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 York Boss Gets Probation for $192,000 Theft

U.S. Dist. Judge Kimba M. Wood (S.D.N.Y., Reagan) sentenced David Blank, ex-secretary-treasurer of Am. Fed'n of Gov't Employees Local 2094, Jan. 12, 2001, to three years probation and restitution of $192,000, relating to an embezzlement of union funds. The local is connected to the Veterans' Affairs Medical Ctr. in N.Y.C.

Blank pled guilty to a three-count criminal information charging that from Jan. 1992 to Dec. 1994, he participated in a conspiracy to commit mail fraud. This was accomplished by embezzling Local 2094 funds, and by making false statements to, and concealing from, the Dep't of Labor, the fact that he and his co-conspirators had embezzled, misappropriated and misdirected union funds. The information also charged Blank with subscribing to a false personal income tax return for the calendar year 1994 and possessing a firearm in a federal facility.

Longshore Union Allegedly Infiltrated by Genovese

Federal prosecutors in Brooklyn accused imprisoned Genovese crime family boss Vincent "Chin" Gigante and seven associates Jan. 23 of infiltrating the Int'l Longshoreman's Ass'n. The Genovese used their control of the union to extort money from firms operating on the piers in the N.Y.C. metro area and in Miami, according to a 40- page racketeering indictment announced by U.S. Atty. Alan Vinegrad. Convicted in 1997, Gigante is serving a twelve-year sentence for racketeering, murder conspiracy, and related crimes. Gigante, known for muttering as he walked around Manhattan's Greenwich Village in a bathrobe, has allegedly continued to run the Genovese family from prison.

Prosecutors allege Gigante obstructed justice during previous trials "by feigning diminished mental capacity." According to prosecutors, "video and audiotapes of Gigante in prison show that Gigante is a fully coherent, careful and intelligent man. In short, he appears to have ceased feigning mental illness in jail." Gigante is an inmate at the U.S. Bureau of Prisons Med. Ctr. in Ft. Worth, Tex. His arraignment  on the new charges is scheduled for about Feb. 6.

$77.5 Million Suit Against Union Wins Class Action Status

U.S. Dist. Judge Sidney H. Stein (S.D.N.Y., Clinton) granted class certification Jan. 8 to a suit brought by participants in the Int'l Ladies Garment Workers' Union death benefit fund who allege that the fund violated its fiduciary duties when it transferred $77.5 million of fund assets to the union, which is now part of the Union of Needletrades Indus. & Textile Employees. The fund was established in 1937 and included language prohibiting any withdrawals except for payment of benefits and administrative costs. In 1976, an amendment was added to ILGWU's constitution that permitted termination of the fund by the union's board. In 1997, the board terminated the fund and transferred the bulk of the fund's assets to a new death benefit fund. However, it also transferred $77.5 million of assets to the union itself, and $12.5 million of which was routed to a nonprofit corporation, 21st Century ILGWU Heritage Fund.

Union, Firms, Settle False Claims Suit for $2.2 Million

U.S. Atty. Thomas M. DiBiagio in Baltimore announced Jan. 17 that the Am. Postal Workers Union, Nat'l Health Servs., Inc., and United Payors & United Providers, Inc. will pay the government nearly $2.2 million to settle charges that they submitted false claims to the government, specifically the Office of Personnel Mgmt.

APWU, through APWU Health Plan, operates a health plan under the Fed. Employees Health Benefits Program. APWU is located in Washington, D.C. and its Health Plan is in Rockville, Md. NHS is provides health care cost containment services such as case management, pre-certification and utilization review and is located in Louisville, Ky. UP&UP is located in Rockville and provides access to its preferred provider network to reduce health care costs. Both companies were acquired in Mar. 2000 by BCE Emergis Corp. of Canada

Ohio Boss Accused of Taking $145,000

In Dec. 2000, ex-treasurer of Int'l Ass'n of Fire Fighters Local 639, Richard Adams, resigned suddenly when the local's bank accounts came up some $143,000 short. He then paid $65,000 in partial restitution for funds he allegedly embezzled from the Parma, Ohio based local since 1987.  Then on Jan. 17, Adams was charged with one count of federal bank fraud. The U.S. Atty.'s Office in Cleveland said Adams once made a $3,139 house payment with a union check. But, according to the Dep't of Labor, the union embezzlement totaled $144,939.46 and final restitution will be based on that amount. Because of a loophole in federal labor labor, a federal union embezzlement charge could not be brought since Local 639 is a public sector union.

Despite the local's request that the matter be resolved internally, Parma Law Director Tim Dobeck called in the FBI and DOL to investigate in Feb. 2001. Dobeck's move disappointed Cliff Taylor, then Local 639 president. Taylor said at the time that the local wanted to handle the matter internally because "our objective was to get the money and we're recouping most of it." Taylor has since resigned.

Boss' Scams Cost D.C. Local $20,600

Ex-president  of Am. Fed'n of Gov't Employees Local 1812, Hope Butler, pled guilty Dec. 7 to a federal felony charge of making false statements. The plea related to her unlawful conduct while serving as president of the Washington, D.C. based local, which is linked to the U.S. Info. Agency, from 1996 to 2000. At the same time, Butler's sister-in-law, co-defendant Nadine Crump Butler pled guilty to misdemeanor first-degree fraud.  From about Mar. 1999 to Apr. 2000, Butler and Crump Butler engaged in a fraudulent scheme to extract funds from the local.

Five Allegedly Stole $71,000 from Atlantic City Local

N.J. Police announced Jan. 2 that they have charged five people with conspiring to steal from  Atlantic City's largest union, in an embezzlement scheme that allegedly drained at least $71,000 from the severance fund of Local 54 of the Hotel Employees & Restaurant Employees Int'l Union.  Mariana Candelaria, who works for Garden State Benefit Servs. Inc., the company that administers the local's severance and pension funds from desks inside Local 54's office, was arrested on Dec. 21. Candelaria allegedly conspired with an ex-colleague and three outsiders by falsifying claims for severance payouts and then issuing and cashing the checks. Police charged Candelaria with embezzling more than $50,000, along with conspiracy, forgery, and theft by deception after an investigation by Detectives Edward Riegel and Brian Paige.

Atlantic City Local's PAC Settles Late Filing Charge

The N.J. Election Law Enforcement Comm'n recently filed charges against a political action committee maintained by the Hotel Employees & Restaurant Employees Int'l Union Local 54, claiming the union failed to file timely reports during 1999 and 2000. NJELEC found in some cases that the Atlantic City local filed its reports 307 days late.

PACs, which are comprised of two or more persons who act jointly to aid or promote candidates for elected office, are required to file quarterly reports with NJELEC. N.J. State law also requires PACs to report all political donations of $600 or more that are made between Sept. and the date of a general election within 48 hours. Failure to file timely reports carries a maximum fine of $3,500 for each unreported transaction. In one count of the charges against Local 54, the union failed to report 20 transactions.

Philadelphia Boss Sentenced for $3,400 Theft

On Jan. 17, James Bryant, ex-secretary-treasurer of Am. Fed'n of Gov't Employees Local 2061 in Philadelphia, was sentenced to three years probation, ordered to make restitution of $1,980, and fined $500. (He had previously made restitution of $1,500.) He had pled guilty on Sept. 12, to two counts of theft by unlawful taking $3,480 within the territorial jurisdiction of the U.S. Local 2061 is connected to the Gen. Serv. Admin. [DOL 1/17/02]

Atlantic City Local Settles Defamation Suit

In a settlement made public Jan. 4, the City of Brigantine, N.J., agreed to pay $1.2 million to an ex-public works director who claimed he was fired for complaining about other officials' wrongdoing. The plaintiff, John Costello, also agreed to take an undisclosed sum to drop a defamation claim against Int'l Bhd. of Teamsters Local 331 of Atlantic City.

Indicted Boston Boss Resigns from Board of State Agency

Recently indicted Teamsters boss George W. Cashman abandoned his plum Mass. Port Auth. Bd. post Jan. 22, sparing acting Gov. Jane Swift (R) from embarrassing political standoff. Cashman, a Democrat and an ally to the last three Republican governors, fired off a terse resignation letter just ten minutes before Swift promised he'd be suspended from MPA Bd., the agency that operates Logan Int'l Airport where two planes that terrorists used to destroy the World Trade Ctr. originated. Eager to fend off an appearance of guilt, the president of the Charlestown-based Int'l Bhd. of Teamsters Local 25, promised to beat the "unfounded" federal indictment. Federal prosecutors charged Cashman Jan. 16 along with three others in a 179-count indictment alleging a scheme to illegally give union health benefits to 19 non-union workers.

DOL Sues Dallas Local over Tainted Election

The Dep't of Labor filed suit Jan. 18 in U.S. Dist. Court for the N. Dist. of Texas against the Am. Postal Workers Union Local 732 of Dallas. The suit resulted from an DOL probe of the local's May 19, 2001 mail ballot officer and delegate election. DOL found that the local denied eligible members the right to vote, in that the local failed to mail ballots to all eligible members, and failed to count all ballots that had been returned by eligible members to the post office prior to the deadline. DOL also found that the local improperly permitted ineligible members to vote in violation of the union constitution and bylaws. The suit seeks  new election for 11 officer and 39 delegate positions under DOL supervision. [DOL 1/18/02]

Three Employees Join Suit to Save Oklahoma Right-to-Work Law

Enjoying free legal aid from the Nat'l Right to Work Legal Def. Fdn., employees from three different  Okla. companies filed formally Jan. 22 in U.S. Dist. Court for the E. Dist. of Okla. to join Okla. Gov. Frank Keating (R) in defending Okla.'s new Right-to-Work constitutional amendment  against multi-union attack.  The employees argue that if the unions prevail in voiding the statewide ban on forced unionism they will suffer direct financial harm as well as damage to  their interests of free speech and free association.

The Okla. AFL-CIO, six local unions, and a heavily unionized company filed the suit in Nov. to overturn the will of Oklahomans in enacting State Question 695 on Sept. 25. The Right-to-Work constitutional amendment bans the widespread union practice of forcing workers to join an unwanted union or pay any union dues as a condition of employment. Okla. is the newest of Am.'s 22  Right-to-Work states.

DOL Pushes for Electronic LM Filing

The Dep't of Labor is urging unions to electronically file the financial forms required under the Landrum-Griffin Act (a.k.a., Labor-Management Reporting & Disclosure Act of 1959). The Office of Labor-Management Standards will enclose copies of a compact disc containing the forms with the traditional paper forms sent to labor unions at the end of their fiscal year, Don Todd, a deputy assistant secretary of OLMS, said Jan. 23. "The software will bring required reporting into the 21st century and should save unions valuable time and enhance the accuracy of their financial reports," he said.

NLRB Reopens Excessive Union Fine Case

Persuaded by Nat'l Right to Work Legal Def. Fdn. attorneys, the General Counsel of the Nat'l Labor Relations Bd. has ordered its investigators to reconsider their dismissal of unfair labor practice charges filed by actor Barry Williams against the Actors Equity Ass'n (AEA).  The former "Brady Bunch" star faces confiscatory union fines for exercising his right to work on a non-union production.

NLRB General Counsel Arthur Rosenfeld remanded the case back to the N.Y. Reg'l Office because it dismissed Williams' June 2001 charges without conducting an adequate investigation. Inexplicably, the N.Y. office investigators had refused to interview key witnesses and collect key evidence. NRWLDF argued that the $30,000 fine levied against Williams for exercising his right to  work in a production that did not force employees to work under union contract is excessive and without justification, since Williams was not a voluntary  member of the union.

AFL-CIO, Eleven Railroad Unions Sue to Stop Congressional Report on Amtrak

The AFL-CIO and eleven railroad-related unions filed suit Jan. 22 for an injunction to prevent a congressionally appointed panel, called the Amtrak Reform Council, from delivering its report  to Congress. In 2001, with Amtrak asking for another $3.2 billion to cope with increased business, ARC decided Amtrak wasn't going to make it. ARC was required to propose changes after declaring that Amtrak wouldn't meet a statutory Dec. 2002 self-sufficiency deadline. ARC voted Jan. 11 eight to one to recommend an end to Amtrak as we know it.  ARC's plan, a final version of which is due before Congress on Feb. 7, is likely to recommend opening America's entire intercity rail system to private competition and the divestiture of Amtrak's tracks and other infrastructure.  The suit filed in U.S. Dist. Court in Washington, D.C. alleged that ARC acted in "excess of its authority" with its recommendations. ARC "has long pursued an ideological agenda to dismember and then sell off Amtrak to private interests," Mark Filipovic, chairman of the union's Rail Labor Division.

Two Longshoremen Found Guilty of Drug Trafficking at the Port of Miami

On Jan. 11,  a federal jury in Miami convicted Charles Thomas and Darryl Bell of attempting to possess with intent to distribute 100 kilograms of cocaine after a four-day trial before U.S. Dist. Judge Federico A. Moreno (S.D. Fla., H.W. Bush). At the time of arrest, both were members of the Int'l Longshoremen Ass'n. Thomas and Bell face a statutory maximum penalty of life imprisonment. Sentencings are scheduled for Mar. 22, 2002, commencing at 9:00 a.m. before Moreno.  Previously on Oct. 26, co-defendant, Joseph Cobb, pled guilty to drug charges and was sentenced by Moreno on Jan. 9 to 46 months in prison.

Couple Pleads Guilty to Defrauding DOL of $300,000

Siria M. Toala of Daytona Beach, Fla., pled guilty Dec. 5 to one count of aiding and abetting the theft of government property. Toala's husband, Ricardo Perez, also pleaded guilty to a one count information charging him with aiding and abetting the making of false claims. The violations occurred between July 1999 and Mar. 2000.

Boston Boss Faces Embezzlement and Bribery Charges

George W. Cashman, president of Int'l Bhd. of Teamsters Local 25 in Charlestown, Mass.,  along with four other individuals and three firms were indicted Jan. 16 on 179 counts of embezzlement and bribery. Allegedly, 19 non-employees were ordered or placed on the firms' payrolls in order to allow the non-employees to receive health benefits from Local 25's Health Services & Insurance Plan to which they were not entitled. Asst. U.S. Atty. Fred Wyshak said the defendants robbed the fund of benefits belonging to qualified members: "The loss is to the fund that has to pay benefits it normally would not have to pay."

Disilva Transp., Inc., Hutchinson Indus., Inc., and Manfi Leasing Corp., run by brothers Thomas A. and James P. Disilva and their brother-in-law William P. Belanger, filed false documents for the bogus employees from 1992-2001 thereby costing Local 25's HSIP $72,000 in wrongful health benefits.  Also, two non-employees were allegedly placed on the firms' payrolls in order to be eligible for pension benefits from the New England Teamsters & Trucking Indus. Pension Fund, which covers several IBT locals.

New York Local Raided in Racketeering Probe

N.Y. prosecutors have reportedly launched a racketeering probe of a Queens local whose members run the cranes and other earth-moving equipment at site of the World Trade Ctr. massacre. The N.Y. State Organized Crime Task Force agents turned up at Int'l Union of Operating Eng'rs Local 14's offices on Jan. 8 and carted off documents and payroll records. The raid was the first action taken in a new probe into reports that mid-level union bosses allegedly doled out no-show jobs, shook down contractors, and engaged in other traditional labor racketeering crimes. Local 14's offices were shut down for more than an hour as agents loaded records into a van. One boss who asked agents for a search warrant was reportedly put up against a wall and frisked. Seized documents reportedly included bank, pension, and annuity fund records. [N.Y. Post 1/13/02]

Syndicate content