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.

Minnesota Local Must Pay Overnite $30,000

Anoka County (Minn.) Dist. Judge James A. Morrow ordered Int'l Bhd. of Teamsters Local 120 to pay $29,873 in damages to Overnite Transp. Co. in connection with violence and misconduct that has occurred in the Minneapolis area during IBT's ongoing strike against Overnite. Local 120 boss C. Thomas Keegel also serves as IBT's secretary-treasurer, the number two post to IBT boss James P. Hoffa.

Since in Nov. 1999, Morrow has issued a series of orders to stop to violence, intimidation and other violations of the law at Overnite's facility in Blaine, Minn. Because of violence and property damage, Overnite brought a motion for contempt. Morrow found "overwhelming" evidence that IBT repeatedly violated the orders. Morrow's findings included:

1) Two separate instances where IBT picketers jumped onto Overnite vehicles. In one case, Morrow found a picketer opened a driver's door and attempted to grab an Overnite employee to pull him out of the truck.

2) Forcing an Overnite employee off the road while the employee was driving home in his personal vehicle and threatening to kill the employee.

Seattle Embezzler Gets 30 Months for $860,000 Theft

U.S. Dist. Chief Judge John C. Coughenour sentenced Bonifacio Garcia June 30 to thirty months' imprisonment for crimes relating to his embezzlement of over $860,000 from the U.S. Dep't of Labor's Office of Worker's Compensation in Seattle.

Garcia had been a DOL employee in Seattle for about 20 years, until Aug. 1998. Among Garcia's responsibilities were processing and computing federal disability benefits for qualified claimants.  He was also responsible for transferring, via DOL's computer network, authorizations for supplemental (lump sum) disability payments to claimants who were owed money by the OWCP.

Garcia was only one of two people at the Seattle office with the authority to transmit these lump sum authorizations. Once DOL in Washington, D.C., received the authorization, it would be forwarded to the Dep't of Treasury, which would direct-deposit the money into the bank account designated on the original authorization.

Internal NEA Political Documents Raise Tax Questions

The Nat'l Educ. Ass'n, which reports to the IRS that it spends no union dues on politics, spent millions of dollars to help elect "pro-education candidates," produce political training guides and gather teachers' voting records, internal documents show. NEA documents reviewed by AP provide a rare window into the internal workings of one of the most powerful unions in the country.

The documents state that NEA since 1994 has budgeted or spent money from its general account "funded by about $200 million a year in teachers' dues" on activities ranging from recruiting teacher-friendly candidates to helping state affiliates raise political action committee funds. A July 1999 plan states NEA budgeted $4.9 million for the 2000 election for such things as "organizational partnerships with political parties, campaign committees and political organizations." Part of the money, the document said, would be spent on a "national political strategy" that involves "candidate recruitment, independent expenditures, early voting, and vote-by-mail programs in order to strengthen support for pro-public education candidates and ballot measures."

Ex-Seattle Boss, Football Star Dies

Arnie Weinmeister, the Pro-Football Hall of Fame defensive tackle who played for the N.Y. Giants in the 1950s and held a second career as head of a Seattle Teamsters union, died June 28 in Seattle of heart failure. After leaving football in 1956, Weinmeister became an organizer for IBT. He was director of the 13-state, Seattle-based Western Conference of Teamsters in the 1980-90s, which is same the IBT organization the corrupt boss David Beck ran in the 1950s. Weinmeister also served as IBT's second vice president, and as IBT Joint Council 28's president covering 20 Teamsters locals in Wash., Idaho and Alaska, and as IBT Local 117's secretary-treasure in Seattle before retiring in 1992.  It's safe to assume he drew income (double-dipped) from each of these posts.

Florida Boss' Punishment for Racist Email Overturned

A Florida union boss can't be punished for making racially offensive email because it was written in the course of union business, ruled arbitrator Roger I. Abrams.

Fla. State Univ. issued a three-day suspension for a unnamed clerk-typist, who also served as president of an Am. Fed'n of State, County & Municipal Employees local.  The suspension was based on the contents of an e-mail that the typist sent to FSU's inspector general criticizing his questioning of an AFSCME steward concerning the alleged fixing of parking tickets.

AFSCME argued that the e-mail was entitled to constitutional protection and that "tolerance [should] be shown for someone who expresses the viewpoint of the oppressed."

Abrams ruled that just cause did not support the typist's suspension. The typist was conducting union business in her capacity as union president at the time she sent the e-mail, which was intended to protect the union steward.  Abrams reasoned that while her impassioned speech and name-calling were regrettable, these errors were commonplace in labor relations.

Antitrust Suit Filed Against New York Local

Two telecommunications firms, U.S. Information Systems, Inc., and Odyssey Group, Inc., recently filed a federal suit in Manhattan alleging antitrust violations by Int'l Bhd. of Elec. Workers Local 3 and contractors that employ Local 3 workers.  The suit alleges that Local 3 and the contractors are conspiring to take over the market for installation of telecommunications wiring and systems in the N.Y. metropolitan area.

Pennsylvania Embezzler Took $32,000, Gets Off Easy

Senior U.S. Dist. Judge Gustave Diamond only sentenced Stephanie A. Smith June 26 to a mere six months of house arrest and three years' probation for embezzling $32,339 from Laborers' Int'l Union of N. Am. Local 952 in Kittanning, Pa. The maximum sentence for a count of union embezzlement is five years in prison and a $250,000 fine. Diamond barred Smith from any union post for five years, but he could have made it thirteen. There was no report of a fine nor an order of restitution. [Pitt. Post-Gaz. 6/27/00]

Indiana Bosses Charged with $894,000 Diversion

A special panel of Int'l Bhd. of Teamsters officials will convene July 10 to review charges by IBT's Independent Review Bd. that Indiana Teamsters Joint Council 69 bosses diverted members' dues money to JC69 to fund additional personal benefits. IRB, in a May report, alleged that $894,865 in local per capita payments were made to JC69 in 1994-99. The money was allegedly paid solely as extra benefits for JC69 bosses. IRB recommended that IBT force JC69 to return the money and put it in trusteeship.

IRB's 32-page report alleges that JC69 bosses devised the scam in 1994  after disgraced ex-IBT president Ron Carey abolished IBT's area conferences (intermediary bodies between joint councils and IBT). JC69 officials arranged to divert an amount equivalent to the per capita payments that previously had gone to the Central Area Conf. to JC69, to be used as an extra severance and pension fund for JC69 bosses. Reportedly, this was in violation of IBT bylaws.

Ex-Illinois Boss, Alleged Murderer Dies

James A. DiForti, reputed organized crime lieutenant and ex-boss of Laborers' Int'l Union of N. Am. Local 5 in Chicago Hts., died June 6 of undisclosed causes while awaiting trial in a 1988 murder case. He was accused of killing William Benham, the owner of B&S Pallet Co., after Benham refused to repay a $100,000 loan and threatened to tell authorities about DiForti's alleged mob ties and loan-sharking activities.

A DNA test matched DiForti's blood to a blood trail that was found leading away from the crime scene in 1988, and DiForti was charged with murder in July 1997. The case was stymied until an FBI informant implicated DiForti in the last few years.

At the time of his arrest, DiForti was secretary-treasurer of Local 5. He was one of about a dozen union bosses targeted by a separate federal probe of LIUNA's alleged ties to organized crime. Prosecutors believed the ex $94,000-a-year secretary-treasurer was in charge of handling loans on the street during the 1980s. After resigning from Local 5 in 1997, DiForti was involved in horse-racing while awaiting trial. [Chi. Trib. 6/24/00]

Florida Boss Implicated in Bribery Case

A criminal complaint claims a shipping company vice-president's contributions to Tampa union boss Perry  C. Harvey, Jr.'s 1996 campaign were actually bribes. Federal prosecutors said June 22 that it was a classic corruption case - an under-the-table deal that sold out  hundreds of Port of Tampa dockworkers.

Reportedly, Joseph F. Casella of Harborside Refrigerated Servs., Inc., bribed Harvey, an ex-Tampa city councilman  who heads Local 1402 of the Int'l Longshoremen's Ass'n and is also an international vice-president on ILA's executive council. Harvey, once one of Tampa's best-known political figures, was not charged in the case. He was the first black elected to city council in modern times, but left politics after losing a bid for a seat on the Hillsborough County Commission in 1996. The bribes were allegedly disguised as $2,000 worth of contributions to Harvey's county commission campaign.

Criminal Coia's Rehab Helped by Kennedy, Reed

Senators Edward M. Kennedy (D-Mass.) and Jack Reed (D-R.I.) paid tribute June 15 to felon Arthur A. Coia, the corrupt ex-boss of the Laborers' Int'l Union of N. Am.  Coia has been dogged by corruption charges for almost twenty-years, and the Dep't of Justice finally got him earlier this year when he pled guilty to federal criminal tax fraud and resigned his union post (with his pension intact).  Criminal Coia was one of four union leaders honored at the dinner commemorating the 20th anniversary organization calling itself the Institute for Labor Studies & Research.

Kennedy, the top-ranking Democrat on the Senate Labor Committee, reportedly praised a Coia speech but later brushed aside a question about whether he was troubled by honoring a labor leader who pled guilty to a felony, according to the Providence Journal-Bulletin. Reed, who introduced Kennedy, said criminal Coia deserved the recognition because "he's made significant contributions to the labor movement."

Judge Rejects 2001 Election Rules

U.S. Dist. Judge David N. Edelstein June 16 rejected rules jointly proposed by the Int'l Bhd. of Teamsters and the Dep't of Justice for use in IBT's Oct. 2001 election of international officers in Las Vegas. The proposed rules would have allowed IBT to run its own election largely free of DOJ supervision. But in a three-page order, Edelstein turned down the rules, saying that to accept them "would be blasphemous."

IBT and DOJ "have attempted to allure this Court into believing that their program for a supervised election will ensure a free, open, and democratic election. Nothing could be further from the truth," wrote Edelstein.

"The submissions are a farrago of ill advice and misguided, inept, controversial, and confused argots. Their program has the potential for bringing grief, strife, controversy, and corruption into the forum," added Edelstein.

The judge said the election rules used in 1991, 1996, and in the rerun vote in 1998 should apply again next year. "These rules have faithfully enforced the letter and the spirit of the [1989] Consent Decree and are preferable to untested and novel rules that may prove cumbersome and confusing," he said.

Ex-Long Island Boss Order to Pay for Clean-Up

The U.S. Court of Appeals for the Second Circuit on June 14 affirmed a ruling that Robert Sacco, ex-boss of Int'l Bhd. of Teamsters Local 282 in Lake Success, N.Y., who pled guilty to criminal racketeering charges, must pay a portion of the cost of the local's monitorship imposed by the Dep't of Justice. But the court remanded the case to determine the amount required of the ex-boss who headed the local from 1984 to 1992. The district court had ordered Sacco to pay 15% of the monitorship costs, or $136,000. But, the appellate court said that in setting the amount, the lower court "did not discuss the role of Sacco in comparison to other individuals who were responsible for corruption in Local 282." The court left open whether the amount might be increased or decreased from the original sum.

Court: Illinois-Iowa Pension Fund's Audit Full of "Fallacies"

Several errors in an audit relied upon by Carpenters' union-sponsored employee benefit funds were cited by the U.S. Court of Appeals for the Eighth Circuit June 20 in overruling a U.S. Dist. Court in Iowa's  decision requiring an Iowa construction company to pay delinquent contributions to the funds. McKenzie Engineering entered collective bargaining agreements in 1994 with two United Bhd. of Carpenters locals. The bargaining agreements obligated McKenzie to contribute to the Carpenters Fringe Benefit Funds of Illinois.

Disputes arose when McKenzie replaced four carpenters on a project with nonunion workers. The Nat'l Labor Relations Bd. held that McKenzie's action violated its agreement with the union. Shortly after this dispute, McKenzie signed a collective bargaining agreement with an Int'l Union of Operating Engineers local and assigned UBC work to IUOE. According to the appeals court, an unfair labor practice charge filed with the NLRB over this assignment has not been resolved.

Discrimination Suit Against New Jersey Local Proceeds

Dwayne Jackson, a black service worker, can proceed with his claim that his Int'l Bhd. of Teamsters local aided and abetted the creation of a racially hostile work environment in violation of New Jersey law by defending the plaintiff's co-workers in a grievance proceeding stemming from a mock lynching, the U.S. Dist. Judge Robert F. Kelly ruled June 20. Kelly said that cases like this one, where a non-union employee attempts to hold a union liable for alleged discriminatory conduct, are "unique."

Denying summary judgment to IBT Local 676 on Jackson’s claim brought under the N.J. Law Against Discrimination, Kelly found that the facts alleged by the plaintiff could permit a trier of fact to find that the local implicitly gave substantial assistance or encouragement to the creation of a hostile environment.  But Kelly rejected Jackson's claim that the union's conduct also violated the federal Civil Rights Act of 1866 because Jackson failed to show that the union intentionally discriminated against him.

Union Pension Funds Linked to Mafia Securities Fraud

On June 15, federal authorities began arresting 120 defendants across the country in a far-reaching securities racket involving three unions and five La Cosa Nostra families: Bananno, Colombo, Gambino, Genovese and Luchese.  The suit filed in U.S. Dist. Court in Manhattan included charges of racketeering, conspiracy, wire fraud, securities fraud, mail fraud, pension fund fraud, bribery, illegal kickbacks, money laundering, witness tampering, extortion, physical intimidation and the solicitation of murder. A year-long probe, Operation Uptick, uncovered the racket.

It included defrauding three N.Y.-based union pension funds: the Detectives' Endowment Ass'n (DEA), which serves NYPD detectives, Production Workers Local 400 and Int'l Union of Operating Engineers Local 137. Defendants allegedly used corrupt securities professionals to manage union pension funds and craft investments in a way that allowed for a secret diversion of money as kickbacks.

Two Local 372 Bosses Sentenced; Hughes Gets 3 to 9

N.Y. Justice William Leibovitz June 5 sentenced Charles Hughes, head of Am. Fed'n of State, County & Mun. Employees Local 372 for thirty years, to three to nine years in prison for stealing over $2 million from the local of school cafeteria workers and crossing guards. Hughes is the most senior boss to pled guilty in Manhattan D.A. Robert M. Morgenthau's on-going union corruption probe of AFSCME Dist. Council 37, in which more than thirty have been criminally charged and more than twenty have pled guilty.

"What is clear is the defendant stole the union money relentlessly. His greed is breathtaking," said Leibovitz.  He also lambasted Hughes' lavish lifestyle:  "He stole this money knowingly and intentionally," adding that Hughes, financed his theft by charging his members high dues that "likely came out of their food and rent money." Local 372 represented the lowest-paid workers on N.Y.C.'s payroll, making $20,000 or less a year.  Asst. D.A. Jane Tully said that despite the modest salaries, members paid "sky-high" monthly union dues of $56.11 ($673.32 annually).

New York Union Shop Allegedly a Sweat Shop

The Asian Am. Legal Def. & Educ. Fund, on behalf of five employees at a N.Y.C. factory, filed a class action lawsuit June 7 claiming they were forced to work 80-hour work weeks without overtime; were often paid by the piece, and that the pay they did receive often came to less than minimum wage. They are seeking class action status on behalf of the roughly 300 workers who sew Donna Karan garments. Donna Karan Int'l does not own the factory.

Most shocking, the employees are represented by Union of Needletrades, Indus. & Textile Employees Local 89-22-1. Richard Rumelt said his local was "outraged this was going on."  He said, "we weren't aware of the conditions."   The Chinese Staff & Workers Ass'n, an advocacy group that often accuses UNITE of not representing workers vigorously, help bring the suit. [N.Y. Post, N.Y. Times 6/8/00]

Local 983 Boss Guilty of Larceny, Fraud

Another AFSCME boss "dropped like a domino" June 6, admitting to stealing over $50,000 from his members and rigging a DC37 contract vote. Robert Taylor, ex-boss of AFSCME Local 983, agreed to a prison sentence of 1.5 to 4.5 years for his guilty plea to grand larceny and scheme to defraud. The fraud count is based on the legal theory advanced by Manhattan D.A. Robert M. Morgenthau that depriving union members of an honest ballot ratification was a criminal theft of their union-given right to vote. Taylor also agreed to pay the Local 983 $50,000 that he admitted stealing.

DC37 members approved a new contract in 1996-97 that froze wages, which many thought would never be approved. But, DC37 bosses, wanting labor peace with the Giuliani Mayoralty, arranged for passage by falsifying the vote.  Taylor admitted that he and other unnamed bosses obtained blank ballots and filled them out. Morgenthau had said previously that the minutes of the local's meeting showed a vote of 40-16 in favor of the contract, but Taylor reported to the council that the vote was 400 in favor and 65 against.

Union Sues Former Officers for $3.7 Million

The Service Employees Int'l Union has filed a $3.7 million June 6 lawsuit against 23 former officers and employees for alleged misappropriation of money, property, and resources, SEIU Canadian vice-president Sharleen Stewart said June 13.  The suit filed in the Ontario Superior Court alleges that the misappropriation allegedly took place as part of the Canadian Auto Workers's attempt to raid SEIU's 30,000 members in Ont.

"The union movement isn't about hatching secret deals and removing members' hard-earned dues money without authority," Stewart said. "You can't hide sleazy manipulation forever behind the maple leaf and bad faith negotiations."

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