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.

Philadelphia Local Chieftains Agree to File Disclosure Forms

Complying with Department of Labor (DOL) requirements for financial transparency doesn’t portend the return of slavery in this country after all.  On January 8, following a nearly two-year holdout, Robert and David Taylor, respectively the president and treasurer of Transport Workers Union Local 700, representing parking garage attendants in Philadelphia, agreed in federal court to disclose their union’s revenues and expenditures.  The consent decree stated that the union would be “permanently enjoined and restrained” from further failure to file its required annual LM-3 disclosure form.  Local 700 had not filed reports for the years 2002-05.  And this was no act of forgetfulness.

Judge Reduces Sentence of Ex-Washington, D.C. Local Boss

Barbara Bullock, the imprisoned former president of the Washington Teachers Union, sought leniency for helping federal prosecutors to convict two top former colleagues.  And on January 23, she received it.  U.S. District Judge Richard J. Leon reduced Miss Bullock’s nine-year prison sentence by more than two years for having helped prosecutors secure the convictions in 2005 of ex-union treasurer James O. Baxter II and office manager Gwendolyn M. Hemphill.  Bullock, said prosecutors, provided key leads and court testimony.

Cincinnati Contractor Associate Pleads No Contest to Fraud

On January 22, Michael Griffie, an associate of a Cincinnati-area contractor, Electrical Innovations, pleaded guilty in Hamilton County, Ohio Court of Common Pleas to one count of unauthorized use of property.  He had been charged back in March with aggravated theft of property or services worth at least $100,000 from International Brotherhood of Electrical Workers Local 212, and with tampering with market recovery forms and forging market recovery fund forms for the purpose of defrauding the local.  The no-contest plea follows an investigation by the Labor Department’s Office of Labor-Management Standards.  The co-owners of Electrical Innovations, Rachetta Johnson and Charlene Monroe, were sentenced last September to five years probation and 500 hours of community service after pleading guilty to theft by deception.  (OLMS, 1/25/07).

 

Ex-Office Manager in Minnesota Sentenced for Embezzlement

Political/Corporate Campaigns, Scams and New Books Led in 2006

And so another year of greed, deceit, treachery and redemption has ended.  The year 2006 provided a great many stories on labor union corruption.  Picking the top ten most important was far from easy.  In one sense, the worst is behind us. The Mafia and other crime syndicates no longer dominate international union leadership in ways that they used to.  And the system can be said to be working in the sense that many corrupt union officials, business agents, trustees and office employees have been caught and punished.  Unfortunately, in another sense, the system isn’t working.  It often takes years, never mind months before a pattern of theft is discovered either from within or outside the union.  The past year witnessed no falloff in the incidence of thefts and other scams.

Union Ally ACORN Produces Voter Registration Fraud in Missouri, Elsewhere

ACORN leadersThe new 110th Congress convened at the start of this month with something it hadn’t had in a dozen years:  a Democratic-controlled House and Senate.  But amid the party’s hoopla over Nancy Pelosi’s ascent to House Speaker is the reality that its Senate majority is a thin 51-49, allowing for the fact that the two "Independent" senators, Joe Lieberman (Conn.) and Bernie Sanders (Vt.), are Democrats all but in name.  That edge could be the result of a close 2006 race in Missouri, where Democratic challenger Claire McCaskill defeated incumbent Republican Senator Jim Talent.  Her margin of victory of slightly less than 50,000 votes very likely in part was the result of voter registration fraud.  And the culprit is an operator familiar to the radical political landscape:  the Association of Community Organizations for Reform Now, or ACORN.  Investigative reporting by the St. Louis Post-Dispatch, the Wall Street Journal and other news sources recently revealed that the nationwide network of nonprofit groups played fast and loose with the voter registration process in the St. Louis and Kansas City areas, not to mention outside Missouri.

Jury Convicts Florida Bosses in Criminal Racketeering Suit

It was the end of the line for Michael and Robert McKay.  They’d been the targets of an extensive racketeering probe into their union, the American Maritime Officers.  Late Friday afternoon January 5, a federal jury in Broward County, Fla., after just one day of deliberation, rendered its verdict:  guilty.  The McKay brothers, respectively, AMO president and secretary-treasurer, had been accused by the Justice Department of rigging elections, stealing benefit plan funds and obstructing justice.  The jury convicted the pair on a variety of charges, including racketeering conspiracy, mail fraud and record forgery.

Ex-Pension Consultant in Illinois Sentenced for Theft

As a pension management consultant, Michael Linder's job was to make money for his clients, especially labor unions.  Unfortunately, his main interest seemed to be making money for himself and his cronies – and in illegal ways.  Now he’s found out just how high the price was.  On December 20, U.S. District Judge Philip Reinhard in Rockford, Ill. ordered Linder to serve seven years in prison for defrauding nearly a dozen separate union pension plans out of $5 million and embezzling another $1.9 million from five union benefit plans.  In addition, Linder will have to make restitution on $6.6 million of that combined amount.  He pleaded guilty in June.  It was a conclusion a decade in the making, involving local affiliates of the Iron Workers, Sheet Metal Workers, Painters and other unions across the state of Illinois.

Prosecutors End Riverside, Calif. Sheriff’s Office Probe

Sometimes rumor doesn’t translate into fact – at least the kind that can be prosecuted.  That’s apparently true at the Riverside (Calif.) Sheriff’s Association.  This past September, FBI agents raided the association office, looking for evidence of potential misuse of more than $100,000 in funds intended to cover attorney’s fees for a previously fired sheriff’s deputy.  The feds had acted on unsigned fax messages bearing the heading, “Corruption Within the Sheriff’s Association,” the result of a bitter feud between the current association president and a terminated employee who’d managed its legal defense fund.  Last summer, federal prosecutors filed a confidential document in Riverside County Superior Court indicating the FBI and the Labor Department were conducting a joint investigation.  The results are now in:  There’s nothing to investigate.

Ex-Los Angeles Union Chieftain Gets Jail Sentence

Janett Humphries hasn’t had much to look forward to over the last several months.  She was convicted in the fall on conspiracy and perjury charges for diverting about $36,000 in funds from her union, Service Employees International Union Local 99, toward the successful 2003 Los Angeles City Council campaign run by ally Martin Ludlow.  And her psychiatrist has confirmed that she has Alzheimer’s disease.  Lawyers for Humphries, 63, argued for leniency at her sentencing hearing, claiming she could not withstand any jail time.  Los Angeles Municipal Superior Court Judge Stephen A. Marcus wasn’t quite swayed.  On December 14, he gave Humphries a six-month sentence.

Michigan Financial Secretary Sentenced for Embezzlement

On December 19, Michael Winchester, former financial secretary for United Auto Workers Local 651, based in Flint, Michigan, was sentenced in federal court to 12 months and one day in prison to be followed by three years of supervised release for embezzling union funds.  He also will have to make restitution to a bonding company, Zurich North America, in the amount of $20,401.46 and pay a $100 special assessment.  He pleaded guilty in September.  The sentencing follows a joint investigation by the Labor Department’s Office of Labor-Management Standards and Office of Inspector General.  (OLMS, 1/9/07). 

 

Kansas City, Mo. Secretary Charged with Embezzlement

Union Bosses Demand New Congress Pass Card Check Bill

When the new 110th Congress convenes this week, it can count on intensive and sustained pressure from organized labor to enact pressing agenda items.  Unions spent an estimated $100 million on the 2006 midterm elections, with the AFL-CIO paying for about $40 million of the tab.  The candidates benefiting from this largesse, directly or indirectly, were overwhelmingly Democratic.  Now that the Democrats have regained a majority in the House of Representatives and (to a lesser extent) in the Senate, ending a dozen years of frustration, labor bosses want Congress to deliver the goods.  That means hiking the federal minimum wage from $5.15 to $7.25 an hour; restricting free-trade agreements; and expanding employee health and safety coverage.  Most of all, it means passing card-check legislation, introduced in the last Congress by Sen. Ted Kennedy, D-Mass., and Rep. George Miller, D-Calif., that would enable unions to obtain exclusive representation of workers without necessarily having to win a majority in a secret-ballot election.  In effect, labor officials want Congress to seriously compromise a principle of more than 70 years of established labor law.

Indiana Official, Training Director Found Guilty of Theft

In Northwest Indiana, the United Brotherhood of Carpenters and Joiners appear to be as adept at mishandling funds as they are at handling building materials.  In 2005 Gerry Nannenga, formerly president of the union’s Local 1005 and then secretary-treasurer of the Indiana-Kentucky Regional Council of Carpenters, was sentenced to 18 months in federal prison after pleading guilty to taking a bribe years earlier to vote in favor of using $10 million in union pension money to buy 55 acres of choice real estate.  This past September 21, a federal jury decided against two other union officials in a separate scandal.  They are Paul Hernandez, Nannenga’s replacement as Local 1005 president, and Kenneth Castaldi, head of the local’s apprenticeship training program.  Each was convicted on theft, mail fraud and other charges.

Ex-Michigan Officials Convicted of Extortion in Hiring Scheme

Nearly a decade ago, in the spring of 1997, General Motors assembly plant workers in Pontiac, Michigan walked off the job in what became a nearly three-month-long strike.  It could have been longer had the automaker not accepted an offer they couldn’t refuse from a United Auto Workers local.  A half year ago, two surviving instigators of the scheme had a date with justice in a federal courtroom.  On June 27, 2006 a jury returned a guilty verdict against Donny Douglas and Jay Campbell, respectively, a former UAW servicing representative and a former shop committee chairman for Local 594, for conspiracy to violate the Taft-Hartley Act and Hobbs Act anti-extortion statutes.  The pair had been indicted nearly four years earlier for using their positions to demand the hiring of unqualified persons, in violation of a contract with GM.  A third man, William J. Coffey, now deceased, also had been indicted, though charges against him were posthumously dismissed.

Nebraska Local Ex-Treasurer Sentenced for Embezzlement

Antoinette Cox-Burress needed money to buy medicine for her ailing mother and support her children.  Unfortunately, she went to the wrong source – her union.  On December 8, Mrs.

Border Patrol Union Secretary in Arizona Charged with Theft

The U.S. Border Patrol, overworked as it is in guarding our border with Mexico, shouldn’t have to worry about guarding the finances of its local unions.  Unfortunately, as long as the locals have members like Janalyn Buseck, they will.  Buseck, a resident of Yuma, Arizona, has been accused of embezzling funds from American Federation of Government Employees Local 2595, which represents border guards working along the Yuma sector.  According to a criminal complaint filed in Yuma County Superior Court, Buseck, 45, who had served as the union’s secretary-treasurer, diverted money from the union to pay off personal credit card bills during 2002-04. 

Arizona Former Local President Sentenced for Embezzlement

On December 14, Josefina Suarez Gonzalez, ex-president of AFGE Local 1662, was sentenced in U.S. District Court for the District of Arizona to five years probation and ordered to pay $27,405 to her union.  Gonzalez had pleaded guilty back in June to one count of embezzling union funds following an indictment back in October 2004.  The union represents employees at the Brown & Root Logistics facility at Fort Huachuca Army Base, not far from Tucson.  The sentencing follows an investigation by the Labor Department’s Office of Labor-Management Standards.  (OLMS, 12/23/06).

 

New Jersey Financial Secretary Pleads Guilty to Embezzlement

Union Takes Over Chicago-Area Local; Major Issues Remain

The International Association of Iron Workers seemed willing to overlook a lot of things that had gone wrong at Riggers Local 136 in the Chicago suburb of River Grove, Illinois.  Former longtime local boss Fred Schreier had pleaded guilty in federal court to graft.  The Department of Labor this July filed a lawsuit alleging financial irregularities in the pension and welfare accounts of this and other Iron Workers locals.  And the Justice Department had begun a probe into long-suspected mob influence at Local 136.  But when local bosses stopped forwarding dues, it was time for the international union to take over the show. 

 

Chicago Lawyers Plead Guilty to Roles in Kickback Schemes

Joseph Cari and Steven Loren saw gold in Illinois teachers’ union pensions.  Where the two Chicago lawyers went wrong was trying to mine it.  On September 15, 2005 the pair pleaded guilty in federal court to charges related to an ongoing criminal probe into pension kickbacks involving the Teachers Retirement System (TRS) for the State of Illinois.  The system, with more than $30 billion in assets, serves hundreds of thousands of active and retired school employees represented by the Illinois Federation of Teachers and the Illinois Education Association – unions, respectively, affiliated with the American Federation of Teachers and the National Education Association.  Cari and Loren, free on bail, now are helping the prosecution, apparently willing to testify against a bigger fish, who like them,

Puerto Rican Union President Sentenced for $15 Million Theft

If labor corruption in Puerto Rico doesn’t happen often, it certainly happens on a grand scale.  In the summer of 2005, four officials of UTM 1740, an affiliate of the International Longshoremen’s Association, along with six businessmen and three companies, were indicted in U.S. District Court on nearly two dozen counts of embezzlement, money-laundering and maintaining false records.  They were accused of converting some $10 million in funds, mainly from the union’s health care plan, to their own use, plus underreporting another $1.5 million in dues collections.  Most of the principals pled guilty.  But all the while, another union on the island was engaging in an even bigger scam.  Leaders of Union Independiente Autentica (UIA), with about 4,000 water and sewer workers, had embezzled more than $15 million over a nearly seven-year period.  On December 6, it was sentencing time for the union’s leader and his cronies.

Hoffa Re-Elected for Third Term; Corruption Still a Factor

Winning a third term in office was the easy part for James P. Hoffa, president of the International Brotherhood of Teamsters.  Few observers gave his perennial challenger, Tom Leedham, much of a chance.  Aside from the advantages of incumbency and last-name recognition, Hoffa had outspent Leedham $3 million to $300,000, according to campaign forms filed with a federal election supervisor.  But keeping corruption out of his union will be the hard part.  Edwin Stier, the lawyer who headed the union’s internal reform operation during 1999-2004 believes that as long as Hoffa remains in control, the IBT will be anything but clean.  “By the time I left, Hoffa and his people had abandoned its efforts to deal with corruption within their union,” Stier told Union Corruption Update in an exclusive interview.  “There have been no Teamster-initiated investigations of wrongdoing since then.”  Stier is a partner in the law firm Stier Anderson, LLC, based in Skillman, N.J., with a Washington, D.C. office.

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