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.

TV Program Sponsors May Have Swayed Lawmaker’s Votes

Satveer Chaudhary loves the outdoors.  An avid hunter and fisherman, the Fridley, Minnesota resident hosts a television show on the 24/7 cable television network, The Sportsman Channel.  But he has another role as well:  member of the Minnesota legislature.  And a number of people are wondering about the consequences of what appears to be the convergence of the two.  In Minnesota, at least, renowned for high ethical standards for public officials, this may amount to more than a tempest in a teapot.

Central Pennsylvania Treasurer Charged with Embezzlement

On April 24, Richard J. Vincent, former treasurer of American Federation of Government Employees Local 3951, was charged in Cambria County (Pa.) Court with two counts of embezzling funds from the Altoona-based union in the amount of $43,694.85.  The charges follow a joint investigation by the U.S. Department of Labor’s Office of Labor-Management Standards and Office of Inspector General.  The local represents employees at the federal prison in Loretto, Pa., west of Altoona.  (OLMS, 5/21/08).   


Local Secretary-Treasurer in Ohio Pleads Guilty to Theft

Washington State Bookkeeper Sentenced for Embezzlement

At least Tara Mullins will be home in time to start a family.  Mullins, 37, was sentenced in U.S. District Court on May 2 to serve four months in federal prison, plus two years of supervision upon release, for embezzling $41,733 from the Seattle Police Officers Guild.  Mitigating her sentence was her payment to the union of nearly $77,500, a sum representing restitution and auditing costs, and the fact that she’s now about a month and a half pregnant.

Delaware Financial Secretary Sentenced for Embezzlement

On April 21, Stephen Priest, former financial secretary of Local 516 of the United Auto Workers, was sentenced in U.S. District Court for the District of Delaware to 24 months in prison, fined $100, and ordered to undergo psychiatric evaluation and treatment for embezzling $97,899.19 from the Middletown-based union.  Priest, who already has made restitution, pleaded guilty in December.  The sentencing comes after an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  (OLMS, 5/2/08).

Washington State Local Treasurer Sentenced for Embezzlement

On April 7, Michael Rutowski, former treasurer of American Federation of Government Employees Local 2913, was sentenced to one day in jail and two years of supervised release, and ordered to pay restitution in the amount of $71,295.75 for making false statements in the Blaine, Wash. union’s annual financial report.  He pleaded guilty in January.  The sentencing follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  (OLMS, 4/24/08).  


Ex-President of Texas Local Indicted for Theft

Mexican Teachers Union Boss, Cronies Wrecking Education

In Mexico, corruption is endemic to everyday life.  That country’s affiliate of the worldwide nonprofit monitoring group, Transparency International, estimates that Mexicans in 2005 paid nearly $2 billion to public servants in more than 115 million acts of bribery.  Organized labor fits very much into this scheme of things, and perhaps no more so than that country’s teachers union, National Union of Education Workers.  Typically referred to by its Spanish-language acronym, SNTE (Sindicato Nacional de Trabajadores de la Educacion), the 1.4 million-member labor organization for decades has represented a huge obstacle to school reform in Mexico – and, less directly, to immigration reform in the U.S.

Connecticut Prosecutor-Union Treasurer Charged with Thefts

For two decades, L. Mark Hurley had been a Connecticut prosecutor.  Now he’s being prosecuted by his employer.  On April 16, Hurley, a resident of Trumbull, turned himself in at the state police barracks in Bethany after learning of several outstanding warrants for his arrest covering nearly 200 counts of second-degree forgery, two counts of first-degree larceny, and two counts of fifth-degree larceny.  Of the more than $60,000 Hurley is accused of stealing, nearly $30,000 came from the state prosecutors union for which he served as treasurer.  He was released after posting $100,000 bail.

German VW Works Council Deputy Chairman May Plead Guilty

Volkwagen’s unwanted reputation as a purveyor of sexual favors continues.  Bernd Sudholt, former deputy chairman of the auto giant’s Works Council, is hoping to avoid the fate of his former boss, Klaus Volkert, who this past February received a two-year, nine-month prison sentence for his acceptance of 2.6 million Euros (about US$3.8 million) in illegal payments from VW management over the course of a decade.  Sudholt and his lawyer reportedly want to cut a deal with German prosecutors in order to avoid the embarrassment of a public trial.

Supreme Court Agrees to Review Idaho Case on Dues Spending

For some three decades, a series of court rulings have established a basic principle:  Unions, whether in the private or the public sector, may not route dues collections toward political purposes against their members’ will.  The U.S. Supreme Court last June defended that principle for public-sector employees.  By a unanimous vote, the court restored Washington State’s “paycheck protection” law, concluding that the state affiliate of the National Education Association (NEA) had to obtain advance written consent from fee-paying nonunion teachers before spending their payments on political causes.  The High Court is due to have its hands full in a similar case next door in Idaho.  On March 31, the Court agreed to hear Ysursa v. Pocatello Education Association, an appeal of a federal circuit court ruling.

Buffalo Local Members Arrested for Conducting Reign of Terror

Western New York State has been the focal point of some of the most virulent union intimidation in the country.  Laborers International Union of North America Local 91 (Niagara Falls) and Local 210 (Buffalo) were notorious in their respective heydays, committing numerous crimes against persons and property before being taken down by federal prosecutors.  In the case of LIUNA Local 210, authorities tied more than 15 murders to union officials, members and associates.  Now another union in the region can be added to this list:  Local 17 of the International Union of Operating Engineers.  And its days, too, appear numbered.

New York SEIU Local Hit with RICO Suit by Rival Security Union

A good many of America’s labor unions have learned to fear and loathe the Racketeer Influenced and Corrupt Organizations Act, or RICO.  Fighting a RICO suit can mean costly legal bills, and possibly (as the Teamsters can attest), a settlement leading to tight and longstanding federal oversight.  Perhaps less known, however, is that unions themselves may sue under the law.  And their target can be another union, not just an employer.  Such is the case in what appears to be a David-and-Goliath battle within organized labor – at least in the minds of the organization holding the slingshot.  On April 10, the Allied International Union (AIU) announced it had filed a civil suit in U.S. District Court for the Southern District of New York against the Service Employees International Union (SEIU) and its flagship New York City affiliate, Local 32BJ.  The suit charges the SEIU with racketeering, extortion and fraud.  It’s a dramatic set of charges.  But they just might hold up.

Local Official, Secretary of Wisconsin Local Charged with Theft

What kind of person would lift a bag containing more than $10,000 in cash from a deceased individual’s apartment?  It’s probably the same kind of person who would steal more than $17,000 from a labor union.  Lori A. Sommers was one of two persons charged in Dane County (Wisconsin) Circuit Court on April 9 with felony theft from a public employees’ union.  Sommers, 43, a housing manager for the City of Madison’s Community Development Authority (CDA), and a colleague, Tracy Shultz, 37, were accused of conspiring to commit theft from American Federation of State, County and Municipal Employees Local 60, also based in Madison.  Sommers had been treasurer of the union during 2002-05.  Shultz, also known as Tracy Woodward, during 2003-06 had been a union secretary, and is currently an administrative clerk with the CDA. 

Houston-Area Ex-Bookkeeper Pleads Guilty to Embezzlement

Heather Lott wrote union checks with a particular beneficiary in mind:  herself.  And her illegal acts may get her some prison time.  On April 7, the former bookkeeper for Local 19 of the International Brotherhood of Teamsters, pleaded guilty in U.S. District Court to one count of embezzling more than $140,000 in union funds.  Lott, 37, a resident of Wichita Falls, Texas, served in her capacity with the Houston-based union, whose members mainly are employees of Continental Airlines, during January 2003-January 2006.

SW Virginia Local President Pleads Guilty to Tax Evasion, Theft

At least Darrell Pendergrass knows he’s done wrong.  The former president of Local 699 of the International Alliance of Theatrical Stage Employees pleaded guilty in federal court in Abingdon, Va. on April 4 to embezzling union funds and attempting to evade payroll taxes.  During his tenure as president and secretary of the photographers’ union during 2003-06, prosecutors charged, Pendergrass, a resident of Bristol, Va., diverted more than $70,000 from the union toward personal use and payroll tax evasion.  Yet hopefully the court will show leniency come sentencing on July 29.  He’s already given the court around $50,000 toward potential restitution.  IATSE Local 699 is based in the Johnson City-Kingsport-Bristol area in northeast Tennessee and southwest Virginia.  (Bristol, Virginia Herald Courier, 4/10/08).     

Former General Services Manager Charged with Embezzlement

Long Island, N.Y. Couple Sentenced; Union Integrity in Question

Every so often, an accused person or persons, though guilty, invites a certain amount of sympathy.  Such appears to be the case of a Long Island, New York married couple, Michael and Dorothy Loguidice.  For a dozen years the pair had obtained public funds under false pretenses to run their trucking business, in the process misusing those funds.  On March 12, the Island Park pair was sentenced in U.S. District Court for the Eastern District of New York to 15 months of incarceration to be followed by three years of supervised release, plus nearly $300,000 in restitution payable to the IRS.  Operating through various enterprises, the Loguidices falsified information on application forms to obtain federal contracts and, once awarded, laundered funds to avoid paying taxes.  But underlying these acts are some highly disturbing aspects about how unions, particularly International Brotherhood of Teamsters Local 282, deal with “uncooperative” contractors.

Ex-IBT President, Comptroller in Chicago Indicted for Election Fraud

The old regime of Chicago’s Teamsters Local 743 is gone, but there’s some unfinished business – at least to federal prosecutors.  On March 6, Robert Walston and Thaddeus Bania, respectively, former president and comptroller of the local, were charged in U.S. District Court as part of a 14-count superseding indictment alleging conspiracy, mail fraud, services theft, and embezzlement related to a vote-fraud scheme.  As previously discussed in Union Corruption Update, Walston and other local officials had conspired to send ballots to wrong addresses in an October 2004 election.  That election was voided, and a subsequent re-run election was held two months later.  The incumbent “Unity” slate of Walston and Bania again won, but the U.S. Department of Labor, acting on a complaint by union dissenters, stepped in and filed a civil suit challenging the results.  The case finally was settled last July, when a federal court ordered another election to be held.  That September, federal prosecutors charged new President Richard Lopez and other persons associated with the union.

New Jersey Ex-Business Agent, Three Others Plead Guilty

The bribery scandal at International Union of Operating Engineers Local 825 seems to be producing dominoes by the month.  On or before March 26, four more persons associated with the Springfield, N.J.-based construction union pleaded guilty in federal court to accepting bribes from various contractors in return for permitting the contractors to avoid hiring and paying union labor.  The lead person in this group is Craig Wask, a former local business agent.  Wask, 60, a resident of Montvale, N.J., pleaded guilty to seven superseding counts before U.S. District Judge Stanley R. Chesler.  He’d been charged last July with, among other things, hiring the daughter of a union member for a no-show job at the construction site of the Goldman, Sachs tower (“30 Hudson”) in Jersey City.  Also pleading guilty were Francis Impeciati, Michael Giangrande and Manuel Pinto.

Former Business Manager in Pennsylvania Sentenced for Thefts

Of all circumstances surrounding union corruption, few are sadder than those triggered by gambling losses.  Such is the case of Joseph Capece, former longtime business manager of Local 163 of the International Brotherhood of Electrical Workers, based in Wilkes-Barre, Pa.  On March 18, Capece, 60, was sentenced in U.S. District Court to six months in prison and fined $4,000 for thefts from his union.  A resident of Nanticoke, Pa., he admitted in a February 2007 letter of resignation to the local president that his embezzlement was gambling-related.  He pleaded guilty last September to stealing overall around $256,000. 

Teamsters Oust Hahs; Await Response from Oversight Board

It may have been inevitable, but Don Hahs’ career as president of the Brotherhood of Locomotive Engineers and Trainmen has all but ended.  And it was Teamster General President James P. Hoffa, under the watchful eye of the feds, who performed the act of ending it.  On March 20, Hoffa removed Hahs from office on charges that he’d misspent tens of thousands of dollars in union funds, replacing him with Edward W. Rodzwicz, the BLE’s first vice president.  The Teamsters also fined Hahs nearly $45,000, and imposed a one-year suspension from union membership and contact with members of either the BLE or the Teamsters.  A Teamsters internal panel heard the charges and recommended the sanctions.  The case now will be submitted for approval by the Independent Review Board (IRB), the three-person entity created in the wake of the Teamsters-Justice Department 1989 civil RICO settlement.

International Union Takes Control of Shipbuilding Local in Maine

Having hardcore fun is one thing; using dues money to pay for it is another.  Unfortunately, Local S-6 of the International Association of Machinists and Aerospace Workers appears not to know the difference.  This past March 17, representatives from the IAM escorted eight local officials from the union hall, placing them on paid administrative leave pending an internal investigation of financial improprieties and misuse of computers.  In a letter sent to various media organizations dated February 19, regional IAM official Paul Shemanski cited “reports of financial and other mismanagement” and “complaints of vast amounts of pornography” accessed from computers belonging to the Bath, Maine union.  Local President Mike Keenan was among the local members removed.

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