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.

DC37 Audit Reveals Systematic Abuse of Funds

Top bosses of the Am. Fed'n of State, County & Mun. Employees' Dist. Council 37 spent $1.5 million on car services from 1995-98. Although they were only supposed to use car services when leaving work after 8:00PM, an audit by KPMG, found that over a 12-month period, bosses took 6,582 trips at a cost of $306,000. These bosses also spent more than $2,062,878 (5,568 food purchases) over four years from two caterers, including Gee Whiz, which has been indicted for paying kickbacks to bosses.

New York Local Linked to Mob Probe

Three federal indictments and one complaint filed Apr. 26 in U.S. Dist. Court in Brooklyn charged 45 reputed members of five N.Y. crime families with racketeering, murder, and other crimes. Among the charges, Salvatore "Sammy Meatballs" Aparo, Vincent Aparo, Jerry Brancato, Peter "Petey Red" DiChiara, Pasquale Falcetti, John "Johnny Green" Faraci, Ismat Kukic, Alana "Baldie" Longo, Glenn McCarthy, Michael Norrito, Louis "Big Lou" Vallario, and Abe Weider were charged with a scheme to bribe Service Employees Int'l Union Local 32B-32J bosses. The local was formerly run by AFL-CIO boss John J. Sweeney.

Allegedly, in exchange for bribes to be paid by Weider, a building owner, the local would replace union workers with nonunion workers. The Genovese family's "Aparo/DiChiara crew" allegedly solicited help from the Gambino and Bonanno families to identify and contact SEIU bosses who might be willing to accept bribes.

FEC Hides AFL-CIO MUR Public File

In the first instance ever at the Fed. Election Comm'n, a completed Matter Under Review file was removed from the public record. It reportedly included sworn statements from AFL-CIO president John J. Sweeney, AFL-CIO secretary-treasurer Richard L. Trumka, ex-Teamsters political director William W. Hamilton, and ex-Clinton-Gore advisor Tony Coelho as well as others from the Clinton-Gore and many House campaigns. The files reportedly include an exhaustive and detailed survey of union political activity and a request for sworn answers from the Executive Office of the President. There were 6,024 pages. [politicalmoneyline.com 5/15/01] According to FEC, the file was prematurely released and will be re-released shortly. But it's not clear if all 6,024 pages will be reissued.

House Subcommittee Holds Beck Hearing

On May 10, the Workforce Protections Subcommittee of the House Educ. & the Workforce Committee held a hearing on workers' rights not to become union members and not to pay dues for unions' nonrepresentational activities and to investigate how union bosses abuse such rights under the 1988 U.S. Supreme Court decision Communications Workers of Am. v. Beck.  Beck held that employees covered by a union security clause in a collective bargaining agreement who choose not to become union members and object to having their dues spent on political and other nonrepresentational activities only can be charged agency fees for union activities related to collective bargaining, contract administration, and grievance adjustment.

"Based on the evidence I have seen, I am convinced that some union locals do, in fact, regularly trample on the rights of individuals in far excess of the scope of their permissible authority," Subcommittee Chairman Charles Norwood (R-Ga.) said. "Too many workers seem to get the run-around when they try to exercise their rights."

UFCW & NLRB Loose Appeal of Dues Case

U.S. Court of Appeals for the Ninth Circuit held May 17 that unions may not include organizing costs in determining the agency fees nonmembers must pay under a union-security clause in a collective bargaining contract. Reversing a 1999 decision by the Nat'l Labor Relations Bd., the court found that the U.S. Supreme Court has already ruled in a case under the Railway Labor Act (Ellis v. Bhd. of Ry., Airline, & S.S. Clerks, 466 U.S. 435 (1984)) that a union cannot charge nonmembers for the union's organizing activity outside of the bargaining unit. The case arose from objections filed with United Food & Commercial Workers Locals 7, 951, & 1036 by nonmember agency-fee payers in bargaining units in Cal., Col., & Mich. covered by bargaining agreements containing a union-security clause.

California Members Win Dues Suit Worth $3 Million

U.S. Dist. Judge William B. Shubb ruled May 8 that the California State Employees Ass'n must return approximately $3 million in forced union dues illegally seized from the paychecks of more than 37,000 employees throughout the state. "This ruling sends a clear message to Big Labor in California that they can no longer violate the rights of employees with impunity," said Stefan Gleason, vice president of the Nat'l Right to Work Fdn.

Shubb found that CSEA bosses illegally seized forced union dues from employees without providing a proper independently audited financial disclosure of union expenditures as required by the NRTW-won U.S. Supreme Court case Chicago Teachers Union v. Hudson. "Fearing that employees will learn how their dues are spent, union officials go to great lengths to hide the true extent of their political spending," said Gleason.

Shubb ruled that CSEA bosses must return to all nonmembers 20%, plus interest, of all forced dues seized in the 1999 "fee-payer year." Union officials seized approximately $1.1 million per month from 37,000 employees over 13 months.

Convicted Chicago Boss' Sentence Vacated

A seven-year prison sentence imposed on an ex-boss official of the Chicago Truck Drivers, Helpers & Warehouse Workers Union convicted of misappropriating union employee benefit funds was vacated May 7 by the U.S. Dist. Court in Chicago. Paul Glover, the ex-vice president and general counsel of the union, had been found guilty of a number of federal offenses involving a series of investments that he arranged to be made with money from the union's benefit funds. He was convicted during a jury trial of one count of conspiracy in violation of the Racketeer Influenced & Corrupt Organizations Act; 11 counts of soliciting and receiving kickbacks; two counts of money laundering; and four counts of tax evasion.

New York Members Blast Union

A growing number of N.Y.C.'s garment workers are coming forward saying that the union they believed would protect them, the Union of Needletrades, Indus. & Textile Employees, has failed them.  While most of the garment factories are unionized, advocates for the workers allege that pay and conditions in those shops are no better than in nonunion shops. "The union has a closer relationship with the boss than the worker," says Wing Lam, director of the Chinese Staff & Workers' Ass'n.

Worker Oi Kwan Lai told CSWA that UNITE failed to protect its members against abusive conditions. "It felt like being in prison," she told the association in a complaint. "We had to keep our heads down at all times once we started working. No looking up. No talking to anyone."

As more and more manufacturing work is taken abroad and N.Y.C.'s garment industry declines, "the union is afraid to enforce its contracts," said Ken Kimerling, Asian-Am. Legal Def. & Edu. Fund attorney. "They're afraid the work will go overseas or go to nonunion shops." AALDEF recently filed three federal suits against unionized factories and others for a wide range of abuses.

Results of IBT-DOJ Talks Uncertain

Int'l Bhd. of Teamsters officials continue to press the federal government to end its 12-year supervision of the union, but IBT president James P. Hoffa said May 15 that he did not expect any change in the consent decree until after IBT's election this fall at the earliest.  Hoffa said that "we've had negotiation meetings with the Justice Department" about lifting the 1989 consent agreement, which settled the government's civil racketeering suit against the union. But DOJ has not said what it intends to do, he said. "We don't know what the government is thinking; we don't know where they are going with this," he told BNA. [BNA 5/16/01]

Nebraska Embezzler Looses Teaching Certificate

The Neb. State Board of Education voted May 4 to revoke the teaching certificate of Linda Harris for two years. Harris, a math teacher at Northwest High School in Grand Island, was sentenced to one year of probation in Sept. 2000 for embezzling more than $14,000 from the school's teachers union, the Northwest Educ. Ass'n. Harris was treasurer of the local union. [Omaha World-Herald 5/5/01]

Illinois Boss Settles Embezzlement Suit for $275,000

Ex-Aurora, Ill., firefighter and union boss Patrick Stiles agreed Apr. 26 to pay $275,000 to two union groups, Aurora Firefighters Local 99 and the Aurora Firefighters Relief Ass'n, that accused him of embezzlement. Though Stiles did not admit any wrongdoing, an order entered by Kane County Circuit Court Judge Michael Colwell stated Stiles "misappropriated and used for his own purposes" more than $300,000 from Local 99 and $65,000 from the Relief Ass'n. He was secretary-treasurer of the Relief Ass'n from 1995-99 and of Local 99 from 1992 until Jan. 2001.

The order did not state that Stiles denies wrongdoing, but the only aspect of the order to which Stiles reportedly agreed was the $275,000 payment. Colwell denied a motion by Fred Morelli, Jr., Stiles' attorney, to have a prior default judgment set aside so he could contest the suit's allegations. Morelli also failed in his demands that the two groups urge law enforcement not to pursue criminal charges and to state specifically that Stiles denies wrongdoing. The two groups filed the civil suit against Stiles in Feb. 2001, about a week after filing police reports that led to an ongoing criminal probe.

New Jersey Boss Admits to Conspiracy

An undisclosed financial settlement was reached Apr. 12 between the Int'l Bhd. of Teamsters and Rod Carter, a former Miami Hurricanes linebacker who was beaten and stabbed during IBT's 1997 strike against UPS and later sued IBT officials for provoking the attack. Carter is barred from revealing details of the agreement in return for dropping a racketeering and civil conspiracy suit pending in Fla.'s Circuit Court for Miami-Dade County against IBT Local 769 in Miami.

"Rod and his family are very pleased with the settlement and feel that the union has finally been forced to pay a price for its involvement. The settlement should send a message to union officials across America violence does not pay." said Stefan Gleason of the Nat'l Right to Work Legal Defense Fdn. The Defense Fdn. helps victims of union violence. It hired Ft. Lauderdale attorneys John W. McLuskey and Earthly McLuskey to represent Carter.

Carey's Permanent Expulsion Upheld

The permanent expulsion of ex-Int'l Bhd. of Teamsters boss Ron Carey from IBT was upheld Apr. 18 by the U.S. Court of Appeals for the Second Circuit. The court affirmed a 1998 district court ruling upholding and enforcing union disciplinary sanctions imposed on Carey and ex-IBT Governmental Affairs Director William W. Hamilton for the central roles they played in the elaborate money laundering scheme that tainted the 1996 IBT election.

"We recognize the irony, indeed the poignancy, of this case, in which a union leader, long pledged to internal reform, should be held accountable for corrupt practices. But the law requires no less," said U.S. Circuit Judge Robert A. Katzmann in writing for the court. "Union democracy, after all, is premised on fair elections. To that end, union officials, such as Carey and Hamilton, have a duty to ensure the integrity of that process and to fulfill their obligations to the union membership by adhering to the highest standards of governance."

Hoffa Campaign Ordered to Return $42,000 in Contributions

IBT Election Administrator William A. Wertheimer overseeing the Int'l Bhd. of Teamsters 2001 election found Apr. 12 that IBT boss James P. Hoffa's reelection campaign received some $42,000 in improper contributions to its legal and accounting fund and that Hoffa must return the contributions.

The ruling stems from a protest filed by Tom Leedham, who is challenging Hoffa for the IBT presidency. Leedham asserted the Hoffa reelection campaign organization received improper contributions from union vendors. Under court-approved rules governing the election, candidates cannot receive contributions from any vendor who has performed services for IBT or its locals within the last 12 months. The rules governing the election require candidates to file periodic reports with Wertheimer detailing contributions and expenditures. These reports are available for review by a candidate's opponent.

Boston Boss Reportedly Targeting Informants

Embattled IBT Local 25 boss George W. Cashman, a target of a federal racketeering probe, is reportedly trying to revoke the union memberships of three Boston members whom he believes are responsible for his legal problems. He petitioned IBT to strip Philip J. Myers Sr., and his two sons, Philip J. Jr. and Paul, of their membership cards or "books," claiming they "brought reproach" upon the union with their own illegal activities, according to a Boston Herald source. "(Cashman) thinks they're the ones responsible for all this," the source said. "They want to punish the Myers family."

Cashman and other Local 25 bosses have been the focus of an 18-month Dep't of Labor probe  for alleged shakedowns of movie producers, moving companies and other businesses that employ teamsters. Local 25's movie crew, run by ex-convict and alleged Mob associate James Flynn, allegedly add unnecessary workers and pad expenses and overtime in addition to their base salaries in excess of $2,100 per week.

Suspension of New York Boss Upheld

The nine-month suspension  from union office imposed on Thomas R. O'Donnell, an Int'l Bhd. of Teamsters int'l vice president by IBT's Indep. Rev. Bd. for election rules violations was affirmed Apr. 12 by U.S. Dist. Judge Loretta A. Preska. However, Preska said O'Donnell's suspension from his int'l post as well as from his position as president of IBT Local 817 in Lake Success, N.Y., should not impede him from participating in IBT's 2001 election of int'l officers. O'Donnell is running on IBT president James P. Hoffa's slate as one of five int'l vice presidents at large.

O'Donnell was elected with Hoffa in the 1998 rerun election but stepped down from the int'l office following the IRB's Nov. 13, decision that he had "brought reproach upon the IBT" and violated the union's constitution by filing election finance reports that he knew failed to disclose certain payments to a campaign aide. In issuing the suspension, IRB said O'Donnell could not obtain employment, consulting, or other work from IBT or any local as an officer or employee. It did not suspend him, however, from IBT for the nine-month period.

Judge Allows Florida Teamsters to Sue Union in Discrimination Suit

U.S. Dist. Judge Elizabeth A. Kovachevich in Tampa ruled Apr. 24 that Surgret U. Doss, a former UPS driver, may sue the Int'l Bhd. of Teamsters and IBT Local 79 for breaching their duties of fair representation in handling his claim that racial bias motivated his termination. Doss alleges that Local 79 mishandled his grievance by failing to assert his discrimination concerns at the termination hearing and discrediting him when he attempted to raise those concerns on his own. Also, IBT may have breached its duty to Doss by improperly denying his appeal of the decision to uphold his termination, Kovachevich found denying the defendants' motion for summary judgment.

According to the opinion, Doss asserted that on Oct. 5, 1998, he stopped his truck at a McDonald's to call the office to ask if another driver needed help. He claimed a supervisor then came to his truck and accused him of taking an unauthorized break, which amounted to dishonesty, one of UPS's "seven cardinal sins" that could lead to termination. Doss said the supervisor threatened his job, called him "son," and ordered him to stand at the back of his truck.

New York Local Puts $2.6 Million in Escrow for Discrimination Suit

Sheet Metal Workers Int'l Ass'n Local 28 in N.Y.C. must set aside $2.6 million to compensate minority workers subjected to discriminatory practices since 1975, the U.S. Court of Appeals for the Second Circuit ruled Apr. 16. The court found no abuse of discretion by the district court and affirmed the escrow order.

Under the terms of the district court decision, Local 28 must place $1 million in an escrow fund immediately and an additional $1.6 million in the fund within six months. In addition, Local 28 must place $900,000 per year in the escrow fund, starting Dec. 31, 2001, for a period to be determined by the court following individual back-pay hearings. Although the total amount of the back-pay award has not been determined, "It is likely that this amount will be in excess of what the union is able to pay at present and could even exceed $12 million," the court said. The court established the schedule for escrow payments to meet possible employment discrimination liabilities.

North Carolina Boss Indicted for $4,500 Embezzlement

A federal grand jury indicted Angela B. Smith of New Bern, N.C., Mar. 20 on two counts of union embezzlement. Smith was the secretary-treasurer of the Paper, Allied-Indus., Chem. & Energy Workers Int'l Union Local 1325 (f.k.a., United Paperworkers Int'l Union Local 1325). From Jan. 1997 to Jan. 1999, Smith allegedly embezzled $4,374.95 from UPIU Local 1325 by issuing checks to herself and third parties for her personal expenses. Further, she allegedly stole $150 from PACE Local 1325 in Dec. 1999 by again issuing a check to a third party for her personal expenses. [USAO E.D.N.C., Media Release 3/22/01; U.S. v. Smith, No. 4:01-CR-14-1H3 (E.D.N.C. indictment 3/20/01)]

Indicted Illinois Boss Attends Governor's Fundraiser

Illinois Gov. George Ryan (R) will donate $40,000 in campaign contributions to charity after learning that the money came from an adult bookstore owner turned insurance executive linked to organized crime by the Chicago Crime Comm'n. State records show Thomas P. Matassa made donations to Ryan dating to 1996.

Matassa's money includes a $10,000 donation that earned him a spot among the 38 members of Ryan's finance committee, which had a fund-raising dinner Mar. 19. Matassa invited nine people to join him at Ryan's fundraiser, including John Serpico, ex-Laborers Int'l Union of N. Am. boss awaiting trial on federal charges of racketeering, fraud and money laundering for allegedly using union assets to obtain personal loans from banks. Serpico and Matassa have been repeatedly linked to the mob by law enforcement officials. They are listed as mob associates on the Chicago Outfit Organizational Chart published in 1997 by CCC. Matassa scoffed at CCC for listing him as a mob associate. [Chi. Sun-Times & Chi. Trib. 4/8/01]

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