Union Corruption Update

Scandal at Union-Owned Bank in Austria Cuts Wide Swath

The downfall early this decade of Union Labor Life Insurance Company, better known as ULLICO, triggered widespread public outrage and extensive Congressional investigations.  During the turn of the decade, the firm’s board of directors, which included America’s top labor chieftains, made off with an estimated $7 million in what looked like insider-trading profits from failed high-risk stock investments.  Yet the ULLICO scandal is small beer compared to the losses occurring around that same time at another union-sponsored financial intermediary across the Atlantic in Austria.  The entity is Bank fur Arbeit und Wirtschaft AG (“Bank for Employment and Commerce”), or BAWAG.  Revelations for a little more than a year now indicate that bank officials managed to lose, and then hide, as much as 1.45 billion euro (US$1.8 billion) in risky hedge funds and other investments.  The crisis at the Vienna-based BAWAG has led to quick exits from the suites, large-scale withdrawals by depositors, and the evaporation of the strike fund of Austria’s labor unions.

Ex-Los Angeles Local President Pleads Guilty to Embezzlement

Few observers gave Janett Humphries much of a chance when she decided to take her case to trial.  In the end, even she didn’t give herself much of a chance.  On November 13, the 63-year-old former president of Service Employees International Union Local 99 pleaded guilty in federal court to charges she had embezzled more than $30,000 from her union to help finance Martin Ludlow’s successful 2003 run for Los Angeles City Council.  She used the funds to pay for travel expenses and a cell phone for Ludlow’s campaign staff, plus personal air travel costs.  Ludlow stepped down from his council post in 2005 to head the Los Angeles County Federation of Labor, but pleaded guilty to a federal conspiracy charge early this year.  Sentencing for Humphries is set for next February.  She already has pleaded guilty to separate local charges.  (Associated Press, 11/14/06).


Ex-Administrator for Northern California Local Pleads Guilty

Queens, N.Y. Politician-Labor Boss Arrested on RICO Charges

As a New York City power broker, Brian McLaughlin had few equals.  He was both a union leader and a politician who played at the highest levels, adept at courting allies to win favors.  And he knew how to take care of his people, including members of his original union, Local 3 of the International Brotherhood of Electrical Workers.  But in the roughly eight months since the FBI raided his two offices, fears that he was bent have proven true – at least say federal prosecutors in a Racketeer Influenced and Corrupt Organizations (RICO) Act indictment.  As they say in baseball, “Say it ain’t so.” 

L.A. Local Boss Testifies at Trial; Reveals Labor’s Political Ties

Labor leaders have been called many names, but “naive” hasn’t been among the more common of them.  Yet Janett Humphries, formerly one of Los Angeles’ more powerful union officials, made naivete her prime line of defense in her recent criminal trial.  Humphries for more than a decade had been president of Service Employees International Union Local 99.  She enjoyed close ties to Martin Ludlow, a former Los Angeles City Council Member and also ex-head of the 825,000-member Los Angeles County Federation of Labor.  Those ties proved too close.  Federal prosecutors early this year charged Humphries, 63, with misusing her office to provide financial aid to Ludlow’s successful 2003 city council election campaign.  Ludlow pleaded guilty this March to conspiracy to divert union funds to the campaign.  Humphries chose to take her federal case to trial; she pleaded guilty to two separate local charges.  In light of her recent testimony, she might be wishing she hadn’t.

Pension Fund Administrator Testifies Against Colombo Thugs

It was June 1, 1999, and the Wall Street bull market was going full steam.  The Colombo crime family of New York believed it was about to strike gold:  unlimited access to the pension fund of Local 400 of the Industrial & Production Workers Union, worth at the time an estimated $50 million.  It was all but a done deal.  A potential rival, local vice-president and reputed Colombo family underboss William “Wild Bill” Cutolo, mysteriously had disappeared less than a week earlier.  Local 400 President John Gannone was at the union’s midtown Manhattan office.  He was accompanied by stockbroker Frank Persico, a first cousin of acting Colombo boss Alphonse “Allie Boy” Persico.  They wanted documents revealing names of all principals connected to the fund.  The only thing standing in the way of the family’s big payday was Kathleen Joseph, the fund administrator.  But that obstacle proved crucial.  The 63-year-old Ms.

Local Business Manager for Boston Tunnel Project Convicted

Compared to the estimated $14.6 billion tab (and counting) to complete Boston’s Central Artery/Tunnel Project, a/k/a “the Big Dig,” the $25,000 or so that Scott Boidi stole was a tiny fraction.  But the former business manager of Tunnel Workers Local 88, an affiliate of the Laborers International Union of North America, received little in the way of courtroom sympathy.  On October 13, a federal jury, after a 12-day trial, convicted Boidi on six counts related to the project’s construction.  He had been indicted last year on nine counts of criminal activity taking place between 1994 and 2002.

Office Assistant, Accountant Sentenced for Roles in D.C. Scam

The process of meting out justice to the racket that was the Washington Teachers Union (WTU) under now-imprisoned former President Barbara Bullock is in the final stage.  Several persons, two of them familiar to readers of this publication and the other two relatively unfamiliar, learned their fate in federal court last month.  It would seem the culmination of four years of revelations of greed and treachery in the Washington, D.C. affiliate of the American Federation of Teachers.

New York City Local Organizer Charged with Payroll Theft

“Going out golfing and getting paid for it” was how Michael “Mickey” Annucci described the requirements of his job.  He spoke prematurely.  Annucci, 54, an organizer and shop steward for Local 157 of New York’s United Brotherhood of Carpenters and Joiners, had embezzled at least $10,000 from his union, according to an indictment by a Manhattan federal grand jury unsealed in mid October.  The sum represents wages, pension and health benefits denied to members because of Annucci’s time-sheet underreporting.

Virginia Local Secretary Pleads Guilty to Filing False Records

On October 10, David Taylor, former financial secretary for Carpenters Local 1402, pleaded guilty in U.S. District Court for the Eastern District of Virginia to one count of making false statements on the union’s reporting form.  The statements were part of a scheme to cover up his embezzlement of $72,422 in union funds.  The guilty plea follows an investigation by the Labor Department’s Office of Labor-Management Standards.  (OLMS, 10/31/06).


Ex-Boss of Connecticut Union Pleads Guilty to Embezzlement

Port Security Law Watered Down by Union Bosses, Congress

When Congress sent a seaport security bill to President Bush’s desk a few weeks ago, supporters were enthusiastic that our nation was giving top priority to a previously neglected area of national security.  Shipping terminals and cargo containers, they noted, are ideal places where terrorists, with some inside help, could place a bomb, possibly of mass destruction.  President George W.

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