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 Local Settles Beck Action

Responding to  pressure brought by Nat'l Right to Work Legal Def. Fdn. attorneys, the Nat'l Labor Relations Bd. forced the Service Employees Int'l Union Local 200 Feb. 7 into a settlement  of unfair labor practice charges brought by employees  of the Marsellus Casket Co.  The case was filed by NRTWLDF attorneys for three employees, Mark L. Miller, Scott Bayer, and David Sprague. The Syracuse, N.Y., based local refused their resignations and forced them to continue to pay full union dues, including dues used for political,  ideological, or other non-representational purposes.

Local 200 must refund the three employees' dues and fees that were used for non-representational purposes. The settlement also forces the union to post a notice alerting workers and  Marsellus Casket employees of their right to refrain from formal union membership and the payment of full union dues.

"The union has finally been forced to pay a price for its illegal practice of fleecing employees for political cash," said NRTWLDF's Stefan Gleason.

DOL Opens Probe of National Union's Election

The Dep't of Labor is reportedly investigating last year's national election of the Screen Actors Guild to determine whether alleged ballot irregularities influenced the outcome of the vote. Five SAG members petitioned DOL to intervene after SAG's elections committee in Jan. scrapped the results of the Nov. election of SAG President Melissa Gilbert and two other national officers. The members argued that the elections committee lacked the authority to overturn the election and that they were biased toward Valerie Harper, who lost the presidential race to Gilbert by 1,588 votes out of about 28,000 votes cast.

The elections committee voted to scrap the election results because N.Y. members had two extra days to vote and the company that printed the East Coast ballots failed to include a signature line similar to ballots sent to members on the West Coast.

Although the members hoped their DOL petition would derail the new election, it will go as planned because DOL's investigation could last up to 60 days. Ballots were mailed to SAG members Feb. 11 and are due by March 8, when the votes will be tabulated.

Welfare Board Files Complaint against New Jersey Local

The government board that runs Passaic County's (N.J.) welfare agency has taken the unusual step of filing an unfair labor practice charge against Communications Workers of America Local 1081, demanding that its leaders apologize for injecting race into their rhetoric and stop interfering with "management rights. " The Board of Social Services has complained that Local 1081 bosses have tried to intimidate the board by raising discrimination issues while opposing a controversial promotion.

Indiana Salt Permitted to Lie on Job Application

U.S. Court of Appeals for the Seventh Circuit said Feb. 6 that a paid union organizer is permitted to lie on his employment application about his status as a "salt," or about facts that might raise suspicion that he is a union organizer, so long as he has not misrepresented facts relevant to his job qualifications. The lie is not material, the court said in addressing the question left open by the Supreme Court's decision in NLRB v. Town & Country Elec., 516 U.S. 85 (1995), because "an employer cannot turn down a job applicant just because he's a salt or other type of union organizer or supporter."  Salting is the union practice in which organizers obtain employment with a nonunion firm and try to organize the company's employees. Even an Indiana statute that criminalizes intentionally making false statements to obtain employment will be preempted by the Nat'l Labor Relations Act, the Seventh Circuit said, if that state law is interpreted to allow an employer to turn down an applicant because he lied about salt status.

Ex-South Florida Boss Sentence to 46 Months

U.S. Dist. Judge William P. Dimitrouleas (S.D. Fla., Clinton) sentenced ousted Broward Teachers Union boss  Anthony J. Gentile to 46-month in prison Feb. 8 on child pornography charges. Gentile, once a giant in Florida education and labor relations circles, struggled to compose himself as he apologized to his family, to the union he helped create, and to the court before his sentence was imposed.

Gentile, who began as a teacher in Pennsylvania and rose to command the fifth-largest teachers union in the country, was ordered to pay a $10,000 fine, in addition to the jail time, for indictments in Alabama and Florida. He will not be allowed to work with minors or be involved with youth organizations when he is released.

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.

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