IRON WORKERS (BSOIW)
California Boss Admits to $120,000 Embezzlement
Another ex-Int'l Ass'n of Bridge, Structural & Ornamental Iron
Workers boss pled guilty Sept. 15 to stealing up to $120,000, admitting
that he routinely used the union's money to cover his and others' personal
expenses. Darrel E. Shelton, who resigned Sept.
14 as the union's Cal.-based general organizer, agreed to cooperate with
prosecutors in a probe into allegations of corruption in the Iron Workers
hierarchy in Washington, D.C. and the D.C. police force.
Shelton's illegal expenses included $3,995 for a Jan. 1997 golf outing in Palm Springs, Cal., attended by BSOIW president Jake West and several D.C. police officials. It reportedly included $1,000 for a dinner attended by West, his friends and several women. Reportedly, Larry D. Soulsby, then the D.C. police chief, was among those on the trip.
In Mar. 2000, Fred G. Summers, BSOIW's executive director of organizing, pled guilty to stealing more than $50,000, including $2,300 stemming for the same Palm Springs golf outing. Last year, Michael J. Brennan, who once headed the Iron Workers Political Action League, pled guilty to charges involving the theft of $7,000 in union money.
Prosecutors began looking into West and other union bosses as part of a broader probe of police corruption. They initially focused on West because he was a frequent dining companion of Soulsby's. But as time went by, the FBI and Dep't of Labor devoted more time to the union.
Shelton also admitted spending funds for numerous dinners for West and West's family and friends. Reportedly, Shelton had a deal with West to write "per J West" on union credit card receipts so accountants would not question West's expenses. In exchange, Shelton reportedly could charge his own personal expenses.
Shelton pled guilty to one count of conspiracy, eight counts of embezzling union funds and one count of making a false entry in union records. He was indicted in Apr. 2000 on 69 charges. As part of his plea bargain, he promised to pay $80,000 in restitution. Under federal guidelines, Shelton could face up to 21 months in prison when he is sentenced by U.S. Dist. Judge Thomas F. Hogan. But prosecutors said they will seek a reduced term if Shelton's cooperation proves valuable. [Wash. Post 9/16/00]
AFL-CIO
NLPC Files Complaint to Disbar Corrupt Trumka
The Nat'l Legal & Pol'y Ctr. filed a formal complaint
with the Disciplinary Bd. of the Supreme Court of Pennsylvania requesting
that AFL-CIO secretary-treasurer Richard
L. Trumka be disbarred from the practice of law. The complaint
details several money-laundering schemes that Trumka allegedly participated
in to aid in the 1996 reelection of then Teamsters president Ron Carey.
Six individuals have been criminally charged in these schemes, five have
pled guilty and one has been convicted. Trumka has invoked the Fifth Amendment
on at least two occasions to avoid federal investigators' questions in
the matter. The complaint is available
at <www.nlpc.org>.
"In order to protect the public, the legal profession and the courts, Trumka should be disbarred from the practice of law," said NLPC Chairman Ken Boehm. "Disbarring Trumka would be a nice first step in bringing accountability to a corrupt union boss."
In his report that disqualified Ron Carey, Teamsters
Election Officer Kenneth Conboy founded that Trumka laundered $150,000
from the Teamsters through the AFL-CIO to a liberal political group
called Citizen Action, which routed $100,000 of that amount to the
Carey campaign. Conboy's report also found that Trumka participated in
a second scheme in which he wrongfully contributed and/or solicited $50,000
to/for the Carey campaign.
AUTO WORKERS (UAW)
Wisconsin Boss Allegedly Embezzled $28,000
Pamela L. Schultz, ex-secretary-treasurer of United Auto Workers Local
553 in Racine, Wis., was indicted Sept. 12 for embezzling $28,088.
From July 1996 to Feb. 1999, she allegedly wrote unauthorized union checks
to herself and to others for her own benefit. She also was charged with
making a false statement in the local's annual report to the Dep't of Labor.
[Milwaukee J. Sent. 9/13/00]
Members' Suit Alleges Michigan Bosses Misused $480,000
UAW Local 594 bosses in Pontiac, Mich.,
embezzled more than $480,000 to settle a sexual harassment suit against
ex-president Donny G. Douglas and to pay legal bills, according to a members'
suit filed Sept. 18 in Detroit. Local 594, already the target
of a federal probe over charges of illegal overtime payments and election
fraud, is now accused using members' dues without their knowledge or approval.
In fact, the local entered into a confidential settlement to ensure the
details of the payment would be kept secret, says Harold Dunne, the attorney
who filed the suit.
Douglas, who ran Local 594 from 1981-95, was promoted in Aug. 1995. He is now a UAW servicing representative, overseeing eight UAW locals from N.J. to Wis., including Local 594.
The suit alleges officials inappropriately used union funds to pay more than $250,000 in legal fees and a $230,000 confidential settlement in the sexual harassment suit against Douglas, by a female employee, Cynthia Van Dusen. Van Dusen had a nine-year affair with Douglas, who was married; she claimed Douglas harassed her years after the affair ended and she had married.
From Nov. 1995 to Oct. 1998 the local paid four attorneys to represent the local and Douglas. The attorneys, Brady Hathaway, Terry Pawlowski, Carlton Roeser and Phillip Seymour, are also named in the suit. They are charged with legal malpractice, for allegedly aiding the embezzlement, and negligence, for allegedly failing to distance the local from Douglas in the harassment suit.
The suit also names Douglas' successor Ron Miller and current Local 594 president Larry Trandell, among others. Trandell's election in May 1999 is being investigated by the Dep't of Labor.
Dunne says the use of $480,000 or more of the local's money for Douglas' defense is a theft of members' money. The amount represents about one-sixth of Local 594's annual budget. "This is plain and simple theft of union funds. It's a breach of fiduciary duties by the officers of that local. The members' interests were sacrificed for Douglas' personal interests," Dunne said. He charges that the local's attorneys should have filed a separate suit against Douglas on the local's behalf to protect the members, who were not responsible for his behavior. This process is known as creating a third-party defendant. "These attorneys were legally and professionally obligated to file against Douglas so the members didn't have to pay for his defense," Dunne said.
Dunne also represents more than 100 members of Local 594, who in Aug. filed a separate class action against Local 594, the UAW and GM alleging a 1997 strike in Pontiac was prolonged for two months while Local 594 officials tried to get illegal overtime payments and jobs for their children.
UAW bylaws appear to require membership approval of payments of the size and nature of the sexual harassment settlement and legal fees. The UAW Constitution says a local's executive board cannot "transact any business that may affect the vital interest of the local union until approval of the membership is secured." Several members of Local 594 argue that paying out the $480,000 without membership approval violates UAW bylaws.
"We were never asked about this suit or if we wanted to pay it. That came out of our pocket and we didn't want to pay that," said member Gene Austin. "That settlement and the legal fees absolutely was a vital interest of ours. It put us in jeopardy financially."
As a result of the legal costs, Local 594 needed a $755,162 loan from the UAW in Feb. 1999 to pay delinquent dues and other money to the UAW. A UAW letter spells out that the local had been given loans of $140,000 and $615,162 to pay off past dues and a lawsuit. The $140,000 went to pay off a lawsuit filed against the local by Ulico Casualty Co., the local's general-liability insurer. Ulico successfully argued in court that it did not have to insure Local 594 for Douglas' harassment.
In his depositions for the Van Dusen case, Douglas admitted he kissed "50 or 60 women" at the local at various parties and social functions. He also said he touched Van Dusen on the rear years after their affair ended and she'd married.
"I touch people. I consider it a habit. I'd consider it a motivational touch. A touch of recognition. A friendly touch. I'm a motivator. I'm not a sexual harasser," he said. He denied harassing Van Dusen and said she had a bad "mental state" and often came to him seeking his "counseling." Van Dusen and Douglas' affair ended in 1990, although Van Dusen continued to work in various clerical jobs at Local 594. She married attorney William Van Dusen, Jr. in Aug. 1994 and alleged that the harassment began shortly after.
Since Douglas left the local, two more complaints of sexual harassment have been lodged against Local 594 officials. Ex-bookkeeper Brenda Shead filed a complaint in July 1996 with the Mich. Dep't of Civil Rights, and a third woman wrote a Jan. 1998 letter to UAW President Stephen Yokich complaining of sexual harassment and hostile working conditions at the local. The third woman, who did not want to be identified for fear of repercussions, was removed from her job as a benefits representative six weeks after she sent her letter. She now has a job in one of the plants. [Det. Free Press 9/19/00]
LONGSHOREMEN (ILA)
Two New Jersey Bosses Plead Guilty to $2 Million Perfume Heist
The Waterfront Comm'n of N.Y. Harbor announced Sept. 14 that Nicholas
Romano and Carl Bilancione pled guilty before U.S. Dist. Judge Katharine
S. Hayden in Newark, N.J. to one criminal count of conspiracy to steal
an interstate shipment of goods.
Romano is a longshoreman, union shop steward and secretary-treasurer of Int'l Longshoremen's Ass'n Local 1588 and Bilancione is a longshoreman and foreman. Both are registered by WCNYH and are employed at Global Terminal in Bayonne, N.J.
In 1998, WCNYH received 43 anonymous letters and other information concerning corrupt activities committed by Romano, Bilancione and others. WCNYH detectives, together with the FBI and U.S. Customs Serv., conducted an extensive two-year probe. WCNYH said evidence was developed which implicated Romano and Bilancione in the June 1995 theft of two containers of perfume valued at $2 million from Global Terminal. Both Romano and Bilancione are allegedly associates of the Genovese Organized Crime Family, according to WCNYH.
WCNYH said more arrests are anticipated and the probe is continuing. [WCNYH, Media Release 9/14/00]
GOVERNMENT EMPLOYEES (AFSCME)
New York Boss Indicted for $3,000 Theft
Ex-boss of Am. Fed'n of State, County & Mun. Employees' Dist. Council
37 in New York, Mary Wilson was indicted Sept. 11 on charges of stealing
more than $3,000 by steering union business to an conference center, the
Friar Tuck Inn near Albany. Wilson, a vice-president of Local
1549, is already awaiting trial on charges of conspiring with other
union bosses to steal more than $2 million through
a variety of other schemes. Owner Steven Caridi pled guilty in May
2000 to paying $15,000 to Wilson to get union business. He agreed to a
prison sentence of two to six years, and his company agreed to have a monitor
for five years. [Newsday 9/12/00]
ELECTIONS & POLITICS / CARPENTERS (UBC)
Clinton Supporter Indicted
One of the eleven union bosses indicted Sept.
6 in a crackdown on alleged racketeering in the construction industry
is a high-profile supporter of Hillary Rodham Clinton's Senate campaign.
Michael Forde heads the N.Y. Dist. Council of
Carpenters and United Bhd. of Carpenters Local 608. He was among those
Clinton singled out for thanks at a May 31 rally at the union's headquarters.
Clinton spokesman Howard Wolfson declined to comment. [Daily News (N.Y.)
9/8/00]
QUOTABLE QUOTE
"[E]xactly 10 years to the day after federal prosecutors filed a civil
racketeering lawsuit aimed at ridding the powerful [N.Y. Dist.] Council
of Carpenters of corruption, the union's long and tortured relationship
with organized crime was once again on public display. Michael
Forde, the newly elected head of the...council, was charged with the
oldest and most practiced crime in the playbook of corrupt trade unionists:
taking bribes...
Forde's indictment came after his union spent millions to settle a federal lawsuit, including payments to high-priced, court-appointed monitors, and millions more on lawyers to negotiate a series of reforms to satisfy the government. Upon his arrest, Forde became the fourth chief of the council since 1980 to be charged with corruption."
- Tom Robbins, Writer, Village Voice, Sept. 19, 2000.
- - - - - -
ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
- - - - - -
IRON WORKERS (BSOIW)
Idaho Secretary Sentenced for $20,000 Embezzlement
Michelle Mogolich, a former office secretary for Int'l Ass'n of Bridge,
Structural & Ornamental Iron Workers Local 732, was sentenced May 2
to six months home detention and three months probation for embezzling
over $20,000 from the Pocatello, Idaho-based local. She was also fined
$500. Mogolich had previously pled guilty to one count of embezzlement
in federal court and had already repaid the local. [Idaho Statesman 5/3/00]
MACHINISTS (IAM)
Boston Boss Sentenced for $30,000 in "No Show Payments"
U.S. Dist. Judge George A. O'Toole sentenced Anthony
J. Frizzi, ex-business agent for Int'l Ass'n of Machinists Local
S25, Sept. 7 to two years probation for his role in soliciting and accepting
illegal payments from an employer which had entered into a collective bargaining
agreement with Boston-based local. The first six months of the probation
must be served in home confinement. O'Toole also fined Frizzi $5,000.
Frizzi pled guilty in Apr. 2000.
In 1995, Frizzi played a central role for Local S25 in negotiating a collective bargaining agreement with Boston Ship Repair, Inc. Frizzi subsequently represented Local S25 and its members in their dealings with BSR. In early 1996, Frizzi informed BSR that he wanted to be placed on BSR's payroll, even though he would not be performing any work. BSR agreed to this request, in the belief that doing so would help to ensure favorable labor relations.
Asst. U.S. Atty. Mark W. Pearlstein said, Frizzi knew that it was illegal for him to be paid by BSR under these circumstances. Frizzi allegedly attempted to conceal his receipt of these payments by providing BSR with his son's social security number for payroll purposes. Pearlstein said, "Frizzi...received $30,826 in 'no show payments' from [BSR], a company whose employees were represented by the Union which Frizzi led. Federal Labor Law strictly prohibits the solicitation and receipt of such payments, in order to ensure the loyalty of Union officials and to prevent Union officials from extorting tribute from employers."
Frizzi attempted to conceal his receipt of these payments by providing BSR with his son's social security number for payroll purposes. [USAO D. Mass. Media Release 9/7/00, 4/3/00, 3/24/00]
STEELWORKERS (USWA) / AFL-CIO
More Charges Added RICO Suit Against USWA
A federal judge on Sept. 13 granted AK Steel Corp.'s motion requesting
to amend the federal Racketeer Influenced & Corrupt Organizations (RICO)
Act lawsuit it filed May 8, 2000 against the United
Steelworkers of America and other defendants. The complaint alleges
the defendants have engaged in unlawful, violent, extortionate and racketeering
acts against AK Steel and numerous other companies.
Additionally, the second amended complaint asserts that Administrative Law Judge Thomas M. Patton of the National Labor Relations Board found on Aug. 2, 2000, that the USWA and two of its locals were jointly liable for approximately 80 unlawful, violent acts committed against Rocky Mountain Steel (Pueblo, Col.) and its replacement workers. Patton also found that the USWA and its locals deliberately destroyed crucial documents relative to the trial. Judge Patton found the USWA and its locals had caused and encouraged violent misconduct and that their relentless propaganda campaign against so-called "goon-guards" encouraged violence. Patton admonished the union by saying, "Rather than repudiating and disavowing picket line misconduct or otherwise taking serious steps to prevent misconduct, the Union sought to excuse misconduct by blaming APT guards."
Among Patton's findings were nearly 50 incidents in which USWA picketers spat upon, dented and scratched replacement workers' vehicles, causing more than $35,000 in damage. In an interview with the trade publication New Steel magazine published in June, USWA president George Becker was quoted as saying, "Standing out there with a picket sign, yelling at someone going by, or spitting on a truck, or even taking a sign and smacking it along side of a truck -- I don't consider that violence."
AK Steel's complaint alleges that Rocky Mountain Steel is one of many companies targeted by the USWA's racketeering and corrupt practices since at least 1979. The complaint now alleges the USWA and its co-conspirators are responsible for more than a dozen acts of arson and more than 250 acts of extortion against AK Steel, primarily in Mansfield, Ohio where members of USWA Local 169 have been locked out since Sept. 1, 1999. In a recent Mansfield incident, the words "Die scab" were scratched into the paint of a replacement employee's vehicle according to AK Steel's RICO complaint.
The RICO complaint alleges that AK Steel has already sustained millions of dollars in damages but that a specific amount cannot be determined because defendants' actions in furtherance of the conspiracy continue. The suit alleges AK Steel is entitled to recover three times the damages it has sustained. According to the complaint, USWA and certain of its officers and agents have employed a strategy utilizing violence, intimidation, threats, coercion and extortion in its dispute with AK Steel in Mansfield. According to the complaint, riots, murderous threats and attempts to completely destroy companies are common tools used by the USWA in labor disputes when employers exercise their legal rights to operate with replacement workers.
Named in the 200-page lawsuit as defendants in addition to the USWA are: Local 169, USWA, AFL-CIO, Richard L. Trumka, secretary-treasurer of the AFL-CIO, George F. Becker, president of the international USWA and Leo W. Gerard, secretary-treasurer of the USWA. [AK Steel, Media Release, 9/14/00]
GOVERNMENT EMPLOYEES (AFSCME) / POLICE UNIONS (PBA)
Ex-Ohio Boss Indicted for Theft
James R. English, ex-president of Am. Fed'n of State, County &
Mun. Employees Local 3895 in Lake County, Ohio, was indicted Sept. 8 on
theft charges of cashing checks totaling $1,900 at without proper authorization
in Feb. 2000. The local has since disbanded and its corrections officers
are now members of the Ohio Patrolmen's Benevolent Ass'n.
Lake County Sheriff's Chief Deputy William Crosier said English was notified Sept. 13 that he faces a disciplinary hearing. The notice said the sheriff intends to fire English for theft, dishonesty and conduct unbecoming a corrections officer in violation of disciplinary rules.
According to investigators, a union official went to the bank to remove the AFSCME funds and transfer them to the new union's coffers and discovered the missing funds. He alerted the union and the Sheriff's Department. Investigators said English used some of the union money to pay rent.
English pleaded not guilty to the theft charges and said there was no money missing. He said the charges were driven by rumors. English was fired by Sheriff Daniel Dunlap in Feb. 1999 after he was accused of sexual harassment. English appealed the firing and was reinstated in Dec. He claims both charges are in retaliation for his union organizing. [Plain Dealer (Cleveland) 9/9, 9/14/00]
UNION DUES / TEACHERS (AFT)
Illinois Union Rebuked for Union Dues Procedures
In Tavernor v. Illinois Fed'n of Teachers, the U.S. Court of Appeals
for the Seventh Circuit held Sept. 6 that the University Prof'ls of Illinois
Local 4100's procedure for deducting union dues from the paychecks of nonmember
employees imposed excessive burdens on objectors who wanted a refund.
Even though the local, an affiliate of the Ill. Fed'n of Teachers, followed state law procedures for collecting "fair share" union dues from nonmembers, Judge Diane P. Wood wrote that "its system in operation did not provide sufficient protection to the objectors." The court found that the procedures did not meet the standard by the U.S. Supreme Court's decision, Hudson v. Chicago Teachers Union Local 1, which held that the procedures used to collect fair share fees must be "carefully tailored to minimize the infringement" on nonmembers' First Amendment rights.
The plaintiffs, ten Univ. of Ill. at Springfield clerical employees led by Bernadette Tavernor, worked in a bargaining unit represented by Local 4100. The collective bargaining agreement between the union and the university required employees either to join the union or to pay fair share fees to cover the cost of their representation in collective bargaining.
The court explained that under the Ill. Educational Labor Relations Act, a nonmember has six months after the first fair share deduction from his or her paycheck to object to the fee. Objections must be renewed annually. If a nonmember objects to the amount of the fair share fee, the full fee continues to be deducted and is placed in an interest-bearing escrow account. The Ill. Education Labor Relations Board then consolidates all fair share fee objections for a single bargaining unit and conducts an administrative hearing to determine the correct fair share fee.
Local 4100 instructed the university to deduct an amount equivalent to 100 percent of union dues from the paychecks of nonmembers as their fair share fee payment. But, the court pointed out, for the 1997-98 school year, the fair share fee actually was 84.46 percent, and for the 1998-99 school year was 86.78 percent. Nonetheless, 100 percent of the dues amount was deducted, and employees were told how to file objections with the IELRB. After objections were filed, the full amount of deducted fees was placed in an escrow account. If nonmembers failed to object to the amount, then the union received the full amount deducted.
The plaintiffs sued, claiming that the union's fair share fee collection procedure violated the First Amendment because it did not include procedural safeguards outlined in Hudson. Under Hudson, the court explained, unions collecting fair share fees must provide an adequate explanation for the basis of the fee, give nonmembers a prompt opportunity to challenge the amount of the fee before an impartial decisionmaker, and place reasonably disputed funds in an escrow account while such challenges are pending.
The plaintiffs argued that the union should be required to reduce fair share fees to only those costs related to collective bargaining upon receipt of the nonmembers' objections. The plaintiffs asked the court for an injunction against the collection of fair share fees and a refund with interest of all funds they had paid that were not related to collective bargaining. [BNA 9/13/00]
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