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.

Former Detroit Police Union Vice President Sentenced for Fraud

Downtown DetroitCorruption ran rampant in Detroit during the tenure of Mayor Kwame Kilpatrick, now serving a 28-year sentence in federal prison.  Many people as well as Kilpatrick have paid a high price.  One of them was Paul Stewart.  On September 29, Stewart, former vice president of the Detroit Police Officers Association and trustee of the police pension fund, was sentenced in U.S. District Court for the Eastern District of Michigan to 57 months in prison and three years of supervised release for conspiracy to commit honest services fraud through bribes and kickbacks.  He also must pay restitution of a sum yet to be determined.  Stewart had been convicted by a jury last December.  The actions follow a joint probe by the FBI, the IRS, and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Postal Workers Secretary in South Carolina Indicted for $200K+ in Thefts

Postal Workers logoOn September 1, Sharon Holmes, former secretary-treasurer of American Postal Workers Union Local 807, was indicted in U.S. District Court for the District of South Carolina on one count of embezzling $41,823 from the Columbia, S.C. union; one count of wire fraud in the amount of $178,330; and one count of fraud and related activity in connection with access devices.  The charges follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Missouri Steelworkers Local Treasurer Indicted for Theft

Steelworkers logoOn October 7, Terry Aters, former treasurer of United Steelworkers Local 11-7686, was indicted in U.S. District Court for the Eastern District of Missouri on one count of embezzling $153,434 in funds from the Marston (New Madrid County)-based union.  The union represents about 850 workers at the Noranda Aluminum plant in Marston, located in the southeast corner of the state.  The indictment follows a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Teamsters Central States Pension Fund Puts PBGC in Jeopardy

Decades ago, the Teamsters’ Central States Pension Fund was a project of organized crime.  In the future, it may well be a project of Pension Benefit Guaranty Corporation, the federal agency that insures pension plans against insolvency.  Ironically, this could put PBGC itself at risk.  This September, the troubled fund, which enrolls over 400,000 active and retired union members in 37 states, filed a restructuring plan with the Treasury Department proposing benefit cuts of nearly 23 percent.  The action is the first under a new law.  Central States Executive Director-General Counsel Thomas Nyhan explains:  “The longer we wait to act, the larger the benefit reductions will have to be.”  Yet the union, with help from Congress, helped bring about this dilemma.

Laborers Bookkeeper in Los Angeles Sentenced for Theft

LIUNA logoOn September 14, Sergio Rascon Jr., former bookkeeper assistant for Laborers International Union of North America Local 300, was sentenced in U.S. District Court for the Central District of California to one year of probation and ordered to pay a $100 special assessment for embezzling $2,417 from the Los Angeles union.  Rascon had pleaded guilty in June.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Washington State Carpenters Local Secretary Sentenced

Carpenters logoOn September 9, John Jones, former financial secretary of United Brotherhood of Carpenters and Joiners Local 59, was sentenced in U.S. District Court for the Eastern District of Washington to two months in federal prison and three years of supervised release for embezzling more than $12,000 in funds from the Spokane-based union.  He also was ordered to pay $10,762 in remaining restitution and a $100 special assessment.  Jones had pleaded guilty in June.  The actions follow a probe by the Labor Department’s Office of Labor-Management Standards.

AFGE Local President in Texas Sentenced for Theft

AFGE logoOn September 9, Paul Florez, former president of American Federation of Government Employees Local 3922, was sentenced in U.S. District Court for the Western District of Texas to 180 days of home confinement and five years of probation for stealing from the El Paso-based union, which represents employees at the local VA Hospital.  He also was ordered to pay $44,878 in restitution and a $5,000 fine.  Florez had pleaded guilty in June after being charged last December with theft in the amount of $59,709.  The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

BMWE Secretary-Treasurer in Kansas City, Mo. Sentenced

BMWE logoOn September 3, Jeremy Bolte, former secretary-treasurer of Brotherhood of Maintenance of Way Employees Lodge 800, was sentenced in U.S. District Court for the Western District of Missouri to five years of probation for embezzling $12,500 from the Kansas City, Mo.-based union, which represents area workers for BNSF Railway.  He also was ordered to pay full restitution and a special assessment of $1,000.  Bolte had pleaded guilty in October 2014 to 10 counts of embezzlement upon being charged.  The actions follow an investigation by the Labor Department’s Office of Labor-Management Standards.

Baltimore AFSCME Local President Indicted for Theft

AFSCME logoOn September 1, Betty Robinson, former president of American Federation of State, County and Municipal Employees Local 2751, was indicted in the Circuit Court for the City of Baltimore, Maryland on one count of theft of at least $10,000 but less than $100,000 from the Baltimore union.  The indictment follows a probe by the Labor Department’s Office of Labor-Management Standards.

Detroit-Area Operating Engineers Local President Pleads Guilty

IUOE logoOn September 2, Steven Minella, former president and business agent of International Union of Operating Engineers Local 324, pleaded guilty in U.S. District Court for the Eastern District of Michigan to one count of failing to report to appropriate authorities the commission of extortion by another official of the Bloomfield Hills, Mich. local.  Minella had been charged in June following a joint investigation by the FBI, the IRS and the U.S. Labor Department’s Office of Labor-Management Standards, Office of Inspector General, and Employee Benefits Security Administration.

Former Member of UAW Local in Louisiana Pleads Guilty

United Auto Workers logoOn September 2, Danny Rawls, former member of United Auto Workers Local 2297, pleaded guilty in U.S. District Court for the Western District of Louisiana to one charge of making a false statement to a Labor Department investigator.  Back in March, Rawls, along with Local 2297 Vice President Gregory Hill, had been indicted on nine counts related to aiding and abetting embezzlement in excess of $12,000, uttering forged checks, and conspiracy to commit forgery against the Shreveport-based union.  The actions follow an investigation by the Labor Department’s Office of Labor-Management Standards.

AFGE Local Bosses in Minnesota Charged with Theft

AFGE logoThe alleged amounts may be modest, but they amount to a twofer all the same.  On August 31, Dean Johnson, former president of the Minneapolis-based American Federation of Government Employees Local 899, was charged in Hennepin County Court of Minnesota with theft in the sum of $2,036.  That same day Edward Barker, former Local 899 vice president, was charged in the same court with theft in the sum of $1,790.  The alleged thefts by Johnson occurred during January 2013-August 2013, while those by Barker occurred during March 2013-July 2013.  The charges follow a joint investigation by the U.S. Labor Department’s Office of Labor-Management Standards and the Minneapolis Airport Police.

Pennsylvania Teachers Official Pleads Guilty to Thefts; Sentenced

NEA logoFor five years, Rae Dawn Grillo embezzled union funds.  She’s now going to spend the next five years under close supervision.  On August 27, Grillo, formerly treasurer of the Charleroi Area Education Association, pleaded guilty in the Court of Common Pleas of Washington County, Pennsylvania (near Pittsburgh) to thefts from the union totaling $65,963.  She then was sentenced to nine months of electronic home monitoring, five years of probation and 200 hours of community service.  She also was ordered to repay residual restitution in the amount of $8,175.  Grillo had been charged in February following a joint investigation by the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Ironworkers Bookkeeper in Illinois Charged with Records Fraud

Iron Workers logoOn August 25, Michelle Misso, former bookkeeper of Iron Workers Local 63, was charged in U.S. District Court for the Northern District of Illinois with one count of making a false entry in the financial records of the Broadview, Ill. (suburban Chicago) union.  The charge follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

New Hampshire Power Plant Security Officers Official Charged

Seabrook nuclear power plantOn August 12, Gregory Paradis, former chief steward of United Federation of Special Police and Security Officers (UFSPSO) Local 501, was charged in U.S. District Court for the District of New Hampshire in a one-count indictment with embezzling funds in an unspecified amount from the Seabrook, N.H. union, which represents workers at the nuclear power plant in that community.  UFSPSO, headquartered in Briarcliff Manor (Westchester County), N.Y., is distinct from another security employees union, the National Association of Special Police and Security Officers (NASPSO).  The indictment follows a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Virginia Police Officers Charged with Embezzling from Union

Police badgeCops normally enforce the law.  Randolph Brann and Jacob Wright, both cops, apparently broke it.  On September 2, Brann and Wright, veteran officers with the Norfolk, Virginia Police Department, were charged with four counts each of felony embezzlement from their union, the International Brotherhood of Police Officers.  They were placed on administrative leave and will remain there pending the results of an internal investigation.  No court dated yet has been set.

Secretary-Treasurer of Metro Phoenix Transit Union Sentenced

ATU logoIt took more than six years for Richard Wayne Johnson to be found out as an embezzler.  And it took more than three years for justice to prevail.  What matters in the end is that it did.  On September 14, Johnson, former secretary-treasurer of Amalgamated Transit Union Local 1433, was sentenced in U.S. District Court for the District of Arizona to 18 months in prison, plus three years of probation upon release, for stealing almost $275,000 from the Phoenix-based transit workers union.  He also was ordered to pay full restitution.  Johnson had pleaded guilty this June following an investigation by the IRS and the U.S. Labor Department’s Office of Labor-Management Standards.

AFGE Local President in Maine Charged with Records Fraud

AFGE logoOn August 7, Mark Durinski, former president of American Federation of Government Employees Local 294, was charged in U.S. District Court for the District of Maine with three counts of making false statements on financial reports of the Limestone, Maine-based local.  The charge follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

American Allied Workers Local President in Illinois Charged

On August 6, Jimmy Bynum, president of American Allied Workers Local 944, was charged in U.S. District Court for the Southern District of Illinois with one count of embezzling funds of an unspecified sum from the Pembroke Township (Kankakee County), Ill.-based union.  The charge follows a probe by the Labor Department’s Office of Labor-Management Standards.

New Study Finds Right to Work Laws Don't Reduce Wages

Righ to Work posterWorkers might not like being forced to pay dues to a union, but they should be grateful anyway because they see more on their paychecks – so goes a common justification offered by union officials for such coercion.  Yet a new Heritage Foundation Issue Brief makes a convincing case that this view leaves out at least as much as it includes.  The author, Heritage fellow and labor issues analyst James Sherk, concludes that after fully taking into account the cost of living, private-sector wages in states with Right to Work laws (i.e., laws barring forced dues payments) are not significantly different from those in states without such laws.  Moreover, while Right to Work laws do slightly reduce public employee pay, they also save taxpayers money.  The study is at once a sequel and a rebuke to one published in April by the Left-leaning Economic Policy Institute.

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