On Oct. 15, 2002, in the U.S. Dist. Ct. for the Dist. of Columbia, Richard C. Holton, pres. of an insurance agency, Holton & Associates, Ltd., pled guilty to 3 counts of bribery via employer payments to a labor union official. Holton and others initiated a self-insurance program known as the Ironworking Contractors Insurance Program (ICIP). ICIP was an effort by the employers to self-insure or reinsure their worker's compensation liability as well as other business risks.
Holton paid former Intl. Assn. of Iron Wrkrs. (IAIW) officials Jake West, LeRoy Worley, and Stephen Cooper to solicit union employers to join ICIP. Later, West threatened that he would withdraw IAIW support for ICIP unless the three officials received additional payments, Holton, with the approval of some of the employers, agreed to pay West, Worley, and Cooper $10,000 each per year for their continued support. Throughout 1996, 1997, 1998 and part of 1999, monthly checks were issued to West, Worley, and Cooper. The charges were brought following a joint investigation by the Wash. D.C. branch of the U.S. Ofc. of Labor-Mgmt. Standards and the FBI. [DOL OLMS 11/13/02]
U.S. Dist. Ct. Judge Thomas F. Hogan (U.S.D.Ct. D.C., Reagan) "postponed indefinitely" the trial of Jake West, frmr. president of the Intl. Assn. of Iron Workers, acc. to West's attny. West was indicted in Aug. 2001 on charges that embezzled more than $50,000 from the union for personal expenses. That trial was scheduled to begin Oct. 2. But Hogan, while refusing to dismiss the case, ruled that West is "medically incompetent" to stand trial.
West is still scheduled to be tried on Oct. 15 on charges that he diverted $37,000 in pension and other union funds to a frmr. union rival who wasn't entitled to them. That trial is also expected to be postponed. [Engineering News-Record, 10/7/02]
A 2nd accountant confessed on Aug. 22 to hiding 7 years of massive embezzlement by the Iron Workers hierarchy in Wash. D.C. The latest confession by Francis J. Massey has increased the suspicion surrounding the accounting firm, Thomas Havey LLP, which brags on its web site of "serv[ing] more international and local labor organization clients  than any CPA firm in the country." Massey himself "served as an instructor and lecturer regarding the LM-2 Report...both at Havey Company in-service training and at training and seminars provided by the Havey Company for various labor unions." On June 24, NLPC petitioned the U.S. Dept. of Labor's Office of Labor-Mgmt. Standards to begin auditing all those unions using Havey's services.
A fed. grand jury in Wash. D.C. issued yet another indictment against ex-Iron Worker officials Jake West and LeRoy Worley on August 7. The indictment adds more than $200,000 to the amount allegedly embezzled from the IAIW, and provides new details on the deal between West and Worley.
West and Worley had both held offices in the Intl. Assn. of Bridge, Structural, Ornamental and Reinforcing Iron Workers since 1989 -- West as General Pres., Worley as General Secy. By 1998, acc. to the indictment, West saw Worley as a challenge to his position in the union and wanted him out of the way. In Nov. of that year, they allegedly made a deal. On the 18th, Worley resigned his position in the IAIW. At the same time, West allegedly arranged for Worley to receive more than $37,000 from the union's pension fund that Worley had not worked for the union long enough to be entitled to. Those facts were previously laid out in a May 17 indictment.
The similarities between the Enron-Authur Andersen scandal and the Iron Workers-Thomas Havey scandal continue to grow. The Dep't of Labor has released new information about the June 4 guilty plea of Alfred S. Garappolo, a partner in the union accounting firm of Thomas Havey LLP, to two felony counts arising from a growing criminal probe into the Int'l Ass'n of Iron Workers and its related funds. First, he confessed to being an accessory after the fact to embezzlement from an employee benefit plan in violation of 18 U.S.C. § 3. He pled guilty to assisting Kerry J. Tresselt, a bookkeeper and daughter of ex-IAIW vice-president Raymond J. Robertson, in order to hinder or prevent her apprehension, trial, and punishment for her embezzlement from the union training fund. Tresselt pled guilty in Nov. 2001 to embezzling $350,000.
As previously reported, Raymond J. Robertson, ex-general vice president of the Int'l Ass'n of Iron Workers and ex-trustee/director of a benefit fund linked to the union, pled guilty Apr. 11 to eight felony counts linked to a series of thefts from the Nat'l Ironworkers & Employers Apprenticeship Training & Journeyman Upgrading Fund. Specifically, he confessed to one count of conspiracy to defraud a benefit plan, one count of aiding and abetting embezzlement from an entity receiving federal funds, and six counts of embezzlement. He agreed to pay a $30,000 fine and $103,170 in restitution. Through several different types of schemes, Robertson stole or helped cover up thefts of more than $100,000 from the Fund from Apr. 1998 to Apr. 2001.
Union boss Jacob "Jake" West, who spent thousands on personal meals, liquor, and golf trips, is claiming he did so only because his attorney said such expenditures were legitimate union expenses. That was the argument of West's new attorney, Michele Roberts, at a May 7 pretrial hearing before U.S. Dist. Judge Thomas F. Hogan (D.D.C., Reagan). West, ex-president and current president emeritus of the Int'l Ass'n of Iron Workers, allegedly embezzled some $50,000 from the Washington, D.C., based union during his 12 years as president. Roberts was previewing arguments that may be used in West's trial, which is scheduled for this summer.
After confessing that casino gambling on the Ohio River and in Las Vegas as well as sport wagering led him to embezzle $130,507 from the United Union of Roofers, Waterproofers & Allied Workers Local 86 in Columbus, Ohio, Robert D. King, Jr., was sentenced Apr. 17 to 21 months imprisonment and three years probation. He stole $88,757 from the local plus $41,750 from local's benefit funds. He was ordered to make full restitution. He pled guilty to two embezzlement counts Dec. 11 before U.S. Dist. Judge George C. Smith (S.D. Ohio, Reagan). King stole the money from Aug. 1999 to Jan. 2001 by writing himself checks from Local 86's general and apprentice-training accounts.
King served as the local's business manager and financial secretary for six years until the union ousted him in Jan. 2001. Local officials became suspicious because King's sloppy record-keeping. The int'l union audited the books and confronted King with numerous discrepancies. The case was then turned over to the Dep't of Labor. [DOL 4/17/02; Columbus Dispatch 12/12/01]
As reported in the last issue, a federal grand jury in Washington, D.C., is probing stock transactions by directors of a union-dominated insurance firm ULLICO linked to the now bankrupt firm, Global Crossing. The Wall St. Journal reports that internal documents reveal that ULLICO officers and board members cashed in on some 71,000 ULLICO shares between Jan. 2000 and Sept. 2001, possibly at the expense of the very union pension funds to which they owed a fiduciary duty. The profits were potentially huge. For example, Martin J. Maddaloni, president of the United Ass'n of Plumbers & Pipe Fitters, allegedly reaped a $184,000 profit from timely selling of a mere 2,000 shares of his ULLICO stock back to ULLICO in 2000.
More than two dozen union presidents were reportedly invited to buy shares in Global Crossing, as the Bermuda-based telecom was first offering its stock to the general public. Now a federal grand jury in Washington, D.C., is probing stock transactions by directors of insurance and investment firm ULLICO (f.k.a. Union Labor Life Ins. Co.), a union-dominated firm founded by the AFL. ULLICO's board is chaired by ex-AFL-CIO Building & Construction Trades Dep't president Robert A. Georgine and includes many current and ex-union presidents.
Reportedly, the investigations focus on trading privileges that allegedly allowed ULLICO's board members to profit from the purchase and sale of its shares. The transactions were lucrative because the privately held company's stock price was reset each year based on its book value and the board members could anticipate the change. ULLICO's shares had risen on the strength of several deals, including a $500 million profit on a $7.6 million investment in telecom firm Global Crossing, which declared bankruptcy in Jan. 2002.