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.
In 1993, two FBI agents confronted Int'l Bhd. of Electrical Workers boss Jerry O'Connor with seemingly incontrovertible evidence of his guilt: a secretly recorded tape of O'Connor, a high-ranking union official in Chicago, accepting a $10,000 bribe in cash from a longtime government informant. Yet O'Connor insisted it wasn't his voice on the tape and that he was innocent of the accusation. But as it turned out, O'Connor was a victim of a greedy informant named William Russell, authorities said, who conned the FBI out of tens of thousands of dollars for worthless undercover work and nearly framed an innocent man.
The Neb. Teachers Credit Union was declared insolvent Sep. 22 by state banking officials amid allegations that the ex-manager and sole employee, Violet Crosby, embezzled over $200,000 from members. NTCU, based in Lincoln, serves Neb. State Edu. Ass'n teachers across the state. Its assets are about $850,000.
The state Banking Dep't began investigating in Jul. when NTCU's treasurer learned that NTCU was not earning as much interest as it should have on a major account. Crosby was fired shortly after the discrepancy was discovered.
An audit to determine the exact amount of the embezzlement is underway. The FBI and Lincoln police have worked on the investigation, and any prosecution will be handled by the U.S. Atty.'s Office.
The credit union will open under new ownership, and none of the members will lose money, since the accounts were federally insured for up to $100,000 each and there were no accounts over $100,000. [Omaha World-Herald 9/23/99]
The Dep't of Justice asked U.S. Dist. Judge Charles P. Kocoras to hold Int'l Bhd. of Electrical Workers Local 134 in Chicago in contempt of court for violating a settlement that allowed bosses to stay in office. The Mar. 1999 agreement settled a suit brought by the Dep't of Labor against Local 134 seeking to void its 1998 election. The suit alleged employer funds were used by boss Michael Fitzgerald's winning slate.
Under the settlement, Local 134 agreed that DOL would supervise the next election in 2001. The agreement also required that member Charlie Chathas, who protested the election with DOL, be allowed to send out a letter to members responding to one sent out by Fitzgerald, before the settlement, that accused Chathas of "conspiring to overthrow" his slate. Local 134 refused to distribute the letter, which DOL approved, and that violated the agreement, said Asst. U.S. Atty. Craig A. Oswald. "Failure to comply could potentially jeopardize the entire settlement," he said.
However, no contempt of court citation was issued. Judge Kocoras said Aug. 26 the local must send the letter, but it may include a disclaimer saying it doesn't reflect the bosses' views.
Boston construction unions are fighting back against anti-development community activists (probably Midwest Academy protégés). Yes, that's right: liberal infighting. Unions say that too many projects remain on the drawing boards or have evaporated. They worry that fierce neighborhood activism may be scaring away developers. The Boston Building Trades Council which is coalition of the Laborers, Ironworkers, Electrical Workers and other unions are making development an election issue.
Many elected officials represent anti-development views. But construction workers, representing a huge voting constituency, don't want to apply the brakes or make life complicated for developers. Mayor Thomas M. Menino demands checks on rampant development. "I don't think any developer has been scared away YET," (emphasis added) he said.
For example, a new Fenway Park would be "nirvana" for the unions. But many Fenway residents remain adamantly opposed to a new stadium in their neighborhood, and candidates running for the City Council seat there have already embraced the residents' cause. [Boston Globe 7/22/99]
The U.S. Dep't of Labor filed suit May 5 against two trustees of the $8.3 billion Nat. Electrical Benefit Fund charging improper dealings between the fund and top Clinton-fundraiser Terence R. McAuliffe. According to DOL, 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 Electrical Workers, from which Moore retired as secretary in 1997, and the Nat. Electrical Contractors Ass'n, of which Grau is a vice president.
The scam involved a $6 million loan in 1992 to Columbia Land & Development Corp. of Orlando to buy a subdivision called Country Run which was to be developed into 545 lots. McAuliffe and his wife, Dorothy S. McAuliffe, own Columbia. The loan was in default from Dec. 1992 to Oct. 1997. DOL says NEBF should have known the loan couldn't be repaid in full with interest. The suit seeks the trustees to reimburse the fund for losses, including interest.
A federal jury convicted ex-FBI informant William A. Russell on May 13 on two counts of perjury and one count of obstructing justice for staging a recorded conversation in Sep. 1991 to make it appear as if he passed a $10,000 bribe to IBEW boss Jeremiah J. O'Connor. Investigators initially thought O'Connor took the bribe and began a major union corruption investigation code-named Operation Chi-Lite. The probe cost taxpayers $173,000 and Russell received nearly $113,000. He faces two years in prison. The scheme unraveled when O'Connor produced records showing that he attended a union meeting five hours from Chicago, in Eau Claire, Wis., on the night the alleged payoff on Chicago's Westside. [Chicago Tribune 5/14/99]
James E. Jackson, ex-boss of the Int'l Bhd. of Electrical Workers Local 45 in Hollywood, was sentenced Apr. 5 to 21 months in prison for embezzling union funds. Prosecutors allege that he embezzled over $259,000, but Jackson was also ordered to pay only $217,878 in restitution to IBEW. He pled guilty to using the union's credit cards for unauthorized purposes from 1994-97. Jackson said he charged $1,200 to IBEW to pay for repair work done on his Mercedes-Benz and spent another $1,207 for a Caribbean cruise. He also had the union pay for auto maintenance and insurance and for his adult daughter's health insurance. [Hollywood Reporter 4/6/99]
According to the Securities & Exchange Commission, the pension manager for Int'l Bhd. of Electrical Workers Local 99 in Providence, R.I., is responsible for "the biggest unauthorized diversion of funds" in New England in the last decade. Todd LaScola, the co-owner of CPA Network Advisors and owner of CPI Investment Management, has been accused of diverting at least $6 million from brokerage accounts of CPA to repay IBEW. LaScola reportedly invested $6.4 million from the pension fund in ultra-speculative promissory notes sold by a Chicago real estate developer, RBG Management Services. After the investment collapsed, he diverted money from customer accounts without permission to cover the loss. Allegedly, IBEW demanded an immediate return of the $6.4 million and after IBEW got its money back, it fired LaScola. No criminal charges or civil sanctions have been filed, but LaScola is still under investigation and his firms have been closed. [A.P. 3/15/99]