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 OPEIU Local Business Manager, Bookkeeper Plead Guilty

OPEIU logoIt was a busy three days for Office and Professional Employees International Union (OPEIU) Local 12. On December 17, Laurie Hoffman, former bookkeeper for the local, was charged in U.S. District Court for the District of Minnesota with embezzling funds from the Roseville (Minneapolis-St. Paul area) union, and with aiding and abetting illegal activity. The following day, December 18, she pleaded guilty to theft in the amount of $8,909. On that latter day, Elizabeth Branca, former Local 12 business manager, was charged with embezzling $16,546 in union funds and with aiding and abetting. She pleaded guilty on December 19. The charges and guilty pleas in both cases follow a probe by the U.S. Labor Department's Office of Labor-Management Standards.

UTU Local Treasurer in Colorado Charged with Embezzlement

United Transportation Union logoJames Hedges III had personal expenses. Unfortunately, he relied on his union to pay for them. Earlier this month, Hedges, former treasurer for United Transportation Union Local 201, was charged in U.S. District Court for the District of Colorado with embezzling $17,500 in funds over a four-year period from the Pueblo-based union. In addition, he was charged with filing false annual financial reports with the U.S. Department of Labor. Local 201 represents about 40 employees of BNSF Railway Company in La Junta and Trinidad, Colo., which, like Pueblo, are located in the southeast part of the state.

Steelworkers Local Secretary-Treasurer in Pennsylvania Sentenced

Steelworkers logoOn December 17, Bernard Nolter, former secretary-treasurer of United Steelworkers Local 635, was sentenced in U.S. District Court for the Middle District of Pennsylvania to one year of probation for falsifying union records to conceal embezzlement of union funds. He already had made restitution in the sum of $7,262. Nolter pleaded guilty in August. The actions follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Upstate New York Transport Workers President Sentenced

TWU logoOn December 12, David Kellner, former president of Transport Workers Union Local 2020, was sentenced in U.S. District Court for the Western District of New York to six months of home detention with electronic monitoring and two years of probation for making a false statement to conceal his embezzlement from the Grand Island, N.Y. (near Niagara Falls) union. He also was ordered to pay restitution in the amount of $12,226, a fine of $2,000 and a special assessment of $25. Kellner had pleaded guilty in September. The guilty plea and sentencing follow a probe by the U.S. Labor Department's Office of Labor-Management Standards.

New Report Reveals Worker Center Union Alliances, Funding Sources

Worker centerUnion Corruption Update several times during the past year has noted the fast-rising profile of 'worker centers.' Anyone doubting that these nonprofit groups in certain ways operate as unions all but in name should read a new monograph published by the Workforce Freedom Initiative, a project of the U.S. Chamber of Commerce. Titled, "The Emerging Role of Worker Centers in Union Organizing: A Strategic Assessment" (see pdf), the report explains why these organizations have become crucial to a Left network dedicated to building an alternative model for labor and political organizing. It also identifies many of the tax-exempt foundations that provide funds. The author, Jarol Manheim, a political scientist at George Washington University, is the right person to do the job.

Cleveland-Area Investment Principal Found Guilty of Fraud Cover-Up

Derek Fisher and Billy Hunter (l to r)When Joseph Lombardo pleaded guilty in Manhattan federal court in November to fraudulently attempting to retain a service contract with the National Basketball Players Association (NBPA), there remained the issue of his employee, Carolyn Kaufman. That loose end was resolved last month. On December 11, Kaufman, a principal with the Independence, Ohio (suburban Cleveland) investment firm of Prim Capital Corporation, was found guilty in U.S. District Court for the Southern District of New York of conspiracy to obstruct justice, obstruction of justice and perjury related to an illegal attempt by her boss to renew a multi-million service contract with the association. Lombardo had forged the signature of a deceased players' union general counsel and another union employee.

Ohio Electrical Workers Local Treasurer Charged with Theft

IBEW logoOn November 15, Ronald Karr, former treasurer of International Brotherhood of Electrical Workers Local 2359, was charged in U.S. District Court for the Southern District of Ohio with embezzling funds in the approximate amount of $158,150 from the Sugar Grove, Ohio union. The charge follows a probe by the U.S. Labor Department's Office of Labor-Management Standards.

Ex-Shop Chairman of Twin Cities-Area CWA Local Charged with Theft

Communications Workers logoOn November 14, Jason Brown, former shop chairman of Communications Workers of America Local 87140, was charged in Hennepin County (Minn.) Court with one count of theft of $3,905 from the Minneapolis union during September-December 2012. He isn't the first official of Local 87140 with legal problems. In November 2012, Dennis Earley, former local financial secretary, pleaded guilty in Hennepin County Court for stealing more than $5,000 from the union and was sentenced immediately thereafter. The charge against Brown follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Former AFGE Local President in Nebraska Charged

AFGE logoOn December 12, Mark Whetstone, former president of American Federation of Government Employees (AFGE) Local 3928 and AFGE Leadership Council 119, was charged in the Criminal Court of Lancaster County, Nebraska, with theft by deception in an amount of more than $1,500 from the Lincoln, Neb.-based local. The leadership council is based in Humble (near Houston), Texas. The charge follows a probe by the Labor Department's Office of Labor-Management Standards.

AFGE President in Florida Panhandle Sentenced for Wire Fraud

AFGE logoDanny Hubbard headed his union for two years. That proved to be enough time to generate a substantial illegal side income. On November 20, Hubbard, former president of American Federation of Government Employees Local 1380, was sentenced in U.S. District Court for the Northern District of Florida to 30 months in prison for stealing more than $90,000 from the Panama City, Fla. union, and was ordered to pay full restitution. He had pleaded guilty to wire fraud in August after being charged in November 2012. The union represents Naval Support Activity employees in Panama City.

Louisiana UFCW Local President Sentenced for Embezzlement

UFCW logoOn December 17, Calvin Sanders, former president of United Food and Commercial Workers Local 638C, was sentenced in U.S. District Court for the Western District of Louisiana to three years of probation and ordered to pay $24,028 in restitution, plus a $100 special assessment, for embezzling funds from the Lafayette, La.-based union. Sanders had been charged last August with making unauthorized withdrawals from the local general and strike funds. He pleaded guilty at that hearing. The actions follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Top Ten Union Corruption Stories of the Year

Top Ten logo Though union membership as a share of  American workers continues its long decline, union officials in 2013 showed they're not the sort to stand on the sidelines, especially in the legal realm. Organized labor was unusually active last year in using the courts and Congress to press their interests. Their ultimate weapon: immigration amnesty/surge legislation. Eight members of the Senate, four from each party ("the Gang of Eight"), solicited advice exclusively from supporters of open borders in hopes of achieving their idea of "comprehensive reform." The Senators unveiled the measure in April and passed it by 68-32 in June, Yet the bill, deservedly, has stalled in the House. Drafted in secret, with no hearings or debate, it represents a corruption of the political process.

Detroit Teamsters Local Business Agent Pleads Guilty to Accepting Bribes

Teamsters logoIt's one of the oldest forms of corruption: a union official accepts a bribe from an employer in exchange for an assurance the workplace will remain nonunion. Michael Townsend believed, wrongly, he could avoid detection. On Monday, December 23, Townsend, a former business agent and trustee of International Brotherhood of Teamsters Local 337, pleaded guilty in Detroit federal court to conspiracy in connection to receiving illegal cash payments from an official of the Detroit-based LaGrasso Brothers Produce Inc. and promising, in turn, not to organize employees. The company, having already pleaded guilty last January and facing a heavy fine, had agreed to cooperate with the U.S. Labor Department in its investigation. Sentencing for Townsend is set for March 24.

Upstate New York Independent Public Employees Treasurer Arrested

On December 10, the Tioga County Sheriff's Office arrested Amy Wales, treasurer of the Owego-Apalachin Employees Association, for embezzling funds from the Owego (near Binghamton), N.Y. independent union. Wales, 45, a longtime secretary in the athletic department of the local public school system, allegedly used her union position as a license to steal more than $51,000 from the union during June 2012-June 2013. Following her arrest, she was charged with grand larceny in Village of Owego Court and released on her own recognizance. The actions follow a complaint by the union president and a subsequent three-month sheriff's investigation.

SEIU Local Treasurer in Los Angeles Indicted for Thefts

Service Employees logoOn December 6, Cedric Hughes, former treasurer for Service Employees International Union Local 721, was indicted in U.S. District Court for the Central District of California on five counts of wire fraud and one count of embezzlement of $15,194 in funds from the Los Angeles union. Hughes, who served in his position during March 2009-June 2010, wrote unauthorized union checks to himself and made unauthorized cash withdrawals and debit card transactions with his union debit card. The indictment follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Ohio UAW Local Treasurer Charged with Embezzlement

UAW logoOn December 3, Kristie McClarren, former financial secretary-treasurer of United Auto Workers Local 3061, was charged in U.S. District Court for the Northern District of Ohio with embezzling $152,639 in funds from the Crestline (near Mansfield), Ohio-based union, which represents employees at the Pittsburgh Glass Works plant in nearby Shelby. The charge follows a joint probe by the Labor Department's Office of Labor-Management Standards and Office of Inspector General.

Kansas City-Area Oil Workers Treasurer Pleads Guilty

On November 27, Jesse Madrigal, former treasurer of the Independent Oil and Chemical Workers Union, pleaded guilty in U.S. District Court for the District of Kansas to embezzling about $24,000 from the Kansas City, Kan.-based independent union. The guilty plea follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

UAW President in East Texas Indicted for Theft

UAW logoOn November 21, Jerry Ragster, former president of United Auto Workers Local 3057, was indicted in the Harrison County Court, Texas for theft of $3,372 in funds from the Marshall, Tex.-based union. The indictment follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Transportation Union Political Operative in Nebraska Indicted

United Transportation Union logoOn November 19, Ray Lineweber, former legislative director for the United Transportation Union Nebraska State Legislative Board, was indicted in U.S. District Court for the District of Nebraska on one count of embezzling $102,907 in funds from the Omaha-based union and 14 counts of concealing the thefts through false record-keeping. The indictment follows an investigation by the Labor Department's Office of Labor-Management Standards.

Postal Workers President in SE Virginia Indicted for Embezzlement

Postal Workers logo On November 7, Eric Barnett, former president of American Postal Workers Union Local 171, was indicted in the Circuit Court for the City of Portsmouth on one count of embezzling funds of $200 or more from the Portsmouth, Va. union. The indictment follows a joint probe by the Labor Department's Office of Labor-Management Standards and the Portsmouth Police Department.

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