Union Corruption Update

Willie Madisha isn't about to be deterred from reforming South African organized labor. Until recently, the Pretoria resident headed the Congress of South African Trade Unions, or COSATU, that country's main labor federation. After being relieved of his duties this past February over unsubstantiated corruption charges, a month later he launched a rival organization, the Independent Trade Union Movement. Certain COSATU loyalists appear to be indicating their disapproval - and through methods that would do the Mafia proud.

If transparency is one of the Obama administration's highest orders of business, it hasn't made much of an appearance at the Department of Labor (DOL). On January 20, immediately following the inauguration ceremony, President Obama's chief of staff, Rahm Emanuel, issued a memorandum advising federal agencies to extend by 60 days the effective date of all regulations not yet published in the Federal Register. That gave the DOL under Secretary Hilda Solis exactly the wiggle room it needed to rescind new requirements to the annual financial reporting form for larger unions, LM-2, finalized during the waning days of the Bush administration.

On March 5, Cassandra Mosley, former business agent for International Brotherhood of Teamsters Local 743 in Chicago, pleaded guilty in U.S. District Court for the Northern District of Illinois to one count of conspiracy to commit mail fraud in a local ballot-rigging scheme in 2004. The plea follows a joint probe by the Department of Labor's Office of Labor-Management Standards and the U.S. Postal Service. (OLMS, 3/23/09).

On February 19, Ruth R. Olson, former financial secretary of Amalgamated Transit Union (ATU) Local 1225 in Marina, California (north of Monterey), was charged in U.S. District Court for the Northern District of California with an information count of false entry in or willful concealment of union records. The charge follows a probe by the Labor Department's Office of Labor-Management Standards. (OLMS, 3/23/09).

On February 23, Michael West, president of Communications Workers of America (CWA) Local 84845 in Evansville, pleaded guilty in the Superior Court of Vanderburgh County, Indiana to one count of illegal conversion of union funds. He previously had made restitution in the amount of $650. Following his guilty plea, he was sentenced to a suspended 90-day jail sentence and a fine. The actions follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards.  (OLMS, 3/23/09).

Lyndon Denney learned his lesson. And that's a major reason why he's not going to do hard time. Denney, a former financial secretary for United Steelworkers of America Local 2-1019, was sentenced in federal court to probation and ordered to make nearly $24,000 in restitution to the Otsego, Michigan (near Kalamazoo) union. He had pleaded guilty in November following an investigation by the U.S. Labor Department.

Denney, 46, a resident of Hastings, over a four-year period beginning in early 2002 stole $23,627.32 from the union formerly known as United Papermakers & Paperworkers. He wrote unauthorized checks from a union account in order to pay off personal debts, and on occasion made unauthorized cash withdrawals from the union savings account. Denney's lawyer, Sharon Turek, said her client was contrite. "He has spent many hours thinking about what he did to get to this point," she wrote in a court filing. "He has had to face former friends and co-workers and his family and admit what he did." (Grand Rapids Press, 3/28/09; other sources).

On February 17, Larry Ramsey, former secretary-treasurer of the Representatives and Organizers Union, was charged with an information count in U.S. District Court, Southern District of Ohio, with embezzling $163,222 from the St. Louisville, Ohio-based union. The charge follows an investigation by the U.S. Department of Labor's Office of Labor-Management Standards. (OLMS, 3/23/09).

Frankie Sanders thought he could fool his union. Instead, he made a fool of himself. And now he's facing civil and possibly criminal charges. On February 9, the American Postal Workers Union (APWU) filed suit in federal court against the former Houston-based union official charging that he had defrauded the union of more than $13,000. The APWU alleges Sanders, a business agent and regional coordinator, employed tactics of racketeering, deceit and breach of contract to disguise more than 20 acts of embezzlement for supposed union-related trips. Ed Gallagher, deputy criminal chief for the U.S. Attorney's Office in Houston, has asked the Labor Department and the Postal Service to conduct a criminal probe.

On February 25, Norman Stefanik, former treasurer of United Steelworkers of America Local 1450, was indicted in U.S. District Court for the Northern District of New York on one count of embezzling $25,808.29 in union funds during February 2004-November 2007. The local is based in Watertown. The indictment follows an investigation by the Labor Department's Office of Labor-Management Standards. (OLMS, 3/23/09).