Fund and Games

Hal Espinosa, President of Local 47 and Tom Lee’s opponent for AFM President in 2007, is going to be leaving the Board of Trustees of the AFM-EP Fund, although not by his own choice:

October 17, 2008Hal Espinosa, President
Local 47, AFM
817 North Vine St.
Hollywood, CA 90038 Dear Hal,

As you know the AFM EP Fund Agreement and Declaration of Trust requires that Union Trustees and management trustees on the Fund be equal in number. That requirement is contained in Article iii, Trustees, Section 3.1 under the title “Composition of Trustees” and it  states “There shall always be an equal number of Employer Trustees and Union Trustees  (except in situations in which a Trustee vacancy is pending and waiting to be filled.)”

As you know, I encouraged the expansion of the number of Trustees in earlier years so that a  symphonic representative could be appointed. Further, it was important to achieve some  diversity in terms of gender and locals. To that end, l’m pleased that there are now three  women Trustees as well as representatives from Nashville, Houston and San Francisco. I know that the Trustees and Local Officers will agree that this is a positive change for the AFM EP Fund Board of Trustees.

At this point in time, one of the management Trustees, lrv Cheskin, has stepped aside and has been given a title of Emeritus but has no voting rights. This means the management Trustees now number 8 while the Union side has 9. There is not a contemplation that the management trustees will replace trustee Cheskin’s position in the immediate future and so  the Union has one more trustee than management.

Since the Declaration of Trust requires an equal number of Trustees I must reduce our side  by one. Inasmuch as you are retiring in the near future, it makes the most sense to retain  Phil Yao as the representative from Los Angeles. Accordingly, I am removing you as a AFM EP Fund Trustee effective December 31. 2008.

On behalf of 90,000 musicians in the AFM I want to thank you for your many years of service  and I look forward to the next time I can appoint a member of the Los Angeles community to  the AFM EP Fund Board of Trustees.

Sincerely and fraternally,

Thomas F. Lee / President / AFM

There are several interesting aspects to this letter. For one thing, Tom’s assertion that he is required to reduce the number of Union trustees by one is a very selective reading of the Trust Agreement. True, it does say that there must be an equal number of employer and union trustees. But the complete text of Article III, Section 3.1 reads:

The number of Trustees under this Agreement shall be designated by the Board from time to time, provided that there shall be at least seven (7) Employer Trustees and at least seven (7) Union Trustees and no more than ten (10) Employer Trustees and ten (10) Union Trustees. There shall always be an equal number of Employer Trustees and Union Trustees (except in situations in which a Trustee vacancy is pending and waiting to be filled).

The fact that there is “not a contemplation” that the departing employer trustee will be replaced means literally nothing; the number of trustees is a decision that must be made by the Board as a whole, not by the management trustees (or, more likely, the lead management trustee, Norman Samnick), and certainly not by Tom Lee acting on his own. If the management trustees are in violation of a decision made by the Board in 2005 to have 18 trustees, then call them on it. Why should the AFM President fire the longest-serving union trustee in order to bring the employer trustees into compliance with the Trust Agreement?

Also curious is Tom’s assertion that he “encouraged the expansion of the number of Trustees in earlier years so that a  symphonic representative could be appointed.” If he’s talking about a union trustee who was a symphonic musician, he could have done that at any time without expanding the Board. The President of the AFM has always had the power to remove union trustees and replace them at his/her discretion. Understandably, AFM presidents have been reluctant to remove trustees (most of whom have been local officers and thus voting delegates to the AFM Convention) in order to replace them, especially with rank-and-file trustees who can’t vote at AFM conventions. But Tom, as President, always had the power to do so, regardless of the number of trustees.

And, if he’s talking about getting an employer trustee appointed from the orchestra industry, that hasn’t happened to date, even though orchestras account for around a third of the Fund’s total contributions and even though ICSOM has gone on record favoring such an appointment. The stated rationale for no such appointment having yet been made has always been the lack of an opening amongst the employer trustees. So why would Tom accede, without the appearance of a fight or even a discussion, to the elimination of an open employer trustee slot? Open slots on the employer side are about as frequent as snow in Florida. Perhaps the employer trustees believe that long service on the Fund Board is helpful to their side and thus hang on forever. I suspect they’re right. If Tom believed that as well, maybe he would have found someone other than the longest-service union trustee to remove.

So what’s really going on? I don’t know. It does seem odd that Tom Lee pushed to expand the number of trustees three years ago, only to roll over without a protest when the employer trustees want to reduce the number now.

I’ve been told that Tom has told people that he tried to get Norman Samnick to bring a symphonic person onto the management side of the Board. I’ve also heard speculation that Hal was dumped so that Local 47, which has always had an elected officer on the Fund Board, would have to get Phil Yao to step down in order to get their seat back. A nice, juicy fight between Local 47 and RMA could certainly be very helpful to Tom in the current RMA/IEB war.

I guess both could be true. But what does seem clear is that Tom’s stated rationales – that he’s required to get rid of one union trustee and that Hal is the logical person to walk the plank, given that he’s about to retire from the presidency of Local 47 – don’t hold up. Not only is Tom not required to dump a trustee; he may not even seem have the authority to do so, if the purpose is to reduce the number of union trustees. And one of the union trustees, Melinda Wagner, retired from her Local’s presidency several years ago. Yes, her presence on the Fund Board contributes to gender diversity. But Hal was the only Hispanic trustee. Why isn’t there room for both?

I’m hoping to be able to retire some day on a pension paid by the AFM-EP Fund. I can’t say that all of this makes me very happy about the Fund, or very confident about my future benefit. If the AFM-EP Fund were a bank, and I saw this kind of stuff going on amongst the bank’s board of directors, I think I’d move my money to another bank.

That’s not so easy to do with the money that’s been contributed on my behalf to the AFM-EP Fund, of course. But I hope that the trustees remember that their most valuable asset is the trust that the participants, and the employers, have in the management of the Fund. I’d hate to see that asset take the same kind of hit that the financial assets of the Fund have likely taken in the past month.


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