House Cmte. Finds Possible Violations of Law in Union Stock Scheme

The House Education & the Workforce Committee today released the final report on its investigation of the questionable stock transactions at the union-owned life insurance company ULLICO Inc., on Oct. 28.  The cmte. report questioned whether the scandal-plagued company violated federal labor and pension laws and called on the U.S. Dept. of Labor to strictly scrutinize that question of law.


Based on witness testimony and more than 95,000 documents the Cmte. reviewed during its inquiry, there remain serious questions about whether the questionable transactions at ULLICO violated federal labor law (the Labor-Management Reporting and Disclosure Act) and federal pension law (the Employee Retirement Income Security Act).  These questions were not addressed by former Ill. Gov. James Thompson, who investigated the ULLICO transactions and authored an independent report on the stock deals, because ULLICO told him not to look into those areas.


“At the very same time Read More ➡

Ex-Gen. Secy. Sentenced for Embezzlement

On Nov. 3, in U.S. Dist. Ct. for the Dist. of Columbia, James E. Cole, former general treasurer and general secretary of the Iron Workers International Union, was sentenced to 15 months in prison, followed by 2 yrs. probation for embezzlement, false union reports, and false union records.  Additionally, Cole was ordered to pay $15,000 in restitution, a $15,000 fine, and a $150 special assessment.  On June 18, 2001, he pled guilty to the charges following a joint investigation by the Washington branch of the U.S. Ofc. of Labor Mgmt. Standards, the FBI, and the U.S. Attny’s. Office for the Dist. of Columbia. [OLMS, 11/6/03]


Insurance Exec. Sentenced for Bribery in D.C. Court

On Oct. 24, in the U.S. Dist. Ct. for the Dist. of Columbia, Richard C. Holton, president of an insurance agency, Holton & Associates, Ltd., was sentenced to 4 mos. house arrest and 12 Read More ➡

L.A. Transit Authority Accuses Striking Union of Mismanaging Pension Fund

As a transit union strike wreaked havoc on rush hour transportation in Los Angeles, transit officials insisted on increased control over the union’s insolvent pension fund.  Local 1227 of the Amalgamated Transit Union (ATU), representing 2,200 Metro. Transportation Auth. Mechanics, began their strike on Oct. 14.  The union representing some 6,000 MTA drivers and train operators refused to cross the ATU’s picket line, and an estimated half-million commuters have had to find alternative transportation since.


At issue is a trust fund that pays for the employees’ insurance and medical expenses.  The fund is currently losing $5 million a month.  Local 1227 president Neil Silver is demanding that the MTA increase its financial support for the fund, which is currently $16.8 million.  MTA officials have offered to contribute an extra infusion of $2.6 million for one time only in exchange for gaining temporary control of Read More ➡

Federal Court Slaps Down Carpenters’ Effort to Undermine Local Control

On Oct. 8, U.S. Dist. Judge Richard G. Stearns (Mass., Clinton) rejected the U.S. Dept. of Labor’s defense of Carpenters chief Doug McCarron’s scheme to transfer power from the locals to unelected regional councils that he set up.  In 1996, McCarron consolidated all the United Bhd. of Carpenters’ (UBC) bargaining powers into 55 councils that were controlled by exec. secy.-treasurers who were not elected to their posts by the union membership.  In addition to their collective bargaining powers, the councils have exclusive authority to submit grievances to binding arbitration, and only they can appoint members to trial cmtes for union discipline.  Local unions can only ratify agreements and handle grievances in their early stages.


In 1999, a group of New England carpenters filed a complaint with the Dept. of Labor (DOL).  But Clinton labor secy. Alexis Herman, followed by current secy. Elaine Chao, defended the Read More ➡

DOL Wins Ruling Replacing Officials of New York Union Plan

Former administrators of the Intl. Bhd. of Industrial Wrkrs.’ Health and Welfare Fund of Central Islip, NY, are permanently barred from serving plans governed by federal employee benefits law, according to a court decision announced Oct. 8 by the U.S. Dept. of Labor. The fed. court also appointed an independent fiduciary to terminate the fund, resolve participant claims and distribute plan assets.


“Individuals entrusted with the assets of employee benefit plans have a serious responsibility, and this Administration will take action to protect workers, as in this case, the International Brotherhood of Industrial Workers’, whose funds have been mismanaged,” said Labor Secy. Elaine L. Chao. “The Department of Labor will vigorously pursue violations to restore plan assets and to safeguard the health benefits of workers and their families.”


The decision, entered in federal district court in Central Islip on Aug. 21, resolves a lawsuit against Joseph Merino and Read More ➡

Ex-Employee of Fla. Union Indicted For Embezzling $30,000 From Welfare Plan

The former office manager of the Ironworkers Local Union No. 808 Joint Apprenticeship and Training Fund in Orlando, Florida, has been charged with 42 counts of embezzling approximately $30,000 in assets from the fund, based on an investigation conducted by the U.S. Dept. of Labor’s Employee Benefits Security Administration (EBSA).


“Theft of employee benefit assets jeopardizes the benefits of workers,” said Howard Marsh, director of the Department’s Atlanta regional office of the EBSA. “This case was the result of an investigation by the department and the workers covered by the training fund deserve to have their money used for the intended purpose.”


Donna L. Cordero was indicted for embezzling the assets of an employee benefit plan governed by the Employee Retirement Income Security Act (ERISA). She allegedly carried out the criminal act by issuing herself additional paychecks to which she was not entitled that were drawn on the Read More ➡

Violent Union Boss Leaves IL Labor Dept.

Michael Fenger resigned from his position as director of the Ill. Dept. of Labor on Oct. 20.  He had only been director since April, when Democrats were forced to ram his nomination by Gov. Rod Blagojevich through the state senate because of his “criminal background.”


In 1997, Michael Fenger, the Bus. Mgr. of Intl. Bhd. Of Elec. Wrkrs. Local 364 was attending a union protest of non-union workers building the store. Several militants surrounded the truck of a non-union worker as he tried to leave the site. With the truck stopped, two police officers saw Fenger use a five-in. awl to puncture all four tires. Sterling police were videotaping the protest and recorded him puncturing at least one of them.  Fenger was charged with felony criminal damage to property and two misdemeanor charges of property damage and reckless conduct. In a plea agreement, Fenger pled guilty to Read More ➡

Intl. Takes Over Houston Local

Responding to a report by the Independent Rev. Bd. (IRB), Intl. Bhd. of Teamsters president James P. Hoffa took control of Houston Local 988 on Oct. 20, imposing a temporary trustee in place of two local officers accused of embezzlement and kickbacks.  The IRB was founded in 1989 to help settle a racketeering suit by the government charging that IBT were controlled by organized crime.


According to the IRB report, Local 988 president Chuck Crawley is accused of soliciting a $20,000 kickback from a contractor installing a new telephone system for the union.  Reportedly, Crawley also inflated invoices for products and services, then kept the excess cash and, in one case, two mobile barbecue pits.  Another union employee, Marie Espinosa, is also accused of diverting cash from inflated invoices, and charging inflated rates to the union for services provided by her cleaning company, for whom the Read More ➡

Final Union Transparency Reform Rule Issued by U.S. Department of Labor

The U.S. Department of Labor announced on Oct. 3 its final rules to strengthen the financial integrity and transparency of labor unions by improving the annual financial disclosure forms filed by unions as required by the Labor-Management Reporting and Disclosure Act (LMRDA).

In May of last year, NLPC submitted a detailed petition asking the Labor Department to issue just such a rule. Many of the suggestions contained in NLPC’s petition are embodied in the new rule, especially the new categories of expenses by which union officials will have to report what they actually do with the dues of the workers they claim to represent. For the first time since the U.S. Supreme Court ruled in 1988 that unionized workers could not be forced to pay for union politics (Communications Wrkrs. v. Beck), all private sector unions will be required to report how much they spend on political and lobbying activities.… Read More ➡

Ex-DC Union Chief Pleads Guilty, Refuses to Cooperate with Investigation

Ex-Wash. Tchrs. Union president Barbara Bullock confessed to stealing more than $2.5 million of the WTU members’ dues on Oct. 7 before U.S. Dist. Judge Richard J. Leon (D.C., G.W. Bush). However, the 66-yr.-old Bullock seems prepared to accept a 10-yr. prison sentence rather than provide information about two other frmr. WTU officials — frmr. Exec. Asst. Gwendolyn Hemphill and ex-Treasurer James Baxter. Hemphill reportedly rejected a plea bargain offer from the U.S. Atny. For D.C. identical to Bullock’s on Sept. 29. Baxter has also reportedly refused to negotiate with prosecutors. After they took over the WTU earlier this year, the Amer. Fedtn. of Teachers claimed that nearly $5 million is missing from the local union’s accounts.

Unanswered in the court was how the massive theft, which acc. to the charges filed Oct. 3 took place from Nov. 1995 until Bullock’s resignation in Oct. of last year, could have gone … Read More ➡