Labor Department Plans Increasing Scrutiny of Union Finances

The Bush administration has been rapidly expanding its audits of labor unions.  Union officials are crying foul, claiming the administration is retaliating against their overwhelming support for Senator John Kerry in last year’s presidential election.  But the primary legacy of the recent ramping up of investigations may be a thorough housecleaning of union of their criminal element.

 

The Department of Labor has released figures showing that during 1991-2000 the number of its audits of national and local unions fell from 1,080 to 206.  By contrast, in 2004 the department performed more than 500 audits.  And it expects to conduct even more this year, in large measure because of the planned addition of 48 full-time workers to its union-auditing unit this year.  That represents a 14 percent increase in the face of personnel cuts in other areas.

 

Lary F. Yud, deputy director of the Read More ➡

Former Head of Kansas Teachers Union Charged with Forgery, Theft

Wayne Kruse has some lessons to learn, not just teach. On March 8, Kruse, former president of the Lawrence, Kansas Education Association, an affiliate of the National Education Association, was charged with two counts of forgery and one count of theft in connection to the disappearance of nearly $100,000 in union funds. LEA’s current leadership discovered more than $97,000 missing from about $240,000 in dues deducted from members’ paychecks between November 2003 and August 2004. Sam Rabiola, a high school English teacher who succeeded Kruse as the local president, said he found the group’s finances in disarray. “There were no books,” he remarked. “There were some duplicate check stubs and that was about it. A lot of money had been spent and was unaccounted for.”

Kruse, a sixth-grade teacher who had headed the local union since 1999, would not be long at his job. Rabiola asked the Kansas chapter of Read More ➡

Fed. Agency Charges Md. Union with Threatening Employees

Federal authorities say the Maryland State Teachers Assn. (MSTA) broke federal labor laws by “threatening and coercing” employees who sought company benefits denied by the union.  According to the National Labor Relations Board (NLRB) ruling at the end of March, union officials must stop such unfair practices as reprimanding workers petitioning for employment benefits or job reassignments and must post notices stating that they violated labor law.

 

The union, an affiliate of the Natl. Education Assn., is Maryland‘s largest union and represents about 60,000 public school employees.  The labor board is the third government agency to find the union mistreated its employees.  The Internal Revenue Service found in February 2004 that the union avoided payroll taxes by wrongfully denying employment benefits to union organizers.  In May, the Maryland Department of Labor, Licensing and Regulation made a similar finding regarding unpaid state workers’ compensation and Read More ➡

Wisc. Union Boss Accused of Stealing

A former official of the American Federation of State, County and Municipal Employees was charged on April 13 with felony theft from that union.  Chris Dehn, 36, of Portage, Wisconsin, had served as treasurer of AFSCME Local 3394, which represents workers at the state’s Columbia Correctional Institution.  Prosecutors allege Dehn, while working as a guard at CCI stole $26,189.  The criminal complaint said that Dehn “admitted to taking cash withdrawals from the union savings account,” and “also stated that it was typical for him to get a signature from another union officer upon a blank check and Dehn would then write the rest of the check out.”

 

Columbia County Circuit Judge Daniel George released Dehn from jail on a signature bond after a court appearance.  If convicted, he faces up to 10 years in prison and a $25,000 fine.  [Associated Press, JanesvilleRead More ➡

Miami Bosses Charged with Embezzlement

For a half-decade, leaders of the Miami-Dade County local of the American Federation of State, County and Municipal Employees ran their union like a private slush fund.  But as ex-leaders, they are paying the wages of their crimes.  On April 20 four former officials of AFSCME Local 121 surrendered to the Dade County authorities, the result of a full investigation by county prosecutors and the inspector general into financial irregularities.  A fifth ex-officer accused in the probe died last year.

 

According to the arrest affidavit, during the period 1997-2002 the five had embezzled roughly $350,000 in membership dues, mainly from county water and sewer department employees, and then lied about the missing money.   The officials were supposed to ensure that $726,865 of the more than $1 million in dues collected over this time were sent to the union’s international and state parent organizations.  But Read More ➡

Gambino Crime Family Busted in Racketeering Case

David N. Kelley, the United States Attorney for the Southern District of New York, Pasquale D’Amuro, the Assistant Director in Charge of the New York Office of the FBI, Robert Johnson, the District Attorney for Bronx County, and Gordon S. Heddell, the Inspector General of the United States Department of Labor, announced on March 9 the unsealing of a 53-count Indictment in Manhattan federal court captioned United States v. Arnold Squitieri, et al., 05 Cr. 228 (the Indictment”).

 

The Indictment charges 32 defendants, most of whom are members or associates of the Gambino Organized Crime Family of La Cosa Nostra (“LCN”), with wide-ranging racketeering crimes and other offenses spanning more than a decade, including violent assault, extortion of various individuals and businesses, loansharking, union embezzlement, illegal gambling, trafficking in stolen property

and counterfeit goods, and mail fraud.

 

The chief defendant is Arnold Squitieri, a/k/a “Zeke,” a/k/a “Bozey,” a/k/a Read More ➡

Ex-Secy. Treasurer Indicted in Md. Fed. Court

On March 2, in the U.S. District Court for Maryland, Steven R. Fairfax, former secy.-treasurer of Branch 3939, Natl. Assn. of Letter Carriers, was indicted on one count of embezzling union funds in the amount of $53,990.  Fairfax was also indicted on two counts of making false statements in reports. Fairfax‘s indictment follows an investigation by the Washington District Office  of the U.S. Office of Labor-Mgmt. Standards. (OLMS, 3/22/05]

 

Ex-Secy.-Treasurer Sentenced in Ill. Fed. Court

On March 11, in the U.S. Dist. Court for the Northern Dist. of Illinois, Derrick Thomas, former secretary-treasurer of Local 138, Glass Molders Plastics Union, was sentenced to three years probation, with the first six months in home confinement, for embezzling union funds.  In addition, he was ordered to: (1) make additional restitution of $3,528.52, (2) pay a special assessment of $100, and (3) complete 200 hours of Read More ➡

President Bush Puts Budget Priority on Union Corruption

While seeking fiscal responsibility in his proposed FY 2006 budget, Pres. Bush has made it clear that he will not stint on fighting union corruption.  While the Dept. of Labor’s overall budget is decreased by 4.4 pct. from FY 2005, the U.S. Office of Labor-Mgmt. Standards includes an increase of $7 million to fight fraud and corruption in labor unions. Money would be used to beef up audits, help hire 48 new auditors, and investigate and combat embezzlement of union funds. [DOL, 2/7/05]Read More ➡

S. Fla. Boss Sentenced for Racketeering

On Feb. 20, Walter J. Browne, former President of the National Federation of Public and Private Employees, and Patricia A. Devaney, his sister and Administrative Assistant at the union were sentenced to terms of 5 yrs, 10 months’ imprisonment and 2 yrs., 3 months’ imprisonment.  They were sentenced by U.S. Dist. Judge Jose E. Martinez (S.D. FL, G.W. Bush) in connection with the defendants’ violations of the Racketeering Influenced and Corrupt Organizations (RICO) Act.  The sentences were announced by Marcos Daniel Jiménez, U.S. Attny. for the Southern Dist. of Fla.; and Douglas Colon, Special Agent in Charge, U.S. Department of Labor, Office of Labor Racketeering and Fraud Investigations

 

On June 2, 2004, Browne and Devaney were convicted by a federal jury in Miami, after a two-month trial, of conspiring to violate RICO, in violation of Title 18, United States Code, Section 1962(d), and of committing substantive RICO Read More ➡

Former NJ Party Chairman Charged with Embezzling from Union & Bankrupt Health Fund

A federal grand jury returned a five-count indictment on Feb. 23 against a former Sussex County political party chairman and two other individuals for their roles in embezzlement schemes that victimized Local 16 of the United Service Workers of America and its now-bankrupt health fund.  Charles W. Cart, Charles H. Wiener and Marvin Raphael are charged with conspiring to embezzle a total of approximately $284,000 in health and union funds as a result of a multi-faceted fraud scheme existing between May 2000 and November, 2001. 

 

Susan Donato of St. Cloud, Fla., formerly the President of Local 16 and the administrator of the Local 16 Health Fund was previously charged in a separate one-count Information.  Donato pled guilty in January to conspiracy to embezzle from the Health Fund and is presently cooperating in the government’s investigation.

 

Cart is a former Sussex County political party chairman as Read More ➡