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.

NLPC Chair Testifies on Pension Corruption in U.S. House

NLPC Chairman Kenneth Boehm testified on how to better protect union pensions from corruption before the Subcommittee on Employer-Employee Relations of the Committee on Education and the Workforce on Sept. 10.

Boehm cited a March 2002 report by the U.S. Dept. of Labor's Inspector General on 357 cases of union racketeering, of which 44% involved pension and welfare plans. He then pointed to a number of particularly outrageous examples reported in UCU:

-- In Oregon, officials with Capital Consultants dispensed favors to union pension trustees, who then steered their members' retirement savings to risky investments, which were then covered with even riskier "Ponzi-like schemes."  More than $100 million was lost.

Frmr. Secy.-Treas. in OH Indicted for $100K+ Theft

Barbara Ryan was indicted Aug. 5 in Toledo on charges that in her eight years as a local Secy.-Treasurer, she embezzled $117,734 from the union.

From 1992 through 2000, Ryan was an officer with Local 626 of the Paper, Allied Industrial, Chemical & Energy Workers union (PACE), which covered employees at the BP Chemicals plant in Lima. During that time, according to Asst. U.S. Attny. Thomas Karol, she disguised financial transfers to her personal accounts as transfers between various union saving and checking accounts, and cashed checks for herself that had been intended for the union.

In addition to the union embezzlement charge, Ryan is also charged with using her position in the BP payroll dept. to make false time entries for work that she had not, in fact, performed, in violation of U.S.C. 18, Sec. 1341. Both counts of embezzlement carry the potential of $250,000 in fines and/or five years in prison. The charges, brought in the U.S. Dist. Ct. for the N. Dist. of Ohio, are the result of an investigation by the FBI and the Cleveland branch of the U.S. Ofc. of Labor-Mgmt. Standards. [U.S.A.O. N.D. OH 8/5/02, DOL OLMS]

Fed. Judge Upholds SEIU Takeover of Mass. Govt. Union

U.S. Dist. Judge Morris E. Lasker (Johnson) upheld the ouster of Mass. govt. union boss Kenneth Lyons by its international affiliate on Aug. 29.

The Service Employees Intl. Union (SEIU) placed the Natl. Assn. of Govt. Employees (NAGE) under trusteeship in Nov. 2001, after Lyons was accused of altering and destroying records relating to meals he paid for with James Hartnett, undersecy. of the Mass. Div. of Admin. and Finance, and the state's chief labor negotiator. Under Mass. ethics laws, public employees are barred from accepting or soliciting gifts and/or meals valued at $50 or more from business associates.

Judge Lasker found that the SEIU did not intimidate other NAGE officials into agreeing with the trusteeship. An election for NAGE president is scheduled for mid-September. [Boston Herald 8/30/02]

Pilot Union Forced to Return nearly $700K in Illegal Dues

In response to legal action brought by attorneys with the National Right to Work Legal Defense Foundation, the Airline Pilots Association (ALPA) union is returning $672,000.00 in dues and interest to 330 non-union airline employees.

The settlement brings to close a long-running case that reached the United States Supreme Court.  In addition to returning the dues money, the ALPA officials are required to change the accounting procedures they use to determine how much non-union employees pay in agency fees. These changes may reduce the difficulties faced by airline employees in reclaiming forced dues used to pay for union politics and other activities unrelated to collective bargaining.

Although many of the airline workers represented by Foundation attorneys live in states with Right to Work laws, they are not protected from compulsory unionism. The airline industry is regulated by the Railway Labor Act (RLA), which imposes compulsory unionism despite state Right to Work laws.

Ex-WI Secy.-Treas. Sentenced for $60K Theft

On September 6, 2002, in the U.S. Dist. Ct. for the East. Dist. of Wisc., David Dobry, former Secy.-Treas. of Boilermakers Lodge 177, was sentenced to five months imprisonment followed by five months of home detention followed by three years of supervision. He was also ordered to pay restitution in the amount of $61,510. He pled guilty to embezzling $61,510 in union funds on July 2, 2002, following an investigation by the Milwaukee branch of the U.S. Dept. of Labor's Ofc. of Labor-Mgmt. Standards. [DOL OLMS 9/12/02]

Ex-NC Pres. Pleads Guilty to Embezzlement, Falsification

On August 19, 2002, in the U.S. Dist. Ct. for the East. Dist. of North Carolina, Hugh C. Credle, former president of United Postal Workers Local 1616 in Roanoke Rapids, pled guilty to making false entries in required union records in violation of U.S.C. 29, Sec. 439(c). He admitted making the false entries in order to conceal his embezzlement of union funds totaling $8,163.09.

Credle had been charged in a two-count indictment on April 17, 2002, following an investigation by the Nashville branch of the U.S. Dept. of Labor's Ofc. of Labor-Mgmt. Standards. As part of the plea agreement, Credle agreed to make restitution of $6,734 to the union, pay a fine of $5,000, and resign from the Halifax County School Board. [DOL OLMS 9/12/02]

More Guilty Pleas as Investigation Expands of Big Labor's "Arthur Andersen"

A 2nd accountant confessed on Aug. 22 to hiding 7 years of massive embezzlement by the Iron Workers hierarchy in Wash. D.C. The latest confession by Francis J. Massey has increased the suspicion surrounding the accounting firm, Thomas Havey LLP, which brags on its web site of "serv[ing] more international and local labor organization clients [700] than any CPA firm in the country." Massey himself "served as an instructor and lecturer regarding the LM-2 Report...both at Havey Company in-service training and at training and seminars provided by the Havey Company for various labor unions." On June 24, NLPC petitioned the U.S. Dept. of Labor's Office of Labor-Mgmt. Standards to begin auditing all those unions using Havey's services.

Pension Cleanup Continues at Capital Consultants in Ore.

Capital Consultants' chief salesman, Dean Kirkland, was indicted Aug. 22 on 20 counts of giving various kickbacks to two union pension fund bosses, one of them his father. The indictment was handed down in the U.S. Dist. Ct. in Portland, Ore., where Capital is based.

The latest indictments bring to six the number of union and pension officials charged with wrongdoing in the firm's 2000 collapse that cost numerous union pension funds a large share of the $500 million lost. Already convicted are the head of Capital, Jeffrey Grayson, and his son Barclay, and John D. Abbott, who admitted in Feb. 2001 to taking nearly $190,000 from the elder Grayson to steer the investments of five Laborers union trust funds to Capital.

Las Vegas Boss Sentenced for $200K Theft

Deborah Partida, ex-secy.-treasurer of Amer. Postal Wrkrs. Union Local 761, and ex-treasurer of the APWU's Nev. State Assn., was sentenced on Aug. 23 to 18 months in prison and ordered to pay back the nearly $200,000 she stole from the Local and state assn. from 1995 to 1999. She was sentenced by U.S. Dist. Judge Roger Hunt (Clinton) in Las Vegas.

According to the May 17 plea agreement, Partida was Local 761 Treasurer from the middle of 1995 until Sept. of 1999. She was entitled to a salary of $150 a month. As soon as she took office, Partida began using the Local's checking account and credit cards for her personal benefit.  In some cases, she forged the local vice-president's name on checks, then deposited them into a checking account which they shared. Partida, however, spent all of the embezzled funds herself.

Pension Plan Insiders Hit with Unfair Labor Practice Charges

Keeping the heat on the union-owned Ullico, under fed. investigation for insider stock trading, the National Right to Work Legal Defense Fndtn. filed charges against the Ullico Board on Aug. 13 with the Natl. Labor Relations Bd. (NLRB)

As reported in previous issues of UCU, a fed. grand jury in Wash., D.C. is investigating allegations that from 1999 to 2001, several intl union presidents used their positions on the Ullico Bd. to sell their personal Ullico stock at a dramatically higher price than its worth, but would not allow larger shareholders such as union pension funds to sell their stock during the same period. As a result, those shareholders were stuck with Ullico's stock, heavily leveraged in the telecom firm Global Crossing, which rode the wave of the telecom bubble to bankruptcy in 2001.

The Fndtn. charges that as an employer providing financial support to several unions through their presidents, Ullico violated Sec. 8(a)2 of the Natl. Labor Relations Act (NLRA), which bars employers from "domina[ting] or interfer[ing] with the formation or administration of any labor organization or contribut[ing] financial or other support to it..." [NRTWLDF]

Duo of Officers in Mo. Charged w/ Embezzlement, False Time Claims

On Aug, 14, in the U.S. Dist. Ct. for the E. Dist. of Missouri, Donald Stevens, former secy.-treasurer of Sheet Metal Workers Local 93 in St. Louis, was indicted on charges of embezzling $41,550 from the Local 93 Sheet Metal Welfare Fund from July 1999 to Mar. 2001. The next day, Gregory Carpenter, former president/organizer of Sheet Metal Workers Local 93, was charged with embezzling union funds by submitting false lost time claims to his union. Stevens pled not guilty before U.S. Magistrate Judge David Noce on Aug. 27. The charges were brought following an investigation by the St. Louis Ofc. of the U.S. Ofc. of Labor-Mgmt. Standards [DOL OLMS 8/28/02, St. Louis Post-Dispatch 8/28/02]

FBI Investigating Harassment by Union-Trained "Petition Blockers" in Mass.

The Justice Dept. in Boston is investigating allegations of harassment by union-trained "petition blockers" aimed at a statewide pro-marriage organization. Massachusetts Citizens for Marriage (MCM) requested the investigation during a petition drive to amend the state constitution by defining "marriage" legally as "the union of one man and one woman."

As supporters worked last Fall to gain enough signatures to get the amendment on the 2004 ballot, they and petition signers were allegedly pushed, yelled at, and spat upon by "blockers" who also wrote down the license plate numbers of petition gatherers. In a letter to U.S. Attny Michael Sullivan, then-MCM Chairman Bryan G. Rudnick charged that "training sessions were held at the Hotel and Restaurant Workers union facility at 58 Berkley Street, where activists were encouraged to report the locations of signature gatherers. A flyer with the home addresses of 18 of the leaders of the pro-marriage petition was also handed out at this ‘training' session." According to MCM officials, the FBI has informed them that an investigation is underway.

Tenn. Stagehand Boss Admits Theft for Friend

Tony Evans, ex-Fin. Secy.-Treasurer of IATSE Local 197 in Knoxville, Tenn., pled guilty on Aug. 14 to embezzling $16,319 for himself and his friend. According to the plea agreement, Evans has fully repaid those funds.

Evans' began his misuse of union funds in Sept. 1998, as Administrator of the Pension Plan of the Intl. Alliance of Theatrical Stage Employees and Moving Picture Operators, Local 197. On Sept. 18, 1998, Evans wrote a check for $2,500 for "office furniture" that was never bought. Evans repaid that amount on Oct. 14, with a check written on the account of a friend, Sally Hutcheson.

In Jan. 1999, Evans became Fin. Secy.-Treasurer of the Local. Starting on Jan. 27 and ending on Jan. 4, 2000, Evans wrote 11 checks from the union's acct. to Hutcheson for a total of $6,333. Continuing his theft until Aug. 2000, Evans paid $3,614 to cover his credit card bills, $1,029 for a Dell computer for Hutcheson, $3,950 to a separate acct. he opened with the union members' knowledge, and $1,392 to buy personal property for Hutcheson.

Ex-VP in NYC Sentenced for Role in Racketeering, No-Show Scheme

On August 7, 2002, in the U.S. Dist. Ct. for the E. Dist. of New York, Robert Shannon, former executive board member/trustee of Elevator Constructors Local One, was sentenced to 400 hours of community service and three years probation, fined $5,000, and ordered to make restitution of $5,107. He had pled guilty on May 30 to Unlawful Labor Payments in violation of 29 U.S.C. 186. The plea was in connection with the investigation of corruption in Local One relating to a no-show scheme at 19 construction sites in New York City. Union officials acquired money by falsely claiming that certain union members had worked certain hours, when in reality they had not, and in many cases were actually working at other construction sites. The charges had been brought following a joint investigation by the New York Dist. Ofc. of the U.S. Dept. of Labor's Ofc. of Labor-Mgmt. Standards, the FBI, and the IRS. [DOL OLMS 8/28/02]

Ex-Union President in Chi. Area Pleads Guilty to Mail & Credit Card Theft

A frmr. postal union president and his wife pled guilty Aug. 21 in the U.S. Dist. Ct. in Chicago to embezzling credit cards through the mail facilities where they worked.

Paul Shyongpan was President of American Postal Workers Union (APWU) Local 4545 when, in Nov. 1998, he began opening mailed credit card offers, removed the cards, and forged signatures on them, while his wife did the same at a different post office, acc. to the plea agreement. Until May 2001, Shyongpan and his wife purchased major home appliances, electronic and stereo equipment, video games, clothes, gift certificates and gift cards worth at least $70,094 using the stolen cards.

Ex-Ofc. Secy. in New Orleans ‘Fesses to Embezzling Charge Accts, Petty Cash

On Aug. 14, in the U.S. Dist. Ct. for the Eastern Dist. of La., Joyce Griffin, former office secretary for the New Orleans Metal Trades Council of the AFL-CIO, pled guilty to embezzling $2,383 in union funds. She admitted to charging personal items to the union's charge accounts and taking cash from the union's petty cash fund. She had been charged in a one-count information on April 25, 2002, following an investigation by the N.O. Dist. Office of the U.S. Labor Dept. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 8/21/02]

Two Intl. Union Bosses Settled Power Dispute w/ Embezzled Payoffs

A fed. grand jury in Wash. D.C. issued yet another indictment against ex-Iron Worker officials Jake West and LeRoy Worley on August 7. The indictment adds more than $200,000 to the amount allegedly embezzled from the IAIW, and provides new details on the deal between West and Worley.

West and Worley had both held offices in the Intl. Assn. of Bridge, Structural, Ornamental and Reinforcing Iron Workers since 1989 -- West as General Pres., Worley as General Secy. By 1998, acc. to the indictment, West saw Worley as a challenge to his position in the union and wanted him out of the way. In Nov. of that year, they allegedly made a deal. On the 18th, Worley resigned his position in the IAIW. At the same time, West allegedly arranged for Worley to receive more than $37,000 from the union's pension fund that Worley had not worked for the union long enough to be entitled to. Those facts were previously laid out in a May 17 indictment.

Problems Continue at DC 37: $15 Million Stolen from Credit Union ATMs

Some 4,000 govt and health workers took advantage of electronic breakdowns after Sept. 11 to loot ATMs operated by the credit union used by members of District Council 37 of the Amer. Fed. of State, Cnty. & Municipal Employees Union (AFSCME), acc. to an indictment announced on Aug. 6 by NYC Dist. Attny. Robert Morgenthau.

Ex-Calif. Bay Area Chief Indicted for "Sham Charities"

A former Santa Clara County Sheriffs Lieutenant and ex-union president was indicted August 2 for trading on the union's name to raise funds for sham charities.

According to the indictment by a Santa Clara grand jury, Armand Tiano and 12 alleged co-conspirators engaged in grand theft, tax evasion and money laundering that involved at least $1.4 million. Among the false charities were two created after the 1998 slaying of Millbrae police officer David Chetcuti. Allegedly, Tiano and the others persuaded many people to write checks for the "Officer Chetcuti Fund" and the "Millbrae Officer Family Trust Fund." The widow, Gail Chetcuti, never received any of those funds.

In his heyday, Tiano oversaw the county jails, presided over the Santa Clara Deputy Sheriffs Assn; and twice campaigned for Sheriff. In 1993, Tiano incorporated his own fund-raising group, the Deputy Sheriiffs' Sports Assn, and contracted with two brothers, George and Matthew Kellner, who already owed the union $100,000 in charity fund-raising. The brothers then began paying off Tiano from the ostensible charity to take advantage of "his official position and contacts" acc. to the indictment.

Duo of Des Moines Officers Confess to $100K plus Theft

Two frmr. officers of Local 177 of the Laborers Intl. Union of N. America confessed in the U.S. Dist. Ct. for Sou. Iowa on July 25 to stealing more than $120,000 from the union's local and job-training funds.

Frmr. Bus. Mgr. Fred T. Risius and ex-vice-pres. Henry A. Jannnenga began their mutual crime spree in Nov. 1999, acc. to the Stipulation of Facts in the Plea Agreement. At month's end, Risius paid a union member $16,500, supposedly for materials he had sold to the Local's apprenticeship program. The member split the cash between himself, Risius and Jannenga.

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