Benefit scams, especially involving health plans, grabbed the lion’s share of union corruption stories in 2016. Scammers came from outside as well as from inside the unions, a fact highlighting the need for trustees to exercise greater due diligence in choosing outside parties. There were also the usual cases of six-figure (or more) embezzlement and fraud against union general funds. Labor officials, meanwhile, expanded their misguided campaign to enact a $15 an hour minimum wage. They also tried to undo Right to Work laws in three states, temporarily achieving success in two by way of court action. And a deadlocked Supreme Court enabled state and local public-sector union bosses to retain their authority to coerce dues payments from unwilling workers. In other words, there was plenty to write about. Here were the ten stories that mattered most:
10) Hawaii contractor pleads guilty; sentenced for scamming Painters union, benefit fund, IRS … Read More ➡
On December 12, William Dixon, former secretary-treasurer of International Brotherhood of Boilermakers Local 2014, was charged in U.S. District Court for the Western District of Virginia with one count of embezzling $4,338 in funds from the Lebanon, Va. union. He then pleaded guilty. The charge and guilty plea follow an investigation by the Labor Department’s Office of Labor-Management Standards.… Read More ➡
Oscar Picazo’s colleagues aren’t happy right now – and with good reason. On December 16, Picazo, former captain with the City of Lodi Fire Department and treasurer of the Lodi Professional Firefighters Union, was charged in San Joaquin County Superior Court with embezzling $297,000 from the union, also known as International Association of Fire Fighters (IAFF) Local 1225. He waived his right to a preliminary hearing at his arraignment on December 22. The actions follow a City investigation. In a prepared statement, the union said: “The Lodi Professional Firefighters has been coping with the damage inflicted by (Picazo) for several months. The LPF was very disappointed to discover that Mr. Picazo violated the trust placed in him by the union.”
According to prosecutors, Picazo fleeced his union during January 2010-August 2016. News of the thefts surfaced after the City of Lodi this summer initiated an investigation at local union request; … Read More ➡
On December 9, Scot McNamara, former financial secretary for International Association of Heat and Frost Insulators Local 34, pleaded guilty in U.S. District Court for the District of Minnesota to one count of embezzlement of $8,871 in funds from the St. Paul-based union. He had been indicted in July on four counts of embezzling $7,761. The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.… Read More ➡
On December 7, Pascale McAtee, former president of International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART) Local 161, was indicted in U.S. District Court for the Western District of Washington on one count of embezzling more than $80,000 in funds from the Everett (Snohomish County), Wash. union. McAtee also was indicted on three counts of making false statements in local financial records. The charges follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.… Read More ➡
Workplace organizing typically requires large amounts of time and money. Yet for more than five years, labor unions increasingly have been relying on a low-cost alternative: partial workplace organizing. A new monograph published by the U.S. Chamber of Commerce summarizes this trend and its enormous potential for harm. The 32-page report, “Trouble with the Truth: Specialty Healthcare and the Spread of Micro-Unions,” explains how a National Labor Relations Board ruling in August 2011 has enabled unions to create miniature bargaining units within the workplace, all the better to conscript reluctant employees. These fractional or “micro” unions, argue the authors, constitute a genuine threat to worker liberty and the integrity of collective bargaining.
In relative numbers, organized labor in this country has seen a long-term decline in membership. In 2015, only 6.7 percent of all private-sector employees belonged to a union, a drop from the mid-50s/early-60s peak years (at … Read More ➡
It took years, but Mark Kirsch finally reaped what he sowed. On August 31, Kirsch, former president and business manager of International Union of Operating Engineers (IUOE) Local 17, was sentenced in U.S. District Court for the Western District of New York to three years in prison and ordered to pay $184,000 in restitution to two contractors for his role in running the Buffalo-area union as a criminal enterprise. For about 10 years, Kirsch and certain union members and business agents vandalized nonunion sites. And they didn’t hesitate to assault or threaten workers at these sites. Kirsch had been convicted by a jury in March 2014, a trial that saw four other Local 17 members acquitted. The case was made possible by a five-year probe by the FBI, the Labor Department and the New York State Police.
Union Corruption Update has described this case more than once. Federal and state … Read More ➡
For more than four years, Michael Lackey used his union as a personal ATM machine. It appears that the machine is now out of order. On November 30, Lackey, former president of Communications Workers of America Local 3901, was indicted on nine counts in U.S. District Court for the Northern District of Alabama related to his stealing funds from the Oxford, Ala.-based union in an amount of nearly $70,000 and then concealing the thefts. The indictment follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.
According to prosecutors, Lackey, 43, a resident of Bremen, Ga., used his position as president of CWA Local 3901 during February 2010-October 2014 to divert local funds to his own personal use. The money went for “unauthorized or nonexistent travel expenses, using debit cards he obtained on accounts for the local at both Regions and Wells Fargo for personal expenses, and making … Read More ➡
The fallout from the Texas health benefit scam continues. On December 14, Brian Haney, part-owner of a Vidor, Texas pharmacy, pleaded guilty in Austin federal court to a two-count information for bribery and tax fraud in connection with his payment of more than $800,000 in kickbacks to Garry Craighead, operator of a chain of physical rehab clinics across the state. The kickbacks were in exchange for referrals by Craighead to participating pharmacies, which inflated prescription prices based on Worker’s Compensation claims. The scam cost the Department of Labor nearly $18 million. The case followed an investigation by the FBI, IRS, U.S. Army, U.S. Postal Service and U.S. Labor Department’s Office of Inspector General. A sentencing date has yet to be set.
Brian Haney, now 37, was part-owner of a pharmacy in the southeast Texas community of Vidor. According to prosecutors, he did more than simply run a business. During November … Read More ➡
Ripping off union benefits is big business. In the case of Yashvant Patel, that wasn’t even half the story. On August 11, Patel, a Chicago-based contractor, pleaded guilty in U.S. District Court for the Northern District of Illinois to mail fraud and financial concealment in connection with defrauding employees out of about $600,000 scheduled benefits and $1.3 million in wages. Many if not most of the shortchanged workers were residing illegally in this country. Patel had sought to escape the terms of a bargaining agreement with affiliates of the Laborers International Union of North America. He was arrested in May 2015 and indicted by a grand jury that August on four counts each of mail fraud and false statements. The actions follow a joint probe by the FBI and the Labor Department’s Office of Inspector General.
Yashvant Patel, now in his early 60s, a resident of St. Charles, Ill., owned … Read More ➡