This means that internal financial flows arise that can easily be misused if there are no strict controls. It has been alleged that within the BBTK/SETCa Brussels-Halle-Vilvoorde section, the contributions of members were systematically used improperly, the accounts were chaotic, there were no internal financial controls, and the membership list was manipulated fraudulently. It has also been established that the audits, organised by the union's national bodies since 1995, are not ideal.

The argument of the national union leadership was that not every affiliate and section could be internally audited at the same time, and hence the turn of the Brussels-Halle-Vilvoorde section only came around in 2001. This does not hold much water because it had long been thought that irregularities prevailed in the section. Since 1998, the regional secretaries of the regional BBTK/SETCa organisation regularly asked Mr Faust to put matters in financial and administrative order. Furthermore, Mr Faust had been put under pressure earlier: in 2000 there was an agreement between himself and Mr Roland to place the Brussels-Halle-Vilvoorde section under supervision in the event of serious irregularities. The recent dispute thus did not just come out of the blue. The strong ideological profile of Mr Faust, who thought that he was untouchable as a result, and the relative autonomy of unions and sections with respect to the national leadership, are undoubtedly better explanations for remedial action being so long in coming.

That Mr Faust was at the basis of the crisis that arose is at the very least surprising. By asking the court to place the Brussels-Halle-Vilvoorde section under external supervision, he was apparently going against his own principles that the members of the union itself must be able to exercise control democratically. Then he ignored the 2000 agreement with the leadership of the national BBTK/SETCa to put matters in order at Brussels-Halle-Vilvoorde. Finally, he was at odds with his earlier approval of placing the Antwerp section under the supervision of the national BBTK/SETCa when irregularities were discovered there in 1995.

As a result of these apparent contradictions, the ideological line of defence that Mr Faust had built up at the start of the dispute crumbled away. He had been initially supported by the more radical left circles. It cannot be denied, of course, that Mr Faust was a dissenter with respect to the more pragmatic line now being adopted by ABVV/FGTB. In this respect, Mr Faust regularly cited the address made by Mr De Vits at the congress that elected her as chair of ABVV/FGTB. She stated that not only the extreme right, but also the extreme left, had no place in the union confederation. Mr Faust persistently used this political statement to argue that it was not his administrative and financial behaviour but his political convictions that were at the basis of his dismissal. However, there appear to be no concrete indications that Mr Faust was dismissed for ideological reasons. For many observers, the evidence of financial and accounting abuses against him seems too convincing. It was also known that Ms De Vits would be tougher than her predecessor on irregular practices in ABVV/FGTB. By apparently considering himself untouchable, it can be argued that Mr Faust became a victim of himself and that the trade union movement became a victim of Mr Faust (Jacques Vilrokx, TESA/VUB)).