LABORERS (LIUNA)
Chicago Boss Charged with $473,100 Embezzlement
A federal grand jury indicted ex-president and business manager
of Laborers’ Int’l Union of N. Am. Local 5, Frank B. Zeuberis, Nov. 9 for
embezzling $473,106 in union funds. Asst. U.S. Atty. Mark J. Vogel said
Zeuberis was arrested Nov. 9 at his home in St. John, Ind. He was released
on a $20,000 recognizance bond after an appearance before a federal magistrate
in Hammond, Ind. The Chicago Hts., Ill., based local has had a long history
of corruption and mob influence.
The indictment includes one count of racketeering, 11 counts of embezzling union funds, and 16 counts of keeping false union records. Reportedly, Zeuberis illegally enriched himself, his wife Joann Zeuberis, who was a clerk at Local 5, and James A. DiForti, secretary-treasurer of the local during the mid-1990s. Allegedly, on 30 occasions, he illegally granted salary increases, paid vacations and bonuses, benefiting himself, his wife, and DiForti.
Zeuberis allegedly supported this fraudulent activity by creating false executive board and membership meeting minutes containing authorizations for salary increases, paid vacations, and bonuses. In addition, Zeuberis allegedly created false authorizations for vehicle expense reimbursements and auto repairs. Zeuberis’ career with LIUNA ended in Oct. 1998, when Local 5 entered into a supervision agreement with LIUNA.
DiForti held his LIUNA post until 1997 when he was charged with the 1988 murder of William Benham, who had refused to repay a $10,000 “juice” loan and threatened to tell authorities about DiForti's alleged loan-sharking activities. DiForti died in June at age 55 before he went on trial for the murder. A 1999 lawsuit by the Dep’t of Justice alleged DiForti was a lieutenant to “outfit” boss John Monteleone and in charge of gambling and juice-loan and street-tax collections for the “26th Street crew.” The suit alleged DiForti had been dispatched by Monteleone to take over Local 5 and to conduct organized crime operations in the south suburbs. [BNA 11/14/00; Chi. Trib. 11/10/00]
Kansas Boss Accused of $12,900 Embezzlement
A federal grand jury in Kansas City, Kan., indicted ex-business manager
and secretary-treasurer of LIUNA Local 1290, Joseph C. Rider, on 10 counts
of embezzling union funds. From Nov. 1995 to Mar. 2000, Rider allegedly
spent $12,976 on the union’s credit card for personal use without making
reimbursements. Reportedly, these purchases included airline tickets, Las
Vegas shows, NASCAR tickets, a rental car and hotel expenses.
Additionally, Rider previously was president of the Western Missouri and Kansas Laborers' District Council. LIUNA removed Rider from his Local 1290 positions at last year. Rider was the third generation in his family to run Local 1290. [K.C. Star 11/17/00]
TEAMSTERS (IBT)
Florida Boss Charged with Extortion & Drug Crimes
A federal grand jury in Ft. Lauderdale indicted ex-president of Int’l
Bhd. of Teamsters Local 390, Clarence Lark, as well as his brother-in-law,
and seven other individuals on drug smuggling, extortion, racketeering,
conspiracy, and other charges. The 43-count indictment, unsealed Oct. 31,
included charges that Lark and brother-in-law Larry Crenshaw were involved
in a racketeering and smuggling operation that since 1985 imported more
than 3,500 kilograms of cocaine and 39,000 kilograms of marijuana through
Miami’s Port Everglades, where Local 390 operates. The indictment also
seeks the forfeiture of about $11 million, real estate, vehicles, and other
property.
Additionally, Lark and Crenshaw allegedly extorted money from union members who were forced to pay kickbacks to get work with Star’s Choice, a company the men allegedly founded using drug profits, which provided transportation and other services to the movie and TV production industry in South Florida. Further, the two were charged with "abusing their union responsibilities.”
In 1996, Lark was barred in by IBT’s Independent Review Bd. from holding a paid or unpaid office within the Teamsters. He ran the local since 1979. Despite the ban, Lark reportedly continued to participate in managing the local and was a silent partner in Star’s Choice. He thus controlled the union transportation captains who were responsible for renting the vehicles, according to the indictment, which added that he and Crenshaw demanded cash payments “in order to receive choice work assignments.”
"What makes this conduct so dangerous, so ominous, is that the defendants were able to dominate one of the major economic arteries that feeds South Florida....In doing so, [they] abused their union responsibilities, turning the union into a racketeering operation,” said U.S. Attorney Guy A. Lewis. “They violated their duties of honesty and trust owed to the hard-working men and women, the rank and file dues-paying members, all to just line their own pockets.”
Also charged were Curtis Newton, a member of the Int’l Longshoreman’s Ass’n, who allegedly introduced Lark to a worker involved in the smuggling operation, and Keith Lampkin and Lawrence Seymore, members of Local 390, who prosecutors said “used their positions to facilitate the removal of controlled substances.” Further, the indictment named as a defendant Ricardo McHorne, an ILA member who allegedly distributed some of the drugs. Also charged were John Gallo, a California producer of pornographic materials, who allegedly laundered more than $1 million in narcotics proceeds, and Charlie Hall, who reportedly performed various construction projects to conceal the source of the allegedly illegal funds. [BNA 11/13/00; USA Today 11/7/00]
Las Vegas Trustee Replaced
Jim Wilkerson, who in Apr. 2000 was brought in by the Int’l Bhd. of
Teamsters to straighten out troubled Las Vegas-based IBT Local 631, was
replaced Nov. 6 for unknown reasons by Ed Jacobson. Wilkerson, a Teamster
in Southern Nevada and ex-president of Local 14, was brought out of retirement
by IBT boss James P. Hoffa when Local 631 was taken into emergency trusteeship
following allegations of improprieties.
Reportedly, an investigation of Local 631 allegedly uncovered “severe mismanagement” that has negatively affected members of the union. Hoffa is reported to have stated that he was committed to restoring Local 631 to the members and “ending any fraud and abuse within the Teamsters union.” Alleged improprieties cited by Hoffa included: 1) failing to file grievances on behalf of members and negotiating substandard agreements with employers; 2) not enforcing collective bargaining agreements; and 3) inadequately representing members because of the inexperience of Local 631 officers and representatives. [L.V. Rev.-J. 11/8/00; Nev. Employment Law Letter 5/00]
PLUMBERS & ELECTICAL WORKERS
Two More Oregon Pension Suits
Members of plumbers and electrical workers unions filed class-action
lawsuits in late-Oct. against the trustees of their union retirement and
benefit plans in connection with the collapse of the troubled Portland,
Or., investment adviser Capital Consultants.
Mark K. Eidem and Marvin A. Malcom, members of the Plumbers Union Local 290 in Portland accused the 9 trustees of the union’s pension trust of breaching their fiduciary responsibility by handing over union members’ retirement money to Capital Consultants. The suit, filed in U.S. Dist. Court in Portland, alleges that the trustees negligently entrusted about $39 million to Capital Consultants.
The investment advisory firm was taken over by the government last month. Federal regulators accused Capital Consultants and its two top managers, Jeffrey Grayson and son Barclay Grayson of making a series of bad investments and concealing losses that could cost its clients more than $243 million.
Also, Andrew McPherson, a member of the Int’l Bhd. of Elec. Workers, filed a similar suit against the 25 trustees of the 8th Dist. Elec. Pension Fund and Health & Welfare Fund of Aurora, Col. The funds, which cover workers from 5 Western states, could lose more than $30 million of its members' money in failed Capital Consultants investments, the suit alleges.
The 19-page complaint charges that some trustees and their spouses might have received “special favors and gifts” from Capital Consultants in violation of federal rules governing pension plans. The complaint further alleges that trustees, after learning Capital Consultants was on the verge of collapse more than a year ago, failed to disclose the financial losses to plan participants and continued to pay excessive fees to the firm. The suit seeks damages in excess of $40 million, the appointment of a new money management firm and the immediate removal of the defendant trustees.
“Trustees owe an enormous amount of diligence” to the union members whose money they are investing, said Richard Birmingham, a Seattle lawyer representing the plaintiff workers in both cases. “It’s our belief that in this case, none of that due diligence took place.”
The new suits mark the third and fourth time union workers have accused their pension and benefits plan trustees of negligence. In Sept., members of the Laborers’ Int’l Union of N. Am. Local 296 and Office & Prof’l Employees Int’l Union Local 11, also filed complaints.
The three Portland-based unions represented 3 of Capital Consultants largest clients. Between them, they entrusted about $340 million to the Graysons’ firm, about a third of Capital Consultants’ total assets under management. [Oregonian 10/31/00; Rocky Mtn. News (Denver) 11/01/00]
ELECTIONS & POLITICS
Key Votes from the 2000 Election
MICHIGAN- - - - - -
(18 Electoral Votes for Gore)
Union Households: 43% of Electorate
Union: Gore 61% Bush 35%
Non-Union: Bush 56% Gore 42%PENNSYLVANIA
(23 Electoral Votes for Gore)
Union Households: 30% of Electorate
Union: Gore 65% Bush 32%
Non-Union: Bush 54% Gore 44%
[BNA 11/9/00]
ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
- - - - - -
TEAMSTERS (IBT)
Kentucky Indictments Reinstated
The Kentucky Court of Appeals yesterday reinstated the indictment of
Gov. Paul Patton's (D) top aide and labor liaison and two prominent Teamsters
on charges of circumventing campaign laws to get Patton elected in 1995.
The 2-1 decision, which is likely to be appealed, was released almost exactly
five years after Patton narrowly defeated Republican Larry Forgy - who
then accused the Democrats of fraud, prompting the investigation that produced
the indictment.
The indictment, by a special Franklin County grand jury in September 1998, alleged a conspiracy among:
Prosecutors allege that the four arranged for Ross' employment, constituting an illegally large and unreported campaign contribution of $20,000 by the Teamsters to the campaign of Patton and running mate Steve Henry. The maximum legal contribution at the time was $500.
Special Circuit Judge William Trude of Irvine ruled last year that the law's definitions of “contribution” and “independent expenditure” were so vague that they were unconstitutional, and threw out the charges. [Courier-J. (Louisville) 11/10/00]
COMMUNICATIONS WORKERS (CWA)
Court Says Free Trip Wrongfully Influenced Unionization Vote
The Communications Workers of America's offer of a free trip to Chicago
so employees of Comcast Cablevision could attend a union meeting on cable
industry issues unduly influenced the outcome of a representation election
among the 50 eligible workers, the Sixth Circuit Court of Appeals court
ruled Nov. 14, reversing the Nat’l Labor Relations Bd. Refusing to enforce
an NLRB order certifying CWA Local 4100 as the bargaining agent of Comcast's
employees in Taylor, Mich., the court held that CWA's offer of $50 worth
of transportation and one night's lodging so employees could attend a two-hour
union meeting on cable industry issues unduly influenced the 31-17 vote
in favor of union representation.
“Providing transportation and one night's lodging so that the employees could have a free weekend in Chicago in conjunction with the two-hour union meeting was sufficiently valuable to influence the vote without relation to the merits of the election," wrote Judge Ronald Lee Gilman.
In reversing the NLRB, the court found that the offer of the free weekend trip was sufficiently valuable to have the potential to influence the employees' votes. Gilman pointed to NLRB’s own past decisions as influencing the court's determination. He said that if the NLRB could find that the distribution of hats and T-shirts (NLRB v. Shrader's Inc. (1991)) and $16 jackets (Owens-Illinois Inc., (1984)) could influence an employee's vote, then a free weekend trip to Chicago, valued at $50, certainly could, as well. [BNA 11/16/00]
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