Roughly three years ago the leadership of the Washington Teachers Union (WTU), an affiliate of the American Federation of Teachers, revealed itself to be a racket of charlatans picking the pockets of dues-paying members. One by one, culminating with local President Barbara Bullock in the fall of 2003, the major players in a complex, long-term scheme to fleece WTU coffers of at least $4.6 million, pleaded guilty in federal court. To the surprise of almost nobody, the union’s two holdouts, Office Manager Gwendolyn Hemphill and Treasurer James O. Baxter II, neither of whom could be called “educators,” failed to convince a court of their innocence.
On August 31, a federal jury found both Hemphill and Baxter guilty on nearly two dozen counts, including conspiracy, embezzlement, money laundering, and wire fraud. A third defendant, a suburban Maryland-based tax accountant, James Goosby, 56, was found not guilty of covering up the thefts. … Read More ➡
The phrase “You stole my heart,” has cropped up in more than one popular song. But the people who write the songs also have a decidedly non-romantic theft issue: stolen royalty payments. And the feds want to know a few details. Charles Sanders, special counsel for the Songwriters Guild of America (SGA), recently confirmed that his group is cooperating with the FBI, the IRS and the U.S. Postal Service in a federal investigation of a suspected embezzlement scheme engineered by its royalties manager, Marsha Aiken, and several relatives and associates. Investigators estimate the total missing funds at $1.25 million. To understand how bandits within the SGA have pulled off the royal scam, it’s essential to know a few things about the guild itself.
The Nashville-based Songwriters Guild of America, with an office in Weehawken, N.J., across the Hudson River from New York City, represents about 5,000 songwriters … Read More ➡
It’s not easy going from hero to goat in one’s own union. But Mike Rice can testify first-hand how quickly it can happen. On September 1, he was charged in U.S. District Court, Madison, Wisconsin, with embezzling more than $30,000 from United Food and Commercial Workers Local 538. For more than a decade he’d headed the local, which represents roughly 2,200 workers at Tyson Foods, Oscar Meyer Foods, and Jones Dairy Farm plants. The U.S. Attorney’s Office, based on evidence obtained from a Labor Department investigation, alleged that from about September 2000 to April 2004, Rice, 57, embezzled UFCW funds by filing expense claims for nonexistent meetings.
The news was a bitter pill for rank and file to swallow. He had been president of Local 538 prior to a nearly year-long strike in 2003 against the Tyson plant in Jefferson (located about … Read More ➡
James C. Gaile was mayor of Niagara Falls, N.Y. in 1998 when hired hands belonging to Laborers Local 91 assaulted non-union workers at two hotel construction sites in the city. But was he privy to a secret agreement to look the other way? Gaile insists neither he nor any other public official gave approval to the goons’ behavior. But one of those indicted goons, Dominick Dellaccio, 60, who at one time was president and business manager of the local, may tell a different tale when he takes the witness stand next January at a federal racketeering trial.
The long reign of intimidation by Local 91 has been well-documented in these pages. But prosecutors think there’s a chance the union had some hidden help from City Hall. Gaile, 63, admits that he, then-Police Superintendent Anthony Fera, and then-City Administrator Anthony Restaino had a meeting … Read More ➡
Wayne Kruse, president of the Lawrence Education Association from 1999 until early this year, pleaded guilty in Douglas County (Kan.) District Court on September 6 to stealing nearly $100,000 from the union. The former sixth-grade teacher admitted to one count each of theft and forgery totaling more than $97,000. In return for the plea agreement, prosecutors dropped a second forgery charge. Sentencing is set for October 3. The LEA is affiliated with the National Education Association. (Associated Press, 9/6).
NYC Fire Fighters Union Member Arrested in Bribe Attempt
Thomas DeParma, 54, was a retired veteran of the New York City Fire Department and a member of the Firefighters union. His son, Christopher, 28, wanted to follow in his footsteps. There was only was obstacle to passing the generational torch: His son had to pass a urine test. … Read More ➡
With the reign of the Duff family now over, Chicago might well have an absence of City Hall patronage scandals were it not for its Hired Truck Program. A reminder that “honest graft” is not a relic of the past, the program thus far has resulted in nearly two dozen guilty pleas. But one of its less heralded repercussions may be confirmation of widespread suspicions that Teamsters President James P. Hoffa and his loyalists have a habitual blind spot when it comes to corruption.
The City of Chicago created the Hired Truck Program to outsource hauling work to private trucking companies and bypass the standard competitive bidding process. In practice, the program has been an open invitation to the greased palm to obtain or retain contracts. Thus far 32 former City workers and trucking officials have been charged in a nearly two-year-old FBI investigation. The latest two trophies are Anthony … Read More ➡
Local 1181 of the Amalgamated Transit Union, in Queens, N.Y., consulted for years with New York’s Genovese crime family. Unfortunately, it didn’t consult with its own 13,000 members. Now, in the wake of federal prosecutions of the local’s leaders, the union’s national headquarters are getting an earful from local rank and file, which consist of drivers of school buses, private buses, and vans.
On July 28, federal agents and local police arrested 20 alleged mob members and associates, including Local 1181’s president, treasurer and pension director. The latter three persons are, respectively, Salvatore Battaglia, 58, Julius “Spike” Bernstein, 82, and Ann Chiarovano, 64. The indictment leading to the arrests charged, among other things, that Bernstein conspired with top Genovese mobster Matty “the Horse” Ianniello to extort cash payments from a medical center that rented space from the local. Some local members aren’t too happy about this turn of events. “We … Read More ➡
San Diego, of all places, lately has acquired an unwanted image as Sin City. In mid July, Acting Mayor Michael Zucchet was forced out of office – his first day on the job. His predecessor, Dick Murphy, re-elected by a close margin last November, had just resigned over allegations of mismanagement of the deficit-ridden public employees’ pension fund. But these scandals, which appear to be heavily driven by zealotry of political opponents, may be masking a bigger problem: a longstanding old-boy network of local politicians and union bosses.
That would seem to be the case with Ralph Inzunza, recently suspended from his job as a San Diego City Council member. He and Zucchet (who also had been a council member), both 35, were convicted in a federal trial court this July on extortion and fraud charges. The case centered on the pair’s acceptance of $34,500 worth of bribes and illegal … Read More ➡
David Feeback’s sybaritic ways as president of Local 69 of the Hotel Employees and Restaurant Employees ended several years ago. This August 23 he got the final bill: a year and a day in federal prison, and mandatory restitution of almost $90,000. Feeback, 43, headed the Secaucus, N.J.-based local during December 1997-September 2001. But his primary duties during that time seemed to be using union funds to support spending sprees at expensive eating and entertainment establishments, and logging them as “business expenses.” The true tally of Feeback’s partying may have been a good deal higher than the restitution. Authorities believe he may have illegally spent as much as $250,000. That’s not an unreasonable claim, considering that the local’s health and welfare fund under his reign managed to rack up $1.5 million in unpaid claims.
Feeback, currently a resident of Charlotte, N.C., had pleaded guilty on May 3 to two counts … Read More ➡
On July 29, in U.S. District Court for the Western District of Missouri (Southwestern Division), Tawyuna Palmer, ex-financial secretary of Local 11-14228 for the United Steelworkers, was sentenced to five years probation for embezzlement of nearly $21,500 in union funds. She pleaded guilty back in April following an investigation by the Department of Labor’s Office of Labor-Management Standards (OLMS), and since then has made restitution. In addition to probation, Palmer will have to serve six months of home detention and perform 120 hours of community service. (OLMS, 8/17).
Former Philly-Area Manager Pleads Guilty to Embezzlement
On July 26, James Jordan, ex-business manager for Local 161 of the Riggers union, pleaded guilty in U.S. District Court for the Eastern District of Pennsylvania to one count of embezzlement totaling $21,652.80. Additionally, he pleaded guilty to one count of making a false entry in the local’s records. He had been indicted in May. … Read More ➡