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.

Boss Can't Make Bail; Sits in Illinois County Jail

An ex-firefighter union boss, accused of stealing some $350,000 from two union funds, could not come up with the $100,000 needed to make his bail on Oct. 30. So after a judge declined Patrick Stiles' request for a lower bail, the boss was taken to the county jail.  Kane County (Ill.) Associate Circuit Court Judge Robbin Stuckert subsequently reset bail at $50,000 on Oct. 31, but Stiles still remained in the Kane County Correctional Ctr. Stuckert declined a request by Stiles' attorney, Fred M. Morelli Jr., to release him on his own recognizance.

Stiles turned himself in after he was indicted on four felony counts in connection with the theft of more than $100,000 from Aurora Firefighters Local 99 and more than $10,000 from the Aurora Firefighters Relief Ass'n. At the bond hearing, Aurora Police investigator Mike Tierney said a 9-month probe found that Stiles stole about $350,000 from both groups. He pled not guilty. Circuit Court Judge Timothy Q. Sheldon set a Nov. 16 status hearing.

Michigan Treasurer Gets 18 Months for $152,700 Theft

U.S. Dist. Judge David M. Lawson (E.D. Mich., Clinton) sentenced union embezzler Tamara Miller Oct. 22 to 18 months in federal prison and ordered her to pay $152,724 in restitution. The ex-treasurer stole the funds from United Ass'n of Plumbers & Pipe Fitters Local 85 in Saginaw, Mich. Miller pled guilty on June 29. Lawson also ordered Miller  to serve 36 months of supervised release after prison plus pay a $100 fee.

Boston Union Wants Secret Corruption Report Disclosed

The Board of the Mass. Bay Trans. Auth.'s Retirement Fund abruptly canceled its monthly meeting Oct. 19 after dozens of Boston Carmen's Union members invaded the session demanding the release of a report examining executive director John J. Gallahue Jr.'s acceptance of apparent kickbacks from a convicted racketeer. "The members paid for the report. We ought to be able to see what's in it," said John Clancy, an MBTA bus driver.

But the Board refused to allow a vote on the issue, which was fiercely debated for nearly two hours before several members left the meeting, said James E. Lydon, a Broad member and president of Carmen's Union Local 589. Lydon said it is time to end the secrecy in the $2 billion Fund's activities. "The whole place needs an enema," said Lydon. "We want full disclosure. No more secrets here."

DOL Wins New Elections at Virgin Islands Local

U.S. Dist. Court for the Virgin Islands approved a Stipulation of Settlement and Order Sept. 7 between the Dep't of Labor and United Steelworkers of Am. Local 8526. The agreement calls for Local 8526 to conduct new nominations and an election for all officer positions, under DOL's supervision. The new election must be held before to Mar. 14, 2002. DOL filed suit in Nov. 1997 seeking to overturn the local's Apr. 1997 election after an investigation by DOL's Office of Labor-Mgmt. Standards Gulf Coast Region established that the local failed to provide proper notice of election and that the union's meeting attendance requirement rendered all but 3% of the membership ineligible for office. [DOL 9/7/01]

California State Employee Blast SEIU, Move to Disaffiliate

The Cal. State Employees Ass'n announced Oct. 29 that it is seeking to end its affiliation with the Service Employees Int'l Union, arguing that recent SEIU's actions have violated the state employee union's rights. The disaffiliation is also considered the result an internal fight for control of the union. CSEA's Board of Directors voted in an Oct. 26 closed session to take legal action to disaffiliate and invalidate its 1988 affiliation agreement with SEIU. "SEIU's interference in association matters has proved very costly to our members," CSEA President Perry Kenny said. "[W]e resist this raid on our identity, our autonomy, and our resources by [SEIU]."

Pittsburgh Boss Loses Appeal to Expand LMRDA Title III Rights

The U.S. Court of Appeals for the Third Circuit ruled Sept. 17 that a former union business agent who was removed from his post after the Hotel Employees & Restaurant Employees Int'l Union came under federal supervision cannot seek monetary damages under the Labor-Mgmt. Reporting & Disclosure Act's trusteeship provision. LMRDA's trusteeship provision does not "allow a private cause of action for individual damages flowing from the termination of an appointed employee," the U.S. Circuit Judge Theodore A. McKee (3d Cir., Clinton) ruled in a case of first impression. Relief under that provision "must be sought on behalf of the local union organization and the entire membership must reap the benefits," the court said.

Philadelphia Trusteeship Upheld

U.S. Dist. Judge John R. Padova (E.D. Pa., H.W. Bush) held Oct. 12 that the trusteeship that the Int'l Bhd. of Teamsters imposed on Local 115 in Philadelphia following an internal union hearing was in accord with the Labor Mgmt. Reporting & Disclosure Act and the IBT's constitution. However, Padova allowed Local 115 boss, John Morris, to proceed with his damage claim against IBT for the five-month period the local was under an emergency temporary trusteeship.The two decision were on summary judgment motions.

School Officials Not Liable for California Unions' Inadequate Financial Disclosures

U.S. Court of Appeals for the Ninth Circuit ruled Oct. 15 that Cal. public school superintendents who deducted agency fees from the paychecks of nonmember teachers are not liable for unions' failure to provide an adequate explanation of the basis for the fee calculation. Reversing summary judgment granted to four teachers, the appeals court held "[a]ction more serious than the routine collection of fees is required" to trigger a public employer's duty to ensure that its employees receive adequate financial disclosure. The court relied on its prior holding that a public employer's duty to ensure proper notice arises when a union takes action against a nonmember for failure to pay agency fees. U.S. Dist. Judge Dean D. Pregerson (C.D. Cal., Clinton), sitting by designation, wrote the opinion, which was joined by U.S. Circuit Judges Procter R. Hug, Jr. (9th Cir., Carter)  and Thomas G. Nelson (9th Cir., H.W. Bush).

Southern California Staffer Embezzled $110,000

U.S. Dist. Judge Ronald S.W. Lew (C.D. Cal., Reagan) sentenced Wilfield Bloomfield, United Bhd. of Carpenters Local 1553's ex-bookkeeper, Oct. 16 to 15 months in federal prison for embezzling more than $110,000 from the local in Hawthorne, Cal. Lew put Bloomfield on 3 years probation and ordered him to pay $110,887 in restitution to the local, which is also known as the Elec. & Space Technicians Local 1553. He pled guilty in June. Bloomfield reportedly stole the money over a 2-year period ending in April 2000."Bloomfield allegedly stole pre-signed checks, made the checks payable to himself, then cashed them at a nearby check-cashing outlet and used the money for personal purposes. [City News Serv. 10/16/01]

DOL Wins New Election at Corrupt New Jersey Local

On Oct. 10, U.S. Dist. Judge Joseph E. Irenas (D.N.J., H.W. Bush) invalidated the June 1999 officers election of the historically-corrupt Hotel Employees & Restaurant Employees Int'l Union Local 54 in Atlantic City. Irenas found that local bosses failed to get ballots to 15% of the members. Irenas order the casino employees local to hold a new election under the supervision of Sec'y of Labor Elaine L. Chao. Irenas, granting the Dep't of Labor's motion for summary judgment, concluded that there were so many undisputed violations of the federal labor law that the outcome of the results could have been affected.

Incumbent president, Robert McDevitt, defeated challenger Bobby Donovan by 440 votes. The rest of the McDevitt slate won by margins of more than 500. However, 1,975 members in good standing never got the election notice mailed to them, and ultimately close to 1,600 members never received a mailed ballot.

Election Corruption Alleged in NYC

A credible N.Y. dissident, Paul Pamias, filed a complaint Oct. 12 with Manhattan Dist. Atty. Robert M. Morgenthau requesting an investigation in his local, Serv. Employees Int'l Union Local 32B-32J, for alleged violations of local election laws in connection with N.Y.C.'s Sept. 25 Democratic primary.

Pamias alleged that on Sept. 11, the original primary day, many of the local's staff were forced to volunteer to campaign for mayoral candidate Mark Green. Staffers were allegedly forced to sign vouchers stating they were taking a vacation day so they can go campaign. Again, on Sept. 24, Staffers were allegedly told at a meeting that they would be campaigning all day Sept. 25. Allegedly, this time they were not ordered to fill out vacation vouchers. After the primary, however, outraged staffers reportedly confronted various bosses, and the bosses avoided a "possible mutiny" by allegedly giving the staff a day off with pay.

Mary Jo White Blows It, Big Time

U.S. Atty. for the the S. Dist. of N.Y., Mary Jo White, lost the Ron Carey case. On Oct. 12, a federal jury acquitted the corrupt Teamsters boss of all seven counts of perjury and making false statements in connection with a $885,000 money laundering scheme that sent union treasury funds into Carey's 1996 reelection campaign.

Even though the union was able to expell and punish Carey, White and her office failed. Losing a such a high-profile case should be a total embarrassment for White, a Clinton-appointee. Blunders--like 1) bring the case almost 5 years after the events took place and 2) putting a hostile witness, convicted union embezzler William W. Hamilton, on the stand only to have him undermine your case against Carey--demonstrate White's incompetence.

Many have been calling on President Bush to replace White since Jan. 20. What further evidence does he need?

McAuliffe's Cronies Settle ERISA Suit for $4.9 Million

Trustees of the Nat'l Elec. Benefit Fund must pay more than $4.9 million to reimburse the fund under a consent order settling Dep't of Labor charges that they breached their fiduciary duties under ERISA by investing in a Fla.. real estate limited partnership. The two trustees, Jack Moore and John Grau, also agreed to pay a civil penalty of $555,000 under the consent order signed Oct. 16 by the  U.S. Dist. Judge Deborah K. Chasanow (D. Md., Clinton). The order resulted from a suit filed in May 1999 by DOL's Pension & Welfare Benefits Admin., alleging that the trustees imprudently loaned pension plan assets to a corporation for certain real estate purchases linked to tainted Clinton family fundraiser and Democratic Nat'l Committee Chairman Terence McAuliffe.

Moore and Grau denied the allegations, but entered into the agreement with DOL after Williams ruled in July that DOL could proceed with its suit. U.S. Dist. Judge  Alexander Williams, Jr. (D. Md., Clinton), denied the trustees' motion for summary judgment, rejecting their contention that they did not breach their fiduciary duties because the real estate transactions had beneficial results.

Hawaiian Local Must Pay Nearly $1 Million in Tort Damages to Employer

U.S. Dist. Judge Helen W. Gillmor (D. Haw., Clinton) ordered the Int'l Bhd. of Teamsters Local 996 in Hawaii to pay nearly $1 million to a dry cleaning firm and its owner for union bosses' "reckless disregard" as to the truth of statements they made regarding the firm's financial state during contract bargaining and in advance of a strike vote. Local 996's bosses "acted with malice in making statement...[at a membership meeting] while being aware of the probable falsity of the statements" about the company's resources, said Gillmor.  The firm's owner claimed he was defamed by the union's false and malicious statements that the firm was making money and that he had hidden the money in a separate entity while demanding that employees accept a concessionary contract.

Passengers Seek Damages from Tattered Union

U.S. Dist. Judge Patti B. Saris (D. Mass., Clinton) ruled Sept. 28 that  Am. Airlines passengers whose flights were canceled as the result of a union "sickout" in Feb. 1999 can proceed with claims against the Allied Pilots Ass'n. Saris denied APA's motion for summary judgment. The court, however, granted summary judgment to the APA's president finding he was immune from personal liability in connection with the sickout.

APA Pilots represented engaged in a sickout between Feb. 6 and Feb. 9, 1999, that resulted in cancellation of more than 1,600 flights. Am. Airlines obtained a temporary restraining order on Feb. 10. However, the day after the TRO was issued, the number of flight cancellations increased. U.S. Dist. Judge E. Joseph Kendall (N.D. Tex., H.W. Bush) on Feb. 12 found APA, its president, Richard Lavoy, and another union boss in contempt for violating the TRO. Kendall levied a $45.5 million fine against the union and its bosses for violating his order to call off the sickout. The fine has been upheld and APA has made arrangements to pay it in full plus interest.

Detroit Local Looses First Round of Discrimination Case

U.S. Dist. Judge Gerald E. Rosen (E.D. Mich., H.W. Bush) denied the Am. Fed'n of Musicians Local 5's motion for summary judgment on the sex discrimination claim by a female opera house worker, Diane Bredesen, ruling that federal labor law does not preempt a claim that the Detroit-based local violated Mich.'s anti-discrimination law by purposefully negotiating a contract that caused her to be paid at half the rate paid to men in her position under other union contracts. However, Rosen rejected Bredesen's claim that the union breached its duty of fair representation, finding that Bredesen failed to exhaust internal union remedies available for that complaint.

Indiana Local Wins Dues Case

U.S. Dist. Judge William C. Lee (N.D. Ind., Reagan) ruled against an employee finding that a union's insistence that the employee provide "independent corroboration" that his religious beliefs precluded his funding or participating in the union did not violate Title VII of the 1964 Civil Rights Act. Lee granted summary judgment to United Auto Workers Local 2209 in Fort Wayne, Ind., on the claim of employee John M. Bushouse that the local failed to accommodate his religious belief by allowing him to donate his union dues to a charity. Lee found that Bushouse did not adequately establish that he held sincere religious beliefs that conflicted with UAW's requirement that he pay dues.

Oklahomans Approve Right to Work Law

Oklahomans voted to become the twenty-second Right to Work State on Sept. 25 with a surprisingly large margin of victory 54.2% to 45.8%. "We're alive," Okla. Gov. Frank Keating (R) exclaimed in a victory speech. "For too long, we've been held back and held down. We are now open for business." The official returns showed that State Question 695, the Right to Work proposal, garnered 447,072 votes for versus 378,465 against. SQ 695 places Right to Work language in the Okla. Constitution as of Sept. 28.

Right to Work laws secure the right of employees to decide for themselves whether to join or financially support a union. According to the Okla. Dep't of Labor, violation of the new law is a misdemeanor, which can be prosecuted by a dist. atty. Individual employees may also seek relief through the courts. The new law will apply to employment contracts entered into after the effective date of the act.

New York Mob Moves in on WTC Massacre Site

N.Y.C. has reportedly appointed four independent monitors to make sure that anyone affiliated with organized crime is kept off clean-up site of the World Trade Ctr. massacre. The Manhattan Dist. Atty.'s Office is conducting a grand jury probe into mob-connected truckers who allegedly stole tons of scrap metal and sold it instead of bringing it to a landfill where it was to be examined as evidence. Reportedly, at least five of the trucking companies being used to haul wreckage from the site are flagged on a city list of vendors involved in alleged corruption or with mob ties. City officials are reportedly now examining subcontractors. One firm, Scalamandri Trucking, is charge by federal investigators as being controlled by Steven L. Crea, the alleged boss of the Luchese crime family.

Further, many of the workers at the site have been provided by the United Bhd. of Carpenters Local 608, which allegedly has long-standing ties to the Genovese crime family. Investigators are reportedly probing allegations that some workers at the site have been forced to pay kickbacks to mob-connected union bosses in order to keep working there. [ABC News 10/4/01]

Kansas City Boss Gets 18 Months for $15,000 Embezzlement

U.S. Dist. Judge G. Thomas VanBebber (D. Kan., H.W. Bush) sentenced admitted union embezzler Joseph C. Rider Sept. 25 to eighteen months in fed. prison, without parole, to be followed by three years of supervised release. Rider, the ex-business manager and secretary-treasurer of Laborers' Int'l Union of N. Am. Local 1290 in Kan., pled guilty in May to one count of union embezzlement. VanBebber also ordered him to pay $15,044.46 in restitution.

U.S. Atty. James Flory said Rider used the local's credit card for personal expenses including airline tickets, restaurant bills, vehicle rentals, entertainment, and purchase of food or lodging. A Nov. 2000 indictment said the expenses included NASCAR tickets and Las Vegas shows. The crime occurred over four years beginning in Nov. 1995. Rider was the third generation in his family to head Local 1290. He was removed in 1999 after an internal probe. He was also president of the W. Mo. & Kan. Laborers' Dist. Council. [USAO D. Kan., Media Release, 9/26/01; K.C. Star 5/24/01]

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