Todd J. LaScola, the fund manager for Int'l Bhd. of Elec. Workers Local 99 in Rhode Island who embezzled more than $ 6.4 million from his clients, was sentenced May 22 to eight years in prison. After an emotional three-hour hearing punctuated by statements from five of the investors defrauded by LaScola, U.S. Dist. Judge Mary M. Lisi's decision boiled down to appearances how LaScola appeared to working and retired people who entrusted him with their savings, and how he has come across since his downfall.
After listening to an elderly woman describe having to seek public housing and a sobbing father describe how LaScola had stolen his children's college money, Lisi learned that LaScola had spent $4,200 on suits last year, so that he could look good for his well-paying job in Ft. Lauderdale, Fla. "There's no more despicable act than lying to people whose money you've taken so that you could look good and live the good life," said Lisi. "During these past several months, when you had some extra change in your pocket, you spent it on yourself. That tells me that you don't get it... I haven't seen you do one blessed thing for the people whose lives you've ruined."
Union pension manager Todd J. LaScola pled guilty in U.S. Dist. Court in Providence, R.I., Feb. 26 to embezzling from his clients to subsidize a lavish lifestyle and to shore up a failing union investment. LaScola admitted defrauding several clients of more than $6 million to pay for a $9,600 diamond engagement ring, among other personal items.
At his peak, the cigar-smoking LaScola pledged $500,000 to his alma mater, St. Raphael's Academy. His business had an office in Switzerland. At its downtown office, Governor Almond (R) made fundraising calls for his campaign. But his success began to unravel in late 1997, prosecutors said, when he began to invest pension money from Int'l Bhd. of Elec. Workers Local 99 against its investment guidelines.
The Seventh Circuit Court of Appeals refused to invalidate a permanent injunction Oct. 18 barring an Int'l Bhd. of Elec. Workers Local 134 boss from soliciting or receiving contributions to the local union's social club from employers. However, Chief Judge Richard A. Posner's decision rejected arguments raised by union members who claimed that along with the permanent injunction they were entitled to a finding or declaratory judgment that Local 134's business manager, Mike Fitzgerald, and the local's Unified Social Club had violated the Nat'l Labor Relations Act by soliciting and receiving employer contributions.
Posner agreed with the union members that they should be able to amend their complaint to include a claim under Section 502 of the Labor-Management Reporting & Disclosure Act of 1959, popularly known as the Landrum-Griffin Act, which forbids union officers from obtaining "a personal interest adverse to the union." On this point, the court reversed the district court.
Thousands of New Yorkers have lost their telephone service in early Aug., as vandals slashed telephone cables in what police are investigating as possible acts of sabotage in support of a strike of the Communications Workers of Am. and the Int'l Bhd. of Elec. Workers. The waves of vandalism come amid negotiations between Verizon Communications and the two unions that represent employees who are on strike in a 13-state region from Maine to Virginia. Verizon is offering a $25,000 reward for information leading to an arrest for vandalism.
There were reports of at least 455 incidents (233 of which were in N.Y.) -- most of which involved property damage such as severed telephone cables, burnt trucks, slashed tires -- or harassment of Verizon managers. "There have also been a couple cases of building keys broken off in the locks, or Super glue in the locks," said John Johnson, a Verizon spokesman in Boston. "One manager received a telephoned death threat."
N.Y. Mayor Rudy Giuliani (R) vowed to arrest the vandals: "I have to remind them that it's a crime, and if we do catch them ...they're going to go to jail."
Two telecommunications firms, U.S. Information Systems, Inc., and Odyssey Group, Inc., recently filed a federal suit in Manhattan alleging antitrust violations by Int'l Bhd. of Elec. Workers Local 3 and contractors that employ Local 3 workers. The suit alleges that Local 3 and the contractors are conspiring to take over the market for installation of telecommunications wiring and systems in the N.Y. metropolitan area.
The U.S. Dep't of Labor's ERISA suit against two trustees of the Nat'l Elec. Benefit Fund charging improper dealings between NEBF and top Clinton-fundraiser Terry McAuliffe is scheduled to have a settlement conference on Sept. 7, according to a June 27 letter from U.S. Magistrate Judge Charles B. Day to the parties. This follows two failed settlement meetings in Jan. and Apr. 1999 before the suit was filed.
Among the May 1999's suit allegations was that NEBF trustee John Grau and ex-trustee Jack F. Moore imprudently lent over $6 million in pension assets. NEBF is operated jointly by the Int'l Bhd. of Elec. Workers, from which Moore retired as secretary in 1997, and the Nat'l Elec. Contractors Ass'n. The alleged scam involved a questionable $6 million loan in 1992 to a McAuliffe firm. The loan was in default from 1992-97, and DOL says NEBF should have known the loan couldn't be repaid in full with interest. DOL seeks the trustees to reimburse the fund for losses, plus interest.
The U.S. Dep't of Labor will ask a court to force Int'l Bhd. of Elec.l Workers Local 1505 in Boston to honor an agreement that it would rerun last year's election of officers. Mark Letizi of DOL's Office of Labor Management Standards said DOL wants a court to order Local 1505 to hold a new election under federal supervision. The local had agreed on Mar. 28 to hold a rerun in June, but in May local bosses backed out of the deal.
"The union has canceled our agreement, which was voluntary and reached prior to any litigation," Letizi said. "So we will seek to overturn the results of the initial election."
U.S. Atty. Janice M. Cole announced that a federal grand jury indicted eleven individuals on Apr. 18-19 with two counts each of mail fraud, in connection with their applications for membership with the Journeyman Inside Wireman classification in the Int'l Bhd. of Electrical Workers Local 495, in Wilmington, N.C. These indictments follow the indictments of ten others on similar charges in Mar. 2000. If convicted, each could receive a maximum sentence of 10 years imprisonment, a fine of $500,000, and a supervised release term of three years. The accused are Ricky L. Barnett Sr., Ricky L. Barnett Jr., Terry Davis, Chris R. Day, Shawn Collins, Gaylo R. Howard, Roger L. Lykins, Marty Mix, Harvey F. Puckett, Stacy Puckett, Robert G. Trimble. [USAO E.D.N.C., Media Release 4/24/00]
U.S. Atty. Janice M. Cole announced that a federal grand jury indicted nine individuals on Mar. 21 with two counts each of mail fraud, in connection with their applications for membership with the Journeyman Inside Wireman classification in the Int'l Bhd. of Electrical Workers Local 495, in Wilmington, N.C. If convicted, each could receive a maximum sentence of 10 years imprisonment, a fine of $500,000, and a supervised release term of three years. The accused are Jamie Bailey, Richard D. Daniels, Bradley S. Darnell, Michael J. Fitzpatrick, Ralph J. Lykins, John C. Martin, Raymond Mead, David A. Petty and Jeremy M. Puckett. Additionally, Robert A. Parsons was charged with one count of mail fraud, and if convicted, faces a maximum sentence of five years imprisonment, a $250,000 fine, and three years of supervised release. [USAO E.D.N.C., Media Release 3/24/00]
The ongoing Int'l Bhd. of Electrical Workers investigation into IBEW Local 21 in Downers Grove, Ill., said it uncovered deficit expenses of over $600,000 for the first six months of 1999. IBEW findings were in a Oct. 14 letter to Local 21 members explaining why the international was "forced" to place the local under trusteeship in Sep. 1999 and suspend its officers. The letter from IBEW president J.J. Barry said the investigation also revealed: 1) unauthorized bonuses paid to bosses and staff, 2) improper and unauthorized use of union credit cards, 3) numerous unauthorized payments to local union bosses and staff, 4) local funds spent to campaign for union office.
But Barry added that the "improprieties uncovered concern past and newly elected officers." IBEW spokesman did not provide specifics on which boss might face disciplinary action, but he said a hearing on the allegations is expected to take place soon.