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.

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.

DOL Sues Northwest Airline Local Over Flawed Natl. Election

On January 16, 2003, a complaint was filed in the U.S. Dist. Ct. for the Dist. of Minnesota against Dist. Lodge 143 of the Intl. Assn. of Machinists (IAM), which represents some 21,800 members predominately employed by Northwest Airlines headquartered in Minneapolis, Minn. The complaint resulted from an investigation by the Minneapolis branch of the U.S. Ofc. Of Labor-Mgmt. Standards into the district lodge's August 13, 2002 election. It revealed that six locals failed to hold an election, eleven locals failed to send out an election notice, and 25 locals sent out an inadequate election notice. The complaint seeks a new election under OLMS supervision. [OLMS 2/5/03]

Frmr. Wall Street Week Regular Sentenced for Defrauding Union Pensions

Alan B. Bond, once a regular on "Wall Street Week with Louis Rukeyser," was sentenced to more than 12 years in prison on Feb. 11 for defrauding union and other pension funds of $56 million. Sr. U.S. Dist. Judge Leonard Sand (Sou. Dist. NY, Carter) also ordered the frmr. President of Albriond Capital Mgmt. to pay $6.6 million in restitution and a $36,000 fine as he condemned Bond's "greed."

Bond was convicted last June of cherry-picking profitable stock trades into his private account, while moving losing trades into his clients accounts. Two of those clients were Amalgamated Transit Union (ATU) Local 725 in Birmingham, Ala., and ATU Local 1220 in Richmond, Va. Strangely, those officials stuck with Bond even after he was indicted in Dec. 1999 on charges that he used kickbacks from stock-brokerage firms commissions to pay for gifts to James Thomas, a trustee of ATU Local 689s pension plan in Wash., D.C.

Until he was indicted again in Aug. 2001, Bond's union clients lost two-thirds of the value of their pension funds, even as he received a 5,000% return on his investments at a time when the stock market was declining. [Los Angeles Times 2/12/03]

18 More NYC School Custodians Indicted for Bribes, Kickbacks

NY Attny. Gen. Eliot Spitzer announced on Feb. 10 the arrest of 18 school custodians and a cleaning contractor on charges of bribes, rigged bids and kickbacks involving each schools cleaning contract. They were arraigned in the Bronx County Sup. Ct. the same day. The latest indictments come a little more than a year after 11 custodians were charged with similar crimes.

Acc. to the latest charges, 17 of the custodians arranged for Thomas Robinson to get the schools window cleaning contracts without considering at least two other bids, as required by the NYC Dept. of Educ. for services costing over $250. Robinson himself provided phony bids, some from firms that didnt exist. After being selected, Robinson would pay the custodians a kickback of 10-50% of each contract, which ranged from $1,000 to $4,000 cash. The scheme is alleged to have occurred from 1996-2001.

Convicted Violent Union Boss Steps up to IL Labor Secy.

A Rockford-area union boss convicted of slashing the tires of a non-union truck outside a Wal-Mart is IL Gov. Rod Blagojevichs choice to run the states Labor Dept.

In 1997, Michael Fenger, the Bus. Mgr. of Intl. Bhd. Of Elec. Wrkrs. Local 364 was attending a union protest of non-union workers building the store. Several militants surrounded the truck of a non-union worker as he tried to leave the 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 was charged with felony criminal damage to property and two misdemeanor charges of property damage and reckless conduct. In a plea agreement, Fenger pled guilty to the misdemeanor charges, and was fined $1,500. Last year, he succeeded in getting the case expunged from the record, but disclosed the incident to Blagojevich aides before his appointment.

Ex-IL Teamsters Treasurer Pleads Guilty to Embezzlement in Fed. Ct

Stephen E. Morris pled guilty on Feb. 7 to embezzling from the union he served as Treasurer for nine years. According to the Plea Agreement and Stipulation of Facts, Morris stole the funds from Local 109 of the Intl. Bhd. Of Elec. Wrkrs in Moline from April 2000 through Oct. 2001. He made unauthorized cash withdrawls of $20,463, unauthorized check withdrawls of $51,881, overstated expenses of $1,933, check amounts raised above what was approved of $4,699, and cash back from deposits of $8,066.

That adds up to $87,043. But the Stipulation reports the total amount stolen to be between that figure and $72,344. Since Morris will be required to make restitution, the amount stolen will likely be determined by Chief U.S. Dist. Judge Joe B. McDade (Cent. Dist., IL, G.H.W. Bush) at Morriss sentencing hearing on June 6.

NYC Union Pres. Plead Guilty, Testifies to Mob Control of Union

Frank "the little guy" Scollo testified on Jan. 28 that he collected payments for "labor peace," and enforced the rule of the Gambino organized crime family over ILA Local 1814 in Brooklyn and Staten Island. He testified in the trial of six members and associates of the Gambino organization, including Gambino boss Peter Gotti and Gambino captain Anthony "Sonny" Ciccone.

Scollo was indicted, along with Gotti and Ciccone, on June 3 of last year for racketeering, extortion, wire-fraud, loan-sharking, illegal gambling, money laundering, witness tampering and other related crimes. In Nov., he pled guilty to extortion and agreed to cooperate with the U.S. Attny's. Ofc. for the E. Dist. of NY.

Scollo testified that as Local 1814 pres., he answered to Ciccone, even though he knew that under a decree in a civil racketeering case, the frmr. union official was not supposed to deal with labor-mgmt. issues. Among the services Scollo performed for Ciccone, starting in 1997, was the collection of payments for "labor peace" from Carmine Ragguci, who owned a Staten Island port company, which Scollo them gave to Ciccone. The payments of around $9,000 came every few months.

Fed. Judge Approves Takeover of NJ Longshore Union

Federal Judge John S. Martin, Jr. (S.D. NY, G.H.W. Bush) agreed on Jan. 29 to appoint an administrator for a mob-riddled union that ignored court orders to clean itself up. The next day, he appointed frmr. N.Y.C. Police Commissioner Robert McGuire to take over the union.

Local 1588 of the Intl. Longshoremen's Assn. in Bayonne settled a racketeering case in 1992 filed by the U.S. Attny. for the Sou. Dist. for NY. As part of that settlement, Eugene G'Sell and John Angelone agreed to keep the Genovese crime family out of their union, and to have nothing to do with Genovese associate Joseph Lore. But in a 2001 trial, G'Sell and Angelone detailed how they helped embezzle between $1.3-$2.3 million from the union for Lore's benefit.

Then this past May, the current president of 1588, John Timparano, and five other current and frmr. officials, were indicted in NJ state court for racketeering and extortion. U.S. Attny. James B. Comey asked Judge Martin for the court takeover on Dec. 10. after Timparano announced that he would still conduct officer elections on the 27th.

1st Charges Filed as AFT Belatedly Takes Over DC Local

The personal driver of disgraced Wash. Tchrs. Union (WTU) president Barbara Bullock was charged with laundering embezzled funds from the union on Jan. 27. That the charges were contained in an "Information" filed with the U.S. Dist. Ct. for D.C. -- not an indictment -- indicates that Leroy Holmes may be cooperating in the investigation of Bullock, ex-WTU Exec. Asst. Gwendolyn Hemphill, ex-Treasurer James O. Baxter, and some of their relatives, for embezzling millions of dollars from the WTU for at least five years.

And after years of ignoring the apparent cash-flow problems in the WTU, the Amer. Fedtn. of Teachers finally stepped in on Jan. 22, taking over the WTU. The AFT was forced to take over the WTU after its auditors concluded that Bullock and her cohorts stole some $5 million. With the WTU's Exec. Bd. failing to detect any problem during the years in which the reported embezzlement took place, outside intervention was necessary.

20th Defendant Pleads Guilty in NYC Racketeering Case

William Barthold became the 20th person to plead guilty, on Jan. 21, to his role in a racketeering scheme at more than 20 New York City construction sites from 1989-2001. The scheme of payments for no-show jobs and "labor peace" cost more than $6 million in lost wages and benefits.

Barthold, a representative of Local 1 of the Intl. Union of Elevator Constructors, and other union members submitted fraudulent time sheets to the construction sites. Many of the members participating in the no-show scheme actually claimed to have worked at multiple sites at the exact same time. Barthold and 26 other Local 1 officials were indicted on Feb. 7, 2002 on 137 counts of unlawful payments for labor under the Taft-Hartley Act and the laundering of those payments in violation of the Racketeering, Influenced & Corrupt Organizations Act (RICO).

Agreement Between Teamsters and UPS Undermines Right to Work Laws

On Jan. 28, attorneys with the Natl. Right to Work Legal Defense Fndtn. filed an  employee's legal challenge to the national contract signed by United Parcel Services (UPS) and the Teamsters union that illegally  requires company officials to pressure tens of thousands of workers to join the union. Douglas Ragone, a non-union member, filed the unfair labor practice charges with the National Labor Relations Board (NLRB) against UPS and the Teamsters. The NLRB is responsible for investigating the charges and will decide whether to prosecute the union and UPS.

A contract provision requires UPS officials in Right to Work states to tell new employees that they should become full dues-paying union members. Ragone is challenging the agreement because the National Labor Relations Act prohibits employers from supporting unions and coercing employees into joining them. In running afoul of federal statutes, the agreement violates the spirit of North Carolina's highly popular Right to Work law. A state Right to Work law frees workers from being forced to join or to pay union dues as a condition of employment.

Ky Sup. Ct. Upholds Indictment of Teamsters in ‘95 Election Case

The Ky. Supreme Court, on Jan. 23, upheld the indictment of four men who allegedly violated state campaign spending limits by coordinating a joint effort of the Paul Patton campaign and the Intl. Bhd. of Teamsters in the 1995 gubernatorial election.

Patton, the current governor, beat Republican Larry Forgy by just 2.2 percent. But after a series of articles by the Louisville Courier-Journal on irregularities in the Democrats' voter turnout drive, Patton ordered an investigation by Attny. General Ben Chandler, also a Democrat. Patton wasn't happy, however, when a special grand jury indicted his chief of staff and campaign mgr., Andrew "Skipper" Martin; his liaison to Big Labor, Danny Ross; Lon Fields, frmr. pres. of Teamster Local 89; and Fields lieutenant Robert Winstead.

Hoffa NJ Vice President Charged by Union with Mob Links

The Intl. Bhd. of Teamsters filed internal charges of links to organized crime against one of its vice presidents on Jan. 21. The internal charges come three years after Donato DeSanti was first accused of of improper behavior while running for vice pres. on James Hoffa's slate.

Hoffa's opponent, Tom Leedham, accused the president of IBT Local 701 in New Brunswick, NJ, of associating with a barred Teamster member who had earlier been disqualified as a part of Hoffa's slate of natl. officer candidates. Leedham's allegations did not prevent DeSanti, or Hoffa, from taking office. But the more recent charges appear to have stuck to DeSanti.

Rev. Bd. Charges Against NY Local Made Public

In a mid-Jan. letter to the members of Local 456, Intl. Bhd. of Teamsters president James Hoffa outlined the results of a 13 month investigation by the union's Independent Rev. Bd. (IRB) that led to the IBT takeover of the Elmsford Local.

The IRB was established under the jurisdiction of the U.S. Dist. Ct. for the Sou. Dist. of NY in 1989 to root out corruption in the Teamsters. In 1999, the IRB concluded that Local 456 pres. Edward Doyle Sr. took part in a bribery scheme in which a Yonkers car dealer sold 12 cars to Local 456 while accepting the Local's used cars at less than fair value. Doyle and other bosses then bought back the used cars at a sharp discount. Doyle agreed to a seven-year suspension from the union and resigned his office. But Doyle remained as head of the Westchester-Putnum Bldg. & Construction Trades Council. His brother, Bernard, took over as pres. of the Local, and his son, Edward, Jr., remained on the Exec. Bd. of Local 456.

Michigan Regional Officials Indicted for Misappropriation of Union Assets

Warren City Councilman William H. Barnwell and four other state officials were indicted on Jan. 24 for claiming union pay and benefits while they worked on some fellow bosses' new home.

Barnwell is director of organizing for the Michigan Regional Council of Carpenters. The other officials indicted are: Edwin R. Nyhus, Charles S. Jackson, and David and Sandra Williamson. According to the indictment, Barnwell and the others took salaries, allowances and pension contributions between Dec. 1997 and April 1998 as they worked on the Williamsons' new house. The Williamsons are also accused of lying to federal agents.

Elected to the Warren City Council in 1999, Barnwell will be forced to leave if he is convicted of the felony charges of misappropriation and conspiracy, each of which carries a maximum penalty of five years in prison and a $250,000 fine. The five were indicted in the U.S. Dist. Ct. for the E. Dist. of Michigan. [Macomb Daily 1/27/03]

Settlement of Election Ballot Dispute in Texas

On Jan. 3, a Stipulation of Settlement between the U.S. Dept. of Labor and Local 732 of the American Postal Workers Union was approved by Magistrate Judge Jeff Kaplan of the U.S. Ct. for the N. Dist. of Texas.

The stipulation requires the local union to open and count 75 ballots cast by eligible members that were not included in the tally completed on May 19, 2001. After the tally of these 75 ballots is completed and the results of the May 19, 2001 officer election are revised accordingly, The U.S. Ofc. of Labor-Mgmt. Standards (OLMS) will supervise new nominations and a new election for all Local 732 offices affected by the 67 votes that were cast by ineligible persons. OLMS will complete this supervised election on or before May 31, 2003. [OLMS 1/21/03]

Previously Barred Member Allowed to Run for Union Office in Washington State
On Jan. 7, a stipulation and order of settlement between the U.S. Dept. of Labor and the Bremerton Metal Trades Council (BMTC) was approved by the U.S. Dist. Ct. for the W. Dist. of Washington.

Ex-Wisc. Secy.-Treasurer Sentenced for Embezzlement

On Jan. 9, in the U.S. Dist. Ct. for the East. Dist. of Wisconsin, Kim M. Conner, former financial secy.-treasurer of United Auto Workers Local 469, was sentenced to six months imprisonment followed by six months of home confinement and three years of supervised release. Conner was ordered to make full restitution of $54,317.39, pay a special assessment of $125, and perform five days of community service. Conner pled guilty on October 10, 2002 to one count of embezzlement of union funds and one count of filing a false LM-2 report following an investigation by the  Milwaukee branch of the U.S. Ofc. of Labor-Mgmt. Standards. [OLMS 1/21/03]

Ex-Montana Treasurer Indicted for Embezzlement
On Jan. 8, in the U.S. Dist. Ct. for the Dist. of Montana, Frank Darvis, former treasurer of United Transportation Union Local 891, was indicted on one count of embezzling $29,865 in union funds following an investigation by the Denver branch of the U.S. Ofc. of Labor-Mgmt. Standards. [OLMS 1/21/03]

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