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.

Ninth Circuit Chips Away at Beck Rights

On Mar. 25 an eleven-judge panel representing the the full U.S. Court of Appeals for the Ninth Circuit chipped away at the Supreme Court's landmark union dues decision, CWA v. Beck. The Ninth Circuit ruled that organizing costs may be included in the agency fees charged to nonmembers covered by a collective bargaining agreement's union-security clause, Mar. 25, upholding a 4-1 Nat'l Labor Relations Bd. decision. Circuit Judge Stephen R. Reinhardt (9th Cir., Carter), who is a ex-union attorney and ex-executive committee member of the Democratic Nat'l Committee, wrote for the court that a union "is permitted to charge all employees, members and nonmembers alike, the costs involved in organizing, at least when organizing employers within the same competitive market as the bargaining unit employer,"

Dissidents Win LMRDA Suit; Union Forced to Strike Anti-Speech Provision from its Constitution

U.S. Dist. Judge James Robertson (D.D.C., Clinton) ruled Mar. 6 that a provision of the United Ass'n of Plumbers & Pipe Fitters' constitution calling for expulsion of any member who distributes "letters of falsehood and misrepresentation" violates the Labor-Mgmt. Reporting & Disclosure Act of 1959 (a.k.a., the Landrum-Griffin Act) and must be excised. Robertson granted summary judgment to union members Charles Callihan and Wilmer Thomas, who claimed that Section 199 of the union's constitution violated their free speech rights under LMRDA, 29 U.S.C. § 411(a)(2).

Robertson ordered the union to excise the provision from its constitution and ordered the union to publish the court's ruling within 60 days in the union's membership publication. That notice, the court specified, should be mentioned in the publication's table of contents and printed in a type size no smaller than 22 point bold for the heading and 11 point for the body of the court order. Robertson also has scheduled a status conference for Apr. 2.

Discrimination Suit against Chicago Local Moves Forward

U.S. Dist. Judge Blanche M. Manning (N.D. Ill., Clinton) ruled Mar. 13 that a black pipe fitter,  Lawrence Malone, submitted sufficient evidence that his union instigated, supported, encouraged, or ratified such the presence of racist graffiti on portable toilets at a job site to avoid summary judgment for the union on his racial harassment claim under Title VII of the 1964 Civil Rights Act. Partially denying summary judgment to United Ass'n of Plumbers and Pipe Fitters' Local 597 in Chicago, Manning said Malone, a union member who worked at a job site in Robbins, Ill., in 1995-96, could proceed with his Title VII claim, even though he never had complained about the graffiti while he worked at the site or produced conclusive evidence that union members actually were responsible for the graffiti.

Ninth Circuit Side with Union in Religion-Dues Suit

The U.S. Court of Appeals for the Ninth Circuit has ruled Mar. 22 that Cal. professors may not  challenge the new state law that allows state and union officials to determine the acceptability of religious beliefs when employees seek an exemption  from the requirement to pay union dues.  The Cal. Faculty Ass'n initially sent a notice to 14,000 non-union  professors that a religious accommodation could be obtained only if they were a member of an approved  church - as stated in the statute. But later, CFA attorneys filed a sworn declaration with the court that despite its previous statements to 14,000 professors, the CFA union does not apply the statute as actually  written - or as advertised to this very day on the  union's web site. Based on that declaration filed  with the court only, the court ruled that the professors do not have standing to challenge the law even if it violates employees' freedom of association under the First Amendment.

New York Boss Sentenced, Benefit Funds Lost $1 Million

On Mar. 1, a boss and a member of the United Bhd. of Carpenters were indicted, pled guilty, and sentenced in Manhattan Supreme Court for taking bribes to let a contractor use nonunion workers at two Manhattan job sites. Stephen Goworek was sentenced to six months in jail and 54 months' probation, and Thomas Riccardo got five years' probation. A third, John Mingione, pled not guilty and will return to court. The scheme allegedly caused the union's pension and welfare fund to be deprived of more than $1 million that was supposed to be paid by the contractor.

The N.Y. State Atty. Gen. charged Goworek in an 11-count indictment, which included Grand Larceny in the First & Second Degrees, four counts of Bribe Receiving by a Labor Official, and five counts of Violating a Fiduciary Duty. Before his arrest, Goworek managed UBC's Stamps Enforcement Unit of the Benefit Funds of the Dist. Council of N.Y. & Vicinity. As the Stamps Enforcement manager, he was responsible for ensuring that contractors remitted the payments to the benefit funds required by contract.

New Jersey Boss Ousted, $642,000 Allegedly Diverted from Local

The Hotel Employees & Restaurant Employees Int'l Union ousted the president of its North Jersey local Mar. 13 after finding that he had made large, unjustified payments to his predecessor, who had been kicked out for associating with mobsters. HERE said Local 69 president David Feeback had misappropriated union money by paying $542,000 in severance benefits to John N. Agathos, who was expelled from the local's presidency in 1996, and to his son, John R. Agathos, who was also ousted that year.

HERE president John W. Wilhelm also placed the Secaucus, N.J., based local into trusteeship after uncovering extensive financial irregularities. HERE accused Feeback of diverting more than $100,000 for his personal benefit, including money for dinners and bar tabs. HERE also asserted that Local 69 bosses had received an illegal $5,282 loan from an employer to buy 76 tickets to a Bruce Springsteen concert.

New York Bosses Sentenced for $130,700 Theft

U.S. Dist. Judge Thomas J. McAvoy (N.D.N.Y., Reagan) sentenced Nancy Groome on Mar. 12 and Daniel Vallee on Mar. 11 for the embezzlement of funds from Civil Serv. Employees Ass'n Local 316 in Albany, which is part of Am. Fed'n of State, Co. & Mun. Employees Local 1000. Groom and Vallee served as Local 316's secretary-treasurer and president, respectively.

From July 1993 to Nov. 1999, Groome wrote 319 unauthorized union checks, totaling $111,476.48, the majority of which were made payable to herself. Some were to third party venders for union-related training trips that she never took. She spent the funds, in part, on vacations, groceries, auto insurance, gifts to others, and other living expenses. She pled guilty July 11. She was secretary-treasurer from 1980 until Mar. 2000.

New Jersey Boss Accused of Stealing $75,000

A Hackensack policeman was charged Mar. 8 with stealing more than $75,000 from police union funds, including money for the widows and orphans of slain officers. Allegedly, Kevin Schneider, who oversaw the several union funds as treasurer for seven years, used the money during the past four years to finance his gambling forays at the Meadowlands Racetrack and casinos in Atlantic City and Las Vegas. Much of the money allegedly came out of the Policemen's Benevolent Ass'n Local 9's death-benefits fund, which helps families after officers die. Reportedly, Schneider has almost totally depleted the fund. He also allegedly ravaged Local 9's general-operating fund, contract negotiating fund, golf-outing fund, and a fund to build an in-line skating park for city youngsters.

California Boss Charged, $22,000 Repaid

Leonard M. Duge, ex-vice president of Communications Workers of Am. Local 59053 (a.k.a., National Association of Broadcast Employees & Technicians Local 53) in Burbank, California, admitted Feb. 25 to embezzling $22,137.66 from the local between Jan. 1996 and June 1998. He submitted fraudulent salary loss vouchers to Local 59053, was reimbursed, and spent the money on personal expenses. In exchange for the guilty plea, the U.S. Atty.’s Office in Los Angeles charged Duge on Mar. 5 with only a single count of falsification of union records. The plea agreement stated that Duge has made full restitution of $22,137.66.

Ousted Chicago Boss Still Politicking for Democrats

Thousands of members of Laborers' Int'l Union of N. Am. Local  2 began receiving letters in late Feb. urging them to support Democrat Lisa Madigan for Ill. Atty. General in the Mar. 19 primary, but the name attached to the mailings was surprising. The letters were signed, "Fraternally, Richard S. Caravetta, business manager." They asked members to take part in Ill. House Speaker Michael Madigan's "Friends and Family" political network on behalf of his daughter. But only weeks before, Caravetta had resigned from his union post in an agreement with LIUNA officials investigating his alleged ties to organized crime.

California Boss Gets Five Months for $64,700 Embezzlement

Deborah Bankston, ex-financial secretary-treasurer of Ass'n of Western Pulp & Paper Workers Local 83 in Stockton, Cal., was sentenced Feb. 20 to five months imprisonment followed by three years of supervised probation for embezzling $64,711.65 in union funds. She was also ordered to make full restitution.  Bankston pled guilty to one count of union embezzlement. She was charged on Sept. 26. [DOL 2/20/02]

Washington Staffer Charged with $15,600 Embezzlement
Geri E. Abbe, ex-office secretary for Ass'n of Western Pulp & Paper Workers Local 5 in Camas, Wash., was charged Feb. 22 in a one-count information with embezzling $15,690 in union funds. [DOL 2/22/02]

Feds Raid Minneapolis Union's Offices; Grand Jury Investigation Ongoing

Federal agents seized records from the United Ass'n of Plumbers & Pipe Fitters Local 15 in Minneapolis as part of a grand jury investigation into aspects of the plumbing trade, including records about property owned by Minneapolis City Council Member Joe Biernat (DFL). A six-hour search of Local 15's during the week of Mar. 4 also sought records pertaining to matters between the local, the Minneapolis City Council, the city's Licenses and Inspections Department, and its plumbers examining board. The warrant also requested information about four area plumbing companies listed as Ventco Appliance, Norblom Plumbing, Jack Seitz Plumbing, and Fignar Plumbing and their owners.

New York Dissident Request Federal Probe of Local

N.Y.C.'s Serv. Employees Int'l Union Local 32B-32J dissident Paul Pamias requested that the Dep't of Labor to investigate his local Mar. 1 for apparent violations of the Labor-Mgmt. Reporting & Disclosure Act (a.k.a. Landrum-Griffin). Excerpts of his letter are below:

"Our union president, Michael P. Fishman, conducts general membership meetings in total violation of the LMRDA, our Local's constitution and basic parliamentary procedure. Mr. Fishman, at every general meeting he has conducted, refuses to open the floor for new business, refuses to take unrehearsed questions and refuses to open the floor to independent motions. Members are not provided information relevant to issues, which are voted upon. We are denied a meaningful/informed vote. Everything is presented in a confusing manner and relevant information is withheld from the members. The opposition is denied every opportunity to debate or present opposing views.

Ex-Long Island Boss' Landrum-Griffin Suit Allowed to Move Forward

U.S. Dist. Judge Naomi R. Buchwald (S.D.N.Y., Clinton) ruled Feb. 20 that Sondra Messina, an elected delegate removed from office by bosses of Service Employees Int'l Union Local 1199 (a.k.a., Nat'l Health & Human Serv. Employees Union), can go forward with her claims under the Labor-Mgmt. Reporting & Disclosure Act (a.k.a., Landrum-Griffin Act) that she was retaliated against for criticizing union bosses. Although LMRDA does not protect union officers such as Messina, Buchwald said retaliatory actions against officers that chill the free expression of critical ideas or deprive members of their chosen representative, will violate members' rights to free speech and to democratic governance of their union, which Buchwald characterized as the underlying objectives of LMRDA.

Union Fund Trustees Settle Members' Suits for $16 Million

Members of three unions settled lawsuits against their pension fund trustees Mar. 7 in a case involving allegations of pension fraud by Capital Consultants LLC, a Portland, Or., fund management firm. Members of two more unions plan to settle suits against their trustees by mid-Mar. The total recovery of all five actions is $16 million.

Capital Consultants had $927 million under its management when federal agents seized its assets in Sept. 2000. Funds from Taft-Hartley plans and other union plans accounted for $407 million of the high-risk private investments, many of which may now be nearly worthless. The Dep't of Labor estimates that the union funds lost more than $100 million due to risky investments.

New York Boss Threatened Whistleblower

The president of a union rocked by the recent indictments of 26 bosses and members in a massive no-show job scheme ordered a union official to stop probing the racket nearly four years ago, according to the N.Y. Post. John G. Green, president of Int'l Union of Elevator Constructors Local 1, reportedly ordered whistleblower Martin Hastings to stop checking N.Y.C. construction sites for evidence of phantom jobs in an Apr. 8, 1998. Green insisted Hastings, who was a member of Local 1's executive board and a union trustee at the time, was not authorized to conduct the probe. Green
also threatened to bring him up on union charges.

"You have no right to conduct any investigation on any job site either as to the number of hoist operators or as to working conditions for elevator mechanics or helpers," Green wrote on union letterhead."Therefore, if I am advised that you have appeared on any job site, and claimed to be a representative of this union, you may rest assured that appropriate charges will be filed against you because of such illegal conduct."

New Details on $144,900 Ohio Embezzlement

As reported in the Feb. 18 issue of the UCU, Richard Adams, ex-treasurer of Int'l Ass'n of Fire Fighters Local 639 in Parma, Ohio, pled guilty Jan. 28 to a federal bank fraud charge for schemes that deprived the local of approximately $144,939.46. Sentencing is scheduled for Apr. 10 before U.S. Dist. Judge Donald C. Nugent (N.D. Ohio, Clinton).  The U.S. Atty.'s Office for the N. Dist. of Ohio in Cleveland has provided the UCU with Adams' plea agreement, which details the ex-boss' outrageous conduct.

From Aug. 1987 to Oct. 2000, Adams devised several fraudulent schemes to obtain funds belonging to Local 639 involving accounts (on which he was the sole signatory) at three federally-insured banks. Without authorization, Adams wrote union checks payable to his personal creditors to cover money he personally owed. He wrote the checks in a manner to give the false appearance that the payments were authorized union purposes by using the creditors names instead of his own and by  including memo notations reflecting the customer account numbers without indication the personal benefit he was obtaining.

ABC's Stossel Exposes Hollywood Hypocrisy

The Mar. 1 edition of ABC News' 20/20 ran troubling story about double standards in the Screen Actor Guild.  The segment was by John Stossel and was entitled "Screen Actors Guild bans little actors who crossed picket line but not stars." Excerpts from the segment's transcript are below:

"BARBARA WALTERS, co-host: Now a true Hollywood story starring George Clooney, Elizabeth Hurley, Shaquille O'Neal and Mario Barbieri.  Who?  Well he's the struggling actor who could have used a break, which has John Stossel saying, GIVE ME A BREAK!

JOHN STOSSEL reporting: Right, Barbara, and if this story had a typical Hollywood ending, the little guy would win.  But in real life, Mario got no break because he had to deal with the Actor's Union. Remember that well-publicized strike by the Screen Actors Guild? . . . SAG claimed big corporations were underpaying actors.

WILLIAM DANIELS (Former President, SAG): (At rally) It's time we received our fair share of corporate profits and astronomical CEO salaries.

SUSAN SARANDON (Actor): (At rally) The little guy is not going to roll over for corporate America.

New York Boss Charged with Embezzlement, Bribery & More

Patricia J. Ford, an ex-boss of the N.Y. State Public Employees Fed'n in Albany, was charged Feb. 22 in a five-count union corruption indictment. First, Ford allegedly embezzled some $10,000 from the union for her personal expenses in Mar. 1997 and, second, allegedly falsified the union's disbursement journal. Third, because NYPEF was in receipt of a federal grant of more than $10,000 from OSHA, Ford was also charged with embezzlement by an agent of an organization receiving federal funds.

Fourth, she was charged with receipt of bribe by an agent of organization receiving federal funds. Between Mar. and July 1997, Ford allegedly accepted a bribe from Peter Bynum, a N.Y.C.-based political consultant, to whom she awarded union business in exchange for his free help with her 1997 reelection campaign. Finally, she was charged with making false statements to a federal investigator--she allegedly lied about the bribe in May 1998.

Las Vegas Boss, Accused of $24,900 Theft, Pleads Guilty

David S. Manes, ex-business representative of United Steelworkers of Am. Local 12-711-A, which represents cab drivers in Las Vegas, pled guilty Feb. 20 to one count of embezzling $1,500 in union funds through an unauthorized salary payment on Oct. 8, 1998. The case is assigned to U.S. Dist. Judge Philip M. Pro (D. Nev., Reagan) and sentencing is scheduled for May 31.

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