CARPENTERS (UBC)
Buffalo Pension Fund in Ruin, Advisor & Trustees Sued
United Bhd. of Carpenters Local 9's pension fund in Cheektowaga, N.Y.
sued its financial adviser and eight trustees for steering the fund toward
bankruptcy. "The fund is currently in financial ruin," said the complaint
filed in U.S. Dist. Court in Buffalo. The pension fund is borrowing from
future income to pay monthly benefits that average $737.
Seeking unspecified damages, the suit charges mismanagement by current and past trustees and malpractice by The Segal Co., a N.Y. firm that advised the fund for over ten years. Also named in the suit are current fund trustees Daryl Bodewes, George Ferraro and James Biddle Sr., and past trustees Terence L. Bodewes, James Maloney, Vincente Fetes, Ernest Bouchard and Thomas Herr.
Local 9 held a meeting for members about the problem on Feb. 26. "The shame of this whole thing is, the rank-and-file participants are the people who are going to be hurt," said Thomas W. Burke, president of Local 9 and chairman of its pension fund. Burke became head of Local 9 last year and filed the suit in Jan. If the fund is terminated, federal insurance would pay a maximum of $458 a month, less than half what many retirees receive.
The fund paid retirees too much in benefits while collecting too little in contributions. Trustees voted to increase benefits almost every year since 1983, even when income fell short of projections. From 1988 to 1997, the fund's six-figure administrative costs exceeded projections.
An internal probe allegedly found no wrongdoing, Burke said. But some members at the meeting were unconvinced. "I think they schemed it out somehow," Raymond Mastrangelo. His brother Ralph said, "I think [the money] was misused." [Buff. News 2/27/00]
LABORERS (LIUNA)
LIUNA Owes IRS $3 Million
The IRS is demanding the Laborers' Int'l Union of N. Am. pay $2,273,876
for back income taxes from 1987-90 and 1993-96 and $618,510 in penalties.
The IRS says that fees paid to LIUNA by its subordinate Nat'l Postal Mail
Handlers Union constitute taxable business income unrelated to the purpose
for which LIUNA is tax exempt. LIUNA filed a petition in U.S. Tax Court
in Washington Jan. 24 to reverse the IRS decision.
The 50,000 member NPMHU has been a division of LIUNA since 1969. Since 1963, it has operated a government-wide health insurance plan that federal employees may join even if they aren't postal employees. The plan now has 1 million members. To be in the plan, non-postal employees must become NPMHU associate members. They pay dues to locals, but don't have a voice or a vote in union affairs. For each associate member, NPMHU began paying LIUNA a $3.60 fee in 1987 and then $4 in 1992. The IRS says by collecting these fees, LIUNA has engaged in "an activity that constituted a trade or business."
Associate members don't receive conventional union "services and support" from LIUNA; and thus, they're merely members of the health plan. LIUNA claims that the desire to make profits is not present and that the fee furthers LIUNA's tax-exempt purpose. [Non-Profit Times 3/00]
FIREFIGHTERS
Iowa Boss Guilty of $10,000 Theft
David Babcock, ex-boss of the firefighters union in Burlington, Iowa,
pled guilty Mar. 7 to second-degree theft for stealing $10,000 from the
union. He used the funds for personal bills. The crime was uncovered when
a check drawn on a union account bounced. He was treasurer from Nov. 1996
to Nov. 1999, a month before he resigned as fire captain and was arrested.
County Atty. Pat Jackson said it's unlikely Babcock will go to prison if
he repays the money. Sentencing is set for Apr. 3. [Des Moines Reg.
3/8/00]
TEACHERS (NEA)
Ex-Indiana Boss Sentenced for Theft; Repaid $52,000
U.S. Dist. Judge William C. Lee sentenced Stephen Confer, ex-head of
the Ft. Wayne Edu. Ass'n to five months in a halfway house and five months
on home detention for embezzling from the union. He was fined $3,000.
A federal grand jury returned a 20-count indictment against Confer in Apr. 1999. It alleged that while he was treasurer of the Ind. State Teachers Ass'n-Professional Staff Org., he wrote checks to himself totaling more than $37,000 between Aug. 1994 and Oct. 1996. Reportedly, the checks were written to various people and companies, including hotels and attorneys, but were issued to Confer.
Confer repaid over $52,000 to the union as part of a settlement. Although he pled guilty to only one count, the plea agreement said he acknowledges embezzling the money listed in the indictment. He faced between 10 and 16 months in federal prison. Defense atty. Quinton Ellis argued for a low sentence, noting that Confer settled before criminal charges were brought. Ass't U.S. Atty. David Miller said, however, that a settlement was only reached after the union confronted Confer.
Confer was a FWEA director from 1994-96 and was PSO treasurer from 1991-96. He left Ind. to take a similar post with the Clark County Classroom Teachers Ass'n in Las Vegas. He resigned in Jan. 1998 after media reports of the embezzlement. [J.-Gazette (Fort Wayne) 3/4/00]
SERVICE EMPLOYEES (SEIU)
$1 Million Taken from Canadian Locals
According to the Service Employees Int'l Union, over $1 million was
removed from the bank accounts of eight dissident SEIU locals in Canada
days before the locals announced plans to terminate their SEIU affiliation
and join the Canadian Auto Workers. Of that amount, $710,000 was taken
from Local 220 in London, Ontario and hasn't been returned, SEIU Canadian
vice-president Sharleen Stewart said Mar. 7 after disclosing bank statements
and certified checks to the media.
This news is the latest fight in a turf battle between the SEIU and the eight locals that voted Mar. 2 to break from the parent union and join CAW.
Stewart said an accounting firm will launch a "full investigation" into why bulk withdrawals of cash from the eight locals were made between Feb. 17 and Feb. 23 -- a week before an Ontario court ordered the locals into trusteeship.
CAW president Buzz Hargrove blasted SEIU's allegations as a smear campaign against the dissident presidents -- who've since been ousted by SEIU. Hargrove said the money was held in trust and is now being transferred by a Toronto law firm to the SEIU head office in Washington.
Separately, SEIU filed a complaint of union raiding the week of Mar. 6 against Hargrove with the Canadian Labour Congress. A third party will be appointed to handle the raiding charges. [London (Ontario) Free Press 3/8/00]
DEPARTMENT OF LABOR (DOL)
Herman Independent Counsel Wins Indictment
Ralph Lancaster, the independent counsel appointed to investigate Labor
Secretary Alexis Herman, has obtained the first indictment in his nearly
two-year investigation.
A federal grand jury in Washington Feb. 16 indicted Abdul Rahman, a foreign national, for allegedly funneling illegal foreign contributions to the Democratic Party through two U.S. citizens, Vanessa Weaver, a close friend of Herman, and her sister Caryliss Weaver.
The indictment accuses Rahman of providing $150,000 in illegal contributions to the Democrats and causing false campaign finance reports to be filed with the Fed. Election Commission regarding an additional $50,000 in contributions. Court documents indicated that Venessa Weaver may also be indicted soon.
Lancaster sought the indictment now to keep the case against Rahman alive because a statute of limitations was about to expire. The Weavers' attorney tried to keep the Rahman indictment sealed. U.S. Dist. Judge Ellen Segal Huvelle held that there was no legal justification for keeping the indictment secret. Huvelle unsealed the indictment even though Lancaster didn't oppose the motion to seal it.
Lancaster was sworn in as independent counsel in May 1998, shortly after Atty. Gen. Janet Reno asked for a probe of Herman in the wake of charges that she was involved in illegal campaign contributions to the Democratic Nat'l Committee. In Jan. 1998, Laurent Yene, a Cameroon businessman working in the United States, told the Dep't of Justice he gave Herman money in exchange for favors for his clients, including help in obtaining a Fed. Communications Commission license. Herman served as White House public liaison before becoming Labor Secretary. She was DNC staffer from 1989-91.
In addition to seeking an investigation of whether Herman played a role in illegal campaign contributions, Reno asked for a probe of whether she improperly sought to benefit a company in which she had a financial interest while serving as public liaison. The company, Int'l Investments & Business Development, was co-owned by Yene and Vanessa Weaver.
W. Neil Eggleston, the "internal appellate judge" of the failed Laborers Union "internal reform effort," is Herman's attorney in this case. [BNA 3/1/00]
ELECTIONS & POLITICS
Union Soft Money Contributions, July 1999 - Jan. 2000
Corrupt unions have showered Democratic Party committees with soft
money. The Am. Fed'n of State, County & Mun. Employees (AFSCME)
has led the way -- not only among corrupt unions, but it also led among
all soft money givers. This election cycle, AFSCME has already contributed
$1.5 million in soft money.
DNC DSCC
DCCC
AFSCME: $245,000 $300,000
$400,000
CWA: $350,000
--
$200,000
SMW: $150,000
$50,000 $125,354
IBEW: $80,000
$100,000 $125,000
SEIU: $15,000
--
$250,000
UFCW: $45,000
$25,000 $100,000
NEA: $50,000
--
$51,000
NTEU: $40,000
$10,000 $50,000
UBC: --
--
$100,000
AFT: $25,000
$35,000 $35,000
UAW: --
$35,000 $45,000
UNITE: $30,000
--
$25,000
IAM: --
--
$50,000
NALC: --
--
$50,000
IAFF: $40,000
--
--
TWU: --
--
$35,000
Totals: $1,070,000
$555,000 $1,641,354
Source: Soft Money Update, FECInfo - Netivation.com
Abbreviations: DNC: Democratic Nat'l Committee; DSCC: Democratic Senatorial Campaign Committee; DCCC: Democratic Congressional Campaign Committee; CWA: Communications Workers of Am.; SMW: Sheet Metal Workers; IBEW: Int'l Bhd. of Electrical Workers; SEIU: Service Employees Int'l Union; UFCW: United Food & Commercial Workers; NEA: Nat'l Education Ass'n; NTEU: Nat'l Treasury Employees Union; UBC: United Bhd. of Carpenters; AFT: Am. Fed'n of Teachers; UAW: United Auto Workers; UNITE: United Needletrades, Industrial & Textile Employees; IAM: Int'l Ass'n of Machinists; NALC: Nat'l Ass'n of Letter Carriers; IAFF: Int'l Ass'n of Fire Fighters; TWU: Transport Workers Union.
- - - - - -
ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
- - - - - -
GOVERNMENT EMPLOYEES (AFSCME)
Minnesota Boss Embezzled $21,000
In the wake of the Am. Fed'n of State, County & Mun. Employees'
$4.6 million union embezzlement and corruption report uncovered by the
N.Y. Times in Jan., some details of a embezzlement scheme in Minn. have
come to light. In 1998, it was discovered that an unnamed "local
rep." of AFSCME Local 83 in Duluth, Minn. "help[ed] herself to $21,000
of the local's money," said Peter Benner, executive director of AFSCME
Dist. Council 6 in Minn. The boss was removed and the investigation
was turned over to the St. Louis County sheriff according to Mary Theurer,
executive director of AFSCME Dist. Council 96 in Minn. "We try to
have safeguards in place, have two people sign off on checks, and sometimes
they're still able to get by," said Theurer. No further information
is available. [Star-Trib. (Minneapolis) 1/22/00; Duluth News-Trib. 1/23/00]
Study Uncovers AFSCME's Secret: Putting Politics First
The minds and matters behind the muscles of the Am. Fed'n of State,
County & Mun. Employees have been examined in detail in a report released
Mar. 6 by the Nat'l Taxpayers Union Fdn. "AFSCME lobbies on a wide array
of issues - from opposing reform of welfare and Social Security to supporting
higher taxes -- that make the group a natural adversary of taxpayers and
those concerned with limiting the role of government in the everyday lives
of citizens," said study author and NTUF Director of Programs Mark Schmidt.
"While every union has a right to be politically active, members and taxpayers
alike have a right to know the costs to our economy and electoral process."
Among Schmidt's findings:
"With new technologies and market forces changing the way public services are delivered, America is at a crossroads," Schmidt concluded. "Our system can either become one held hostage by indifferent public employee union leaders, or it can encourage efforts to streamline costs and foster competition that ultimately benefits everyone. The path working Americans choose will determine the level of taxes we all pay in the 21st Century, as well as the health of our democratic system."
The NTUF Policy Paper, The AFSCME Government Union: Yesterday's Solutions to Tomorrow's Problems, by Mark Schmidt with Paul Gessing, is available at www.ntu.org.
SERVICE EMPLOYEES (SEIU)
Los Angeles Local Opposes Driver Safety Reform
Despite a series of incidents involving L.A. city truck drivers, including
a fatal accident that last month resulted in a record $19-million settlement,
Service Employees Int'l Union Local 347 is opposing city officials' calls
for a review of driver safety and concerns that the city isn't doing enough
to protect the public. Of the 2,600 city truck drivers, 113 have been allowed
to operate the vehicles in the last three years even though they had failed
drug tests or lost the right to drive their personal vehicles. The issue
of fatigue caused by significant amounts of overtime has also been raised.
Investigators said fatigue appeared to be a factor in the fatal truck accident
that resulted in the $19-million payout.
In calling for a review of city policies and practices, City Councilman Joel Wach said he is alarmed by the rising tide of lawsuit settlements and judgments involving accidents. Last year, before the record personal injury settlement, the city paid $19.3 million in judgments and settlements involving all vehicle crashes, up from $11.2 million the year before. For Wachs, the big issue is a city policy that allows truck drivers back on the road after twice failing drug or alcohol tests. A total of 95 city drivers were returned to their jobs after testing positive at least once in the last three years for drugs or alcohol, according to city records. Of the 42 who failed a second test in that time, 23 are back on the job.
To get back to work after failing a drug test, a driver must serve a suspension, pass a retest and face additional random testing. The problem, some city officials acknowledge, is a policy that generally gives drivers until a third positive drug or alcohol test before they face possible removal. "They get three cracks at the apple in the city," said Drew Sones, assistant director of the city's Sanitation Bureau. "That's not my policy. I think three is too much. Zero tolerance is what I would like to see, but these drivers have a union and they negotiated that." Officials said the practice has been to follow the union contract, which calls for leniency after the first infraction when there has been no other misconduct.
"It seems to me that our policy is far too liberal and the stakes are far too high: people's lives," Wachs said. "I don't think you ought to be able to get three chances."
Local 347 boss, Julie Butcher, said the practice of giving drivers second and third chances is humane. "I think it's absolutely supportive of the highest levels of public safety," she said. "The only way they can get back to work is if they are clean."
In contrast, the Cal. Dep't of Transportation automatically fires drivers after a second positive drug test, and the L.A. Unified School Dist. fires drivers after one positive test. Caltrans personnel officer Dave Brubaker and union director Ron Glick, who represents Caltrans drivers, both said the state policy is reasonable, and questioned whether the city was too lenient. "As a union, we don't want anyone out driving trucks on drugs," Glick said, calling the city's practice "strange. It's unusual." [L.A. Times 2/24/00]
TEACHERS / UNION DUES
California Professors File Union Dues Suit
Three Cal. State Univ. professors sued the Cal. Faculty Ass'n and the
state Feb. 24 in the second federal class
action aimed at striking down a new state law requiring collection
of agency fees from nonmembers represented by the union. The suit against
the CFA, State Controller Kathleen Connell, and Cal. Public Employee Relations
Bd Chairman David M. Caffrey alleges that a bill signed into law Oct. 10,
1999 is unconstitutional on several grounds. The law allows collection
of union agency fees from nonmember, union-represented employees of CSU
and the Univ. of Cal. system for the first time. The Nat'l Right to Work
Fdn. is representing the plaintiffs.
According to the complaint, the law illegally allows CFA to spend agency fees on nonrepresentational activities such as lobbying and political activities. Use of agency fees for lobbying is a violation of the First Amendment, as established in the U.S. Supreme Court's decision in Lehnert v. Ferris Faculty Ass'n. In addition, the law requires CSU employees to pay agency fees without first giving them the opportunity to negotiate the fees with the union, and requires agency-fee payers to pay the costs of a statewide election if they want to attempt to rescind the fee collection. These provisions violate the equal protection clause of the Fourteenth Amendment of the U.S. Constitution, because no other state employees are subject to them, the complaint alleges. The three named plaintiffs, all CSU professors, are seeking class certification on behalf of 14,000 professors who are represented by CFA but are not members of the union. [BNA 2/28/00]
TEAMSTERS (IBT) / UNION DUES
California Local Loses Union Dues Suit
Int'l Bhd. of Teamsters Local 166 in Riverside, Cal., failed to provide
employees covered by a union security clause with adequate information
for them to decide whether to decline union membership and object to the
amount of agency fees charged to nonmembers, the D.C. Circuit Court of
Appeals ruled Feb. 22. Overruling a Mar. 1999 Nat'l Labor Relations Bd.
decision, the federal appeals court found inadequate the local's provision
to objectors of a one-page list of 19 general categories of expenditures
identifying the amount and percentage of each category chargeable to nonmembers.
The court also ruled that Local 166 must explain how the portion of money
paid to its affiliates that was charged to nonmembers was spent.
Additionally, the court decided that the local must inform new employees and nonmembers who pay full dues about the precise lower amount they would be entitled to pay if they exercised their rights under Communications Workers of America v. Beck and objected to paying for expenditures unrelated to representational activities.
Overruling NLRB on this point, the appeals court found that this result was required by its earlier decision in Abrams v. Communications Workers of America, which held that unions must inform potential objectors about the percentage of expenditures chargeable to objecting nonmembers.
Section 8(a)(3) of the Nat'l Labor Relations Act permits unions to negotiate union security clauses allowing them to collect dues from all members of the bargaining unit, including those who decline to become union members. But the Supreme Court in Beck held that employees are not required to pay for union activities not germane to collective bargaining, contract administration, and grievance adjustment. The Supreme Court held in Chicago Teachers Union, Local 1 v. Hudson that potential objectors must be given "sufficient information to gauge the propriety of the union's fee." In Abrams, the D.C. Circuit extended the same requirement to unions representing private sector employees and specifically ruled that new employees were entitled to the same notice.
Robert Penrod, Nadine Penrod and Clement Wierzbicki, employees of DynCorp Support Services Operations, decided to resign their Local 166 membership and exercise their Beck rights. A fourth employee, John Burnham, informed the union shortly after he was hired by DynCorp that he did not want to join the union. The four, represented by the Nat'l Right to Work Legal Defense Fdn, filed unfair labor practice charges against Local 166 for failure to inform them about their Beck rights. Settling the charges, the union agreed to provide to new employees and nonmembers a written notice describing Beck rights and how to exercise them.
Local 166 then sent a letter to the nonmembers who objected to paying
for nonrepresentational activities, informing them that they owed 93.6%
of the regular dues charged to union members and describing procedures
for
challenging the calculation. Finding the information inadequate,
the four employees renewed their unfair labor practice charges. However,
NLRB decided that the local had complied with its duty of fair representation.
[BNA 2/25/00]
ELECTRICAL WORKERS / MACHINISTS / CARPENTERS
Seattle Electrician Sues Local Unions over Safety
A Puget Sound Naval Shipyard electrician is suing several unions and
their bosses, accusing them of removing him from his job as union safety
officer because he repeatedly complained about safety issues.
Jackie Stanfill began working as an electrician at the Bremerton shipyard in 1982. In 1993, he became a shop steward for the Int'l Bhd. of Electrical Workers. He was eventually assigned full time to union issues at the shipyard as assistant safety chairman for the Bremerton Metal Trades Council. Stanfill complained in 1993 that the shipyard wasn't protecting workers from electrical shock and other injuries. His efforts, he said, were met with opposition from the union.
In 1998, after a worker was killed in an accident, Stanfill says he tried to reform the union. Then, according to his suit, BMTC removed him as assistant safety chairman, and the shipyard then demoted him to a job in which he was responsible for chopping up extension cords.
The lawsuit, which seeks unspecified damages, was filed Mar. 3 in U.S. Dist. Court in Tacoma. Among the defendants is BMTC, an umbrella labor organization that represents 1,900 members at seven local naval facilities. It also negotiates terms and working conditions for most of the 7,700 workers at the shipyard.
BMTC president Tim Gary said Stanfill was removed from both positions because he stopped obeying orders from then-trade council safety chairwoman Amelia Maule. Maule said she clashed with Stanfill because he was obsessed with safety. Stanfill said one of the issues over which he and Maule clashed was whether to involve federal safety officials after an accident in 1996 in which an electrician was shocked by a 440-volt line. Stanfill complained to OSHA, which then criticized the shipyard's handling of electrical safety. Also named as defendants were 11 union officials and some unions associated with BMTC - the Int'l Ass'n of Machinists; IBEW Local 574; IBEW International 9th Dist.; and United Bhd. of Carpenters Local 2317.
The shipyard was not named in the lawsuit, but Stanfill said he filed a complaint about shipyard safety with the the Office of Special Counsel - a presidential agency that investigates whistle-blower complaints. The office is looking into the complaint. [Seattle Times 3/1/00]
Union Corruption Update is made possible by the generous contributions from readers like you. NLPC, P.O. Box 6273, McLean, VA 22106-6273. Thank you.
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 and state-by-state index of all Union Corruption Update articles.
If you have story 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.
Union Corruption Update Article Index (by Union)
Union Corruption Update Article Index (by State)
Organized Labor Accountability Project