New York City-area construction unions are well-known for being on the take. A recent announcement by the U.S. Department of Justice won’t likely alter that reputation. On October 1, the U.S. Attorney’s Office for the Southern District of New York announced the arrest and indictment of 11 officials of the New York State Building and Construction Trades Council on various charges related to their receipt of over $100,000 in bribes from nonunion contractors in return for bid-rigging, in the process selling out the dues-paying union members whom they represented. Led by Trades Council President James Cahill, the defendants are current or former members of two local affiliates of the United Association of Plumbers & Pipefitters. Aiding in the probe was the Suffolk County (Long Island), N.Y. district attorney’s office. All the defendants pleaded not guilty at arraignment.
It’s a common form of back-scratching in the world of organized labor: An employer, often though not necessarily unionized, bribes a union official with cash and/or other things of value and in return the official refrains from pushing certain wage, benefit and other demands. Sometimes it is the employer who offers the payment; other times it is the union official who requests it. This pay-for-play arrangement is illegal under the Taft-Hartley Act of 1947. With increasing frequency, it also is being prosecuted as “honest services fraud,” an offense created by Congress in 1988 as an enhancement to existing mail and wire fraud statutes. Honest services fraud refers to a situation in which a representative of an organization willfully neglects his fiduciary duties, thus depriving members of services for which they have paid. Such behavior seems to have been in evidence lately among certain officers of the New York State Building and Construction Trades Council, an affiliate of the AFL-CIO’s Building and Construction Trades Department.
According to federal and Suffolk County prosecutors, fully 11 Trades Council officers, starting in or around October 2018, participated in a bribery and bid-rigging scheme in conjunction with certain nonunion building contractors. Most of the accused, including alleged ringleader James Cahill, were members of Plumbers Local 638, though a couple of them belonged to Local 200. The 10 persons charged beyond Cahill were Christopher Craft, Patrick Hill, Matthew Norton, William Wangerman, Kevin McCarron, Jeremy Sheeran, Andrew McKeon, Robert Egan, Scott Roche and Arthur Gipson. The first eight listed here were charged with honest services fraud, bribery and racketeering; Roche and Gipson were charged with honest services fraud and bribery, but not racketeering. Prosecutors allege that the defendants received dozens of illegal payments totaling over $100,000. That’s a pretty modest sum. But the economic impact may have been large. The Long Island City (Queens), N.Y.-based Local 638 has jurisdiction over unionized pipefitting in New York City and Long Island.
In the alleged scheme, Cahill and the other defendants installed cronies in leadership positions at Local 638 and told them to solicit bribes from nonunion contractors. The payoffs consisted of cash and other things of value such as unrepaid loans for food, drink and an ice machine. In exchange for this generosity, Cahill and the others rejected project bids from unionized firms. Rank and file union members, in other words, lost out. Key to uncovering the scheme was a nonunion employer identified only as “Employer-1.” The complaint accuses the defendants of “acquiescing in Employer-1’s bidding and performing of construction work with nonunion labor for plumbing and pipe fitting projects that would have otherwise have potentially been awarded to companies whose employees were represented by Local 638 or Local 200.”
There was little doubt that Cahill, now 71, was the man in charge. In one instance, he was caught on a wiretap advising Employer-1 to “tell everyone to go fuck themselves” because “if you become union, you’ll have 12 fucking guys on your back.” After the employer paid a bribe to one of Cahill’s people, Cahill told co-defendant Patrick Hill, “Welcome to the real world.” He explained to the employer the facts of life. “Here’s the thing,” Cahill said. “I give you Paddy (Hill). But if Paddy fucks up and does stupid things, you have to tell me…I got my guys, I got the guys who come to me, and you know that, and everyone knows who comes to me.” In a separate conversation, defendant Matthew Norton stated at a meeting at which he, Cahill and Hill received bribes: “The real world is the real world and there’s…always wiggle room as long as everyone…understands each other, and everyone’s taken care of.”
U.S. Attorney Ilan Graff believes that the evidence against the 11 defendants is sound. “As alleged,” said Graff, “the defendants exploited their labor organization positions to line their pockets. They did so at the expense of the unions and their members by accepting bribes to favor nonunion employers and corruptly influence the construction trade.” Suffolk County District Attorney Timothy Sini likewise commented: “This was a complete betrayal of these unions and their membership. Our two-year wiretap investigation uncovered a shocking level of greed and corruption, and the investigation is very much ongoing.” Mario Cilento, president of the New York State chapter of the AFL-CIO, emphasized that while none of the charges directly involve his organization, protecting the integrity of the labor movement is of paramount importance. This is an encouraging gesture, but it’s worth noting that if New York were a Right to Work state, much of the corruption in this case might not have happened. It should be individual workers themselves, not labor bosses, who decide upon union representation. As it stands, dues-paying members of Plumbers Locals 638 and 200 haven’t gotten their full money’s worth.