CARPENTERS / BRICKLAYERS / LABORERS
Massive New York Probe Nabs 11 Union Bosses
The Manhattan Dist. Atty. charged 38
union bosses, contractors and reputed mobsters with bribery, bid-rigging
or other racketeering schemes Sept. 6 that allegedly siphoned millions
from construction projects in the last two years. Reputed boss of the Luchese
crime family, Steven L. Crea, was the leading figure named in the 57-count
indictment. Allegedly, he has played a role in construction racketeering
schemes for decades.
The indictment charged 11 union bosses, including Michael Forde, who heads the Dist. Council of Carpenters in N.Y.C. and the United Bhd. of Carpenters Local 608. Both organizations have a history of mob influence. Forde's father ran the local and was convicted of taking bribes in 1990. Forde and Local 608 business agent Martin Deveraux were charged with taking bribes to allow contract violations. Also, Gerald Woods, the secretary-treasurer and business manager of UBC's N. N.J. Reg'l Council, was indicted for taking bribes to allow contract violations and improperly signing agreements to let N.J. contractors work on N.Y.C. job sites without having to sign contracts with Local 608.
D.A. Robert M. Morgenthau said the racketeering diverted millions to the Luchese family and its partners, corrupt union officials and contractors. Morgenthau said the victims included union workers deprived of jobs by their union bosses; nonunion workers who replaced them and were paid far below union wage and received no benefits; and honest contractors frozen out of the bidding by the mob's corrupt alliance. He explained the scheme as a 5% "mob tax."
Others accused included Santo Lanzafame, the president of Builders & Allied Craftsmen Local 1, which represents bricklayers. He is charged with appointing union stewards at job sites knowing that they would file false union documents to cover up contract violation. Three Local 1 business agents and three shop stewards were also indicted.
Also indicted was Giuseppe Palmieri, a shop steward with Laborers' Int'l Union of N. Am. Local 20, known as the Cement & Concrete Workers. He allegedly participated in a bid-rigging scheme and falsifying union reports on a public school construction project.
Also charged was Joseph Martinelli and his company, the N. Berry Corp. Martinelli has been involved in the construction business for more than three decades, and has been identified as an associate of the Luchese family and of Crea's since 1990, according to FBI reports. The documents show that 10 years ago, Martinelli, a successful contractor, received medical benefits through a Teamsters union local controlled by Crea. Prosecutors also said that in the current case, six organized crime figures or associates were collecting benefits as part of the current schemes. Martinelli was charged with 16 counts of falsifying business records in the first degree, a felony, in the filing of false reports to the Cement & Concrete Workers Dist. Council Benefit Funds.
Strangely, an hour before the crusading Morganthau (who has adeptly prosecuted the AFSCME Dist. Council 37 scandal) announced the sweeping indictments, U.S. Atty. for Manhattan Mary Jo White (who has botched the prosecution of AFL-CIO boss Richard L. Trumka and others connected to the 1996 Teamsters money-laundering scandal) made a similar, but weaker, announcement. Both Morganthau and White tapped Luchese phones for two years and built separate but nearly identical cases of corrupt construction dealings. This is the latest incident in what has been dubbed "The War of the Prosecutors."The two have reportedly been rivals since White took office in 1993. Morgenthau admitted surprise when he heard of White's indictments, which were voted by a federal grand jury Aug. 30 but kept sealed until Sept. 6. Morgenthau found out only when White's media release was waved in the air by one of the scores of reporters he'd summoned to his office.
The rival offices declined to comment on the dueling announcements, but there was a reported flurry of behind-the-scenes finger-pointing. Law-enforcement sources sympathetic to Morgenthau's camp were quick to point out that the D.A.'s indictment package was far more comprehensive with powerful charges that White's probe apparently couldn't substantiate. Compared to Morganthau's 38, White could only muster charges against six, lower-level mobsters and no union bosses. Another reported source of tension was the use of a key informant. [N.Y. Times, N.Y. Post, Daily News 9/7/00, BNA 9/8/00]
CARPENTERS (UBC)
Cleveland Staffer Charged with $194,000 Theft
Federal prosecutors charged Leslie S. King, an ex-clerical employee
of the United Bhd. of Carpenters group in Cleveland, Aug. 31 with stealing
$194,138 from a union hospitalization fund. King allegedly submitted a
series of false medical claims for reimbursement and received payment on
checks drawn from the fund between July 1999 and Apr. 2000. [Plain Dealer
(Cleveland) 9/1/00]
LABORERS (LIUNA)
Connecticut Dissidents Win Appellate Victory
Two Conn. dissidents, Gary Wall and William Cooksey, who were refused
readmission to Laborers' Int'l Union of N.
Am. Local 230, won a major victory Aug. 24 when the Second Circuit
Court of Appeals allowed them to proceed with a Labor Management Reporting
& Disclosure Act suit against the union. The LMRDA, known as the Landrum-Griffin
Act, guarantees members the right to express any views regarding union
policies and protects them from discipline for exercising their rights.
Chief Judge Ralph K. Winter reversed a lower court decision and held that the claims weren't barred by a three-year statute of limitations because the two relied on the union's "false and misleading justifications as to why they could not be readmitted at a particular time, while holding out the promise that readmission would follow referral to a job." He also ruled that the period was tolled while the two pursued internal union remedies.
Wall and Cooksey were longtime members who vocally disagreed with bosses and filed unfair labor practice charges against the union for discrimination. The Nat'l Labor Relations Bd. decided in Oct. 1990 that the union removed Wall as shop steward in Nov. 1985 in retaliation for refusing to follow directions to "shake down" laborers for money. NLRB also held the union denied both men jobs through the hiring hall in retaliation for opposing bosses. The parties settled in 1992.
Cooksey had stopped paying dues in July 1990, due to lack of work. Wall stopped in Feb. 1992, intending to cut all ties with LIUNA. But when questions arose about the effect of the settlement on their pension credits, the two men attempted to rejoin. In Apr. 1992, the union rebuffed Cooksey's attempt, saying there were no jobs available and it was union policy not to accept members absent work opportunities. The union told Wall in Aug. 1993 that he was not eligible for readmission because he had not paid dues for a year and that he couldn't join as a new member until there were jobs or he found a job as a laborer. Both sought work through the hiring hall.
The two again sought readmission through "reforms" established in the highly-controversial deal between LIUNA and the Dep't of Justice which created the failed "internal reform effort" in 1995. They were again refused work. In Dec. 1995, the union barred the two men from using the hiring hall but, after complaining to the LIUNA general counsel, they were again allowed into the hiring hall.
In Jan. 1996, a union boss wrote Wall that he was barred under the LIUNA ethics code from rejoining the union and that the official would refer the matter to LIUNA's inspector general. A union attorney agreed that Wall and Cooksey were both barred. But, the LIUNA's "in-house prosecutor," the ethically-challenged Robert D. Luskin, took the position that no one could be barred without following the union's ethics procedure.
Wall received a job referral in July 1996 and asked to rejoin the union, but the union still denied him membership. When Luskin directed the local to readmit Wall and Cooksey, the LIUNA general counsel asserted that the two men could not rejoin the union because LIUNA's union constitution only allowed readmission within 12 months of allowing membership to lapse. Luskin then caved. The two sued in May 1997. The district court dismissed the complaint in May 1999, ruling the claims were time-barred. [BNA 8/29/00]
LIUNA Ousts Chicago Reformer
The recent ouster of a union-appointed trustee for LIUNA Local 2 has
stirred controversy between bosses and reformers within Chicago's historically
corrupt Laborers union. Joe Romano, a veteran United Steelworkers of Am.
official, was ousted in Aug. as head of Local 2 by LIUNA's "in-house
prosecutor" Robert D. Luskin. Romano' s supporters said his outspoken
efforts to reform the local prompted his ouster. But, bosses in Chicago
and Washington allege that he has not done his job and that the local needs
someone with "roots" in the Laborers (which has far greater tradition of
corruption than does the Steelworkers).
Romano, coincidentally, was featured prominently in a Sept. 3 article in the Chicago Tribun111e Magazine on union corruption. In the article, Romano voiced his criticism of LIUNA's reform efforts. He said that he wasn't sure LIUNA was committed to ending corruption, noting that wrongdoers hadn't been criminally charged and that some of the Old Guard still held jobs. "There's not always prosecutions here, that's the sad thing... So, I question all of this cleaning up. I don't think we really are allowed to clean up."
Romano "challenged the whole scheme of things to the point that they couldn't accept it," said Ed Sadlowski, a ex-Steelworkers official, who served until recently as supervisor for LIUNA Local 5. Sadlowski said that the current Chicago Laborers' Dist. Council bosses were eager to remove Romano because they "don't want reform."
The ethically-challenged Luskin responded that Romano was replaced by Randy Dalton, LIUNA Local 681's boss, because the local needed someone to "integrate it" with the CLDC--whatever that means. [Chi. Trib. 9/3/00]
CORPORATE CAMPAIGNS
GAO: Inspections More Likely for Employers with Labor Unrest
Employers experiencing labor unrest are about 6.5 times more likely
to be inspected by the Occupational Safety & Health Admin. than the
average employer, according to a government report released Aug. 31. The
Gen. Accounting Office produced the report at the request of Rep. Peter
Hoekstra (R-Mich.), chairman of the House Education and the Workforce Subcommittee
on Oversight and Investigations, and Rep. Cass Ballenger (R-N.C.), chairman
of the Subcommittee on Workforce Protections.
GAO conducted the study from June 1999 to June 2000 and covered about 22,000 employers GAO researched 1) the extent to which employers experiencing labor unrest are more likely to be inspected than those with more tranquil labor relations, 2) whether OSHA has policies for performing inspections during periods of labor unrest, and 3) whether those policies are followed. GAO noted that "labor unrest" means dissatisfaction among workers, but there is no consensus about the ways in which labor unrest develops or the forms it takes.
"[I]t is clear that there is some relationship between labor unrest and employees' dissatisfaction with wages and working conditions," wrote GAO.
GAO found that in 1994-98, about 68% of the almost 1,900 OSHA inspections conducted each year at companies experiencing labor unrest resulted from complaints, fatalities, or catastrophes. In contrast, only about 27% of the almost 100,000 total inspections OSHA conducted each year resulted from complaints, fatalities, or catastrophes. GAO said that among employers experiencing labor unrest, there was a higher proportion of complaint-based inspections at employers with unions than at non-union employers. [BNA 9/5/00]
QUOTABLE QUOTE
"More disturbing are the questions about Gore's
attitude toward union corruption raised by his campaign's closeness
to figures convicted or implicated in violations of law... [T]he Gore campaign's
actions suggest a coziness with allies convicted of or implicated in illegally
manipulating a union election. In 1960, John Kennedy campaigned as a backer
of union positions but an opponent of union corruption. Gore takes the
first stance but not, it seems, the second."
- Columnist Michael Barone, U.S. News & World Report, Sept. 4, 2000.
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ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
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AFL-CIO / AUTO WORKERS (UAW)
Indiana and Kentucky UAW Locals Pull Out of State AFL-CIO
Kentucky state AFL-CIO officials were reportedly scratching their heads
after a surprise announcement Aug. 23 that United
Auto Workers locals were pulling out of state federations in both Indiana
and Kentucky. Ky. AFL-CIO president Bill Londrigan said he and secretary-treasurer
Chris Sanders were mystified by the UAW action. He said they have been
seeking advice from national AFL-CIO leaders such as president John J.
Sweeney and the corrupt secretary-treasurer Richard
L. Trumka, and with UAW leaders in Detroit, in an effort to turn the
defection around.
UAW Region Three Director Terry Thurman, who called local delegates to his Indianapolis office last week and called for a vote on withdrawal, said the action is an "internal matter," and not one he cares to discuss except with members. He said the UAW will cooperate with both state federations, but he said withdrawal of dues will cost the Ky. AFL-CIO about $120,000 a year. It will take an even bigger toll in Ind.; UAW Local 862 president Rocky Comito said the UAW financial contribution to the Ind. AFL-CIO is about $680,000 a year.
Asked if he thinks the UAW decision could be turned around, Thurman said, "No."
Londrigan said the departure is a blow to the Kentucky federation he heads. "We're concerned about how it's going to affect our ability to operate," he said. "It's a disappointing turn of events for us. It was totally unexpected and basically unwarranted, as far as we're concerned."
The UAW locals rejoined the Ky. AFL-CIO just four years ago, after a split that dated to a 1967 feud between then- national AFL-CIO chief George Meany and the UAW's Walter Reuther. The UAW international rejoined the national AFL-CIO in 1982, but many locals stayed away from state bodies for some years thereafter.
Comito, like Thurman, said he didn't care to go into detail. But he said "different things that happened" in UAW relationships with one or both state federations "over the years," and the fact that the UAW "did well all of those years without affiliation" figured in the decision.
"Apparently he had a disagreement over a political endorsement" in Indiana, Londrigan said."I don't know why Bill is saying that," Thurman responded.
Thurman was chairman of a labor committee that rewrote the Ky. AFL-CIO constitution last year, after several bosses and staffers were removed in an scandal that included a burglary, an arson and a suicide, as well as an embezzlement of approximately $285,000. [Courier-J. (Louisville) 8/26/00]
LABORERS (LIUNA)
Ex-Oregon Boss Get Lucrative Contract with Pension Advisor
Portland, Oregon, money manager Jeff Grayson gave a powerful Laborers'
Int'l Union of N. Am. boss a consulting contract worth at least $805,000,
according to an investigative report by The Oregonian newspaper. Grayson,
chief executive of Capital Consultants, quietly awarded the $7,500-a-month
contract in Aug. 1998 to Kaylano Consulting, a firm founded by John D.
Abbott and his wife, Pam. Abbott was for years a dominant force in LIUNA
in Oregon and Idaho, as well as a longtime ally of Grayson's. As an influential
trustee of three LIUNA trust funds, Abbott helped steer millions of dollars
of union pension fund money to Capital Consultants.
Under terms of the contract, Capital Consultants agreed to pay Kaylano $7,500 a month over five years -- $ 450,000 in all. Abbott has the right to renew the contract for an additional five years. Grayson can end the contract after the initial five years, but only if he pays Kaylano a $ 270,000 lump sum. Capital Consultants also agreed to pay Kaylano a $ 50,000 signing bonus and to pick up a $35,000 club membership fee.
The contract was signed in late Aug. 1998, but Capital Consultants said it didn't go into effect until Sept. 1998, after Abbott left his post as business manager of the Oregon, Southern Idaho & Wyoming District Council of Laborers, as well as his trust fund positions. But when exactly Abbott left those positions is murky, according to the report.
Abbott publicly defended Grayson in 1995 after the Dep't of Labor accused the Capital Consultants in a lawsuit of overcharging the LIUNA on investment fees. Grayson settled the suit by agreeing to repay $2 million, without admitting or denying guilt.
Grayson also helped Abbott when Abbott was in difficulty. In Dec. 1997, as Abbott was about to have to explain $ 50,000 in personal charges on his union credit card, Grayson found a buyer for a home-catering company that had been operated by Abbott's late wife, Nancy. Capital Consultants lent the buyer $166,000 for a complex deal that netted Abbott $60,000.
If renewed for a second five years, the Kaylano contract will pay the Abbotts $950,000. In addition to that, Capital Consultants agreed to buy a $35,000 membership at the PGA West Golf Club in La Quinta, Cal., and make it available to Abbott. The club is a short drive from the Abbotts' condominium in the resort community. Add the $60,000 deal that Grayson engineered for the catering company in 1998, and Grayson's commitment to the Abbotts surpassed $ 1 million. [Oregonian 9/4/00]
TEAMSTERS (IBT)
Boston Drug Indictment Linked to Local 25
There was no mention of the local Int'l Bhd. of Teamsters Aug. 29 when
convicted Massachusetts bank robber James McCormack was hauled into federal
court to face charges that he plotted to sell cocaine and, along with two
friends, kidnapped and beat a former drug dealer in a bid to extort $1
million. But McCormack, while not a Teamster, has strong ties to Charlestown-based
IBT Local 25, which is under investigation for
allegedly extorting movie makers who film around New England.
One of McCormack's alleged partners in a cocaine deal, listed merely as "another person" in the four-count indictment, is Philip Myers, a Charlestown crime figure and ex-Teamster-turned-government witness who has been reportedly aiding the federal probe involving Local 25 and the movie industry. Myers, a convicted bank robber and killer, was arrested on cocaine charges in Sept. 1998 on the loading dock at the Boston Herald, where he worked as a member of Local 25. Facing a lengthy prison term, Myers began cooperating with Drug Enforcement Admin and the Dep't of Labor's Division of Labor Racketeering, providing information on alleged criminal activity by Teamsters and gangsters.
It was Myers who told investigators that McCormack with Richard Hegarty, Jeff Buckley and others were involved in the kidnapping and beating of a former drug dealer, who was snatched from his home at gunpoint in Apr. 1998. The indictment charges McCormack, Hegarty, and Buckley with plotting to extort $1 million from James D. Carter, who was viciously beaten, blindfolded, and held for ransom. He was released with orders to come up with the money, but never did.
McCormack was allegedly involved but was never indicted in the trial of five men convicted in a string of bank robberies, including a 1994 armored car heist in Hudson, N.H., in which two guards were killed. Four of the men convicted in the case were members of Local 25 who worked on movie sets. There was testimony at the Hudson trial that McCormack was involved in bank robberies with the men. McCormack was convicted of bank robbery in 1990.
U.S. Magistrate Judge Lawrence Cohen ordered McCormack and Buckley held without bail pending a hearing after Asst. U.S. Attorneys George Vien and Cherie Krigsman said they posed a danger and may flee. Hegarty is serving a five-year prison term for bank robbery.
McCormack said he didn't have enough money to hire a lawyer, and planned to represent himself because, "I don't trust anybody anymore. Everybody is playing the game." McCormack's former lawyer, Frederick Ford, was sentenced to eight years in prison last May after admitting he hired a hitman to kill McCormack and another man because he feared they'd reveal it was Ford's idea to kidnap Carter. Luckily for McCormack, Myers introduced Ford to a purported hitman who was an undercover agent for DOL. [Boston Globe 8/30/00]
TEAMSTERS / HOTEL & RESTAURANT EMPLOYEES
New York Crime Boss Dies in Prison
Ex-crime boss Anthony "Tony Ducks" Corallo, 87, died Aug. in a federal
prison hospital in Springfield, Mo., while serving a 100-year term for
racketeering. He was convicted on the basis of wiretapped conversations
that led to a spectacular series of La Cosa Nostra trials, after the FBI
slipped a listening device into the wood-grained dashboard of his chauffeur's,
Salvatore Avellino, black Jaguar in the parking lot of N.Y. banquet hall.
The tapes caught Luchese family members talking about how the Gambino family used Int'l Bhd. of Teamsters Local 813 to control the private garbage carting industry. The tapes also revealed how the boss of the Gambino family gave orders to officials of N.Y's Hotel Employees & Restaurant Employees Int'l Union. "Right now as the association, we control the bosses, right," Corallo's driver said on one tape. "Now, when we control the men, we control the bosses even better, now because they're even more...afraid...This wise guy'll even make more money with a strong union."
The tapes also exposed Corallo's control over rackets at Kennedy Airport and in the construction and garment industries. The mob controlled the construction industry by threatening to cut off cement supplies of disobedient contractors or by causing labor problems. The mob also extorted payoffs from contractors.
Corallo, found to be the head of the Luchese crime family, was one of nine indicted 1985 as leaders of the La Cosa Nostra Commission that controlled organized crime activities including the Long Island garbage carting industry. Leaders of the Genovese and Colombo families were also indicted and convicted.
"This is a great day for law enforcement. This is a bad day for the Mafia," then-U.S. Attorney Rudolph Giuliani said on the day Corallo and the others were indicted. Neither Corallo nor any other of the mob leaders indicated any remorse during their trials, and U.S Dist. Court Judge Richard Owen imposed sentences intended to keep most of them in jail for the rest of their lives. Corallo was sentenced on Jan. 14, 1987. [Newsday 9/2/00]
GOVERNMENT EMPLOYEES (AFSCME)
New Jersey Grocery Pleads Guilty in DC37 Turkey Scam
The Manhattan Dist. Atty.s Office announced Aug. 24 that Corrado's
Family Affair, Inc., pled guilty to larceny for ripping off members of
scandal-scarred Am. Fed'n of State, County & Mun. Employees Dist. Council
37 by overcharging them for 11,500 holiday turkeys in 1997. The N.J.-based
grocery was charging 99 cents per pound of turkey in Nov. 1997 when
it made the massive sale to the AFSCME Local 372. But, the grocery
reportedly inflated the weight of the turkeys sold by more than 40 tons,
to cheat the union out of $85,000.
The local has been the focus of a massive union corruption investigation that led to the turkey probe. In June, ex- president Charles Hughes was sentenced to nine years in prison after he admitted stealing more than $2 million from union members since 1971.
Gloria Montealegre, a D.A. spokeswoman, said the company pled guilty Aug. 17 to theft before N.Y. Supreme Court Judge Charles H. Solomon. It was sentenced to pay $85,000 in restitution and $85,000 in fines. The company has already paid $ 50,000, and will have two years to pay the remaining $120,000, she said. [Record (Bergen County, N.J.) 8/25/00]
ELECTIONS & POLITICS / STEELWORKERS (USWA)
Pennsylvania Member Speaks Out Against Union "Bigwigs"
The following are excerpts of a letter-to-the editor that appeared
in the Lancaster (Pa.) New Era on Sept. 4, 2000. It was written by
Donald Felty of Lititz, Pa., and titled "Not All Members of Unions Will
Vote Democratic."
"The place where I work is a closed union shop, represented by the United Steelworkers of America, of which I am a member. On the union bulletin board are several papers bashing Texas Gov. George W. Bush. One claims that Bush's plan to let people invest a small portion of their Social Security funds in the stock market will result in dire consequences. Another paper claims that Bush is against the minimum wage, against better education, how bad off working families in Texas are, and how Texas dropped from 29th to 48th in state rankings of the best state in which to raise a child.
...So, where were all these poor, working families when Bush won his second term? Did these great masses of poor, working Texans lose their cars and were too weak from near starvation to walk to the polls to vote against Gov. Bush? According to this union propaganda, Bush should have lost big on his second run.
The fact is that this union crap is nothing but Democrat-union lies and distortions. There is not one thing posted about Al Gore's criminal fundraising activities of 1996, or about his extremist environmental beliefs. This scene is repeated in every union shop in the country.
Union leaders at the national and international levels are in bed with, and in lockstep with, the Democratic Party. The unions project and want other people to believe that all union members are lapdog Democrats. Nothing could be further from the truth. I know many people where I work that will vote for Gov. Bush in November.
Right now, the overpaid union bigwigs use a portion of members' dues for political purposes, which are to help Democrats. They do this without asking members' permission. Republicans want to pass a law, which would force unions to get permission from each member, and the unions are desperately afraid of such a law. Union Democrat bigwigs, obviously, don't think that too many members will give them permission to keep this thieving racket going. They are right. Democrats have been waging war on our individual rights for decades, and many, if not most, union members would not give permission.
Our individual rights and our heritage of freedom made America great. Democrats are putting these freedoms at risk. The most important word in the title "United Steelworkers of America" is America. I, and other freedom-loving union members, want to keep America free. We will vote for George W. Bush."
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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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