LABORERS (LIUNA)
Pennsylvania Embezzler Took $32,000, Gets Off Easy
Senior U.S. Dist. Judge Gustave Diamond only sentenced Stephanie A.
Smith June 26 to a mere six months of house arrest and three years' probation
for embezzling $32,339 from Laborers'
Int'l Union of N. Am. Local 952 in Kittanning, Pa. The maximum sentence
for a count of union embezzlement is five years in prison and a $250,000
fine. Diamond barred Smith from any union post for five years, but he could
have made it thirteen. There was no report of a fine nor an order of restitution.
[Pitt. Post-Gaz. 6/27/00]
FLINT GLASS WORKERS (AFGWU)
Pennsylvania Boss Gets Year and a Day for $59,000 Theft
U.S. Dist. Judge Donald J. Lee sentenced Emerson
Frederick June 28 to one year and one day in prison for embezzling
about $59,000 from Am. Flint Glass Workers Union Local 555 in New Brighton,
Pa. Frederick, Local 555's ex-financial secretary, was also ordered to
repay more than $36,000 to the local. He pled guilty Mar. 13 to embezzling
funds over a six-year period. Asst. U.S. Atty. Barbara M. Carlin said he
wrote 79 checks from union accounts to himself, made 22 unauthorized withdrawals
from those accounts and failed to deposit union dues. At sentencing, he
presented a $6,000 check to the local and apologized for his theft. [Pitt.
Post-Gaz. 6/29/00]
FOOD WORKERS (UFCW) / PAPERWORKERS (UPIU)
Two Cleveland Bosses Indicted for Embezzlement
U.S. Atty. Emily Sweeney announced the indictment of two Cleveland
union bosses June 28 for embezzlement. She said the cases were unrelated.
Tyrone Parker, ex-secretary of United Food & Commercial Workers Local 838, allegedly embezzled over $12,600 from the local in 1997-99. He also allegedly forged other bosses' signatures on union checks and withdrawal slips and destroyed union checks. He was charged with one count of union embezzlement and three counts of falsification of union records.
Willie E. Woods, ex-president of United Paperworkers Int'l Union Local 1250, allegedly embezzled over $4,300 in 1997-98 by charging the local for bogus hotel expenses and inflating lost time while he served as president. He was charged with one count of union embezzlement, two counts of making false statements and one count of falsification of union records. [Plain Dealer (Cleveland) 6/29/00]
TEAMSTERS (IBT)
Indiana Bosses Charged with $894,000 Diversion
A special panel of Int'l Bhd. of Teamsters officials will convene July
10 to review charges by IBT's Independent Review Bd. that Indiana Teamsters
Joint Council 69 bosses diverted members' dues money to JC69 to fund additional
personal benefits. IRB, in a May report, alleged that $894,865 in local
per capita payments were made to JC69 in 1994-99. The money was allegedly
paid solely as extra benefits for JC69 bosses. IRB recommended that IBT
force JC69 to return the money and put it in trusteeship.
IRB's 32-page report alleges that JC69 bosses devised the scam in 1994 after disgraced ex-IBT president Ron Carey abolished IBT's area conferences (intermediary bodies between joint councils and IBT). JC69 officials arranged to divert an amount equivalent to the per capita payments that previously had gone to the Central Area Conf. to JC69, to be used as an extra severance and pension fund for JC69 bosses. Reportedly, this was in violation of IBT bylaws.
In Jan. 2000, JC69 became aware of IRB's probe, and JC69 president Danny Barton sent a letter to IBT president James P. Hoffa requesting retroactive approval to 1994 of the per capita payments to JC69. Reportedly, Hoffa directed Barton to draft an appropriate amendment to the JC69's bylaws for his signature. But, IRB charged that JC69 took the funds for over five years without appropriate authority: "[R]etroactive approval does not cure the violation."
The far-left Teamsters for a Democratic Union, which zealously backed the corrupt Carey, criticized Hoffa for retroactively approving the per capita tax without questioning the funds' purpose. TDU urged Hoffa to probe other IBT entities where similar hidden perk schemes may exist, suggesting that the Ohio Conf., the Ky.-W.Va. Conf., and the Mo.-Kan. Conf. might require scrutiny. TDU called on Hoffa to "abolish do-nothing Teamsters structures such as [JC69]" and return the funds to members. [BNA 6/30/00]
Detroit Bosses, Hoffa Pal, Accused of Embezzlement
IBT's Independent Review Bd. publicly charged IBT Local 337 president,
Lawrence Brennan, and his top officers June 19 with embezzling union funds
for their own union election campaigns. Brennan is a close friend and ally
of IBT president James P. Hoffa. The charges
coupled with other recent setbacks are widely seen as major blows to Hoffa's
hopes end the Dep't of Justice's eleven-year supervision of the corrupt
union.
IRB's 37-page report also named secretary-treasurer Colonel W. Myers, vice-president Robert F. Holmes, Jr., recording secretary Frank Walker, trustee Richard Gremaud and ex-Trustee Charles Isom. They allegedly voted themselves a pay raise and increased Christmas bonuses for the sole purpose of diverting the money into their reelection campaign. It totaled about $32,000.
IRB also sharply criticized Carlow Scalf, an ex-Local 337 official who handled the reelection money, with failing to keep and maintain proper financial records and even shredding documents after the election. While the board said Scalf's explanations for not keeping records was "unpersuasive and misleading," it did not charge him with wrongdoing. Scalf is now Hoffa's executive assistant.
IRB's charges will now be reviewed by IBT's executive board for a recommendation of a penalty, if any. Given his ties to the local, Hoffa has recused himself from the hearing.
Brennan, who is also president of IBT Jt. Council 43, which oversees all of Mich.'s locals, has been Hoffa's long-time supporter and confidant. When Hoffa first tried to run for IBT president in 1991, he could not because he had not worked as a Teamster. Brennan hired Hoffa, then a Detroit labor lawyer, as an assistant. When Hoffa was elected in 1998, he was Brennan's administrative assistant. [BNA 6/20/00; Det. News 6/21/00]
LABORERS (LIUNA)
Ex-Illinois Boss, Alleged Murderer Dies
James A. DiForti, reputed organized
crime lieutenant and ex-boss of Laborers'
Int'l Union of N. Am. Local 5 in Chicago Hts., died June 6 of undisclosed
causes while awaiting trial in a 1988 murder case. He was accused of killing
William Benham, the owner of B&S Pallet Co., after Benham refused to
repay a $100,000 loan and threatened to tell authorities about DiForti's
alleged mob ties and loan-sharking activities.
A DNA test matched DiForti's blood to a blood trail that was found leading away from the crime scene in 1988, and DiForti was charged with murder in July 1997. The case was stymied until an FBI informant implicated DiForti in the last few years.
At the time of his arrest, DiForti was secretary-treasurer of Local 5. He was one of about a dozen union bosses targeted by a separate federal probe of LIUNA's alleged ties to organized crime. Prosecutors believed the ex $94,000-a-year secretary-treasurer was in charge of handling loans on the street during the 1980s. After resigning from Local 5 in 1997, DiForti was involved in horse-racing while awaiting trial. [Chi. Trib. 6/24/00]
LONGSHOREMEN (ILA)
Florida Boss Implicated in Bribery Case
A criminal complaint claims a shipping company vice-president's contributions
to Tampa union boss Perry C. Harvey, Jr.'s 1996 campaign were actually
bribes. Federal prosecutors said June 22 that it was a classic corruption
case - an under-the-table deal that sold out hundreds of Port of
Tampa dockworkers.
Reportedly, Joseph F. Casella of Harborside Refrigerated Servs., Inc., bribed Harvey, an ex-Tampa city councilman who heads Local 1402 of the Int'l Longshoremen's Ass'n and is also an international vice-president on ILA's executive council. Harvey, once one of Tampa's best-known political figures, was not charged in the case. He was the first black elected to city council in modern times, but left politics after losing a bid for a seat on the Hillsborough County Commission in 1996. The bribes were allegedly disguised as $2,000 worth of contributions to Harvey's county commission campaign.
In return, Harvey allegedly double-crossed union members by agreeing in contract negotiations with Casella to cut such things as pension and vacation benefits paid to the average longshoreman by roughly $2 per hour. Casella was charged with bribery and corruption of a union official. Asst. U.S. Atty Jeffrey DelFuoco said Casella had been arrested in the case before, in Feb. 1999, and this was "rearrest" because Casella had allegedly broken a promise to help in an ongoing investigation of union bribery. When asked about further indictments, U.S. Atty.'s Office spokesman Steve Cole said the case was "an ongoing investigation" and that people should "[s]tay tuned."
Harvey, a former three-term city councilman, figured in a federal investigation of ILA corruption once before, in 1991. He was forced from office after being indicted for allegedly conspiring with two other ILA employees to embezzle $225,000 from the union. Four months later, Harvey was acquitted in the case and reinstated to his city council seat. [Tampa Trib. 6/23/00]
QUOTABLE QUOTE / SERVICE EMPLOYEES (SEIU)
"We fought against Ali Baba and the 40 thieves. Now Ali Baba is gone, but the 40 thieves are still here."
- Carlos Guzman, Serv. Employees Int'l Union Local 32B-32J in N.Y.C. dissent who successfully employed federal labor law to oust corrupt ex-boss Gus Bevona in 1999, accusing SEIU president Andrew L. Stern and others of attempting to manipulate the local's upcoming elections and hand pick the local's new leaders as once Bevona did. Benova and Stern have both succeed AFL-CIO boss John J. Sweeney in their respective union posts. [Daily News (N.Y.) 6/20/00]
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ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
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LABORERS (LIUNA) / ELECTIONS & POLITICS
Criminal Coia's Rehab Helped by Kennedy, Reed
Senators Edward M. Kennedy (D-Mass.)
and Jack Reed (D-R.I.) paid tribute June 15 to felon Arthur
A. Coia, the corrupt ex-boss of the Laborers'
Int'l Union of N. Am. Coia has been dogged by corruption charges
for almost twenty-years, and the Dep't of Justice finally got him earlier
this year when he pled guilty to federal criminal tax fraud and resigned
his union post (with his pension intact). Criminal Coia was one of
four union leaders honored at the dinner commemorating the 20th anniversary
organization calling itself the Institute for Labor Studies & Research.
Kennedy, the top-ranking Democrat on the Senate Labor Committee, reportedly praised a Coia speech but later brushed aside a question about whether he was troubled by honoring a labor leader who pled guilty to a felony, according to the Providence Journal-Bulletin. Reed, who introduced Kennedy, said criminal Coia deserved the recognition because "he's made significant contributions to the labor movement."
Several other Democratic leaders, including R.I. Secretary of State James R. Langevin and fellow U.S. House candidate Kate Coyne-McCoy, also said they were not troubled by the criminal record of Coia.
"It's [the Institute's] choice who they honor," said R.I. Atty. Gen. Sheldon Whitehouse, a ex-U.S. Atty, who attended. "I didn't even know who was being honored tonight. I thought it was Kennedy who was being honored." While a U.S. Atty., Whitehouse forced Coia's ex-lawyer and LIUNA "in-house prosecutor" Robert D. Luskin to forfeit $245,000 in tainted legal fees he had received from convicted money launder Stephen A. Saccoccia.
Others in the labor movement were reportedly troubled by what they viewed as a step in the rehabilitation of a corrupt union boss's reputation.
"It's bad for the union. It's bad for the labor movement to reward the guy," said Ron Nobili, business manager of LIUNA Local 665 in Bridgeport, Conn.
"It's pitiful," said Herman Benson, of the Ass'n for Union Democracy. "I have a high regard for Ted Kennedy but here you have a great liberal Democrat standing side-by-side with a labor leader who has been forced out of his union because of corruption charges."
In his remarks, Coia never mentioned his legal troubles, focusing instead on the need for the unions to form allegiances with elected officials such as Reed and Kennedy and to battle the "right-wingers who hate the poor and the working people."
R.I. Democratic Party Chairman William Lynch excused Coia's conduct: "I don't think you judge someone's lifetime of achievement by what even he would admit was an error in judgment." [Providence Journal-Bulletin 6/16/00]
TEAMSTERS (IBT)
Judge Rejects 2001 Election Rules
U.S. Dist. Judge David N. Edelstein
June 16 rejected rules jointly proposed by the Int'l Bhd. of Teamsters
and the Dep't of Justice for use in IBT's Oct. 2001
election of international officers in Las Vegas. The proposed rules
would have allowed IBT to run its own election largely free of DOJ supervision.
But in a three-page order, Edelstein turned down the rules, saying that
to accept them "would be blasphemous."
IBT and DOJ "have attempted to allure this Court into believing that their program for a supervised election will ensure a free, open, and democratic election. Nothing could be further from the truth," wrote Edelstein.
"The submissions are a farrago of ill advice and misguided, inept, controversial, and confused argots. Their program has the potential for bringing grief, strife, controversy, and corruption into the forum," added Edelstein.
The judge said the election rules used in 1991, 1996, and in the rerun vote in 1998 should apply again next year. "These rules have faithfully enforced the letter and the spirit of the [1989] Consent Decree and are preferable to untested and novel rules that may prove cumbersome and confusing," he said.
IBT spokesman Bret Caldwell said IBT was "dismayed" by Edelstein's decision.
U.S. Atty. Mary Jo White's office tentatively approved the revised rules, subject to final approval by Edelstein. In April, the Dep't of Labor's Office of Labor-Management Standards also approved the rules after making some modifications related to campaign contribution limits and the involvement of independent committees in the election process. [BNA 6/20/00]
This was major blow to IBT president James P. Hoffa's hopes of ending DOJ's supervision of the corrupt union. Hoffa has insisted that IBT is clean and members no longer need an independent appeals process to rectify campaign violations, such as intimidation of voters or illegal donations. To bolster his case, he has set up an anti-corruption program called RISE (Respect, Integrity, Strength, Ethics).
Critics say RISE is little more than a PR stunt that will not clean up the union. "It's an absolute sham," says Ashley McNeeley, a Northwest Airlines flight attendant from Honolulu, who is a leader of far-left Teamsters for a Democratic Union which zealously backed Hoffa's corrupt predecessor Ron Carey.
To head RISE, Hoffa hired ex-federal prosecutor Ed Stier and appointed a 22-member task force to draft a code of conduct for the union. Of those members, 21 belong to Hoffa's executive board or are close associates of his slate. Reportedly, just one member, Ron Teninty, is a supporter of Hoffa's likely opponent next year, Tom Leedham (former Carey backer as well). Teninty made excellent recommendations for the code of conduct: to ban multiple salaries, to require that stewards be elected and to use mail ballots in local union elections (to decrease intimidation). All were rejected.
Instead, the vast majority of the draft code of conduct simply repeats provisions that are already part of federal law (e.g., no union embezzlement). The task force recommended all complaints be heard by appointees of the union president. They also suggested the code should not set maximum salaries for officials, limit multiple salaries, "contain any restrictions on nepotism" or prohibit "no-show jobs." No-show jobs, of course, are illegal. For example, in 1986, ex-IBT boss Jackie Presser was indicted for having ghost employees on the payroll.
Note on the multiple salaries issue: Hoffa has reportedly appointed 82 supporters to various titles that draw an extra salary and pension on top of their existing jobs. Twenty of 22 Hoffa supporters on the executive board take multiple salaries. Campaigning in 1998, Hoffa promised to cap all union officials' salaries, including his own, at $150,000. Today he draws $200,000, and a few dozen other officials make more than $150,000. [In These Times 6/26/00]
Ex-Long Island Boss Order to Pay for Clean-Up
The U.S. Court of Appeals for the Second Circuit on June 14 affirmed
a ruling that Robert Sacco, ex-boss of Int'l Bhd. of Teamsters Local 282
in Lake Success, N.Y., who pled guilty to criminal racketeering charges,
must pay a portion of the cost of the local's monitorship imposed by the
Dep't of Justice. But the court remanded the case to determine the amount
required of the ex-boss who headed the local from 1984 to 1992. The district
court had ordered Sacco to pay 15% of the monitorship costs, or $136,000.
But, the appellate court said that in setting the amount, the lower court
"did not discuss the role of Sacco in comparison to other individuals who
were responsible for corruption in Local 282." The court left open whether
the amount might be increased or decreased from the original sum.
In 1992, DOJ brought suit under the Racketeer Influenced and Corrupt Organizations Act against Sacco and Local 282 bosses, charging them with conspiring to conduct the affairs of the local through a pattern of racketeering activity. In 1994, Sacco pled guilty to the charges and was sentenced to 41 months' imprisonment, three years' supervised release, and was ordered to pay $58,800 in fines and costs. DOJ alleged Sacco was an associate of the Gambino crime family. Between the late 1970s and early 1990s, Sacco and other local bosses allegedly used threats of physical, economic and financial harm, including work stoppages, against New York area construction companies and other employers with which the local had contracts, extorting payments from the companies.
In 1994, DOJ brought a separate civil RICO action against Local 282 and its officers, citing a 25-year history of "systematic infiltration, control and corruption" of the local by the members of the Gambino crime family. In 1995, DOJ, Local 282, and IBT entered into a consent agreement settling the charges. The agreement called for establishment of a monitorship of Local 282 to eliminate corruption within the local. The IBT, with the approval of DOJ and the district court, appointed a trustee and a "corruption officer" for the local. The consent judgment provided that the expenses of the corruption officer, not to exceed $100,000 in the first year and $87,000 per year thereafter, were to be paid from settlement payments made by the Sacco and the other previously convicted officers. The funding was to be augmented periodically by payments from the local.
In 1997, DOJ sought a court order requiring Sacco to pay his share of the funding of the monitorship. The government said the monitorship up to that time had cost $681,000 and that an additional $225,000 in costs were expected before it was scheduled to end in 1999. DOJ had received $209,500 toward the funding of the monitorship from the other RICO defendants and it asked that Sacco be ordered to pay $400,000. Sacco contested the order, arguing that RICO does not permit a civil defendant be required to fund a monitorship and that the remedy was punitive and thus barred by the double jeopardy clause of the Fifth Amendment. But the U.S. Dist. Court for the Eastern Dist. of N.Y. ordered Sacco to pay $136,000 for the monitorship. [BNA 6/26/00]
CARPENTERS (UBC)
Court: Illinois-Iowa Pension Fund's Audit Full of "Fallacies"
Several errors in an audit relied upon by Carpenters' union-sponsored
employee benefit funds were cited by the U.S. Court of Appeals for the
Eighth Circuit June 20 in overruling a U.S. Dist. Court in Iowa's
decision requiring an Iowa construction company to pay delinquent contributions
to the funds. McKenzie Engineering entered collective bargaining agreements
in 1994 with two United Bhd. of Carpenters locals. The bargaining agreements
obligated McKenzie to contribute to the Carpenters Fringe Benefit Funds
of Illinois.
Disputes arose when McKenzie replaced four carpenters on a project with nonunion workers. The Nat'l Labor Relations Bd. held that McKenzie's action violated its agreement with the union. Shortly after this dispute, McKenzie signed a collective bargaining agreement with an Int'l Union of Operating Engineers local and assigned UBC work to IUOE. According to the appeals court, an unfair labor practice charge filed with the NLRB over this assignment has not been resolved.
The funds then hired a certified public accountant to conduct an audit of McKenzie's payroll records and determined that McKenzie owed $49,160 in unpaid contributions. In the funds' action under the Employee Retirement Income Security Act Section 515 to collect the contributions, the U.S. Dist. Court for the Southern Dist. of Iowa granted summary judgment in favor of the funds.
On appeal, McKenzie challenged the union auditors' determination that the company owed contributions "for all hours worked by McKenzie employees that were not reported to any union fringe benefit fund." Finding several faults in the union auditor's determination, the appeals court noted that, during the audit, the funds claimed a right to contributions for all hours worked by employees "regardless of the kind of work they did," and "even if they [were] not participants or beneficiaries of the Funds."
According to the appeals court, "the many fallacies" of UBC funds' calculation of the amount of unpaid contributions included listing "unreported" hours for: work not covered by the pertinent collective bargaining agreement; employees who were members of other craft unions; employees who worked during the relevant collective bargaining agreements period, but who worked on projects not covered by the agreements; and hours worked by IUOE.
As to the hours listed in the audit that were attributable to work performed IUOE, the appeals court noted that some of the work performed during the period was performed by UBC. However, because UBC failed to invoke the jurisdictional dispute procedures included in its bargaining agreement with McKenzie, the funds were not entitled to contributions for work assigned to IUOE. [BNA 6/29/00]
TEAMSTERS (IBT)
Discrimination Suit Against New Jersey Local Proceeds
Dwayne Jackson, a black service worker, can proceed with his claim
that his Int'l Bhd. of Teamsters local aided and abetted the creation of
a racially hostile work environment in violation of New Jersey law by defending
the plaintiff's co-workers in a grievance proceeding stemming from a mock
lynching, the U.S. Dist. Judge Robert F. Kelly ruled June 20. Kelly said
that cases like this one, where a non-union employee attempts to hold a
union liable for alleged discriminatory conduct, are "unique."
Denying summary judgment to IBT Local 676 on Jackson’s claim brought under the N.J. Law Against Discrimination, Kelly found that the facts alleged by the plaintiff could permit a trier of fact to find that the local implicitly gave substantial assistance or encouragement to the creation of a hostile environment. But Kelly rejected Jackson's claim that the union's conduct also violated the federal Civil Rights Act of 1866 because Jackson failed to show that the union intentionally discriminated against him.
In Nov. 1998, Jackson, an employee of T&N Van Service, was grabbed from behind by a white co-worker who forced a noose around his neck and yelled "Skin him!" to two other workers who smiled and laughed. After an investigation by T&N, the workers were suspended, and the company said that it intended to discharge them. The workers asked the union to help them regain their jobs, and the union concluded that the conduct at issue did not warrant their discharge, the court said. As a result of subsequent grievance proceedings, two of the workers were reinstated. Jackson charged that Local 676 violated Section 1981 and the NJLAD in its defense of the co-workers, and in its willingness to tolerate an atmosphere of discrimination by and among its members. [BNA 6/26/00]
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