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.

N.J. Supreme Court Says 'No' to Unions; Allows Gov. Christie to Delay Pension Payments

Whether one sees New Jersey Governor Chris Christie as confronting or punting, it’s hard to deny he knows a crisis when he sees one.  The State Supreme Court sees one as well.  On June 9, the Court ruled 5-2 that Christie was within bounds in delaying two years of contributions, nearly $2.5 billion, to the state’s chronically underfunded public-employee pension system.  The ruling, a clear blow to the unions who brought forth the suit, for now averts a fiscal calamity.  Critics claim that Christie, expected shortly to enter the Republican presidential race, broke a law he signed in 2011, passing the buck to his successors.  Supporters counter that the ruling gives the legislature breathing room to fix a condition resulting from years of excessive union contract demands.  The latter is a familiar story in other states, too.

Screen Actors Guild Office Manager Charged with Embezzlement

SAG logoIn film, TV and radio, a "residual" is a payment to the creator of a piece of work beyond the original screening or airing.  Typically, the union distributes the money, once received from the studio.  The production company gets 80 percent of the fees; the performers and supporting crew collect the other 20 percent.  All this assumes the union administrator will forward the money.  Michelle Dancy apparently doesn't like that part.  On May 21, Dancy, former office manager with the Residuals Estates and Trust Department of the Screen Actors Guild (SAG), was charged in U.S. District Court for the Central District of California with four counts of embezzlement from the Los Angeles-based union totaling at least $54,109 and five counts of false identification in connection with the alleged thefts.  The charges follow a joint probe by the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General leading to a grand jury indictment in January.

Electrical Workers Business Manager in Missouri Sentenced

IBEW logoOn May 21, Dennis Fuston, former business manager for International Brotherhood of Electrical Workers Local 545, was sentenced in the Buchanan County (Missouri) Circuit Court to five years of probation, and ordered to pay restitution to the St. Joseph, Mo.-based union in the amount of $23,768 and a $25 assessment.  Fuston had pleaded guilty in April to theft after being charged in February.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Phoenix Metro Transit Union Treasurer Pleads Guilty to Thefts

ATU logoRichard Wayne Johnson may have thought his union wouldn’t find him out.  He guessed wrong.  This Tuesday, June 2, Johnson, formerly secretary-treasurer of Amalgamated Transit Union Local 1433 and a bus driver for Valley Transit, pleaded guilty in U.S. District Court for the District of Arizona to embezzlement, fraud and forgery in an amount of nearly $275,000 from the union, which represents thousands of bus, para-transit and light rail operators in the Phoenix metro area.  He faces 16 years in prison at his sentencing hearing in August.

UAW Financial Secretary in Indiana Pleads Guilty to Forgery

United Auto Workers logoOn May 7, Marcia Shull, former financial secretary of United Auto Workers Local 661, pleaded guilty in Hancock County, Indiana Circuit Court to one count of felony forgery.  She had been charged last September with theft and forgery of an unspecified sum from the Greenfield, Ind.-based union after a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

AFGE Local Secretary-Treasurer in Colorado Sentenced

AFGE logoOn May 11, Aide Spade, former secretary-treasurer of American Federation of Government Employees Local 709, was sentenced in U.S. District Court for the District of Colorado to three years of probation for making false statements in financial records of the Littleton (suburban Denver)-based union to conceal her thefts.  She also was ordered to pay $14,234 in restitution on top of the $44,935 in restitution she already paid, plus a $5,000 fine.  Spade had pleaded guilty to one count of concealment in October after being indicted on four counts in June.  AFGE Local 709 represents Colorado prison system employees.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards and the U.S. Justice Department's Office of Inspector General.

Can Gov. Rauner Put Illinois Pension Funds in the Black?

If any one state stands out in the race to the bottom of public employee pension insolvency, Illinois would be it. And GOP Governor Bruce Rauner is steeling himself to prevent a collapse.  Rauner, a former private equity fund manager, was elected last November over Democratic incumbent Pat Quinn.  He faces $111 billion in unfunded pension liabilities, or about $8,500 per resident.  The years of greed, corruption and bad luck having taken a toll, the governor and his top fiscal policy adviser, Donna Arduin, have proposed tough measures to reverse course.  So far, they haven’t won any friends among public-sector unions - or the Illinois Supreme Court, which on May 8 sided with the unions in invalidating reforms enacted in late 2013. 

Kansas City, Mo. AFSCME President Sentenced for Theft

AFSCME logoJesse Morgan used to head a union that represented county jail employees.  Now he’s set to become a federal prison inmate.  On May 11, Morgan, formerly president of American Federation of State, County and Municipal Employees (AFSCME) Local 1707 in Kansas City, Mo., was sentenced in U.S. District Court for the Western District of Missouri to 21 months in prison for defrauding the union, which represents employees of the Jackson County Detention Center.  He had pleaded guilty in October 2014 after being indicted that February.  The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Elevator Constructors Business Manager in New Mexico Sentenced

Elevator Constructors logoLeonard Bridge II found a variety of ways to rip off his union.  But during the next year he’s not likely to find much of a variety in anything.  On May 4, Bridge, former business manager for International Union of Elevator Constructors Local 131, was sentenced in U.S. District Court for the District of New Mexico to 12 months in prison, to be followed by three years of supervised release, for embezzling more than $140,000 from the Albuquerque union.  He had been indicted in February 2014, and pleaded guilty to one of 20 counts in September following an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Labor Department Files Complaint against Michigan CWA Local

Communications Workers logoThe current leadership of Communications Workers of America Local 84555 might not be stealing funds, but they are inviting suspicion all the same, especially from the U.S. Department of Labor.  On April 28, the DOL filed a complaint in Detroit federal court against the Durand, Mich.-based union, claiming it has been repeatedly and excessively late in filing required annual financial statements to its Office of Labor-Management Standards.  The fiscal year 2014 report, for example, was due last June 29 yet has not been sent.  The nearly 200-member local has not issued a response.            

New Study Tallies Longshoremen Costs; Calls for Bargaining Alternative

Two and a half years ago, the International Longshoremen's Association was digging in for a strike that could have crippled shipping along the Atlantic and Gulf Coasts.  The strike didn't happen.  Yet the union power that led to the impasse remains.  The Manhattan Institute has some ideas about how to avert future such showdowns.  Last month it published a paper, “Held Hostage:  U.S. Ports, Labor Unrest, and the Threat to National Commerce,” arguing that strikes and slowdowns, or the threat of them, impose high costs.  Written by Institute Senior Fellow Diana Furchtgott-Roth, the report cites federal labor law as the main culprit, concluding Congress should shift responsibility for collective bargaining oversight from the National Labor Relations Board to the National Mediation Board.

Transportation Union Treasurer in Houston Pleads Guilty to Theft

United Transportation Union logoOn April 24, Henry Shuler, former secretary-treasurer of United Transportation Union Local 1892, pleaded guilty in U.S. District Court for the Southern District of Texas to one count of embezzling $40,118 in funds over a six-year period from the Houston-based union.  Prosecutors had charged that Shuler, now 65, a resident of Houston, wrote union checks for purchases from Sam’s Club and masked other funds as “dues” repayments to nonexistent local members.  He had been charged in February following an internal audit and a subsequent investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  He is set for sentencing in July.

Security Officers Union President Charged with Embezzling $300K+

Security guardOn March 30, Assane Faye, founder and president of the United Security & Police Officers Association (USPOA), was indicted in U.S. District Court for the District of New Jersey on two counts of embezzlement of union funds and seven counts of unemployment fraud.  Prosecutors say that Mr. Faye, an ethnic Senegalese, since 2010 stole more than $300,000 from the Washington, D.C.-based union.  The indictment follows a joint probe by the U.S. Labor Department’s Office of Labor-Management Standards and the Office of Inspector General.

Feds Probe Free-Spending Boilermakers Local in Pittsburgh

Boilermaker at workWhen it comes to living large, no union is quite the match for the International Brotherhood of Boilermakers.  And the IBB appears to be setting an example for its local affiliates.  Late last month, KDKA, the CBS television affiliate for the Pittsburgh area, confirmed that the FBI has launched an investigation of the Pittsburgh-based Boilermakers Local 154.  The union, which represents more than 2,000 welders, pipefitters and other construction workers, may have diverted as much as $1 million in member dues for unauthorized expenditures during the three most recent fiscal years.  The probe is based on financial reports submitted to the U.S. Labor Department’s Office of Labor-Management Standards.

Illinois Laborers Local Bookkeeper Indicted for Embezzlement

LIUNA logoCarolyn Hall took around a year and a half to have the law of averages catch up.  On or about April 24, Hall, former bookkeeper for Laborers International Union of North America Local 1197, was charged in U.S. District Court for the Southern District of Illinois with embezzling $26,491 in cash receipts from the union, which represents construction and other workers in southern counties of the state.  Prosecutors allege Hall, 53, a resident of McLeansboro, Ill., during July 2012-February 2014 stole cash receipts from member dues and used the funds to cover personal expenses.  The indictment follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

New Bill Would Ban Mandatory Project Labor Agreements

In the construction industry, nothing exemplifies union monopoly, and its costs, quite like a Project Labor Agreement.  A new proposal before Congress, the Government Neutrality in Contracting Act, would protect contractors from intrusion by organized labor upon contractual liberty.  Sponsored by Rep. Mick Mulvaney, R-S.C., and Sen. David Vitter, R-La. (H.R. 1671, S. 71), the measure would bar the use of these agreements on federally-sponsored or subsidized public works.  In promoting open competition in bidding, hiring and other aspects of project labor, it effectively would overturn President Obama’s Executive Order 13502.  Issued in February 2009, that order “encouraged” federal agencies to require such pacts on a case-by-case basis on projects of $25 million or more.

New Bill Would Ban 'Official Time' for Unionized Federal Workers

AFGE logoFor decades, federal employees have used working hours to conduct union business, effectively forcing taxpayers to cover the costs of activity unrelated to job responsibilities.  Rep. Jody Hice, R-Ga., thinks this practice, known as ‘official time,’ is due for an overhaul.  On March 26, Hice unveiled the Federal Employee Accountability Act (H.R. 1658).  The bill, which has gathered more than 15 House co-sponsors, would bar unionized federal workers from engaging in bargaining or arbitration while on agency time. “After examining the practices of over 60 government agencies,” said Hice, “my office has found an astounding amount of government waste.  By eliminating the ‘official time’ practice, we will return over $1 billion to hardworking American taxpayers, and shed this shady, wasteful practice that only benefits unions.”

UTU Financial Secretary in Washington State Pleads Guilty

United Transportation Union logoOn March 20, Alfonso Rodriguez, former financial secretary of United Transportation Union Local 117, pleaded guilty in U.S. District Court for the District of Washington to one count of false reporting in connection with his theft of funds from the Southworth (Kitsap County), Washington-based union.  He also agreed to pay restitution in the amount of $34,601.  Sentencing is set for June.  The plea follows a probe by the U.S. Labor Department’s Office of Labor-Management Standards.    

New York MTA Police Union President Charged in Theft

MTA inspectorsIt’s a familiar story:  A union official with a gambling problem steals from the till to cover personal losses.  On March 31, John Earvin, former president of the United Federation of Law Enforcement Officers (UFLEO), was arrested by federal agents for embezzling nearly $50,000 over more than three years from the Bellerose (Nassau County, Long Island), N.Y.-based union, which represents Special Inspectors at the New York Metropolitan Transportation Authority.  He had been indicted on one count of wire fraud the previous day in Manhattan federal court following a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Laborers Secretary-Treasurer in Oklahoma Charged; Pleads Guilty

LIUNA logoOn March 26, Michael Low, former secretary-treasurer of Laborers International Union of North America Local 2097, was charged in U.S. District Court for the Western District of Oklahoma to one count of making a false statement in financial records of the Oklahoma City union in connection with his embezzlement of $12,937.  He then pleaded guilty.  The charge and plea follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.     

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