Union Corruption Update

Well-respected car guy and General Motors supporter, Bob Lutz, posted a piece on Forbes that attacked "right-wing" criticism of the Chevy Volt. With all due respect and noting that I have nowhere near the credentials of Mr. Lutz, I feel it appropriate to respond to the ridiculous defense that we have seen of a vehicle that is costing taxpayers billions of dollars while offering little in return. I also have some questions of my own for Mr. Lutz and GM.

On November 14, Charles McDaniel, former general chairman of United Transportation Union General Committee of Adjustment 341, was sentenced in U.S. District Court for the Western District of Missouri to five years probation and ordered to pay $68,365.62 in restitution and a $100 special assessment. McDaniel had been charged in April with wire fraud in the theft of $44,889.62 from the St. Joseph, Mo.-based union and another $36.629.29 from Burlington Northern Santa Fe Railroad, pleading guilty immediately afterward. The actions follow a probe by the U.S. Labor Department's Office of Labor-Management Standards.

Ann Kelly can be thankful she paid back what she took. On November 16, Kelly, formerly secretary-treasurer of American Federation of Government Employees Local 2814, was sentenced in U.S. District Court for the Southern District of Iowa to three years probation and six months home confinement for embezzling $33,296.28 in funds from the Council Bluffs union. She also was ordered to pay a $5,000 fine and a $100 special assessment. The retired federal railroad inspector had pleaded guilty to one count of wire fraud back in August for stealing the money during 2002-07 to pay off credit cards and help family members. Kelly pleaded for leniency, stating that she had paid the money back after dipping into her retirement savings. The sentencing follows a probe by the U.S. Labor Department's Office of Labor-Management Standards.

Back during the days of General Motors' bankruptcy proceedings, media reports cited the many "sacrifices" made by the politically favored UAW. I have long wondered what these many sacrifices were, as UAW members seem to be doing pretty well since the GM bankruptcy. One such "sacrifice" was a supposed agreement that the UAW could not go on strike at GM until after 2015, as mentioned in this Bloomberg piece, and accepted as fact by all media sources. I questioned this assertion in a piece I wrote in December of 2010, but as has been the case with much of the coverage of GM, the potential GM deception was left unchallenged by auto journalists and the mainstream media. Recent reports of a strike authorized by GM UAW workers in Kansas now raise the question of if my suspicions were correct that there are no binding agreements to prevent strikes at GM plants.

On November 9, Derek Klingman, former secretary-treasurer of United Transportation Union Local 1006, was indicted in U.S. District Court for the Southern of Pennsylvania for embezzling $9,354.84 in funds from the Finleyville, Pa. (near Pittsburgh) union. The charge follows a probe by the Labor Department's Office of Labor-Management Standards.

Sometimes the unfinished business of a strike can take years to resolve. In the case of Donny Douglas and Jay Campbell, it was close to 15 years. Douglas and Campbell, each a former officer with United Auto Workers (UAW) Local 594 in Pontiac, Mich., were sentenced in Detroit federal court on December 19 for conspiracy to commit extortion and violate the Taft-Hartley Act. The pair had used their bargaining leverage to extend a strike in 1997 against General Motors by telling GM negotiators if they didn't hire Campbell's son and the son of another UAW official for high-paying jobs, the strike would continue. Douglas received 18 months in prison, while Campbell received 12 months and day in prison.

On November 1, Bobby Harrison, former treasurer of American Postal Workers Union Local 79, was sentenced in U.S. District Court for the Northern District of Georgia to six months in prison, three years of supervised probation and 300 hours of community service for embezzling $21,737.11 in funds from the Gainesville, Ga.-based union. He also was ordered to pay $15,159.77 in restitution and a $100 special assessment. Harrison pled guilty in August. The guilty plea and sentencing follow a joint investigation by the U.S. Labor Department's Office of Labor-Management Standards and the U.S. Postal Service's Office of Inspector General.

On November 1, David Daugette, former secretary-treasurer of International Association of Machinists Local Lodge 2766, was indicted in U.S. District Court for the Northern District of Alabama for embezzling $6,740.03 in funds from the Madison, Ala. union. Daugette, 48, a resident of Huntsville, allegedly stole the money during 2006-08. The charge follows a probe by the U.S. Labor Department's Office of Labor-Management Standards.

On October 25, Leonard Carman, former financial secretary of International Brotherhood of Electrical Workers Local 1142, pleaded guilty in the Circuit Court for the City of Norfolk, Va. to one count of embezzlement of less than $200 from the Virginia Beach-based union. He then was sentenced to one year in prison (suspended), two years of supervised probation and 50 hours of community service. Carman, who pleaded guilty in August, previously had made restitution in the amount of $3,118. The guilty plea and sentencing follow an investigation by the Labor Department's Office of Labor-Management Standards.