International Brotherhood of Electrical Workers (IBEW)

DOL Seeks to Overturn Tainted Elections at New Jersey Local

The Dep't of Labor filed suit Mar. 30 in U.S. Dist. Court for the Dist. of N.J. against the North Jersey Area Local of the Am. Postal Workers Union. DOL's probe of the local's Apr. 18, 2000 election which disclosed the union used union resources to promote incumbent candidates. The complaint seeks a new election under DOL supervision for nine local union officer positions. [DOL 3/30/01]

St. Louis Local Conducted Unfair Nominations
On Mar. 29, 2001, the U.S. Dist. Court for the E. Dist. of Mo. issued an order agreeing in part with the Sec'y of Labor's complaint challenging 1998 elections in Serv. Employees Int'l Union Local 50 based in St. Louis. The Dep't of Labor's complaint challenged both the reasonableness and application of a petition requirement for nomination to office. The court held that the requirement itself was reasonable, but agreed that it was not applied fairly and directed DOL to submit a proposed order for new elections under the supervision of the Sec'y. The DOL's Office of Labor-Mgmt Standards St. Louis Dist. Office will supervise any remedial election. [DOL 3/29/01]

McAuliffe's Cronies Settle ERISA Suit for $4.9 Million

Trustees of the Nat'l Elec. Benefit Fund must pay more than $4.9 million to reimburse the fund under a consent order settling Dep't of Labor charges that they breached their fiduciary duties under ERISA by investing in a Fla.. real estate limited partnership. The two trustees, Jack Moore and John Grau, also agreed to pay a civil penalty of $555,000 under the consent order signed Oct. 16 by the  U.S. Dist. Judge Deborah K. Chasanow (D. Md., Clinton). The order resulted from a suit filed in May 1999 by DOL's Pension & Welfare Benefits Admin., alleging that the trustees imprudently loaned pension plan assets to a corporation for certain real estate purchases linked to tainted Clinton family fundraiser and Democratic Nat'l Committee Chairman Terence McAuliffe.

Moore and Grau denied the allegations, but entered into the agreement with DOL after Williams ruled in July that DOL could proceed with its suit. U.S. Dist. Judge  Alexander Williams, Jr. (D. Md., Clinton), denied the trustees' motion for summary judgment, rejecting their contention that they did not breach their fiduciary duties because the real estate transactions had beneficial results.

Member Sues Pittsburgh Local

A Pittsburgh Port Auth. employee and senior member of the Int'l Bhd. of Electrical Workers has sued the Authority and IBEW Local 29 in U.S. Dist. Court, saying he has been denied overtime work and his grievances have been ignored. Robert Exler of Harmar, Pa., has been a Port Authority employee since 1968 and says Local 29 violated the collective bargaining agreement of hourly workers by denying him the opportunity to arbitrate or appeal.

Under the terms of the agreement, senior members are to be used for work whenever possible. Exler says he is the most senior member of IBEW Local 29, but says it has denied him overtime work. He also claims Local 29's business agent "intentionally denied [him] of his rights by not allowing the grievance procedure to occur."

Exler says the Authority was told about the problem but ignored it, saying its policy was to deal only with Local 29 concerning labor disputes between the parties. He claims the Authority violated its duty to enforce the bargaining agreement. Exler is asking for a judgment in excess of $100,000 in lost overtime pay and damages. [Pittsburgh Post-Gazette 8/16/01]

Rhode Island Embezzler Loses Pension Suit

Ex-union pension manager and prison inmate Todd LaScola must repay $1,279,656 to the retirement plan of Int'l Bhd. of Elec. Workers Local 99 in Providence, R.I., under terms of a federal default judgment. U.S. Dist. Judge Ronald R. Lagueux (D.R.I. Reagan) signed the order July 24, after LaScola and his firm, CPI Fin. Servs., Inc., failed to respond to an ERISA suit filed in Jan. by the Dep't of Labor accusing them of misusing plan assets. DOL's suit alleged that LaScola invested approximately $5,970,000, over 20% the plan's total assets, in unregistered, highly risky notes issued by real estate limited partnerships owned by RBG Mgmt. Servs., Inc., of Chicago. Allegedly, there was no trading market for the RBG notes, making the investment a violation of the plan's guidelines. LaScola received approximately $312,400 in commissions from RBG, as well as $127,652 in management fees from the plan.

Judge Allows DOL's McAuliffe Suit to Proceed

U.S. Dist. Judge Alexander Williams, Jr., (D. Md., Clinton) allowed the Dep't of Labor to proceed with its suit June 15 alleging that trustees of the Nat'l Elec. Benefit Fund, which is linked to the Int'l Bhd. of Elec. Workers, breached their ERISA fiduciary duties by investing in Am. Capitol Group I Assets LP, a Fla. real estate firm, tied to Democratic Nat'l Committee chairman Terence R. McAuliffe and his wife. In 1999, DOL sued trustees Jack Moore and John Grau alleging imprudent real estate deals.

Four New York Racetrack Tellers Indicted for Money-Laundering

Four N.Y. racetrack tellers used the flow of cash through betting windows to launder money, law enforcement officials alleged in indictments announced July 19. The four face multiple counts that could bring an aggregate sentence of more than 10 years for each. Three of the men were arrested July 18 and arraigned in Saratoga County Court in Saratoga Springs. They are: Robert E. Lodati, Robert J. Marshall, and Joseph Rabito.  They were released on bail ranging from $20,000 to $35,000. A fourth, Peter Oster, turned himself in turned himself in July 25, he was arraigned in Saratoga County Court before Judge Jerry Scarano and released on a $25,000 bail bond. Lodati is the president of the the betting clerks' union, Div. of Mutuel Employees, which is a unit of the Int'l Bhd. of Elec. Workers Local 3 in Queens. Marshall is reportedly DME's vice president. The indictments charge them with laundering $300,000, exchanging small bills for large ones, over six months for state police investigators posing as drug dealers, in transactions that were recorded on videotape and audiotape. The clerks allegedly pocketed a cut of 5% to 10% every time they made the swaps.

DOL Sues Trustees of Rhode Island Fund

The Dep't of Labor has filed suit in the U.S. Dist. Court in Rhode Island to recover nearly $30,000 in improper benefit payments from the trustees of the Int'l Bhd. of Elec. Workers Local Union 99 Health & Welfare Fund. The suit, filed May 31, charges Board of Trustees members Ernest W. Audet, Jr., G. Thomas Chabot, Raymond J. Lambert, James W. Crandall, Normand L. Jodoin, Thomas J. Lynch, and John I. McGee with violations of the Employee Retirement Income Security Act. DOL alleges that, between Jan. 1994 and Dec. 1995, the named individuals failed to adequately review, monitor, and ensure the accuracy of employee eligibility information which they provided to Provident Life & Accident Ins. Co., the plan administrator.

Specifically, DOL alleges that the plan paid approximately $29,424.60 in medical benefits on behalf of seven employees who were ineligible to participate in the plan, and that the trustees, aware that benefits were paid to ineligible participants, failed to take appropriate action to recover the monies. ERISA requires that such plan assets be used and administered solely for the benefit of the plan's participants.

Rhode Island Union Fund Manager Gets Eight Years

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."

Rhode Island Union Fund Manager Pleads Guilty

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.

Court Upholds Injunction Against Chicago Boss

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.

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