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.

Florida Boss Indicted for Pension Abuse

U.S. Atty. Guy A. Lewis annouced Oct. 27 that a grand jury returned a five-count indictment charging former Miami Police Chief and City Manager Donald H. Warshaw with conspiracy and mail fraud. He also served on Bd. of the Miami Police Relief & Pension Fund, which is connected to a local of the Fraternal Order of Police.

The indictment alleges that as an officer and board member on the pension fund, Warshaw had a fiduciary responsibility to act honestly and faithfully in all of his dealings with the pension fund, and to perform his duties free from fraud, self-enrichment and self-dealing. Warshaw is charged with having breached that duty by defrauding the pension fund of its monies.

The indictment then describes a scheme to defraud that extended from May 1993 until at least Apr. 1999 through which Warshaw, who had signing authority over the bank accounts, funneled pension fund monies to himself. Specifically, it alleges that Warshaw made personal charges to credit cards of the pension fund. This and a related charity scheme resulted in a net gain to Warshaw of $80,000. [USAO S.D. Fla., Media Release 9/27/00]

Local 983 Boss Cheated Immigrants

A N.Y. traffic officer who also serves as the treasurer of a public employees Am. Fed'n of State, County & Mun. Employees Local 983 was charged in court Oct. 18 with cheating two recent immigrants of more than $1,600 while running a tax and immigration aid business. Two women paid the officer, Fernando Rodriguez, who is also a certified public accountant, to help them with tax and immigration paperwork, but he funneled the money to his union and to himself, said Asst. DA Lee Llambelis . He was charged with fraud, grand larceny and petty larceny.

Kokomo, Indiana Bosses Probed

Bob Bolton considers himself a marked man. The United Auto Workers Local 685 member says he and his family have been threatened and harassed by fellow union members ever since he spoke out about alleged wrongdoing by union leadership. Despite these alleged threats, Bolton and a group of about a dozen Local 685 members have made enough noise that the FBI and others have started looking into the allegations.

Much of the allegations of wrongdoing center on charges that union leaders are being paid for hours they never worked at DaimlerChrysler's Kokomo Transmission Plant or Indiana Transmission Plant. "Most of the time, they [union bosses] are at the hall and getting paid for 12 hours at Chrysler," said Bob Bolton, who was an elected Local 685 officer. Bolton resigned as a committee member Sept. 18 because of the alleged threats. "They're supposed to be representing the members and they're not," Bolton said. "I have been hearing this for years, but no one was willing to come forward out of fear for their job security and even their life."

Local 1508 Boss Pleads Guilty

A Manhattan union boss who racked up thousands of dollars for hotel rooms in Brooklyn pled guilty Oct. 17 to $3,000 larceny charge and agreed to a sentence of five years probation. Al Cannizzo also agreed to pay $20,000 in restitution to his union, AFSCME Dist. Council 37. Cannizzo was president of AFSCME Local 1508. A union disciplinary panel accused Cannizzo in Feb. 2000 of spending more than $100,000 improperly for hotel rooms, repairs to his personal cars, his personal telephone bills, dry-cleaning, and shoe repair. [Newsday (N.Y.), N.Y. Times 10/18/00]

Three Local 1549 Bosses Plead Guilty
Three more officials of AFSCME Dist. Council 37 have pled guilty to plundering union funds for vacation cruises and other personal use. Lionel Scott, Mary Wilson and Eugene Bruno all pled guilty Oct. 11 in Manhattan to larceny charges.  All were associated with Local 1549. The guilty pleas in this set of indictments leaves ex-Local 1549 president Al Diop as the only defendant.

Federal Grand Jury Now Probing Trumka

There is a new development, finally, in the federal investigation of Richard L. Trumka, AFL-CIO secretary-treasurer and top union ally of Al Gore, for his alleged participation in two money-laundering conspiracies that involving $200,000 and aided the 1996 reelection campaign  of ex-Teamsters boss Ron Carey. According to the Washington Times, a federal grand jury in Manhattan has been empanelled and it has subpoenaed AFL-CIO records concerning the transactions in question.

While the Clinton-Gore-Reno Dep't of Justice have refused to comment on the Trumka probe, DOJ recently blocked the Int'l Bhd. of Teamsters from going to court to seek $9 million in damages in a civil racketeering suit, saying it would undermine a criminal investigation.

New Jersey Family Guilty of $200,000 Embezzlement

Victor Garcia, Sr., the ex-president of the Nat'l Union of Hosp. & Health Care Employees District 1199J and his son, Victor Garcia Jr., the district's ex-pension fund assistant executive director, were found guilty Sept. 28 of conspiring to embezzle about $200,000 from the pension fund.  The N.J. based Dist. 1199J is part of the Am. Fed'n of State, County & Mun. Employees. The jury in U.S. Dist. Court in Newark deliberated about 12 hours over three days before returning its verdict.

Senior was also found guilty of conspiring to receive about $200,000 in cash kickbacks from a general contractor who, from 1994-97, made about $6 million in renovations to a building. The contractor, among other things, paid for the repair of Senior's car in order to retain the union contract. [USAO D.N.J., Media Release 9/28/00]

Justice Delay: Diop's Embezzlement Trial Postponed

The trial of three AFSCME Dist. Council 37 bosses charged with stealing more than $1 million in union funds was postponed Oct. 3 pending a mental health examination of one of the defendants. After defense attorneys reported that Albert Diop, ex-president of Local 1549 and AFSCME international vice-president, was not competent to stand trial, Manhattan trial judge William Leibovitz ordered that Diop undergo mental examinations by two court-appointed doctors. The trial for Diop and two of his top aides, Mary Wilson and Lionel Scott, will resume Nov. 13 pending results of the psychological evaluations.

Leibovitz said Diop, who is currently out on bail, will be remanded to Bellevue Hospital Center if he does not show up for the evaluations, regardless of the reason. He also warned attorneys that the case is in no way being put off indefinitely. Defense attorney Ramon Pagan said Diop is being treated for "depression and other factors" at Lenox Hill Hospital and cannot be released from observation for at least 25 days.

Buffalo Boss Jailed for Strike Action

N.Y. trial judge Kevin M. Dillon sentenced Philip Rumore, president of the Buffalo Teachers Fed'n, to 15 days in jail for showing "complete and total disrespect" for the law by leading a strike of city teachers.

"What it came down to was: Either you were in charge or the law was in charge," Dillon said while sentencing the union boss. "In words and deeds, you made it clear you were not going to adhere to court orders you did not agree with. That is difficult for me to accept and impossible for me to condone."

Dillon did not impose jail terms on other BTF bosses, Barbara Bielecki and Edith LeWin, but fined them each $1,000. Rumore began his jail time Sept. 29; he was also hit with a $1,000 fine. Rumore faced the possibility of 30 days in jail for violating Dillon's no-strike order and state labor law by leading a teachers strike on Sept. 14. The three bosses and the BTF, as a corporation, pled guilty Sept. 22 to contempt of court charges. Dillon also is empowered to impose a fine of any amount he deems reasonable against the union itself when he sentences it on Nov. 13.

Members Win Continue Notice of Landrum-Griffin Rights

U.S. Dist. Judge Peter J. Messitte in Maryland ordered the Int'l Ass'n of Machinists Sept. 19 to continuously post summaries of the Labor-Management Reporting & Disclosure Act, popularly called the Landrum-Griffin Act, following a ground-breaking U.S. Fourth Circuit Court of Appeals decision, Thomas v. Grand Lodge of Int'l Ass'n of Machinists, in Jan. that reversed the district court and held that a union's obligation to inform members of their rights under the law is an ongoing one.

Messitte's order stipulates that IAM must provide the summary of Landrum-Griffin to all new union members, publish the summary in three issues of the IAM Journal, and post the summary continuously on its Internet website. Landrum-Griffin, among other things, establishes a "Bill of Rights" for union members covering elections of officers, requires minimal union financial disclosures and criminalizes union embezzlement.

Illinois Firm Files Racketeering Suit Against Steelworkers

Tire manufacturer, Titan Int'l, Inc., filed racketeering charges in U.S. Dist. Court in Springfield, Ill., Sept. 29 against the United Steelworkers of Am. Locals 164 and 303L and over 100 named individuals.  The suit is for damages of $240 million.

"It is time for companies to stand up to labor unions and demand that the laws be upheld," stated Maurice Taylor Jr., Titan president and CEO. "Companies need to defend the rights of their employees. The Titan lawsuit will bring to light the union's unbelievable disregard for laws. The union is accustomed to using its propaganda machine to influence politicians and public opinion, but it is very difficult to bully a Federal Court with the same tactics. Titan will be asking other companies to step forward with information regarding similar acts committed by USWA. Titan also plans to organize a group of companies to focus on changing the labor laws of this country to better protect workers' rights."

Florida Firm Helps in Probe of Boss

U.S. Dist. Judge William Dimitrouleas fined a Port Everglades, Fla.-based marine firm $60,000 on Sept. 22 for making illegal payments to union boss Walter "Buster" Browne in 1995. The fine, recommended by prosecutors as part of a plea agreement in June, was equal to the amount the company, Hvide Marine Corp, admitted to paying Brown. Dimitrouleas handed down the sentence after investigators completed a background check of the firm's records.

Hvide executives also agreed to cooperate with federal investigators who are targeting Browne, the politically connected president of the Nat'l Fed'n of Public & Private Employees. Browne was a paid consultant for Hvide on government issues from 1993-98. Prosecutors tried and failed to convict him for tax-evasion and mail-fraud charges in the 1990s, but he did plead guilty in 1996 to charges stemming from a rigged union election. On previous occasions Browne has said publicly that he expects a federal indictment. [Sun-Sent. (Ft. Lauderdale) 9/24/00]

North Carolina Members Win Union Dues Suit

U.S. Magistrate Judge Carl Horn in N.C. ruled Sept. 14 that the Int'l Ass'n of Machinists "systematically denied procedural protections" to two nonmembers the union represented at US Airways who objected to the payment of dues in support of IAM's nonrepresentational activities. Horn found IAM denied John Masiello and Craig Sickler their right to object to supporting the union's nonrepresentational activities when it failed to institute the precollection procedures the Supreme Court established in Chicago Teachers Union v. Hudson before it sought to enforce the union security clause in its contract with the employer. "The record is replete with examples of the union's untimely, inadequate practices and procedures," Horn wrote.

Probe of Boston Local Reportedly Expands

Expanding the federal shakedown probe into Int'l Bhd. of Teamsters Local 25 in Boston, investigators are reportedly now probing allegations that Local 25 president George W. Cashman nixed a plan to kill a member of another union, agreeing instead to have her beaten last month "to send [her] a message." Investigators are reportedly probing an Aug. attack on Susan Christy, a snack truck driver on the movie set of "What's the Worst That Could Happen." and a member of the Int'l Ass'n of Theater & Stage Employees.

According to Boston Herald sources and a Boston Police report, James P. Flynn, a reputed mobster and ex-con who runs the Charlestown-based Teamsters' movie crew, ordered Christy to quit so Teamster Robert Martini could take over her concession contract prior to the start of filming this summer. When Christy refused, Flynn reportedly threatened that her equipment would be "severely damaged" if she continued to work, investigators have been told.

Illinois Organizer Accused of Racial Slur

A hotly contested effort to organize St. Mary's Hospital in E. St. Louis, Ill., took a racially divisive turn Sept. 25 when SMH executives posted a sign with quotes attributed to a union organizer who allegedly used a racial slur to describe SMH's CEO. The slur allegedly came from Wade Outlaw, a former hospital worker and organizer for the Serv. Employees Int'l Union. Outlaw denied he made the remark. The union is trying to sway a majority of the hospital's 500 workers to vote for collective bargaining in an election scheduled for Oct. 5.

Outlaw's alleged remarks are contained in an affidavit signed by a witness who told the Nat'l Labor Relations Bd. that Outlaw referred to CEO Richard Mark, "the head nigger" and that "he wasn't going to keep us down anymore." Outlaw also allegedly told the witness, an unidentified drug company representative, that Mark is being investigated by federal authorities for embezzling $150,000, according to the affidavit. Mark said there isn't an investigation into missing money.

Rhode Island Boss Accused of Stealing from Town

Known as the "conscience of Town Hall," the Rhode Island town of Burrillville's deputy treasurer Sandra J. Stone was charged Sept. 21 with embezzling town funds.  Stone is also a union steward Am. Fed'n of State, County & Mun. Employees Dist. Council 94. Stone is accused of embezzling $925 from the town, but state police say she is the sole suspect in the disappearance of about $20,000 in public funds.

Town Council President Wallace F. Lees said that Stone is the last person he would suspect of being involved in these allegations. Even before she became an AFSCME boss, Stone watched out for other employees; if she thought someone was cheated in dollar value or time off, she'd go to bat for them, Lees said. She is known for having a firm sense of right and wrong, Lees said. And she would be the last person to tolerate embezzlement if the case involved someone else, he said. She'd hang them, he said.

So why would Stone have done something so out of character? According to a state police affidavit filed in court, Stone offered this explanation: The money was there, it looked good, so I took it.

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]

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