SERVICE EMPLOYEES (SEIU)
Boss Took Trip to London with Members' Funds
A former boss of the Service Employees Int'l Union used union members dues for personal trips to Disney World and London. The former head of the SEIU local in Boyton Beach, Fla., Wanda Stimpson, was sentenced Sep. 4 to 5 months in prison for embezzling $120,000 from the union for her vacations. Federal prosecutors said she altered checks to conceal her scheme. The SEIU boss also was sentenced to 5 months of home detention and 2 years of probation. There was no report of restitution. [Palm Beach Post 9/5/98]

$412K a Year Boss Sets Up Defense Fund
Reportedly America's highest-paid union boss, Gus Bevona, who made $412,000 in 1997 as president of N.Y.'s SEIU Local 32B-32J, is in trouble. Despite his salary, Bevona is asking other union bosses to fund his latest legal defense costs. According to his lawyer's recent letter to other bosses, he "is being victimized by a campaign of legal harassment."

The source of harassment? A 28-year member of the local, Carlos Guzman who is fed up with Bevona's hand-picked business agents failing union members. He also criticizes Bevona's salary and the number of Bevona family members on the payroll. Guzman rapidly became Bevona's worst nightmare by using political and legal campaigns in tandem. Despite Bevona's power and union money, he has lost a string of suits to Guzman over the lack of democracy in the union. In one case, Bevona was found guilty by a federal jury of violating Guzman's free-speech rights by hiring private investigators to spy on him. The verdict led to a $100,000 fine against the union. Bevona spent $1.2 million of union members' money in the case and appeal.  Other suits forced the union into contested elections and membership referendums for the first time in decades.

Guzman filed a suit last year demanding that Bevona reimburse the union for $1.2 million spent on the spying case. He also wants Bevona to repay $500,000 the union spent to publish a book "commemorating the history of the union."The book attacked Guzman and was mailed to all 60,000 members. In a separate case, a federal judge held Bevona's book was an illegal campaign expense. U.S. Dist. Judge Robert Patterson has now ordered Bevona not to use SEIU funds to pay the legal costs of fighting the current this recovery suit. That's the reason for Bevona's "Defense Fund." "Heaven forbid Bevona should spend any of his own money," said the Daily News.

The AFL-CIO Central Labor Council in N.Y. has concluded that if Bevona loses and has to pay, other union bosses will suffer. The Council has even filed an amicus brief insisting that Bevona and his board were following their lawyers' advice when hiring the spies, and that they were engaging in free speech when they spent union funds on the book praising Bevona. To hold union bosses personally liable for something the courts later declared illegal, the AFL-CIO bosses claim, would cause "grave consequences to the internal affairs" of other unions.

In the words of the Daily News, "And they're absolutely right. Grave consequences like leaders who are responsible for their actions. Grave consequences like a little more democracy. No wonder Gus and so many other union honchos are worried..." [N.Y. Daily News 9/15/98]

HOTEL & RESTAURANT EMPLOYEES (HERE)
Second Hanley to Resign Over Criminal Charges
The son of Edward T. Hanley, the disgraced former President of the Hotel Employees & Restaurant Employees Int'l Union, has reportedly settled charges of embezzlement and misuse of union funds. Thomas Hanley has resigned as HERE's director of organization and as president of Local 1 in Chicago. Kurt Muellenberg, HERE's monitor under the 1995 consent agreement with the Justice Dep't, confirmed that Hanley's resignation was stipulated under an agreement settling various charges of misconduct. But, Muellenberg refused to give further details until U.S. Dist. Judge Garrett E. Brown has reviewed the agreement.

However, a government source familiar with the agreement told the Bureau of National Affairs that Hanley agreed to relinquish his two positions and pay a $25,000 penalty. But Hanley would be able to retain his HERE membership (thus his pension), and after Aug. 31, 1999, he could participate in HERE without restriction the source said. Hanley's ouster comes a month after his father resigned as general president under similar circumstances (see UCU 1.4 7/27/98). There was no mention of criminal prosecution against either Hanley. But a May 20 statement U.S. Atty. for the Dist. of N.J. noted that charges were pending against union bosses including Thomas Hanley for "embezzlement of union funds and a scheme to defraud the members of the union of money and property." [BNA 9/10/98]

TEAMSTERS
Federal Sting Nabs Corrupt Boss
A Chicago Teamsters boss was indicted Sep. 17 for taking $16,000 in bribes from a mole of an federal investigation called Operation Silver Shovel. The mole, John Christopher, attempted to bribe the boss to overlook his financial obligations to Local 786. The local's president from 1982-97, Walter Hoff, allegedly accepted two payoffs. Hoff is the 17th defendant charged in the ongoing investigation, but the first defendant named in 10 months, and the first union figure implicated in what has been mostly a public corruption probe.

"Labor union officials are supposed to bargain with employers at arm's length, not with their hands in each other's pockets," said U.S. Atty. Scott Lassar. "The defendant allegedly placed his own financial interest ahead of his
duty to protect the interests of the workers whom he represented."

Hoff is charged with 9 counts of fraud, labor racketeering and tax evasion. Prosecutors said that one payoff came in May 1994 after Christopher walked into Hoff's office, as the union president held up a sign that said "don't talk." As Christopher signed documents, Hoff lifted his hand and rubbed his fingers together, allegedly indicating that he wanted a payoff and silently $8,000 in cash was handed over. In return for the bribes, Hoff reportedly made it look like Christopher's companies were unionized in a way that enabled him to qualify for certain contracts, while avoiding over $70,000 in employee benefit payments. [Chicago Tribune 9/18/98]

Rerun Election Pushed Back
U.S. Dist. Judge David N. Edelstein approved Sep. 14 an new timetable for the Teamsters rerun election. Members will vote Nov. 2-Dec. 3., and counting begins Dec. 3. The reason for the delay: the $538,000 money-laundering schemes employed by the disgraced and expelled president, Ron Carey' campaign. Taxpayers have been forced to contribute $4 million to the rerun's monitoring cost after paying nearly $20 million for the failed monitoring of the 1996 election. The corrupt union reluctantly agreed to pay $2 million. This is $2.6 million short of the $8.6 million originally requested. The savings will come from limiting protest processes and substituting electronic devices for security guards at the ballot counting. [BNA 9/16/98]
 
Texas Boss Gets 51 Months for Theft
A Houston Teamsters boss was sentenced Aug. 31 to 51 months in prison for using union funds for personal items such as underwear and monogrammed luggage. Richard Hammond was also ordered to pay $369,000 in restitution and fined $25,000. The former president and business manager of Local 988 was convicted on 14 counts of theft, embezzlement, fraud and tax evasion. Prosecutors said the boss used a union credit card to buy over $60,000 in personal goods. Many items were bought from catalogs and shipped to his home. He also embezzled $75,000 from a union welfare fund and stole $44,000 from a union political action committee. [Houston Chronicle 9/1/98]

GOVERNMENT EMPLOYEES (AFSCME)
Boss Stole $8K on the Job
According to the Ohio auditor's office, the president of the Am. Fed. of State, County and Municipal Employees Local 3984 owes Ohio $8,217 that she admitted stealing last year while working in the Butler Co. Clerk of Courts office. Lori Lutes, who is also a motor-vehicle dep't bookkeeper, pled guilty in Jul. to "theft in office," a felony.  [Cincinnati Enquirer 9/10/98]

LABORERS (LIUNA)
LIUNA Boss Accused of Harassment
Two female construction workers who alleged that a union boss demanded sex for job assignments have won probable cause findings from the Mass. Comm'n Against Discrimination. Ruth Ann Niemeyer and Pamela J. Corey alleged James M. Porter, LIUNA Local 243 business manager, made the women perform sex in return for work. Winning the Sep. 3 decision was the women's first legal hurdle. Despite complaining about Porter's behavior, LIUNA refused to take action. The alleged actions are quite sick. Niemeyer alleges Porter forced her to perform oral sex at union job sites from 1986-97 for job placements. Shortly after her first job as a LIUNA member, Porter raped her and said "that this was her initiation into the union," she claims. Corey also alleges she was forced to perform oral sex on Porter for jobs from 1993-97. [Worcester Telegram & Gazette 9/4/98]

Baton Rouge Boss Pleads Guilty
A Baton Rouge LIUNA boss pled guilty Sep. 16 to embezzling funds from from Local 1177. The amount Ann D. Page stole remains in dispute. Reportedly, Page originally admitted taking $21,000 from the union's cash receipts, but later reduced it to $4,000. Page faces 5 years in prison and a $250,000 fine. The U.S. Labor Dep't said that an Apr. 1997 audit found a $26,000 shortage. Page has implicated another LIUNA boss in the scheme which ran May-Dec. 1996. [Advocate 9/17/98]

QUOTABLE QUOTE
"Let's stop celebrating Labor Day...I mean, let's stop assuming that the hard-won gains of organized labor in the United States are a done deal."

-Service Employees Int'l Union President Andrew L. Stern in a Sep. 7 Wash. Post Op-Ed. Stern has been implicated in the Teamsters money-laundering scheme which has already brought down Ron Carey. According to court records, Stern illegally pledged to raise $50,000 for Carey's campaign, and a SEIU attorney delivered $16,000.

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

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FOOD & COMMERCIAL WORKERS (UFCW)
Long-time Boss' Expenses Questioned in Cal. Election
The election of president of central California's largest union "has been a cakewalk" for Don Hunsucker for nearly the past two decades, but fellow United Food & Commercial Workers Local 1288 member, Candelaria Arroyo, could change that in this month's election. Arroyo has blasted Hunsucker and his staff for their lavish expense accounts, but stopped short directly criticizing Hunsucker for his $120,000 a year base salary. Hunsucker has been Local 1288's boss for 20 years and has run unchallenged in every election since 1981. "There are some people who have been in office for so long that they've forgotten about the working people," Arroyo said. [Fresno Bee 9/7/98]

SERVICE EMPLOYEES (SEIU)
Boston Bosses Monitored for Unfair Practices
The Service Employees Int'l Union has begun monitoring Boston's SEIU Local 254 following a hearing last spring on allegations that the Local unfairly represented members.  SEIU spokeswoman Jill Gallagher confirmed Sep. 16 that Thomas Balanoff of SEIU's executive board will monitor the Local to make sure it adheres to a number of the hearing report's recommendations. Gallagher declined to reveal the report's contents. The hearing came on a formal complaint brought by a group of maintenance workers who alleged unfair practices. Tensions have increased between the Local's bosses and a members calling themselves Trabajadores Unidos of Workers United, after the workers alleged that the bosses had negotiated contracts that undercut their wages. [Boston Globe 9/17/98]

OPERATING ENGINEERS (IUOE)
$26K Embezzled from Union Welfare Fund
Demonstrating the constant threat union pensions and health-care benefit programs face, a claims supervisor was charged Sep. 4 with embezzling $26,422 from the International Union of Operating Engineers Health and Welfare Fund. Dana Andrew Fernandez Carlisle stole the money from Dec. 1996 to Apr. 1997. According to the federal indictment, checks were issued in the name of a dentist and to Dr. Dana Fernandez for fictitious services and deposited in a bank account he opened, and as a claims supervisor, Carlisle had authority over the funds assets and determined the action on claims.  The embezzler faces 10 years in prison and a $250,000 fine. [Times-Picayune 9/5/98]

LABOR DEPARTMENT (DOL)
$500K Embezzled from Workers' Compensation Fund
A contract employee for the U.S. Labor Dep't and a co-conspirator embezzled over $500,000 from DOL's Division of Longshore & Harbor Workers' Compensation. Jennifer M. Spraitz and Rachel Lea Gratton pled guilty to conspiracy to commit mail fraud and theft from a federal program. The Division administers compensation benefits, medical payments and vocational rehabilitation services to injured workers and is funded by the federal government and private employers. Spraitz created false vocational rehabilitation counselor invoices, making up the names of allegedly injured workers who were supposedly receiving services she listed on the invoices. Spraitz used Gratton's name as the fictitious rehabilitation counselor on the invoices and listed addresses that were under their control. From Oct. 1993 to Nov. 1997, Spraitz submitted 150 fraudulent invoices which generated government checks totaling $524,722. Spraitz retrieved the checks for Gratton who then returned personal checks for half the amount to Spraitz. Both used the funds for personal expenses and to buy cars.  Both face 10 years in prison, a $250,000 fine and an order for complete restitution. [Workers' Compensation Monitor 9/98]

LONGSHOREMEN (ILWU)
Union Sued for Illegal Activities
 Frustrated by over 135 illegal union actions that have continually idled West Coast ports since 1996, the Pacific Maritime Assn. is seeking a court order to prevent dockworkers from violating contract provisions prohibiting strikes and slowdowns. PMA filed suit Sep. 11 in U.S. Dist. Court in L.A. to halt an alarming trend of improper walkouts, demonstrations and stoppages that have cost shippers and consumers tens of millions of dollars.

"Illegal slowdowns, gimmicks and games have become daily fare for the [Int'l] Longshore & Warehouse Union," the suit states. "[M]illions of dollars are lost each week by the ILWU's contemptuous behavior." Named defendants include ILWU, Locals 13 in L.A. and Local 63 in Long Beach. The suit doesn't seek financial damages. Instead, PMA attorneys want a permanent injunction to force ILWU to comply with existing contracts. The suit cites seven major work stoppages that were deemed illegal by arbitration authorities.

The most recent and egregious example came Jul. 10 when ILWU members from Alaska set up roving pickets in the ports of L.A. and Long Beach to protest an Alaskan dispute. Members of Local 13 & 63 honored the picket lines closing terminals for 5 hours. The action was later found to be illegal because the Alaskan dockworkers had no dispute with shippers in L.A. or Long Beach. Then on Jul. 27, the Alaskans returned to L.A. and Long Beach to picket again. Ignoring the earlier ruling, members of Local 13 & 63 refused to cross the picket lines again. "Repeating a pattern that is almost pathological, the unions continue to violate the no-strike clause with impunity, irrespective of arbitration awards that condemn the activity," the lawsuit states. [L.A. Times 9/12/98]

Union Sues to Block Criminal Background Checks
From Fort Lauderdale Sun-Sentinel's Sep. 10 editorial: "Unionized longshoremen are making a serious and disruptive mistake by trying to block criminal background checks at Port Everglades. Local 1526 of [ILWU] had ample time to protest specifics of the security measure before it was agreed on, and evidently said during earlier discussions it wouldn't oppose the checks. Now, late in the process, the union is filing a federal lawsuit. The unacceptable result could well be to enhance and prolong the flow of illegal drugs through the port and into Florida's streets.

This issue is about cocaine, heroin and marijuana in large quantities being smuggled through the Broward County port. For years, the port has been a sieve and therefore a favorite destination of drug smugglers who bring narcotics here from Colombia, usually with stops in the Caribbean.

One reason for the easy path through Port Everglades has been the disturbing number of workers there with criminal histories. This unpleasant fact was pointed out forcefully last year by U.S. Rep. E. Clay Shaw, R-Fort Lauderdale, whose staff checked out a random sample of workers at Port Everglades and the Port of Miami. Not long after Shaw's disclosure, the Port of Miami put criminal background checks into effect, following the example of the Port of New York, which for decades has successfully used that approach. In Broward, though, the County Commission hemmed and hawed for months, then finally reacted to pressure from Shaw and federal anti-drug agencies by passing a series of security measures, including background checks.

These checks are critical to reducing the flow of drugs. In several recent drug busts at the port, many of those arrested were workers who had extensive criminal backgrounds, including narcotics offenses; some were members of Local 1526. Smugglers seek out workers with such backgrounds, knowing they could become confederates and are in an ideal spot to either shepherd drugs through the port or look the other way. Those who work on or near the docks, and in airports as well, are especially vulnerable to smugglers.

The union's lawyer claims he doesn't oppose the idea of background checks, but says the new law is too sweeping. It bars from the docks anyone with a felony conviction in the past five years for drug dealing, smuggling, theft and some other offenses. Why did the union wait until now, when the background checks are getting under way, to object? Questions should have been raised much earlier, when there was a chance to compromise without a lawsuit. Perhaps union leaders don't realize that a lawsuit leaves the public impression their members have something to hide. It's an unfortunate action, and the union's best course is to back off from the lawsuit."

STUDIES
"Epidemic of Union Violence"
A 1973 Supreme Court decision effectively made vandalism, assault and even murder by union officials exempt from federal anti-extortion law, and "the result has been an epidemic of union-related violence," according to a new study from the Cato Institute (www.cato.org). In "Freedom from Union Violence," author David Kendrick traces the history of labor law and union violence during the 20th century, beginning with the notorious case of a former Idaho governor murdered in 1905 by union mine workers who felt he had betrayed them by calling in federal troops during a strike.

In 1946 Congress passed the Hobbs Act, aimed at a wide spectrum of union violence. Among other things, it defined criminal extortion as "the obtaining of property . . . by wrongful use of actual or threatened force, violence or fear [emphasis added]." In using the word "wrongful," Kendrick says, "Congress left a narrow opening through which the U.S. Supreme Court would push a bulldozer in 1973." In its decision in United States v. Enmons, the Court upheld a lower court ruling that three electrical union members indicted for sabotaging a substation and other violence had done nothing illegal because they were pursuing "legitimate" union objectives.

"The Court's misreading of the clear legislative history of the Hobbs Act is incredible," he writes. Kendrick, who is program director at the National Institute for Labor Relations Research, draws on his organization's comprehensive data file to quantify the result. "Since 1975, at least 181 Americans have died as a result of union violence," the data show. "There have also been more than 5,600 assaults, kidnappings, and threats-almost all committed by striking union militants."

Kendrick catalogs many of the most serious instances of union violence since the Enmons decision and reports that despite nearly 9,000 incidents of union-related violence since 1975, there were fewer than 2,000 arrests and only 258 convictions. Research indicates that "barely 3 percent of the violent incidents recorded in the Institute's data file have led to convictions," and thus "thousands of acts of union violence have gone unpunished," the report concludes. "Legislation such as the Freedom from Union Violence Act may be the only way of dealing with the problem."

HOTEL & RESTAURANT EMPLOYEES (HERE)
Union Shutout in Jacob's Field
Food service workers at the Cleveland Indian's Jacob's Field rejected union representation Sep. 11, handing the local union bosses a high-profile defeat. The voting ended just minutes before the start of the Indians's game and a mere 37% of Cleveland Sportservice employees voted to join Local 10 of the Hotel Employees and Restaurant Employees International Union. Sandy Golden, a commissary worker, said, "I don't have any complaints about the way things are now. I feel my wages are fair, and I'm treated respectfully." Historically, HERE is one of America's most corrupt unions, and Cleveland has been the home of some of the most corrupt locals in America. [Plain Dealer 9/12/98]

In addition to the unions and organizations covered in this Union Corruption Update,readers can look forward to news and information on other corrupt and abusive unions in future editions.

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 Updatte,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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