Union Corruption Update

DOL Planning Stepped-up Audits of Union Finances

The U.S. Dept. of Labor aims to toughen its regulation of Big Labor greater scrutiny of spending and hiring practices, and will continue to increase sharply the number of financial audits of individual unions, reports Dan Roberts of the London Financial Times.  DOL officials say the measures are necessary to make unions more accountable to their members and to root out any corruption or mismanagement.

 

Despite declining membership, unions continue to be a thorn in the side of big business, orchestrating campaigns against companies such as Wal-Mart and using their influence over pension funds to press for corporate governance reform.

 

RI Mobster Pleads in Case where LIUNA Offices were Searched

A high-ranking mobster in the Patriarca crime family and laborers union member has agreed to plead guilty to cocaine trafficking charges stemming from his arrest in an FBI sting operation two months ago.  Matthew L. Guglielmetti has signed a plea agreement admitting that he conspired to distribute and possessed with intent to distribute more than 5 kilograms of cocaine.  The plea agreement was filed March 30 in the U.S. District Court in Providence.

 

Fed. Judge Throws out Union Trustees of NJ Benefit Fund

A federal judge has removed the administrator and two trustees of a New Jersey union's benefit funds that are now the focus of an ongoing federal corruption probe.  Citing serious questions about possible financial misconduct within Local 734 of the Laborers' Intl. Union of N. America (LIUNA), U.S. District Judge Dennis Cavanaugh in Newark said he would appoint substitute trustees to oversee the local's pension and welfare funds, pending a new election.

 

Ex-Treasurer Admits Embezzlement in Minn. Fed. Court

On March 23, in the U.S. District Court for Minnesota, Dana Lockwood, former treasurer of Local 49, the Intl. Assn. of Heat & Frost Insulators & Asbestos Workers, pled guilty to a one-count information charging him with embezzling $64,255 in union funds.  The guilty plea follows an investigation by the Minneapolis Resident Investigator Office of the U.S. Office of Labor-Mgmt. Standards. [OLMS, 4/4/05]

 

Ga. Union Ordered to Conduct New Election

Hoffa Fires his "Chief of Staff"

Carlow Scalf, a former Detroit Teamsters boss and former top aide to Intl. president James P. Hoffa the past six years, has been fired amid allegations that he improperly received a housing allowance of more than $69,000.  Scalf was identified last year by Edwin Stier, the union's former internal investigator, as the person most responsible for shutting down his probe of mob influence in Chicago locals.  Stier resigned last May, perceiving that Hoffa was "no longer committed" to ridding the union of organized crime.

 

DOL Wins $4.3 Million Settlement in Cap Consultants Case

The U. S. Dept. of Labor has obtained settlement agreements providing for restitution of $4,312,063 to 10 pension and health plans in Arizona, Colorado, Minnesota and Ohio that invested plan assets in risky private placement schemes with Capital Consultants, LLC.  The consent orders also require payment of $862,413 in civil penalties to the government.

 

Ex-Dem Party Boss Charged with Bankrupting NJ Union

Charles Cart, the former Democratic Party boss for Sussex County, appeared in federal court on March 22 and pled not guilty to allegations of embezzlement and money laundering that bankrupted a local union he founded and once ran.  The same day, Cart was sued by Stacey Melendy, who accused Cart of firing her from his medical company after she got pregnant and refused to get an abortion.

 

Ex-Secy. Treasurer Indicted in Md. Fed. Court

On March 2, in the U.S. District Court for Maryland, Steven R. Fairfax, former secy.-treasurer of Branch 3939, Natl. Assn. of Letter Carriers, was indicted on one count of embezzling union funds in the amount of $53,990.  Fairfax was also indicted on two counts of making false statements in reports. Fairfax's indictment follows an investigation by the Washington District Office  of the U.S. Office of Labor-Mgmt. Standards.

Calif. Unions Find Loophole through Landrum-Griffin

Los Angeles union chief Miguel Contreras and other union officials have tapped Hollywood studios, energy companies and other large corporations for hefty donations to finance its activities over the last eight years. In doing so, they have apparently found a loophole in the Landrum-Griffin Act, reports the Los Angles Times.

 

Created in 1997 to conduct voter registration, educate voters and campaign for ballot measures, the Voter Improvement Program (VIP) had the advantage of being able to receive unlimited donations. Unions have not been able to directly receive corporate donations for almost 60 years, as a result of congressional reaction to corruption scandals. 

Frmr. Ohio Union Employee Charged in Local Court

On March 3, in the Court of Common Pleas, Franklin County (Ohio), an indictment was filed against Aunalie Parsons, former employee of the Ohio Nurses Association, charging her with one count of theft of union funds in an amount more than $500, but less than $5,000. In addition, Parsons was charged with two counts of forgery. The indictment follows an investigation by the Cleveland District Office  of the U.S. Office of Labor-Mgmt. Standards.

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