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.

Fallout from Embezzlement Scandal Hits Law & Accounting Firms

The law and accounting firms whose partners assisted officials of the Intl. Assn. of Iron Wrkrs. (IAIW) in their massive embezzlement are now paying the price.  In an agreement deferring prosecution by the U.S. Attny's. Ofc. for Washington, D.C., the law firm has agreed to drop the name of the founding partner, the late Victor Van Bourg, who helped hide the embezzlement of some $1.5 million in the 1990s.  The accounting firm of Thomas Havey, LLC, whose partners also concealed the embezzlement, broke up in January with a new firm, Legacy Professionals, retaining its other numerous union clients.

Oklahoma Right to Work Law Goes Back to State Supreme Court

Ironically arguing that the state of Oklahoma cannot protect the right to join a union, union lawyers have successfully stalled a final decision as to whether Oklahoma’s popular Right to Work constitutional amendment will be upheld.

The U.S. Court of Appeals for the Tenth Circuit – based in Denver – has ruled that the provision in Oklahoma’s Right to Work Law that protects the right to join a union is also preempted by the NLRA (which already protects that very right), and thus can only be enforced as to public employees in the state. The State Supreme Court must now decide whether the preempted provisions of the law are severable from the core of the law, which establishes the right of employees not to join or financially support an unwanted union.

Jersey City Union Boss, Fla. Developer, Indicted for Embezzling Welfare Funds

On May 5, a federal grand jury returned a six-count indictment against two union officials and a building contractor in an embezzlement scheme against Local 148 of the Novelty and Production Workers Union in Jersey City, U.S. Attorney Christopher J. Christie announced.

The indictment alleges that between 1992 and 2001, Joseph Nardone, Jr., 49, of Bayonne, the Welfare and Pension Fund Administrator for Local 148 and the Local's recently removed President, and Stanley Rothman, 67, a building contractor now residing in Boynton Beach, Fla., conspired with each other and others to embezzle more than $350,000 in welfare and union funds through a multi-faceted fraud scheme.  The indictment also charges Peter Hasho, 67, of Long Island, President of Local 713 of the International Brotherhood of Trade Unions, located in Albertson, N.Y.

2 More Fish Netted in NYC Racketeering Scheme

Two of the leaders in the racketeering scheme at more than 20 New York City construction sites from 1989-2001 pled guilty in late April. The scheme of payments for no-show jobs and "labor peace" cost more than $6 million in lost wages and benefits.

On April 24, in the U.S. Dist. Court for the Eastern Dist. of NY, Matthew Joseph Downey, a representative of Local One of the Intl Union of Elevator Constructors, pled to racketeering, unlawful labor payments, money laundering conspiracy, witness tampering, and tax evasion.  He agreed to forfeit $800,000 to the United States Government within 120 days from his assets representing a portion of the racketeering profits.

Another Guilty Plea in NYC MTA Fraud Case

On April 11, Morris Diminno, a former representative of the Intl. Union of Operating Engineers Local 14, pled guilty to conspiracy to receive, possess and dispose of money obtained by fraud and transported across state lines, unlawful labor payment, engaging in an unlawful monetary transaction, and obstruction of justice.  He agreed to forfeit $800,000 to the United States Government within 90 days from various assets. He had been indicted on April 16, 2002 on charges relating to the taking of payoffs to help developers at the Metropolitan Transportation Authority's renovation site bill the MTA for no-show workers at inflated rates.  The charges had been brought following a joint investigation by the New York branch of the U.S. Ofc. of Labor-Mgmt. Standards (OLMS) and the FBI. [OLMS, 4/30/03]


Ohio Union Boss Held in Contempt

Grand Jury Closes in on Ullico Directors: Georgine Steps Down

A Washington, D.C. grand jury has subpoenaed union directors and executives of the Ullico board to testify about their buying and selling of Ullico stock at the expense of the union pension funds that underwrite the company.  At the time of the sales, that board included AFL-CIO chief John Sweeney, who didn't participate in the scheme, but has since resigned in protest over the sales, even though he apparently did not protest until the scandal became public last year.

Georgine agreed on April 23 not to run for another term on the Ullico board at its annual meeting in May, but also said he intends to remain as president and CEO.  However, with Sweeney and other disgruntled union chiefs pushing a slate of 13 new directors for the Ullico board, leaving only two from the board that approved the sales, Georgine may have trouble keeping his offices at Ullico come its May 8 annual meeting.

CA Labor Commissioner Used Taxpayer Dollars to Pay Personal Expenses

California labor commissioner Art Lujan charged over $17,000 in false relocation costs, as well as various travel and meal expenses, the California Bureau of State Audits concluded on April 17.  Before Gov. Gray Davis appointed him in 2000, Lujan was business mgr. of the San Diego Bldg. and Construction Trades Council.

The Dept. of Industrial Relations that Lujan heads is based in San Francisco.  Between April 2000, and Nov. 2001, Lujan claimed $1,524 in relocation costs within the allowable 30 days after his appointment, but without the approval of the Dept. of Personnel Admin.  After the 30-day window, Lujan wrongly claimed another $2,554 in relocation costs, as well as $861 in airfares between San Diego and San Francisco he claimed were related to his move.  The only problem, as Lujan later admitted, was that he considered the real estate costs too high to actually move to San Francisco, where his dept. had its headquarters.  During Lujan's supposed relocation, he also received $787 for lodging costs while in San Francisco.  In all, Lujan's dept. admitted that their boss was wrongly reimbursed $5,726.

Dems Ram Violent Union Boss thru IL Senate

Allowing no debate, democrats rammed the nomination of Michael Fenger as Labor Secy. through the Illinois Senate on April 10.  But Sen. Peter Roskam (R) managed to mention Fenger's "criminal background" three times during procedural questions.

The frmr. Business Mgr. of Intl. Bhd. of Electrical Wrkrs. Local 364 pled guilty to property damage and reckless conduct after police officers saw him puncture all four tires of a non union worker's car as he tried to leave a Wal-Mart construction site but was surrounded by union protesters in 1997.  When Gov. Rod Blagojevich appointed Fenger labor secy. earlier this year, Fenger claimed to have only pled "no contest."  But the prosecuting attny. pointed out that no such plea exists in IL law.

"Now I represent the workers of the state of Illinois -- all of them, union or not -- that's my new job," Fenger said after his committee hearing the week before the senate vote. [Rockford Register Star, 4/11/03]

Boston Teamster Boss, Accomplice Plead Guilty

Thomas Disilva pled guilty on April 18 to helping Intl. Bhd. of Teamsters Local 25 president George Cashman defraud the union's benefit plan, and using the union's pension funds for extortion.  Faced with Disilva's cooperation and testimony at his trial set to begin April 28, Cashman pled guilty to both charges as well.

Cashman and Disilva were originally indicted on Jan. 16, 2002, for allegedly arranging the placement of 19 non-employees on the payroll of Disilva's companies, thus robbing Local 25's Health Services and Insurance Plan of $72,000 from 1992-2001.  More recently, the two were indicted on March 13 for extorting payments to Disilva after Cardinal Health Inc. refused to pay $100,000 to Disilva in exchange for Cashman settling a suit over Cardinal's obligation to the Local 25 pension fund.  Cashman admitted to receiving $20,000 in the extortion case

Intl. Bosses Drop Fines against Atlanta Dissidents

On April 10, the General Exec. Board of the Intl. Assn. of Iron Workers dropped their massive fines of two Atlanta members who contacted NLPC for help in ferreting out corruption in their local union.

Local 387 member Carl Bishop and trustee Oscar Ingram had been fined a total of $11,000 for contacting NLPC and the U.S. Dept. of Labor in an effort to obtain documentation of expenses charged to Local 387 by its president, Hugh Dryden.  In July, Dryden used a union meeting to incite a mob against Bishop and Ingram, demanding that the two be expelled.  Soon after, the two were fined for violating the Ironworkers constitution for revealing information about the union to outside organizations, including NLPC and the labor dept.  At first, the Intl. hierarchy in Washington, D.C. supported the discipline, upholding Ingram's $1,000 fine, while reducing Bishop's from $10,000 to $5,000.

Judge Orders Miami Union Bosses to Repay Bilked Investors

U.S. Bankruptcy Judge Larry Lessen on April 11 ordered Miami police union officials to repay $909,000 they got back from their crooked accountant's investment fund before the other investors learned of his fraud.

Ronald Stern was hired to handle the Miami Police Relief and Pension Fund (MPRPF) in 1990 by its then-president, Donald Warshaw.  In 1996, Stern began diverting funds from the MPRPF into an investment account he called the Florida Fund.  He gained other clients for the fund with bogus reports of high returns.  In November 1998, union officials found discrepancies in the pension fund's certificate of deposit accounts.  In January 1999, an audit revealed that Stern had stolen $1.4 million from the pension trust.

Appeals Court Upholds Bush Order on Forced Union Dues

The U.S. Court of Appeals for the District of Columbia on April 23 upheld President George W. Bush's Executive Orderrequiring federal contractors to post notices informing employees that they cannot be compelled to join a union or pay union dues spent for partisan politics or other activities unrelated to collective bargaining.   

The 2-1 decision overturns a previous ruling from the U. S. District Court for the District of Columbia that invalidated the President's Executive Order.  In addition to defending the order as amicus curiae in the case, the National Right to Work Foundation had called upon the Bush Administration to appeal the District Court's original decision and delivered over 100,000 signed grassroots petitions urging President Bush to defend his Executive Order from union attack.

"This ruling is a step toward informing employees they have the right not to be shaken down to pay for union political activities," stated Stefan Gleason, Vice President of the National Right to Work Legal Defense Foundation.  "No employee should be forced to fund a political agenda they abhor as a job condition."

Three Providence Bosses Indicted for Extortion

A Rhode Island grand jury indicted three Providence officials of the Intl. Longshoremen's Assn. in early April for extortion and conspiracy.  The three indicted officials of Local 1329 are president Raymond Silva, vice president Domingo Silva and secy.-treasurer John Carnevale.

According to the indictment, the three conspired to "verbally and maliciously threaten to injure" David Borque, president of the scrap company at the Providence port between January 1, 1999 and October 22, 2002.  The three officials were reportedly enraged when Borque refused to hire a member for a no-show job for 30 hours a week.  In addition to threatening Borque personally, the three also allegedly threatened his family.  Borque eventually began wearing protective padding in case union goons attacked him. 

NJ Boss Finally Confesses to Fraud, Sort Of

Frank Ginesi, frmr. president of the NJ State Policeman's Benevolent Assn. (PBA), said on April 21 that he had no idea how he ended up in fed. court.  But earlier that day, he confessed to U.S. Dist. Judge Dennis Cavanaugh (NJ, Clinton) that from 1991 through 1996, he had withdrawn more than $1 million from the PBA's funds "in a manner not authorized by the [PBA] constitution and by-laws."  He also admitted setting up four accounts at the Family First (later Great Falls) bank without ever informing the membership.

DC 37 Exec. Director Accused of Nepotism in Contract

The executive board of District Council 37 in New York City, on April 21, ordered a reconsideration of a union contract awarded to the nephew of DC 37's executive director Lillian Roberts.  Three days later, the nephew, Ivan Smith, gave up the contract in which his law firm -- Vladeck, Waldman, Elias & Engelhard -- would represent the council's employee benefits fund. 

Roberts was elected to head the huge NYC affiliate of the Amer. Fedtn. of State, County & Municipal Employees (AFSCME) in Feb. 2002.  Roberts replaced the disgraced Stanley Hill, who presided over a board in which more than half the directors were convicted of various crimes and the council's assets plummeted by more than 80%.

Why is Miami Union Boss Covering for Embezzler?

Keith Beckler, frmr. treasurer of Local 587 of the Intl. Assn. of Fire Fighters, was caught red-handed by the union stealing at least $15,000 for things such as a trip to Disney World with his girlfriend.  But rather than contacting law enforcement authorities, Local 587 president Ed Piderman is indignantly insisting on handling it within the union.

"The union is not a public entity and it's not subject to public-records laws.  This is 100 percent our money," Piderman told Tristram Korten of Miami New Times on April 10.  But as Korten point out, since these public sector union officers are entitled to 6,000 hrs. of pay while conducting union business, taxpayer money is involved.  And in justifying his trip to Disney World, Beckler reportedly lied to the city by claiming his leave was for union business.  Nor is this the first time the use of taxpayer money for union activity has come up.  In 2002, the Dade County Office of the Inspector General concluded that activities conducted on union leave time had cost the county $640,000 in a 21-month period.

Ex-President Indicted in Ky. Federal Court

On April 9, in the U.S. Dist. Court for the Eastern Dist. of Kentucky, Timothy Aldridge, former president of United Steel Workers Local 1 in Florence, an independent union, was indicted on four counts. Aldridge is charged with one count of embezzling $112,525.27 in union funds and three counts of withholding or concealing union records he was required to report to the U.S. Dept. of Labor.  Aldridge is alleged to have committed his violations of 29, U.S.C. Secs. 501(c) and 439(c) from Feb. 2000 to Jan. 2002.  The charges were brought following an investigation by the Cincinnati branch of the U.S. Ofc. of Labor Mgmt. Standards. [OLMS 4/16/03, U.S.A.O. E.D. Ky, 4/9/03]


Frmr. President Confesses to Embezzlement in Fla. Fed. Court

On April 9, in the U.S. Dist. Court for the Middle Dist. of Florida, Anibal Roldan, former president of Bakery, Confectionary, Tobacco and Grain Workers Local 361 in Tampa, pled guilty to embezzling $14,684.28 in union funds. Roldan had been charged on March 20, 2003, following an investigation by the Atlanta branch of the U.S. Ofc. of Labor Mgmt. Standards. [OLMS, 4/16/03]

Ullico Chief Tries to Trump Thompson Report with "Special Committee"

Former Illinois Gov. James Thompson found "compelling evidence" that the union boss directors of Ullico violated their fiduciary duty to the union members whose pension funds support the insurance company.  In Maryland, where the union insurance company is based, state law requires company directors to act in the best interests of the company, not themselves.  But from 1999 to 2001, 19 Ullico directors took advantage of insider stock deals disproportionally structured to favor them even as the company finished 2002 in debt, and has seen its insurance rating downgraded twice this year.

Thompson handed over his report to Ullico CEO, and former construction union boss Robert Georgine last November.  But Georgine refused to release the report to the public, and has fought efforts by U.S. labor dept. and Maryland insurance officials to see the report, claiming attorney-client privilege.  In response to the Thompson report, Georgine formed a "Special Committee" of Ullico directors who reportedly did not take part in the stock deal. 

Mass. City Workers Revolt Against Local 25

With its president, George Cashman, set to be tried for extortion on April 22, Intl. Bhd. of Teamsters Local 25 faces a revolt by Cambridge city workers seeking to form their own union.  According to the dissidents, Local 25 has resorted to harassment and intimidation of those leading the effort.

The Local has been under federal investigation for years for allegedly extorting filmmakers in Massachusetts.  A number of former local officials have already been convicted of defrauding the union's pension fund, charges that Cashman also faces.  Now, 220 of the 330 municipal employees of Cambridge have signed a petition asking for an election on forming a new union no longer under Local 25's control. 

NY Developer, Union Boss, Plead Guilty in $10 Million Fraud Case

A Manhattan developer and two former union bosses have confessed to defrauding the taxpayers of NYC by helping to steal more than $10 million from the N.Y. Metro. Transportation Authority (MTA).  That brings to four the number of defendants who have pled guilty to the scheme in which developers overcharged the MTA for construction projects, then conspired with officials from Local 14 of the Intl. Union of Operating Engineers (IUOE), and Local 1 of the Intl. Union of Elevator Constructors, to pocket the savings from using lower-paid non-union workers.

On March 31, Frederick Contini pled guilty to his major role in the conspiracy.  In Feb. 1999, the MTA contracted with Contini to renovate a 1.2 million-sq. ft. space on Broadway at a cost of $55 million, which eventually grew to $155 million.  Contini, using a sham company called Links Construction, billed the MTA at the highest possible wage for labor to be supplied by the two unions.  In addition to the use of non-union workers, Contini also inflated the number of hours actually worked. 

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