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.

California Boss Admits to $120,000 Embezzlement

Another ex-Int'l Ass'n of Bridge, Structural & Ornamental Iron Workers boss pled guilty Sept. 15 to stealing up to $120,000, admitting that he routinely used the union's money to cover his and others' personal expenses. Darrel E. Shelton, who resigned Sept. 14 as the union's Cal.-based general organizer, agreed to cooperate with prosecutors in a probe into allegations of corruption in the Iron Workers hierarchy in Washington, D.C. and the D.C. police force.

Shelton's illegal expenses included $3,995 for a Jan. 1997 golf outing in Palm Springs, Cal., attended by BSOIW president Jake West and several D.C. police officials. It reportedly included $1,000 for a dinner attended by West, his friends and several women. Reportedly, Larry D. Soulsby, then the D.C. police chief, was among those on the trip.

In Mar. 2000, Fred G. Summers, BSOIW's executive director of organizing, pled guilty to stealing more than $50,000, including $2,300 stemming for the same Palm Springs golf outing. Last year, Michael J. Brennan, who once headed the Iron Workers Political Action League, pled guilty to charges involving the theft of $7,000 in union money.

NLPC Files Complaint to Disbar Corrupt Trumka

The Nat'l Legal & Pol'y Ctr. filed a formal complaint with the Disciplinary Bd. of the Supreme Court of Pennsylvania requesting that AFL-CIO secretary-treasurer Richard L. Trumka be disbarred from the practice of law.  The complaint details several money-laundering schemes that Trumka allegedly participated in to aid in the 1996 reelection of then Teamsters president Ron Carey. Six individuals have been criminally charged in these schemes, five have pled guilty and one has been convicted. Trumka has invoked the Fifth Amendment on at least two occasions to avoid federal investigators' questions in the matter. The complaint is available at <www.nlpc.org>.

"In order to protect the public, the legal profession and the courts, Trumka should be disbarred from the practice of law," said NLPC Chairman Ken Boehm. "Disbarring Trumka would be a nice first step in bringing accountability to a corrupt union boss."

Members' Suit Alleges Michigan Bosses Misused $480,000

UAW Local 594 bosses in Pontiac, Mich., embezzled more than $480,000 to settle a sexual harassment suit against ex-president Donny G. Douglas and to pay legal bills, according to a members' suit filed Sept. 18 in Detroit. Local 594, already the target of a federal probe over charges of illegal overtime payments and election fraud, is now accused using members' dues without their knowledge or approval. In fact, the local entered into a confidential settlement to ensure the details of the payment would be kept secret, says Harold Dunne, the attorney who filed the suit.

Douglas, who ran Local 594 from 1981-95, was promoted in Aug. 1995. He is now a UAW servicing representative, overseeing eight UAW locals from N.J. to Wis., including Local 594.

The suit alleges officials inappropriately used union funds to pay more than $250,000 in legal fees and a $230,000 confidential settlement in the sexual harassment suit against Douglas, by a female employee, Cynthia Van Dusen. Van Dusen had a nine-year affair with Douglas, who was married; she claimed Douglas harassed her years after the affair ended and she had married.

Two New Jersey Bosses Plead Guilty to $2 Million Perfume Heist

The Waterfront Comm'n of N.Y. Harbor announced Sept. 14 that Nicholas Romano and Carl Bilancione pled guilty before U.S. Dist. Judge Katharine S. Hayden in Newark, N.J. to one criminal count of conspiracy to steal an interstate shipment of goods.

Romano is a longshoreman,  union shop steward and secretary-treasurer of Int'l Longshoremen's Ass'n Local 1588 and Bilancione is a longshoreman and foreman. Both are registered by WCNYH and are employed at Global Terminal in Bayonne, N.J.

In 1998, WCNYH received 43 anonymous letters and other information concerning corrupt activities committed by Romano, Bilancione and others. WCNYH detectives, together with the FBI and U.S. Customs Serv., conducted an extensive two-year probe. WCNYH said evidence was developed which implicated Romano and Bilancione in the June 1995 theft of two containers of perfume valued at $2 million from Global Terminal. Both Romano and Bilancione are allegedly associates of the Genovese Organized Crime Family, according to WCNYH.

WCNYH said more arrests are anticipated and the probe is continuing. [WCNYH, Media Release 9/14/00]

New York Boss Indicted for $3,000 Theft

Ex-boss of Am. Fed'n of State, County & Mun. Employees' Dist. Council 37 in New York, Mary Wilson was indicted Sept. 11 on charges of stealing more than $3,000 by steering union business to an conference center, the Friar Tuck Inn near Albany. Wilson, a vice-president of Local 1549, is already awaiting trial on charges of conspiring with other union bosses to steal more than $2 million through a variety of other schemes. Owner Steven Caridi pled guilty in May 2000 to paying $15,000 to Wilson to get union business. He agreed to a prison sentence of two to six years, and his company agreed to have a monitor for five years. [Newsday 9/12/00]


Clinton Supporter Indicted
One of the eleven union bosses indicted Sept. 6 in a crackdown on alleged racketeering in the construction industry is a high-profile supporter of Hillary Rodham Clinton's Senate campaign. Michael Forde heads the N.Y. Dist. Council of Carpenters and United Bhd. of Carpenters Local 608. He was among those Clinton singled out for thanks at a May 31 rally at the union's headquarters. Clinton spokesman Howard Wolfson declined to comment. [Daily News (N.Y.) 9/8/00]

Idaho Secretary Sentenced for $20,000 Embezzlement

Michelle Mogolich, a former office secretary for Int'l Ass'n of Bridge, Structural & Ornamental Iron Workers Local 732, was sentenced May 2 to six months home detention and three months probation for embezzling over $20,000 from the Pocatello, Idaho-based local. She was also fined $500. Mogolich had previously pled guilty to one count of embezzlement in federal court and had already repaid the local. [Idaho Statesman 5/3/00]


Boston Boss Sentenced for $30,000 in "No Show Payments"
U.S. Dist. Judge George A. O'Toole sentenced Anthony J. Frizzi, ex-business agent for  Int'l Ass'n of Machinists Local S25, Sept. 7 to two years probation for his role in soliciting and accepting illegal payments from an employer which had entered into a collective bargaining agreement with Boston-based local. The first six months of the probation must be served in home confinement.  O'Toole also fined Frizzi $5,000. Frizzi pled guilty in Apr. 2000.

More Charges Added RICO Suit Against USWA

A federal judge on Sept. 13 granted AK Steel Corp.'s motion requesting to amend the federal Racketeer Influenced & Corrupt Organizations (RICO) Act lawsuit it filed May 8, 2000 against the United Steelworkers of America and other defendants. The complaint alleges the defendants have engaged in unlawful, violent, extortionate and racketeering acts against AK Steel and numerous other companies.

Illinois Union Rebuked for Union Dues Procedures

In Tavernor v. Illinois Fed'n of Teachers, the U.S. Court of Appeals for the Seventh Circuit held Sept. 6 that the University Prof'ls of Illinois Local 4100's procedure for deducting union dues from the paychecks of nonmember employees imposed excessive burdens on objectors who wanted a refund.

Even though the local, an affiliate of the Ill. Fed'n of Teachers, followed state law procedures for collecting "fair share" union dues from nonmembers, Judge Diane P. Wood wrote that "its system in operation did not provide sufficient protection to the objectors." The court found that the procedures did not meet the standard by the U.S. Supreme Court's decision, Hudson v. Chicago Teachers Union Local 1, which held that the procedures used to collect fair share fees must be "carefully tailored to minimize the infringement" on nonmembers' First Amendment rights.

Massive New York Probe Nabs 11 Union Bosses

The Manhattan Dist. Atty. charged 38 union bosses, contractors and reputed mobsters with bribery, bid-rigging or other racketeering schemes Sept. 6 that allegedly siphoned millions from construction projects in the last two years. Reputed boss of the Luchese crime family, Steven L. Crea, was the leading figure named in the 57-count indictment. Allegedly, he has played a role in construction racketeering schemes for decades.

The indictment charged 11 union bosses, including Michael Forde, who heads the Dist. Council of Carpenters in N.Y.C. and the United Bhd. of Carpenters Local 608. Both organizations have a history of mob influence. Forde's father ran the local and was convicted of taking bribes in 1990. Forde and Local 608 business agent Martin Deveraux were charged with taking bribes to allow contract violations. Also, Gerald Woods, the secretary-treasurer and business manager of UBC's N. N.J. Reg'l Council, was indicted for taking bribes to allow contract violations and improperly signing agreements to let N.J. contractors work on N.Y.C. job sites without having to sign contracts with Local 608.

Connecticut Dissidents Win Appellate Victory

Two Conn. dissidents, Gary Wall and William Cooksey, who were refused readmission to Laborers' Int'l Union of N. Am. Local 230, won a major victory Aug. 24 when the Second Circuit Court of Appeals allowed them to proceed with a Labor Management Reporting & Disclosure Act suit against the union. The LMRDA, known as the Landrum-Griffin Act, guarantees members the right to express any views regarding union policies and protects them from discipline for exercising their rights.

Chief Judge Ralph K. Winter reversed a lower court decision and held that the claims weren't barred by a three-year statute of limitations because the two relied on the union's "false and misleading justifications as to why they could not be readmitted at a particular time, while holding out the promise that readmission would follow referral to a job." He also ruled that the period was tolled while the two pursued internal union remedies.

LIUNA Ousts Chicago Reformer

The recent ouster of a union-appointed trustee for LIUNA Local 2 has stirred controversy between bosses and reformers within Chicago's historically corrupt Laborers union. Joe Romano, a veteran United Steelworkers of Am. official, was ousted in Aug. as head of Local 2 by LIUNA's "in-house prosecutor" Robert D. Luskin. Romano' s supporters said his outspoken efforts to reform the local prompted his ouster. But, bosses in Chicago and Washington allege that he has not done his job and that the local needs someone with "roots" in the Laborers (which has far greater tradition of corruption than does the Steelworkers).

Romano, coincidentally, was featured prominently in a Sept. 3 article in the Chicago Tribun111e Magazine on union corruption. In the article, Romano voiced his criticism of LIUNA's reform efforts. He said that he wasn't sure LIUNA was committed to ending corruption, noting that wrongdoers hadn't been criminally charged and that some of the Old Guard still held jobs. "There's not always prosecutions here, that's the sad thing... So, I question all of this cleaning up. I don't think we really are allowed to clean up."

GAO: Inspections More Likely for Employers with Labor Unrest

Employers experiencing labor unrest are about 6.5 times more likely to be inspected by the Occupational Safety & Health Admin. than the average employer, according to a government report released Aug. 31. The Gen. Accounting Office produced the report at the request of Rep. Peter Hoekstra (R-Mich.), chairman of the House Education and the Workforce Subcommittee on Oversight and Investigations, and Rep. Cass Ballenger (R-N.C.), chairman of the Subcommittee on Workforce Protections.

GAO conducted the study from June 1999 to June 2000 and covered about 22,000 employers GAO researched 1) the extent to which employers experiencing labor unrest are more likely to be inspected than those with more tranquil labor relations, 2) whether OSHA has policies for performing inspections during periods of labor unrest, and 3) whether those policies are followed.  GAO noted that "labor unrest" means dissatisfaction among workers, but there is no consensus about the ways in which labor unrest develops or the forms it takes.

"[I]t is clear that there is some relationship between labor unrest and employees' dissatisfaction with wages and working conditions," wrote GAO.

Indiana and Kentucky UAW Locals Pull Out of State AFL-CIO

Kentucky state AFL-CIO officials were reportedly scratching their heads after a surprise announcement Aug. 23 that United Auto Workers locals were pulling out of state federations in both Indiana and Kentucky. Ky. AFL-CIO president Bill Londrigan said he and secretary-treasurer Chris Sanders were mystified by the UAW action. He said they have been seeking advice from national AFL-CIO leaders such as president John J. Sweeney and the corrupt secretary-treasurer Richard L. Trumka, and with UAW leaders in Detroit, in an effort to turn the defection around.

UAW Region Three Director Terry Thurman, who called local delegates to his Indianapolis office last week and called for a vote on withdrawal, said the action is an "internal matter," and not one he cares to discuss except with members. He said the UAW will cooperate with both state federations, but he said withdrawal of dues will cost the Ky. AFL-CIO about $120,000 a year.  It will take an even bigger toll in Ind.; UAW Local 862 president Rocky Comito said the UAW financial contribution to the Ind. AFL-CIO is about $680,000 a year.

Ex-Oregon Boss Get Lucrative Contract with Pension Advisor

Portland, Oregon, money manager Jeff Grayson gave a powerful Laborers' Int'l Union of N. Am. boss a consulting contract worth at least $805,000, according to an investigative report by The Oregonian newspaper. Grayson, chief executive of Capital Consultants, quietly awarded the $7,500-a-month contract in Aug. 1998 to Kaylano Consulting, a firm founded by John D. Abbott and his wife, Pam. Abbott was for years a dominant force in LIUNA in Oregon and Idaho, as well as a longtime ally of Grayson's. As an influential trustee of three LIUNA trust funds, Abbott helped steer millions of dollars of union pension fund money to Capital Consultants.

Under terms of the contract, Capital Consultants agreed to pay Kaylano $7,500 a month over five years -- $ 450,000 in all. Abbott has the right to renew the contract for an additional five years. Grayson can end the contract after the initial five years, but only if he pays Kaylano a $ 270,000 lump sum. Capital Consultants also agreed to pay Kaylano a $ 50,000 signing bonus and to pick up a $35,000 club membership fee.

Boston Drug Indictment Linked to Local 25

There was no mention of the local Int'l Bhd. of Teamsters Aug. 29 when convicted Massachusetts bank robber James McCormack was hauled into federal court to face charges that he plotted to sell cocaine and, along with two friends, kidnapped and beat a former drug dealer in a bid to extort $1 million. But McCormack, while not a Teamster, has strong ties to Charlestown-based IBT Local 25, which is under investigation for allegedly extorting movie makers who film around New England.

One of McCormack's alleged partners in a cocaine deal, listed merely as "another person" in the four-count indictment, is Philip Myers, a Charlestown crime figure and ex-Teamster-turned-government witness who has been reportedly aiding the federal probe involving Local 25 and the movie industry.  Myers, a convicted bank robber and killer, was arrested on cocaine charges in Sept. 1998 on the loading dock at the Boston Herald, where he worked as a member of Local 25. Facing a lengthy prison term, Myers began cooperating with Drug Enforcement Admin and the Dep't of Labor's Division of Labor Racketeering, providing information on alleged criminal activity by Teamsters and gangsters.

New York Crime Boss Dies in Prison

Ex-crime boss Anthony "Tony Ducks" Corallo, 87, died Aug. in a federal prison hospital in Springfield, Mo., while serving a 100-year term for racketeering.  He was convicted on the basis of wiretapped conversations that led to a spectacular series of La Cosa Nostra trials, after the FBI slipped a listening device into the wood-grained dashboard of his chauffeur's, Salvatore Avellino, black Jaguar in the parking lot of N.Y. banquet hall.

The tapes caught Luchese family members talking about how the Gambino family used Int'l Bhd. of Teamsters Local 813 to control the private garbage carting industry. The tapes also revealed how the boss of the Gambino family gave orders to officials of N.Y's Hotel Employees & Restaurant Employees Int'l Union. "Right now as the association, we control the bosses, right," Corallo's driver said on one tape. "Now, when we control the men, we control the bosses even better, now because they're even more...afraid...This wise guy'll even make more money with a strong union."

New Jersey Grocery Pleads Guilty in DC37 Turkey Scam

The Manhattan Dist. Atty.s Office announced Aug. 24 that Corrado's Family Affair, Inc., pled guilty to larceny for ripping off members of scandal-scarred Am. Fed'n of State, County & Mun. Employees Dist. Council 37 by overcharging them for 11,500 holiday turkeys in 1997. The N.J.-based grocery was charging 99 cents per pound of turkey in Nov.  1997 when it made the massive sale to the AFSCME Local 372.  But, the grocery reportedly inflated the weight of the turkeys sold by more than 40 tons, to cheat the union out of $85,000.

The local has been the focus of a massive union corruption investigation that led to the turkey probe. In June, ex- president Charles Hughes was sentenced to nine years in prison after he admitted stealing more than $2 million from union members since 1971.

Gloria Montealegre, a D.A. spokeswoman, said the company pled guilty Aug. 17 to theft before N.Y.  Supreme Court Judge Charles H. Solomon. It was sentenced to pay $85,000 in restitution and $85,000 in fines. The company has already paid $ 50,000, and will have two years to pay the remaining $120,000, she said. [Record (Bergen County, N.J.) 8/25/00]

Pennsylvania Member Speaks Out Against Union "Bigwigs"

The following are excerpts of a letter-to-the editor that appeared in the Lancaster (Pa.) New Era on Sept. 4, 2000.  It was written by Donald Felty of Lititz, Pa., and titled "Not All Members of Unions Will Vote Democratic."

"The place where I work is a closed union shop, represented by the United Steelworkers of America, of which I am a member. On the union bulletin board are several papers bashing Texas Gov. George W. Bush. One claims that Bush's plan to let people invest a small portion of their Social Security funds in the stock market will result in dire consequences. Another paper claims that Bush is against the minimum wage, against better education, how bad off working families in Texas are, and how Texas dropped from 29th to 48th in state rankings of the best state in which to raise a child.

...So, where were all these poor, working families when Bush won his second term? Did these great masses of poor, working Texans lose their cars and were too weak from near starvation to walk to the polls to vote against Gov. Bush? According to this union propaganda, Bush should have lost big on his second run.

Local 983 Boss Gets 18 to 54 Months in Prison

Another boss from Am. Fed'n of State, County & Mun. Employees Dist. Council 37 in N.Y. was sent to prison Aug. 22. Robert Taylor is at least the fifth ex-DC37 boss to become a prison inmate in the recent corruption scandal,  which has had more than thirty criminal indictments and more than twenty guilty pleas.

Taylor, ex-president of AFSCME Local 983, was to sentenced to 18 to 54 months for rigging a contract ratification vote and embezzling more than $50,000 of union funds. He agreed to the sentence in June as part of plea bargain with the Manhattan Dist. Atty.'s Office.

Local 983 is now run by reformer Mark Rosenthal, who has been a key source for prosecutors on how DC37 bosses rigged the 1996-97 City contract vote. [Newsday 8/23/00]

New Jersey Boss Admits $345,000 Theft

William Saksinsky, ex-vice-president of the N.J. State Policemen's Benevolent Ass'n pled guilty Aug. 10 to defrauding his union of at least $345,000. He agreed to pay NJSPBA $400,000 in restitution and damages. Saksinsky also admitted filing a false 1994 income tax return.

In the plea, Saksinsky implicated the current deputy director of the Newark Police Dep't, Rocco Malanga. Saksinsky told U.S. Dist. Judge Katharine S. Hayden that Malanga, who is an ex-boss of the NJSPBA's Newark Chapter, conspired with him and others to divert money from a pool of artificially inflated convention fees. He said they inflated the fees for miniconventions by $10 a person. Then NJSPBA's ex-president, Frank Ginesi, Malanga and he reportedly split $58,000 in 1992 and $25,000 in 1993.

In another scheme, Saksinsky created secret accounts that only he controlled and into which he would deposit cash and checks ostensibly paid for NJSPBA purposes like insurance. Saksinsky said that from 1991-96 he diverted $326,370 from such accounts and received about $19,300 in illicit checks from those Ginesi controlled.

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