Twenty Indicted in Probe of Boston Terminal Longshoremen Payroll Scam

international longshoremen_s association logoBoston Longshoremen don’t like people poking around into the way they do business. It’s a world of tightly-knit Irish ethnic families where work on the docks is passed on from one generation to the next. And if breaking the law is what it takes to make a good living, some of these people will do just that, especially if it involves group cooperation – i.e., a racket. Cracking this kind of racket is far from easy. But it appears that the Massachusetts Attorney General’s Office, with some outside help, has done just that.

 

On August 9, Attorney General Tom Reilly announced a combined 118 indictments against 20 individuals, almost all of whom are or have been affiliated with locals of the International Longshoremen’s Association. He was flanked by Massachusetts Port Authority (“Massport”) Executive Director Thomas Kinton, Jr., U.S. Labor Department official Marjorie Franzman, and members of the Massachusetts Department of Unemployment Assistance. The probe, noted Reilly, uncovered “a system of fraud and corruption on Boston’s waterfront…where a few insiders gamed the system to benefit themselves and their friends and took opportunities and benefits away from other longshoremen who played by the rules.” 

 

The indictments follow an extensive investigation into payroll fraud and other schemes among dock workers who unload container ships at Massport’s Conley Terminal in South Boston. The probe began in April 2005 after Massport contacted the attorney general’s office over concerns that various ILA members were putting their sons, some as young as toddlers, on the payrolls. That way, if and when the offspring worked the docks for real, their accrued “seniority” would qualify them for far higher wages than other rookie Longshoremen. In today’s terms, that would mean that a 21-year-old dockworker listed on the payroll since age 2 would get around $28 an hour to start instead of only $16 an hour. Dockworkers are members of ILA Locals 799, 800 and 805, and formally are not Massport employees. Among the indicted were: 1) two Longshoremen business agents and three Longshoremen officials for listing children on payroll time sheets; 2) more than a dozen ILA members and a Massport assistant terminal manager for conspiring with workers who had accumulated hours in excess of the minimum needed to qualify for full benefits to transfer some of those hours to persons not meeting the threshold; and 3) three dockworkers for falsely claiming eligibility for unemployment benefits.

Reilly, a Democrat, is currently in a tough primary race with former Assistant U.S. Attorney General Deval Patrick and nonprofit activist Chris Gabrieli for Massachusetts governor. But he made clear politics isn’t what motivated the indictments. It’s sticking up for the people of the Bay State, and making sure that its economy remains competitive. “Massachusetts is already an expensive place to do business,” he said. “We are in competition with ports up and down the eastern seaboard for shipping business. Adding a fraud tax to the costs of doing business here is simply unacceptable.” Longshoremen spokesman James McNamara took issue with Reilly’s statements, calling them “totally false.” None of the indicted persons were arrested, but they’ll soon get a chance to give their side of the story at a hearing in Suffolk County Superior Court on September 5. (States News Service, 8/9/06; Associated Press, 8/9/06; Pacific Shipper, 8/17/06).