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.

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]

DOJ Report Says New York Boss Aided Mobsters

An internal Dep't of Justice  report alleges that the boss of the correction officers union at the Brooklyn federal lockup doled out favors to jailed mobsters for eight years. The report cites detailed statements from three fellow officers and 17 inmates, including members of the Colombo, Gambino and Luchese crime families, who say union boss Raymond L. Cotton smuggled in contraband like hero sandwiches, veal cutlets and radios, warned of prison searches and broke visiting rules in exchange for bribes.

Allegations against Cotton, a correctional counselor and president of Am. Fed'n of Gov't Employees Local 2005, surfaced in 1997 after his arrest with 11 other guards in the "Operation Badfellas" probe by the DOJ's Office of Inspector Gen. Nine were convicted on criminal charges. Two others were fired. Federal prosecutors dismissed the case against Cotton in June 1998 after a key mob informant and inmate was accused of drug deals at the jail.

Illinois Union Endorsed Indicted Mayor

Stone Park (Ill.) Mayor Robert Natale has been accused by federal prosecutors of shaking down drivers when he was a cop and taking mob payoffs as mayor. But that hasn't stopped a local police union from endorsing Natale in his re-election bid--because he has been tough on crime, the union says. Stone Park residents received a letter last week from the Ill. Council of Police & Sheriffs, which represents Stone Park officers, endorsing the mayor and his slate of candidates for election Apr. 3.

Norm Frese, boss of the tiny union,  said he had no problem endorsing the mayor, who awaits trial in federal court with alleged West Side and DuPage County mob boss Anthony Centracchio and two others. Natale, mayor since 1989, insists he is innocent.

The union letter says State Police data show crime was down in Stone Park in 2000 by 67% from 1999. The only problem: The number is wrong. The crime rate was down, but not as much as the union and Natale say, based on numbers the village provided. The crime rate for 2000 was down 22.3%, according to the measure commonly accepted by criminologists.

Overnite's Texas Tort Suit Proceeds

Overnite Transp. Co. may proceed with its claim that the Int'l Bhd. of Teamsters unlawfully interfered with the firm's business relationships by distributing an allegedly defamatory flier to Overnite customers, the Texas Court of Appeals ruled Mar. 29. Reversing summary judgment granted to IBT, the appeals court found that because IBT admitted, solely for purposes of the motion, that it published a defamatory flier for the purpose of injuring Overnite's business, IBT failed to show its actions were legally justified.

IBT also failed to show the tort claim was preempted by the Nat'l Labor Relations Act, the appeals court decided, because the union did not show that handbilling based on defamatory statements is protected union activity. Justice Jan P. Patterson wrote the decision.

The case stems from IBT's long-running effort, marred by union violence, to unionize Overnite. In addition to the Texas suit, Overnite has cases pending in Georgia and Virginia involving defamation and libel claims against IBT.

Seattle Union Loses Sex Case, Jury Awards $638,000

A Washington state jury  awarded $638,764 to a ex-union steward Mar. 29 after finding that Int'l Ass'n of Machinists Dist. 160 in Seattle discriminated against her because of her sex. The jury found Dist. 160 violated the Wash. Law Against Discrimination by not hiring Linda Blaney, a senior chief shop steward, as business representative, and also by removing her from the steward position. The order directing the union to pay Blaney was signed April 9.

According to Blaney's attorney, the jury decided the union illegally failed to hire Blaney as business representative in 1998, 1999, and 2000. The jury awarded her $112,903 in lost wages and benefits, $450,861 in future lost wages and benefits. The jury award on the failure-to-hire charge included no damages for pain, suffering, and emotional distress.  In connection with Blaney's removal from the shop steward job, the jury awarded her $75,000 in pain, suffering, and emotional distress, and no amounts for past or future wages and benefits.

Would-be Hawaiian Fund Manager Sentenced to 60 Months for Fraud

U.S. Dist. Chief Judge David A. Ezr sentenced Anthony G. DiPace to a term of imprisonment of 60 months after federal jury convicted him Feb. 8 of all 11 counts of mail fraud charged against him. Specifically, an indictment charged that DiPace executed a scheme to defraud the Hotel Union & Hotel Industry of Hawaii Pension Plan & Trust. Essentially, the indictment charged that DiPace lied about his credentials in an effort to be hired by the Pension Plan as its investment monitor. If DiPace had been successful in obtaining the position, it would have paid him in excess of $300,000 per year.  DiPace also received a term of supervised release of three years and a special assessment of $850. Ezr  also ordered DiPace to make restitution in the amount of $32,063 to Hotel Employees & Restaurant Employees Int'l Union Local 5.

Obituary: Corrupt New York Boss Cody

John Cody, 79, who federal investigators said helped organized crime figures extort the construction industry from Montauk to Manhattan in the 1970s and 1980s, died Apr. 3 of Alzheimer's disease at his home in Seaford, N.Y. Cody was the longtime boss of Int'l Bhd. of Teamsters Local 282 in Elmont, now in Lake Success. The local's members drive the trucks that deliver concrete and building supplies to many construction sites in the metropolitan area.

While reformers fought Cody for control of the union for decades, FBI agents and federal prosecutors sent him to prison, once in the 1980s for racketeering and once in the 1990s for plotting to murder a rival who had taken over the union during Cody's earlier imprisonment.

Tennessee Boss Indicted on 56 Counts of Union Corruption

A federal grand jury handed down a 56-count indictment Mar. 21 against Donald G. Martin, ex-boss of United Steelworkers of Am. Local 8681 in Knoxville, Tenn., for union corruption. Allegedly, he embezzled more than $6,875 in union funds. Specifically, he was charged with 49 counts of union embezzlement, five counts of making false entries into union records, and two counts of making false statements concerning union reporting requirements.

Reportedly, Martin, Local 8681's financial secretary, had $6,600 in union reimbursement checks issued to him between 1996-98. The checks were supposed to serve as reimbursements for time lost from their jobs for official union business and travel expenses. He also allegedly took $275 via a union check issued to him without authorization and without listing it in the cashbook. He is also accused of falsely stating that five reimbursement checks were payable to union officers when he knew they were payable to him. It also charges him with falsely representing that he received about $1,480 in disbursements for 1996 and $470 for 1997 when he knew he actually received $4,150 and $1,930.

$160,000 Embezzlement Reported in Cleveland Local

Allegedly, members of the N. Ohio Firefighters Union have accused a member of Local 639 of embezzling money from union coffers. The thefts are alleged to have occurred over more than a decade and total as much as $160,000. The FBI is reportedly investigating. Further details were not available. [Cleveland Scene 3/15/01]

Iowa Boss Guilty of $4,000 Embezzlement
Randy Kamp, ex-president of the Paper, Allied-Indus., Chem. & Energy Workers Int'l Union local in Waterloo, Iowa, pled guilty to a $4,773 union embezzlement. Kamp was accused in Feb. 2001 of stealing union funds between June-Nov. 1999. He faces up to five years in prison and a $250,000 fine. Sentencing is scheduled for June 11. He is free until sentencing. [Des Moines Reg. 3/24/01]

Jesse Jackson Staffers on Union's Payroll

For decades Rev. Jesse Jackson has picketed, prayed and negotiated on behalf of unions, and now the Chicago Tribune has uncovered what the unions do for Jackson. Some give money to Jackson's groups, and a few pick up costs for salary and benefits' packages for Jackson's staffers. Among those benefiting from the arrangement with the Hotel Employees & Restaurant Employees Int'l Union was Karin Stanford, Jackson's ex-mistress and ex-employee. In 1999, Stanford received a salary rate of $35,000 from HERE plus health-care and other benefits, according to HERE.

Jackson's solicitations to unions are blunt according to Gary Massoni of Rainbow/PUSH Coalition: "When Rev. Jackson meets with union leaders, he says, I've been involved in labor rights. I've got three things I want you to do," and asks the bosses to put "someone on the staff payroll," take part in his events, and make a "cash contribution." HERE boss John W. Wilhelm praised Jackson: "He's been with us on strikes all over the country." Other unions which have reportedly given are NEA, IATSE, USWA and locals of UFCW and SElU.

Chicago Members Sue Wilhelm, International

On Mar. 16, the final day of a hearing on the Hotel Employees & Restaurant Employees Int'l Union's trusteeship over Chicago-based Local 1, members of the scandal-scarred local went to federal court seeking an order to compel the HERE to dissolve the trusteeship. The suit responded to statements by HERE president John W. Wilhelm and Local 1 trustee Henry Tamarin during the hearing, indicating that they would seek to extend the trusteeship for at least another 17 months. At the same time, the trusteeship terminated the three top bosses of Local 1. The suit was filed by Local 1 members Linda Brush and Sigrid Alexandersen. In addition to HERE, Wilhelm, Tamarin, and James Dupont, assistant trustee of Local 1, were named as defendants in the suit.

New York Boss Named Unindicted Co-Conspirator in Mob Investment Case

Thomas J. Scotto, the president of the N.Y.C. police detectives union has been named as an unindicted co-conspirator in what federal prosecutors say was an organized-crime scheme to use kickbacks to union leaders and mob threats and violence to tap pension funds, inflate stock values and defraud thousands of investors.  Scotto, who has led the Detectives Endowment Ass'n since 1986, was named by prosecutors in papers filed in U.S. Dist. Court in Manhattan recently to supplement information in 16 indictments that brought charges against 120 people in Jun. 2000 in a wide conspiracy.

Utah Governor Signs Paycheck Protection into Law

President Bush's efforts to enact legislation protecting the first amendment rights of America's worker were given a boost Mar. 19, according to Am. for Tax Reform, as Utah Governor Michael O. Leavitt (R) signed a paycheck protection bill into law.  Utah becomes the sixth state to enact such a statute; the others are Idaho, Michigan, Ohio, Washington and Wyoming.

Under the "Voluntary Contributions Act," no Utah worker may have monies deducted from his or her paycheck by an employer or union for political purposes unless the worker has first given written permission.  The measure also gets taxpayers out of the business of subsidizing political fundraising by prohibiting the use of public employer resources to collect political contributions.

Pittsburgh Local Placed in Trusteeship

Service Employees Int'l Union Local 585 in Pittsburgh was placed in trusteeship Mar. 5 because of allegations that democratic procedures were ignored by its newly elected president, James Neville. The trusteeship was imposed after a hearing in late Feb. by int'l vice-president Thomas Balanoff. Deborah Schneider, regional director of SEIU District 925 in Cincinnati, was appointed trustee. Thomas Hoffman, a longtime SEIU staffer in Pittsburgh, was named deputy trustee.

The action takes control of the union away from Neville, an ex-Allegheny County assessor and former Air Force officer, who last December defeated Rosemary Trump, the 27-year president, by a vote of 1,505 to 1,403. Roughly 20% of the local's membership voted. Trump, an outspoken leftist, was recently the subject defamation suit brought by an employer, Beverly Enterprises.

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