A local drywall company, embroiled in a dispute with a local union over how much it pays its carpenters, has lost its subcontract on the new Boise branch library at Ustick and Cole roads.

The city asked the contractor to let Great White Drywall Inc. go after learning from the union that the company's owner had a $2 million lien placed on him by the Internal Revenue Service. The lien was for unpaid federal employee payroll, unemployment and income taxes from 2001 to 2006, when the business was a sole proprietorship.

The union, the Pacific Northwest Regional Council of Carpenters, is "taking my personal life and crucifying me with it," said Martin Palasch, owner of Great White Drywall. "As far as we're concerned, if the city pulls the contract, we're going to sue them."

Adam Park, a spokesman for Mayor Dave Bieter, confirmed that the city sent a letter to general contractor Petra Construction saying "we aren't comfortable with Great White as a subcontractor."

"We're concerned with a company that has such a large number of tax issues against it," Park said. While Bieter is a Democrat and his party is friendly to unions, "It's not a political issue," Park said. "We feel like we want to do business with people who are financially responsible."

A spokesman for Petra Construction said the company has always had a good relationship with Great White, but ultimately Petra works for the city and will have to abide any request to remove the subcontractor.

Great White is the latest local contractor to be targeted by the carpenters union for allegedly paying less than the $24 an hour in wages and benefits earned by union members. The union is also protesting the hiring of Interior Systems Inc. to provide carpentry work for the $122.5 million renovation and expansion at the Capitol building.

The union's protest against Great White has expanded beyond the library project to its work on Boise State University's new nursing building and its work on the new tower at Boise Airport.

The union says Great White is undercutting wages for all area carpenters. "If we don't prop up our own wages, then everybody suffers," union official Lloyd Weatherford said.

Great White's Palasch says he pays his journeyman carpenters between $17 and $21 an hour.

Great White will have to pay the federally mandated minimum wage of $23.92 plus benefits on the airport tower, a Federal Aviation Administration project, Weatherford said. That payroll has to be certified by the federal government.

Weatherford alleges that by paying lower wages and then not paying taxes, Great White can undercut its competition. As an example, he said Great White won the contract to do the drywall work on the new airport tower with a bid that came in about 40 percent below its closest competitor.

"That tells me that either they made a serious math error (in the bid), or they don't plan on paying the prevailing wage required on a federally funded project," Weatherford said.

A wage survey conducted last year by the state and federal governments said the nearly 4,200 carpenters in Ada, Canyon, Boise, Gem and Owyhee counties averaged $14.15 an hour, excluding overtime and benefits. Many carpenters do not belong to unions. Idaho is a right-to-work state, meaning workers cannot be compelled to join a union or pay union dues to keep a job.

Another union official, Ron Robbins, said Palasch is not only limiting competition, he's encouraging contractors to cheat as well.

"How long can you keep losing projects to a competitor before you start employing the same tactics to get down to the same bid?" Robbins asked.

Great White Drywall's job was to do the drywall and steel stud work on the new branch library for $224,733.

At the time Palasch fell behind on taxes, his company was a sole proprietorship operating under the name Great White Drywall Unlimited, so the liens were against Palasch himself.

Palasch admits that the payroll and other taxes were not paid but insists it was a mistake he was not aware of at the time.

"It was just stupidity. But it's my responsibility and it is being taken care of," he said.

Palasch said he is gradually paying the $2 million. In addition, Great White owed the government between $200,000 and $300,000 in other unpaid taxes, much of which has already been paid, he said.

He also ran into trouble with state taxes. Seven state tax liens were filed against Great White between July 2002 and March 2006, and 15 against Palasch and his wife, Carolyn, between March 2000 and January 2008. All have been satisfied, according to Weatherford and the Idaho Tax Commission.

Great White has since incorporated, with Palasch as an employee and stockholder.

Palasch's attorney, Larry Dunn, said that if the IRS had found any criminal intent it would have brought charges against his client, rather than agreeing to a repayment plan.

Weatherford said that even if the $2 million tax lien is against Palasch personally, the IRS could potentially step in and take over the new company, which raises questions about Great White's ability to complete its public works project.

Another of Palasch's lawyers, Rick Stacey of Meuleman Mollerup LLP, dismissed that argument, saying that general contractors require their subcontractors to put up performance bonds that guarantee "the work will be done" even if both the general contractor and subcontractor go out of business.

"Right now, we're looking at our legal options against Petra and the city," Stacey said.

Stacey said a meeting with the city has been requested in hopes that "if we sit down, everything can be worked out and Great White can go back to work." So far, however, "the city has not agreed to the meeting," Stacey said.

Joe Estrella: 377-6465