When it comes to union violence, International Union of Operating Engineers (IUOE) Local 17, based near Buffalo, N.Y., has to rank as among its most obnoxious practitioners. The evidence of crime proved convincing enough for a federal jury last month to convict former local president and business manager Mark Kirsch on various racketeering-related charges. Yet the same jury in the eight-week trial also acquitted four other defendants. Prosecutors alleged that all five union members were involved in repeated acts of vandalism of nonunion construction sites and terror against nonunion contractors and workers. The case had sprung open in 2008 with the indictment of a dozen persons, several of whom eventually pled guilty. While union leaders and their lawyers are cheering the outcome, it is highly unlikely the local can resume its mobster style of enforcement.
Union Corruption Update first reported on this case six years ago. During predawn hours of April 8, 2008, federal and state law enforcement agents arrested a dozen Local 17 members, among them Mark Kirsch. The raid was the culmination of a five-year joint federal, state and local investigation into a series of reported assaults, threats and property destruction at construction sites in Western New York State that began in 1997. All defendants named in the 62-page, eight-count indictment initially denied the charges. Prosecutors had alleged that the 75 listed criminal acts, far from being unconnected, were part of a criminal enterprise intended to persuade area contractors to use Operating Engineers Local 17 labor. Projects ranged from small-scale demolitions to the renovations of the Roswell Park Cancer Institute and Ralph Wilson Stadium.
The union drove a rough bargain. If it got wind that a given construction project was using nonunion equipment operators, it responded with intimidation that would have done the Mafia proud. Among incidents cited in the indictment:
Carl Larson, an organizer for Local 17, on February 5, 2003 tried to force an Orchard Park, N.Y. contractor and project owner to sign a collective bargaining agreement with the union. Several weeks earlier, in December 2002, the project owner had been stabbed in the neck by another union member, Michael Caggiano, and had his tires slashed. The owner asked Larson in the February encounter: “What are the positives [to signing with the union]? You guys slash my tires, stab me in the neck, and try to beat me up in a bar. What are the positives to signing? There are only negatives.” Larson’s response: “The positives are that the negatives you are complaining about would go away.”
Michael Eddy took part in a campaign of violence and intimidation against a Latham, N.Y.-based contractor who at the time was removing soil contaminated with coal tar from underneath a school in downtown Buffalo during the summer of 2005. Eddy was part of a group of members of Local 17 who had vandalized a pickup truck driven by the contractor project manager and then, after the manager had entered the work site and gotten out of his truck, “belly bumped” him. During this campaign a Local 17 organizer had gotten hold of the project manager’s address and sent an anonymous threatening letter to his wife.
George DeWald was part of a campaign to force a Frankford, N.Y. contractor, the low bidder on a project to expand a landfill in Chaffee, N.Y., to sign a collective bargaining agreement. On the night of May 7 or 8, 2002, DeWald and several other members went to the landfill and inserted sand into the engines and hydraulic lines of nine separate pieces of heavy machinery. This caused significant delays in project completion time and over $240,000 in equipment damage.
Larson, Eddy and DeWald each pleaded guilty on or just before December 27, 2013 and agreed to testify in the trial of seven remaining defendants. By the time the trial rolled around, a grand jury already had handed down two superseding indictments.
That the court trials had been delayed for so long is a tribute to the resourcefulness of the legal team representing the Lake View (Erie County), N.Y.-based Operating Engineers Local 17. One union attorney, Catherine Creighton, is a lead partner at Creighton, Johnsen & Giroux, the Buffalo law firm where current National Labor Relations Board Chairman Mark Gaston Pearce practiced prior to becoming a board member; months prior to his March 2010 recess appointment to the NLRB, Pearce acknowledged during a Senate confirmation hearing that the local had been one of his clients. In the case at hand, defense attorneys from the start have been pouring on the populist puffery. At President Mark Kirsch’s well-attended bail hearing in April 2008, one of his defense lawyers, Rodney Personius, declared: “I’ve never seen such tremendous family support. He (Kirsch) feels that all the activities that he engaged in were proper union activities.” And union attorney Richard Furlong stated: “If these defendants truly get a jury of their peers – including working people, including those who have lost a job or who have no health insurance – they will all be acquitted. In fact, the jury will pin medals on them.”
But the prosecution also had fire in their eyes. They had persuaded a grand jury to deliver two superseding indictments – the second one against 10 persons. And the feds had every reason to believe they would win, especially given that their star witness was union organizer James Minter III. One of three defendants accused of running (as opposed to simply taking part in) the racket, Minter already had pleaded guilty. He was the guy who wrote that menacing letter to a contractor’s wife. Five IUOE Local 17 members – President Mark Kirsch, business agents Gerald Bove and Thomas Freedenburg, and members Michael Caggiano and Kenneth Edbauer – went on trial starting this January. Caggiano already had pleaded guilty to a state misdemeanor (not a felony) charge in his stabbing of a contractor. During his testimony, Minter told the jury in the Buffalo courtroom about his decade-long involvement in criminal activity. In his words, the strategy was: “Try to delay work as much as possible. Try to slow down the trucks.” Under questioning by U.S. Attorney Anthony Bruce, Minter spoke of his handing out “stars” (sharp metal objects) designed to flatten truck tires at a picket line; pouring sand into the machinery at another site; and writing a menacing letter to a contractor’s wife. The purpose of such acts, Minter emphasized, was to intimidate contractors into hiring members of Operating Engineers Local 17.
More than anyone else, Mark Kirsch was the key to the case. If he could be shown to have orchestrated the campaign, prosecutors believed, the four other defendants would roll as well. Taking the witness stand in late February, he denied that he was part of a criminal conspiracy. Instead, he claimed to have been aware of only five instances of vandalism, and when notified, ordered disciplinary action against the perpetrators in each case. Under friendly examination by defense lawyer Rodney Personius, he denied that any contractors or fellow union leaders had complained about vandalism. And while he personally approved of the acts of violence and vandalism (itself a red flag), he denied that he took part in them. His account sounded convincing, but it flatly contradicted sworn statements by dozens of union members, nonunion employees and contractors.
In all, about 80 witnesses testified. When the trial was over, it was hard to doubt that Local 17 operated as a criminal enterprise. On March 7, the jury reported its verdict: Mark Kirsch was guilty of racketeering conspiracy, extortion conspiracy, and attempted extortion. Yet the jury also declared the other four defendants not guilty. Defense lawyers were over the moon. “Their (the jury’s) overall verdict demonstrates they were not enamored with the government’s case,” said Rodney Personius. And Michael O’Rourke, who represented Michael Caggiano, the guy who stabbed a contractor, exulted: “Mr. Caggiano is absolutely elated. He’s had this matter hanging over his head since the indictment. From my perspective, he never should have been part of this case.” U.S. Attorney Anthony Bruce, understandably, was more circumspect. “The verdict was a mixed verdict,” he said. “We accept what the jury did, and justice was done.”
Yet the big picture suggests the outcome was a good deal more favorable to the prosecution – and public accountability. Of the ten defendants named in the second superseding indictment of January 10, 2012, five already had pleaded guilty. The ringleader, Mark Kirsch, is almost certainly headed for federal prison. And the four who got to walk aren’t likely to play any future role in union affairs. The federal government will be watching them like a hawk. Who wouldn’t watch them? The whole crew was scary. Even some of the feds admitted as much. “The union members who pleaded guilty in this case made honest working people go to work in fear of being stabbed or assaulted, even more so than I do as a law enforcement officer,” said Brian Boetig, FBI Special Agent-in-Charge in Buffalo. The smart money says the old regime is gone. Like two other fallen Western New York State union behemoths, Laborers Local 91 (Niagara Falls) and Laborers Local 210 (Buffalo), Operating Engineers Local 17 is about to understand the meaning of the word “limits.” Nonunion contractors in the Buffalo area, not to mention their work forces, can breathe easier.
The case may be over, but there is a key piece of unfinished long-term business: eliminating a loophole in the Hobbs Act, an anti-racketeering law passed by Congress in 1946 designed to discourage extortion or robbery in the course of interstate commerce. The loophole is more than 40 years old. The Supreme Court, in United States v. Enmons (1973), ruled by 5-4 that under certain circumstances a union could be exempt from Hobbs Act statutes if it could demonstrate its intent to pursue “legitimate” objectives. While the High Court did not exempt unions outright, it did raise the bar to achieve a conviction. In the process, it implied that when it comes to unions, the ends may justify the means. More than a dozen states since have created a similar exception. Federal prosecutors in the Local 17 case relied upon the Hobbs Act (and by extension, its original basis, the Anti-Racketeering Act of 1934) to show that IUOE Local 17 operated as a criminal enterprise. Over the years, certain members of Congress, especially Sen. Orrin Hatch, R-Utah, and Reps. Joe Wilson, R-S.C. and John Kline, R-Minn., have tried to repeal the Enmons exception. Each time, the proposed legislation went nowhere. Now would be a good time to revive it.