HOTEL & RESTAURANT EMPLOYEES (HERE)
Aug. 1 Starts New Era for Corrupt Union
Despite the union's contrary claims, Edward T. Hanley, one of America's most powerful and corrupt union bosses, was forced out of the Hotel Employees & Restaurant Employees Int'l. Union according to U.S. District Court records. Hanley was HERE president for 26 years, and, as part of a bargain with the Justice Department, he will finally relinquish his grip over the 250,000 member union on Jul. 31.

Initially, it was portrayed as a gracious "retirement," but unsealed court records show Hanley cut a deal to avoid charges of corruption and ties to organized crime. The deal bars Hanley from any "direct or indirect" role in union affairs and forces him to repay approximately $14,000 for his union-leased vehicle. Hanley was alleged to have ran a "ghost local" in Rhinelander, WI near his and other union bosses' vacation homes. He also faced charges that he did nothing, yet received a $31,200 a year job from HERE Local 1 in Chicago where his son is the president. The junior Hanley did not fare as well as his father -- he has looming allegations of embezzlement. Most shocking of all, however, is the senior Hanley's "golden parachute." He will continue to receive his $270,000 a year salary from HERE for life. [Chicago Sun-Times 05/21/98]

GOVERNMENT EMPLOYEES (AFSCME)
2 Plead Guilty to AFSCME Embezzlement Scheme
Two union bosses of the American Fed. of State, County & Municipal Employees pled guilty Jul. 23 to embezzlement charges, admitting to stealing over $830,000 from union coffers. From 1991 to 1996, Thomas W. Waters and Barbara T. Wood embezzled funds while employees at AFSCME's District Council 20 which represents 6,700 employees from the Washington, D.C. government, American Red Cross & Howard University Hospital. According to the U.S. Attorney's Office, Waters opened a secret bank account in the union's name and had dues checks deposited into the account. Then both used the unions members' money for personal expenses. They also took money from another AFSCME account. Waters, Council 20's secretary-treasurer, admitted taking more than $761,000 and faces a 3-year prison term. A U.S. District Court Judge ordered Waters jailed immediately after his guilty plea, saying he was a danger to the community. Wood, the finance director, admitted taking $73,500 and faces up to 18-months in prison. [Washington Post 07/24/98]

TEAMSTERS
Rerun Election Funds Still Up in the Air
In the hour-by-hour saga over how the Teamsters' rerun election will be funded, the latest twist on Jul. 23 came from Senate Appropriations Committee Chairman Ted Stevens (R-AK). Stevens, over Subcommittee Chairman Judd Gregg's (R-NH) objections, endorsed a Justice Department proposal, called by some "the least lousy choice," that has the taxpayers paying about half of the $8.6 million estimated rerun costs. This comes after the U.S. District Judge David N. Edelstein's multiple deadlines for Justice to secure funding have passed, and after the Teamsters, emboldened by a favorable U.S. Appeals Court ruling, have said they will contribute no more than $1 million towards the rerun. If there is no resolution, Edelstein has no choice but to allow the Teamster to conduct an unsupervised election. This entire sad situation is due to Ron Carey's 1996 campaign's $538,100 money-laundering schemes. [BNA Daily Labor Report 07/24/98]

Libel Suit Against Teamsters Continues
On Jul. 22, the GA Court of Appeals reinstated libel claims by Overnite Transportation and 3 managers against one of America's most corrupt unions, Int'l. Brotherhood of Teamsters, as well as Teamsters Local 728, the AFL-CIO and several union bosses. Overturning summary judgment for the union defendants, the appeals court held that a jury could determine if the unions acted with actual malice in publishing fliers that falsely suggested the managers were indicted on criminal charges. The suit was sparked by 3 fliers distributed by Teamsters to several hundred Overnite employees during an Atlanta organizing drive. [BNA Daily Labor Report 07/23/98]

AUTO WORKERS (UAW)
UAW Settles Racial Harassment Suit for $75K
St. Louis United Auto Workers Local 25 agreed on Jul. 16 to settle a lawsuit brought by the Equal Employment Opportunity Commission for $75,000. The suit contended that the UAW failed to stop "severe and pervasive" harassment of 3 black General Motors supervisors by now-former union boss Robert Wilson in the period 1992-94. The EEOC's statement called it a "landmark case" and said it was "the first to hold that a federal employment discrimination statute prohibits unions from allowing their officers to racially or sexually harass company managers." [BNA Daily Labor Report 07/21/98]

AFL-CIO
Election Fraud Case Stays Secret
A KY judge rejected prosecutors' bid on Jul. 13 to release secret grand-jury testimony about Gov. Paul Patton's (D) 1995 campaign, the AFL-CIO and other union groups' alleged effort to circumvent the spending limit candidates adopt in return for taxpayer financing under an ill-designed law limiting campaign contributions and free speech. Three of the four unnamed witnesses from AFL-CIO HQ in Washington objected to the release of jury material and have refused to be interviewed by local law enforcement. The ruling complicates a case entangled with legal issues, and the Registry of Election Finance cannot use grand jury evidence in its "most important case ever." The ruling's immediate impact is that the grand jury will meet to consider indictments of campaign and union officials sooner than expected. The grand jury is scheduled to begin that process today. Larry Forgy (R), who narrowly lost to Patton, said, "I believe the grand jury is the only organization now that is in a position to unravel this." [Louisville Courier-Journal 07/14/98 & 07/17/98]

COMMUNICATION WORKERS (CWA)
Funding the WorldCom-MCI Foes?
On Jul. 15, the Justice Department approved WorldCom's acquisition of MCI over the protests of rivals, unions and left-wing activists. The merger has one more regulatory hurdle: a "public interest review" by the Federal Communications Commission where an alliance of self-interested opponents will put up their strongest fight. In addition to the Communication Workers of America, the AFL-CIO's John J. Sweeney, Jesse Jackson and Ralph Nader have entered the fray. And GTE, hoping to revive its own efforts to acquire MCI, has fought the merger. WorldCom & MCI are largely non-union companies. If this merger is overturned and GTE gets MCI, CWA stands to inherit a hefty amount of defenseless workers ripe for unionizing.

Evidence is growing that corporate dollars are supporting the union and left-wing activist's PR battle. GTE's PR firm Powell Tate, a D.C. firm which is also working with Nader on an anti-Microsoft campaign, held a Capitol Hill news conference at the posh Hyatt Regency in Mar. featuring Sweeney, Jackson & Nader. Jackson's PUSH/Rainbow Coalition and CWA have undertaken print ad campaigns that have been reportedly supported, in part, by GTE. Also, Jackson's group has created a flashy website for disinformation on the merger. [LA Times 07/16/98, Washington Post 03/13/98 & National Journal 02/07/98]

TRANSIT WORKERS (ATU)
Boss Gets 1 Year for Embezzlement
On Jul. 20, the U.S. District Court in Seattle sentenced Robert Kellas, former-president of Amalgamated Transit Union Local 843 in Bellingham, WA, to a year and a day in prison and ordered him to pay $78,248 in restitution on top of $70,000 already paid. He will also serve 3 years of supervised release after facing a maximum of 5 years in prison. On Apr. 23, Kellas pled guilty to embezzling between $70,000 and $120,000 from Local 843 and the ATU Legislative Council of Washington State. He was president of Local 843 from 1990-97 and secretary-treasurer of the Legislative Council from 1994-97. The U.S. Attorney's Office said Kellas' scheme was simply writing checks to himself from the 2 unions. [Seattle Times 04/24/98 & 07/21/98]

STUDIES
Union Corruption Studies Available
The Public Service Research Council just published 2 timely studies: "Fraud Prevalent in Prevailing Wage Surveys" & "The Case Against Public Sector Unionism & Collective Bargaining." To get a copy call 703-242-3575.

ELECTRICAL WORKERS (IBEW)
Boss Settles Insider-Trading Case
Int'l. Brotherhood of Electrical Workers Local 827 boss, Joseph Penna, agreed Jul. 21 to settle a Securities & Exchange Commission case alleging he made $36,671 in illegal stock profits. Penna's profits from call option contracts came by wrongfully acting on insider information about planned acquisitions by AT&T. He will forfeit the profits; but due to his "inability to pay," no interest will be collected and no penalty assessed. [Dow Jones 07/21/98]

POLICE UNIONS
Union Boss Probed & Expelled
On Jul. 15, the Denver District Attorney's Office confirmed that it had opened a criminal investigation into Fraternal Order of Police Lodge 27 President Joe Sanchez. The same day, his union voted 200-35 to recall him and then to expel him. The union boss is accused of embezzling more than $12,000 from union-run bingo games. The union represents 400 members of the Denver Sheriff's Department. [Denver Post 07/16/98]

QUOTABLE QUOTE
"This general strike has been a complete success. We achieved our objective of paralyzing the country and [we] established a historical precedent." -Annie Cruz, President of the leftist Committee of Labor Organizations (CAOS) and member of the Independent Brotherhood of Telephone Employees, on the recent union terrorism in Puerto Rico. [InterPress 07/09/98]

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ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:

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PROFESSIONAL SPORTS
Disgraced NHL Boss' Restitution to go to Defrauded Players
Announced Jul. 16, the $1 million (Canadian) in restitution paid by the founder of the National Hockey League Players' Association, R. Alan Eagleson, will be divided among 1,400 players harmed by his embezzlement schemes. On Jan. 6, the NHL union boss pled guilty in U.S. District Court in Boston to 3 counts of fraud and theft thereby avoiding prosecution on 32 counts which included stealing from players' pension funds and insurance premiums, as well as cheating players out of disability money. The next day, he pled guilty in a Canadian court to 3 counts of fraud for skimming advertising money for tournaments and other hockey entities. On top of the restitution, he was sentenced to 18 months in prison in Canada, but was released Jul. 6 after serving only 6 months. [Boston Globe 01/06/98 & Toronto Star 07/17/98]

TEACHERS
Probe of CA Teachers Association Concludes
San Bernardino Co., CA District Attorney's Office's investigation into embezzlement schemes involving local teachers unions concluded on Jul. 8, when San Bernardino Co. Superior Court sentenced Nancy Hooper to 180 days of electronic surveillance. Hooper had pled guilty to 8 counts of grand theft embezzlement and 1 count of receiving stolen property. Hooper stole more than $36,000 from the Fontana Teachers Association's checking account for her personal use. The former Fontana City Councilwoman was also ordered to pay $11,000 in restitution, which is on top of $22,000 already paid. She will also pay the $400 monthly surveillance cost.

This comes less than a month after a Rialto, CA teachers union official was sentenced to 28 months in prison for embezzling about $110,000 from the Rialto Educators Association and Citrus Belt UniServ which oversees several area teachers unions including Fontana Teachers Association. Mary Jane Bronson pleaded guilty to 2 counts of grand theft embezzlement on May 12 and was sentenced Jun. 12. Bronson too took the money from union coffers for personal use. She was ordered to pay $106,769 in restitution. The Rialto union has implemented new safeguards attempting to prevent similar crimes, but as a union offical adeptly commented, "But it always seems as though people can find away to steal money [from a union] if they really want to." [Riverside Press-Enterprise 05/13/98, 06/13/98 & 07/09/98]

TEAMSTERS
Dissention in the Teamsters Ranks in A-B Strike Vote
Some Teamsters are angry at the way their union is handling negotiations with Anheuser-Busch (A-B) and have successfully delayed the counting of votes on the latest strike proposal. The ballots mailed to 8,000 Teamsters were supposed to be counted on Jul. 15, but the challenges delayed the mailing of ballots and pushed back the count to Jul. 30. Bosses at 8 of the 16 locals that represent the A-B workers asked the Teamsters to call off the vote. The opponents said they were confused about what they were voting on because of additional proposals. But the Teamsters systematically rejected all the opponents' challenges. Officers of the Baldwinsville, NY and Williamsburg, VA locals hoped the Teamsters would reconsider its decision; otherwise, court action is possible according to Steve Richmond, a member of the Baldwinsville union's negotiating team. He said that federal law guarantees workers the right to an "informed vote" in such situations. He said there hasn't been time for the membership to fully debate the offer on the table. [St. Louis Post-Dispatch 07/12/98]

Teamsters Loose in Phoenix
The Teamsters, one of America's most corrupt unions, suffered yet another organizing loss when it pulled its petition to organize Phoenix's St. Joseph's Hospital & Medical Center on Jul. 20. The action canceled an election scheduled for Jul. 23. The obvious conclusion: the Teamsters' 17-month campaign was a failure and that a majority of St. Joe's employees would have chosen freedom by voting against unionization. Because the Teamsters withdrew the petition, St. Joe's can enjoy a 6-month moratorium on union organizing. [Arizona Republic 07/21/98]

Teamsters Plan National Rally Against UPS
The Teamsters is planning rallies against United Parcel Service around the country on Jul. 31 over propaganda that UPS has failed to create full-time positions it promised in return for an end to last year's debilitating strike. However, UPS stated the jobs are contingent on recovering from strike-hit shipping levels, and UPS remains 4% behind its pre-strike volume. "Unfortunately, the Teamsters have done this to themselves," said Norman Black of UPS. [Buffalo News 07/21/98]

GOVERNMENT EMPLOYEES (AFSCME)
Improper Election of Rhode Island Boss
RI's American Federation of State, County & Municipal Employees Council 94 has been ordered to rerun election of top officers because it allegedly failed to ensure a secret-ballot vote. The investigation was sparked by self-styled dissident Linda C. Riendeau who lost to incumbent union boss J. Thomas Chellel at the Apr. convention. Chellel has run Council 94 since 1979. AFSCME's judicial panel in Washington questioned whether 71 delegates to the convention, who voted on behalf of 8,000 union members, were able to vote by secret ballot. The panel was also troubled by a plan to change the formula for determining the size of Council 94's executive board which the panel said was improperly adopted and didn't allow Riendeau a chance to organize her own board slate. Announced Jul. 10, the rerun will be Aug. 12. [Providence Journal-Bulletin 07/09/98 & 07/11/98]

Lazy Unions In Springfield, IL
Poor work habits by union employees in the Springfield, IL Department of Public Works (SDPW) have been said to be contributing to slow pickup of branches knocked down by recent storms. Ward 5 Alderman Bob Vose said on Jul. 20, "I've complained and complained and complained, and everybody's turned their head . . . (and) looked the other way. This is not right. We're not getting the work done." Based on what he's been told by constituents and whistle-blowers and what he's observed on his own, Vose said, some employees take 90-minute or even two-hour lunches and crews sometimes don't get to their first job sites until as much as two hours after their shifts start. Vose said he met with SDPW officials about the problem several months ago. But he doesn't believe the problem has been adequately addressed. Most are workers in question are members of American Federation of State, County and Municipal Employees Local 3417. [State Journal Register 07/21/98]

1998 ELECTIONS
AFL-CIO's Candidate Evades Sanctions
Gubernatorial candidate Glenn Poshard (D-IL) will not face sanctions for improperly handling contributions from the AFL-CIO. Poshard's campaign "acknowledged it failed to properly report nearly $109,000 in advertising on its behalf by the AFL-CIO," according to State Board of Elections (SBE) documents released Jul. 16. Under an agreement with the IL Republican Party, which filed the complaint, and accepted, by the SBE, Poshard's campaign will not be punished as long as it doesn't repeat the violation. [Chicago Daily Herald 07/17/98]

AFL-CIO Attack Ads Roll Again
In a preview of their preferred plan of attack against Republicans, the militant and corrupt Sweeney-Trumka AFL-CIO has started another irresponsible nationwide television campaign. The union ads attack Republicans on the HMO reform/patients rights issue, wrongfully distorting Republican proposals. According to the National Republican Congressional Committee, the union ads are running in at least 9 media markets including Birmingham, Louisville and Boise - very targeted selections. The ads were anticipated to run Jul. 15-21 with additions and extensions likely.

SERVICE EMPLOYEES (SEIU)
KC School District Wrongfully Gouged on Union Overtime
An audit of 1996-97 overtime pay found some Kansas City School District union workers got overtime they didn't work and others got overtime no one authorized. Some claimed more than 100 hours a week and in many cases no documentation was provided to support the overtime claimed. "This isn't just sloppiness. I think this is criminal in some cases... There has to be some accountability. We've suspected for years there's fraud going on in overtime," said board member Lance Loewenstein. No legal action or criminal investigation has been announced at this time. Auditors also found that excessive overtime costs are due to high levels of absenteeism among custodians, and they recommended hiring of temporary employees or out-sourcing the work to a private firm. But, not surprisingly, Service Employees International Union Local 12 President Louis Byrd blasted any idea of private firms. [KC Star 07/17/98]

FOOD & COMMERCIAL WORKERS (UFCW)
MD Senators Bought With $150,000 from UFCW & Others
On Jul. 22, NLPC blasted MD Senators Barbara A. Mikulski (D) and Paul S. Sarbanes (D) for becoming mouth-pieces of the United Food & Commercial Workers (UFCW) in the fight against the Giant Foods and Royal Ahold merger. Mikulski & Sarbanes have taken $153,700 in political action committee (PAC) contributions since the 1980 elections from union organizations which have a vested interest in Giant Foods. "It should be no surprise why Mikulski & Sarbanes entered the fray on the side of the unions," said NLPC Chairman Ken Boehm. "They've been bought and paid for with union PAC money. When union bosses crack the whip, the politicians shamelessly obey -- especially when tens of thousands of dollars are involved."
 
UFCW Local 27 President Buddy Mays issued a media released on Jul. 14, in which he accused Royal Ahold of secretly targeting only unionized Giant stores for divestiture as a way of satisfying possible Federal Trade Commission (FTC) concerns about the merger. On Jul. 15, Mikulski & Sarbanes sent a letter to the FTC opposing the possible divestiture due to "existing labor contracts" and related issues. In addition to the UFCW, one of America's most corrupt and scandal-ridden unions, the Teamsters, is the second major union involved in Giant Foods. Both the UFCW and the Teamsters are members of the AFL-CIO.

According to Federal Election Commission (FEC) records, since the 1980 elections Sen. Mikulski has received $34,650 from UFCW's PAC, $27,100 from the Teamsters' PAC and $19,000 from the AFL-CIO's PAC for a total of $80,750. In the same period, Sen. Sarbanes has received $27,100 from UFCW's PAC, $24,500 from the Teamsters' PAC and $21,350 from the AFL-CIO's PAC for a total of $72,950. These totals DO NOT include soft money contributions from these union organizations, nor do they include contributions from union bosses as individuals. They also don't include any other "political" activities that are not required to be reported to the FEC. The totals reflect the most current FEC information on the 1998 cycle.

TEXTILE EMPLOYEES (UNITE)
Hoekstra Victorious in Obtaining UNITE Records
On Jul. 15, Rep. Peter Hoekstra (R-MI) finally got the documents from the Mademoiselle Knitwear Chapter 11 bankruptcy case. Hoekstra's committee is investigating how well workers are protected under current labor law. The documents contain information about liquidated damage payments made by Liz Claiborne, former Mademoiselle customer, to the Union of Needletrades, Industrial & Textiles Employees. UNITE initially contested Hoekstra subpoenas for the records which have a confidentiality seal imposed by bankruptcy judge. UNITE agreed to allow Mademoiselle to turn over the documents after 2 weeks of negotiations with Hoekstra's staff and after court approval on Jul. 13. Liquidated damages are a long-standing feature of apparel union contracts. They are penalties paid by apparel manufacturers when they violate union contracts by using nonunion producers. Mademoiselle has claimed in a lawsuit against Claiborne and UNITE that the charges represented a "bribe" so that Claiborne could get out of obligations to provide work to Mademoiselle. [Capital Cities Media 07/14/98]

UNION DUES
House Rejects Paxon Union Dues Amendment
In blow against union accountability, the U.S. House of Representatives voted 248-150, according Majority Whip Tom Delay (R-TX), against Rep. Bill Paxon's (R-NY) amendment requiring unions to report the amounts spent on political activities. The measure also would have required these reports posted on the internet for rank-and-file union members and the public to view. This amendment was part of the debate on the Shays-Meehan campaign regulation bill
that aims to restrict free speech.

All back issues of the Union Corruption Update can be viewed at NLPC's website (www.nlpc.org). Also available is a union by union index of all Union Corruption Update articles.

If you have ideas or suggestions for future editions of Union Corruption Update , please email NLPC at nlpc@nlpc.org. Thank you.

Union Corruption Update is part of NLPC's Organized Labor Accountability Project which is investigating and exposing corruption and extremism in the Teamsters, LIUNA, AFL-CIO and many other union organizations. NLPC is a nonpartisan, nonprofit foundation promoting ethics and accountability in government through research, education and legal action.

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