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 Fund Manager Admits to Kickbacks

A N.Y. union pension fund consultant admitted Feb 6. that he paid kickbacks to a fund trustee. George W. Philipps, ex-president and owner of Pension Fund Evaluations, Inc., a consulting firm in Centerreach, N.Y., pled guilty before U.S. Dist, Judge Nancy Gertner (D. Mass., Clinton) in Boston to a charge of paying kickbacks to William V. Close, who was then a trustee of the pension funds of Int'l Bhd. of Teamsters Local 710 and Auto. and Int'l Ass'n of Machinists Local 701 (a.k.a., Auto. Mechanics Union Local 701), both of which are in Chicago.

Two Convicted in Scheme to Bribe Union Bosses to Access Pension Funds

A N.Y. stockbroker and a Chicago futures trader were convicted Feb. 13 of scheming to bribe union bosses to invest millions of dollars of pension fund money with a corrupt money manager. Stockbroker John M. Black, who authorities say was a Luchese organized crime family associate, and futures trader Glenn B. Laken were convicted today of racketeering, bribery and fraud. Among those whom they planned to bribe were bosses with the Annuity Fund of the N.Y.C. Police Detectives Endowment Ass'n, the independent Production Workers Local 400 in N.Y.C., and Int'l Union of Operating Engineers Local 137 in Briarcliff Manor, N.Y.  The verdict was reached at the conclusion of a three-month trial before U.S. Dist. Judge William H. Pauley, III (S.D.N.Y., Clinton).

Indiana Boss Charged with Forgery and $4,000 Theft

On Dec. 17, in Wayne County (Ind.) Superior Court, Priscilla Crist, ex-president of Auto Workers Local 2374 in Richmond, Ind., was indicted for forgery and theft of $4,092 in union funds. [DOL 12/17/02]


Georgia Boss Charged with False Recordkeeping
Joseph Argo, ex-president of Int'l Ass'n of Machinists Lodge 615 in Marietta, Ga., was charged in a one-count information with false financial recordkeeping. [DOL 1/15/02]


Atlanta Boss Charged for Failing to Maintain Financial Records
On Jan. 15, Charles Astin, ex-president of Retail, Wholesale & Department Store Union Local 343 in Atlanta, was charged in a one-count information with failure to maintain union financial records. [DOL 1/15/02]


Florida Boss Allegedly Concealed Records
On Dec. 17, in U.S. Dist. Court for the S. Dist. of Fla., David Lareau, ex-business manager of Int'l Bhd. of Painters & Allied Trades Local 160, was charged in a one-count information with concealing and withholding union financial records.

Indicted West Virginia Boss Resigns, Accused of Playing Favorites in Job Assignments

Indicted union boss Tom Bailey, facing internal pressure from his union, agreed to resign from the Am. Fed'n of Musicians Local 136's eight-member board of directors effective Dec. 31. He remains a member of the Charleston, W. Va., based local. In Dec., Bailey and his wife, Deborah, were indicted on federal union embezzlement charges and accused of embezzling some $15,000 from the local. Their criminal trial is scheduled for Mar. 26.

New local president Brad Bradley held a meeting Feb. 10 to tell members about changes that will be made in the local. "We're going to try to redirect the union focus back to a more service-friendly organization," Bradley said. "We're really wanting to change things around."

Arkansas Judge Bars Union from Wal-Mart due to Trespass Violations

An Ark. state court judge issued a nationwide injunction Jan. 29 barring the United Food & Commercial Workers from passing out literature or soliciting for the union inside Wal-Mart stores. Judge James Spears of the Chancery Court in Ft. Smith, Ark., determined that UFCW organizers violated state trespassing law when in late Sept. 2001 they participated in a week-long "blitz," entering a number of Sam's Club stores to distribute union literature.   Following a Dec. hearing, Spears issued the order enjoining UFCW from soliciting activity inside any Wal-Mart or Sam's Club stores. Spears said the order was "nationwide in scope."

Contractors May Proceed with Antitrust Suit Against New York Local

U.S. Dist. Judge Richard M. Berman (S.D.N.Y., Clinton) ruled Jan. 24 that two telecommunications wiring installation contractors, U.S. Info. Systems Inc. and Odyssey Group Inc.,  may proceed with their claims that Int'l Bhd. of Elec. Workers Local 3 and six contractors that employ Local 3 workers violated federal and state antitrust laws by conspiring to exclude the plaintiffs from telecommunications installation work in the N.Y.C.  area. Berman denied the defendant's motion for summary judgment on the USISI and OGI's claims brought under the Sherman Antitrust Act and state antitrust law, finding that the plaintiffs, adequately pled violations of the acts.

Employees Win $120,000 from Oklahoma Local in Beck Action

Richard Ohse and 60 other employees of the Carlon Corp. won a long-running case on Jan. 31 against Int'l Bhd. of Boilermakers Lodge 465-D in Oklahoma City . Ohse, with the help of Nat'l Right to Work Legal Def. Fdn. attorneys, filed charges with the Nat'l Labor Relations Bd. to reclaim dues that had been illegally collected by the union and used to support political activities. As a result of the NLRB's ruling, the local, also known as Cement Workers Lodge 465-D, will have paid out a total of $120,000 in full refunds of illegally seized dues, plus interest,  to the 61 employees who were the beneficiaries of the complaint. Ohse, and the other Carlon employees have had to wait more than a decade for this ruling. The charge was first filed in 1991, but  it took several years to force the Clinton NLRB to act  on the matter.

"After all of these prosecutorial delays and the union's stonewalling, these employees have finally been made whole," said NRTWLDF's Stefan Gleason. "No matter  how long union officials hold out, they cannot ultimately deny workers their fundamental rights."

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.

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