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.

Boston Boss Faces Embezzlement and Bribery Charges

George W. Cashman, president of Int'l Bhd. of Teamsters Local 25 in Charlestown, Mass.,  along with four other individuals and three firms were indicted Jan. 16 on 179 counts of embezzlement and bribery. Allegedly, 19 non-employees were ordered or placed on the firms' payrolls in order to allow the non-employees to receive health benefits from Local 25's Health Services & Insurance Plan to which they were not entitled. Asst. U.S. Atty. Fred Wyshak said the defendants robbed the fund of benefits belonging to qualified members: "The loss is to the fund that has to pay benefits it normally would not have to pay."

Disilva Transp., Inc., Hutchinson Indus., Inc., and Manfi Leasing Corp., run by brothers Thomas A. and James P. Disilva and their brother-in-law William P. Belanger, filed false documents for the bogus employees from 1992-2001 thereby costing Local 25's HSIP $72,000 in wrongful health benefits.  Also, two non-employees were allegedly placed on the firms' payrolls in order to be eligible for pension benefits from the New England Teamsters & Trucking Indus. Pension Fund, which covers several IBT locals.

New York Local Raided in Racketeering Probe

N.Y. prosecutors have reportedly launched a racketeering probe of a Queens local whose members run the cranes and other earth-moving equipment at site of the World Trade Ctr. massacre. The N.Y. State Organized Crime Task Force agents turned up at Int'l Union of Operating Eng'rs Local 14's offices on Jan. 8 and carted off documents and payroll records. The raid was the first action taken in a new probe into reports that mid-level union bosses allegedly doled out no-show jobs, shook down contractors, and engaged in other traditional labor racketeering crimes. Local 14's offices were shut down for more than an hour as agents loaded records into a van. One boss who asked agents for a search warrant was reportedly put up against a wall and frisked. Seized documents reportedly included bank, pension, and annuity fund records. [N.Y. Post 1/13/02]

Massachusetts Local Settles Election Suit

Int'l Bhd. of Elec. Workers Local 1505 in Waltham, Mass., has entered into a consent judgment providing for Dep't of Labor supervision of the next election of Local 1505's officers on June 11, 2002. The Jan. 3 agreement settled a suit that the Dep't of Justice, on behalf of DOL, brought against Local 1505 in July 2000 alleging that the last election of officers held in June 1999, was unfair and in violation of the Landrum-Griffin Act. The civil suit alleged that Local 1505 failed to hold its election of officers by secret ballot and, in the conduct of its election, used union funds to prepare and distribute a union letter that promoted the candidacy of the incumbent Financial Secretary/Business Manager. The parties will meet no later than Apr. 12 to establish ground rules for the new election. The court will retain jurisdiction and DOL will certify names of the election winners to the court.

Union Watchdog Ask President to Appeal Ruling Striking Down Beck Executive Order

As reported in the last UCU issue, U.S. Dist. Judge Henry H. Kennedy, Jr. (D.D.C., Clinton) struck down President Bush's Executive Order 13201 Jan. requiring fed. contractors to post notices informing employees of their rights not to join a union or to pay fees for nonrepresentational purpose, under the Supreme Court's 1988 decision, CWA v. Beck. The Nat'l Legal & Pol'y Ctr. was written President Bush requesting that he and his Administration appeal Kennedy's adverse ruling.  

DOJ Agrees to End Auditor's Oversight of Corruption Plagued Union

Oversight of the Int'l Bhd. of Teamsters' financial affairs by an outside auditor will end later this month as the result of an order signed Dec. 20 by U.S. Dist. Judge Loretta A. Preska (S.D.N.Y., H.W. Bush), who has ongoing oversight of the consent decree that in 1989 settled the racketeering suit against IBT. On Jan. 10, IBT said an agreement had been reached with the Dep't of Justice to eliminate the independent financial auditor (IFA) first put in place in 1997 following discovery of the illegal money laundering schemes that help finance the re-election of then-president Ron Carey. Federal officials said at the time that lack of adequate internal union controls enabled Carey operatives to siphon off union funds for his reelection and "were an invitation to improper and illegal conduct."

Native American Reservations Win Case Permitting Right to Work Laws

In a precedent-setting 9-1 ruling, the U.S. Court of Appeals for the Tenth Circuit has upheld the sovereign right of Native American reservations to pass Right to Work laws to protect workers from being forced to pay union dues.  The ruling announced today advances the Nat'l Right to Work Legal Def. Fdn.'s battle to protect Right to Work laws around the country. The decision affirms that the 300 Native American reservations across America may pass Right to Work laws to limit forced unionism. Attracted to growing economies, union organizers have made increasing efforts in recent years to unionize companies on reservations. This ruling clears the path for tribal governments to act without interference from the federal government.

"Not only is this a tremendous victory for Native American workers and reservations around the country, but also for the Right to Work movement," said Stefan Gleason, Vice President of NRTWLDF, which provided free legal aid to the Pueblo in the case. "In addition to preserving individual rights, Right to Work laws will help to bring new business and economic growth to these long-impoverished regions."

New York Post Uncovers New Details from Union Corruption Probe

An elevator mechanic's little black book is helping federal prosecutors blow the lid off a multimillion-dollar scam in which corrupt members of a powerful mob-tainted N.Y.C. union lined their pockets through no-show jobs. The well-worn, leather-bound book contains the home and cellular phone numbers of key union members who are thought to be masterminds of the scam. Some contact numbers belong to union members with blood ties to a Gambino crime family capo.Two entries in the book list the locations and numbers for pay telephones - a preferred method of communication for those concerned about police phone taps. The pages also feature handwritten lists of major construction sites around the city and the names of union workers assigned to them - including some workers already busted in the no-show job scam.

NLRB Brings Charges Against Youngstown Local

In response to charges brought by hospital employees at St. Elizabeth Health Ctr. in  Youngstown, Ohio, the Gen. Counsel of the Nat'l Labor Relations Bd. filed a formal complaint Jan. 15 against Int'l Bhd. of Teamsters Local 377 for unfair labor practices. The workers, with the assistance of Nat'l Right to Work Fdn. Legal Def. Fdn. attorneys, filed federal charges in 2001 against the the local for refusing to accept their resignations and for failing to properly notify them of their right to refrain from paying dues to subsidize union political activities.

"Teamsters officials must now answer for their systematic shaking down of employees," said Stefan Gleason, Vice President of the NRTWLDF. "Hopefully, this is a signal that the Bush NLRB plans to stand up for union-abused workers."

Guild's Leadership in Disarray from Tainted Election

The Screen Actors Guild is in disarray. SAG's elections committee astounded Hollywood on Jan. 7 by setting aside Melissa Gilbert's Nov. 2 victory as SAG president, along with wins by Elliott Gould for secretary and Kent McCord for treasurer. The five-member committee, headed by Fred Savage, set a rerun and blasted SAG staff and Sequoia Voting Systems, which conducted the election which was tainted by misconduct that may have affected the outcome.   The two main reasons put forth by the committee in their decision was the deletion from the ballot package sent to New York branch members of a member signature line and instructions to sign the return ballot envelope which violated the SAG constitution  as well as two extra days allotted to New York branch voters to return their ballots.

Trusteeship to End at New York City's Corrupt District Council 37

After a three-year trusteeship aimed at rooting out widespread corruption, Am. Fed'n of State, County & Mun. Employees Dist. Council 37, NYC's giant municipal union, will again be allowed to run its own affairs beginning this spring, union bosses said Jan. 9. DC37 bosses said officials from their parent union had indicated that the trusteeship would be over by the end of Mar. 2002 and an election held that same month. The union has been rocked by a scandal in which more than 20 officials were convicted of embezzlement and other crimes. The presidents of two of the council's 56 union locals were convicted of stealing more than $1 million. Several council officials were convicted of stuffing the ballot box in 1996 to ensure approval of an unpopular contract with a two-year wage freeze. [N.Y. Times 1/10/02]

EEOC: California Union Engaged in Religious Discrimination

On Jan. 4, the Equal Employment Opportunity Comm'n found reason to believe the Cal. Faculty Ass'n discriminated against Cal.  State Univ. Prof. Charles Baird by  refusing to accommodate his sincere religious objections to joining or paying compulsory agency fees  to the union. The EEOC judged the CFA's actions to be in direct violation of Title VII of the  1964 Civil Right Act after hearing arguments from attorneys with the Nat'l Right to Work Legal  Def. Fdn. "This ruling reaffirms that Big Labor cannot trample on someone's religious freedom," said Stefan Gleason, NRTWLDF vice president. "The CFA claims to stand up for  the rights of employees, but this case shows that it only wants to stand for forced unionism."

SEIU Teams Up With ACLU to Overturn Federal Baggage-Screen Law

The Am. Civil Liberties Union and the Service Employees Int'l Union filed a suit Jan. 17 challenging the citizenship requirement for airport baggage screeners in the recently enacted Aviation & Transp. Security Act, which requires virtually all airport baggage screeners to be federal employees within one year. Applicants must be United States citizens to qualify for those federal jobs.  In addition to the suit, ACLU and SEIU are calling on Congress to remove the citizenship requirement from the statute. Sen. Dianne Feinstein (D-Cal.) has introduced a bill (S. 1829) to allow permanent foreign residents to be eligible for federal screener jobs if they are in the process of becoming U.S. citizens. However, a spokesman for SEIU told BNA that while the union supports Feinstein's measure, the bill would affect less than 10% of the legal immigrants who hold baggage screening positions.

Five Convicted in $750,000 New Jersey Scandal

A federal jury in Trenton, N.J., convicted four union officials and an employer's hiring agent Dec. 17 in an massive embezzlement scandal that victimized Local 1588 of the Int'l Longshoreman Ass'n in Bayonne, N.J. Joseph Lore, ex-hiring agent at Int'l Terminal Operating Co., was found guilty of conspiring to receive in excess of $750,000 in union funds as a result of a multi-faceted scheme to skim union monies between 1991-99.

Also convicted of conspiracy were Denise Bohn, Local 1588's office manager, Joseph Pelliccia, the local's vice president, William Hurley, a Local 1588 business agent, and Thomas Rackley, the local's environmental representative. Local 1588's president, John J. Angelone, and its ex-president, Eugene G'Sell, both previously pled guilty and testified for the government in a bid for leniency. Initial indictments in the case were brought in June 1999.

Northern Illinois Boss Charged with $353,000 Theft

Charles C. Isely, III, ex-president and treasurer of the Int'l Employees Welfare Union was indicted Dec. 19 on one count of embezzlement and three counts of mail fraud. He allegedly embezzled $353,000 from the Waukegan, Ill.-based union, which he founded and ran from 1974 to 1998. He allegedly wrote 30 fraudulent checks totaling $225,000 from IEWU's death trust fund. He also allegedly wrote another 40 checks for $108,000 on IEWU's bank accounts. The checks were allegedly routed to Isely's bank accounts and used for personal expenses. Further, Isely allegedly obtained a $20,000 bank loan under the union's name and reportedly deposited it in his personal bank account. The alleged crimes occurred in 1994-98.

Uniquely, Isley was also the president of the Lake County (Ill.) Chamber of Commerce. He held that post since 1974 but resigned in 1998 after the Dep't of Labor's probe of his union activities became public. His wife, Patricia, IEWU's ex-vice president and secretary, was not charged. Both resigned in Mar. 1998. In Nov. 1998, Isley and his wife filed for bankruptcy and claimed outstanding debts to IEWU. [Chi. Daily Herald 12/22/01; Chi. Trib. 12/20/01]

New York Probe May Bring Charges to Stop Union Corruption at Site of September 11 Massacre

According to the N.Y. Post, the U.S. Attorney's Office in Brooklyn is on the verge of charging up to 75 individuals linked to Int'l Union of Elevator Constructors Local 1 in order to stop the allegedly mob-tainted local from illegally lining their pockets or inflating construction costs in the devastated World Trade Ctr. site. Local 1 operates temporary construction elevators, which will be required on the rebuilding of damaged buildings around Ground Zero. Members of the local have allegedly doled out no-show jobs to union cronies and members of two Mafia crime families. Additionally, the prosecutors will reportedly seek a court monitor to oversee the local, whose membership list reportedly includes Joseph Gotti, nephew of imprisoned Gambino crime family boss John Gotti.

New Charges for Hawaiian Boss

A federal grand jury in Honolulu returned a new indictment Dec. 19 against United Public Workers boss Gary Rodrigues and his daughter Robin H. Sabatini adding to an existing union corruption indictment that was brought in Mar. 2001. The new indictment alleges that Rodrigues accepted more than $100,000 in kickbacks from a life insurance agent in connection with an employee benefit plan. In Mar., he was indicted for allegedly embezzling from the union's medical and dental plans through overcharging.

Currently, both are charged with 50 counts of mail fraud, one count of conspiracy to defraud a health care benefit program, two counts of conspiracy to commit money laundering, and 42 counts of money laundering. Also, Rodrigues is charged with five counts of embezzling union assets and one count of accepting kickbacks in connection with an employee benefit plan. Their trial was set to begin in Jan., but the new charges are expected to cause a several month delay.

Union Fund Manager Charged

Federal prosecutors in Boston and Chicago announced today that George Philipps, president of a N.Y. investment consulting firm, Pension Fund Evaluations, Inc., was charged Dec. 18 in a one count information with paying illegal kickbacks to William Close, ex- trustee of the pension funds of Int'l Bhd. of Teamsters Local 710 and Int'l Ass'n of Machinists Local 701 (a.k.a., the Auto. Mechanics Union), both of Chicago. Allegedly, from about Mar.-Nov. 1997, Philipps paid kickbacks to Close in exchange for Close directing that trades of assets of the two pension funds be executed through PFE's clearing brokers. PFE in turn had agreements with the brokers that PFE would receive 70% of commissions earned on the trades. Close previously pled guilty to racketeering charges arising out of his receipt of illegal kickbacks, and is awaiting sentencing. [USAO D. Mass. 12/18/01]

Oklahoma Battles to Save Right-to-Work Law on Sovereign Immunity Grounds

Attorneys for the State of Okla. and Gov. Frank Keating (R) have filed a motion to dismiss a union-led lawsuit that seeks to overturn the State's recently ratified Right-to-Work law. Under the Eleventh Amendment and the Sovereign Immunity grounds, the State argues that the federal district court does not have jurisdiction.  The suit is before U.S. Dist. Judge Frank H. Seay (E.D. Okla.). The civil rights suit claims that Okla.'s Right-to-Work law violates the plaintiffs' federal rights under the U.S. Constitution and an array of federal statutes. The State maintains, however,  that the law is clear and a state cannot be held liable for an alleged civil rights violation. "As the state is not a 'person' subject to suit, there is no  material fact at issue which would entitle plaintiffs to any relief  against the state," the motion says. The motion to dismiss is limited to only immunity claims, with defendants not waiving other potential grounds for dismissal. The court had scheduled a status conference in the case for Jan. 4. [Daily Oklahoman 12/19/01]

Kickbacks Charges Brought Against New York City School Custodians

Eleven N.Y. City public school custodians, all members of Int'l Union of Operating Engineers Local 891, were arrested and charged Dec. 11 with receiving bribes and kickbacks and rigging bids for window cleaning services. According to N.Y. State Atty. Gen. Eliot Spitzer, from June 2000 to Nov. 2001 the suspects received kickbacks of $300 to $2,000 in cash, or 10% of the contract price, from the cleaning services in exchange for selecting them for their schools. The suspects allegedly asked contractors to supply false bids as a way to circumvent NYC Board of Educ. requirements for at least three bids for services costing more than $250.

D.C. Circuit Overturns NLRB's Approval of "Staggering" Fine by Milwaukee Union

The U.S. Court of Appeals for the Dist. of Columbia Circuit ruled Dec. 28 that the National Labor Relations Board erred in exculpating Int'l Bhd. of Elec. Workers Local 494 in Milwaukee for fining a member $100,000 after he took a supervisor's job at a nonunion shop. The appeals court said NLRB was "flatly unreasonable" for finding that the union did not commit an unfair labor practice by fining the member. NLRB's conclusion, that no violation of the act occurred because the local union was not seeking a collective bargaining relationship with the nonunion employer, was not supported by substantial evidence, the court held. Comments from the union business agent, as well as the "staggering" size of the fine, which was later reduced to $10,000 by the int'l union, "conclusively establish[ed] that the local sought a collective bargaining relationship with [the nonunion company] and retaliated against [Joseph] Podewils for not providing it," wrote U.S. Circuit Judge Laurence H. Silberman (D.C. Cir., Reagan).

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