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.

Union Directors Colluding to Keep Internal Report from Grand Jury

Directors of the Union Labor Life Insurance Company (ULLICO) are attempting to keep a report on their insider stock deals under cover of "attorney/client privilege," and away from the U.S. Attny in Washington, D.C.

ULLICO pres. and ex-chief of the AFL-CIO's Bldg. & Construction Trades Dept., Robert Georgine, allowed the union boss directors to buy and sell ULLICO stock before its value was reset at the beginning of each year. Thus, with ULLICO's stock highly leveraged on the telecom firm Global Crossing, directors could buy ULLICO stock "low," before its value rose along with Global Crossing's in 1999. As the telecom bubble deflated in 2000 and 2001, they were allowed to sell back their stock "high," before its price was readjusted downward as Global Crossing spiraled toward the 4th largest bankruptcy in history. But ULLICO's rules only allowed individuals, with a relatively small number of shares, to participate. As a result, the huge union pension funds, which largely own ULLICO, were stuck with its falling stock.

Houston Union Agrees to Return Charity Funds never Given to Toys for Tots

A Houston-area deputies union has agreed to hand over funds it raised, ostensibly for the Marine Corps Toys for Tots Fndtn., but which union officials pocketed.

The settlement of the deceptive trade lawsuit filed last year by County Attny. Mike Stafford and Attny. Gen. and senator-elect John Cornyn was agreed to by State District Judge Bruce Oakley on Nov. 8. The Harris County Deputies' Organization admitted no wrongdoing, but agreed to pay $60,756 to Toys for Tots, and $63,500 in civil penalties and attny. fees. Union fund-raiser Ron Kowalsky was ordered to pay $100,000, including $70,000 to Toys for Tots. Telemarketer John Merritt will have to pay $50,500, with $20,000 going to the charity. In total, the union, Kowalsky and Merritt will have to pay $274,756, with $150,756 going to Toys for Tots

From 1998 until Dec. 2000, the union used telemarketers who told donors that they were collecting on behalf of Toys for Tots. But acc. to Asst. County Attny. Roberta Lloyd, union officials never informed the Marine Corps of their fund-raising. Only after the investigation started did the deputies union donate a mere $1,700 in bicycles to Toys for Tots.

HI State Union Chief Convicted of Fraud, Embezzlement

United Public Workers (UPW) chief Gary Rodrigues was found guilty by a Honolulu jury on Nov. 19 of fraud and embezzlement that cost UPW members nearly $200,000. Rodrigues reacted by pointing at the fed. prosecutors and saying, "Get a good look at their faces, remember their faces," then later grabbing a microphone from a reporter's hand and smashing it on the ground.

Rodrigues was convicted of accepting kickbacks from 1996-2000 from insurers who did business with the union, which is affiliated with the Amer. Fedn. of State, County & Municipal Employees. Rodrigues also set up consultant contracts with family and friends, supposedly to review the union's benefits programs, but who did little actual work. Also convicted was Rodrigues' daughter, Robin Sabatini, who formed her own company, Four Winds RSK Inc. to take on the union business referred by her father, but spent only one to four days a month on her business, while making more than $142,000 a year.

Were NYC Union Workers Forced to Work for Union-backed Candidate?

Manhattan D.A. Robert Morgenthau is investigating charges that N.Y.C. service union bosses pressured their staffers to work for mayoral candidate Mark Green on union time, and contributed to Green's campaign from members' regular dues, as opposed to political action committee money. The grand jury investigation comes more than a year after N.Y. union dissident Paul Pamias first filed his complaint with the D.A.

 Two frmr. officials of Local 32BJ of the Service Employees Intl. Union (SEIU) said that higher-ups in the Local threatened staffers with reprimands unless they volunteered to help the Green campaign in the Dem. primary in 2001, and that they did such work on union time, which is illegal under local election law. Contributing members' regular dues to Green could violate the U.S. Sup. Ct. decision, Communications Wrkrs. v. Beck. In that 1988 ruling, the High Ct. held that it was illegal for unions to spend forced dues for political activities with which the dues-payer disagreed.

Minneapolis City Councilman Convicted of Aiding Union Theft

A fed. jury convicted Minneapolis City Council member Joseph Biernat of aiding union embezzlement on Nov. 21. In 1999, Biernat accepted $2,700 in free plumbing work, on a house he owned, from Thomas J. Martin, ex-bus. mgr. of Local 15 of the United Assn. of Plumbers and Pipefitters. Martin is scheduled to go on trial Dec. 3 for 10 related charges of stealing from the union. Biernat was also convicted of lying about whether he had received property improvements from at one other than his family. [Minneapolis Star Tribune 11/21/01]

Adminr. Sentenced for Embezzling NY Electricians' Pensions
On Oct. 10, in the U.S. Dist. Ct. for the Southern Dist. of NY, Barbara Monfre, administrator of the Electrical Workers (IBEW) Local 3, Elevator Division Retirement Plan, was sentenced to 2 yrs. imprisonment and was ordered to pay restitution in the amount of $314,547. She was arraigned on March 22, 2002, on charges of embezzling approximately $289,000 in benefit plan funds following a joint investigation by the NYC branch of the U.S. Ofc. of Labor-Mgmt. Standards and the U.S. Dept. of Labor's Pension and Welfare Benefits Admin. [DOL OLMS 11/13/02]

Ex-WI Bus. Mgr. Confesses to $135K Embezzlement

Michael E. Koehler pled guilty on Nov. 8 to using funds from the union of which he was the only full-time officer for his personal use and entertainment.

From 1980 until his defeat in a 2001 election, Koehler was Fin. Secy. and Bus. Mgr. of Local 965 of the Intl. Bhd. of Electrical Wrkrs. In Oct. 1997, Koehler began submitting false claims for reimbursement for money he claimed to have given to grieving families at members' funerals, gas mileage and meal expenses he never incurred, and overtime he never worked. Before that, Koehler had regularly claimed his tee time at the Portage Country Club as union business since 1989. The $135,200 Koehler stole from the union made him Wisconsin's highest paid union official.

Fed. Judge Barbara Crabb (U.S.D.C. W.D. WI, Carter) will sentence Koehler on Feb. 4, 2003. [Capital Times, Wisconsin State Journal 11/9/02]

"Usual Suspects" West & Worley Implicated in Insurance Bribery Scheme

On Oct. 15, 2002, in the U.S. Dist. Ct. for the Dist. of Columbia, Richard C. Holton, pres. of an insurance agency, Holton & Associates, Ltd., pled guilty to 3 counts of bribery via employer payments to a labor union official. Holton and others initiated a self-insurance program known as the Ironworking Contractors Insurance Program (ICIP). ICIP was an effort by the employers to self-insure or reinsure their worker's compensation liability as well as other business risks.

Holton paid former Intl. Assn. of  Iron Wrkrs. (IAIW) officials Jake West, LeRoy Worley, and Stephen Cooper to solicit union employers to join ICIP. Later, West threatened that he would withdraw  IAIW support for ICIP unless the three officials received additional payments, Holton, with the approval of some of the employers, agreed to pay West, Worley, and Cooper $10,000 each per year for their continued support. Throughout 1996, 1997, 1998 and part of 1999, monthly checks were issued to West, Worley, and Cooper. The charges were brought following a joint investigation by the Wash. D.C. branch of the U.S. Ofc. of Labor-Mgmt. Standards and the FBI. [DOL OLMS 11/13/02]

Further Details Emerge on MI Laborers Official's Embezzlement

U.S. Attny Jeffrey G. Collins announced further details on the case of convicted embezzler Edward Wiebeck, who was sentenced by Fed. judge Denise Page Hood (U.S.D.C. E.D. MI, Clinton) to a split sentence of 6 months in fed. prison, followed by 6 months of home confinement, three years of supervised release and $32,790.82 in restitution.

Mr. Collins stated that the evidence against Mr. Wiebeck showed that in 1970, Mr. Wiebeck became a member of Laborers Local 503, in Jackson, MI, which was part of the Laborer's International Union of North America. Between 1970 and 1976, he became a member of the Executive Board. In 1976, he was appointed to complete the unexpired term of the outgoing Business Manager. He was elected to the position every three years thereafter until he retired on March 1, 1998.

Controversial Boston Local under Spotlight for Possible Embezzlement at Airport Parking Garage

FBI and IRS agents searched the Logan Airport's Parking garage and interviewed at least 23 wrkrs. and mngrs. on Nov. 7, after being alerted to "discrepancies" in parking revenues. The wrkrs. at the garage are controlled by Local 25 of the Intl. Bhd. of Teamsters, already under investigation for a series of shakedowns and featherbedding in the movie-making industry, and whose president, George W. Cashman, is under indictment for union insurance fraud.

Mass. Port Authority CEO Craig P. Coy contacted fed. investigators after he was hired in April and discovered the "discrepancies," which were uncovered in a Dec. 2001 audit. The indicted boss, George W. Cashman, sat on the port authority bd. until forced to resign after his indictment in Jan. of this year. Coy, hired to reestablish public trust in the authority known as a haven for political patronage jobs, said he was asked to delay any actions of his own until after the grand jury investigation is complete. [Boston Globe 11/8/02, Boston Herald 11/9/02]

Carpenters Boss Feels Heat, Promises to Give Back Ill-Gotten Stock Gains

United Bhd. of Carpenters (UBC) President Douglas McCarron finally promised, Oct. 29, to return the insider stock profits he made at the expense of union members' pensions, which were tied to the insurance company on whose board McCarron sits.

That still leaves Morton Bahr, President of the Communication Wrkrs. of Amer. (CWA), Robert Georgine, frmr. head of the AFL-CIO's Bldg. & Construction Trades Dept., United Assn. of Plumbers & Pipefitters pres. Martin Maddaloni, and frmr. Intl Assn. of Iron Wrkrs. pres. Jake West, as four of the leading union chiefs still clinging to their stock profits from ULLICO. The union-owned insurance company saw its stock first skyrocket, then plunge, as ULLICO directors bought into Global Crossing, whose stock rose during the telecom bubble, then crashed into bankruptcy in 2001.

D.C. Teacher Boss Forced to Resign amid Allegations of Financial Wrongdoing

Barbara Bullock resigned as president of the Wash. Teachers Union (WTU) in late Oct., after natl. union officials found financial irregularities possibly involving "hundreds of thousands" of dollars. The case has been referred to the U.S. Attny. in Washington. Also forced out were WTU treasurer James Baxter and special asst. Gwendolyn Hemphill, who at the same time, resigned as co-chair of D.C. Mayor Anthony Williams' reelection campaign.

According to Edward J. McElroy, secy.-treas. of the Amer. Fed. of Teachers (AFT), a local member contacted the AFT after her monthly dues deduction went from $16 to $160. When AFT officials couldn't resolve the problem, they commissioned an audit of the WTU, which found other dues over-charges and "a number of checks and credit card expenditures" lacking proper explanations. It was after this audit that the AFT Executive Bd. asked the three officials to step down, and turned over their findings to the U.S. Attny.

Fed. Govt. Union Boss Charged with Embezzlement in NJ

Verlia Jones was charged on Oct. 18 with double-dipping embezzlement in her dual offices at the local and dist. level. The criminal complaint was filed in the U.S. Dist. Ct. for N.J.

Jones was elected president of Local 1012 of the Amer. Fed. of Govt. Employees (AFGE) in Feb. 1998. While in ofc. until Jan. 2001, acc. to the complaint, Jones stole nearly $45,000 through union checks payable to, and cashed by, herself. She also used the Lyons-based Local's checking acct. to cover numerous personal expenses charged to her credit cards. In Oct. 1999, Jones was elected to the ofc. of Treasurer of the 2nd Dist. Veterans Admin. Council, also located at the VA Medical Center in Lyons. Until she left ofc. last May, Jones withdrew $14,500 from the Council's checking acct.

On May 9, Jones signed a statement, admitting her embezzlement to investigators with the Newark  branch of the U.S. Ofc. of Labor-Mgmt. Standards. Jomes is charged with having embezzled a total of $59,513 from AFGE on fed. govt. property, in violation of 18 U.S.C. Sec. 661. [U.S.A.O. D. N.J. 11/1/02] 

Investigation of HI Union Non-Profit Deepens

As one person was sentenced for defrauding a union-controlled non-profit group, another was indicted for witness-tampering in relation to a search of that non-profit and the union that controlled it.

On Oct. 30 of this year, the U.S. Attny. for the Dist. of Hawaii charged Aaron Rutledge with persuading an unnamed individual to destroy and withhold records and "objects" sought by fed. investigators on Oct. 30, 1997. That day, the agents were searching the offices of the non-profit, Unity House, and Local 5 of the Hotel Employees & Restaurant Employees union (HERE). They also searched the home of Aaron's grandfather, Art, frmr. chief of Local 5 and founder of Unity House, a non-profit established to benefit members of Local 5 and the Hawaii Teamsters union. Reportedly, the agents seized computer files and bundles of cash that day.

Ex-SD Treas. Indicted for Embezzlement

On Oct. 22, in the U.S. Dist. Ct .for South Dakota, Jo Ann Vaughn, frmr. treasurer
of the Intl. Alliance Theatrical, Stage & Picture Operators Local 220, was indicted on one count of causing a false report in violation of 18 U.S.C. 1001, and one count of embezzling approximately $33,000 in union funds. Vaughn pled not guilty. The charges were brought following an investigation by the Minneapolis Resident Investigator branch of the U.S. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 10/30/02]

3rd Va. Official Sentenced for Embezzling from Union Relief Fund
Chief U.S. Dist. Ct. Judge Samuel Wilson (U.S.D.Ct. W.Dist. Va, G.H.W. Bush) sentenced William Fricker on Oct. 25 to 4 yrs. probation, 6 mos. of home detention, and restitution of $6,300 he stole from  the union he headed and its disaster relief fund.

MI Workers Accuse Local Bosses of Falsification, Misspending of Dues

Four members of United Auto Wrkrs. (UAW) Local 869 filed unfair labor practice charges against the hierarchy on Oct. 31. The Natl. Labor Relations Bd. (NLRB) is now investigating the allegations of kickbacks, pay for unperformed work and nepotism.

The four employees charge that local officials punch in for their shifts, then immediately leave and return later through entrances without time clocks. Particularly, the workers charge, Local 869 committeeman David Joiner took payment for time worked on Sundays at the Daimler/Chrysler stamping plant in Warren that he actually spent at membership meetings and picnics. One time sheet shows Joiner on the job for 12 hrs. on Sunday, Aug. 25, the same day as a 2 1/2 hr. membership meeting. Joiner claims that he went to the meeting on his lunch hr., and that he left early.

The workers also charge that union officials took gifts and favors, such as parking privileges, from Daimler/Chrysler and parts suppliers, and that a contract to paint the union hall was awarded to the brother of Local 869 pres. Pat Peralta without bids or the members' approval.

Miss. Man Sentenced for Misusing Union Credit Card

James R. Dawson Sr. was sentenced to three years of supervised probation, and fined $1,700, for union embezzlement on Oct. 18 in the U.S. Dist. Ct. for the Sou. Dist. of Miss. Dawson was President of Local 325 of the Natl. Postal Mail Handlers, a division of the Laborers Intl. Union of N. Amer., when he made $9,400 in unauthorized cash advances from the union's credit card from May 1997 through Nov. 2001. He pled guilty to violations of 29 U.S.C., Sec. 402(i) and 402(j) on Aug. 7. Dawson had previously made full restitution to the local union. [DOL OLMS 10/30/02, U.S.A.O. S.D. Miss.]

Frmr. Teasurer Pleads Guilty in NY Fed. Ct.
On Oct. 24, in the U.S. Dist. Ct. for the W. Dist. of NY, David S. Koch, frmr. treasurer of PACE Local 236, pled guilty to one count of violating 29 U.S.C. 439(a). He admitted that he failed to file the union's annual financial reports for the fiscal years ending April 30, 2000 and April 30, 2001. He made a $4,000 restitution payment to the union prior to the plea being entered. The charges were brought following an investigation by the Buffalo branch of the U.S. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 10/30/02]

Union PACs Lead in Contributions since 1990, Give Dems Edge in Donations from Top 100

Six of the top 10, and 12 of the top 20 campaign contributors over the past 14 years are unions. And with 94% of their donations going to Democrat candidates, these unions have given the Dem. party a 20% edge in contributions from the "Top 100," acc. to a non-partisan study released Oct. 22. The study by the Center for Responsive Politics chronicles both direct contributions to candidates by political action cmtes. (PACs), and "soft money" donations to political parties from 1989-90 to the current campaign cycle.

The top contributor, of $30,671,426, was the Amer. Fed. of State, County & Municipal Employees, followed by the Natl. Educ. Assn. with $21,116,383. Also in the top 10 are the Intl. Bhd. of Teamsters at no. 6, the Intl. Bhd. of Electrical Workers at no. 7, the Serv. Employees Intl. Union at no. 9, and the Comm. Wrkrs. of Amer. at no. 10. Of the top 100 contributing organizations since 1989, Dem. candidates received 60% of their total donations, thanks to the 94% of union contributions that went to the Dem. party. The study can be read at the CRP's web site, http://www.opensecrets.org

Hawaii's "26th Senator" Tried for Fraud & Embezzlement

Once known as the "26th Senator," United Public Workers union chief Gary Rodrigues began his trial on 100 counts of mail fraud, defrauding the union's health & benefit program, and embezzlement on Oct. 2. Also on trial for allegedly accepting kickbacks disguised as consulting fees is Robin Sabatini, Rodrigues's daughter. Presiding over the jury trial is fed. Judge David Ezra (U.S.D.C. HI, Reagan).

According to Rodrigues's ex-secy. and girlfriend, Georgietta Carroll, insurance agent Herb Nishida showed up at the union hall almost every month during the 1990s with a white envelope, Afterwards, Carroll testified, Rodrigues would say, "A payment was made," or "we can go out to dinner tonight," then take the envelope to a downstairs safe. Nishida himself later testified that he gave Rodrigues an annual average of $20,000 for five years by skimming from commissions he got selling insurance policies to union members.

WI Sen. Leader Indicted for Laundering Contributions through Union PAC He Controlled

The Milwaukee Dist. Attny. announced on Oct. 17 the indictment of Sen. Majority Leader Chuck Chvala on charges of laundering campaign contributions through a union-backed political action committee (PAC) in violation of state law.

The indictment appears to have been filed just one day after Chvala's chief of staff, Doug Burnett, agreed to cooperate with investigators and plead guilty to two misdemeanor charges. Chvala faces three counts of extortion, seven counts of misconduct in public office and 10 campaign finance violations. Nine of those charges allege that Chvala conspired to funnel campaign contributions to PACs he controlled, in violation of Wisconsin law barring such coordination between PACs and candidates.

S. Fla. Govt. Workers Abandon Indicted Union Chief

As indicted union boss Walter Browne awaits trial on racketeering charges, the employees of Sunrise, Fla., voted by a 4-1 margin to oust his union as their bargaining representative in mid-Oct.

Browne and his sister, Patricia Devaney, were indicted in Nov., 2001, on 22 counts of racketeering within the Natl. Fed. of Public & Private Employees (a.k.a. Marine Engineers Beneficial Assn., Dist. 1) he headed. In April 2000, the owner of Coleary Transport pled guilty to paying a $2,000 bribe to Browne, and agreed to cooperate in the fed. investigation. Browne is also accused of taking and/or seeking bribes from Hvide Marine (n.k.a. Seabulk Intl.) ($263,000); SeaAmerica Cruise Lines ($50,000), and Intl. Cruises ($12,500). Hvide has pled guilty for his part in the racketeering.

In March of this year, 72% of Sunrise city employees asked for a vote to switch from Browne's union to the Fraternal Order of Police (FOP), after months going without a contract while city commissioners voted to increase their own pensions. The vote earlier this month was 259-63 [Ft. Lauderdale Sun-Sentinel  10/23/02]

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