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.

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.

Former Officials of Philadelphia Local Plead Guilty to Thefts

On June 11 and 12, Lawrence Marable and Deborah Powell, respectively, the former president and treasurer of American Federation of Government Employees Local 1793, pleaded guilty in U.S. District Court for the Eastern District of Pennsylvania to one count of conspiracy, five counts of property theft, and one count of making a false statement.  Marable and Powell had conspired to convert $184,129.85 in dues and union checks for their personal use.  The local represents employees at the VA Medical Center in Philadelphia.  The guilty pleas follow a joint investigation by the U.S. Labor Department’s Office of Labor-Management Standards and the Department of Veterans Affairs’ Office of Inspector General.  (OLMS, 7/5/07).   

 

Michigan Local Treasurer Secretary Sentenced for Theft

Film & TV Writers Union Sits on $20 Million in Back Royalties

It’s a scandal right out of a movie plot.  And it’s more than a little ironic that the people allegedly being scammed make a living writing movie plots.  A Los Angeles-based union, the Writers Guild of America, West (WGA), has been deliberately withholding and/or siphoning off about $20 million in accumulated royalty checks to which screenwriters or their estates are legally entitled – or so a class-action suit filed in Los Angeles federal court in September 2005 alleges, a suit recently sent back to a state court.  In the nearly two years since, accusations continue to fly.  The guild stands accused by four parties of sitting on a huge pile of revenues from foreign levies rather than distributing them to their rightful claimants.  Worse, though not the subject of the suit, the union may have funneled far greater sums of money to major studios and producers, and keeping some of it.  Guild officials insist they want to mail all checks to their proper recipients, but can’t find them.  A number of writers, led by ex-WGA member William Richert, say this is a fish story, another example of creative accounting, Hollywood-style.

U.S. Supreme Court Sides with Washington State Dissenters

Dissenting teachers in Washington State put forth a long and mighty effort, and were rewarded for their patience – even though the rewards may be more psychic than monetary.  In a unanimous 9-0 decision, the U.S. Supreme Court on June 14 ruled in favor of the right of nonunion employees to exercise discretion over how their mandatory union fees are spent.  Consolidating the cases of Davenport v. Washington Education Association (No. 05-1589) and Washington v. Washington Education Association (No. 05-1657), the Court upheld a Washington State law passed by voter referendum a decade and a half ago giving public-school teachers the right to withhold payments for what they might consider objectionable political purposes.  In so doing, the court overturned a state decision holding this “paycheck protection” law to be a violation of a union’s free-speech rights.  At the same time, it’s a limited victory.  The High Court sidestepped the issue of constitutionality of union forced-dues collections.  Moreover, just weeks before the decision, the state’s union-friendly Democrat political establishment gutted the law.

DOL Unveils Plan to Reduce Financial Reporting Delinquencies

The Internet may be one of the best things ever to happen to public transparency.  That’s why the Department of Labor now requires unions to file their annual financial reports online.  Presumably, union members and the general public benefit.

NYC Labor Council Elects Successor, Institutes Reforms

The New York City Labor Council (CLC) has found a permanent successor to fallen president Brian McLaughlin.  On June 25, delegates at a meeting of the AFL-CIO-chartered federation, representing some 400 unions, overwhelmingly elected Gary La Barbera, an official with the International Brotherhood of Teamsters, as its new head.  Though that union bolted from the AFL-CIO to help form a rival group, Change to Win, La Barbera, 47, impressed the CLC with his track record as a corruption fighter.  More than a decade ago, he’d begun serving as a trustee overseeing the cleanup of Teamsters Local 282, a cement-truck drivers’ union previously under the thumb of the Gambino crime family.

Federal Court Upholds Convictions of Hawaii Boss, Daughter

Fathers have a lot to teach their offspring, and unfortunately, that includes the finer points of stealing from a labor union.  Escaping detection may be easy for a while, but if and when caught, the culprits aren’t likely to come up with too many convincing alibis.  On June 11, a federal appeals court in Hawaii belatedly upheld mail fraud, money-laundering and embezzlement convictions of a powerful state labor chieftain and his daughter.  Gary Rodrigues, former state director of the United Public Workers, an affiliate of the American Federation of State, County and Municipal Employees, had been sentenced in 2003 to more than five years in prison following his conviction the previous fall.  His daughter, Robin Rodrigues Sabatini, received a sentence of three years and 10 months for helping her father defraud the union through her consulting firms.  Each had been free while appealing their convictions.

Brooklyn, N.Y. Shop Steward Pleads Guilty to Accepting Bribe

David Veltri may have been a bit player, but his role in a much larger 11-year scam to defraud the New York City District Council of Carpenters wasn’t about to go unnoticed.  Federal authorities on June 15 announced that Veltri, a shop steward for the council, an affiliate of the United Brotherhood of Carpenters and Joiners, had pleaded guilty to accepting bribes totaling at least $8,000 from the owners of a contracting firm, Tri-Built Construction, Inc.  He was one of several people who skimmed union benefit funds to pay nonunion workers off the books and underreport hours worked by union employees.

CPA Sentenced for Misclassifying Costs of Seattle-Area Union

On June 5, James A. Pulsifer, a certified public accountant, was sentenced to one year of probation and fined $1,000 for knowingly making false entries in the annual Labor Department reporting form of the Society of Professional Engineering Employees in Aerospace (SPEEA).  In the course of making accounting adjustments, he had misclassified some $500,000 in union expenditures.  SPEEA officers who signed the report believed it was free of errors and in compliance with federal regulations.  Pulsifer was charged in November and pleaded guilty in February.  The union, based in Seattle, represents professional employees of Boeing, BAE Systems and other aerospace companies.  The action comes in the wake of an investigation by the Labor Department’s Office of Labor-Management Standards.  (OLMS, 6/15/07).  

 

Former Treasurer of Atlanta Union Indicted for Embezzlement

Union Bosses, Researchers Distort Data to Push Card-Check Bill

One of the more time-tested ways of getting Congress to pass legislation of dubious value is to lie with numbers.  Interest groups with a stake in passage know the drill.  They invent numbers, or failing that, take them out of context.  Either way, the intent is to convey the impression of an exploding problem rectifiable only by emergency national action.  Whether the crisis at hand is “three million homeless,” “skyrocketing divorce rates,” or “plummeting SAT scores,” the point is to scare lawmakers into rapid action, bypassing consideration of serious objections.  Organized labor’s aggressive campaign on behalf of the misnamed Employee Free Choice Act, or EFCA, follows this pattern.  And like many other efforts at panic-peddling, union-sponsored or otherwise, this one seems to be succeeding.

New Jersey Mobsters Charged in No-Show Union Job Scam

To get a job on the massive Goethals Bridge reconstruction project, Andrew Merola was the man to see.  Whether one actually did any work was a separate issue.  Asking too many questions could get someone hurt – at least until late last month.  The FBI and various state and local authorities in New Jersey, starting on May 21, arrested a reported 25 suspects involved in a wide variety of criminal schemes, including labor racketeering.  A reputed Gambino crime family soldier with close connections to the Lucchese family, Merola, 40, allegedly ran a ghost-worker operation for International Union of Operating Engineers Local 825 (Springfield, N.J.) and Laborers International Union of North America Local 1153 (Jersey City) from a taxpayer-funded construction site in Elizabeth underneath the Goethals Bridge (the section of I-278 connecting New Jersey with northern Staten Island, N.Y.), where he had obtained a job through Local 825.  “Merola benefits from the activities of dozens of associates who report to him on their activities, which range from gambling to loan-sharking to a highly organized theft ring dealing in high-end merchandise,” said Union County (N.J.) Assistant Prosecutor Scott Kraus.

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