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.

New Reports Show Severe Shortfalls in Multiemployer Union Pensions

pension crisisA retirement plan supposedly is an excellent reason for joining a union. Yet a March report by the U.S. Government Accountability Office reveals chronic underfunding and potential insolvency of pension plans involving a union and two or more private-sector employers within the same industry. The insurance fund covering these "multiemployer" plans, run by a federal agency, Pension Benefit Guaranty Corporation (PBGC), "would be exhausted in about two to three years if projected insolvencies of either of two large plans occur in the next 10 to 20 years." The study follows a January PBGC report projecting "current premiums ultimately will be inadequate to maintain benefit guarantee levels."

Ex-Head of New Jersey Nurses Local Sues Union Officials, Benefit Managers

NursesHealth Professionals & Allied Employees (HPAE) has a generous benefits plan - especially, it seems, for the people running it. And a former president of an affiliate wants to change the situation. On May 17, Kathleen Fonti filed a civil suit in Bergen County, N.J. Superior Court (Docket No. L-3718-13) against officials of the New Jersey union and its Retiree Medical Trust. Fonti, who headed Emerson, N.J.-based HPAE Local 5030 until several years ago but who remains a union member, is accusing HPAE founder-president Hanna "Ann" Twomey of self-dealing by way of her personal relationship with a leading union vendor. She's also alleging Twomey and several associates misled rank and file as to the details of the health care plan.

Senate Labor Committee Approves Five NLRB Nominees; Old Issues Remain

NLRB headquartersThe National Labor Relations Board, strictly speaking, should have shut down nearly five months ago. But it has kept on going anyway. And even if President Obama's slate of five nominees takes office, the issues surrounding its legal limbo almost certainly will continue onward to the Supreme Court.  On May 22, the Senate Labor Committee approved all five and sent their names in one package for a full floor Senate vote.  In February the president had re-nominated two members, Sharon Block and Richard Griffin, both of whose recess appointments were declared unconstitutional on January 25 by a federal appeals court.

Security Professionals President in Louisiana Pleads Guilty to Theft

SPFPA logoOn May 30, Wayne Boudoin, formerly president of Security, Police and Fire Professionals of America Local 709, pleaded guilty in U.S. District Court for the Eastern District of Louisiana to embezzling $16,367.96 in funds from the Houma, La. union over a more than seven-year period. He had been charged in April. The charge and guilty plea follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Louisiana Graphic Communications Local President Pleads Guilty

Graphics workerOn May 29, Malvin Bergeron, former president and secretary-treasurer of Graphic Communications International Union Local 537M, pleaded guilty in U.S. District Court for the Eastern District of Louisiana to embezzlement of $4,041.88 in funds from the Teamsters-affiliated local, formerly located in Marrero, La. Bergeron had been charged on May 3 following an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Georgia Letter Carriers Local Treasurer Sentenced for Records Fraud

Letter Carriers logoOn May 29, Joseph Allen, former secretary-treasurer for National Association of Letter Carriers Branch 588, was sentenced in U.S. District Court for the Middle District of Georgia to one year in prison and one year of probation for filing a false financial report on behalf of the Athens, Ga.-based union. He also was ordered to pay restitution in the amount of $50,000. Allen pleaded guilty in March after being charged in November for embezzling slightly over $3,000. The actions follow a probe by the U.S. Labor Department's Office of Labor-Management Standards and Office of Inspector General, and the U.S. Postal Service's Office of Inspector General.

Northern California Teachers Union Local Treasurer Arrested

NEA logoOn May 9, Ronda Mackey-Fish, treasurer for the Redding Service Center Council, was arrested for embezzling more than $18,000 from the union, an affiliate of the California Teachers Association, which in turn is an affiliate of the National Education Association. The council had contacted police regarding a possible theft. Following an investigation, the authorities determined that Mackey-Fish, 54, a resident of Anderson, Calif., had stolen the money. She was booked at the Shasta County jail and was held on $25,000 bail.

AFGE Local Secretary-Treasurer in Cincinnati Pleads Guilty

AFGE logoOn May 28, Cynthia Yancey, former secretary-treasurer of American Federation of Government Employees Local 3840, pleaded guilty in the Hamilton County, Ohio Court of Common Pleas to misdemeanor theft from the Cincinnati-based union. She then was ordered to pay court costs. Yancey previously had made restitution in the amount of $4,255 after being indicted on April 8. The actions follow a probe by the U.S. Labor Department's Office of Labor-Management Standards.

Upstate New York Steelworkers Financial Secretary Pleads Guilty

Steelworkers logoOn May 22, William Mochrie, former financial secretary for United Steelworkers Local 28, pleaded guilty in U.S. District Court for the Northern District of New York to making false entries in records of the Castleton, N.Y. (near Albany) union. He has agreed to make restitution in the amount of $13,763.05. Mochrie had been charged on May 8. The charge and guilty plea follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Steelworkers Secretary-Treasurer in Tennessee Sentenced for Theft

Steelworkers logoOn May 21, Clarence Howard, former Secretary-Treasurer of United Steelworkers Local 789, pleaded guilty in the Criminal Court for Hamilton County, Tennessee to one count of theft of property in an amount of over $1,000 from the Chattanooga union. He then was sentenced to three years of probation and ordered to pay a $26.50 fine. Howard had been indicted last December. The actions follow an investigation by the Labor Department's Office of Labor-Management Standards.

SEIU Joins Protests Against New GOP-Controlled North Carolina

George Gresham photoA series of puny protests against the now Republican-controlled North Carolina General Assembly and governorship were perpetuated the last few months thanks to coverage by a compliant local media, but now threatens to grow as liberal groups from outside the state ship in additional forces.

With previously powerful NC Democrats now shunted to the sidelines, Republican political leaders have undertaken ambitious overhauls including the reduction of unemployment benefits, tax reforms, budgeting changes, voter ID, elections adjustments, and health care. Especially drawing liberal ire was the refusal to expand the Medicaid rolls because North Carolina’s system is wasteful and broken, and because the federal government only promised support for a few years before the state would have to bear a greater burden.

Treasury and UAW Hand in Hand on GM Offering

It looks like the Obama Administration and the UAW are again working hand in hand as the two entities are coordinating on an offering of a total of 50 million General Motors shares. Treasury is planning on selling 30 million shares as the UAW's VEBA (Voluntary Employee Beneficiary Association) Trust will sell 20 million shares. The VEBA Trust was formed to cover retiree's medical benefits for the UAW and received about a 17.5% ownership stake in GM as part of the 2009 bankruptcy process.

Plumbers Business Manager, Wife Sentenced for Thefts from Northern California Local

Plumber at workOn May 17, Robert Carr, former financial secretary and business manager for United Association of Plumbers and Pipefitters Local 228, was sentenced in U.S. District Court for the Eastern District of California to 30 months in prison for embezzling union funds. That same day, his wife, Theresa Ann Carr, was sentenced to three months in prison for her role in the thefts. The couple also was ordered to pay a combined $120,000 in restitution. The Carrs had pleaded guilty this February after being initially charged in April 2009 with theft of more than $45,000 and then charged in a superseding indictment in August 2011. The actions follow a joint investigation by the U.S. Labor Department's Office of Labor-Management Standards and Office of Inspector General, and the U.S. Postal Inspection Service.

Arkansas Air National Guard Employees Secretary Sentenced for Theft

Air National GuardemployeesOn May 16, Owen Smith, former secretary-treasurer for Association of Civilian Technicians Chapter 117, was sentenced in U.S. District Court for the Eastern District of Arkansas to three years probation, assessed a $100 fine, and ordered to pay $18,023 in restitution for embezzling funds from the Jacksonville, Ark. union. ACT Chapter 117 represents Arkansas Air National Guard employees at Little Rock Air Force Base. Smith pled guilty last October. The sentencing follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Pennsylvania Metal Employees Union Secretary-Treasurer Indicted

Metal workerOn May 14, Duane Rill, secretary-treasurer of the Berry Metal Employees Association, was indicted in U.S. District Court for the Western District of Pennsylvania for embezzling $13,496 in funds from the Cranberry Township, Pa.-based independent union. Rill, 51, a resident of Cranberry, allegedly wrote and cashed unauthorized checks and made unauthorized cash withdrawals from a union account during March 2007-November 2009. The indictment follows a probe by the U.S. Labor Department's Office of Labor-Management Standards.

Did IRS Target Homebuilders on Behalf of Laborers Union?

Ray LaHood photoIn the fall of 2011 the National Legal and Policy Center (NLPC) submitted Freedom of Information requests to the Department of Labor and the Internal Revenue Service following an announcement that the administration was investigating homebuilders in an attempt to bolster union membership at the expense of housing sector jobs.

To read article by John Ransom at Townhall.com, click here.

Glass Workers Financial Secretary in Texas Indicted for Embezzlement

Glass workerOn May 14, Johnny Torres Jr., former financial secretary for Glass, Molders, Pottery, Plastics and Allied Workers Local 259, was indicted in U.S. District Court for the Western District of Texas for embezzling $9,947 in funds from the Waco-based union. The indictment follows a probe by the Labor Department's Office of Labor-Management Standards.

Upstate New York Steelworkers Secretary Charged with Records Fraud

Steelworkers logoOn May 8, William Mochrie, former secretary-treasurer of United Steelworkers Local 28, was charged in an information count in U.S. District Court for the Northern District of New York with falsifying records of the Castleton, N.Y. (near Albany) union. The charge follows an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Ex-President of New Jersey Production Workers Local Sentenced

NoveltiesOn May 13, Stephen Arena, former president of Novelty and Production Workers Local 148, was sentenced in U.S. District Court for the State of New Jersey to six months in prison and six months of home confinement for embezzling funds from the Jersey City local. He and the union's former secretary-treasurer, David Caivano, had been arrested and indicted in October 2010 for stealing a combined more than $375,000 during July 2005-March 2010. Arena pleaded guilty in May 2012. He already has made full restitution in the amount of $193,000, though the court ordered him to pay a $5,000 fine on top of that. As for Caivano, he pleaded guilty this January and was sentenced in March. The actions follow a probe by the U.S. Labor Department's Office of Inspector General and Office of Labor-Management Standards.

Tax Consultant Pleads Guilty to $3.3M+ in Thefts; UNITE HERE Las Vegas Local Is Out $673,000

the Las Vegas StripDeborah DiFrancesco kept two sets of books. Her mistake was assuming she was too smart for anyone to catch on. Last Thursday, DiFrancesco, founder and head of the now-defunct Lakes Payroll Inc., which handled payroll taxes for Las Vegas-area employers, pleaded guilty in Las Vegas federal court to three counts of wire fraud and one count of tax evasion in connection with her embezzlement of more than $3.3 million in funds. Significantly, thefts from Culinary Workers Local 226, the largest affiliate of the UNITE HERE International Union, accounted for about a fifth of the total. That figure doesn't even include the roughly $500,000 in penalty and interest she owes clients or the more than $1.1 million she owes the IRS, each part of the plea deal. Sentencing is set for September 4.

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