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.

Michigan Local Mistreatment of Nonunion Worker Precluded Grievance Representation

The U.S. Court of Appeals for the Dist. of Columbia Circuit ruled Feb. 26 that because union stewards wrongfully prevented a nonunion postal employee from filing a grievance, Nat'l Ass'n of Letter Carriers Branch 3126 in Royal Oak, Mich., must allow the employee to proceed with the grievance and pay for him to be represented by his own attorney.

Enforcing an order issued by the Nat'l Labor Relations Bd., U.S. Circuit Judge Douglas H. Ginsburg (D.C. Cir., Reagan) ruled that NLRB was authorized to issue the order for attorneys' fees. The court rejected the union's argument that it could have represented employee Joe Pitlanish fairly and without bias: given the union stewards' prior mistreatment of Pitlanish, it was within the board's discretion to decide that an independent lawyer was the better strategy, the court said.

Beck Victory for Connecticut Worker

On remand from the U.S. Court of Appeals for the Dist. of Columbia Circuit, the Nat'l Labor Relations Bd. provisionally held Dec. 20 that autoworker George Gally is entitled to a make whole order to remedy the violation found by the court. That is the United Auto Workers of Am.  and UAW Local 376 in Hartford, Conn. violated the Nat'l Labor Relations Act causing Gally's employer Colt Industries to discharge Gally for nonpayment of dues without first informing him of the amount by which his union fees would be reduced if he became an objector under CWA v. Beck. NLRB originally dismissed Gally's complaint but was reversed by the court.

Oklahoma Seeking to Stop Union Payroll Deductions for Non-Members

Enforcing for the first time an administrative rule that has been on the books for five years, the Okla. Comm'r of Labor Brenda R. Wynn ordered a Tulsa employer to stop deducting the union dues of employees who resigned from their union. In a Feb. 12 letter to Baldwin Steel Co., Wynn demanded that the firm refrain from withholding union dues from the paychecks of 19 employees who resigned their membership from Int'l Bhd. of Teamsters Local 523 and asked that their dues no longer be deducted.

Wynn said the regulations implementing its wage law lists allowable deductions from employee paychecks, but that union dues are not an allowable deduction. The regulations are intended to protect employees who do not want money deducted from their paychecks without their permission

California State Employees Win Class Action Status

By certifying  a federal suit as a class action, U.S. Dist. Judge Garland E. Burrell, Jr. (E.D. Cal., H.W. Bush) has allowed 3,200 Cal. state employees to  challenge the money confiscated for politics and other  activities by the the State and the Prof'l Engineers in Cal. Gov't.  Nat'l Right to Work Legal Def. Fdn. attorneys filed the  lass-action suit, Wagner v. PECG, in Sept. 1999 on behalf of Richard Wagner, an investigator for the Cal. Air Resources Bd. in the Sacramento area,  and Kristin Schwall, a water quality engineer from San Diego. They filed the complaint on behalf of all non-member government workers under the PECG's statewide memorandum of understanding (MOU) - also known as a collective bargaining agreement - who have been illegally forced to pay for union political  activities.

FEC Appeals Hidden Records Case

The Fed. Election Comm'n filed an appeal Feb. 15 in a case testing the limits of disclosure of documents from FEC investigations of possible campaign finance violations.  The notice of appeal was filed with the U.S. Court of Appeals for the Dist. of Columbia Circuit. It challenged a decision by U.S. Dist. Judge  Gladys Kessler (D.D.C., Clinton), that documents from the FEC probe of links between the Democratic Nat'l Committee and the AFL-CIO must be kept secret. The FEC investigation was launched following reports of a $35 million AFL-CIO effort to aid Democrats in the 1996 congressional election

Bush, DOL Committed to Fighting Union Corruption

Despite a significant decrease in the Dep't of Labor's proposed FY2003 discretionary budget, the agency charged with monitoring union finance and elections would see a sizable increase in funding, under President Bush's proposed budget. DOL's Office of Labor-Mgmt. Standards, currently is funded at $30.6 million, but would get a $3.9 million increase under the proposed budget. The new funding is intended to increase the number of OLMS audits of unions under the Labor-Mgmt. Reporting & Disclosure Act of 1959 (a.k.a., Landrum-Griffin Act ). It includes $3.4 million and 40 additional staffers "for enhanced enforcement" "to ensure compliance" with LMRDA.

"This is a victory for every American who is forced to pay dues or fees to a union," said NLPC Chairman Ken Boehm. "As repeatedly documented in NLPC's Union Corruption Update, there is wave of union corruption plaguing our country. It's reassuring to know the Bush Administration recognizes the problem and is willing to do something to combat it."

Twenty-Six New York Bosses/Members Indicted on Racketeering and Other Charges; $6 Million Taken

On Feb. 7, federal and local law enforcement announced the unsealing of a 137-count indictment against 26 bosses/members and one associate of the Int'l Union of Elevator Constructors Local 1. More than $6 million in wages and benefits were allegedly stolen. Allegedly, Local 1 bosses defrauded the construction industry and abused the hiring rights of Local 1 members by committing racketeering crimes at more than 20 construction sites in the N.Y.C. area between 1989-2001. The indictment outlines a longstanding scam in which corrupt union bosses repeatedly lined their pockets through no-show jobs doled out to corrupt union members willing to assist the enterprise.

"The acts of the individuals from Local 1 are appalling," said N.Y.C. Police Comm'r Raymond W. Kelly. "As all New Yorkers are working toward rebuilding the City, it is despicable that members of Local 1 participated in such corrupt activities. [We] will continue to target those who manipulate union guidelines for their own benefit."

Philly Boss Accused of $50,000 Theft; $2,500 from Widow

A federal grand jury in Philadelphia returned a 21-count indictment Feb. 13 charging Kendall Williams with theft of union funds, theft from a union health and welfare fund, failure to keep required records, and failure to file required reports with the Dep't of Labor. The alleged thefts totaled $50,983.84. Williams is the president of the independent PNI Security Union, which represents the security officers at the facilities of the Philadelphia Inquirer and Daily News.

Between 1997-99, Williams allegedly embezzled approximately $29,683.84 from the PNI Security Union Health & Welfare Fund by falsely claiming that another union member, L. Zane, would join him in traveling to benefit plan administration conferences put on by the Int'l Fdn. of Employee Benefit Plans. After obtaining funds for the bogus expenses (conference fees, preconference fees, air transportation, lodging, lost wages, and per diem expenses), he deposited the Fund's checks into the union's checking account and then withdrew that money for his own personal use.

No Jail Time for California Extortionist

U.S. Dist. Judge Virginia A. Phillips (C.D. Cal., Clinton) sentenced Hank Van Heyningen, ex-president of Christian Labor Union Local 17 (Dairy Employees), to a mere 36 months probation and 300 hours of community service for extorting money from workers for job referrals. He faced up to 20 years in prison. Phillips also ordered Van Heyningen to pay $100 restitution and a $2,500 fine. The boss of the Chino, Cal., union pled guilty to one federal count of extortion on Oct. 23. He admitted to regularly extorting money for 10 years. A member who received a full-time job with regular daylight hours was charged $800 to $1,500. [DOL 1/7/02; USAO C.D. Cal. 10/23/01]


Ohio Boss Admits $142,700 Scheme
On Jan. 28, Richard Adams, ex-treasurer of Int'l Ass'n of Fire Fighters Local 639 in Parma, Ohio, pled guilty to a federal bank fraud charge for a scheme to deprive the union of $142,715.78. Sentencing is scheduled for Apr. 10 before U.S. Dist. Judge Donald C. Nugent (N.D. Ohio, Clinton). [DOL 1/28/02; Plain Dealer (Cleveland) 1/30/02]

Class Action Pension Suit, Alleging $37 Million in Losses, Allowed to Move Forward

U.S. Dist. Judge Ellen S. Huvelle (D.D.C., Clinton) ruled Jan. 20 that officers and employees of an investment adviser may have breached their fiduciary duties to an the United Food & Commercial Workers Pension Plan for Employees, which is governed by Employee Retirement Income Security Act. Pension plan participants filed a class action against the trustees of the UFCW Pension Plan, claiming they breached their fiduciary duties to the plan by following the advice of Investment Performance Servs., the investment advisers and permitting a investment firm to implement a hedge program. UFCW Pension Plan's executive committee approved an options-based hedge strategy, which allegedly resulted in a $37 million loss. Under ERISA, trustees found to have breached their fiduciary duties to the plan are personally liable for damages.

The trustees claimed the investment firm and IPS breached of their respective fiduciary duty. The participants amended their complaint to add three individuals, officers, and employees of IPS, who the participants claimed breached their fiduciary duty under ERISA by investigating, recommending, implementing, and continuing the hedge program.

Indicted Boston Boss Targeted by the Mob

Boston-area gangsters were plotting to use violence to push aside Int'l Bhd. of Teamsters Local 25 president George W. Cashman in the mid-1990s and seize control of lucrative movie contracts, a U.S. Drug Enforcement Admin. agent said in an affidavit filed Feb. 11 in federal court. John "Mick" Murray, a Local 25 member and an alleged associate of fugitive organized crime boss James "Whitey" Bulger, was "not pleased with the management of Local 25 by . . . Cashman," Agent Joseph W. Desmond said in his affidavit. Murray and Phil Myers, another Local 25 member who was arrested in 1998 on drug charges and is now cooperating with authorities, were allegedly "part of a conspiracy to take charge of Local 25's movie crews through the use of force and violence," he said. The two men plotted to "confront Cashman with a weapon and force Cashman to make changes in the management of the movie crews," Desmond said, adding that they went so far as to track the union president's movements before Myers was arrested and the plan was abandoned.

Cleveland Local in Trusteeship; Boss Accused of Unauthorized Salary Increases

Int'l Bhd. of Teamsters Local 244 in Cleveland has been under trusteeship since late last year after a report that its president may have embezzled the local's money. Investigators for IBT's court-supervised Independent Review Board reported in Oct. 2001 that Jarrell Williams apparently embezzled at least $3,300 by increasing his salary without approval of the local's executive board, as required in its bylaws. The investigators also said that the executive board doesn't have an active role and that Williams holds "incredible power."

Richard Murray, an IRB investigator, said the IRB has not officially charged Williams with any wrongdoing. Rather, it recommended appointing a trustee to run the local's affairs for up to 18 months and to root out any wrongdoing. "The report said basically the entire local is not being run properly; you'd better get someone in there," Murray said.

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.

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