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.

16 New York Racetrack Tellers Plead Guilty to Tax Fraud

Sixteen N.Y. racetrack tellers pled guilty to stealing bettors' money for their personal use, then laundering that money through false tax returns, US Dist. Attny Alan Vinegrad announced on June 25.  Three of the pleas were new, while 13 defendants pled guilty last year, but were unsealed along with the three new confessions.  One of those who pled earlier is Robert E. Lodati, president of the the betting clerks' union, Div. of Mutual Employees, which is a unit of the Int'l Bhd. of Elec. Workers Local 3 in Queens.

In the scheme, the tellers pocketed bettors' wagers, compensated the racing assn when their cash drawers came up "short," then claimed those payments as "unreimbursed employee expenses," on their federal tax returns.  By laundering the bettors' case this way, the tellers lowered their taxable income without lowering their actual income.  They face a maximum sentence of three years in prison, a $250,000 fine, and payment of back taxes, interest and penalties.  Donald Patterson is scheduled to be sentenced by US Dist Judge Arthur  D. Spatt (E.D.N.Y., Bush #1) on October 4, Gary Klis and Charles Bonanno a week later.

Union-Abused Teachers Testify At Congressional Hearings

Two Ohio teachers at the center of a national religious discrimination case involving the National Education Association (NEA) teacher union testified before the Workforce Protections Subcommittee of the House Education and Workforce Committee regarding the need to end forced unionism.

"The teachers' testimony exposed the harassment that many employees face every day when laboring under compulsory unionism," said Mark Mix, Executive Vice President of the National Right to Work Committee. "The only way to help workers suffering under compulsory unionism is to make union membership 100 percent voluntary."

The Subcommittee hearings come on the heels of a nationally publicized determination by the Equal Employment Opportunity Commission (EEOC) that the NEA union is systematically discriminating against religious objectors by stonewalling objections. The teacher union forces objectors to undergo extensive interrogation on an annual basis before honoring their right to divert dues away from union officials on the basis of their religious beliefs.

Minneapolis Boss' Brother Admits $9,100 Theft

Joseph W. Martin, who with his union-boss brother and Minneapolis City Council Member Joe Biernat (DFL) was charged with corruption, pled guilty June 21 to federal charges of aiding and abetting the theft of $9,177 from union coffers. He is the first in the scandal to plead guilty. Martin confessed  to using union funds from the United Assn. of Plumbers & Pipe Fitters Local 15 for plumbing work in his own home. His attorney, Gerald Yost, reported that Martin claims his brother, Thomas J. Martin, Local 15 business manager, assured him the transaction was all right.

U.S. Dist. Judge Ann D. Montgomery (D. Minn., Clinton) has not set a date for Joseph Martin's sentencing. That's probably because he agreed to testify against his brother and Biernat at their trials, which were scheduled for July 1 but are expected to be held at a later date. Biernat is accused of receiving $2,700 in free plumbing work at the same time he and council colleagues were considering the appointment of Thomas Martin to the city board that licenses plumbers. Thomas Martin is accused of embezzling some $43,300 from the local. [Star-Trib. (Minneapolis) 6/22/02]

La. Local Accuses Boss of Credit Card Misuse

United Steelworkers of Am. Local 8363 in Chlamette, La., found May 22 that its ex-president, Earl Dauterive III, misused the local's credit card on some 61 occasions. Dauterive now serves as a public official: chairman of the St. Bernard Parish Planning Comm'n. Local 8363 also alleges 18 instances of "double-dipping" on money in which Dauterive was improperly paid salary by both his employer, Murphy Oil, and the union for union activities. The Dept. of Labor has obtained records from the local and is reportedly investigating the case, Thibodeaux said. No criminal charges have been filed yet.

Dauterive, who resigned his union presidency prior to a union trial committee finding, has repaid $1,913 of the money the union claims he owed, according to Joe Thibodeaux, local vice president and chairman of the union trial committee. He said the union is accepting the money only as a partial payment. Allegedly, Dauterive owed about $4,700 in restitution.

Is Dist. Council 37 Back to Old Ways?

As NYC prepares for negotiations with its unions, the bosses of the largest one are honing their bargaining skills -- in Las Vegas.

District Council 37 is paying the freight for nearly 400 of its members to the sun-drenched gaming mecca for the convention of its parent union, the American Federation of State, County and Municipal Employees.  The trip comes six months after the Intl. ended its three-year trusteeship of DC 37.  The NYC local was rocked by a scandal in which more than 20 officials were convicted of embezzlement and other crimes.  The presidents of two of the council's 56 locals were convicted of stealing more than $1 million.  Several council officials were also convicted of stuffing ballot boxes in 1996 to ensure approval of an unpopular contract.

Oliver Gray, Assoc. Dir. of DC 37, insisted that contrary to reports by other union members, the Local was not paying hundreds of dollars per room, but had negotiated a rate of $119 a night per room.  Gray also claimed that the week long Las Vegas meeting is essential to union business, in part because the union locals had to discuss how to manage in tough economic times.

SD Union Illegally Withheld Benefits from Non-Member Employees

Responding to charges filed by an employee of the City of San Diego, the California Public Employment Relations Board (CPERB) has decided to prosecute the San Diego Municipal Employees' Association (MEA) union for overtly discriminating against non-union members.

Enjoying free legal assistance from the National Right to Work Legal Defense Foundation, Tanya DuLaney filed charges after the MEA union decided to withhold dental coverage from all non-union members. MEA's actions are in violation of several California statutes that are intended to protect an employee's right to abstain from membership and that require union officials to fairly represent an employee.

Is SEIU Local in NYC Creeping Back to Corrupt Ways?

Nearly three years after the ouster of free-spending patriarch Gus Bevona, Local 32B-32J of the Service Employees Intl. Union, which represents doormen and other building workers in NYC, is once again in turmoil.

On Apr. 26, local SEIU delegate Ismat Kukic was indicted, along with 40+ members of NY crime families, for attempting to bribe union officials to replace union workers with non-union workers in a Brooklyn housing complex.  What union dissidents want to know is:  How did 32B-32J President Mike Fishman allow Kukic, whose normal union jurisdiction was in Manhattan, into 32B-32J's Brooklyn jurisdiction?  "Good question," Fishman told Newsday, insisting that he is "fully cooperating with the federal authorities."

NLPC Study: Union Monopolies Cost Economy Trillions

Union monopolies in manufacturing, transportation, and other industries have cost American workers some $50 TRILLION over the past six decades, according to a new study published by the Nat'l Legal & Pol'y Ctr. and the John M. Olin Inst. for Employment Practice & Pol'y at Geo. Mason Univ.

Written by Ohio Univ. professors Richard K. Vedder and Lowell E. Gallaway, the study is entitled Do Unions Help the Economy? The Economic Effects of Labor Unions Revisited. According to Vedder and Gallaway, union labor monopolies in manufacturing, transportation, mining, and construction have decimated employment in those industries, increased the supply of employment in less unionized fields, and lowered their wage growth.

Accounting Firm's Contract with Union Allegedly Depended on Its Willingness to Cover Up Corruption

The similarities between the Enron-Authur Andersen scandal and the Iron Workers-Thomas Havey scandal continue to grow. The Dep't of Labor has released new information about the June 4 guilty plea of Alfred S. Garappolo, a partner in the union accounting firm of Thomas Havey LLP, to two felony counts arising from a growing criminal probe into the Int'l Ass'n of Iron Workers and its related funds. First, he confessed to being an accessory after the fact to embezzlement from an employee benefit plan in violation of 18 U.S.C. § 3. He pled guilty to assisting Kerry J. Tresselt, a bookkeeper and daughter of ex-IAIW vice-president Raymond J. Robertson, in order to hinder or prevent her apprehension, trial, and punishment for her embezzlement from the union training fund. Tresselt pled guilty in Nov. 2001 to embezzling $350,000.

International Boss Allegedly Padded Pension

On June 3, the U.S. Atty.'s Office in D.C. unsealed a May 17 indictment which charged LeRoy Worley, ex-IAIW general secretary, with embezzling more than $37,000 from an employee benefit fund in violation of 18 U.S.C. § 664.  Worley reportedly resigned and retired when he was 58 and had worked between 17 and 18 years for IAIW. However, he was allegedly paid a full pension from the Iron Workers Staff Retirement Pension Fund as if he had retired at age 60 and as if he had worked 20 years for IAIW. The indictment further charged that his annual salary preceding his retirement was about $152,000, yet he was paid a pension as if his annual salary preceding retirement had been $169,184. Worley is one of nine individuals indicted in the federal probe of the union and its related funds. Seven have already pled guilty. Worley is awaiting trial as is IAIW president emeritus Jacob "Jake” West. [DOL 6/3/02]

Finally, LM-2s are on the Internet!!

At long last, the Dep't of Labor unveiled June 3 its Internet disclosure system for unions' annual financial reports, such as the LM-2 form. The website, http://www.union-reports.dol.gov, allows easy access to union financial reports maintained by DOL's Office of Labor-Mgmt. Standards. Union members, investigative journalists, non-incumbent union candidates, employers, and anyone else may now view, via the Internet, the union reports and conduct data searches free of charge.

"What used to take weeks will now take seconds. It's a major breakthrough for holding unions and union bosses accountable," said NLPC Chairman Ken Boehm, commenting on the difficult process of securing copies of union annual reports, at the cost of the copies, from DOL before the new website became accessible. "It's free and you don't have to drive to to your local DOL office to see these reports. This will be a great resource for union members and anyone else wishing to keep track of the shenanigans that go on within unions. I encourage everyone to log on to DOL's new site today," said Boehm. "You never know what kind of corruption you might find."

IRB Ousts Hoffa's "Duke" for Nepotism

On May 30, the Int'l Bhd. of Teamsters' court-monitored oversight panel barred William Hogan, Jr., Chicago's most powerful Teamster and close ally of IBT boss James P. Hoffa, from the union for life due to a plot to drive down wages and benefits for Las Vegas IBT Local 631 to help a Chicago-based firm in which his brother had a stake. Also banned for life was Dane Passo, a Chicago Teamsters who became Hoffa's right-hand-man at IBT headquarters in Washington. The Indep. Review Bd.'s action came as Hoffa endorsed Ohio's GOP governor and appeared with the likely GOP gubernatorial nominee in Md., all in an effort to reportedly persuade President Bush to seek IRB's disbandment. IRB was founded in 1989 to help settle a racketeering suit by the government charging that IBT were controlled by organized crime.

Gotti Clan Indicted for Infiltration of New York Locals

On June 3, federal and N.Y. authorities announced the arrests and indictments of seventeen members and associates of the Gambino Organized Crime Family of La Cosa Nostra for racketeering, extortion, wire-fraud, loan sharking, operating illegal gambling businesses, money laundering, witness tampering and other related crimes. The 68-count indictment outlines the Gambino family's influence, through extortion and wire fraud, over the Int'l Longshoremen's Ass'n Locals 1 and 1814, as well as firms on the Brooklyn and Staten Island waterfronts. Allegedly, waterfront employees and their relatives, several business owners, and an individual in the film industry were extorted.

First Guilty Plea in Massive New York Probe

Robert Shannon, vice-president and business agent of Int'l Union of Elevator Constructors Local 1 in N.Y.C., pled guilty May 30 to labor corruption charges, becoming the first to fall in a massive federal probe into no-show job schemes. Shannon admitted that he took thousands in no-show job money between Feb. 1997 and Mar. 1998. Under the plea, he is expected to serve under two years in prison and pay thousands in fines.

Disturbingly, while Shannon agreed not to serve as a union bosses for seven years but he can remain a Local 1 member as part of the plea deal. Shannon was indicted Feb. 7 with twenty-five other Local 1 bosses and members for ripping off millions through no-show schemes from nineteen construction sites around N.Y.C. Even more troubling, Shannon, a close associate of Local 1 president John Green, did NOT agree to cooperate in the probe. "Shannon made a personal decision to put this behind him," said Shannon's attorney, Frank Murray. "There was no agreement to cooperate. It was just a straight plea." [N.Y. Post  5/31/02]

Judge Slaps Down Union Challenge to Oklahoma Right to Work Law

A federal judge in Oklahoma June 5 upheld the central provisions of the state's newly adopted right-to-work law, which guarantees Oklahoma workers the right to choose whether to pay union dues.  Oklahoma voters approved the constitutional amendment on Sept. 25, 2001.  In November, seven unions and a pipeline services company in the state filed a federal lawsuit, claiming  that certain provisions of the amendment were preempted by federal labor law, and that the whole statute should be thrown out. (Local 514, Transport Workers Union v. Keating, E.D. Okla., No. CIV-01-633-S, 6/5/02).

However, Judge Frank H. Seay (E.D. Okla., Carter) held that while the Right to Work law cannot be enforced with regard to the limited number of employees laboring under the Railway Labor Act, the law clearly and constitutionally applies to employees who work for private companies under the National Labor Relations Act.  The vast majority of Oklahoma employees fall under the NLRA's jurisdiction, and are thus protected by the Right to Work law.  Clarifying the limits of the Right to Work law's jurisdiction, Judge Seay upheld the remaining portions of the law.

Government Recovers $8.583 Million in Chicago Racketeering Case

William V. Close, ex-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, was sentenced May 30  along with pension fund managers Christopher P. Roach and Richard S. Tringale on federal racketeering conspiracy and pension fund kickback charges arising out of hundreds of thousands of dollars in commission kickbacks.

DOL Sues Indiana Fund, $3.4 Million in Violations Alleged

 The Dep't of Labor filed suit May 24 against the trustees and service providers of the pension, welfare and off-season supplement plans of Int'l Longshoremen's Ass'n Local 1969 in Portage, Ind., for violations of Employee Retirement Income Security Act of 1974. DOL alleges the trustees authorized multi-million dollar payments to parties-in-interest in connection with two Nev. real estate deals. Named in the suit were trustees Andre Joseph, Raymond Sierra, David Lynch, and Edward Rentz as well as Michael A. Daher, sole owner and investment advisor with Leader in Marketing Fulfillment, Inc. (LMF) and John Sherwood Dunsmoor who had power of attorney over the pension plan account.

Teacher Union Head Whines in Public, then Sues Group Quoting Him

First, the head of the Michigan Education Association (MEA) calls a press conference to complain about the Mackinac Center's successes in promoting charter schools, educational choice and other reforms in public schools.  Then when Mackinac quotes him in a fund-raising letter, the MEA sues Mackinac.

The MEA doesn't claim that their president, Luigi Battaglieri, was misquoted.  Instead, the union's lawyers claim that Mackinac "misappropriated" Battaglieri's name.

At the press conference announcing the start of their own "think tank," Battaglieri said, "quite frankly, I admire what they [Mackinac] have done over the last couple of years entering into the field as they have and being pretty much the sole provider of research to the community, to the public, to our members, to legislators and so on."  In December, Mackinac President Lawrence Reed quoted Battaglieri saying, "quite frankly, I admire what they have done," then added, "Mr. Battaglieri, whose union is generally at odds with the Mackinac Center, said this with respect to how Mackinac Center research has shaped education reform in Michigan and around the nation."

Magistrate Releases Niagara Falls Bosses from Jail

Surprisingly, U.S. Magis. Judge Leslie G. Foschio (W.D.N.Y.) released three ex-bosses of Laborers' Int'l Union of N. Am  Local 91 in Niagara Falls from jail  May 23 after, ruling that federal prosecutors did not give him enough information to prove the men would be a danger to the community. Nevertheless, Foschio warned Mark Congi, Andrew Shomers, and Salvatore Bertino, that they would be put back in jail if they harass witnesses or anyone else connected to their case. Congi, ex-president, Bertino, ex-vice president; and Shomers, ex-job steward, were among fourteen Local 91 bosses who were indicted by a federal grand jury May 17 on racketeering and extortion charges. Held without bail since the arrests, they appeared in court in orange jail uniforms. The other eleven bosses indicted with them were released May 17, the day of their arrests.

NLRB to Prosecute Alaska Local for Beck Violations

Responding to  charges brought by Joshua Deuter, an employee of First Student Inc., the Nat'l Labor Relations Bd. decided June 5 to prosecute Int'l Bhd. of Teamsters Local 959 in Anchorage, Alaska, for illegally forcing employees to pay full union dues, including dues spent for politics, and threatening employees by saying that circulating a deauthorization petition was a criminal act.  Benefiting from free legal help from the Nat'l Right to Work Legal Def. Fdn., Deuter filed unfair labor practice  charges against the local in Feb. 2002. NLRB has set a trial date for Aug. 8.

In Dec. 2001, in an effort to prevent workers from  signing a deauthorization petition (which calls for an NLRB-supervised election to throw out the mandatory dues clause from the collective bargaining agreement), a union shop steward threatened Deuter.  According to NLRB's complaint, Deuter and others were told that the petition was "illegal, a criminal act," and that the union "could press internal charges against employees for circulating the petition."

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