GOVERNMENT EMPLOYEES (AFSCME)
New York Explodes with Dist. Council 37 Scandal News
Numerous union corruption scandals surrounding Am. Fed. of State, County
& Municipal Employees Dist. Council 37 broke in the last two weeks.
Here are some highlights:
McEntee Puts DC 37 Under Administratorship
National AFSCME president Gerald W. McEntee placed all of DC 37 (56
locals) under an administratorship Nov. 30 due to growing allegations of
corruption. Top McEntee lieutenant, Lee Saunders, was made DC 37 administrator.
DC 37 Exec. Director Stanley W. Hill, widely alleged to be part of the
corruption, took a voluntary, unpaid leave of absence. Numerous other bosses
have step-aside or resigned with some getting cushy compensation packages.
All 56 locals will be audited. AFSCME intends to share any findings of
corruption with Manhattan Dist. Attorney Robert M. Morgenthau who has had
an on-going criminal investigation into DC 37 for several months. [N.Y.
Times 11/30 & 12/8/98; BNA 12/1/98]
McEntee has Ethics Questions of His Own
Via a letter-to-the-editor in the Dec. 4 Wall Street Journal
and a Dec. 1 Newsday article, NLPC Chairman Ken Boehm blasted McEntee
his hypocrisy in the DC 37 matter. Just last year McEntee was linked to
the money-laundering scam that brought down ex-Teamsters boss Ron Carey.
On Nov. 17, 1997, Carey was disqualified from running for reelection based
the findings of court-appointed monitor that over $538,000 was illegally
funneled into Carey's 1996 campaign. Those same court documents implicated
McEntee. The scheme began with Carey-campaign aides obtaining a $50,000
pledge from AFSCME organizing director Paul Booth. Union election rules
prohibit officials of unions other than the Teamsters from contributing
or soliciting funds for Teamsters candidates. Booth came through with $27,100.
The court documents state that $20,000 of it was raised, in cash, from
McEntee. Reportedly, McEntee solicited the cash from a union vendor. The
documents term the scheme a "clear contravention of the Election Rules."
(Chart of Scheme)
McEntee hires Cherkasky's P.I. Firm
As part of the DC 37 probe, McEntee hired the private investigation
firm, Kroll-O'Gara Co. (NASDAQ: KROG), to examine the corruption involved
with vote-tampering in the ratification of DC 37's contract with N.Y.C.
An interesting, and unreported, aside to this story is that Kroll is the
firm of Michael G. Cherkasky, the current Teamsters Election Officer. This
is a troubling nexus given McEntee's ties to the Teamsters money-laundering
scandal.
Dissidents File RICO Suit over Vote-Fraud Allegations
Two presidents of dissident locals within DC 37 filed a federal RICO
suit Nov. 30 against DC 37 bosses, N.Y. Mayor Rudolph W. Giuliani
(R) and others for failing over allegations of fraud in a 1995-96 contract
ratification vote for city workers. The suit also alleges kickback schemes
and election fraud within DC 37. The suit seeks appointment of a court-appointed
independent monitor over DC 37 implying that the dissidents have little
faith in McEntee's administratorship. They seek treble damages to compensate
members for the "gross violation of their rights." [N.Y. Times 11/30/98
& BNA 12/1/98]
FBI Investigating Mob Ties in DC 37
The FBI is reportedly has begun investigating allegations of death
threats and decades of organized-crime influence in DC 37. FBI agents reportedly
interviewed DC 37 dissident Mark Rosenthal Dec. 4 about William "Wild Bill"
Cutolo, a former Colombo family capo. Cutolo was acquitted in 1994 of killing
of an ally of an enemy family faction and of conspiring to kill other rivals.
Allegedly, Cutolo was often seen roaming the halls of DC 37 collecting
for "charities" in which the funds raised often didn't reach researchers
or people suffering from diseases. [N.Y. Post 12/6/98]
TEAMSTERS
Hoffa: End Gov't Supervision; Carey Disgraced Union
James P. Hoffa won 55% of the vote in a 3-way rerun election for the
presidency of the Teamsters. At his Dec. 7 press conference, Hoffa said
he wants to end the government supervision of the Teamsters that started
in 1989. He said "a lot of the work of the government has been done." When
ask if ex-president Ron Carey did anything positive for the union, Hoffa
said "I guess he did. But, you know, if you look at a union where we end
up with him being accused, and him and a major part of his administration
accused of embezzling $875,000 and really bringing disgrace to our union,
it's hard to say that whatever he did was overshadowed by his embezzlement
and his criminal behavior. And it certainly puts a cast on our union that
the so-called reformer, the darling of the media, turned out to be the
person that embezzled that large sum of money. And also many of the people
that were on his slate or involved with him either have pled guilty or
are in trouble with the law."
Carey Fundraiser, Blitz, fined $2K
Charles Blitz, liberal campaign fundraiser, was sentenced Dec. 2 to
two years probation and fined $2,000. Blitz pled guilty Aug. 17 in U.S.
Dist. Court to lying to a court-appointed monitor about the money-laundering
schemes that ruined ex-Teamsters president Ron Carey. Blitz was the fourth
to plead guilty but the first to be sentenced in the case. Blitz faced
5 years in prison and a $250,000 fine. [BNA 12/3/98]
According to court records, the scheme, of which Blitz was a part, illegally raised $110,000 and $75,000 for "Teamsters for a Corruption Free Union" from the liberal Citizen Action and Project Vote, respectively. In return, the Teamsters "donated" $475,000 to Citizen Action and $175,000 to Project Vote. An additional $85,000 to the Nat. Cou. of Senior Citizens garnered $42,500 for Carey. The $227,500 covered Carey's direct mail expenses. (Chart of Scheme)
AFL-CIO
Kentucky AFL-CIO in Melt-Down
The financial chaos of the Kentucky AFL-CIO was called "the worst"
of any state operation for more than 25 years by the national AFL-CIO's
Laurence Gold. This after a Dec. 4 report by AFL-CIO hearing officer William
George that said there is "no question" that the Ky. AFL-CIO has been "mismanaged
for years," and that the Ky. bosses allowed a "longstanding embezzlement
scheme to operate." George's probe resulted from follows: 1) complaints
about financial irregularities, 2) a Sep. 4 fire, that investigators determined
was arson, that destroyed records at the Ky. AFL-CIO office, and 3) an
Aug. 10 burglary where records were reported stolen. George's report concluded
that national monitors should remain in Ky. indefinitely.
George noted that state and federal criminal authorities have begun investigating the matter. The report focused on Morgan Bayless, the Ky. AFL-CIO's ex-political director, and his late wife, Donna Bayless, the ex-bookkeeper for the Ky. AFL-CIO. Donna was found dead, shot in the head, 5 days after takeover of the Ky. office. Anderson County Coroner said Dec. 4 the cause of death appears to be a suicide, but he will call for an inquest.
George found that since Sep. 1995, Morgan & Donna Bayless received approximately $285,000 over their salaries. The report also raised questions about the lack of audits, misuse of credit cards, auto leases and the sale of low-income housing company. [Courier-Journal 12/5/98]
HOTEL EMPLOYEES (HERE)
Ex-Boss Snags Immunity Deal
Hotel Employees & Restaurant Employees Int'l Union ex-president
Edward T. Hanley won't be criminally prosecuted for any wrongdoing that
may have occurred during his 25-years reign due to a Nov. 30 immunity deal
with the U.S. Justice Dep't. DOJ refused to discuss the deal that reportedly
trumped efforts of U.S. Attorneys in Chicago and Madison, Wis., to bring
criminal indictments against Hanley. One federal official, who requested
anonymity, said the agreement "stinks."
Hanley "retired" on Jul. 31 as a condition of another deal to avoid civil charges brought by HERE's court-appointed monitor Kurt W. Muellenberg. Hanley allegedly ran "ghost Local 77" in Rhinelander, Wis., near his and other union bosses' vacation homes as a way to have vacation costs covered by HERE. Hanley was reportedly shocked to learn his agreement to "retire" wouldn't shield him from criminal prosecution. The boss threatened to back out of the civil deal, but allegedly DOJ's criminal immunity deal satisfied him. Critics say the criminal immunity deal raises many questions about the value of DOJ's reform efforts and what DOJ got in return for the deal. [BNA 12/01/98]
SERVICE EMPLOYEES (SEIU)
Wisconsin Boss Arrested for Battery
Eight union radicals were arrested Dec. 4. for for disorderly conduct
after raiding an employer-rights seminar in Milwaukee. Service Employees
Int'l Union boss Steve Cupery was also arrested for battery. SEIU's target
was a seminar called, "Operating Union-Free in the 21st Century," sponsored
by the Wessels & Pautsch law firm. Union radicals marched outside the
event, but then a security guard and a seminar attorney were punched. Protesters
then attacked the meeting room and read a statement objecting to alternatives
to unionization. Police soon arrived to arrested them. Battery carries
a fine of $330, disorderly conduct $115. [Mil. Journal-Sentinel
12/5/98]
AUTO WORKERS (UAW)
$346K PAC Transfer Violate Law?
The Mich. Chamber of Commerce filed a complaint with state election
officials Dec. 9 alleging that the Mich. United Auto Workers' political
action committee broke state campaign finance laws by accepting $346,000
from UAW's national PAC. The Chamber says the transfer violated the state
requirement that PACs funded by payroll deductions must reaffirm the deduction
with workers making the donation each year. Federal PACs don't have the
same requirements; thus, the transferred funds are deemed "tainted" under
Mich. campaign laws according to the Chamber. "The money should have been
ineligible for use in Michigan elections," said the Chamber's Bob LaBrant.
UAW's PAC could be required to reimburse the money to the national PAC
or pay a fine. [BNA 12/10/98]
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.
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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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