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 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.

Unions Strike; Vandals Hit the East Coast

Thousands of New Yorkers have lost their telephone service in early Aug., as vandals slashed telephone cables in what police are investigating as possible acts of sabotage in support of a strike of the Communications Workers of Am. and the Int'l Bhd. of Elec. Workers. The waves of vandalism come amid negotiations between Verizon Communications and the two unions that represent employees who are on strike in a 13-state region from Maine to Virginia. Verizon is offering a $25,000 reward for information leading to an arrest for vandalism.

There were reports of at least 455 incidents (233 of which were in N.Y.) -- most of which involved property damage such as severed telephone cables, burnt trucks, slashed tires -- or harassment of Verizon managers. "There have also been a couple cases of building keys broken off in the locks, or Super glue in the locks," said John Johnson, a Verizon spokesman in Boston. "One manager received a telephoned death threat."

N.Y. Mayor Rudy Giuliani (R) vowed to arrest the vandals: "I have to remind them that it's a crime, and if we do catch them ...they're going to go to jail."

Colorado Union Embezzlers Still on the Job

Three Denver sheriff's deputies, who were also union bosses, with criminal convictions in the past year for embezzling union funds were not disciplined and did not miss a day of work. All they were required to do was return the stolen money. Despite their convictions, Capt. Lenny Ortiz and deputies Joe Sanchez and Venita Ruybal never spent a day in the jail they guard each day. None has been disciplined by their department, although Ortiz's case is about to be forwarded to Denver Manager of Safety Butch Montoya for his decision - four months after Ortiz's guilty  plea.

Such revelations caused at least one city official to react with disgust. "These guys are pleading to crimes and they are never disciplined? This erodes the whole system," said Councilman Ed Thomas, a longtime friend of Ruybal and her police-officer husband. "I definitely think the loss of their job should be a  consideration or at least a part of the equation."

Hoffa Campaign Already in Trouble

William Wertheimer, Jr., the appointed administrator for the 2001 Int'l Bhd. of Teamsters elections, ruled Aug. 1 that IBT president James P. Hoffa's campaign violated rules pertaining to the distribution of nomination petitions and other materials. The election officer invalidated petitions gathered before Aug. 1. The ruling, which will reportedly be appealed, requires the campaign to stop using the fax machines of IBT locals to distribute campaign materials and petitions. Since June, the Hoffa campaign has faxed petition forms and other materials to the more than 500 IBT locals.

All IBT candidates for the fall 2001 elections must file their accreditation petitions by Aug. 31, 2000 to obtain space in the October issue of Teamster magazine. Nomination petitions may be submitted through Dec. 15, 2000 under the election rules.

The Hoffa 2001 Unity campaign said the invalidation was a minor setback that will not harm the candidate's re-election bid.

The campaign office of ex-Ron Carey backer, Tom Leedham, running against Hoffa put out a statement saying: "Right out of the box, Hoffa was caught in major violations."

Niagara Local Probed for Violence

A federal task force and a grand jury are investigating possible connections between Laborers' Int'l Union of N. Am. Local 91 and a series of threats, assaults, vandalism and sabotage incidents at Niagara County, N.Y., construction sites. The incidents include beatings, bombings, death threats, damage to vehicles and equipment, and rocks hurled through the windows at truck drivers on work sites where Local 91 has had disputes with contractors, non-union workers and members of other unions.

The U.S. Atty. in Buffalo, Denise E. O'Donnell, is coordinating the probe, which also involves the FBI, the U.S. Dep't of Labor's Inspector General's Office, N.Y. State Police, the Niagara County Sheriff's and District Attorney's offices, and Niagara Falls Police. Investigators want to determine whether Local 91 bosses, particularly longtime business manager Michael A. "Butch" Quarcini, had any role in a series of strong-arm incidents that, some believe, have inhibited development in Niagara County.

More Honors for Prosecutors of Coia

In addition to two Asst. U.S. Attorneys in Boston name in the last Union Corruption Update,  the U.S. Dep't of Justice has honored four federal prosecutors from Chicago for arguably helping to clean up the Laborers' Int'l Union of N. Am. Among thirty-one individuals receiving the Atty. Gen.'s Distinguished Service Award in a ceremony in Washington on July 28 for their work on a number of matters were First Asst. U.S. Atty. Gary S. Shapiro; Thomas P. Walsh, chief of the Civil Division in the U.S. Atty.'s Office; and Asst. U.S. Attys. Craig A. Oswald and David D. Buvinger. All are from the U.S. Atty.'s Office for the N. Dist. of Ill.

The four were recognized for their efforts in a decade-long battle to remove the corrupting influence of organized crime from LIUNA. Oswald and Buvinger had the primary responsibility for day-to-day involvement in monitoring union activities and reform efforts. Walsh and Shapiro were more involved in negotiations with union lawyers and others to make these measures work. [Chi. Daily L. Bull. 8/1/00]

Colorado Locals Cited for Picket Misconduct

National Labor Relations Board administrative law judge Thomas Michael Patton issued Aug. 2 findings of labor law violations stemming from allegations of picket line misconduct by the United Steelworkers of Am. in a Oct.  1997 strike against  Rocky Mountain Steel Mills, Inc., formerly CF&I Steel, in Pueblo, Colo. Patton recommended that NLRB order the USWA and Locals 2102 and 3267 to cease and desist from misconduct at RMSM, including threatening employees and others entering or leaving the facilities and other misconduct as described in some 38 violations alleged by RMSM.

"The record shows that the union had knowledge of the misconduct [at] the picket line," Patton wrote. "[I]dentified [union] agents were...observers of misconduct and in some cases, personally participated in the misconduct."  According to Patton, during the strike, union agents and members placed nails or other objects on the road leading to and from the facility and otherwise blocked entry into the facility.

Rhode Island Unionists Accused of Perjury

Johnston, Rhode Island, Mayor, William R. Macera, Macera has asked R.I.'s Attorney General to determine whether five firefighters committed perjury during an arbitration hearing in Apr. 2000. In a July 13 letter to Atty. Gen. Sheldon Whitehouse, Macera alleged that the witnesses who testified on behalf of the Int'l Ass'n of Fire Fighters Local 1950 did so in a clearly false manner,

Macera called the conduct unacceptable and an affront to the people of the town of Johnston. Macera also wrote that this type of blatant lying under oath undermines the integrity of the adversarial process and the effective administration of justice.

The subject was an arbitration decision issued in the case of five firefighters suspended for two days for parking in a no-parking zone at department headquarters. The five are Capt. Arthur Moretti, Lt., Anthony Mazzulla, Lt., Thomas Ricci and Privates Donato Paolucci and Stephen Hart.

New Orleans May Go to Bat for Union

The following excerpts are from a Aug. 3, editorial in the Times-Picayune: "No Free Ride for Hotel Union":


"New Orleans officials shouldn't try to tell hotel companies how to run their businesses, and they certainly shouldn't take sides in potential disputes between management and union organizers. Yet the New Orleans City Council is poised to do just that when it takes up a zoning variance for the proposed J.W. Marriott hotel project on Canal Street. Included in the ordinance is a demand for a "labor peace agreement" -- an agreement that would force management to accommodate a union organizing drive in some manner.

The council ought to strike that demand and consider the rest of the ordinance on its merits. Existing federal laws govern how employers can react to union organizing campaigns, and there's no reason New Orleans should require hotel developers to follow different -- and less favorable -- rules.

California Unions Blocked from Collecting Agency Fees

U.S. Dist. Judge Charles Legge blocked Aug. 8 the California Teachers Ass'n and eight local school districts from collecting union agency fees from nonmembers unless the union and districts report local unions' expenditures. Legge granted a motion by the National Right to Work Foundation in its lawsuit contesting the forced payment of union dues and CTA's use of the dues, including political expenditures.

Two Unionists Running for Congress

Militant unions can make a difference in the political arena by electing the right Democrats to office, which is why two members of the United Steelworkers of Am. are running for Congress, USWA President George Becker said
Aug. 7. Becker alleged that the problems members face, such as jobs being lost because of businesses moving to foreign countries, require a political solution, Becker told delegates to USWA's thirty convention. That is why the Becker is pulling out all the stops to get USWA members elected, he said.

Democrat Greg Goodnight, who works at a specialty steel manufacturer in Kokomo, Ind., is challenging incumbent Rep. Steve Buyer (R-Ind.). In Pa., Ed O'Brien, the ex-boss of a Bethlehem Steel local, is challenging incumbent Rep. Pat Toomey (R-Pa.).

A third USWA member, Marvin Williams, a Democratic forklift driver in Tenn., was defeated in an Aug. 3 primary in his bid to unseat six-term incumbent Rep. John Tanner (D-Tenn.). USWA was targeting Tanner for defeat because he was one of 73 Democrats who voted to grant China permanent normal trade relations. [BNA 8/8/00]

New York Boss Indicted in Scalping Ring

Ticket Agents' Union Local F-72 president Frank Greenwald was one of sixteen individuals indicted July 24 in an alleged ticket scalping ring by Manhattan Dist. Atty. Robert Morgenthau and N.Y. Atty. Gen. Eliot Spitzer. The alleged conspiracy, composed of ticket brokers and Mets and Yankees box-office employees, scalped tickets with a face value of over $300,000 in 2000 alone.

Reportedly, the box-office employees took bribes from the brokers in return for handing over thousands of prime baseball tickets, including seats to the 1999 World Series. The brokers would resell the tickets or funnel them to street scalpers at large markups. A disgruntled fan tipped off officials after he recognized a guy selling tickets behind a box-office window as the same guy who had previously scalped a ticket to him outside the stadium.

Greenwald's brother Richard, a union member, was also indicted. Both worked in the Yankees box-office. The 15-month probe resulted in charges ranging from misdemeanor bribing to second-degree grand larceny. [N.Y. Post 7/25/00]

Boss Coia's Prosecutors Honored

Assistant U.S. Attorneys Alex Whiting and Ernest DiNisco received the Distinguished Service Award for their prosecution of Arthur A. Coia, ex-boss of the Laborers' Int'l Union of N. Am., who pled guilty to tax fraud in Jan. 2000. The prosecutors were among 13 from Boston and 190 nationally who were honored in an awards ceremony July 28 in Washington by Atty. Gen. Janet Reno.

"I am extremely proud of the extraordinary work done by members of the U.S. Attorney's office," said U.S. Atty. for the Dist. of Mass. Donald Stern. "These awards are given to very few persons nationally, and the number received by individuals in our office indicates the very high level of commitment and professionalism we always hope to achieve." [Boston Herald 7/30/00]

New Jersey Boss Pleads Guilty to Theft

Michael Opalenik, president of Policemen's Benevolent Ass'n Local 175 in Long Beach Island, N.J., pled guilty July 14 to stealing at least $500 from the local for personal use between Jan. 1998 and Dec. 1999. He admitted withdrawing funds with a debit card from an account that included union dues and public donations. The full amount of the theft will be determined in a yet-to-be scheduled restitution hearing, at which time Opalenik will be ordered to reimburse Local 175 and pay for a $10,000 audit that was conducted. The Ocean County prosecutor's office estimates that the theft was between $28,000 and $31,000.

The discrepancy in PBA funds was uncovered by newly appointed treasurer John Hill in Jan. 2000. Several withdrawals, checks and monthly statements were unaccounted. As president, Opalenik was the only one who had access to the bank card. The local estimated that $25,000 was missing and arranged for an internal audit to determine whether the funds were mishandled.

The local also asked ex-treasurer Jeff Ehlers to resign. Long Beach Township Police Capt. Leslie Houston said the township isn't conducting any investigation into Ehlers.

New York Bosses Allegedly Bribed $200,000

George D'Andrea and Joseph Famularo, Sr., both business agents for United Union of Roofers, Waterproofers & Allied Workers Local 8 in N.Y., were indicted July 25 by Manhattan Dist. Atty. Robert Morgenthau for their alleged roles in a bribery ring. The two allegedly received over $200,000 in bribes in 1999. They were two of the thirteen people and six companies charged with participating in a racket that allowed the companies to reap large profits from government contracts by using nonunion workers.

Morgenthau said the alleged scheme was a criminal enterprise headed by Joseph Delancey, a nonunion roofing contractor who operated a number of different roofing companies. He routinely bribed Local 8 officials in exchange for labor peace. In return for bribes, the companies were able to place nonunion roofers on union projects awarded by a number of N.Y. agencies, including the School Construction Auth., N.Y. Dormitory Auth., Transit Authority and Port Auth. of N.Y. and N.J. The bribes allegedly totaled about ten percent of the cost of the project, which ranged in size from $50,000 to $500,000. The scheme ran from Oct. 1997 to Nov. 1999.

Jury Convicts Diop, Lubin for Fraud

Two more bosses of the Am. Fed'n of State, County & Mun. Employees' Dist. Council 37 in N.Y. were convicted July 25 on charges that they helped rig a contract ratification vote in 1995. Albert A. Diop, who was AFSCME Local 1549 president, DC37 vice-president and AFSCME int'l vice-president, and Martin Lubin, ex-DC37 associate director, were convicted by a N.Y. jury. Diop faces up to four years in prison and Lubin seven. Sentencing is scheduled for Sept. 7. DC37 has suffered over thirty indictments and over twenty guilty pleas in the last two years.

Diop was convicted on charges to defraud and falsify business records. Lubin was convicted on charges to defraud and forgery. While Lubin only was accused of helping rig the ratification votes, Diop has been charged with stealing over $2 million from his local and using a penthouse apartment at DC37 headquarters as a personal residence, while billing the local for rent as a business expense. That trial is scheduled to begin Sept. 17. Reportedly, Diop's annual salary from just Local 1549 was $206,000.

Ohio Boss Suspended Amid Mismanagement Charges

Gary Josephson, president of Communications Workers of Am. Local 4501 at Ohio State Univ., was suspended recently amid allegations of mismanagement of union funds. Union member Joe Baringhaus filed a complaint against Josephson July 7 after questions of the local's bookkeeping were raised at a local meeting.  Seth Rosen, spokesperson for CWA's district headquarters in Cleveland, said that it received a request for an audit of the local and that an outside auditor will be sent.

Josephson believes members have unfairly blamed him for difficulties during a recent strike against OSU. Recently, anonymous phone calls have been reportedly made to a local newspaper attacking Josephson's management of union funds. Josephson said these callers "obviously have political motives to approach the press. They're trying to impugn my character."

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