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.

Ex-Treasurer of Kansas City, Kansas Local Sentenced for Theft

William Kendrick wasn’t treasurer of American Postal Workers Union Local 238 for very long.  But he made the most of his opportunity – until he was caught.  Kendrick, a resident of Grandview, Missouri, was sentenced in federal court on August 17 to five years’ probation and six months home detention for embezzling $26,235.94 from the Kansas City, Kan.-based union.  Kendrick, who had served in his position from April 2003 to August 2004, pleaded guilty this May to one count of embezzlement.  He admitted that he and Local 238 President Dwayne Giles, also of Grandview, co-signed checks from a union account payable to Kendrick.  They also made child support payments on behalf of Giles, who already has pleaded guilty and awaits sentencing on October 1.  (Kansas City Star, 8/17/07).            


Ohio Local Secretary-Treasurer Charged with Embezzlement

Security Firm Sues City of Los Angeles, Alleges Union Pressure

The Service Employees International Union never has been bashful about making a point.  A little more than two decades ago, then-President John Sweeney, along with top aide Andrew Stern, hit upon an ingenious idea for organizing hotel and office building employees.  The campaign would be called “Justice for Janitors.”  First in Denver, and then in other U.S. cities, SEIU workers/demonstrators would rattle noisemakers at ear-splitting volume, chant, shout, and block sidewalk and/or street traffic in a coordinated effort to persuade building subcontractors to recognize the union and negotiate higher wages and benefits.  It generated a lot of attention, but more importantly, victories; intimidated subcontractors typically gave into union demands.  Thanks in large measure to Justice for Janitors, the Service Employees have boosted their ranks – now up to around 1.8 million – while membership in most other unions either has stagnated or declined.  The campaign also helped propel Stern to the union presidency following Sweeney’s election as AFL-CIO president in the fall of 1995.  A decade later Stern would pull his union out of the AFL-CIO and launch his own federation, Change to Win.

Secretary-Treasurer of Tennessee Local Has Criminal Record

The International Brotherhood of Teamsters is a union that believes in diversification.  Beyond its core work force – private-sector truckers and warehousemen – the Teamsters has come to represent employees within such occupations as flight attendants, industrial cleaners and police officers.  The problem is that the union, though under federal supervision for nearly two decades, still exhibits an occasional blind spot for bad apples in its ranks.  One of them is Joe Bennett, secretary-treasurer of Teamsters Local 327, which represents Metro Nashville police officers.  Nearly 20 years ago Bennett was convicted of hiring a hit man to carry out a murder.  The killing didn’t happen, but many local police aren’t happy about his presence anyway.  “Not only is it morally wrong to be involved in an organization who employs convicted felons, it’s also against our policy to associate with convicted felons,” said an unnamed cop, a Local 327 member.

Nashville Police Decommission Officer in Surveillance Plot

As if Teamsters Local 327 doesn’t have enough to worry about these days, the union now is finding itself in a different kind of trouble, one rooted in recent events.  The Nashville Metro Police Department has decommissioned one of its officers after learning on July 26 that the officer had been involved in a plot to bug an event held by the local’s rival, the Fraternal Order of Police (FOP).  The action is the latest installment in an ongoing Teamsters-FOP feud in the Nashville area, where the Teamsters more than a year ago won collective-bargaining rights.  The officer, Roy Dunaway, had served as the police department’s liaison to Local 327.  Making this black-bag operation even more inexplicable is the fact that the suspects had planted the listening device(s) at the FOP’s summer youth camp in Mt. Juliet, east of Nashville.

New Book Recalls Elder Hoffa’s Control of Twin Cities Local

Jimmy Hoffa unquestionably ranks as a dominant figure in the annals of American organized labor, and very likely the most memorable as well.  The late Teamster leader ruled his union with a combination of energy, charisma and autocracy, and the last thing anyone wanted was to cross him the wrong way.  Some did and paid a price.  A new book, Crossing Hoffa:  A Teamster’s Story (Borealis Books), recalls just how unpleasant things could get for those who challenged him or his allies.  Author Steve Harper recreates the world of his father, Jim Harper, an insurgent member of Teamster Local 544 in Minneapolis.  The elder Harper, who died at age 73 in 2001, for a brief time, during 1959-61, posed a real threat to Hoffa’s dominance.  The book, aside from serving as an invaluable social history of the labor movement, also is a cautionary tale of the difficulties of reforming a union from within, whether or not going through proper channels.

Plea Bargain Possible in Northern California Treasurer’s Theft

There’s nothing illegal about driving a school bus.  But stealing from a union representing bus drivers and other school employees is another story.  Lincy Merritt, bus driver and treasurer for California School Employee Association Local 98 in the San Joaquin Valley community of Tracy, pleaded not guilty in June to using her union office to falsely obtain $8,744.16.  Her claim runs counter to a two-page felony embezzlement complaint filed the previous month.  A local court, following her appearance on July 31, set aside a preliminary hearing for Merritt, 45, until September 4.  But a plea deal already may be in the works.

Officials of Washington State Employees Union Request Probe

Thank God for tipsters.  At least that’s what many members of Washington Federation of State Employees (WFSE) Local 491 probably are thinking now.  Officials of the local, representing state-funded caregivers and other employees at the Rainier School in Buckley (Pierce County), Wash., have asked the state parent organization to look into allegations that one of its members recently stole funds.  The probe was triggered by an anonymous phone call to the Tacoma News Tribune.  Liz Larsen, director of administration for the WFSE, confirmed that her union is investigating the possibility of embezzlement.  The state federation is affiliated with the American Federation of State, County and Municipal Employees.

Secretary-Treasurer in Delaware Pleads Guilty to Embezzlement

Michael Pingatore was clever enough to evade detection – but only for a time.  On July 23, the former secretary-treasurer of the Delaware Rural Letter Carriers Association pleaded guilty in federal court to stealing $58,908.38 from his union over a four-year period.  Pingatore, 47, during 2002-06 had diverted association funds to a personal checking account by writing unauthorized checks to himself and by starting a credit card on a union bank account without approval.  In all, said Assistant U.S. Attorney Robert Kravetz, Pingatore conducted dozens of transactions ranging anywhere from $12 to $6,727.  At his hearing, he pleaded guilty to all six charges of embezzlement in exchange for a promise by prosecutors not to bring additional charges related to the thefts.  The union represents about 400 letter carriers in the state.  (Delaware Online, 7/23/07).          


Maryland Local Treasurer Sentenced for Embezzlement

House Cuts Funding for Union Oversight Agency

Those who read this publication soon enough come across the acronym, “OLMS” – as in the Office of Labor-Management Standards.  It’s the agency within the U.S. Department of Labor that processes union financial disclosure forms, and where necessary, investigates irregularities.  It’s a relatively low-cost way to keep union bosses, employees and associates honest.  But the Democrat-controlled 110th Congress, not unexpectedly, is on the verge of clipping its wings.  Almost all union political spending – and lots of it – goes to Democratic candidates or party committees.  On Tuesday night, July 17, the House of Representatives voted 237-186 to reject an amendment sponsored by Rep. John Kline, R-Minn., to restore a cut in OLMS funding to the overall Labor, Health & Human Services, and Education fiscal 2008 appropriations bill (H.R. 3043).  The current OLMS budget is $47.8 million; the approved measure would reduce that sum to $45.7 million.  That might not seem much of a cut, but it should be put into context.

California Health Care-SEIU Contract Rift Widens

Andrew Stern, president of the Service Employees International Union, has a dream:  to make organized labor mighty again.  He views huge increases in membership, most of all in his own 1.8 million-member union, as central to this campaign.  And with a hike in rank and file must come a new approach to collective bargaining, with unions being more businesslike in running their organizations and less adversarial in their negotiations with employers.  The May 7 issue of Union Corruption Update, relying on an earlier story in the San Francisco Bay Area alternative newspaper, SF Weekly, reported that the SEIU, with strong guidance from Stern, has put together sweetheart deals with dozens of California health-care providers.  The result has been severely substandard contracts for workers employed at dozens of health care facilities and a 140,000-member Oakland-based SEIU affiliate, United Healthcare Workers West (UHW), left out in the cold.  UHW chieftain Sal Rosselli already has denounced the agreements as sellouts.  Now he’s taken his fight to a higher level.

California Union Ordered Out of Kaiser Permanente Organizing

If the United Healthcare Workers West (UHW) had free reign – that is, freedom to operate independently of its SEIU overlords back east – what would be the result?  Very likely, it would be an expansion of the Service Employees’ penchant for aggressive card-check procedures to organize employees.  What Sal Rosselli and UHW organizers weren’t counting on was worker resistance, and successful resistance at that.  On July 9, the National Labor Relations Board (NLRB) ruled in favor of four Kaiser Permanente employees in Southern California who had filed unfair labor practice charges against the union only weeks earlier.  The workers alleged that the UHW had engaged in a deceptive card-check campaign, telling nonunion employees that signing a card was merely a request for more information about unionizing rather than a formal endorsement of union recognition.  What’s more, UHW-SEIU organizers allegedly engaged in unlawful bargaining over employee wages and working conditions before the employees had a chance to select the union as their representative.

NYC Developer Sentenced, Fined in Mob Kickback Scheme

Several years ago Frederick Contini realized that resistance would do him no good.  The developer of the New York State Metropolitan Transit Authority’s (MTA) new headquarters, located at 2 Broadway, pleaded guilty to various federal charges in March 2003 and July 2004.  Now he’s been handed the tab.  This July 11, Contini was sentenced in U.S. District Court for the Eastern District of New York to five years probation and ordered to make more than $8 million in restitution.  The punishment was based on his guilty plea of March 31, 2003 to conspiracy to receive, possess and dispose of money obtained by fraud and transported across state lines, obstruction of justice, and engaging in unlawful monetary transaction.

Bowers Steps Down as President, No. 2 Man Hughes Takes Over

For the last two years the International Longshoremen’s Association has been operating under a Justice Department civil racketeering indictment.  But whether the change in leadership at New York City headquarters this month suggests the feds will drop its suit remains to be seen.  As expected, John Bowers resigned on July 26 as president of the ILA at the union’s quadrennial convention in Hollywood, Fla., having held the job since 1987.  Bowers, 84, had been indicating for some time that he would not seek re-election.  His close ally, Richard Hughes, Jr., 74, the ILA executive vice president, takes over at the top spot, having run uncontested.  Hughes’s replacement is Harold Daggett, assistant general organizer and president of the nearly 2,000-member Local 1804-1 across the river in New Jersey, long under control of the Genovese crime family.  Daggett had been acquitted in November 2005 after an emotionally draining waterfront criminal trial that saw, among other things, the discovery of the dead body of missing witness Lawrence Ricci.  Hughes had gotten his job in 2005 as a replacement for Albert Cernadas, who retired after pleading guilty in the case.

Former Local Financial Secretary in Michigan Pleads Guilty

Willie Haynes had enjoyed a three-year streak until he pushed his luck too far.  On Monday, July 9, Haynes, formerly financial secretary of United Auto Workers Local 362 in Bay City, Michigan, pleaded guilty in federal court to falsifying union records.  Prosecutors had not charged him with embezzlement, yet made clear that his alteration of financial reports was intended to cover up thefts.  As such, he faces up to six months in prison, the same sentence he would face if he had been charged with stealing between $5,000 and $10,000.

Financial Secretary in Tennessee Sentenced for Embezzlement

On July 7, Larry Haislip, former financial secretary for Local 09-7509-S of the United Steelworkers of America, was sentenced in U.S. District Court for the Eastern District of Tennessee to six months probation for embezzling union funds in the amount of $1,702.97.  His real take, however, was much higher; the court also ordered him to pay $49,428.78 in restitution.  The sentencing comes after a Labor Department investigation.  (OLMS, 7/16/07).  


Former President in Oklahoma Charged with Filing False Report

Senate Blocks Card-Check Bill; Supporters Vow They’ll Be Back

June 26, 2007 was a bad day for organized labor.  Indeed, its chieftains may look back on it as a day of infamy.  The unions’ number-one legislative priority – passage of a mandatory card-check bill – went down to defeat in a procedural vote.  Senate Democrats had been promising for weeks that they would try to break a threatened Republican filibuster over the Employee Free Choice Act, or EFCA (S. 1041), a measure whose benign title belies its intent.  The Senate voted in favor of the measure by 51-48, a majority well short of the three-fifths needed to invoke cloture; i.e., to end debate.  EFCA would have forced employers to recognize a union if it obtains signed cards indicating a desire to join from more than 50 percent of affected workers.  This “card check” process would have preempted the secret ballot as the primary means by which workers decide upon representation.

Labor Department Set to Allow San Francisco Chieftain to Walk

Let it never be said that Lawrence J. Mazzola doesn’t know how to cut a deal.  According to various sources, the longtime business manager, secretary-treasurer and trustee of San Francisco’s United Association of Plumbers, Pipefitters and Journeymen Local 38 has arranged to have the U.S. Department of Labor drop planned sanctions against him and other union officers.  The department back in November 2004 announced it had filed a civil complaint against the local leadership, current and former trustees, and benefit plan administrator for diverting more than $36 million in assets of five employee benefit plans toward the renovation and operation of the Konocti Harbor Resort and Spa at Clear Lake in Kelseyville, Calif.  “The Plumbers plan officials mismanaged the investments and placed the benefits of thousands of union workers at risk,” said Secretary of Labor Elaine Chao at the time.  “This Administration is committed to protecting the employee benefits of America’s workers, and we won’t hesitate to act when plan officials are not managing their workers’ benefits responsibly.”

Divided Sacramento Local Brawls, Faces Racketeering Battle

Among Sacramento, Calif.-area sheriffs, the term “wrestling for control” can be taken literally.  And the conflict splitting their 1,700-member union has one faction reportedly planning a racketeering suit against the other.  On Friday, June 29, months-long dissension within the Sacramento County Deputy Sheriffs’ Association came to a head at union headquarters.  The two factions consist of members who support President Steven Fisk and those who support Vice President Brannon Polete.  And neither side seems willing to yield an inch.

Niagara Falls Dentist Indicted for Filing False Benefit Claims

Local 91 of the Laborers International Union of North America may be the embodiment of the expression, “the gift that keeps on giving.”  Though the last of more than a dozen officials, members and associates of the Niagara Falls, N.Y. union arrested and indicted in 2002 for extortion, assault and property destruction have pleaded guilty, a new, less bombastic local-related case has cropped up.  On July 3, a federal grand jury indicted a local dentist, Scott Geise, for filing nine false claims totaling $6,970.  Prosecutors allege that Dr. Geise, owner of a family dental practice in nearby Newfane, during September 2002-November 2006 had assisted another person in submitting fraudulent benefit claims to the Laborers Local 91 Welfare Fund and to insurers.

Northern California Local Treasurer Accused of Embezzlement

Two dollars a month can go a long way if there are enough people from whom to steal.  That was the case of Lincy Estelle Merritt, who served for three and a half years as treasurer of a school employees’ union in Northern California.  Merritt, 45, recently was charged with embezzling $8,744.16 from Local 98 of the California School Employees Association, which represents about 500 bus drivers, custodians and other employees of the Tracy Unified School District.  She’d taken the money on or about August 4, 2006, local prosecutors charge.  The defendant has pleaded not guilty, and is scheduled to return to court on Tuesday, July 17.

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