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.

Ohio Steelworkers Local Officials Charged with Embezzlement

Steelworkers logoOn March 16, Stacy Sacks and Tim Fisher, respectively, former president and former vice president of United Steelworkers  Local 982, were charged in U.S. District Court, Northern District of Ohio, with embezzling union funds. Sacks, who allegedly stole $7,739.76, also was accused of falsifying financial records to cover up the theft. Fisher allegedly stole $4,858.21. In addition, the pair used union funds to buy a flat screen television set for their personal use valued at $1,520.77. The union is based in Wapakaneta, located in the western part of the state. The charges follow an investigation by the Labor Department's Office of Labor-Management Standards.

GM Spends Taxpayer Money to Lobby for More Taxpayer Money

According to CNBC, General Motors has ramped up its lobbying efforts to the tune of $3.58 million in the first quarter of 2011. This is nearly triple the $1.36 million it spent in the first quarter of the prior year. It is also over double the $1.67 million spent by non-bailed out Ford in the same quarter. The $50 billion that taxpayers gave to bail out GM is now partially being distributed back to President Obama, Congress and a variety of agencies in an effort by GM to, well, receive more taxpayer money.

Detroit Steelworkers President Sentenced for Records Fraud

Steelworkers logoOn March 15, Oscar Gatewood, former president of Local 842 of the United Steelworkers, was sentenced in U.S. District Court for the Eastern District of Michigan to three years probation, the first six months of which must be served in home confinement, for concealment of financial records of the Detroit union. He also was ordered to pay $2,666.61 in restitution and a $25 special assessment. Gatewood pled guilty last October. The guilty plea and sentencing follow an investigation by the Labor Department's Office of Labor-Management Standards.

Letter Carriers President in Kentucky Pleads Guilty to Theft

On May 19, Max Messamore, former president of National Association of Letter Carriers Branch 2039, pleaded guilty in U.S. District Court for the Eastern District of Kentucky to failing to maintain proper records in connection with theft of funds from the Somerset, Ky. union. Messamore, who had been indicted in January, admitted that he willfully failed to maintain financial records to cover up his embezzlement of $2,293.77. The theft charge will be dropped once he begins serving time for records concealment. The indictment and guilty plea follow a probe by the U.S. Labor Department's Office of Labor-Management Standards.

NE Pennsylvania Carpenters Bookkeeper Pleads Guilty to Embezzlement

On June 13, Colin Rehrig, former bookkeeper for United Brotherhood of Carpenters and Joiners Local 600, pleaded guilty in federal court to embezzling $30,483 over four years from the Bethlehem, Pa.-based union. Rehrig, 68, a resident of Mahoning Township, stole the money from a bank account from which he wrote union checks during September 2004-September 2008. He had been charged in March. The guilty plea follows an investigation by the Labor Department's Office of Labor-Management Standards.

Plumbers Secretary in Michigan Pleads Guilty to Stealing $400K

On April 7, April Franklin, formerly office secretary for United Association of Plumbers and Pipefitters Local 333 and former bookkeeper for the union's apprenticeship fund, pleaded guilty in U.S. District Court for the Western District of Michigan to embezzling a combined more than $400,000 from the Lansing-based labor organizations. An employee of the union during 1999-2009, she was charged this January with her husband in the theft of $234,331.33 from the training fund and $40,886 from the union general fund during 2008-09. The plea agreement also refers to her stealing additional funds, bringing the total to $411,979.37. She is set for sentencing on July 25. The indictment and guilty plea follow an investigation by the Labor Department's Office of Labor-Management Standards, Office of Inspector General and Employee Benefits Security Administration.

NLRB Rule Would Burden Employers with Fast-Track Union Elections

Trumka photoUnion leaders, frustrated over their inability to sway Congress, more than ever are relying upon the National Labor Relations Board to enact stealth legislation. The board, now with a Democratic majority, seems willing to oblige them. Case in point: an NLRB proposal announced last Tuesday, June 21, and published in the Federal Register the next day, to substantially reduce the duration of election campaigns for union representation. While the board touts the regulation as an overdue streamlining of an inefficient system, its covert motive, say critics, is to hamstring employer opposition.

Let's Not Forget Ethical Shortcomings of Auto Bailout

The auto bailouts are now being touted by President Obama as a "success" even though the taxpayer is about to take at least a $10 billion hit when the government sells its remaining GM shares. There is, however, a missing dimension in this debate. It is the moral one.

Prior to General Motors filing for bankruptcy in June of 2009, I was involved as a GM bondholder advocate for a group called the Mainstreet Bondholders. Attempts were made by my group to bring about fair negotiations for creditors of GM, attempts that were ignored by the Obama Administration's Auto Task Force, headed by Steven Rattner. The Task Force stated that their goal was to restructure GM outside of bankruptcy as they laid out a "take it or leave it" bond exchange offer that was supposedly designed to keep GM out of bankruptcy.

New DOL Rule Would Require More Disclosure of Employer Consultants

Department of Labor headquartersThe consultants who advise employers on how to avert union organizing or collective bargaining demands soon may have to reveal a good deal more about themselves and their operations. This past Tuesday, June 21, the U.S. Department of Labor (DOL), to the delight of labor officials, published a proposal in the Federal Register to expand the circumstances forcing companies to disclose information about their advisers. Because the rule change would not apply to union consultants, it appears to be motivated heavily by politics.

Wisconsin Supreme Court Upholds Collective Bargaining Curbs

Madison, Wisconsin demonstratorsPublic-sector unions in Wisconsin are having a hard time hiding their rage over the most recent round in the state's fiscal war. Last Tuesday, June 14, by a 4-3 margin, the Wisconsin Supreme Court upheld a new law curbing collective bargaining rights for most state and local employees, part of a larger (passed) budget bill. The decision overturns a permanent injunction issued May 26 by Dane County (Madison) Circuit Judge Maryann Sumi blocking the law on grounds that Senate Republicans violated the state Open Meetings Law.

More Bad News for the Chevy Volt

Volt photoAs General Motors gambles on ramping up production of the Chevy Volt, a couple of new reports point to headwinds for demand of electric hybrid vehicles, like the Volt. A new British study disputes the perception of eco-friendliness of electric vehicles. The study takes into consideration driving, manufacturing and disposal and undermines the case being made for a rapid introduction of electric vehicles as a means to address environmental concerns.

Alabama Postal Workers President Indicted for Embezzlement

APWU logoOn June 1, Albert Gardner, former president of American Postal Workers Union Local 359, was indicted in U.S. District Court for the Northern District of Alabama for embezzling $12,346 from the Madison, Ala.-based union. Gardner, 48, a resident of Huntsville, allegedly stole the funds during June 2006-June 2007. The indictment follows an investigation by the Labor Department's Office of Labor-Management Standards.

Detroit Mail Handlers Local President Pleads Guilty to Embezzlement

LIUNA logoOn March 14, Donald Kister, former president of National Postal Mail Handlers Local 307 in Detroit, pleaded guilty in U.S. District Court for the Eastern District of Michigan to embezzling $4,137.35 in union funds during August 2006-October 2007. The Mail Handlers are an affiliate of the Laborers International Union of North America (LIUNA). Kister had been indicted last September. The indictment and guilty plea follow a probe by the U.S. Labor Department's Office of Labor-Management Standards.

Postal Workers Treasurer in New Jersey Sentenced for Thefts

APWU logoOn May 24, John McGovern, former secretary-treasurer of American Postal Workers Union Local 190, was sentenced in Newark, New Jersey federal court to 20 months in prison to be followed by 36 months of supervised release. He had pleaded guilty in November 2010 to conspiring with ex-local President Gary Weightman to embezzle some $200,000 in funds from the Clifton, N.J.-based union during 2000-02 and concealing the thefts by destroying financial records. McGovern, 55, a resident of Hawthorne, N.J., stole an estimated $140,000, and was ordered to pay $783,931 in total restitution. Weightman pleaded guilty to a separate tax evasion charge in December 2008 and is awaiting sentencing. Each had been indicted in February 2006 following a joint investigation by the Labor Department, the Justice Department and the U.S. Postal Inspection Service.

Is GM Feeding Rumors About its Finances?

There are some big rumors circulating about the finances of bailed-out General Motors. The first of these is that GM is considering repurchasing Treasury's stake in the automaker and were circulated by sources who, according to a Bloomberg report, "didn't want to be identified." The message was that GM is so cash-rich that they were considering buying back shares from Treasury, thus eliminating the government overhang on the company. This stance raises questions about past actions at GM. Why did GM issue $2 billion of new stock to help fund pension plans if they have adequate cash to do so? Why did GM's wholly owned finance arm need to issue half a billion dollars of junk bonds for "general purposes" if they are so flush with cash?

Convicted New York-New Jersey Port Authority Union Boss May Get Second Chance

Holland TunnelThe case against Daniel Hughes seemed airtight the last time around. That's why he pled guilty a year ago to fraud. But the former boss of the union representing maintenance workers for the Port Authority of New York & New Jersey might have to go through the motions again. On the upside, he might walk. On May 6, Hughes, a Port Authority employee as well as ex-president of Port Authority Field Supervisors Association Local 111-S, appeared in Brooklyn federal court to receive word that his union might not be covered under the law used to charge him with stealing nearly $300,000 in local funds. If he pleads not guilty this time, prosecutors would charge Hughes with wire fraud. And it's hard to see an outcome any different.

Olivieri Sentenced for Role in Carpenters Union-Contractor Scam

Dirty moneyCorrupt construction union officials in the New York City area knew they had no better friend than Joseph Olivieri. That relationship formally ended last October when a jury in Manhattan federal court declared him guilty of perjury as part of a scheme to line union bosses' pockets with would-be benefit contributions. Last Friday, June 3, Olivieri, the former head of a Long Island-based construction trade association, received his reward: an 18-month prison sentence plus three years of supervised release. He was one of 10 defendants convicted in the case and the eighth to be sentenced, though he was the only one to go to trial. Olivieri also will have to pay a $10,000 fine.

Akerson Wants $5 Gas; CEO Unfit to Lead Bailed-Out GM

gas price signGeneral Motor's CEO, Dan Akerson, wants higher gas taxes and the price of a gallon of gas to increase closer to $5 a gallon. Are you kidding me?! The comments were made in an interview with the Detroit News. Regarding government imposed fuel efficiency increases Akerson stated, "You know what I'd rather have them do, this will make my Republican friends puke, as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas. People will start buying more Cruzes and they will start buying less Suburbans." With comments like these, Akerson might make average Americans and GM investors "puke" along with those Republicans.

Laborers President in St. Louis Indicted for Embezzlement

LIUNA logoOn March 9, Mark Winston, former president of Laborers International Union of North America, was indicted in U.S. District Court for the Eastern District of Missouri for embezzling $11,057 in funds from the St. Louis union. The charge follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Wisconsin Letter Carriers Local President Charged with Theft

On March 3, Nancy Kumbier, former president of Branch 1144 of the National Association of Letter Carriers, was charged in Green Lake County, Wisconsin Circuit Court with theft of between $2,500 and $5,000 from the Berlin, Wisc.-based union. The complaint follows an investigation by the Labor Department's Office of Labor-Management Standards.

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