John Ulrich might have called it payola, but prosecutors called it bribery. And evidence indicates they were right. On December 12, Ulrich, former vice president of the Great Neck (Long Island), N.Y.-based International Brotherhood of Teamsters Local 812 and a trustee of its health plan, pleaded guilty in Manhattan federal court to soliciting tens of thousands of dollars in bribes from an official with the plan’s third-party contractor in return for ensuring the union’s retention of the company. Ulrich had been indicted last February following a joint investigation by the FBI and the U.S. Labor Department’s Office of Labor-Management Standards, Office of Inspector General, and Employee Benefits Security Administration. Sentencing is set for April 23.
Teamsters Local 812 represents more than 3,000 soft drink and brewery production, bottling, delivery and auxiliary workers in the New York City metropolitan area. It also has a health benefit plan lucrative enough to attract management consultants. According to federal prosecutors, John Ulrich, now 48, a resident of Newburgh, N.Y., sometime in or about 2013 began soliciting bribes from an executive of the plan’s third-party administrator (“TPA-1”), a person identified in charging documents as “Executive-1.” Preceding these solicitations, plan trustees had sent out a request for proposals for a new administrator. Fearing the loss of its contract, TPA-1 let Ulrich know of its dissatisfaction. Ulrich responded by vowing to use his clout with the union to ensure TPA-1 would remain as administrator, but with the caveat that the company must make payments in the sum of $5,000 per quarter. In or about 2014, Ulrich raised this sum, claiming it was necessary to help a fellow trustee, and would solicit additional payments starting in or about September 2015.
Unfortunately for Ulrich, the board of trustees had grown suspicious that favors were for sale. These concerns came to head in February 2016 during a special board meeting at which trustees, having reviewed accusations that Ulrich had blocked competitive bidding, voted to remove him as both union vice president and health plan trustee. The union then notified federal authorities and requested a full investigation. This led to a four-count indictment of Ulrich in February 2019 and his guilty plea 10 months later. Immediately following the plea, U.S. Attorney Geoffrey Berman remarked: “As he admitted in court today, John Ulrich betrayed the trust of the Union members who elected him in order to line his pockets with bribe money. This Office is committed to prosecuting corrupt union officials who abuse their positions of trust for their own financial benefit.” A civil suit filed by Ulrich against Teamsters Local 812 and related parties remains active, but at this point it is difficult to imagine him prevailing.