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.

Mexican Mine Workers Boss Hiding in Canada Wins Injunction

Mexican mapOn the matter of Napoleon Gomez Urrutia, the Mexican government appears to be of two minds. That's been keeping Mr. Gomez, a popular labor leader, safe for the time being in self-imposed Canadian exile. Three years ago, Gomez, general secretary of Mexico's National Union of Miners and Metalworkers ("Los Mineros"), fled to Canada to avoid arrest on charges of fraud and embezzlement. He repeatedly has vowed to stay there until all charges are dropped. The Mexican government - at least the portion favorable to his case - appears to be obliging him. On March 22, the union announced in a press release that Gomez has won an injunction against his arrest, thus making extradition less likely.

Waterfront Guard Officials in Maryland Indicted for Thefts

Paul S. Peters II and Brian Armentrout helped guard the Baltimore waterfront. Someone should have been guarding them before they managed to pilfer what prosecutors say was more than $300,000 from their union treasury.  Peters and Armentrout, respectively, the former president and recording secretary of Waterfront Guard Association (WGA) Local 1852 in Baltimore, recently were indicted on 18 embezzlement-related charges by a federal grand jury in that city.  Each faces up to five years in prison.

According to the indictment, unsealed on March 26, the two during January 2002-September 2005 embezzled funds from the union's pension and welfare plans, and from its general operating account.  They used the money to pay for personal expenses, including motor vehicles, home improvements, stock transactions, home mortgage payments, and boarding for horses.  Peters allegedly withdrew pension and welfare funds and deposited them into the general fund.  Then, he and Armentrout made cash withdrawals or wrote out checks payable to themselves.

Former Indiana Local Treasurer Pleads Guilty to Embezzlement

GMP logoOn February 5, Jeffrey C. Harris, former financial secretary-treasurer of Glass, Molders, Pottery, Plastics and Allied Workers International Union Local 285 in Fort Wayne, pled guilty in U.S. District Court for the Northern District of Indiana to one count of embezzling $5,048 in union funds. He agreed to make restitution in the same amount. The guilty plea follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards. (OLMS, 3/23/09).

UAW, Ford Revise Pact on Retiree Health Care Funding

Auto workersEven the United Auto Workers knows that sometimes it's necessary to bite the bullet to come out ahead in the long term. On Monday, February 23, the UAW and the Ford Motor Co. announced they had hammered out the details of a new agreement to preserve retiree health care benefits without jeopardizing the company's existence. The pact would have Ford to pay the union up to half its liabilities in the form of company stock. Given precipitous declines in auto industry stock prices over the last year, it's a sensible way to avoid disaster.

Israeli Firefighters Union Head, Five Associates Arrested

Police detectives in Israel are calling it the "Red Hot Affair." It's actually a pun. But not too many people are laughing. On March 15, the head of that country's Fire Brigades Union in the Jezreel Valley (in the northern part of the country) turned himself into police after five other suspects, among them various family members, were arrested for running an elaborate embezzlement ring. The ringleader, union chairman Avi Zagori, also a member of the Migdal Ha'emek Municipal Council, embezzled cash and checks worth millions of shekels (1 shekel = about US$0.25). The suspects face fraud, forgery, embezzlement, money-laundering and other charges. Authorities also detained another four persons for questioning.

Ohio Ex-Local Communications Workers Treasurer Pleads Guilty to Theft

On February 4, Deborah Chichick, former treasurer of Communications Workers of America (CWA) Local 4527, pleaded guilty in the Court of Common Pleas for Jefferson County, Ohio, to one count of theft of $1,440 from the Steubenville union.  She then was sentenced to a year of probation and ordered to make restitution.  The guilty plea and sentence follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards.  (OLMS, 3/18/09).    

Welsh Local Council Worker Convicted; Told to Make Restitution

Mark Taylor isn't the only UNISON member in Wales to have been convicted for theft lately.  Late last October, David Evans, a council worker in Glamorgan, was ordered by Cardiff Crown Court to repay pounds 18,191 (about US$26,000) from the public sector workers union coffers.  He also was given a 24-week prison sentence, suspended for 12 months, following his guilty plea.  Evans, 47, a support manager of the members services department at the council offices of the Vale of Glamorgan, wrote himself checks from a union account.  "He was claiming money, suggesting it was being paid to the Vale of Glamorgan Council," said prosecutor Chris Lewis.  "There is no disputing money was taken."  The thefts occurred sometime between January 1, 1999 and April 6, 2006.  Evans will have two years to pay back what he took.  (Barry and District News, 11/6/08).

Health Care Worker in Wales Pleads Guilty to Theft; Sentenced

With more than 1.3 million members, UNISON is a huge public-sector workers union in the United Kingdom.  It is almost inevitable that some bad apples are among them.  Early this month, Mark Taylor, a store manager for Royal Glamorgan Hospital in Llantrisant, Wales, pleaded guilty at Merthyr Tydfil Crown Court to a dozen separate charges of embezzlement and was sentenced to 10 months in jail.  Taylor, a branch secretary for UNISON's Pontypridd and Rhondda branch, had diverted pounds 23,000 (roughly US$33,400) in member dues. 

Secretary-Treasurer of Chicago Transportation Local Sentenced for Embezzlement

On February 4, Keith H. Cook, former secretary-treasurer of United Transportation Union (UTU) Local 620, was sentenced in U.S. District Court for the Northern District of Illinois to a year in prison and three months supervised probation for embezzling union funds, and 10 months in prison and a year of supervised probation for making a false entry in the records of the Chicago union.  He also will have to pay $47,079.21 in restitution and pay a $125 assessment.  Cook was convicted by a jury last September.  The concurrent sentences follow a joint investigation by the U.S. Labor Department's Office of Labor-Management Standards (OLMS) and Office of Inspector General.  (OLMS, 3/18/09).

Economist's Advice to Obama Carries a Union Label

Krugman photoPaul Krugman has become to print media what Keith Olbermann is to television:  a Left-leaning prince of darkness.  A professor of economics and international affairs at Princeton this decade, Krugman, now 56, has cultivated a recognizably caustic style of scoring points against free-market economics in theory and practice, especially in his New York Times op-ed and blog columns.  The problem is that as he’s become a public figure, he’s shed, or at least has kept well-hidden, his empirical sense.

St. Louis-Area Pension Manager Indicted for Embezzlement

It didn’t take long for Harry Keil to set about enriching himself.  Keil, pension manager for International Association of Machinists and Aerospace Workers District 9, was indicted on January 29 on two counts of felony embezzlement for diverting nearly $55,000 from an employee benefit plan.  He was arrested in Rockford, Illinois and appeared in U.S. District Court for the Eastern District of Missouri on February 10.  Reports did not indicate whether he pleaded guilty.

Long Beach, Calif. Local Probed for Political Spending Patterns

The National Education Association, like its rival, the American Federation of Teachers, isn’t shy about throwing its weight behind political causes.  But even these unions sometimes run up against limits.  The Long Beach, California affiliate of NEA’s state chapter, the California Teachers Association (CTA), very likely exceeded them.  The incumbent president remains in office.  But the union, run by a CTA-appointed trustee since October 2007, is in turmoil.  That’s very much the result of an outside audit revealing irregular spending patterns during the 2006 and 2008 election cycles.  A recent court case over the right of the

Mexican Authorities Ask Canada to Extradite Mine Workers Boss

Mexican mapNapoleon Gomez Urrutia has been on the lam for some three years.  And now that his government wants to put him on trial again, he doesn’t mind hiding indefinitely.  Gomez is – or was, depending on how one looks at it – general secretary of Mexico’s National Union of Miners and Metalworkers, or “Los Mineros.” Now with roughly 280,000 members, it’s one of the nation’s largest and most powerful labor organizations.  The Mexican government insists it’s also one of the most corrupt.  That might not be saying much in light of the standards his accusers have set over the years, but they are convinced

New Report Projects Card Check Law Will Create Joblessness

The Employee Free Choice Act (EFCA), as this publication has noted several times, is a classic case of deceptive packaging. The proposal, now pending before Congress, would effectively eliminate the secret ballot as a means of allowing workers to decide whether to join a union. Specifically, it would force an employer to recognize as binding the result of a union "card check" campaign that generates signatures from at 50 percent of affected workers who indicate a desire to join. Labor leaders from the start have admitted they seek to boost their ranks and retool themselves as a formidable economic and political force. What they won't admit is the possibility that EFCA, once enacted, would be counterproductive to the interests of workers as a whole. A new study concludes, however, that such a possibility is very real.

Obama Set to Block Labor Department Transparency Rules

President Barack Obama frequently has vowed to make ethics in government a top priority. On January 21, his first full day in office, he announced, "Let me say it as clearly as I can: Transparency and the rule of law will be the touchstones of this presidency." He had timed his words to coincide with separate executive orders that froze the pay of White House officials whose salaries exceeded $100,000, imposed gift bans on political appointees, and restricted lobbyists' access to government jobs.  Yet this "new era of openness," as the president termed it, apparently hasn't extended to oversight of supportive organizations - like labor unions.

Atlanta Federal Jury Rules Union Engaged in Secondary Boycott

Intimidation is ingrained in the way many unions do business.  In the pursuit of their interests, labor organizations are not above threatening employers, nonunion workers and even pedestrians with economic and physical harm.  One of the more deceptively aggressive tactics in their arsenal is the secondary boycott.  Unions in such instances attempt to coerce a neutral (or “third”) party into siding with them in a dispute.  While secondary boycotts are illegal under the National Labor Relations Act (NLRA), that doesn’t mean unions shun them.  Indeed, they will pursue it if for no other reason than the inevitable imprecision in defining it.  A court decision earlier this month at least clarifies certain boundaries.  The victor is a Gwinnett County, Georgia contractor who had been under continuous fire from a regional affiliate of the United Brotherhood of Carpenters and Joiners.   

 

New Report Shows Union Pension Shortfall in the St. Louis Area

Employees covered by union-sponsored pension plans have had little to cheer about lately.  Those living in and around St. Louis are no exception.  A study released this past December has concluded that current assets of several area labor-sponsored funds are insufficient to meet total liabilities.  Worse yet, the situation has deteriorated since the start of the stock market crash in the fall of 2007.  The report, titled, “The Financial Health of Defined-Benefit Pension Plans:  An Analysis of Certain Trade Unions’ Pension Plans,” and co-authored by John R. McGowan, a professor of accounting at St. Louis University, and a graduate student, Catherine Donovan, concludes that as of around two years ago the pension funds of five major construction unions had only about 70 percent of the assets necessary to cover long-term obligations.  Moreover, the study estimates that by the close of 2008 this figure had declined to less than 55 percent.  Union leaders understandably are critical of the study.  Yet the findings merely mirror nationwide trends.

 

Former President of Chicago Local Indicted on Drug Charges

Robert Walston had a side career during his reign as a Teamster local leader.  And by prosecutors’ accounts, it was an illegal one.  On January 22, Walston, formerly president of International Brotherhood of Teamsters Local 743 in Chicago, was indicted on conspiracy and drug trafficking charges related to his alleged role as a bagman in an attempted 2007 Texas cocaine deal.  The crimes occurred when he was still president of the local, though he would relinquish his post only a couple of months later to an ally, Richard Lopez, himself indicted in short order for his participation in a 2004 union election-rigging scheme. 

Philadelphia Treasurer Pleads Guilty to Theft, False Statements

Peter Rhein’s ride is over.  Rhein, former treasurer of American Federation of Teachers Local 3845, pleaded guilty on February 3 in U.S. District Court for the Eastern District of Pennsylvania to six counts of embezzlement and eight counts of making false statements to the federal government.  Prosecutors charged that between October 2002 and February 2008, Rhein, 42, forged $43,600 in union checks to cover personal expenses.  He also forged the signature of the local president and falsified financial reports filed with the U.S. Labor Department.  Sentencing is scheduled for May 5.  The local represents instructors at Philadelphia’s Lincoln Technical Institute.  (Philadelphia Inquirer, 2/4/09).

West Virginia Local Financial Secretary Sentenced for Thefts

On February 3, Donna Roles, former financial secretary of United Steelworkers Local 14310 in Mt. Hope, West Virginia, was sentenced in U.S. District Court to one month in prison and three months of supervised release for embezzling funds in the amount of $76,420.  She also was ordered to make $70,000 in restitution (she already has paid $1,775), pay a $100 special assessment, and undergo drug and alcohol evaluation.  Roles, a resident of Beckley, W.V., pleaded guilty in October to having taken the money during January 2002-September 2005.  The sentencing follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  (Charleston Gazette, 2/4/09; OLMS, 2/12/09).      

 

Wisconsin Vice President Sentenced for Records Fraud

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