Among unions, the term "pension reform" is a red flag. In Rhode Island, labor officials are taking their opposition to a higher level. Early this month, a prominent researcher hired by the American Federation of State, County and Municipal Employees (AFSCME), Ted Siedle, filed a request with the Securities & Exchange Commission requesting an investigation of Rhode Island State Treasurer Gina Raimondo (in photo). Back in mid-October Siedle had released a report accusing her and her various associates in the financial industry of siphoning benefits. Not long after, Rhode Island State Senator and Laborers union official Frank Ciccone filed a similar request with the SEC. Yet in November he resigned from his union posts.
On April 9, Grace Rathke, former office manager for Laborers International Union of North America Local 32, was sentenced in U.S. District Court for the Northern District of Illinois to 17 months in prison and three years of probation for embezzling more than $190,000 in funds from the Rockford-based union during November 2004-March 2009. She also was ordered to pay restitution in an amount exceeding $200,000. Rathke had been indicted in August 2011, and pled guilty this past January. The actions follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards and Office of Inspector General.
When it comes to intimidation in the pursuit of economic interest, organized labor long has been a master of the art. Such behavior is especially noxious and costly among construction unions. This past Monday through Wednesday, February 11-13, National Review Online published three articles under the title "Goon City" - here, here and here - on how Philadelphia's construction unions are imposing their brand of justice on open-shop contractors, workers and project sites. Assault, threats, harassment, vandalism, and arson are simply ways of doing business. Union bosses and their lawyers rationalize this behavior. Victims usually don't publicly complain about it. And the city council has every incentive to wink at it. The three-part series brings home with force the reality that union violence, in Philadelphia and elsewhere, is hardly "a thing of the past."
On January 9, David Beard, president of Laborers International Union of North America Local 381, admitted in the Trial Court of Massachusetts, BMC Department, to sufficient facts in a Continuance without a Finding for three counts of larceny in amounts over $250 from the Boston-based union. He then agreed to make $7,709 in restitution. The plea and sentencing follow a probe by the Labor Department's Office of Labor-Management Standards.
On January 7, Aundrea Valerio, former dispatcher for Laborers International Union of North America Local 872, was sentenced in U.S. District Court for the District of Nevada to six months of home confinement and three years of probation, and ordered to make restitution, for embezzling funds from the Las Vegas union. She pleaded guilty last September after being indicted in April 2010 with two other local office employees, Stacy Johnson and Aurora Rios, for stealing a combined more than $300,000; Valerio's share of the take was about $13,500. The actions follow a probe by the Labor Department's Office of Labor-Management Standards.
Skimming contributions long has been a favored method of theft by union embezzlers. But the odds of getting caught eventually catch up. Just ask Grace Rathke. On January 3, Rathke, formerly office manager for Laborers Union of North America Local 32, pleaded guilty in U.S. District Court for the Northern District of Illinois to stealing more than $190,000 in funds from the Rockford union. She had been indicted in August 2011 on 10 counts of embezzlement following an investigation by the U.S. Labor Department's Office of Labor-Management Standards and Office of Inspector General.
The increasing overlap of labor and political activism is an insidious form of public corruption in this country. It enables union officials to deemphasize their role of representing workers at the bargaining table in favor of advocating policies to socialize the economy, building incestuous relationships with politicians, and fattening their bank accounts. This tendency was heavily felt in 2012, a presidential election year. Union leaders recognized the need to re-elect their ally and benefactor, President Barack Obama, over someone who was a wealthy Republican with a strong business background; i.e., someone they truly could despise. They got what they wanted. In the process, they further built a political infrastructure. Yet union leaders also experienced reversals of fortune at the state level - most of all, in Michigan - where they had been used to getting their way.
Melissa King is going to spend six years in prison. For union members, that can't be long enough. Their anger is understandable. King, formerly benefits consultant for Laborers International Union of North America Local 147, aka "the Sandhogs," received her prison sentence in Manhattan federal court on June 21 for embezzling what prosecutors said was $42 million from the local. Dozens of members of the New York City-based underground construction workers union were on hand for the occasion. It was the largest instance of one-person embezzlement in American organized labor history. Ms. King, who aspired to the life of a queen, proved as adept at spending money as she was at stealing it. The main concern among rank and file now is how much of their retirement benefits they will see - assuming they can afford to retire.
On September 19, Aundrea Valerio, former dispatcher for Laborers International Union of North America Local 872, pleaded guilty in U.S. District Court for the District of Nevada to two counts of embezzling funds from the Las Vegas union. She had been indicted in April 2010 with two other local office employees, Stacy Johnson and Aurora Rios, in a scheme that netted the defendants a combined $225,000, a sum later raised by prosecutors to $320,000. Valerio's share was $13,500. Johnson was found guilty by a jury this past April and sentenced to a year in prison. Rios pleaded guilty that month and awaits sentencing. In addition to sentencing, the defendants must make restitution. The actions follow an investigation by the Labor Department's Office of Labor-Management Standards.
Stacy Johnson might consider getting some new friends. Last Thursday, August 23, Johnson, a cashier for Laborers International Union of North America Local 872, was sentenced in U.S. District Court for the District of Nevada to a year in prison for embezzling funds from the Las Vegas union. She also will have to pay $53,500 in restitution. Johnson, along with two other office employees, had been indicted in April 2010 following an investigation by the U.S. Labor Department's Office of Labor-Management Standards. She was convicted by a jury this past April and must report to prison by November 21.