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.

NLPC's Boehm Testifies Before Senate

Sen. Mitch McConnell (R-Ky.), Chairman of the Senate Rules Comm., held a hearing on compelled political speech on Apr. 12 focusing on unions. He said the hearing was on an "important civil rights issue...largely overlooked, perhaps intentionally, by so-called campaign finance reform advocates, their political allies and their admirers in the media."

McConnell stated, "the best way I can think of to protect workers from being forced to subsidize political speech with which they disagree is to ensure that they get an annual report of the ideological and political causes unions are supporting with their dues and fees. In that vein, I plan to introduce the Worker Information and Empowerment Act to make it easier for workers to determine if they want to...seek a refund."

Ken Boehm, Chairman of the National Legal and Policy Center, a union corruption watchdog, was one of six individuals before the committee.  Boehm agree with McConnell that reforms are needed and pointed out the nexus of union corruption and union compelled speech reforms. Boehm's testimony is at <http://www.nlpc.org>.

Another Teamsters Scandal Figure Sentenced

U.S. Dist. Judge Thomas P. Griesa sentenced Nathaniel Charny, a lawyer with labor law firm of Cohen, Weiss & Simon, who vetted contributions for the Carey campaign, was sentenced to "serve time" and a $500 fine for conspiring to make false statements to a court-appointed election officer investigating the fund-raising activity. He pled guilty in Oct. 1998. [BNA 4/10/00]

No DOJ Oversight of 2001 Election
For the first time since settling federal racketeering charges in 1989, the Int'l Bhd. of Teamsters will conduct leadership elections free of government supervision. Campaigns for union posts in the historically-corrupt union begin this year with the selection of local delegates and conclude next fall with the election of a general president.   Each of the past three Teamsters ballots -- including the scandal-ridden vote in 1996 in which Ron Carey's campaign stole the election with union funds -- have been conducted under the Dep't of Justice's oversight.

Ex-Police Chief Sues South Florida Union

Ex-Hollywood, Fla. Police Chief Rick Stone, who was forced out of his job after a bitter union campaign against him, filed a lawsuit on Apr. 13 against the Broward County Police Benevolent Ass'n and two union bosses. The suit accuses PBA president and ex-Sgt. Dick Brickman and Sgt. Jeff Marano of racketeering, defamation, infliction of emotional distress, invasion of privacy and interference with Stone's ability to do his job.   Stone seeks unspecified damages for loss of past and future earnings and benefits, emotional distress and damage to his reputation.

Boston Boss Got $30,000 in "No Show Payments"

Anthony J. Frizzi, ex-boss of Int'l Ass'n of Mach. Local S25, pled guilty Apr. 3 to soliciting and accepting illegal payments from an employer who had entered into a collective bargaining agreement with the S. Boston local.

Frizzi played a key role for Local S25 in negotiating a 1995 contract with Boston Ship Repair, Inc. Frizzi then represented Local S25 in its dealings with BSR. In 1996, Frizzi informed BSR that he wanted to be placed on its payroll, even though he wouldn't perform any work and was receiving a union salary. BSR agreed, in the belief that doing so would help to ensure favorable labor relations.

Hoffa on the Hill: End DOJ Consent Decree

Int'l Bhd. of Teamsters boss James P. Hoffa told Congress that his union is no longer under the influence of organized crime and should be rid of government control. "Our union today is one of the cleanest of any now on the labor scene," Hoffa told the Rep. Peter Hoekstra (R-Mich.) and the Edu. & Workforce Com.'s Oversight & Investigations Subcom. "Organized crime has been eliminated. There are no people who have a connection with organized crime in the union today and we are ever-vigilant of that and we want to make sure it stays that way."  The Dep't of Justice's supervision since 1989 has cost IBT about $88 million.

Hoffa said IBT is ready to file a racketeering suit against those involved in the 1996 scheme to swap IBT political contributions for donations to Ron Carey's campaign. "We have drafted a RICO suit, and it's ready to go," said Hoffa. Rumors of such a suit have been circulating for months.

Trusteeship Sought for Pittsburgh Local

Why it's taken five years is unclear, but the failed "internal reform effort" of the Laborers' Int'l Union of N. Am. wants a trusteeship imposed on Local 1058 in Pittsburgh because of alleged ties to organized crime. No officers or executive board members of Local 1058 face criminal or union disciplinary charges. In his intra-union complaint dated Mar. 21, the ethically-challenged "in-house prosecutor," Robert D. Luskin, stated that Local 1058 bosses have had personal, family and business connections with Pittsburgh's La Cosa Nostra for 30 years. Luskin has run the failed "internal reform effort" since 1995, and it has reportedly cost LIUNA over $35 million.

Local 1058 retained ex-U.S. Atty. Frederick W. Thieman and ex-Asst. U.S. Atty. Stephen R. Kaufman. Thieman said accusations are mostly vague allegations against individuals who are being tarred with mob associations that stem from actions of their older and often long-dead relatives.

Michigan Boss Grilled on Campaign Cash

The FBI has stepped-up its probe of corruption in Warren, Mich., with at least two councilmen testifying in Mar. before a federal grand jury. One of the councilmen in question, Bill Barnwell, is also an organizer for the Mich. Reg. Council of Carpenters. Barnwell told the Detroit News that he was asked about a range of subjects from campaign contributions to ticket fixing.  He said he was grilled about union campaign contributions. "They didn't accuse me of anything. They insinuated," he said. The probe is looking into allegations of police corruption, bid rigging and campaign-finance abuses in Warren government.  [Det. News 3/26/00]


Rosy Anti-Corruption Picture Painted
The Dep't of Labor's Office of Inspector General's agenda for FY2001 includes probes of financial transactions linked to the loss of pension plan assets, as the agency continues to focus on an area that has resulted in 29 currently ongoing investigations involving $1.5 billion in pension assets, reported Patricia Dalton, DOL's acting IG, to the House Appropriations Subcommittee on Labor, HHS & Education on Mar. 28.

Union Attendance Rule Struck Down

The Seventh Circuit U.S. Court of Appeals held Mar. 23. that the United Steelworkers of Am.'s rule limiting eligibility for office to members who have attended at least eight local monthly meetings within two years was unreasonable and invalid. USWA failed to show that the rule, which disqualified 92% of the 3,000 members of Local 1011 in E. Chicago, Ind., was not burdensome or supported by compelling need, Judge Richard A. Posner ruled.

"The requirement is paternalistic," Posner stated. "Union members should be capable of deciding for themselves whether a candidate for union office who had not attended eight, or five, or for that matter any meetings within the past two years should by virtue of his poor performance forfeit the electorate's consideration." He held that under the Landrum-Griffin Act, all members in good standing are eligible to run for office subject to "reasonable qualifications uniformly imposed." [BNA 3/28/00]

North Carolina Grand Jury Indicts Ten on Mail Fraud Charges

U.S. Atty. Janice M. Cole announced that a federal grand jury indicted nine individuals on Mar. 21 with two counts each of mail fraud, in connection with their applications for membership with the Journeyman Inside Wireman classification in the Int'l Bhd. of Electrical Workers Local 495, in Wilmington, N.C.   If convicted, each could receive a maximum sentence of 10 years imprisonment, a fine of $500,000, and a supervised release term of three years.  The accused are Jamie Bailey, Richard D. Daniels, Bradley S. Darnell, Michael J. Fitzpatrick, Ralph J. Lykins, John C. Martin, Raymond Mead, David A. Petty and Jeremy M. Puckett.  Additionally, Robert A. Parsons was charged with one count of mail fraud, and if convicted, faces a maximum sentence of five years imprisonment, a $250,000 fine, and three years of supervised release. [USAO E.D.N.C., Media Release 3/24/00]

Rival Los Angeles Unions Swap Allegations of Wrongdoing

The union representing most sheriff's deputies sued an upstart rival today, claiming "false and defamatory accusations" were made to boost the younger union's membership numbers.  The Ass'n for L.A. Deputy Sheriffs (ALADS) accused the L.A. Sheriffs Prof'l Ass'n (LASPA) of spreading rumors that the ALADS has been investigated by the FBI.  ALADS's suit in L.A. Superior Ct. states that no such investigation has taken place.

ALADS, which has been in existence for 30 years, is the official salary negotiator for the department's non-supervisory sworn officers. Since its incorporation in June 1999, LASPA has been attempting to oust ALADS. LASPA began as an ALADS dissent group. "This (drive) began after we were kicked out of ALADS," said LASPA President Alex Villanueza. "We had a profound disagreement. They don't  believe in the democratic process or being held accountable for how they spend the money, and we obviously disagree."

Tables Turned on Investigators of New York Local

Seven years ago, N.Y. State investigators cut a deal with an air freight company, Amerford Int'l Corp., they had caught working with the mob: forfeit $2.5 million said to have passed through the hands of the Mafia and avoid the embarrassment of criminal charges. Amerford had been caught, by both the federal government and the state attorney general's office, firing more than twenty shipping clerks at Kennedy Int'l Airport and handing the money from the saved wages to the Luchese crime family. The forfeiture agreement called for the state's Organized Crime Task Force to distribute the money to the clerks who had been wrongly fired.

But on Mar. 30, U.S. Dist. Judge Eugene H. Nickerson ruled that the att'y gen. at the time, Dennis C. Vacco, had apparently violated the agreement by funneling about $1.5 million of the forfeited money into the task force's coffers. And, according to the Nickerson, that money was never accounted for and remains missing. "The dismissal of criminal charges here was contingent upon a $2.5 million payment," stated Nickerson. "The task force apparently intended all along to keep $1.5 million of that sum for itself."

Internal Dispute Turns Almost Deadly in Pennsylvania

Thomas E. Eaton of Clarendon, Pa. was accused Mar. 30 of an attempted poison gas attack reportedly tied to a dispute with United Ass'n of Journeymen & Apprentices of the Plumbing & Pipe Fitting Industry Local 47 in Monaca, Pa. Federal agents said Eaton, who worked as a pipefitter, tried to pipe a tankful of deadly chlorine gas into the home of Michael Lacey in Beaver, Pa., in the early hours of Dec. 7, 1998. The family of four survived only because Lacey's 13-year-old son awoke with a scratchy throat at 2 a.m. and roused his mother.

Eaton didn't like the way his job assignments were being handled by Lacey, Local 47's business manager. So he took a large, rusting tank of chlorine and ran a hose from it through an open vent into the Lacey home while the family slept, authorities charged. Eaton was charged by a federal grand jury with using a chemical weapon and other offenses. If convicted of the charges in the indictment, he faces a maximum penalty of life in prison and $750,000 in fines. [Pitt. Post-Gazette 3/31/00]

Getting Off Light: Hamilton Sentenced to Only 3 Years

U.S. Dist. Judge Thomas P. Griesa in Manhattan sentenced ex-Int'l Bhd. of Teamsters political director William W. Hamilton to 36 months in prison Mar. 14 after he was convicted of helping steer $885,000 in IBT funds to liberal groups as part of a scheme in which donors later contributed to ex-IBT boss Ron Carey's campaign. Federal sentencing guidelines recommend 46 to 57 months in prison. The maximum is 360 months; Hamilton's six convictions were punishable by up to five years each.

Hamilton's lawyer, G. Robert Gage, Jr., pled with Griesa to depart from the guidelines. He emphasized that Hamilton hadn't benefited financially from the embezzlement, had ill and elderly parents and had spent decades working in "public service." Hamilton led civil rights demonstrations as a student, headed Planned Parenthood's D.C. office and was AFSCME's chief of staff. Asides: While at Planned Parenthood, Hamilton attacked the late Mother Teresa in a June 29, 1985 letter in the Wash. Post. And, how does being an AFSCME boss qualify as "public service"?

Pennsylvania Boss Embezzled $200,000

Wheeland "Bill" Hill, Jr., embezzled over $200,000 from the Perkasie (Pa.) Ambulance Ass'n over five years.  The ex-president's embezzlement was detected in May 1999 when PAA's new president discovered secret bank accounts Hill had maintained for the union. He pled guilty and was sentenced to 6-23 months in prison. He must serve seven years' probation and make restitution. [Morning Call 3/12/00]


Pennsylvania Boss Admits to $59,000 Embezzlement
Emerson Frederick, ex-secretary-treasurer of Am. Flint Glass Workers Union Local 555 in New Brighton, Pa., pled guilty Mar. 13 to embezzling approximately $59,000 from the local. Over six years, he wrote 79 checks from union accounts to himself, made 22 unauthorized withdrawals and failed to deposit union dues. He's free on bond and scheduled to be sentenced June 23. He faces up to five years in prison and $250,000 in fines or both. He also will be barred from union office for 13 years. [Pitt. Post-Gazette 3/14/00]

Boss Embezzled $50,000 from International Union

Fred G. Summers, ex-boss of the Int'l Ass'n of Bridge, Struc. & Ornamental Iron Workers, pled guilty Mar. 15 in U.S. Dist. Court in Wash., D.C., to embezzling over $50,000 of union funds. The ex-organizing director admitted using BSOIW's credit card for personal expenses, including travel and meal costs for his wedding and honeymoon. He also admitted covering expenses for BSOIW president Jake West and their friends and relatives. He pled guilty to 19 charges of embezzlement and making false entries in union books.

The U.S. Atty.'s Office said union money was illegally spent from 1994-99 at restaurants in D.C. and on trips to Fla., Ind., Cal. and elsewhere. For example, in Jan. 1997, Summers spent $2,300 on a golf outing in Palm Springs. Prosecutors said West permitted Summers to pay the tab so West could provide "entertainment of his family and personal friends with less likelihood of detection." One dinner reportedly cost $933.

Two New York Locals Taken Over

IBT's Independent Review Bd. removed the executive boards of two IBT locals in N.Y. earlier this month after internal probes reportedly found rampant corruption, embezzlement and mismanagement. IRB has only removed the boards of only two dozen locals since 1989.

Local 806 in Garden City reportedly has a history of organized crime. Donald Calagna served as president until he and the other six members of the board were ousted. IRB said Calagna's father, Anthony, Sr., was barred by IRB's predecessor a decade ago because of mob ties. IRB charged that Local 806 conducted only four membership meetings that met a quorum during the past five years, despite IBT's requirement they be held monthly. It also failed to hold executive board meetings. The local also entered into at least seven "sham" contracts, and raided $1.7 million from the members' Health & Welfare Fund and pension fund between 1987-98, IRB said. Despite financial trouble, Calagna received a 25% raise in 1995, making his annual salary $90,000.

Gore Aides Sought IRS Info for Union

Two aides to Al Gore improperly called the IRS on the same day in Jan. 1997 seeking information on a tax case of interest to a unnamed union whose president was scheduled to meet with Gore the next day, Congressional investigators reported Mar. 16. The Joint Committee on Taxation's report said that the two "appear to have attempted to obtain taxpayer return information to which they were not entitled." Federal law bars almost any release of IRS information on specific taxpayers.

Lindy L. Paull, JCT's chief, said that she was constrained by taxpayer confidentiality from identifying the union. She said the calls, which the IRS rebuffed, raised questions about whether Gore's office created the "appearance of influence" on the union's behalf.

According to the report and supporting IRS documents, the then-counsel to Gore, Kumiki Gibson, and Gore staffer, Joe Eyer, both called the IRS on Jan. 28, 1997 "and in violation of written White House policies...attempted to secure taxpayer return information." Under White House policy, "no member of the...staff should have any communication of any type with the IRS without prior approval of the [White House] Counsel."

Union Tied to Two New Jersey Men Charged with Racketeering

Two alleged associates of the DeCavalcante crime family were arrested Mar. 14, charged with conspiring to conduct racketeering, loansharking, extortion, mail fraud and theft offenses in connection with North Jersey construction projects, according U.S. Atty. for N.J. Robert J. Cleary.

Arthur McCarthy, a former vice-president in charge of construction with the Bellemead Construction Corp., and Francesco Paparatto, 60, of Cranford  were charged in a 22-count indictment unsealed today with their arrests. Also charged and arrested today was Pat Dwyer, 39, of Las Vegas, formerly of New Jersey, a former Bellemead Construction project manager.

The indictment focuses on corruption and mob influence in the construction industry and identifies Bellemead Construction of Roseland as the enterprise used in the corruption.  The indictment alleges that from at least as early as July 1994 through in or about May 1999, the defendants engaged in racketeering activity, including loansharking, extortion, mail fraud and theft in Essex County, according to the Indictment.

Union Grievance Blamed for Bad Buffalo Cop

A union grievance helped a Buffalo police officer back into the world of drugs and dirty money. In 1993, the FBI warned Buffalo's police commissioner he had a crooked cop on his narcotics squad. The FBI said Darnyl Parker, a decorated detective who lectured schoolchildren about the evils of drugs, was secretly passing confidential police information to drug dealers. The FBI said it also believed Parker was stealing cash from drug dealers and providing dope to his twin brother.

Richard Donovan, Buffalo's police commissioner at the time, immediately removed Parker from a federal drug task force and transferred him out of the narcotics squad. But the police union, claiming Donovan had no right to discipline Parker without formally charging him, demanded he be given his job back.   The Police Benevolent Association won. An arbitrator ordered Parker returned to narcotics investigations. He also made the city pay Parker $18,438 in overtime that he potentially would have earned on the narcotics squad.

New Jersey Fund Violated ERISA; Wrongly Denied Pension

The U.S. Ct. of Appeals for the Third Circuit held March 9 that the Int'l Bhd. of Teamsters Local 641 Pension Fund -- which allows represented employees to transfer service credits earned while working under the jurisdiction of other IBT locals, but had a 15-year vesting threshold -- violated Employee Retirement Income Security Act which requires a 10-year vesting period.

The pension plan, known as a pro-rata pension plan, was available to certain employees who had been represented by other IBT locals but didn't attain a minimum of 10 years with any one employer within the jurisdiction of Local 641 in Northern N.J.  The fund calculated participants' pension based on the amount of pension they would have been entitled to had they earned all of their combined pension credits under Local 641's jurisdiction. The pro-rata pension was generally paid only to employees who earned a minimum of 15 years of combined service credits.

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