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.

IRB Clears Michigan Boss, Hoffa Ally

Lawrence Brennan, president of Int'l Bhd. of Teamsters Local 337 in Detroit and the Mich. Teamsters Jt. Council 43, as well as mentor to IBT president James P. Hoffa, was found not guilty by IBT's Indep. Rev. Bd. June 5 of charges that he masterminded a scheme to use $30,000 in members' dues for his reelection campaign.

The court-appointed IRB found that there was not enough evidence to convict Brennan, although it found some of the accusations about the embezzling credible. Brennan could have faced expulsion from the union. Before Hoffa was elected union president in Dec. 1998, he was Brennan's administrative assistant.

IRB said there was contradictory testimony by Local 337's secretary-treasurer, Colonel W. Myers, who, FBI agents testified, first told them Brennan had formed a scheme to double the Christmas bonuses of officials on the local's board. The federal investigators said Myers also told them that the bonus checks had been cashed and that the money had then gone to Brennan's campaign fund.

Union Training School Linked to Corruption Probe

Federal investigators probing embattled Int'l Bhd. of Teamsters Local 25 boss George W. Cashman have subpoenaed Mass. Port Auth. records cornering a sweetheart deal that allows the Local 25 to operate a profitable truck driver training school rent-free on MPA's prime waterfront property in East Boston, sources told the Boston Herald. Investigators are reportedly eyeing whether Charlestown, Mass.-based Local 25 is being given special treatment because its president is Cashman, who is also a member of the MPA's board of directors. In addition, the driving school may be violating state law by training drivers for commercial driver's licenses who are not members of Local 25. Reportedly, MPA's employees receive training at the IBT school.  Further, drivers from other companies, including utilities, allegedly pay for instruction at the IBT school even though the school is not certified, as required by the Registry of Motor Vehicles if the school trains drivers outside Local 25.

California VP Accused of $277,300 Embezzlement

A federal grand jury recently charged Alan L. Axt, ex-vice president of the United Food & Commercial Workers Local 1288 Federal Credit Union with embezzling an estimated $277,335. Before U.S. Magis. Judge Sandra M. Snyder, Axt pled not guilty July 9 to embezzling funds from the Fresno, Cal., credit union. The one-count indictment alleges that Axt embezzled the funds from Mar. 1999 to Nov. 2000. He faces a maximum of 30 years in prison and a $1 million fine. After the June indictment, Axt's attorney, David Gottlieb, said that he was cooperating with the FBI, the U.S. Atty.'s Office, and the credit union and hoped "to get it resolved as quickly as we can." [Fresno Bee 7/10/01]


Weak Evidence, Statute of Limitations Help Chicago Boss
 In a blow to the U.S. Atty.'s Office in Chicago, U.S. Dist. Judge Blanche Manning acquitted ex-union boss John Serpico on four of eleven counts July 9, calling the government's evidence too weak to go to the jury. The action in effect dismissed racketeering, conspiracy, bank fraud, and false statement charges against Serpico on the eve of closing arguments. Jury deliberations began July 12.

Boss Accused of Fixing Chicago Election; Quindel Returns

In a series of post-election protests, the Hotel Employees & Restaurant Employees Int'l Union's Yale-educated top boss John W. Wilhelm has been accused of essentially fixing the recent election at HERE Local 1 in Chicago. The protests allege that Wilhelm created rules and directed resources in an effort to maintain the int'l union control over the scandal-scarred local. Specifically, Wilhelm allegedly tampered with Local 1's bylaws in order to permit outsiders to participate in the election, in violation of HERE's constitution. Also,Wilhelm is accused of inappropriately using int'l union resources to benefit his favored slate of candidates.

"This was a clear situation in which the general president was engaged in anti-democratic practices to benefit his handpicked candidates," said Patrick Deady, an attorney for one of the two losing slates. Deady said Wilhelm's actions were an attempt to "fix" or "stack" the election.

AFL-CIO, DNC Loose FEC Case

Reversing an earlier move, the Federal Election Comm'n voted to place back on the public record thousands of pages of documents regarding an FEC probe of AFL-CIO dealings with the Democratic Party.  FEC voted unanimously to reject requests from the labor federation and the Democratic Nat'l Committee to keep the documents confidential, according to a July 10 letter to DNC gen. counsel Joseph Sandler. In its initial response to the AFL-CIO and DNC requests, FEC in May had made an unprecedented decision to remove the case file from the public record. The letter said the file on the case (MUR 4291) would be made public again July 17. That gives AFL-CIO and DNC time to challenge the decision in court.

Illinois Boss Admits $470,000 Theft, Racketeering

Frank B. Zeuberis, ex-boss of Laborers' Int'l Union of N. Am. Local 5 in Chicago Hts., Ill., pled guilty June 18 to a federal racketeering charge and admitted that he embezzled $470,106 in union funds. The ex-president and business manager admitted that he gave himself, his wife and James A. DiForti unauthorized and fraudulent salary increases, bonuses, and paid vacations. DiForti was a reputed mob lieutenant who Zeuberis appointed as Local 5's secretary-treasurer. Zeuberis also admitted that he solicited $5,000 to appoint a union member as a business agent. The wife was not charged, and DiForti died in June 2000. Zeuberis faces up to 42 months in prison when he is sentenced Oct. 18. Zeuberis was indicted on 28 counts in Nov. 2000. [Chi. Trib. 6/19/01, BNA 6/21/01]

North Dakota Boss Stole $33,000, Charges Against Wife Dropped

Bryan D. Kroh pled guilty June 15 in U.S. Dist. Court in Bismarck, N.D., to embezzling $33,468.52 from the Bhd. of Locomotive Eng'rs. The ex-secretary-treasurer admitted to writing unauthorized checks to himself and his wife, Dinah, as well as numerous checks to vendors and a bank. Reportedly, there were 61 illegal transactions from Jan. 1996 to Mar. 1999. The U.S. Atty.'s Office also filed charges against Dinah, a rare move, for union embezzlement and aiding and abetting. But, both felony charges against the wife will reportedly be dismissed at Bryan's sentencing.

Despite Bryan's 1991 felony conviction on one count of federal tax evasion, prosecutors will recommend a prison term of not more than nine months on the embezzlement charge. He received three years probation for the tax crime. The maximum penalty for union embezzlement is five years in prison and a $250,000 fine. Also, as part of his plea on the embezzlement charge, a second charge of giving false statements was dropped. But, prosecutors will ask the judge to order Bryan to pay restitution. [Bismarck Trib. 6/16/01]

Fourth International Boss Guilty of Union Corruption

James E. Cole, Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers' general secretary, pled guilty to one count of embezzling of union funds, one count of "failing to disclose a material fact" in a report to the Dep't of Labor, and one count of "making a false entry" in union records. In return, he will cooperate with the ongoing federal probe of BSORIW, under the terms of a plea agreement approved June 18 by U.S. Dist. Judge Thomas F. Hogan in Washington, D.C. Cole's trial on 18 felony charges was scheduled to begin June 18. Cole is the fourth BSORIW boss to admit to crimes against his union in the three-year probe by the U.S. Atty.'s Office in D.C., FBI, and DOL.

Hogan did not set a sentencing date, but he ordered Cole to return to court on Sept. 26 for a status hearing. Cole faces a maximum sentence of up to seven years in prison and a fine of up to $450,000 when he is sentenced. But prosecutors may seek a shorter sentence if Cole provides them with substantial assistance. Currently under the plea agreement, Cole will pay a $15,000 fine within 30 days of signing the plea agreement and $15,000 in restitution for his embezzlements.

Possible Tampering in Ohio Vote

Int'l union election officer Stephen B. Goldberg impounded ballots and ordered a new election at two Laborers' Int'l Union of N. Am. locals in the Columbus, Ohio, area due to possible ballot tampering. LIUNA Locals 216 and 423 recently completed an election for delegates to attend LIUNA's convention this fall in Las Vegas. Twelve were nominated for nine slots. Nine were local bosses running as a slate.

Goldberg ruled June 21 that, while he could not determine whether there was an intentional effort to tamper with ballots, there were numerous violations of election rules that "cast substantial doubt on the validity of the election." He cited several violations, including the fact that ballots were picked up early from a post-office box and left at a candidate's office, and that far more ballots than needed were printed. He added that the problems raise concerns about the locals' future ability to conduct fair elections.

RNC to FEC: Open AFL-CIO Files

The Republican Nat'l Comm. asked the Fed. Election Comm'n June 13 to release thousands of pages regarding a FEC case against AFL-CIO and the Democratic Party. RNC complained of an unprecedented move by FEC to yank all of the probe's files from the public record. In May, after a lengthy staff review to remove confidential materials, FEC made 6,024 pages public, but quickly reversed itself and suppressed the documents four days later.

"Compounding the seriousness of this bizarre action by the commission is the fact that the removal-and presumably the explanation for the removal-was conducted in secret," RNC gen. counsel Michael E. Toner said in a motion demanding an explanation from FEC and asking that the papers be made public again. Toner added: "Because this motion involves a closed matter, the RNC trusts that all deliberations regarding this motion will be conducted at a public meeting of the commission."

California Embezzler Gets One Year for $210,000 Theft

U.S. Dist. Judge Dean D. Pregerson in L.A. sentenced Teresa E. Sanchez, admitted union embezzler, May 24 to twelve months at a federal community confinement center and ordered her to pay more than $210,000 in restitution to Int'l Longshore & Warehouse Union Local 20A in Wilmington, Cal. Indicted in July 2000, Sanchez pled guilty in Dec. 2000 to three counts of embezzling union funds and two counts of falsifying union records. She was the local's financial secretary from 1988-99. The Dep't of Labor's Office of Labor-Mgmt. Stnds. in L.A. and Office of the Inspector Gen. found that from 1993-99 Sanchez cashed 168 union checks. She also signed an unauthorized union check to her daughter for $2,000. She concealed the embezzlement by falsifying monthly reports. Sanchez begins her sentence July 23. [OLMS Media Release 5/25/01]

Two California Bosses Sentenced for Union Theft

Two bosses of Am. Fed'n of Gov't Employees Local 2018 in Twentynine Palms, Cal., have been sentenced in Cal. Superior Court in San Bernardino for grand theft to one day in county jail and five years probation, Jeff Gitomer of the Dep't of Labor's Office of Labor-Mgmt. Stnds. L.A. Dist. Office told the Union Corruption Update May 31. Dannie S. Dickerson, ex-local president, and Tara D. Alexander were also ordered to pay a $200 fine and $21,000 in restitution. Both were charged in Jan. 2000 with embezzlement and grand theft. Dickerson was initially charged with stealing $11,975, and Alexander $5,117. Both later pled guilty. The San Bernardino County Dist. Atty.'s office filed the charges after an OLMS probe. [OLMS Media Release 1/19/00]

New Federal Probe Info; At Least Six Locals Eyed

Recently, members from ten United Auto Workers locals, including Dale Garrish of Local 594 in Pontiac, Mich., have asked the federal agents to investigate their union. With time sheets, secret tape recordings and internal memos, they've persuaded the FBI and Dep't of Labor to consider their complaints against six locals. The allegations involve collaboration between employers and UAW bosses. The whistle-blowers want investigators to determine whether the firms paid bosses unworked overtime or secured jobs for friends and relatives in exchange for cooperation.

Paul Krell, an assistant to UAW president Stephen Yokich told the Detroit Free Press: "We go to great lengths to protect our members. I think it's rare they'd go outside of us." Reportedly, the whistle-blowers are seen by some as traitors to a union; some say they've been threatened and shunned. They say they only turned to federal authorities as a last resort when UAW bosses wouldn't respond.

Old Guard Attorney Loses Suit; More Info on D.C. Probe

The federal criminal probe into the misuse of D.C.  police union funds spilled over into D.C.  Superior Court May 18, where a hearing pitted several lawyers against union bosses. At issue is who should hold the contract to represent the union and who makes decisions on behalf of the union, the Fraternal Order of Police/Metro. Police Labor Comm. Ted J. Williams, MPLC's disputed attorney, is suing his client's chairman, Gerald G. Neill, and attorney Kenneth Bynum, claiming breach of contract. Neill claims he has authority to pick the union's attorney, Bynum.

D.C. Superior Court Judge Linda K. Davis gave two apparent victories to Neill at May 23 hearing. She ruled that Williams has no standing to sue over the matter and must seek arbitration. Davis also dismissed a suit filed by three members of the MPLC's exec. comm. who sought to bar Neill from picking Bynum. Neill´s opponents on the committee are Rene Holden, vice-chairman; Tyrone Best, treasurer; and Michael W. Johnson, executive steward. Davis admonished Neill´s three opponents to "follow proper procedures" as they make decisions.

IRB Says Chicago Bosses Breached Duties

The court-appointed Indep. Rev. Bd. of Int'l Bhd. of Teamsters accused William T. Hogan, a top IBT boss in the Midwest, May 23 of colluding with a Las Vegas janitorial service company to have the firm's nonunion employees perform work at Las Vegas trades shows and conventions. IRB's report alleged that Hogan, president of Chi. Teamsters Jt. Council 25, and IBT int'l rep. Dane Passo with scheming to have employees of the Chi.-based United Servs. Companies perform trade show work at rates below those paid members of IBT Local 631. The two union officials allegedly schemed to try and force the trustees of Local 631 to enter into a substandard contract with United, according to the 177-page report.  Hogan had no official responsibility for the operation of Local 631. But Hogan's brother, Michael is vice-president of United.

In the report, forwarded to the Teamsters General Executive Board, IRB recommends internal union charges be brought against Hogan and Passo for violating their fiduciary obligations to the union and its members.

Media Report Uncovers Question Spending in Three Joint Funds

The United Auto Workers and the automakers usually find themselves on opposite sides of the bargaining table. Both are behind the manager's desk however, at three little-known, but very big nonprofit organizations they run together: UAW-GM Ctr. for Human Resources, UAW-Ford Nat'l Programs Ctr., and UAW-DaimlerChrysler Nat'l Training Ctr. The joint funds began in 1982 to retrain laid-off employees who had little hope of returning to the automakers' factories. The funds now run child-care, fitness centers, and training centers; they also help members pay college bills, cope with addictions and look after elderly parents. Between 1996-99, the joint funds with Gen. Motors, Ford Motor Co., and DaimlerChrysler AG spent more than $1.3 billion.

Rhode Island Union Fund Manager Gets Eight Years

Todd J. LaScola, the fund manager for Int'l Bhd. of Elec. Workers Local 99 in Rhode Island who embezzled more than $ 6.4 million from his clients, was sentenced May 22 to eight years in prison. After an emotional three-hour hearing punctuated by statements from five of the investors defrauded by LaScola, U.S. Dist. Judge Mary M. Lisi's decision boiled down to appearances how LaScola appeared to working and retired people who entrusted him with their savings, and how he has come across since his downfall.

After listening to an elderly woman describe having to seek public housing and a sobbing father describe how LaScola had stolen his children's college money, Lisi learned that LaScola had spent $4,200 on suits last year, so that he could look good for his well-paying job in Ft. Lauderdale, Fla. "There's no more despicable act than lying to people whose money you've taken so that you could look good and live the good life," said Lisi. "During these past several months, when you had some extra change in your pocket, you spent it on yourself. That tells me that you don't get it... I haven't seen you do one blessed thing for the people whose lives you've ruined."

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.

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