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.

Denver Boss Ordered to Pay $18,000 in Restitution

U.S. Dist. Judge Lewis T. Babcock (D. Colo., Reagan) sentenced union embezzler Bobby R. Putnam Apr. 23 to five years probation, including six months in home detention with electronic monitoring, and was ordered to pay $18,026.95 in restitution. Putnam, ex-secretary-treasurer of Communications Workers of Am. Local 14708 (a.k.a., Denver Mailers Union No. 8) in Denver, was charged Oct. 31 in a 40-count indictment with embezzling $7,808.26 and falsifying union
records. He later pled guilty. The reason for the $10,218.69 difference between the indictment and the restitution amounts was unavailable.

Illinois Boss Pleads Guilty to Embezzling $13,000

Wesley J. Sharp, ex-financial secretary-treasurer of Paper, Allied-Indus., Chem. & Energy Workers Int'l Union Local 647 in Des Plaines, Ill., pled guilty May 6 to a one-count of embezzling $13,062.86 in union funds. According to the plea agreement, Sharp wrote 53 unauthorized checks on the local's checking account between Mar. 1, 1996 and Dec. 29, 1997 totaling $13,062.86. Each check required two signatures of union officers.  On 49 checks, Sharp forged the signature of a second  union officer before negotiating the check. On the other four checks, he simply left off the second signature but was still able to cash the check. He made all the checks payable to himself and converted the union's funds to his personal use.

Of the embezzled amount, $9,362.86 remains outstanding. Sharp agreed to reimburse $5,000 to Local 647's corruption insurance company, Fidelity & Deposit Co. of Md. He also agreed to make further restitution of $4,362.86 to Local 647.  U.S. Dist. Judge William J. Hibbler (N.D. Ill., Clinton) set sentencing for July 29. [USAO N.D. Ill. 5/9/02; DOL 5/6/02]

Magistrate in Florida Embezzlement Case Rules She Has No Impermissible Conflict

As previously reported, over the Dep't of Justice' strenuous objections, U.S. Magis. Judge Linnea R. Johnson (S.D. Fla.) ruled in Mar. 2002 that ex-U.S. Atty. Thomas E. Scott's prior government service did not create a conflict of interest that would bar him from representing indicted union boss Walter J. "Buster"  Browne. Johnson allowed Scott to represent Browne in his upcoming criminal trial on racketeering and embezzlement charges. 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.

LMRDA Victory for Ex-Kansas City Boss

The U.S. Court of Appeals for the Eighth Cir. ruled Apr. 24 that an ex-officer of Int'l Bhd. of Painters & Allied Trades Dist. Council 3 who won a Nat'l Labor Relations Bd. action against his union over his job loss can additionally bring a civil action against the union and its officers alleging violations of the the Labor Mgmt. Reporting & Disclosure Act of 1959. Reversing the U.S. Dist. Court for the W. Dist. of Mo.'s dismissal of Lonnie Gurley's LMRDA action on the ground that he had already been "made whole" by the NLRB's order that the union restore his lost earnings and benefits, the Eighth Cir., in an opinion by U.S. Cir. Judge Gerald W. Heaney (8th Cir., Johnson), held that Gurley did not have an "adequate opportunity" to litigate his LMRDA claim before the NLRB. The agency lacked jurisdiction over the claim, the court found, and was unable to award the full range of remedies available to a district court under the LMRDA.

Ohio Unionist Indicted on Pipebomb and Counterfeiting Charges

The State of Utah's Third Dist. Court has rejected union lawyers' attempts to dismiss a counter suit, brought by employees represented by Nat'l Right to Work Legal Def. Fdn. attorneys, which, as a result, calls into question the constitutionality of the fundamental union privilege known as monopoly bargaining.  In his ruling issued the week of April 29, Utah Judge Stephen L. Henriod allowed the employees to defend the constitutionality of Utah's Voluntary Contributions Act (VCA), a law intending to give union members the right to withhold union dues spent for political activities.  If the court refuses to uphold the VCA as constitutional, the court will consider the employees alternative argument that monopoly bargaining power--held in many locales by union  officials of the Utah Public Employees' Ass'n (UPEA) and Utah Education Association (UEA)--is unconstitutional.

Judge Allows ADA Suit Against Union to Proceed

U.S. Dist. Judge George Z. Singa (D. Me., Clinton) held Apr. 23 that an ex-paper mill employee can go forward with an Americans with Disabilities Act claim against Paper, Allied-Indus., Chem. & Energy Workers Int'l Union Local 1188 in Bucksport, Me., because of the local's "deliberate acquiescence" with the potentially illegal actions of the employer.  The U.S. Court of Appeals for the First Cir. has not yet considered whether a claim for deliberate acquiescence can be brought under either the ADA,  said Singa; but his decision to allow Joseph Greenier to proceed with an ADA claim against the union is "recognition that it is a plausible legal theory worthy of further factual development."

Boss Admits Stealing $271,800 Ontario Local

It's hard for Gordon Walsh to even consider forgiving his longtime friend, a man who turned against him and stole more than C$270,000 from the union he was heading. Walsh, president of the Canadian Union of Public Employees Local 32 and ex-president of Local 68, sat in the Ontario Court of Justice in Kitchener, Ontario, Apr. 26 as Harvey Holst, ex-Local 68 secretary-treasurer, pled guilty to pocketing a total of C$271,800 in union funds from Jan. 1989 to May 2000. The missing money was noticed in May 2000 after Local 68 amalgamated with two other unions representing outside municipal workers. Holst, who secretary-treasurer for 12 years, was arrested in July 2001.

Seven Bosses, Contractors Indicted in $10 Million Fraud

A Manhattan developer and several union bosses defrauded the N.Y. Metro. Transp. Auth. (i.e., taxpayers) and a landlord of more than $10 million by billing for phantom workers at inflated rates, according to an indictment unsealed Apr. 18 in U.S. Dist. Court in Brooklyn. Seven people, including developer Frederick Contini and Int'l Union of Operating Eng'rs Local 14 shop steward Morris "Mickey" or "Fat Boy" DiMinno, were charged in a 55-count fraud and money laundering indictment. Contini allegedly conspired with DiMinno and other union bosses to set up a shell company that billed MTA and the landlord, Zar Realty Mgmt., for non-existent elevator operators at MTA's new headquarters a 2 Broadway in Manhattan.

Cleveland Boss Gets 18 Months for $144,900 Theft

U.S. Dist. Judge Donald Nugent (N.D. Ohio, Clinton) sentenced Richard Adams Apr. 19 to 18 months in federal prison for stealing $144,939.46 in union funds and donations, including money collected for the family of a slain police officer. Adams, who was the treasurer of Int'l Ass'n of Fire Fighters Local 639 in Parma, Ohio, for 13 years, often told members that their money was safe and earning 13% interest in bank accounts. Instead, Adams looted the local's accounts for his own purposes and left the local $12,000 in debt when he was ousted in Dec. 2000.

Local 639 president Nick Kashi told Nugent that the local could have fulfilled dreams but for Adams. "Would we own a union hall today to hold our meetings, children's Christmas parties and other union-sponsored events to raise money for local charities and public relations events? The possibilities are almost endless. We will never know where our union could have been today," he said. Later Nugent told Adams, "The members will never be made whole. They had plans. They thought things were being done. This is really a black eye on the firefighters, even though they didn't have anything to do with it."

Ohio Boss Get 21 Months for $130,500 Gambling-Related Theft

After confessing that casino gambling on the Ohio River and in Las Vegas as well as sport wagering led him to embezzle $130,507 from the United Union of Roofers, Waterproofers & Allied Workers Local 86 in Columbus, Ohio, Robert D. King, Jr.,  was sentenced Apr. 17 to 21 months imprisonment and three years probation. He stole $88,757 from the local plus $41,750 from local's benefit funds. He was ordered to make full restitution. He pled guilty to two embezzlement counts Dec. 11 before U.S. Dist. Judge George C. Smith (S.D. Ohio, Reagan). King stole the money from Aug. 1999 to Jan. 2001 by writing himself checks from Local 86's general and apprentice-training accounts.

King served as the local's business manager and financial secretary for six years until the union ousted him in Jan. 2001. Local officials became suspicious because King's sloppy record-keeping. The int'l union audited the books and confronted King with numerous discrepancies. The case was then turned over to the Dep't of Labor. [DOL 4/17/02; Columbus Dispatch 12/12/01]

Feds Indict Minneapolis City Councilman & Union Boss

Stolen union money paid for plumbing work at property owned by Minneapolis City Councilman Joe Biernat (DFL), according to federal charges against Biernat, a boss of United Ass'n of Plumbers & Pipe Fitters Local 15 in Minneapolis, and the boss' brother. The indictments unsealed Apr. 18 allege that in 1999, Thomas J. Martin, ex-Local 15 business agent used $2,700 in union funds to pay for Biernat's plumbing work at the same time the council member and his colleagues were approving Martin's appointment to the city board that licenses plumbers. The specific charge is conspiracy to extort under color of official right in violation of 18 U.S.C. § 1951 (Hobbs Act). Biernat also was charged with making a false statement to the FBI, aiding and abetting union embezzlement, and mail fraud.

Feds Probing Illinois Agencies & Local

Federal prosecutors in Springfield, Ill., have reportedly opened a criminal investigation into a 2001 labor dispute at E. Ill. Univ., and have subpoenaed records from the office of Ill. House Speaker Michael Madigan (D), the Ill. Bd. of Higher Educ., the Ill. Educ. Labor Relations Bd., the Ill. Dep't of Labor, and others. Reportedly, the subpoenas were delivered to the IBHE only a day after the Mar. 19, 2002, primary (in which Madigan's daughter Lisa, also a state senator, won the Democratic nomination for Ill. Atty. Gen.) and sought documents relating to negotiations between EIU, located in Charleston, Ill., and Int'l Union of Operating Eng'rs  Local 399 in Chicago. The subpoenas reportedly sought materials related to the role any state employee might have played concerning a new labor contract. Reportedly, the federal grand jury in the case is also currently taking testimony from a number of individuals.

Judge Upholds Ban of Hoffa Ally

On Apr. 18, U.S. Dist. Judge Loretta A. Preska (S.D.N.Y., G.H.W. Bush) upheld the lifetime union membership ban imposed on Michael C. Bane, ex-president of Int’l Bhd. of Teamsters Local 614 in Pontiac, Mich. Preska, who oversees a 1989 consent decree which governs IBT, denied Bane’s appeal of the decision of IBT’s court-supervised Indep. Rev. Bd., which is charged with rooting out corruption and organized crime influence within IBT. In July 2001, IRB found that Bane had intentionally misled an IRB investigation of Bane’s association with organized crime figures. As result, IRB found Bane should be permanently barred from membership in any position in the IBT or any IBT-affiliated entity

Government Takes Over Corrupt New Jersey Local

U.S. Dist. Judge Garrett M. Brown, Jr. (D.N.J., Reagan) Apr. 17 appointed a monitor to purge organized crime influence from Hotel Employees & Restaurant Employees Int'l Union Local 69 in Secaucus, N.J.  Brown signed a consent order giving monitor Kurt Muellenberg broad powers to oversee Local 69. Muellenberg was the monitor over the int'l HERE when it was under DOJ control from 1995-2000. HERE recently removed all of Local 69 bosses and installed a trusteeship, alleging that some $642,000 was wrongfully diverted.

Prosecutors now allege that Local 69 has been influenced by the Genovese crime family for at least 15 years. Prosecutors filed a civil complaint under the Racketeer Influenced & Corrupt Orgs. Act that said the local's bosses had embezzled funds, extorted money from an employer, and "fostered a climate of intimidation." Asst. U.S. Atty. Michael Chagares said, "The purposes of this action are to rid Local 69 of corruption and organized crime influence, and to return this union back to its honest, hard-working members."

Louisiana Boss Gets Year for Embezzling $91,400

U.S. Dist. Judge Tucker L. Melançon (W.D. La., Clinton) sentenced Willie R. Walker, ex-secretary-treasurer of the Int'l Longshoremen's Ass'n Local 1349 in Lake Charles, La., Apr. 18 to one year and one day in federal prison for a $91,423.11 union embezzlement. Walker pled guilty Jan. 25 to one-count of union embezzlement after being indicted Nov. 16 on the one embezzlement count and one count of falsifying union records. Melançon also order the ex-boss to pay $68,423.11 in outstanding restitution and three years on supervised release after prison.  .

Convicted Illinois Embezzler Seeks to Withdraw Guilty Plea; Judge Postpones Jail Term

Confessed union and benefit fund embezzler, Patrick Stiles, was due to surrender Apr. 23 to serve a two year prison term, but Kane County (Ill.) Circuit Judge Donald Hudson agreed Apr. 22 to let Stiles stay free on bond until his motion to allow the ex-boss to withdraw his guilty plea  is considered. The motion seeks to have his conviction vacated so the case can go to trial, said defense attorney Philip Collins III. "A lot of innocent people plead guilty, oftentimes when they could show reasonable doubt, and we believe there's reasonable doubt here," said Collins, who replaced Fred Morelli Jr. as Stiles' attorney. Asst. Kane County State's Atty. Joseph Cullen said his office would oppose Stiles' attempt to withdraw his plea. A hearing on the motion has yet to be scheduled.

Forgery, $36,000 Larceny Garners 3 Years for Connecticut Bookkeeper

Darrell Dove, an ex-bookkeeper for a New Britain, Conn.,  city employees union began a three-year prison term Apr. 12 for embezzling $36,631. Dove's sentence could have been lighter if he had paid back money to Am. Fed'n of State, County & Mun. Employees Local 1303, where he worked until his arrest in 2000 on state larceny and forgery charges. But Dove had paid nothing back. Conn. Superior Court Judge Howard Owens said that Dove lacks both the resources and the will to pay.

City police said Dove embezzled the money from the Local 1303's office from June 1999 to Mar. 2000 by forging signatures of the union president and vice president on union checks and then cashing them. Dove was caught because he made the stolen checks cashable to him. The scheme was uncovered during a routine audit of the local in 2000.

Connecticut Boss Used Union to Pay for $15,900 of Personal Expenses on Government Credit Card

U.S. Dist. Judge Robert N. Chatigny (D. Conn., Clinton) sentenced Ralph Varnado, ex-president of Am. Fed'n of Gov't Employees Local 1674 in West Haven, Conn., Apr. 12 to five years probation and six months of home confinement and was ordered to make total restitution of $15,973.99. He pled guilty Sept. 17 to one count of violating 18 U.S.C. § 641, embezzlement of public money. Varnado, also an employee of a Veteran's Affairs Med. Ctr., confessed that on numerous occasion in 1999 and 2000 he misused used his government-issued credit card to pay for personal expenses. Further, Varnado abused his position of trust as local president by embezzling over $15,000 from the local's account to cover these credit card payments, as well as other personal expenses. At sentencing, Chatigny state that there was a "strong argument" for imposing a prison sentence given Varnado's repeated acts of embezzlement over a period of time. But Chatigny concluded that sentence of probation was appropriate to allow Varnado to remain employed and meet his restitution obligations. [USAO D. Conn. 4/12/02; DOL 4/12/02]

Court Orders California Union to Pay $300,000 in Illegal Seized Union Dues

U.S. Dist. Judge Garland E. Burrell, Jr. (E.D. Cal., G.H.W. Bush) ordered the Prof'l Eng'rs in Cal. Gov't to return nearly $300,000 to state employees who were  illegally forced to pay for lobbying and other union political activities.  Burrell ruled that the union had seized almost $100 per employee over a seven-month period in 1999 and ordered  the union to pay nominal and compensatory damages to 3,200 non-union employees, totaling approximately  $298,000.

"Today's ruling shows that California's union officials cannot get away with ripping off the working men and women of this state," said Stefan Gleason, vice president of the Nat'l Right to Work Legal Def. Fdn., which provided free legal aid to the employees.

Miami Unions Indicted in Drug Smuggling Case

Federal prosecutors announced Mar. 29 the unsealing of an indictment charging Emmett Martin, Kenneth Johnson, Willie Lloyd, Bradley Pearson and Maurice Johnson with the following: 1) conspiracy to import cocaine; 2) conspiracy to possess with intent to distribute cocaine; 3) four counts of attempted possession with the intent to distribute cocaine; 4) four counts of attempt to import cocaine into the United States; and 5) one count of carrying a firearm in relation to a drug trafficking crime.  Emmett Martin, Kenneth Johnson, Willie Lloyd, and Bradley Pearson are members of the Int’l Longshoremen Ass’n. If convicted, each defendant faces possible terms of life imprisonment and up to $4 million in fines.

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