As reported in the last issue, a federal grand jury in Washington, D.C., is probing stock transactions by directors of a union-dominated insurance firm ULLICO linked to the now bankrupt firm, Global Crossing. The Wall St. Journal reports that internal documents reveal that ULLICO officers and board members cashed in on some 71,000 ULLICO shares between Jan. 2000 and Sept. 2001, possibly at the expense of the very union pension funds to which they owed a fiduciary duty. The profits were potentially huge. For example, Martin J. Maddaloni, president of the United Ass'n of Plumbers & Pipe Fitters, allegedly reaped a $184,000 profit from timely selling of a mere 2,000 shares of his ULLICO stock back to ULLICO in 2000.
More than two dozen union presidents were reportedly invited to buy shares in Global Crossing, as the Bermuda-based telecom was first offering its stock to the general public. Now a federal grand jury in Washington, D.C., is probing stock transactions by directors of insurance and investment firm ULLICO (f.k.a. Union Labor Life Ins. Co.), a union-dominated firm founded by the AFL. ULLICO's board is chaired by ex-AFL-CIO Building & Construction Trades Dep't president Robert A. Georgine and includes many current and ex-union presidents.
Reportedly, the investigations focus on trading privileges that allegedly allowed ULLICO's board members to profit from the purchase and sale of its shares. The transactions were lucrative because the privately held company's stock price was reset each year based on its book value and the board members could anticipate the change. ULLICO's shares had risen on the strength of several deals, including a $500 million profit on a $7.6 million investment in telecom firm Global Crossing, which declared bankruptcy in Jan. 2002.
Leonard M. Duge, ex-vice president of Communications Workers of Am. Local 59053 (a.k.a., National Association of Broadcast Employees & Technicians Local 53) in Burbank, California, admitted Feb. 25 to embezzling $22,137.66 from the local between Jan. 1996 and June 1998. He submitted fraudulent salary loss vouchers to Local 59053, was reimbursed, and spent the money on personal expenses. In exchange for the guilty plea, the U.S. Atty.’s Office in Los Angeles charged Duge on Mar. 5 with only a single count of falsification of union records. The plea agreement stated that Duge has made full restitution of $22,137.66.
U.S. Dist. Judge Richard M. Berman (S.D.N.Y., Clinton) ruled Jan. 24 that two telecommunications wiring installation contractors, U.S. Info. Systems Inc. and Odyssey Group Inc., may proceed with their claims that Int'l Bhd. of Elec. Workers Local 3 and six contractors that employ Local 3 workers violated federal and state antitrust laws by conspiring to exclude the plaintiffs from telecommunications installation work in the N.Y.C. area. Berman denied the defendant's motion for summary judgment on the USISI and OGI's claims brought under the Sherman Antitrust Act and state antitrust law, finding that the plaintiffs, adequately pled violations of the acts.
The government board that runs Passaic County's (N.J.) welfare agency has taken the unusual step of filing an unfair labor practice charge against Communications Workers of America Local 1081, demanding that its leaders apologize for injecting race into their rhetoric and stop interfering with "management rights. " The Board of Social Services has complained that Local 1081 bosses have tried to intimidate the board by raising discrimination issues while opposing a controversial promotion.
As reported in the last UCU issue, U.S. Dist. Judge Henry H. Kennedy, Jr. (D.D.C., Clinton) struck down President Bush's Executive Order 13201 Jan. requiring fed. contractors to post notices informing employees of their rights not to join a union or to pay fees for nonrepresentational purpose, under the Supreme Court's 1988 decision, CWA v. Beck. The Nat'l Legal & Pol'y Ctr. was written President Bush requesting that he and his Administration appeal Kennedy's adverse ruling.
Bobby R. Putnam, ex-secretary-treasurer of Communications Workers of Am. Local 14708 (a.k.a., Denver Mailers Union No. 8) in Denver, was charged Oct. 31 in a 40-count indictment with embezzling $7,808.26 and falsifying union records. The case has been assigned to U.S. Dist. Chief Judge Lewis T. Babcock (D. Colo., Reagan).
U.S. Dist. Judge David M. Lawson (E.D. Mich., Clinton) sentenced union embezzler Tamara Miller Oct. 22 to 18 months in federal prison and ordered her to pay $152,724 in restitution. The ex-treasurer stole the funds from United Ass'n of Plumbers & Pipe Fitters Local 85 in Saginaw, Mich. Miller pled guilty on June 29. Lawson also ordered Miller to serve 36 months of supervised release after prison plus pay a $100 fee.
The Communications Workers of Am. and Verizon Communications face a federal prosecution for allegedly illegally seizing some $150,000 in forced union dues from employees following a 2000 strike. Agreeing with arguments presented by Nat'l Right to Work Legal Def. Found. attorneys, the Nat'l Labor Relations Bd. issued the federal complaint after employees Kenneth Olszewski and Nancy Simms of Md. filed unfair labor practice charges on behalf of thousands of employees in 2000.
They filed the charges after Verizon helped CWA bosses collect dues for a one month period (Sept. 2000) following the strike in which no collective bargaining contract was in place. When no such forced-fee agreement is in effect, bosses can't compel the payment of any dues from employees who exercise their right not to join a union.
On May 10, the Workforce Protections Subcommittee of the House Educ. & the Workforce Committee held a hearing on workers' rights not to become union members and not to pay dues for unions' nonrepresentational activities and to investigate how union bosses abuse such rights under the 1988 U.S. Supreme Court decision Communications Workers of Am. v. Beck. Beck held that employees covered by a union security clause in a collective bargaining agreement who choose not to become union members and object to having their dues spent on political and other nonrepresentational activities only can be charged agency fees for union activities related to collective bargaining, contract administration, and grievance adjustment.
"Based on the evidence I have seen, I am convinced that some union locals do, in fact, regularly trample on the rights of individuals in far excess of the scope of their permissible authority," Subcommittee Chairman Charles Norwood (R-Ga.) said. "Too many workers seem to get the run-around when they try to exercise their rights."