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.

NYC School Bus Inspectors Sentenced, Union Officials Indicted in Bribery Scam

School busEven with the Genovese crime family less overtly in the driver's seat, Local 1181 of the Amalgamated Transit Union hasn't been entirely clean. But the union's legacy of corruption recently received a major blow in Manhattan federal court with a round of criminal actions. On May 26, Neil Cremin, a former New York City Department of Education (DOE) school bus inspector, was sentenced in U.S. District Court for the Southern District of New York to four months of incarceration to be followed by four months of home confinement and ordered to make $30,000 in restitution to the DOE. Some two weeks later on June 8, George Ortiz, a former DOE school bus inspector, was sentenced to two and a half years in prison to be followed by two years of supervised release and ordered to make restitution of $5,000. Each had been accused of extorting and/or accepting bribes. Between these actions, brothers Nicholas and Paul Maddalone, former board members and assistant trustees of the Queens, N.Y.-based Local 1181, which represents about 15,000 New York City school bus drivers, mechanics and escorts, were indicted on June 1 for extortion, unlawful payments and conspiracy to commit bribery.

Upstate New York Roofers Business Agent Sentenced

Roofers at workOn June 15, Michael Pagano, former business agent and secretary-treasurer of United Union of Roofers, Waterproofers and Allied Workers Local 74 in West Seneca, New York, was sentenced in U.S. District Court for the Western District of New York to one year of probation and ordered to make restitution in the amount of $9,264. He had pleaded guilty in December to one count of falsifying union records. The sentencing follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

VA Hospital Employees Union Treasurer in Ohio Sentenced for Theft

AFGE logoOn June 11, Monica Smalls, former treasurer of American Federation of Government Employees Local 2209, was sentenced in Montgomery County (Ohio) Court of Common Pleas to five years probation for theft of union funds. Indicted in April, she pleaded guilty in May following an investigation by the U.S. Labor Department's Office of Labor-Management Standards. Smalls also will have to pay restitution in the amount of $3,790. The local represents employees at the VA Hospital in Dayton.

New Jersey Health Care Union Local President Pleads Guilty

NursesOn June 10, Kathleen Fonti, former president of Health Professionals & Allied Employees (HPAE) Local 5030, pleaded guilty in U.S. District Court for the District of New Jersey to improperly receiving more than $14,500 in loans from the Emerson, N.J. local. The guilty plea follows an investigation by the Labor Department's Office of Labor-Management Standards. HPAE represents about 11,000 nurses and other health care-related employees in New Jersey.

Arkansas Postal Workers Official Pleads Guilty to Embezzlement

Postal Workers logo On June 8, Brian Brownlee, former vice-president of American Postal Workers Union (APWU), 2nd District, pleaded guilty in U.S. District Court for the Western District of Arkansas to embezzling $16,221.30 in funds from the Hot Springs union. An investigation by the U.S. Labor Department's Office of Labor-Management Standards had concluded that Brownlee falsified information on travel vouchers.

Upstate New York Steelworkers Treasurer Charged with Thefts

Steelworkers logoOn June 8, Gail Shingler, former treasurer of United Steelworkers Local 53 in Oneida, New York, was charged in Oneida City Court with two counts of fourth-degree larceny in the amount of $2,572. The charge follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Bakery Workers Financial Secretary in Indiana Indicted for Embezzlement

Bakery & Tobacco Workers logoKeith W. Hart Jr. had the system beat - for about eight months. On June 3, Hart, ex-financial secretary for Bakery, Confectionery, Tobacco Workers and Grain Millers Union Local 315G, was indicted by an Indianapolis federal grand jury for embezzling $13,904.69 from the Mount Vernon, Indiana union. Prosecutors allege that between November 1, 2006 and July 9, 2007, Hart, 31, a resident of Mount Vernon, wrote checks, made cash withdrawals and received cash from deposits without union authorization. The indictment follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Blagojevich Aide Harris Pleads Guilty, Agrees to Testify

John HarrisIf former Illinois Democratic Governor Rod Blagojevich thought his problems were behind him, the worst lies ahead. Late in January the state legislature voted to impeach and expel him from office. But it's not just his job but also his freedom that may be lost, thanks to pending testimony from his former chief of staff, John Harris. Harris yesterday pleaded guilty to a federal corruption charge. And whatever details he spills in court aren't likely to make the Service Employees International Union (SEIU) look much better than Blagojevich. Nor are they likely to enhance the reputation of President Barack Obama.

Issa: Obama Abetting Union Corruption

Rep. Darrell IssaFrom literally day one, the Obama administration has made clear its intent to back off from investigating corruption within organized labor. At least one member of the House of Representatives has expressed concern over this direction in policy. On June 23, Rep. Darrell Issa, R-Calif., ranking Republican on the House Committee on Oversight and Government Reform, issued a press release highlighting his objection to the ongoing rollback of union financial reporting requirements by the Department of Labor (DOL). His intent was to publicize a letter he'd sent the previous day to Denise Boucher, policy and disclosure director of the department's Office of Labor-Management Standards (OLMS).

Ex-Laborers Business Manager in Ohio Pleads Guilty to Embezzlement

LIUNA logoIf Shawn Clark believes he's innocent, then the case of Steven Thomas won't provide too much encouragement. Thomas for a while served as business manager of Laborers International Union of North America (LIUNA) Local 500 in Toledo, Ohio until he and local recording secretary Thomas Leonard were charged with making unauthorized use of their union credit cards to pay for visits to strip clubs. Leonard last October pleaded guilty in Toledo federal court to racking up unauthorized cumulative charges of $4,386. Now his partner is facing the same music. This past May, Steven Thomas pleaded guilty to one count of embezzlement totaling $17,500, plus another $11,000 in illegal travel allowances.

New Jersey Carpenters Business Agent Indicted for Embezzlement

Carpenters logoShawn Clark justified his use of a union charge card at strip clubs as business expenses. Federal prosecutors have a different word for it: embezzlement. Clark, formerly business representative for both the New Jersey Regional Council of Carpenters and Brotherhood of Carpenters and Joiners Local 455 in Somerville, N.J., was arrested on Thursday morning, June 18 after a federal grand jury handed down a 16-count indictment alleging he'd embezzled more than $85,000 by making unauthorized charges on his union's American Express card. Roughly $65,000 of this sum represented 450 transactions at 14 area gentlemen's clubs. Clark's attorney, John Fahy, says his client, released on a $100,000 bond, plans to plead not guilty to all counts.

Richmond, Va. Postal Workers Official Indicted for Theft

Postal Workers logoOn June 1, Sylvia Grooms, director of industrial relations for American Postal Workers Union (APWU) Local 199, was indicted in Circuit Court for the City of Richmond, Virginia, on four counts of grand larceny of an unspecified amount from the Richmond union. The indictment follows a joint investigation by the U.S. Labor Department's Office of Labor-Management Standards and Office of Inspector General, along with the U.S. Postal Service's Office of Inspector General.

Laborers Secretary-Treasurer in Massachusetts Admits to Larceny

LIUNA logoOn May 28, Susan J. Elliot, formerly secretary-treasurer of Laborers International Union of North America (LIUNA) Local 1162, admitted in the District Court of Brockton, Massachusetts to sufficient facts to a charge of larceny from the Brockton union and was ordered to perform 100 hours of community service and pay assessments and fees totaling $594. She also made restitution in the amount of $24,000. The case was continued without a finding, pending successful completion of two years of supervised probation. The sentencing follows a joint probe by the U.S. Labor Department's Office of Labor-Management Standards (OLMS) and the Massachusetts State Police.

Missouri Public Employees Union Official Sentenced for Bank Fraud

AFSCME logoOn May 27, Wendy Bentzen, former information/financial manager for American Federation of State, County and Municipal Officials Council 72 in Jefferson City, was sentenced in U.S. District Court for the Western District of Missouri to six months home detention and five years supervision for bank fraud and was ordered to pay $32,256.60 in restitution plus a $100 special assessment. She had pleaded guilty last September. The sentencing follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards (OLMS).

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.

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