Department of Labor (DOL)

Herman Independent Counsel Wins Indictment

Ralph Lancaster, the independent counsel appointed to investigate Labor Secretary Alexis Herman, has obtained the first indictment in his nearly two-year investigation.

A federal grand jury in Washington Feb. 16 indicted Abdul Rahman, a foreign national, for allegedly funneling illegal foreign contributions to the Democratic Party through two U.S. citizens, Vanessa Weaver, a close friend of Herman, and her sister Caryliss Weaver.

The indictment accuses Rahman of providing $150,000 in illegal contributions to the Democrats and causing false campaign finance reports to be filed with the Fed. Election Commission regarding an additional $50,000 in contributions. Court documents indicated that Venessa Weaver may also be indicted soon.

Lancaster sought the indictment now to keep the case against Rahman alive because a statute of limitations was about to expire. The Weavers' attorney tried to keep the Rahman indictment sealed. U.S. Dist. Judge Ellen Segal Huvelle held that there was no legal justification for keeping the indictment secret. Huvelle unsealed the indictment even though Lancaster didn't oppose the motion to seal it.

Hoffa Says DOL Not Necessary for 2001 Election

James P. Hoffa, president of the Int'l Bhd. of Teamsters, said Aug. 18 that while the Dep't of Labor may choose to supervise IBT's 2001 general election, he believes the union is capable of conducting a free and fair election on its own. Under the 1989 Consent Decree settling federal racketeering charges against IBT, DOL has the option of supervising the next election. When asked whether DOL would add credibility to the election, Hoffa responded, "I don't necessarily believe that. When we conduct the election we're going to have it supervised by people of high integrity. We have in mind a group of people that are former government employees."  This was the latest statement in Hoffa's battle to end the government's supervision over the corrupt union. [BNA 8/20/99]

Missouri Local Rigged Election, says DOL

U.S. Dep't of Labor filed suit Jan. 4 to overturn the Jul. 1998 election of Service Employees Int'l Union Local 50 in St. Louis because bosses allegedly rigged the nominations. DOL charges that SEIU violated federal labor laws by failing to provide timely and adequate notice of nominations, using an unreasonable nomination procedure, refusing to provide information to a challenger and failing to assure a fair election. Local 50 president Don Rudd said DOL asked Local 50 to agree to a new election, but Rudd refused because DOL sought to change the nomination process. Rudd said Local 50's bylaws "were all approved by our international union." But SEIU said the bylaws weren't in question; rather their application by Local 50 was.

DOL Forces Return of $20 Million to Pension Plan

Teamsters' Local 705 in Chicago agreed Dec. 14 to restore $20 million to the union's pension plan under a U.S. Dist. Court consent order and judgment won by the U.S. Dep't of Labor. Trustees improperly transferred pension funds to a welfare benefit plan from 1991-95. Trustees claimed the transfers were to help support to the welfare plan. DOL charged that many individuals who paid into the pension plan were not covered by the welfare plan, and thus, were harmed by the transfers. The pension plan was worth $780 million in Jan. 1996. [BNA 12/16/98]

Hoekstra Turns Probe to DOL

In the ongoing Congressional probe of the tainted 1996 Teamsters election, Rep. Pete Hoekstra (R-Mich.) is exploring claims that U.S. Labor Dep’t officials agreed to take action on the union's behalf in return for its support for President Clinton's 1996 reelection campaign. Hoekstra, Chairman of Oversight & Investigations Subcommittee of the Workforce Committee, has asked DOL Sep. 18 for documents relating to a Mar. 1995 meeting that he says was attended by Harold M. Ickes, former deputy chief of staff at the White House; Thomas Glynn, former deputy secretary of DOL; Steve Rosenthal, former associate deputy secretary of DOL; Ron Carey, disgraced former president of the Teamsters; and William Hamilton, disgraced former government affairs director of the union.  This request follows Attorney General Janet Reno's announcement that she has opened a 90-day preliminary investigation into allegations that Ickes lied in Senate testimony last year about his efforts to help the Teamsters in exchange for the union's support for Clinton's 1996 campaign (See: UCU 1.6 8/24/98). [BNA 9/21/98]

$500K Embezzled from Workers' Compensation Fund

A contract employee for the U.S. Labor Dep't and a co-conspirator embezzled over $500,000 from DOL's Division of Longshore & Harbor Workers' Compensation. Jennifer M. Spraitz and Rachel Lea Gratton pled guilty to conspiracy to commit mail fraud and theft from a federal program. The Division administers compensation benefits, medical payments and vocational rehabilitation services to injured workers and is funded by the federal government and private employers. Spraitz created false vocational rehabilitation counselor invoices, making up the names of allegedly injured workers who were supposedly receiving services she listed on the invoices. Spraitz used Gratton's name as the fictitious rehabilitation counselor on the invoices and listed addresses that were under their control. From Oct. 1993 to Nov. 1997, Spraitz submitted 150 fraudulent invoices which generated government checks totaling $524,722. Spraitz retrieved the checks for Gratton who then returned personal checks for half the amount to Spraitz. Both used the funds for personal expenses and to buy cars.  Both face 10 years in prison, a $250,000 fine and an order for complete restitution.

Food Service Employees Ruin USC Graduation

L.A. Police arrested 37 members of the Hotel Employees & Restaurant Employees International Union, many disguised in caps and gowns, for unruly demonstrations during the University of Southern California's commencement. The demonstration was part of an on-going strike against USC. USC spokesman James Elmendorf said, "it's extremely tragic that this group would destroy, or attempt to destroy, one of the most significant days in the lives of the students and their families." [City News Service 05/08/98]

Herman's Independent Council Named
Announced May 26, Labor Secretary Alexis M. Herman will be investigated by Independent Counsel Ralph I. Lancaster, Jr. for an alleged swap scheme that traded campaign contributions to the DNC for favors to a business in which she had a financial interest during her time on the White House staff. Herman is the 7th top Clinton administration official to be investigated by an independent counsel over suspected criminal activity. [Washington Times 05/27/98]

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