Union Corruption Update

Since 1997, NLPC has become a high-profile and credible source for information about America’s labor unions through our publication Union Corruption Update.

The newsletter has been referenced in many other media outlets including the New York Times, Chicago Tribune and National Journal.

Michigan Division Secretary-Treasurer Charged with Theft

On September 16, Charles Bohanon, former secretary-treasurer of Brotherhood of Locomotive Engineers and Trainmen Division 1, was charged in U.S. District Court for the Eastern District of Michigan with embezzling funds from the Petersburg, Mich. union in the amount of $18,074.23.  The charge follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  (OLMS, 10/12/08).  

West Virginia Ex-Secretary Pleads Guilty to Embezzlement

Two Ex-GOP Senators Warn of Potential ACORN Vote Fraud

It might seem a stretch, but the behavior of the Association of Community Organizations for Reform Now, better known as ACORN, may hold the key to the 2008 elections.  The union-backed far-Left network of nonprofit groups, now with 1,200 neighborhood chapters in 110 cities across the U.S., has been involved in a wide range of projects, not all of them on the right side of the law.  More than once, Union Corruption Update has reported on recent documented cases of election fraud involving ACORN chapters.  That perpetrators on occasion have pleaded guilty is no guarantee of clean hands.  At least that’s the message a pair of former U.S. senators, John Danforth, R-Mo., and Warren Rudman, R-N.H., are trying to convey to the McCain presidential campaign – and to the nation as a whole.

Ex-Connecticut Prosecutor Sentenced for Union Thefts

L. Mark Hurley had racked up serious gambling losses.  Unfortunately, he used his union’s coffers to cover them.  On Wednesday, September 24, Hurley, a Connecticut state prosecutor and treasurer of his union, was sentenced in State Superior Court to 22 months in prison plus five years of probation and 400 hours of community service for embezzlement.  He illegally had diverted to his own use well over $80,000 from a combination of union and union-sponsored charity funds, the latter earmarked for crime victims.  Hurley, 48, in August had pleaded no contest to larceny and forgery charges, and was disbarred immediately after sentencing.

Ex-Siemens Board Member Admits Paying Off Union Boss

Founded more than 160 years ago, Germany’s Siemens is one of Europe’s oldest and most respected corporations.  But the engineering-industrial conglomerate, with dual headquarters in Berlin and Munich, lately has had more than its share of unwanted publicity.  Last October a court in Munich ruled that the company, with almost a half-million employees worldwide, had bribed foreign officials to win contracts.  It ordered Siemens to pay a fine of 201 million euros (almost US$300 million).  The scandal led to the resignation of CEO Klaus Kleinfeld and Chairman Heinrich von Pierer, and since then has widened to a probe of some 300 individuals.  Now another bribery case involving a ranking company official has taken center stage.  And this one has the imprint of labor corruption.

Former Secretary of Ohio Local Pleads Guilty to Embezzlement

Visiting a strip joint can provide some fleeting pleasures.  Thomas Leonard found out that the tab can be more long-lasting, especially if the money to pay for them comes out of union funds.  Leonard, former recording secretary for Laborers International Union of North America Local 500 in Toledo, Ohio, pleaded guilty on October 2 in federal court to using his local credit card in 2004 to pay for visits to strip clubs totaling $4,386.  He already has paid restitution, which should lighten the sentence.  Former local business manager Steven Thomas is facing similar charges. 

Officers of NE Pennsylvania Local Plead Guilty to Thefts

The union that Scott Gehringer and Alex Margaritis headed no longer exists.  But the memories may linger for some time.  The pair, respectively, former president and financial secretary of International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers Local 594 of Bethlehem, Pennsylvania, pleaded guilty on September 23 in federal court to embezzling from their union.  At sentencing in December, each could receive up to five years in prison plus a restitution order and a fine.

Northern Indiana President Pleads Guilty to Embezzlement

Local 285 of the Glass, Molders, Pottery, Plastics and Allied Workers International Union is getting used to guilty pleas among its members.  On September 18, Jeanette McFarland, former president of the Fort Wayne, Ind. local, pleaded guilty in U.S. District Court for the Northern District of Indiana to one count of embezzlement from the union, which represents workers at Fort Wayne Foundry.  McFarland is the third local official to admit to theft within the last several years.   She faces sentencing in December.

Wife of Colorado Local Treasurer Pleads Guilty to Theft, Forgery

On September 15, Kathleene Bigham, wife of former Brotherhood of Maintenance of Way Employees Local 779 Secretary-Treasurer Alfred Bigham, pleaded guilty in the Seventh District Court of Carbon County, Utah to theft of $14,280 in union funds plus three counts of forgery.  She also will have to pay more than $2,000 in remaining restitution, plus $800 in fines.  Bigham had been charged in June.  Though she is a resident of Utah, the union is based in Grand Junction, Colorado.  The guilty plea follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  (OLMS, 10/2/08).  

Los Angeles Boss Removed; Stern Seeks Outside Help in Probe

It’s understandable why Andrew Stern, president of the Service Employees International Union, has been nervous lately.  The union’s 160,000-member Los Angeles affiliate, the United Long-Term Care Workers, also known as Local 6434, has been the target of reported investigations by the U.S. Department of Labor and the House of Representatives following revelations that its president, Tyrone Freeman, engaged in a pattern of misconduct.  Freeman had taken a paid leave of absence in order to facilitate an internal SEIU probe.  About the last thing Stern wants is for Congress and the executive branch to come down on his union. 

Top Officer of Local, California Affiliates Probed; Takes Leave

Annelle Grajeda believes her only offense was standing by a friend.  The Service Employees International Union, however, will have the final word.  Grajeda, president of SEIU Local 721, is yet another Los Angeles SEIU official to step aside in the wake of revelations of possible misuse of office.  That she also is president of the SEIU California state council and an executive vice president of the international union makes the need for damage control all the more imperative.  A Los Angeles Times report indicated there was evidence that she had arranged a transfer of tens of thousands of dollars in improper payments to a former boyfriend, Alejandro Stephens. 

NYC Labor Negotiator Is Key Rangel Donor, Real Estate Partner

At 94, most men are lucky to be alive, much less enjoying the scenery at a Caribbean seaside resort.  But Ted Kheel is an unusual case of both longevity and networking.  A longtime negotiator on behalf of New York City labor unions, he’s cultivated close ties to a number of Democratic Party leaders over the years, most significantly, Rep. Charles B. Rangel, D-N.Y., chairman of the House Ways and Means Committee.  The business side of that relationship is now the subject of a possible federal investigation, a probe triggered by a series of articles appearing in the New York Post.  Reporter Isabel Vincent had revealed that a real estate company co-founded by Kheel decades ago had arranged for the powerful Congressman to obtain an interest-free mortgage on a villa in the Dominican Republic.  That deal opened the door for Rangel to collect what may be hundreds of thousands of dollars in unreported gross rental income.

Sierra Leone Union Sues Rival; Alleges Massive Thefts

A decade ago, Sierra Leone was in the throes of brutal anarchy, a civil war over control of diamond mines and exports.  That war, depicted in the 2006 movie, “Blood Diamond,” eventually claimed tens of thousands of lives before the UN brokered a settlement early this decade.  Yet a battle of a legal sort is being fought in that small, tropical West African country of a little over six million people.  Serious money is at issue all the same.

South Carolina Boilermakers Secretary-Treasurer Indicted for Embezzlement

On September 10, Joseph Michael Johnson, former secretary-treasurer of International Brotherhood of Boilermakers Lodge 687, was indicted in U.S. District Court for the District of South Carolina on one count of embezzling $102,519 in funds from the Charleston Heights union.  The indictment follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  (OLMS, 9/19/08).


Los Angeles Boss Probed for Fundraising, Spending; Resigns

The Service Employees International Union under President Andrew Stern, as this publication has noted more than once, is committed to maximizing membership in its own ranks and in the labor movement as a whole.  Part of this ongoing campaign involves backing union-friendly political office-seekers.  But in Southern California this alliance has produced a downside:  bad publicity and a pair of investigations.  The focus of attention is SEIU Local 6434, also known as the United Long-Term Care Workers, and its embattled president, Tyrone Freeman.  On Thursday, August 21, Bernard Parks, a Democratic candidate for the Los Angeles County Board of Supervisors, demanded that his opponent, Mark Ridley-Thomas, also a Democrat, return more than $4.5 million raised by a union-led alliance whose driving force is Freeman. 

Donor Who Bailed Out Rathkes Identified as Foundation Head

The unfolding financial scandal at the Association of Community Organizations for Reform Now, or ACORN, has taken a new turn.  ACORN, based in New Orleans, never wanted known the identity of the person who assumed responsibility for a promissory note of nearly $740,000, a sum representing the remaining balance of the roughly $950,000 embezzled from ACORN’s coffers nearly a decade ago.  But thanks to some digging by San Francisco Chronicle reporter Henry K. Lee, the identity of the person is now known:  Drummond Pike, founder and chief executive of the Tides Foundation, a San Francisco-based philanthropy well-known in progressive circles.  The case is significant for organized labor because ACORN founder and chief organizer Wade Rathke is the founder and chief organizer of Local 100 (Arkansas, Louisiana and Texas) of the Service Employees International Union.  In addition, SEIU Local 880, based in the Midwest, operates as an adjunct of ACORN.  Three months ago, he resigned from his post over the scandal. 

Pittsburgh-Area Local Secretary Indicted for Thefts

Donna Simpson’s $50,000-plus salary as a union secretary apparently wasn’t enough to make ends meet, so for a year and a half she took to stealing from the union.  The thefts weren’t detected at first, but her good luck streak eventually ended.  Simpson was indicted in late August by a federal grand jury in Pittsburgh for embezzling $87,823 from a bank account of the United Steelworkers' Organization for Active Retirees.  Neither she nor union spokespersons could be reached for comment.   


Simpson, 42, a resident of East McKeesport, Pa., had served as field secretary for the organization.  U.S. Attorney Mary Beth Buchanan said in a prepared statement that from June 2006 until early 2008 she wrote herself 82 unauthorized union checks.  Her salary last year was $50,305, according to the union’s financial report to the U.S. Department of Labor.  The indictment follows an investigation by DOL’s Office of Labor-Management Standards.  (Pittsburgh Tribune-Review, 8/26/08).    


Ohio Local President Indicted for Embezzlement, Records Fraud

Obama’s Support of Union Card Checks Part of Broad Campaign

Running a presidential campaign requires a certain amount of boiling down of ideas into easy sound bites and slogans.  The opposition party candidate, in particular, must successfully define himself as the candidate of “change,” possessed of an ability to alter the nation’s course away from the “failed policies of the past.”  The Democratic Party’s presumptive nominee, Sen. Barack Obama, D-Ill., is no exception.  He knows he’s got to win over skeptics with simple messages, but at the same time offer specific proposals for true believers.  And as much as any bloc in his party can be, labor leaders and activists are true believers.   

Cronyism Is Well and Alive at Boston Retirement Board, Union

The Boston Retirement Board has a reputation for taking a long time making decisions.  In fact, this public-employee entity has allowed nearly 100 disability cases to pile up.  An unexpected stroke of good luck may speed things up.  If nothing else, it has given additional ammunition for an ongoing probe of the board and a close labor ally, International Association of Fire Fighters Local 718.  On August 6, the Boston Herald reported that the board turned down a disability retirement claim by a union member, Albert Arroyo.  The claim might have been approved had it not been for a YouTube video captured for posterity.

Ex-Bookkeeper for Los Angeles Local Arrested for Thefts

For a union office employee, Rosa Della Porta seemed to live beyond her means.  The new BMW she drove to work raised her boss’ suspicions, especially as funds seemed to be disappearing.  Those suspicions eventually were borne out.  Della Porta, former bookkeeper for Local 26 of the International Longshore and Warehouse Union in Los Angeles, was arrested this month for embezzlement of $108,000 in local funds and indicted on August 8 in federal court.  “After receiving cash from various sources, Della Porta allegedly deposited less cash than the union received and pocketed the difference,” noted the U.S. Attorney’s Office.

St. Louis Ex-Local Treasurer Sentenced for Embezzlement

Gambling losses, and thefts from union treasuries to cover them, have ruined more than a few careers of labor officials and employees.  On occasion, they’ve nearly ruined unions outright.  Edna Latimore provides a case in point.  On August 7, the former treasurer of American Federation of Government Employees Local 900 in St. Louis pleaded guilty in U.S. District Court for the Eastern District of Missouri to embezzling around $77,000 in funds from her union and then attempting to cover up the thefts by making false statements on a Department of Labor financial report.  She is due to be sentenced in October.

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