The New York Hotel Trades Council and UNITE HERE Local 6, one of the most powerful hotel workers unions in the city, is embroiled in a scandal over allegations of corruption and quid pro quo dealings. A scathing whistleblower letter alleges that top officials, including President Richard Maroko, participated in actions that violated internal policies and possibly federal law.
The letter, which was reviewed by Fox News Digital, claims that union leaders accepted gifts from hotel executives, manipulated lease arrangements, and improperly influenced union business. The allegations were corroborated by union sources who spoke with Fox News Digital on the condition of anonymity due to fear of retaliation.
According to the letter, Maroko and other union officials accepted gifts of hotel rooms, liquor, gourmet food, and electronic items from hotel officials on a quid pro quo system. The letter also claims that Maroko and his team pressured an arbitrator to render a decision favorable to Highgate, a major hotel owner, and that Maroko threatened the job of the arbitrator and his son unless he ruled in Highgate's favor.
Crain's New York reported that the Hotel Association of New York City, a trade group representing hotel interests, retained former Southern District of New York public corruption chief Brendan McGuire to investigate the allegations. However, two exhaustive, independent investigations conducted by third-party lawyers on behalf of the union found no evidence to support the whistleblower's claims.
The union's spokesman, Austin Shafran, denied all allegations of impropriety and stated that the union's internal investigations found the whistleblower's claims to be unsubstantiated. However, multiple sources with firsthand knowledge of the union's operations told Fox News Digital that the allegations were true and that the union's leadership has a culture of quid pro quo dealings.
One source, who has decades of experience working with the union, said that the union's leadership has become increasingly corrupt and that the union's rules and policies are no longer being followed. The source also claimed that the union's leadership has a close relationship with hotel executives and that this relationship has led to the union's corruption.
The whistleblower's letter also alleges that the union's leadership has manipulated lease arrangements and that the union has accepted gifts from hotel executives in exchange for favorable treatment. Fox News Digital has reviewed photographs that appear to show hotel industry figures or their associates entering union offices with shopping bags. The union acknowledged the veracity of these photographs, but claimed that the bags only contained a pie or cake, not expensive food and drink.
Maroko's compensation package, worth nearly $1 million annually, has also come under scrutiny. The Center for Union Facts, an organization critical of labor unions, argues that Maroko is using his members' dues for self-enrichment. Additionally, the union's decision to rent a building owned by UNITE HERE Local 6 to HTC at a rate allegedly far below what the space would go for on the open market has raised eyebrows.
Two sources told Fox News Digital that the lease was not approved by the union's executive board. The union's spokesman, Shafran, stated that the lease was signed over 40 years ago and renewed over 20 years ago, and that the current administration had nothing to do with it.
The union's internal investigations have been criticized for being a farce that dismissed the seriousness of the situation and left out key information. One union source close to the situation told Fox News Digital that they were not interviewed as part of the internal probe and that Maroko wanted no part of it.
The allegations made by whistleblowers have yet to be corroborated by any independent review or legal authority. However, a veteran hotel industry leader who has dealt extensively with HTC told Fox News Digital that the allegations of improper gift-giving were "not shocking" but that the allegations of arbitration tampering were "surprising and alarming."
