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.

Former Israeli Finance Minister Sentenced for Theft from Union

Avraham HirchsonAvraham Hirchson was finance minister for Israel from May 2006 to July 2007. But it's what he did in the preceding years that led to the end of his career. On Wednesday, June 24, an Israeli court sentenced Hirchson to five years and five months in prison for embezzling roughly 1.75 million shekels (US$600,000) from a labor union he'd headed during 1998-2005. Union Corruption Update last June reported that authorities had arrested Hirchson for embezzling at least $755,000 and possibly as much as $1.2 million from that country's National Workers Union, also known as National Workers Labor Federation. In all, nearly a dozen other persons, including his son Ofer, were nabbed. In addition to serving a sentence, Hirchson will have to pay a fine of 450,000 shekels.

Suburban Chicago Police Officer Charged with Theft from Union

Police officersGerald Bossolono may have been a cop, but that didn't stop him from being a thief as well. Bossolono, a 10-year veteran of the Cicero, Illinois police force, was arrested June 24 for allegedly stealing more than $70,000 from the Cicero Police Benevolent Association, where he has served as treasurer. Cook County State's Attorney Anita Alvarez said that Bossolono, 46, has been charged with one count of felony theft, punishable by three to seven years in prison or probation.

ACORN Int'l Changes Name; ACORN Retains Intimidating Style

ACORN International logoEven radical activists occasionally engage in re-branding, even if mainly for public relations. But a recent name change by an affiliate of the nation's leading radical community action network may signify more than simply a desire for a new image. Wade Rathke, founder and former longtime chief organizer of the Association of Community Organizations for Reform Now (ACORN), announced a few days ago that he has changed the name of the affiliate he heads, ACORN International.

Report: Employee Free Choice Act Would Boost Union Political Spending

dollarsThe Employee Free Choice Act (EFCA) is a triumph of rhetoric over reality. In the name of expanding worker choice, this proposed federal legislation, stalled for the past couple years, effectively would eliminate secret-ballot elections for nonunion workers seeking to decide whether to join a union and would mandate government arbitration if collective bargaining following a successful "card check" fails to produce a settlement. EFCA is coercive to the benefit of organized labor, a fact that extends to finances. And unions, once having realized a dues windfall, will use a certain portion of that money to fund political activity of the sort that put the bill on the front burner in the first place. An ad hoc nonprofit group, the Workforce Fairness Institute, recently released a report estimating union-controlled political activism would exceed $1.75 billion, at minimum, in the initial decade.

Raynor Forced Out of UNITE HERE; Allies Form New Union and Affiliate With SEIU

UNITE HERE logoIn labor as in business, a merger doesn't always work out. In the case of UNITE HERE, which until recently represented more than 400,000 hotel, food service, textile, laundry and other workers, it's a marriage gone sour. The odd man out is General President Bruce Raynor. But he's far from out of the picture. In fact, he may wind up on top. Raynor and anywhere from 100,000 to 150,000 supporters recently jumped ship and formed a new union, Workers United, which recently elected him president and affiliated with the Service Employees International Union (SEIU). To say that UNITE HERE President John Wilhelm is not on the best of terms with either Raynor or Service Employees President Andrew Stern is an understatement.

Japanese Teachers' Benefit Fund Looted

downtown TokyoEven by modern legal standards, it was a slick maneuver. Nozumu Sahashi, former head of a chain of English-language schools in Japan, admitted this June 1 in an Osaka courtroom to taking money from an employees mutual aid organization to prop up his company's losses, even as his lawyer entered a "not guilty" plea. Mr. Sahashi, now 57, longtime president of the Osaka-based Nova Corporation, had been arrested last June for allegedly diverting 320 million yen (at the time, about US$3.1 million) from a teachers' employment benefit fund to another firm which he controlled. Nova, though having declared bankruptcy, remains in operation, if in different hands and under a new name.

Memo to Starbucks: Dig In, Smell the Coffee, Fight Back

Starbucks logoStarbucks, that epitome of a socially-conscious corporation, is now the target of an escalating campaign among self-styled socially-conscious activists to blacken its name. One can understand why these radical activists would go after discount retailing behemoth Wal-Mart. But who would have thought they'd also have classy Starbucks in their sights?

Michigan Postal Workers Local Secretary Charged with Forgery, Theft

APWU logoOn May 13, Kimberly Drake, former treasurer of Local 3466 of the American Postal Workers Union, was charged in the 79th District Court of Mason County, Michigan with one count of forgery and one count of embezzlement in the amount of between $1,000 and $20,000. The guilty plea follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards. The union is based in Ludington, a harbor town along Lake Michigan. (OLMS, 6/15/09).

Florida Stage Employees Local Secretary-Treasurer Pleads Guilty

IATSE logoOn May 13, Steve Pfeiffer, former secretary-treasurer of International Alliance of Theatrical Stage Employees Local 60, pleaded guilty in U.S. District Court for the Northern District of Florida to embezzlement of $12,051 from the Pensacola union. The guilty plea follows a probe by the U.S. Labor Department's Office of Labor-Management Standards. (OLMS, 6/15/09).

Former Communications Workers Secretary in Michigan Sentenced for Embezzlement

On May 18, Kevin Welch, former financial secretary for Communications Workers of America Local 84-415 in Grand Rapids, Michigan, was sentenced in the 61st District Court of Kent County, Michigan to one year in prison (suspended) and given a year of probation for embezzling union funds. He also will have to pay restitution in the amount of $2,759.55. He pleaded guilty in April. The sentencing follows an investigation by the Labor Department's Office of Labor-Management Standards. (OLMS, 6/15/09).

Gingrich Skewers UAW Role in Federal Auto Industry Bailout

Newt GingrichAt least one major American political figure is calling the recent Obama administration-engineered bailouts of General Motors and Chrysler the political payback to the United Auto Workers (UAW) that they really are. In the cover article for the June 15 issue of the conservative weekly Human Events, former House Speaker Newt Gingrich, R-Ga., termed the bailout a "scandal," similar in behavior to the Teapot Dome scandal of the Harding administration but far larger in scope. Gingrich lays out the case for why "saving" the automobile industry, with $50 billion in taxpayer-backed loans ($30 billion of it yet to come) for GM alone, constitutes an unconstitutional tax on bondholders and taxpayers.

Public Employees Union Treasurer in Albany, New York Sentenced for Embezzlement

AFSCME logoAs treasurer of the largest public employees union in New York State, Carol Bruno managed to help herself to its treasury. Now she'll have a few years to think about it. On Friday, May 15, Bruno, formerly an administrative assistant for Civil Service Employees Association (CSEA) Region IV, was sentenced in U.S. District Court in Albany to three years of probation, the first 10 months of which will involve home confinement.

Beginning in March 2004 and for a period of two years thereafter, Bruno took about $40,000 from union accounts until certain fellow office employees noticed money was missing and notified the authorities. In July 2007, she was removed from her state government and union posts, and in January 2009 pleaded guilty to embezzling more than $16,000. CSEA Region IV is alternately known as Local 1000 of the American Federation of State, County and Municipal Employees. (Associated Press, 5/15/09).

Former Steelworkers Treasurer in Upstate New York Pleads Guilty to Embezzlement

Steelworkers logoOn May 15, Norman Stefanik, formerly president of United Steelworkers Local 1450 in Watertown, New York, pleaded guilty to embezzlement after being indicted in February. According to court documents, Stefanik, 51, a Watertown resident, during February 2004-November 2007 stole $25,808.29 from the union, which represents employees of Knowlton Technologies. He is due for sentencing on September 25. The action follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards. (Watertown Daily Times, 5/19/09).

Union Pension Fund Management Concludes Plan Is Critically Underfunded

SEIU logoAndrew Stern, president of the Service Employees International Union, often has emphasized his commitment to building a lean, efficient organization. His union and unions generally, he argues, need to aggressively cut costs and generate revenues in every way possible. Yet the SEIU is a union in major financial trouble. Its pension plan is no exception. Several weeks ago, the Washington, D.C.-based SEIU National Industry Pension Fund (NIPF) revealed in an April 30 letter to union leadership that the pension plan was in "critical status," or the "red zone." This "Notice of Critical Status" stated as follows: "This is to inform you that on March 31, the Plan actuary certified to the U.S. Department of the Treasury, and also to the Trustees, that the Plan is in critical status (the "red zone") for the plan year beginning January 1, 2009. Federal law requires that you receive this notice."

Benefit Plan Manager of St. Louis-Area Machinists Affiliate Pleads Guilty to Embezzlement

Machinists logoHarry Keil was in a lot deeper than initial reports had indicated. Keil, a former benefit fund manager for International Association of Machinists and Aerospace Workers (IAM) District 9, pleaded guilty in May in St. Louis federal court to one count of embezzlement and one count of mail fraud. He admitted that he'd embezzled $341,000 from the Bridgeton, Mo. union, a figure far higher than the earlier figure of $54,702 reported following his indictment on January 29.

McLaughlin Cousin Sentenced for Fraud from New York Labor Federation

He may have been a sideshow to the main event, but Thomas Schuette has a lot more publicity than he wants. Schuette, a Long Island chiropractor, is a cousin of Brian McLaughlin, the convicted and now-sentenced former head of the New York City Central Labor Council (CLC), an umbrella group for some 400 unions in the metro area. McLaughlin last month received a 10-year sentence for thefts in excess of $3 million from the council and other sources. But some of his take was part of a family business.

Canadian Auto Workers Local Financial Secretary Accused of Embezzlement

Salt mineDavid St. Denis insists he's not an embezzler. But having apparently absconded with incriminating paperwork, he may have a tough time convincing a court as much. St. Denis for four years had been financial secretary of Local 1959 of the Canadian Auto Workers (CAW), an affiliate of the United Auto Workers. He's been charged with fraud in the amount of more than $20,000 from the Windsor, Ontario union. "Nothing went missing," he stated at his trial that began on May 11. "I did not take any money." Unfortunately, the original evidence is "missing."

Virginia Voters Reject Influence-Peddler Terry McAuliffe

McAuliffe photoBy a wide margin yesterday, Virginia voters nominated State Senator R. Creigh Deeds as the Democratic Party candidate for governor. In so doing, they rejected the candidacy of former Democratic National Committee (DNC) Chairman Terry McAuliffe, a top Clinton confidante with a long history of influence-peddling. With roughly 75 percent of the ballots counted, Deeds had received about 50 percent of the tally, with McAuliffe and State Delegate Brian Moran each with roughly 25 percent. Deeds will face Republican Attorney General Bob McDonnell, who ran unopposed, in this November's general election. But the real news may be the defeat of McAuliffe, a powerful and ethically-challenged party fundraiser. Former President Bill Clinton, among other party stalwarts, actively had stumped on his behalf.

Public Employees Official in San Diego Resigns Amid Credit Card Fraud Allegation

San Diego skylineAs general manager of San Diego's largest municipal employee union, Judie Italiano wanted extra perks to take the place of the ones she lost. That desire now has cost her a job. Ms. Italiano until late May had been the longtime general manager of the San Diego Municipal Employees Association (SDMEA), an independent 6,000-member union. She resigned following an internal investigation revealing she had made nearly $14,000 in unauthorized credit card charges to cover personal expenses. And while she's paid back the money, the scandal suggests ongoing political turmoil.

Kansas Steelworkers Local Secretary Indicted for Embezzlement

Steelworkers logoOn Thursday, May 28, prosecutors announced the indictment by a Wichita federal grand jury of Daryl Becker, formerly financial secretary of United Steelworkers Local 558, for embezzlement of union funds in an unspecified amount. Becker, 56, a resident of McPherson, allegedly committed the theft on July 2, 2005. The union also is based in McPherson. The indictment follows a Labor Department investigation. (KAKE News, 5/28/09; Associated Press, 5/29/09).

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