WASHINGTON - Call it the case of the pot calling the kettle black.
The Teamsters union, long known for its won run-ins with federal and state authorities as well as a bushel of troubles, has embarked on aa nationwide campaign agaisnt Merrill Lynch & Co. over a labor dispute, using allegations and assertions about the firm's bond business.
The Teamsters have sent letters to more than 100 cities and all 50 states bringing to their attention Merrill Lynch's connection with Pony Express Courier Corp. and publicizing the underwriter's cotroversies.
The union is trying to force Merrill Lynch to bargain a contract for Pony Express Courier Corp., a courier company to which the firm is tied through a subsidiary.
Last week, the St. Louis city coucil passed a resolution calling for Merrill Lynch, one of the leading underwriters of municipal bonds in the nation, to "have its subsidiary, Pony Express, act in a responsible manner and observe U.S. labor laws, or forfeit its right to do business" with St. Louis.
But the vote was more of a warning than anything else. The resolution is an indication of the mood of the city council and is generally non-binding, a city-council staff member said. "Pony Express is the target" of the resolution, a staff member said, not Merrill Lynch.
Merrill Lynch is calling foul.
"The Teamsters' picketing is misdirected," said William Clark of Merrill Lynch corporate communications in New York City. A Merrill Lynch subsidiary called Merrill Lynch Capital Partners is "simply a silent investor" in Borg-Warner, which owns Pony Express, Clark said.
"Merrill Lynch has no control over day-to-day operations" at Pony Express, according to a Merrill Lynch statement.
"But, of course, the name Merrill Lynch draws a lot of attention ... and [the Teamsters are] trying to bring as much pressure to bear against teh company so that we'd put pressure on Borg-Warner," Clark said. "But, we can't do anything about it."
The Teamsters are using allegations of contoversies involving Merrill Lynch over political contributions and conflicts of interest as a further reason for cities and states to stop doing business with Merrill Lynch until the labor dispute is resolved, said Bart Naylor, the Teamster's national coordinator of its office of corporate affairs.
"Pony Express is illustrative of a reason you would not want to use Merrill Lynch," Naylor said in a telephone interview yesterday. He said the union is trying to highlight the issue of abuses with campaign contributions and conflicts of interest to change the way business is conducted at Merrill Lynch.
"No matter what anyone is telling you, the real agenda of the Teamsters is to get a favorable outcome in a labor dispute in a company which Merrill Lynch does not control," said James Wiggins, director of corporate communications at Merrill Lynch.
In press releases and correspondence, the Teamsters are bringing up old allegations against Merrill Lynch. Since 1993, the firm has been under investigation by federal and state officials over a number of bond issues or business relationships in the municipal bond business.
The teamsters are dredging up old headlines and news stories to support their campaign, but have not brought any new allegations or charges to the table.
In a June 10 letter to Alabama Gov. James El Folsom, the Teamsters listed many issues on which it disagrees with Merrill Lynch's practices.
"I write to urge action to reform the practices of Merrill Lynch whose misconduct challenges the trust of awarding it taxpayer dollar to underwriter public debt," Ron Carey, general president of teh Teamsters union, said in the letter.
Merrill Lynch was one of the leaders in efforts to curb political contributions, Wiggins said in response to the Teamsters bringing up old political contributions stories. Merrill Lynch, for example, was one of the first firms to sign on to a voluntary ban started by Wall Street firms on campaign contributions to public officials who are also involved in bond issues.
Merrill Lynch is being "victimized by a progpaganda campaign that is a distortion of the facts," Wiggins said.
The city council members who passed the St. Louis resolutions do not know the whole story, Wiggins said, and Merrill Lynch is doing its best to make sure people understand that the premise the Teamsters are taking is "not accurate and not factual."
In early June, the Portland, Ore., city council tabled a resolution similar to the St. Louis one because the resolution went further than the city council legally could, said Nancy Biasi, and assistant to council member Gretchen Kafoury, who volunteered to oversee the investigation into Merrill Lynch's involvement in Pony Express.
The Portland city council is expected to consider another resolution concerning Merrill Lynch in the next two weeks, Biasi said. That resolution will probably meet the same fate as the first, she said, because the council realizes Merrill Lynch does not control Pony Express.
The Teamsters argue that Merrill Lynch and its subsidiaries hold a 47% interest in Borg-Warner and have three people sitting on its board, which makes Merrill Lynch capable of pressuring Borg-Warner into ending the labor dispute. Merrill Lynch & Co. holds 13%, with its subsidiaries holding about 34% Wiggins said.
"Even at 13%, we think they are major investors and at the very least have major influence" on Pony Express and these labor relations, Naylor said.
"The role of the directors is not necessarily to take teh side of the labor union in a labor dispute, Wiggins said. "The board has stated that Borg-Warner is bargaining i good faith." There are "fundamental inaccuracies" in what the Teamsters is alleging, he said.