Union Corruption Update

It’s getting to be a regular occurrence over the past several months:  A very unpleasant guy from Laborers Local 91, the scourge of the Niagara Falls, N.Y. area, pleads guilty.  The latest to join the club is Patrick McKeown, a local board member.  McKeown, 58, recently admitted his role in two incidents:  1) the destruction of landfill liner roughly the size of four football fields that had been installed by a non-union company at the Browning Ferris Industries landfill in the Town of Niagara; and 2) the destruction of construction equipment used by a non-union company at the Ordnance Works in Lewiston, N.Y.

Crime paid well for Antoinette Cox-Burress – at least for three and a half years.  But now the former treasurer of Amalgamated Transit Union Local 1293, in Lincoln, stands accused of stealing $14,663 from the union.  During June 2001-December 2004, Lancaster County prosecutors allege, she embezzled funds from the local account at First Choice Credit Union in Lincoln.  Officers served a search warrant at the credit union on September 22, and determined that she had made 42 unauthorized withdrawals.  In some cases, Cox-Burress took cash; in others, she transferred funds to another personal account at the union.  She posted a $300 bond and

Mike Rice’s fall from grace was swift.  On September 19, Rice, ex-president of UFCW Local 538 in Madison, pleaded guilty in federal court to embezzling $30,211 from the union.  He filed false expense vouchers over several years, even as he led members in a bitter strike against the Tyson Foods plant in Jefferson.  The 2,200-member local also represents workers at Oscar Meyer (Madison) and Jones Dairy Farm (Fort Atkinson).  His sentence could include up to five years in prison and a fine of up to $250,000.<

The New York City Metropolitan Transit Authority (MTA) back in the late 90s thought it was getting a steal of a deal on the construction of its new headquarters at 2 Broadway in Lower Manhattan.  And in an unintended way, it was.  An unholy alliance between a major developer, the Gambino crime family, a host of contractors, and at least three unions led to thefts in excess of $10 million, and contributed toward a total project cost overrun of more than $300 million.  A 43-count federal indictment unveiled last September alleged that Gambino influence led to fraud, extortion and kickbacks in at least 10 separate contracts.   This August 2 one of the syndicate’s key players, Mario Garafola, learned he would have to do some prison time.  But his wrongdoing has to be seen in the context of a far broader conspiracy uncovered by the FBI and the Department of Labor’s Office of Labor-Management Standards (OLMS).

Teachers unions aren’t exactly shrinking violets when it comes to politics.  And nothing fuels political campaigns more than member dues.  In California, at least, there’s a blurred line between campaigning and embezzlement – at least according to a prominent conservative legal group.  On September 14, the Landmark Legal Foundation formally requested the California Public Employment Relations Board to investigate whether the California Teachers Association (CTA) is illegally financing a multimillion dollar effort to defeat several ballot initiatives in a statewide November 8 special election. 

America’s maritime officers are seafarers, working the decks, engine rooms and other sections of U.S.-flagged commercial and military vessels.  They sail the world’s oceans, the Great Lakes and inland waters.  But federal prosecutors right now are concerned about certain things the people who run their 4,000-member union may have done on land.  On September 14, officials from the Justice and Labor Departments announced the unsealing of a 13-count indictment against Michael McKay, 58, national president of the American Maritime Officers (AMO), his brother, Robert McKay, 55, AMO’s national secretary-treasurer, and two other men.  Charges include embezzlement, mail fraud, graft, obstruction of justice, witness tampering and falsification of records.

Roughly three years ago the leadership of the Washington Teachers Union (WTU), an affiliate of the American Federation of Teachers, revealed itself to be a racket of charlatans picking the pockets of dues-paying members.  One by one, culminating with local President Barbara Bullock in the fall of 2003, the major players in a complex, long-term scheme to fleece WTU coffers of at least $4.6 million, pleaded guilty in federal court.  To the surprise of almost nobody, the union’s two holdouts, Office Manager Gwendolyn Hemphill and Treasurer James O. Baxter II, neither of whom could be called “educators,” failed to convince a court of their innocence.

It’s not easy going from hero to goat in one’s own union.  But Mike Rice can testify first-hand how quickly it can happen.  On September 1, he was charged in U.S. District Court, Madison, Wisconsin, with embezzling more than $30,000 from United Food and Commercial Workers Local 538.  For more than a decade he’d headed the local, which represents roughly 2,200 workers at Tyson Foods, Oscar Meyer Foods, and Jones Dairy Farm plants.  The U.S. Attorney’s Office, based on evidence obtained from a Labor Department investigation, alleged that from about September 2000 to April 2004, Rice, 57, embezzled UFCW funds by filing expense claims for nonexistent meetings.

Wayne Kruse, president of the Lawrence Education Association from 1999 until early this year, pleaded guilty in Douglas County (Kan.) District Court on September 6 to stealing nearly $100,000 from the union.  The former sixth-grade teacher admitted to one count each of theft and forgery totaling more than $97,000.  In return for the plea agreement, prosecutors dropped a second forgery charge.  Sentencing is set for October 3.  The LEA is affiliated with the National Education Association.  (Associated Press, 9/6).