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.

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.

Felony Charge for Burned Unionists

An attempt by two striking unionists to reportedly sabotage Verizon Communications backfired when one mistakenly cut into a power line he thought was a phone line in Baldwin, N.Y. As 13,200 volts of electricity surged through Joseph Hertzel's body Aug. 17 and threw him to the ground, his shirt caught fire and one of the blades on his tree-pruning sheers melted. His girlfriend, Joanne Pender, was also injured by the explosion.

"They picked the wrong cable," said Nassau Detective Robert Winter. "They cut the main feeder for ... electricity for that area."

The two members of Communications Workers of Am. Local 1108 were charged with felony tampering and criminal mischief and were arraigned on Aug.18 in the hospital. Hertzel was ordered held on $1,500 bail and Pender on $750.

Nassau police said 20 similar acts of sabotage were been reported during the Verizon strike. For example, another striking unionist was arrested Aug. 17 for allegedly trying to run a Bell Atlantic van off the Long Island Expressway while driving his 2000 Lexus. [Newsday 8/18-19/00]

Illinois Union Official Charged with Indecent Solicitation of a Child

A union negotiator for several Illinois Education Ass'n units in Lake County pled not guilty Aug. 22 to charges of felony indecent solicitation of a child. Mark Reinstein was arraigned in Cook County Court on a seven-count indictment arising from his alleged contacts with an undercover Cook County Sheriff's officer posing as a fourteen-year-old girl.  He is currently free on $4,000 bond, and his next court date is scheduled for Sept. 26.

Reinstein was arrested in July after allegedly attempting to meet the officer outside a Lincolnwood restaurant. According to the Cook County State's Atty.'s office, Reinstein had been in contact several times with the undercover officer via the Internet and the telephone. According to police, Reinstein began a computer conversation with the officer on July 11 while in a sexually explicit Internet chat room.

Following several computer conversations, the undercover officer agreed to meet Reinstein outside the Lincolnwood restaurant. Police said Reinstein wanted to take the officer to a private location for sex.

UBC Boss Threatens to Walkout of AFL-CIO

Douglas J. McCarron, general president of the United Bhd. of Carpenters, said his union may choose to end its affiliation with the AFL-CIO, asserting that its contributions to the federation are doing little more than paying the salaries of Washington bureaucrats. The statement came during UBC's convention in Chicago, where McCarron Aug. 24 won a second five-year term.

In his opening remarks Aug. 21, McCarron expressed disappointment with the Sweeney-Trumka AFL-CIO's organizing and spending strategies. At a time when the UBC is restructuring and looking for new ways to organize workers, McCarron accused the federation of boosting spending on failed organizing strategies.

"Other unions -- the AFL-CIO the worst offender -- have made commitments to organizing, but without reviewing their operations," McCarron said. "And all they have done is spent more and raised our per-capita tax to pay for it. I am telling you now, we are looking at how the AFL-CIO and the Building and Construction Trades Department spends our money -- more than $4 million a year at the national level -- and if they don't use it as well as we can, they will not use it at all."

Beverly Allowed to Continue Defamation Suit Against Union

The Nat'l Labor Relations Bd. ruled Aug. 8 that Beverly Health & Rehabilitation Servs., Inc., may proceed with a state court defamation suit against the Service Employees Int'l Union for statements made in handbills and a paid radio broadcast during a 1996 labor dispute in Pennsylvania. NLRB members Wilma B. Liebman, Peter J. Hurtgen and J. Robert Brame upheld administrative law judge's recommendation that SEIU's complaint alleging that Beverly's suit is itself an unfair labor practice be put on hold until the defamation suit is resolved. The members held that issuance of the
unfair-labor-practice complaint does not preempt state court jurisdiction.

To win the defamation suit, NLRB said that Beverly must show that SEIU Locals 668 and 585, District 1199P, and/or Dist. 1199P boss Thomas DeBruin, made a false statement of fact and did so with actual malice and that the company was harmed as a result.

Florida Court to Unions: Raising Political Funds on School Property is Illegal

Just as unionists are gearing up for the 2000 elections, Fla. Education Ass'n has lost a court battle that bars soliciting campaign donations on school property. Ending a four-year suit, Fla.'s First Dist. Court of Appeal upheld Aug. 10 a Fla. Elections Comm'n ruling that could have far-reaching impacts on the way many  government employee unions collect political contributions. The court held that unions break the law when they give employees forms at work to make campaign donations.

The requests for money are supposed to be sent to employees at home or off the work site. But union bosses acknowledge it is more persuasive to seek money at work. The union fought vigorously for the right to solicit for political money on school campuses, even bringing in Nat'l Education Ass'n attorneys from Washington to help argue their case.

Kansas City Boss Embezzled $18,000

Roger L. Mathisen, ex-boss of Int'l Ass'n of Fire Fighter Local I-34 in the Kansas City area, pled guilty Aug. 10 to embezzling $18,404 in union funds from 1996-98. Reportedly, Mathisen used a union debit card to make nearly $14,000 in unauthorized withdrawals from ATMs. The remaining funds reportedly came from overpayment for travel, unauthorized meeting expenses and an improper 10% stipend on his salary as an ambulance driver.

The embezzlement came to light after the local inquired into Mathisen's financial dealings and he acknowledged the thefts. He then came under federal scrutiny. Mathisen agreed to pled guilty  before the government indicted him, according to his attorney John P. O'Connor. Under the plea, Mathisen could face from eight to fourteen months in prison. U.S. Dist. Judge Gary Fenner said he may also order Mathisen to make full restitution. [K.C. Star 8/11/00]

Chicago Boss Sentenced for Bribery

U.S. Dist. Judge Charles Kocoras sentenced Walter Hoff, ex-president of Int'l Bhd. of Teamsters Local 786 in Chicago, Aug. 10 to five months in prison and five months of home confinement for accepting $16,000 in bribes. The jail term that was stayed because Hoff has terminal cancer. Hoff pled guilty in Dec. 1999 to two counts, mail fraud and tax evasion, of what was originally a nine-count federal indictment.

Hoff pled guilty to accepting bribes of $8,000 in Sept. 1993 and May 1994 from John Christopher, a contractor and ex-con who was working undercover for federal investigators in "Operation Silver Shovel." In exchange for the money, prosecutors alleged that Hoff altered paperwork so that thousands of dollars in members' union dues that Christopher was supposed to pass on to IBT were wiped off of union books.

AFSCME Funds New 501(c)(4)

One of the America's most corrupt unions, the Am. Fed'n of State, County & Mun. Employees, a top bank-roller of Al Gore and the Democratic Party, has "quietly" created a group that is televising an ad harshly critical of George W. Bush. Neither, the group's ad, nor its website, discloses its relationship with AFSCME.

AFSCME funneled $800,000 to start the group, Am. Family Voices. The group describes its mission as advocacy of "progressive policies, especially economic issues." It alleges its membership includes advocates for consumers, health care, education, children, the elderly, civil rights and labor.

AFV was created in July, after Congress altered tax and election law to increase regulation of  groups under Sec. 527 of the tax code. AFV was instead chartered under Sec. 501(c)(4), a provision in the tax code that allows it to engage in political activity with minimal financial disclosure.

AFV's executive director is Michael Lux, a longtime liberal campaigner who worked for two years in the Clinton-Gore White House and has been affiliated with liberal group,  People for the American Way.

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