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.

New Charges in Minnesota Case; $43,300 Theft

A federal grand jury returned additional felony charges May 21 against Thomas J. Martin, ex-business manager of United Ass'n of Plumbers & Pipe Fitters Local 15 in Minneapolis, and Minneapolis City Council member Joe Biernat  (DFL).  Each face two added mail fraud charges in connection with Martin's alleged use of $2,700 in union funds to pay for plumbing work in 1999 at Biernat's home.

The original indictment, unsealed Apr. 18, charged that Martin paid for Biernat's plumbing work at the same time Biernat and his colleagues were approving Martin's appointment to the city board that certifies plumbers to work in the city. The new indictment also increases the amount of money Martin is charged with stealing to $43,323, taken on six occasions between 1998-2001. Originally, he was charged with a $17,877 embezzlement. The indictment gives no indication of how Martin used the other money he allegedly stole.

NLRB Attorney Removed for using Federal Government Resources to Help Democrat

The federal government's Office of Special Counsel announced May 21 that Nat'l Labor Relations Bd. attorney Bruce Buchanan agreed leave federal service for violating the Hatch Act.  OSC, an independent federal investigative and prosecutorial agency covering the federal workforce, filed a petition with the Merit Systems Protection Bd. in Oct. 2001, seeking Buchanan's disciplinary removal for allegedly engaging in political activity prohibited by the Hatch Act. The Hatch Act prohibits most government employees from partisan political activity while on duty or in a government facility.

Editorial Blasts Indicted Buffalo Bosses

The following are key excerpts from the Buffalo News' May 22 editorial, entitled "Laborers Local 91," that put the recent racketeering and extortion indictments in the proper perspective:

"[S]omeone has been committing labor violence in Niagara County for years. With these charges, law enforcement has finally served notice that it has to stop. For the sake of that enfeebled county, and all Western New Yorkers, it is important that it does. A 43-page indictment described the charges that led to Friday's arrests of 14 members of Local 91, including its business manager, Michael "Butch" Quarcini, and its president, Mark Congi. It is a damning document, accusing the 14 of crimes ranging from vandalism and beatings to bombings and death threats.

If proved in court, the allegations could go a long way to explaining why Niagara Falls, one of the world's best-known tourist destinations, is an economic backwater. Facing a backdrop of worksite violence and exorbitant labor costs, in addition to governmental incompetence, what developer would bother to build there, especially if it could go somewhere else? The answer is, almost none.

Indicted Local 91 Boss Fired from Government Post

The Niagara County (N.Y.) Legislature voted unanimously May 21 to fire indicted Laborers' Int'l Union of N. Am. Local 91 official Paul J. Bellreng from his seat on the board of directors of the county Industrial Development Agency. Bellreng was ousted from the unsalaried post following a caucus of the Legislature's Democratic majority, the same group that installed him and the rest of the nine-member board in Jan. 2002.

Keeping Bellreng on the board "sends the wrong message," said Legislature Chairman Bradley E. Erck (D). Bellreng is one of 14 Local bosses who were arrested May 17 on federal charges. Erck said he sent Bellreng a registered letter May 20 requesting his resignation, but had not received an answer.

Audit Reveals "Significant Accounting and Bookkeeping Problems" at Chicago Local

A year after Laborers' Int'l Union of N. Am. Local 2 came out of trusteeship, the troubled Chicago-based local was again subjected to discipline by the int'l union. Matt Paul, an "in-house prosecutor" with LIUNA's Office of the Gen. Executive Bd. Atty.'s Office, told the Daily Labor Report May 20 that a "supervision agreement" had been imposed on Local 2. Reportedly, supervision is a form of discipline less restrictive than trusteeship and is accomplished in "cooperation" with the local's executive board. Paul said the supervision agreement was reached on May 8.

Local 2 has been the subject of several corruption probes. It was placed under an emergency trusteeship in May 1999 . At that time, "in-house prosecutors" contended the local was under the control of organized crime and had ignored democratic principles. The local's primary officer John Matassa was alleged to be a "made" member of Chicago organized crime and later was barred from LIUNA for life.

Grayson and Ten Other Defendants Settle $110 Million Pension Suit

Dozens of union pension and other benefit funds reached a settlement May 13 with eleven parties to recover $110 million of losses involving allegations of pension fraud by the Portland, Or., based Capital Consultants LLC.  Capital Consultants had $927 million under its management when federal agents seized its assets in Sept. 2000. Funds from Taft-Hartley plans and other employee benefit plans accounted for a large share of nearly $500 million in estimated investment losses  The demise of Capital Consultants sparked lawsuits by a number of union trusts, alleging fraud and seeking to recover some of their losses. The proposed settlement, yet to be approved by the district court, calls for payments to the trusts by 11 companies and professional advisers, including legal and accounting firms.

Local's Employment Contract with its Organizer Held Inherently Unfair and One-Sided

U.S. Court of Appeals for the Fourth Circuit held May 10 that United Food & Commercial Workers Int'l Union Local 400's arbitration agreement in an employment contract between the local and its organizer was  "unconscionable" and unenforceable because it permitted the local to select a single arbitrator and to overturn the arbitrator's ruling. "[W]e again refuse to enforce an agreement so 'utterly lacking in the rudiments of even-handedness,' " U.S. Cir. Judge William B. Traxler, Jr. (4th Cir., Clinton), wrote for the court. "By agreeing to arbitration in lieu of litigation, the parties agree to 'trade the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration.' They do not agree to forgo their right to have their dispute fairly resolved by an impartial third party."

Illinois Court Allows Boss' Self-Serving Interpretation of Bylaws to Stand

The Second District of the Appellate Court of Illinois ruled May 3 that a temporary special dues assessment levied by United Food & Commercial Workers Int'l Union Local 881 to pay picketers at nonunion grocery stores was in compliance with local union's bylaws. The court rejected a challenge by union members Mitchell Diamond and Amy Weltlich, who maintained that the bylaws required a majority of the 35,000 local members to approve the assessment. Instead, the court held that Local 881 president Ronald E. Powell's self-serving "interpretation" of the rules as requiring only a majority of those members who actually voted, was reasonable, and consequently, decisive.

Amid Lingering Corruption Allegations, DC37's Benefits Fund to be Audited

The new bosses of the scandal-scared Am. Fed'n of State, County & Mun. Employees Dist. Council 37 in N.Y.C. said May 17 that they had ordered a thorough audit of the union's benefits fund, which will receive $206 million from the city this year.  Lillian Roberts, the district council's newly elected executive director, said the union wanted an audit because it was time for a fresh review of the fund. Roberts, who took over in Feb. 2002, ordered the audit three weeks after the fund's longtime director stepped down. The benefits fund helps the union's 125,000 members pay for prescriptions, optical care, dental visits, and legal help.

Mark Rosenthal, DC37's treasurer, said: "We want to know that everything's being done correctly and if anything needs to be changed. If the audit shows we need to do something different, we'll do it." Council officials said they had not yet selected an auditor. In Apr., Roslyn Yasser resigned after running the fund since 1978. Roberts replaced her with Rosaria Esperon, who was a DC37 attorney in the late 1980's and then worked for N.Y.C. Comptrollers Elizabeth Holtzman and Alan G. Hevesi over the last eleven years.

Troubled Boston Local's School Ordered to Vacate Rent-Free Lot

The Mass. Port Auth. Bd. has ordered Int'l Bhd. of Teamsters Local 25 to vacate a prime waterfront lot in East Boston they use rent free for a profitable truck driver training school, an arrangement federal investigators have eyed in connection with their racketeering probe of Local 25's indicted-president George W. Cashman. In a letter sent to union bosses on May 17, MPAB Chief Development Officer Lowell L. Richards III said the development of Pier One in Eastie is expected to begin in earnest next year and the developers want all occupants off the property. "I am notifying you that Local 25 must move the Driving School and vacate Pier One and its backlands by Dec. 31, 2002, approximately eight months from now,"  Richards wrote to officials at the Charlestown-based union.

Ex-U.S. Attorney Withdraws, Magistrate Recommends Ouster for Indicted Boss' Other Attorney

On May 1, under heavy pressure from the Dep't of Justice, ex-U.S. Atty. Thomas E. Scott has finally quit his potion of a defense attorney for his "old friend", indicted union boss Walter J. "Buster" Browne. Browne pled not guilty Nov. 3 to a 40-page federal indictment, brought by Scott's former U.S. Atty.'s Office, accusing Browne and his sister, Patricia B. Devaney, of running a racketeering scheme that milked more than $400,000 from his union and four companies. Browne is president of the Marine Eng'rs' Beneficial Ass'n Dist. 1 (a.k.a., Nat'l Fed'n of Public & Private Employees) headquartered in Fort Lauderdale, Fla.

Employees Win Pension Suit

The U.S. Court of Appeals for the Fourth Cir. ruled May 20 that a pension plan amendment adopted by the governing body of Dist. 1 of the merged Marine Eng'rs Beneficial Ass'n and Nat'l Maritime Union was not invalidated after union corruption was discovered and the merger rescinded.The governing plan documents clearly gave the merged union the authority to amend the plan unilaterally, said the opinion written by U.S. Cir. Judge Cynthia H. Hall (9th Cir., Reagan), sitting by designation, in affirming the finding of U.S. Dist. Judge Andre M. Davis (D. Md., Clinton) that the plan amendment, which enabled certain plan participants to obtain pension credits for past service with affiliated unions, was validly adopted.

California Boss Gets Away With Tainted Election Victory

U.S. Dist. Judge David F. Levi (E.D. Cal., G.H.W. Bush) ruled May 2 that the Dep't of Labor failed to show that a candidate for business agent of United Ass'n of Plumbers & Pipe Fitters Local 442 violated the union's election bylaws against electioneering and campaigning within 100 feet of the polling place on election day. In 1997, the local based in Stockton and Modesto, Cal., adopted bylaws that included detailed rules for conducting elections. Section 28(j) of the bylaws states: "No campaigning or electioneering shall be allowed inside the building where the election is conducted or closer than 100 feet from the entrance to the building."

Union Settles Religious Discrimination Claims with Western Pennsylvania Teacher

Facing religious discrimination charges, the Pa. State Educ. Ass'n begrudgingly agreed May 14 to honor the right of a school teacher in Armstrong, Pa., to refrain from paying dues to the union because the organization's social advocacy violated his religious convictions. Carl C. Glock, III, a practicing Christian, objected to association with the Armstrong Educ. Ass'n and its affiliates, the PSEA, and Nat'l Educ. Ass'n, because of their support of resolutions calling for special legal protections for homosexuality, abdicating parental responsibility, and criticizing the practice of home schooling.

After filing charges at the Equal Employment Opportunity Comm'n, Glock's attorney, provided by the Nat'l Right to Work Legal Def. Fdn., helped persuade the union hierarchy to halt its discrimination by allowing Glock to donate his monthly agency fee to the W. Pa. Sch. for the Blind, rather than funding the AEA union and its affiliates.

EEOC Threatens Union With Prosecution

In response to religious discrimination charges brought by Ohio teacher Dennis Robey, the Equal Employment Opportunity Comm'n threatens to prosecute the Nat'l Educ. Ass'n on May 20, if the union does not  stop forcing teachers to endure annually a burdensome and invasive process before respecting their religious objections to union affiliation. With the help of Nat'l Right to Work Legal Def. Fdn. attorneys, Robey brought charges against NEA and its local affiliates after they refused to honor his religious objection to supporting the union because it promotes pro-abortion, pro-homosexuality positions and constantly attempts to interfere with parental rights.

"The NEA union's illegal scheme is intended to force teachers of faith to shut up and pay up," said NRTWLDF vice president Stefan Gleason. "The EEOC's action further  underscores that the nation's largest teacher union is systematically persecuting people of faith."

Davis, Ansara Sentenced; Pay $1,345,000 in Restitution

The UCU has now learned that the two last unaccounted for defendants in the Teamsters money-laundering scandal were sentenced in Mar. 2002, at two hush hush court hearings, which that have gone unreported by major daily newspapers. When the UCU previously reported that scandal figure Jere Nash was sentenced on Apr. 9, it incorrectly reported that the two other defendants who pled guilty with Nash, had not yet been sentenced. Both were sentenced some 54 months after they pled guilty on Sept. 18, 1997. The three engaged in a series of schemes which led to the embezzlement of some $885,000 from the Int'l Bhd. of Teamsters and to $538,100 in illegal campaign contributions to the failed 1996 reelection campaign of expelled IBT president Ron Carey.

Trusteeship Illegal: $400,000 Punitive Award Upheld

The U.S. Court of Appeals for the Sixth Circuit upheld a jury's $400,000 punitive damages award against the United Steelworkers of Am. on Apr. 18. The court ruled that USWA unlawfully imposed a trusteeship and removed the officers of Local 5644 in Toronto, Ohio. Further, the court held that the district court properly assessed compensatory damages of $9,406 against USWA plus agreed with U.S. Dist. Judge Algenon L. Marbley (S.D. Ohio, Clinton) that USWA's actions were sufficiently "reprehensible" to warrant the jury's large punitive award. Allegedly, the plaintiffs, Local 5644 officers Charles Argentine, Clarence Wingo, and John Gooch, were removed to silence their opposition to a USWA-negotiated collective bargaining agreement.

Indicted Boss: My Attorney Said It Was Okay

Union boss Jacob "Jake" West, who spent thousands on personal meals, liquor, and golf trips, is claiming he did so only because his attorney said such expenditures were legitimate union expenses. That was the argument of West's new attorney, Michele Roberts, at a May 7 pretrial hearing before U.S. Dist. Judge Thomas F. Hogan (D.D.C., Reagan). West, ex-president  and  current president emeritus of the Int'l Ass'n of Iron Workers, allegedly embezzled some $50,000 from the Washington, D.C., based union during his 12 years as president. Roberts was previewing arguments that may be used in West's trial, which is scheduled for this summer.

Ullico Board on Defensive; Fashions an "Investigation"

The scandal-scarred board of Ullico, Inc., appointed labor-friendly ex-Ill. Gov. James R. Thompson (R) Apr. 29 to "review" the insider trading scheme that allowed some directors of the union-dominated insurance company to make hundreds of thousands in tainted profits. To see just how labor-friendly, visit http://www.ipsn.org/ullico/thompson_ullico.htm, for a picture from when Thompson was governor. It shows Thompson with Robert A. Georgine, now the Ullico president, who helped select Thompson for the lucrative investigatory job and who Thompson is supposed to be investigating. Also pictured is Angelo Fosco. The deceased Fosco was president, as was his father, of the Laborers' Int'l Union of N. Am from 1975-1993. The government's draft 1994 racketeering suit that led to a quasi-government takeover of LIUNA, stated that Fosco "was an associate of the Chicago [La Costa Nostra] family" and accused him of racketeering acts related to extortion of LIUNA members. Also in the picture is deceased plumbers and AFL-CIO boss Edward Brabec.

Boss Stole $52,000 from Illinois Local

John M. Cornwell pled guilty Apr. 29 to one count of union embezzlement and agreed to pay restitution of $52,009.33. Cornwell was financial secretary-treasurer for Sheet Metal Workers Int'l Ass'n Local 479 in Peoria, Ill., from Jan. 1998 to Feb. 2001. During the plea hearing in open court, he admitted to converting more than $50,000 in local funds to his personal use from Dec. 18, 1998 to Jan. 20, 2001.

Cornwell confessed that he wrote and negotiated some 62 unauthorized Local 479 checks to himself and to his wife. He signed both his name and Local 479 president Sharon Ball's name to the checks without Ball's knowledge or permission. The U.S. Atty's Office for the Cent. Dist. of Ill. told the UCU that Cornwell spent the funds on routine living expenses. U.S. Dist. Judge Joe B. McDade (C.D. Ill., G.H.W. Bush) scheduled sentencing for Aug. 23. Cornwell currently a resident of Lenoir City, Tenn. [USAO C.D. Ill. 4/30/02; DOL 4/29/02]

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