On July 15, Jacob Barkemeyer, former treasurer and chairman of Brotherhood of Railroad Signalmen Local Lodge 172, was sentenced in U.S. District Court for the District of New Mexico to two years of probation for making false entries in the records of the Los Lunas, N.M.-based union to conceal his thefts. He also was ordered to pay $8,608 in restitution, plus a $1,000 fine and a $25 assessment. Barkemeyer had pleaded guilty to an information count in January after being indicted for embezzlement last October. The actions follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards.
Unions do more than raise labor costs of employers with whom they negotiate. They also reduce wages and job growth in states where they are most prevalent. That's the conclusion of a new monograph published by the Washington, D.C.-based Competitive Enterprise Institute titled "The Unintended Consequences of Collective Bargaining" (see pdf). The authors, economist Lowell Gallaway (Ohio University) and law student Jonathan Robe, calculate union-associated "deadweight loss," on a state-by-state basis, over several decades. They concluded that a relatively high proportion of unionization, or union density, correlates with high rates of job loss. This suggests that by forcing employers to the bargaining table, federal labor law depresses entry-level worker prospects. It also suggests that state Right to Work laws mitigate this outcome.
Union benefit plans work on an assumption that participating employers will make good on their promises. At a number of Maryland plans sponsored by the International Brotherhood of Electrical Workers (IBEW) that hasn't been a safe assumption. On July 24, Michael Sewell, owner of MESCO Inc., a suburban Baltimore HVAC and plumbing supplier-service contractor, was charged in U.S. District Court for the District of Maryland with document fraud and wage/hour underreporting related to IBEW Local 24 benefit plans to which it owed contributions. In an earlier civil action, a group of IBEW benefit plans and the local had sued MESCO and Michael Sewell & Associates Inc., accusing them of failing to make scheduled payments. The plaintiffs in February were awarded most of the nearly $500,000 they had sought in back contributions, damages and interest.
On July 24, Robert Davis, former secretary-treasurer of Brotherhood of Locomotive Engineers and Trainmen (BLET) Division 644, a Teamsters affiliate, was sentenced in U.S. District Court for the Central District of Illinois to four years of probation, the first six months with supervised release, for embezzling funds from the Cameron (near Galesburg)-based Ill. union. He also was ordered to pay $24,625 in restitution and a $100 assessment. Davis had pleaded guilty in March after being charged in July 2013 with embezzling $27,712. The actions follow a probe by the U.S. Labor Department's Office of Labor-Management Standards.
William Hainsey has two major problems right now. And only one of them has to do with the money he took from his union. On July 18, Hainsey, formerly treasurer of National Veterans Affairs Council 249, an affiliate of the American Federation of Government Employees, was sentenced in Clark County (Wash.) Superior Court to 15 months in prison for stealing more than $45,000 in funds from the Vancouver, Wash.-based labor organization. He also was ordered to serve three years of probation and pay full restitution plus a $500 fine. Hainsey, out on bail since his arrest, had been charged back in August 2012, and pleaded guilty this March 20 following an investigation by the U.S. Labor Department's Office of Labor-Management Standards. The council represents about 10,000 employees in 12 local unions.
On July 9, Robert Mays, former financial secretary of United Steelworkers Local 561, was charged in U.S. District Court for the Southern District of Ohio with one count of embezzlement of $24,833 from the Logan-based union. The charge follows a probe by the Labor Department's Office of Labor-Management Standards.
If sunshine is the best antidote to corruption, then Senator John Thune, R-S.D. (in photo), must be opening a lot of windows. Last Wednesday, July 30, Sen. Thune unveiled the Union Transparency and Accountability Act (S. 2688), a measure that would require greater transparency in the information labor organizations report to the Department of Labor. The bill would improve detection of misuse of funds, especially by union officials and benefit fund trustees. Thune explained his discontent over President Obama's approach: "I hope my colleagues join me in supporting my bill to put an end to the administration's political favoritism and restore transparency to union finances. Union members deserve to know how their dues are being spent." The legislation effectively would restore three finalized rules shelved by the DOL in 2009.
For three and a half years, public-sector unions in Wisconsin, to little or no avail, have sought to topple a state law to restrict their collective bargaining abilities. Their options now are nearly exhausted. Last Thursday, July 31, the Wisconsin Supreme Court upheld the constitutionality of a 2011 law passed by the Republican-majority legislature at the urging of GOP Governor Scott Walker. By a 5-2 margin, the court concluded that while public employees may organize unions, their employers are not obligated to negotiate with them. The ruling is a clear victory for Gov. Walker, who survived a voter recall in June 2012 over this issue. It's also a blow for fiscal responsibility at a time when many state and local governments are facing large deficits in employee benefit programs.
On July 10, Nyaunu-Wi Meatia Palmer was sentenced in U.S. District Court for the District of Columbia to two years of supervised probation and 50 hours of community service, and was ordered to pay $9,836 in restitution, for attempting to cash a counterfeit check drawn on the bank account of Marine Engineers Beneficial Association District 1, based in Washington, D.C. The following day, one of her co-conspirators, Kenneth Marshall Jr., was sentenced in the same court to three years of supervised probation and 100 hours of community service, and ordered to pay restitution in the amount of $18,851. Palmer had pled guilty to bank theft in April; Marshall had pled guilty in March. The third co-conspirator, Dianna Woodall, had been sentenced in June after pleading guilty in March. None of the three were union members. The actions follow a probe by the FBI, and the U.S. Labor Department's Office of Labor-Management Standards and Office of Inspector General.
Utility Workers of America Local 475 must be having a tough time finding a few honest men. On July 16, John Vetterly, Jr., former president of the Rochester (Beaver County), Pa.-based union was sentenced in U.S. District Court for the Western District of Pennsylvania to nine months of house arrest and five years of probation for embezzling $26,605 in funds from its coffers. He also was ordered to pay restitution, plus interest and a fine of 10 percent of the embezzled funds. Vetterly had pleaded guilty in March after being indicted last October. Unfortunately, another former Local 475 president, Michael Trembulak, had a similar problem. Less than two weeks later, on July 29, Trembulak was indicted on one count of embezzling $31,528 in union funds during April 19, 2012-September 18, 2012. The actions in each case follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards.