FIREFIGHTERS
Illinois Local and Fund Sue Boss for $311,000
Kane County (Ill.) Judge Michael Colwell has frozen the assets of Patrick
Stiles, an ex-Aurora firefighter accused of embezzling up to $311,000 from
Aurora Firefighters Local 99 and Aurora Firefighters
Relief Ass'n as new details emerged about the extent of the alleged
scheme. Colwell's temporary restraining order came in response to a civil
suit filed against Stiles, who resigned from the Aurora Fire Dep't in Jan.
Local 99 is seeking to recover $240,000 from Stiles and the Relief Ass'n $71,000. The complaint alleges that $38,000 in 1997-98 union dues "were apparently not deposited," and Stiles provided no records "as to the existence or expenditure" of more than $150,000 in 1999-2000 union dues. Allegedly, Stiles made out union checks to pay for non-union expenses, including $16,800 to credit card firms, $8,839 for telephone bills during 1997-98, $3,250 for computer equipment and $8,000 for payments to a non-union bank account. The complaint states that an embroidery firm received $5,120 during 1997-98 "with no apparent connection to union activity" and a flower shop received $1,420 during the same period "when there was no known union need for flowers."
The Relief Ass'n alleges that Stiles made out $15,092 in checks to himself, $12,000 credit card firms, $1,941 to his auto mechanic and $4,420 to other firefighters who did work on his house. The firefighters payments were recorded as injury payments, but the firefighters were reportedly not injured. None were aware the checks were drawn on a Relief Ass'n account.
Stiles was secretary-treasurer of the Relief Ass'n from 1995 to 1999. He held the same position in Local 99 from 1992 to 2001. The court order requires Stiles to provide an accounting of all funds during the time he ran each organization and a listing of his personal assets. Both Local 99 and Relief Ass'n filed criminal complaints in Jan. No charges have been filed. [Chi. Trib. 02/09/01]
POLICE UNIONS
National Boss Charged with $50,000 Embezzlement
Federal prosecutors charged union boss Dennis Chiocchi Feb. 9 with
embezzling more than $50,000 from the Am. Fed'n of Railroad Police. Chiocchi,
formerly of Melville, N.Y., and now of Villas, N.J., allegedly embezzled
the funds between 1995 and 1998 when he was secretary-treasurer and then
president of AFRP, which serves Amtrak and is based in Woodbury, N.Y.
John McGlynn of the Dep't of Labor's Inspector General's Office in Manhattan
said Chiocchi used union funds for personal travel and a Jeep Grand Cherokee.
Chiocchi left the force after losing reelection. He was arraigned in U.S.
Dist. Court in Newark, N.J., Feb. 9 on a charge of embezzlement and released
without bail. [Newsday; N.Y. Times 02/14/01]
PROFESSIONAL SPORTS (IBF)
Boxing Boss Sentenced; He and Son Banned
Robert W. Lee, Sr., ex-president of the
N.J.-based Int'l Boxing Fed'n, was sentenced
Feb. 14 to 22 months in prison for his corruption convictions. U.S. Dist.
Judge John W. Bissell ordered Lee to surrender by Mar. 30 to begin serving
the sentence. Bissell also fined Lee $25,000.
A federal jury convicted Lee on Aug. 17 of one count of money laundering, three counts of interstate travel in aid of racketeering and two counts of filing false tax returns. The jury acquitted Lee's son, Robert Lee, Jr., of all charges. The indictment against the Lees described a corrupt fighter rating system in which bribes were routinely paid by boxing promoters and managers to alter ratings of particular boxers and to provide others with favorable treatment. During the trial, the government called as witnesses numerous promoters and insiders who described instances where they paid Lee to have their fighters ranked and positioned for upcoming bouts and purses. Bribes ranged from $1,000 to $25,000. In one instance, testimony revealed that promoter Cedric Kushner paid Lee $100,000 to bring about a heavyweight championship fight between George Foreman and Axel Schulz.
Further, Bissell signed the orders, which had also been signed by Lee, Sr., and Lee, Jr., permanently barring them from IBF and the boxing industry. The decrees permanently enjoin both from "having any effect, directly or indirectly, on the affairs of the IBF or any other boxing organization or entity." Also, the orders bar them from "having any dealings, directly or indirectly, with any director, officer, employee or member of the IBF or any other boxing organization or entity" and even from attending any boxing match.
The decree pertaining to Lee Sr. also requires that he repay the not-for-profit IBF $50,000 and that he divest himself of his majority shares in a separately incorporated IBF for-profit corporation, which prosecutors argued was illegitimate. [USAO D.N.J., Media Release 02/14/01]
OPERATING ENGINEERS (IUOE)
Pension Scam Leader Pleads Guilty
The highest-ranking Mafia member in the government's "Mob
on Wall Street" case pled guilty Feb. 15 to taking part in a massive
scheme that allegedly cheated investors out of $50 million. Robert A. Lino,
a reputed "capo" of the Bonanno crime family, topped the list of 120 defendants
(some union bosses) charged last June.
Lino admitted to manipulating stocks through DMN Capital, a N.Y.C. firm that prosecutors have described as "fraud central." He told U.S. Dist. Judge William H. Pauley III that he and others bribed brokers to tout stocks and sell them at artificially high prices. He also described a plan to defraud several union pension funds through a kickback scheme. It reportedly included three N.Y.-based funds: the Detectives' Endowment Ass'n, Production Workers Local 400 and Int'l Union of Operating Engineers Local 137. Lino is scheduled to be sentenced June 1. [Newsday 02/16/01]
AFL-CIO / TEAMSTERS (IBT)
Sweeney Still High on Trumka
AFL-CIO boss John J. Sweeney insisted Feb. 5 at a Nat'l Press Club
Luncheon that is second-in-command, secretary-treasurer Richard
L. Trumka, has done nothing illegal in connection with the money-laundering
scandal that led to the Jan. indictment
of ex-Int'l Bhd. of Teamsters boss Ron Carey.
Sweeney said the "Teamster situation is really a tragic situation," but
said Trumka had the "highest integrity [and a] wonderful character."
[Det. News 02/06/01]
Has Sweeney read the Teamsters case? According to court documents, Trumka help routed $150,000 from the Teamsters' treasury to Carey's reelection campaign, and he allegedly contributed/solicited another $50,000 to the Carey campaign in violation of federal labor law. According to the trial transcript of convicted union embezzler William W. Hamilton, one of the key meetings that helped facilitate the $150,000 transaction reportedly took place in Trumka's AFL-CIO office with him present. Trumka has used the Fifth Amendment at least twice to avoid questions from federal investigators.
Journalist Robert Novak now reports, "The same sources who predicted to me that Carey would be indicted now say Richard Trumka...could be next in [U.S. Atty. Mary Jo] White's bull's-eye." Novak also reports: "A registered independent..., the Clinton-appointed White is campaigning to be retained as federal prosecutor by Bush. That is considered an outrage by such Republicans as former U.S. Atty. Joseph diGenova, who told me White could have indicted Carey a year ago but 'held off to see how the election would turn out.'" [Chi. Sun-Times 02/05/01]
TEAMSTERS (IBT)
Boston Local, Under a Cloud, Slated for Massachusetts Funds
The Boston Herald wants to know: "How lucky can a union local--especially
one under federal investigation -- get? And how tone deaf can Gov. Paul
Cellucci (R)be to EARMARK $125,000 in 'worker development' funds for Local
25 of the Teamsters, the local run by George Cashman?"
Reportedly, this is the second year that Local 25 has been included Cellucci's budget for a special appropriation. The money would be channeled through the quasi-public Commonwealth Corp., which last year actually saw its overall funding cut from $757,000 to $507,000. "Not a problem for Local 25 though, which is apparently 'more equal' than its brother Teamsters locals that have to compete with other AFL-CIO members for the rest of the pie," says the Herald.
The Herald goes on to correctly observe: "All of this might just be an amusing tale of political back-scratching were it not for the federal probe of Local 25 and its officials, the complaints of extortion and thuggery against the union by a host of filmmakers and the recent report of retired Judge Robert Barton urging reform. Barton told the governor in no uncertain terms that his intervention in Teamster negotiations with filmmakers was counter-productive and that it was time the union mended its ways, particularly its contract practices rife with featherbedding.
What lesson can the union local take away from the fact that it gets a $125,000 check from the state, that it alone gets money earmarked in the budget? Surely it must be doing everything right as far as the governor's concerned. Or with one foot out the door, perhaps he's simply not concerned? If legislators go along with this ill-advised giveaway, extracting no reforms in return, then they will be as culpable as the governor in winking at corruption." [Bos. Herald 02/10/01]
QUOTABLE QUOTE
"I don't think any of it helps us, and I think that when you
look at all of this turmoil that's out there and the focus that's on it,
it really detracts us from the problems that are facing the country."
- Richard L. Trumka, Esq., Secretary-Treasurer, AFL-CIO, responding to question from CNN's Judy Woodruff on "Inside Politics" Feb. 15 about Bill Clinton and "all of the controversy with regard to his leaving the White House." In his statement, Trumka appears to have forgotten that he is involved a "controversy" himself. He is reportedly a target of federal criminal investigation into the 1996 Teamsters money-laundering scandal.
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TEAMSTERS (IBT)
Review Board Hears Case Against Detroit Bosses
Two federal investigators testified Feb. 5 that the leadership of Int'l
Bhd. of Teamsters Local 337 in Detroit misused
members' dues to fund their own reelection campaigns. At a hearing of the
Independent Review Board, retired Dep't of Labor investigator Craig Woodhouse
said officers in the local nion voted to give themselves a $100-a-week
pay raise in 1996 without approval of the rank and file, and that some
of that money went into the local officers' reelection campaign.
On June 2, IRB recommended that six Local 337 board members, including president Lawrence P. Brennan, be disciplined over allegedly funneling at least $14,000 in union dues into their reelection coffers, without members' permission. An IBT panel dismissed the charges and referred its decision to the board, which now will decide whether to take action. Brennan, who is also president of Joint Council 43 and a close ally of IBT boss James P. Hoffa, denied the allegations.
Woodhouse and FBI Special Agent Paul Russo interviewed local vice-president Colonel Myers on June 6, 1997. The interview came following a tip from IBT lawyer Brian Kelly that Myers might discuss alleged corruption at the local. After refusing to answer specific questions about checks for the campaign, "a visibly shaken" Myers went to the bathroom, Russo said. "After a long time, he came back out and said, 'I don't know whether I should do this. And I hope I don't live to regret this,'" Woodhouse testified. Brennan's attorney dismissed the testimony as Myers' "bathroom exorcism" and reiterated that the officers did nothing wrong, because the membership did approve the raise and that it wasn't unreasonable.
However, IRB investigators note that the union officers in Apr. 1996 received a bonus in lieu of a raise of at least $2,000, with a second payment to be made later that year. The leaders asked for the early half of the bonus because they were afraid that then-Teamsters President Ron Carey would put the local into trusteeship. The $100-a-week raise was to be a payback for depositing the $2,000 bonus check into the union campaign account, the board's 42-page June report said. But the union ended the raise after 13 weeks, because it was running a deficit.
In a setback for the review board, Russo testified he didn't know who orchestrated the plan, despite repeated questions by the board members. Woodhouse testified Myers named Brennan as the mastermind. Woodhouse also said that Myers told them that some of the union funds were transferred to Hoffa's campaign account, but he declined to elaborate. Much of Myers' statement remains under court seal.
A federal grand jury has had Local 337 under investigation for years. The U.S. Attorney's Office has declined to comment on whether the union leaders face indictment. [Det. News 02/06/01]
MAINTENANCE OF WAY (BMWE)
Kentucky Boss Sentenced for False Statements
U.S. Dist. Judge Thomas B. Russell in Paducah, Ky., sentenced union
boss Lawrence A. Triche Jan. 16 to one year
probation and imposed a $500 fine and a $100 special penalty assessment.
Triche was convicted Oct. 12 of making false statements to a Dep't of Labor
investigator. Triche, who was vice-chairman and secretary-treasurer
of the Bhd. of Maintenance of Way Employees, was charged with lying to
the federal agent, who was conducting an audit on Feb. 23, 1999, at the
union's office in Mayfield, Ky., to determine Triche's reasons for writing
himself a check for $3,162 in union funds. Triche told the agent the check
was written to cover union-related travel expenses, when it was not. [USAO
W.D. Ky., Media Release 01/16/01]
POSTAL WORKERS (APWU)
Indiana Boss Gets 8 Months for $17,400 Embezzlement
U.S. Dist. Judge Richard L. Young, in Evansville, Ind., sentenced union
boss Elizabeth A. Schaefer Oct. 19 to eight months imprisonment for union
embezzlement. Schaefer, the ex-treasurer of Am. Postal Workers Union
Local 347 in Newburgh, Ind., pled guilty to embezzling approximately $17,396.50
of union funds from Nov. 1996 to Oct. 1997. The corruption was uncovered
by an investigation by the Dep't of Labor's Office of Labor-Management
Standards. Young also imposed two years supervised release following
Schaefer's release from prison, but he did not fine her. Restitution had
already been paid. [USAO S.D. Ind., Media Release 10/19/00]
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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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