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.

Michigan Employees Hit Union with Federal Charges

A Brighton Interior Systems employee today filed class-action charges against the United Auto Workers after union bosses illegally coerced hundreds of workers into joining the union.  Stephen Yokich, UAW international president, was among the union officials served.  With the assistance of Nat'l Right to Work Legal Defense Found. attorneys, Erik Daly, an employee at the Brighton auto parts factory, filed the unfair labor practice charges with the Nat'l Labor Relations Bd. against the UAW and UAW Local 599 in Flint, Mich.

"UAW bullies are forcing these workers to join the union under the threat of being fired from their jobs," said NRTW's Randy Wanke

Jury Finds California Bosses Not Guilty of Defamation for Accusing Rival Union of Corruption

A California jury decided Aug. 21 that three members of the L.A. Sheriffs Prof'l Ass'n were unaware that an e-mail they sent deputies last fall accusing a rival union of corruption was false. LASPA vice-president Scott Mckenzie and his union were sued for defamation in March by the Ass'n for L.A. Sheriffs Deputies, which sought $1.1 million in compensation.  ALADS claimed its reputation was damaged by the e-mail, which alleged that ALADS was under FBI investigation for a list of offenses ranging from racketeering to bribery of public officials. ALADS also named LASPA president Alex Villanueva and deputy Steven Miller as parties in the suit.

The jury found that Mckenzie and Villanueva did publish false and defamatory information about ALADS in the e-mail, but did not know it was incorrect at the time the message was transmitted. The FBI was investigating ALADS at the time, but it was not engaged in an "extensive investigation" as the e-mail alleged, the defendants' attorney Gregory Emerson told the jury.

San Francisco Boss Indicted for Bank Robbery

President of the Nat'l Air Traffic Controllers Ass'n's San Fran. Local and veteran S.F. Int'l Airport air traffic controller believed by police to be the "Robust Robber" was indicted Aug. 16 in a string of bank holdups that authorities said he blamed on financial problems. Rick L. Davis was named in a nine-count indictment returned by a federal grand jury in Oakland that said he netted $40,000 during a 10-month spree in Fremont, Union City, and Concord. Police dubbed him the "Robust Robber" because of his stocky build.

Davis' attorney, Randy S. Pollock of Oakland, said that she has asked for a court date of Aug. 27, at which time Davis -- who police say confessed committing the robberies -- intends to plead not guilty to all counts.

He is now on unpaid suspension, the latest in a string of personal problems, his attorney said. In 1996, Davis was seriously hurt when his car hit a cow in Hawaii, where he had been living with his wife and two sons. Davis later divorced and filed for bankruptcy. Davis told police he robbed banks to help pay for airline tickets for his children to visit him, authorities said.

Washington Union Fined $400,000 in Dues-for-Politics Case

Thurston (Wash.) County Judge Gary Tabor issued a "guilty" verdict July 31 against the Wash. Edu. Ass'n for what he characterized as intentional violations in WEA's use of mandatory teacher dues and fees for politics. The penalties, sanctions, and reimbursements make this the largest fine ever levied against WEA: some $500,000. He assessed a $200,000 civil penalty then doubled it to $400,000 as a punitive sanction saying that WEA "'intentionally' chose not to comply with the clear language of the statute." Tabor also ordered WEA to pay for the costs of the probe, trial, and attorneys' fees.

BBush to Replace White; Bad News for Trumka?

Clinton's Manhattan U.S. Atty. Mary Jo White is on the way out, according to a Dep't of Justice official on Aug. 2. The official didn't say when President Bush would move adding that she may complete the Clinton pardon probe before leaving.

"White's impending exit may be very bad news for the AFL-CIO's Richard Trumka." said Nat'l Legal & Pol'y Ctr. chairman Ken Boehm. "By all accounts Trumka should have been indicted long ago for his role in the money-laundering scandal that brought down ex-Teamsters boss Ron Carey and his campaign team. It appears Trumka has greatly benefited from a very generous dose of prosecutorial discretion from White."

Carey's Perjury, False Statements Trial Begins in August

Ex-Int'l Bhd. of Teamsters boss Ron Carey fought so hard to keep mobsters out of his union that he broke the law to do it, prosecutors will argue to a jury later this month. The bizarre "be a criminal to beat a criminal" theory will be presented when Carey goes on trial in U.S. Dist. Court in Manhattan for allegedly lying about a massive money-laundering scheme during his 1996 IBT campaign, including a $475,000 donation to the hard-left Citizen Action, which was roughly 80 times the size of the average IBT political donation. Asst. U.S. Atty. Andrew Dember claims that Carey felt he had to break the rules to keep James P. Hoffa, son of the notorious James R. Hoffa, from succeeding him as IBT president. Carey attorney Reid Weingarten promised, "They can come up with any theory they want, but he's not getting convicted." [N.Y. Post 8/5/01]

Miami Audit Questions Overtime

The Miami-Dade Inspector Gen.'s office is taking Transp. Workers Union Local 291 to task, contending in an audit report that two top union bosses are raking in thousands a year in overtime pay auditors say was undeserved. The report's finding that the Miami-Dade Transit Agency appears to be "subsidizing union activity" led County Manager Steve Shiver to discontinue the "Membership Assistance Program" program Aug. 2 in which the bosses worked as "peer counselors" to reduce absenteeism. Shiver said, "if the... findings are upheld, there needs to be serious and systematic action."

IRS May Audit AFL-CIO, NEA, More

The Landmark Legal Found. filed an IRS complaint July 20 against the Nat'l Edu. Ass'n. citing new evidence not only of NEA's use of millions of dollars of tax-exempt funds for political purposes, but its extensive campaign coordination activities with DNC. LLF's complaint includes evidence provided to FEC, which released this information to the public on May 2, 2001, but four days later placed the evidence under seal. LLF secured copies of this evidence during the first 48-hours of its public release.

LLF's complaint provides overwhelming evidence of NEA's political activities, including its key role in the "Coordinated Campaign Steering Committee," which set strategy for the election of Democratic candidates. In addition to NEA and DNC, other members of the Committee were AFL-CIO, Clinton-Gore '96, DSCC, DCCC, Democratic Governors' Ass'n,  Democratic Leadership Campaign Committee, and the hard-left Emily's List. NEA state groups were also involved.

Rhode Island Embezzler Loses Pension Suit

Ex-union pension manager and prison inmate Todd LaScola must repay $1,279,656 to the retirement plan of Int'l Bhd. of Elec. Workers Local 99 in Providence, R.I., under terms of a federal default judgment. U.S. Dist. Judge Ronald R. Lagueux (D.R.I. Reagan) signed the order July 24, after LaScola and his firm, CPI Fin. Servs., Inc., failed to respond to an ERISA suit filed in Jan. by the Dep't of Labor accusing them of misusing plan assets. DOL's suit alleged that LaScola invested approximately $5,970,000, over 20% the plan's total assets, in unregistered, highly risky notes issued by real estate limited partnerships owned by RBG Mgmt. Servs., Inc., of Chicago. Allegedly, there was no trading market for the RBG notes, making the investment a violation of the plan's guidelines. LaScola received approximately $312,400 in commissions from RBG, as well as $127,652 in management fees from the plan.

Wall Street Pension Manager Indicted for Second Time

Alan B. Bond, a union pension manger who is scheduled to stand trial in Nov. on charges he took illegal kickbacks from brokerage firms, was arrested Aug. 9, on separate fraud charges, federal prosecutors said. In a 32-page complaint filed in U.S. Dist. Court in Manhattan, Bond was charged with conducting an illegal "cherry picking" scheme that directed virtually all of his profitable stock trades to his own accounts and most of his unprofitable ones to accounts he managed for three clients, including the Birmingham Amalgamated Transit Auth. Local 725 pension fund. Separately, Sec. & Exch. Comm'n attorneys were in court Aug. 9 seeking to freeze all of Bond's assets.

Despite White's Attacks, diGenova Wins IRB Post

The Int'l Bhd. of Teamsters' Indep. Rev. Bd., the internal oversight body created under a 1989 consent decree, will have a new composition as the result of a pair of actions by the Dep't of Justice and U.S. Dist. Judge Loretta A. Preska  (S.D.N.Y. H.W. Bush). On Aug. 8, Preska after a brief hearing, approved IBT's designation of ex-U.S. Atty. Joseph E. diGenova to be its representative on the three-member IRB. A few hours later, U.S. Atty. Mary Jo White announced that Atty. Gen. John Ashcroft had designated Benjamin R. Civiletti, who was an attorney general in the Carter administration, to be DOJ's representative on IRB. IRB's third member will be chosen jointly by the other two, and each member has a five-year term.

If Preska approves, Civiletti will replace ex-U.S. Dist. Judge Frederick B. Lacey (D.N.J. Nixon) who served as IBT's court-appointed independent administrator from 1989-92 before assuming a seat on the IRB when it was formed in Oct. 1992. DiGenova replaces Grant Crandall, a labor attorney appointed as IBT's representative in 1996 by disgraced ex-IBT boss Ron Carey.

IRB Member Tainted at Questionable Dinner

According to Columnist Robert Novak, Int'l Bhd. of Teamsters' Indep. Rev. Bd. member, ex-U.S. Court of Appeals Judge William H. Webster (8th Cir. Nixon) was honored May 11 at a N.Y. Marriott Marquis Hotel dinner hosted by one of the most unsavory of old Teamsters, George Barasch. Webster is also a former U.S. Dist Judge (E.D. Mo. Nixon), former FBI Director, 1978-87, and former CIA Director, 1987-91. Webster addressed the Union Mut. Benefit Ass'n, which is charged in a United Food & Commercial Workers Int'l Union lawsuit as draining millions from Barasch's Allied Trade Council for his personal use. In Nov. 1999 IRB charged that Barasch and his family were siphoning money from benefit plans of the ATC and the Barasch-controlled IBT Local 815. A attorney in the UFCW suit was recently told by Barasch's son, Stephen: "Judge Webster seems to think we're OK." [Chi. Sun-Times 8/2/01]

Louisiana Suit Alleges Unions Misused $4 Million Federal Grant, Shredded Records

A lawsuit filed Apr. 2 accuses a group of labor unions of scheming to misuse a $4 million federal grant then firing the veteran mariner who tried to blow the whistle on them. Ex-Gulf Coast Mariners Ass'n training manager Capt. Kenneth P. Puckett filed the suit in E. Baton Rouge Parish under La.'s whistleblower law, which protects workers who report unlawful acts by their supervisors. Puckett claims he repeatedly urged managers to abide by rules of a federal grant meant to offer vital safety training to mariners. He claims union bosses misused the grant money for profit and to promote union organizing efforts in the Houma-Thibodaux area and S. La. offshore oil and marine industries.

New York Union Violated Federal Labor Law

The N.Y. State Nurses Ass'n violated the Nat'l Labor Relations Act by failing to issue a 10-day strike notice when it directed its members to refuse to volunteer for overtime at Mt. Sinai Hosp., a divided National Labor Relations Board panel ruled July 27. Overturning a decision by an administrative law judge, the majority found that nurses who refused to volunteer for overtime work at the union's request and those who refused assigned overtime were engaged in a concerted refusal to work within the meaning of NLRA Section 8(g). That section requires a union to issue a 10-day notice to the institution and the Fed. Mediation & Conciliation Serv. before engaging in any strike, picketing, or other concerted refusal to bargain at any health care institution.

Chicago Jury Convicts Boss Serpico and Girlfriend

After three days of deliberations, a federal jury in Chicago convicted ex-union boss John Serpico July 16 on six of seven mail fraud counts. Two of Serpico's longtime associates, Maria Busillo and Gilbert Cataldo were also found guilty. Busillo, the longtime girlfriend of the married Serpico was convicted of mail fraud and making false statements to a bank. Cataldo was convicted of mail fraud. As an ex-int'l vice president of the Laborers' Int'l Union of N. Am. and ex-head of the Central States Jt. Bd., Serpico is the most significant Chicago union boss to be convicted on corruption charges in years. CSJB is a labor organization which handles funds for eight locals including locals of LIUNA and the Int'l Union of Allied Novelty & Production Workers. Serpico was CSJB president from 1975-94 and is now its $50,000-a-year consultant. Busillo is the current CSJB president and IUANPW secretary-treasurer. Serpico also held influence with prominent politicians including several Ill. governors, who appointed him to the Ill. Int'l Port Dist. He was IIPD's longtime chairman until 1999 when he was indicted. He was purged from LIUNA in 1995.

Judge Helps AFL-CIO/DNC Suppress Public Documents

U.S. Dist. Judge Gladys Kessler (D.D.C., Clinton) blocked the Fed. Election Comm'n July 16 from re-releasing public documents from FEC's probe of 1996 campaign efforts of AFL-CIO, the Democratic Nat'l Committee, and other liberal entities. Kessler's preliminary injunction, sought by AFL-CIO/DNC, came a day before FEC planned to re-release the documents, which may contain evidence of union embezzlement crimes whose statutes of limitations are due to run this Fall. Despite this, Kessler's order will remain in effect until at least Oct.; she claims no one will suffer a great injury from the delay. AFL-CIO/DNC claim the documents contain "proprietary information," including campaign strategies and employees' names. [AP 7/16/01; BNA 7/17/01]

Judge Allows DOL's McAuliffe Suit to Proceed

U.S. Dist. Judge Alexander Williams, Jr., (D. Md., Clinton) allowed the Dep't of Labor to proceed with its suit June 15 alleging that trustees of the Nat'l Elec. Benefit Fund, which is linked to the Int'l Bhd. of Elec. Workers, breached their ERISA fiduciary duties by investing in Am. Capitol Group I Assets LP, a Fla. real estate firm, tied to Democratic Nat'l Committee chairman Terence R. McAuliffe and his wife. In 1999, DOL sued trustees Jack Moore and John Grau alleging imprudent real estate deals.

New York Boss Forged Checks for $111,000

Ex-Albany boss, Nancy Groome, admitted July 11 that she embezzled more than $111,000 from Civil Serv. Employees Ass'n Local 316. She pled guilty to one count of union embezzlement and told U.S. Dist. Judge Thomas J. McAvoy (N.D.N.Y., Reagan) that she forged union checks to pay for groceries, car insurance, and other personal expenses. Allegedly, she forged 319 checks between 1993-99.

Groome wrote checks on a union account  made out to herself. She also wrote checks to vendors for union-related training trips that she never took. She was Local 316's treasurer from 1980 until Mar. 2000. The checks were reportedly forged between July 22, 1993, and Nov. 2, 1999. CSEA rules require that checks be signed by the union president and the chief financial officer, but Groome reportedly forged those signatures. The missing funds were discovered during a union audit. She reportedly faces prison time and $111,476 in restitution when she is sentenced Nov. 1. [Times Union (Albany) 7/13/01]

Two Accused of Siphoning Funds

A man federal prosecutors identified as the ex-acting boss of the Genovese crime family is accused of a money-laundering conspiracy: Liborio S. "Barney" Bellomo was indicted in U.S. Dist. Court in Brooklyn on July 12. The charges reportedly stem from efforts by Bellomo and Thomas Cafaro, an alleged Genovese crime family associate, to launder money they siphoned from the Int'l Longshoremen's Ass'n benefit funds in 1996-97. Cafaro was also charged. The charges were added to an April indictment, which was among several that charged more than two dozen crime family figures with racketeering and other crimes. While Cafaro was charged in the earlier indictment, Bellomo was not.

In 1997, Bellomo was sentenced to 10 years in prison for an extortion conspiracy. He had pled guilty to conspiring to extort $200,000 in 1989-91 from a garbage hauling firm. He also admitted conspiring to extort from bosses of the Mason Tenders Dist. Council of Greater N.Y. Local 46, which is unit of the Laborers' Int'l Union of N. Am. Murder and racketeering charges against him were dropped in a plea deal. [N.Y. Times 7/14/01]

Four New York Racetrack Tellers Indicted for Money-Laundering

Four N.Y. racetrack tellers used the flow of cash through betting windows to launder money, law enforcement officials alleged in indictments announced July 19. The four face multiple counts that could bring an aggregate sentence of more than 10 years for each. Three of the men were arrested July 18 and arraigned in Saratoga County Court in Saratoga Springs. They are: Robert E. Lodati, Robert J. Marshall, and Joseph Rabito.  They were released on bail ranging from $20,000 to $35,000. A fourth, Peter Oster, turned himself in turned himself in July 25, he was arraigned in Saratoga County Court before Judge Jerry Scarano and released on a $25,000 bail bond. Lodati is the president of the the betting clerks' union, Div. of Mutuel Employees, which is a unit of the Int'l Bhd. of Elec. Workers Local 3 in Queens. Marshall is reportedly DME's vice president. The indictments charge them with laundering $300,000, exchanging small bills for large ones, over six months for state police investigators posing as drug dealers, in transactions that were recorded on videotape and audiotape. The clerks allegedly pocketed a cut of 5% to 10% every time they made the swaps.

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