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.

Confirmation of Convicted Union Boss on Hold in IL Senate

Two months after Illinois Gov. Rod Blagojevich nominated him for Director of the state labor department, Michael Fenger's confirmation is on hold in the state Senate.  But that hasn't stopped the Rockford-area union boss, convicted in 1997 of slashing the tires of a non-union truck, from setting up shop as the acting director.
    
Fenger was the business manager of Intl. Bhd. Of Elec. Wrkrs. Local 364 when several militants surrounded the truck of a non-union worker as he tried to leave a Wal-Mart construction site.  With the truck stopped, two police officers saw Fenger use a five-in. awl to puncture all four tires. Sterling police were videotaping the protest and recorded him puncturing at least one of them.  Fenger denied any involvement in the tire-slashing, but later pled guilty to two misdemeanor charges of property damage and reckless conduct.  
    

Ex-Atlanta Apprentice Coordinator Confesses to Embezzling from Training Fund

Tony Mancel Davis pled guilty on March 18 to embezzling nearly $40,000 from a union apprentice training fund in an Atlanta federal court.  The fund was administered by Local 48 of the Int'l Assn. of Heat & Frost Insulators & Asbestos Workers.

From June 1998 to October 2001, David used his position as coordinator of the fund to reimburse his food, clothing and travel expenses of $8,310, and stealing $31,647 in illegal salary advances, duplicated salary and fraudulent overtime.  The fund has about 200 participants and $56,000 in assets.

David is scheduled to be sentenced in the U.S. District Court for Northern Ga. on June 2.  He faces a maximum prison sentence of five years on each of the two embezzlement counts and $250,000 in fines.  As part of his plea agreement, Davis agreed to repay the full amount he embezzled.  David was charged on Feb. 24 after an investigation by the Atlanta branch of the U.S. Dept. of Labor's Employee Benefits Security Administration. [EBSA 3/26/03]


Granddaughter of SD Union Founder Sentenced for Embezzlement

More Allegations Surface of Union Featherbedding on Boston Film Sets

A fed. grand jury is investigating new allegations that bosses of a Boston Teamsters union forced the hiring of no-show drivers on the set of "Mystic River," directed by Clint Eastwood.  According to the Boston Globe, the grand jury in Worcester summoned Keith Dillon, a Teamster from Los Angeles who has worked on previous Eastwood films, to testify about his dealings with Local 25 of the Intl. Bhd. of Teamsters in Boston.

"Mystic River" was the first feature film to be shot in Mass. in two years.  Local 25 has been under investigation since 2000 for allegedly extorting job favors for organized crime associates on the sets of such films as "The Perfect Storm," "The Cider House Rules," and "Good Will Hunting."  On the set of "What's the Worst that Could Happen," Local 25 boss George Cashman approved the beating of a female snack truck driver who refused to turn her concession contract over to a Teamster member.

Atlanta Workers Sue Hierarchy for Violating Free Speech Rights

Two dissidents from Atlanta Local 387 sued the Intl. Assn. of Iron Wrkrs. on Feb. 25 for using union discipline to squash their efforts to ferret out corruption in the troubled Local.  Carl Bishop has been a union member for 20 years, and a member of Local 387 for seven.  Oscar Ingram has been a trustee of the Local since Feb. 2000.

The two have joined other members in trying to get information about the Local's finances for years.  In April of last year, Steven Jones, the Local's ex-secy. treasurer, was sentenced for embezzling $90,000 from the Local and an apprenticeship fund.  Throughout the Spring, Bishop and Ingram sought to verify that Local bus. mgr. Hugh Dryden Jr. had reimbursed the Local for personal airfare they believed he had charged to the union credit card.  They also tried to obtain records of Dryden's cell phone usage, paid for by Local 387.

Bookkeeper Fired, Accused of Stealing over $400 K from MI Union

Debra Lewis, an 18-year employee of the Mich. Nurses Assn. until her recent firing, as admitted to embezzling at least $418,000 from the union.  She has not been charged, but is cooperating with an investigation by the Meridian Township Police Dept.

Although Lewis, as the state union's office mgr., has always been responsible for paying the union's bills, her apparent theft was only discovered at the end of February, when auditors began looking for some missing cancelled checks.  According to the Union's 2001 LM-2 disclosure form filed with the U.S. Dept. of Labor, an audit failed to uncover the missing funds.  "It's shocking," said union spokeswoman Carol Feuss.  "We are trying to figure out how it happened and how we can prevent it from happening again."  Lewis made $47,474 in 2001.

Lewis's attny. has contacted the Ingham County prosecutor's ofc.  According to the attorney, Lewis is remorseful, and is aware that she faces a decade in prison and could be required to fully repay the stolen funds. [Lansing State Journal 3/11/03, WILX-TV 3/12/03]

Iowa Officials Sentenced for Embezzlement

Two frmr. union officials have been sentenced for working together to embezzle more than $120,000 between them from Des Moines Local 177 of the Laborers Intl. Union of N. Amer.  On Feb. 28, frmr. president Fred T. Risius and ex-VP Henry Jannenga were sentenced, followed by local member Norval Craig Michael on March 6.

Risius was sentenced to 15 mos. in prison, followed by three yrs. of supervised release, and was ordered to repay the union for the $100,000 he embezzled from Local 177 through payments to, and kickbacks from, a phony construction firm, payments to fictitious picketers, and personal purchases on the union credit card.

Jannenga received three months in prison, and was ordered to repay the $22,500 he embezzled from the Iowa State Laborers' Training Fund.  Michael was sentenced to five yrs. probation, and was ordered to join with Risius in repaying $16,900 he received from Risius, ostensibly for materials Michael sold to the union but which he and Risius split between themselves. [U.S. Ofc of Labor-Mgmt. Standards 3/13/03]

Ex-Bus. Agent Sentenced for Embezzling Strike Funds in Penn. Fed. Ct.

Sr. U.S. Dist. Judge William Standish (W.D. Pa., Reagan) sentenced John Dorrier on Feb. 28 to a year in prison and ordered him to repay $56,195 he stole from Local 66 of the Intl. Union of Operating Engineers.  Dorrier must begin paying $1,000 a month in restitution after his release.

From 1993 through 1998, Dorrier cashed $137,645 in vouchers for fictitious picketers, of which he kept $41,795 for himself while he paid the rest to relatives and friends and to some of the supposed "picketers" to keep them silent after they received IRS tax forms for their false picketing payments.  Dorrier pled guilty on Nov. 14 last year to embezzlement, forgery and tax evasion after a joint investigation by the Pittsburgh branch of the U.S. Ofc. of Labor-Mgmt. Standards and the Criminal Investigative Div. of the IRS. [OLMS 3/11/03, Butler Eagle 3/4/03]

Ex-Secy.-Treasurer Confesses to Bank Fraud in Ohio Federal Court

Thomas M. Payne pled guilty on Feb. 28 to one count of bank fraud (18 U.S.C., Sec. 1344) in the U.S. Dist. Ct. for the Southern Dist. of Ohio, Western Division.  From March 1998 until his resignation on Sept. 1, 2000, Payne was Secy.-Treasurer of Local 1938 of the Amer. Fedtn. of Govt. Employees.  On nine occasions, he endorsed dues checks from members, then deposited less than the full amount of the checks at the Star Bank in South Point.

Payne also forged the signature of the Local president on checks made payable to himself.  To conceal the theft, he made false entries in the check stubs and used cancelled checks to create false duplicates of the checks he had cashed for himself.  In the plea agreement, the U.S. Attny. and Payne agreed that the total amount he fraudulently obtained was $12,184. [U.S.A.O. S.D. OH, OLMS 3/13/03]

Frmr. NJ Treasurer Admits Stealing $13,550

Hilda Battle frmr. treasurer of Local 351 of the Policeman's Benevolent Assn. in Camden, NJ, admitted writing six unauthorized checks for $13,550 on March 3.  The Assn. represents Camden County's correction officers.  It is not known why she stole the funds.  In pleading guilty, Battle agreed to resign her 14-yr. job at the county jail and repay the Local.  She will be sentenced on April 14 [WPVI-TV 3/4/03]


W. Va. Computer Specialist Confesses to Union Embezzlement
Julia Mynes pled guilty to union embezzlement before U.S. Dist. Judge Joseph Goodwin (S.D. WV, Clinton) on March 10.  Mynes used her access to the computerized check-writing system of United Steelwrkrs. Local 14614 to cash $4,001 in union checks between Dec. 2000 and Jan. 2001.  She is scheduled to be sentenced on June 2. [Charleston Gazette 3/12/03]

Exec. Council Meets in Hotel Boondoggle Fed with Union Pensions

What a tangled web they weave -- the AFL-CIO's Executive Council met the last week of Feb. in a Florida hotel that has become a boondoggle funded with union pensions.  And this boondoggle was made possible by the union-pension-owned insurance company now under criminal investigation for insider stock deals that enriched the union presidents sitting on its Board.

In September of last year, the U.S. Dept. of Labor asked a federal judge in Ft. Lauderdale to remove five trustees of the Plumbers & Pipefitters national pension fund.  In its suit, the labor dept. laid out a pattern of poor planning, financial favoritism, and cost overruns surrounding the Diplomat Hotel in Hollywood, Florida, where the Executive Council met.

One of the officials whom Labor Secretary Elaine Chao is seeking to remove is Plumbers union president Martin Maddaloni, already under investigation for participating in insider stock trades involving the pension-funded Ullico, formerly known as the Union Labor Life Insurance Company.  Maddaloni is one of many union presidents who sit on the Ullico board.

Mob Control of NYC Construction Sites Alleged in Indictment: WTC Possibly Involved

A massive indictment alleging mob control of two engineers' unions and construction sites throughout NYC was unsealed on Feb. 26. Forty-two men -- members of the Genovese and Colombo crime families and officials of Locals 14 and 15 of the Intl. Union of Operating Engineers -- are charged with stealing at least $3.6 million from 1997 until this year.

Not mentioned in yesterday's indictments are allegations that the collection of wages for no-show jobs and mob payments extended even to the clean-up at the fallen World Trade Center. At a press conference announcing the arrests, law enforcement officials would not say if those allegations were true or false. But James Comey, U.S. Attny. for the Sou. Dist. of NY, promised that any evidence of such a scheme would be "pursued very aggressively."

The investigation was spearheaded by the NY State Organized Crime Task Force and the NYCPD, while the indictments will be prosecuted by the U.S. Attnys. for the Southern and Eastern districts of NY.

NY Corruption Hearing Becomes Rally for Teamster Bosses

A Feb. 22 hearing to consider extending the Intl. Bhd. of Teamsters' trusteeship of Local 456 turned into a raucous rally in support of two brothers accused of nepotism, bribery and financial mismanagement.

In January, IBT president James P. Hoffa responded to a finding by the fed. Independent Rev. Bd (IRB) that Edward and Bernard Doyle had mismanaged the financial affairs of Local 456 in Elmsford by imposing a temporary trusteeship. The three-member IBT panel arrived in Elmsford on the 22nd to consider an IBT takeover of the Local. Over 1,000 of the Doyles' supporters met them, warmed up by State Sen. Nicholas Spano (R-Yonkers), who urged them to support the Doyles. To hoots and hollers, the panel entered a union hall draped with a banner saying, "Say no to the IRB and Trusteeship."

Local president Bernard Doyle, accused by the IRB of arbitrarily choosing union members and misusing a union credit card for personal expenses, addressed the hearing from the crowd of supporters. "[T]hey [the IRB] knock the Doyle name all over," he said: "I'm proud to be a DoyleÖObviously we did pretty well," Doyle said to repeated cheers and ovations.

Boss Coia Passes "Personal Responsibility" Course, Gets Back Law License

The Rhode Island Sup. Ct., last month, reinstated the license to practice law of Arthur Coia, who was forced to resign as boss of the Laborers Intl. Union of N. Amer. (LIUNA) in 1999.  Thus, the man who was repeatedly accused of ties to organized crime by the U.S. Dept. of Justice, and pled guilty to tax evasion, has now come full circle.  He has retained his $250,000 salary as "general president emeritus" of LIUNA, and is free again to practice law in RI.

Coia pled guilty on Jan. 31, 2000, to defrauding RI taxpayers of nearly $100,000 in taxes on three Ferraris he purchased from the vendor supplying vehicles to LIUNA executives.  In one instance, Coia paid $215,000 for a vintage car, but used an invoice claiming that the price was only $2,160.  Under a sweetheart deal negotiated with the Clinton-Reno justice dept., Coia resigned from all positions in the LIUNA hierarchy, and agreed to a two-year suspension of his law license.  But Coia could have permanently disbarred, and by being given the emeritus title, he retained his full union salary.

Convicted Hawaii Union Chief Claims $1 million in Unused Leave

Former United Public Workers boss Gary Rodrigues, convicted of over 100 counts of embezzlement and fraud then kicked out of his office, has now sued his replacement, claiming 37 years of unused leave.

Rodrigues and his daughter were convicted in a Hawaii federal court on Nov. 19 of last year. Two days later, the Amer. Fedtn. of State, County & Municipal Employees (AFSCME) announced Rodrigues' suspension. But Rodrigues showed up at the UPW's Honolulu HQ the next day and convened a bd. meeting that rejected AFSCME's choice of a temporary director and installed Rodrigues' choice instead. Finally, on Dec. 5, a delegation arrived from Washington, D.C. to place the UPW under direct AFSCME control.

Rodrigues now claims that he "retired" from the UPW on Nov. 22, and is entitled to nearly $1 million of unused sick leave and vacation, which he says temporary director Peter Trask is denying him. [Honolulu Advertiser 2/14/03]

IN Dem Chief Embroiled in Possible Misuse of Pension Funds Resigns

Peter J. Manous, who took $10,000 to help sell property to a union pension fund that has gone undeveloped, resigned as Chairman of the Democratic Party in Indiana on Feb. 12.

In June 1999, pension trustees with the United Bhd. of Carpenters paid $600 million for the 640-acre Coffee Creek Center in Chesterton. Lake Erie Land Co., a subsidiary of NiSource Inc., sold the property and paid $10,000 in legal fees for what spokesman Mark Friedlander claimed was routine work to Manous. Governor Frank O'Bannon (D) gave the planned community a ringing endorsement. "This is the way we all should live as we continue forward to protect the environment," he said at its June 2001 dedication.

But the pension-owned property has become a boondoggle, with only a handful of houses and no commercial development. A federal indictment has reportedly been prepared, but has not yet been unsealed to the public. Manous's attny., Mark Rotert, said he had "no reason at all" to believe that Manous was named in the indictment. But he refused to say whether Manous had been called before the federal grand jury investigating the case. [Indianapolis Star 2/14/03]

WI Judge Throws Book at Convicted Embezzler

U.S. Dist. Judge Barbara Crabb (W.D. WI, Carter) rejected any leniency in sentencing Michael E. Koehler on Feb. 14 to 2 yrs., 1 month in prison, 3 yrs. supervised release, and full restitution of the $135,197 he embezzled from a Madison union. The frmr. financial secy. of Local 965 of the Intl. Bhd. of Electrical Wrkrs. pled guilty to taking unauthorized salary payments, and falsely claiming reimbursements for meal, mileage and meeting expenses.

Koehler pled guilty in exchange for the U.S. Attny's. recommendation of a reduced sentence. But Judge Crabb was angered by Koehler's statements to a pre-sentence investigator that frivolously denied relevant conduct that was the basis for the Oct. 24 information. Koehler was not being sentenced for mistakes, Judge Crabb told Koehler, but because "you cheated, you lied and you stole." [U.S.A.O. W.D. WI 2/14/03]

Frmr. Treasurer Pleads Guilty to Embezzlement in IL Fed. Ct.

On Feb. 20, 2003, in the U.S. Dist. Court for the Northern Dist. of Illinois, Anthony King, former treasurer of International Bhd. of Electrical Workers Local 533 in Berwyn, Illinois, pled guilty to embezzling $14,450 in union funds between May 1997 and June 1999 (a change of plea). King was charged on January 24, 2003, following an investigation by the Chicago branch of the U.S. Ofc. of Labor-Mgmt. Standards. [OLMS 2/27/03]


Intl. Union Takes Over NC Local Amid Charges of Mishandles Finances
With local members claiming $100,000 in mishandled finances and credit card charges, the Communications Wrkrs. of Amer. imposed a trusteeship on Local 3640 in Winston-Salem late in Feb. Formed only in 2000, the Local represents about 1,100 U.S. Airways ticket workers. A number of frmr. local officials said that members had complained repeatedly of rules violations and misappropriation of funds. But CWA spokeswoman Dina Beaumont simply referred to "officers who said they...could not sort out their problems themselves" and "other internal issues that made it difficult to move forward." [Winston-Salem Journal 2/25/03]

Ex-Treasurer Pleads Guilty to Embezzlement in Minn. Court

Cheryl Raas pled guilty on Feb. 14 to using her frmr. position as a union treasurer to write $10,800 in union checks to herself. According to a criminal complaint filed in the Ramsey County Court, two officials of Local 22 of the Amer. Fedtn. Of State, County & Municipal Employees (AFSCME) confronted Raas last July after they discovered that only $400 remained in the union's checking acct.

Raas admitted to the theft, claiming that she took the money to pay for cancer treatments. But Local officials said she never appeared sick or claimed any sick leave, and St. Paul police officers questioning her said that Raas was vague when asked about her health. The 11 checks police identified were paid to the owner of her apartment and a rental-car company. Ramsey County Dist. Judge David Higgs is scheduled to sentence Raas on March 3. [Minneapolis Star Tribune 2/15/03]

Labor Dept. Sues after Ullico Chief Ignores Subpoena

The U.S. Dept. of Labor sued Robert Georgine, president of the Ullico insurance company, on Feb. 12 after he ignored their subpoena for documents relating to the insider stock trades that netted Georgine and other union chiefs $6 million in profits. According to AP labor writer Leigh Strope, the DOL is seeking any documents relating to compensation, loans and stock transactions at Ullico involving Georgine, the frmr. head of the AFL-CIOs Bldg. & Construction Trades Dept.

Also at the top of the DOLs list is a report by frmr. IL gov. James Thompson on the stock deals, in which Ullico directors bought the union-pension-owned company stock in late 1999 at $54 a share  knowing that it would be hiked to $146 in 2000.  A year later, the same union directors voted to sell their $146 shares  knowing that Ullico stock would soon fall to $71. When the inside stock profit scheme became public knowledge last year, Georgine asked his old friend, frmr. gov. Thompson, to conduct an internal investigation.

Bush 2004 Budget Adds Funds to "Revitalize" Labor-Mgmt Standards Ofc.

Pres. George W. Bush, on Feb. 3, proposed adding $8.3 million and 75 new staffers to better protect union members rights and promote the financial accountability of union officials.

At a press conference announcing the Dept. of Labors proposed budget for fiscal year 2004, Deputy Secy. of Labor Cameron D. Findlay said that the Ofc. of Labor-Mgmt. Standards (OLMS) would receive an extra $6.1 million, along with the new staff, to improve the OLMS enforcement of the Labor-Mgmt. Reporting & Disclosure Act (LMRDA). Also known as the Landrum-Griffin Act, that 1959 law mandates free and fair local union elections, and requires union officials to annually report the finances of their unions to DOL.

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