AUTO WORKERS (UAW) / LABOR LAW REFORM
Michigan Dissidents Seek Congressional Probe
In an effort to spark a congressional hearing or broad-based federal
probe into the United Auto Workers, members of a dissident group, UAW
Concern, traveled to D.C. Feb. 20 to talk with Senate staff and drop
off materials they say show a pattern of corruption. A half-dozen members
of the Kalamazoo-based group met with the staff director of the Senate
Commerce Committee, Mark Buse, as well as an aide to Sen. Carl Levin (D-Mich.),
to urge them to get the Senate to investigate UAW.
"Our priority is to tell the Commerce Committee that we can show the UAW corruption and the collusion between the UAW and the companies. We've got 20 people or more who will come and testify about the UAW's lack of representation," said Pat Meyer, UAW Concern founder. Previously, Meyer helped members from UAW Local 594 in Pontiac meet with the Dep't of Labor and FBI investigators in Detroit. That criminal investigation recently proceeded onto the grand jury phase.
Meyer's group brought up the Detroit probe in its meeting with Buse. He said Chairman John McCain (R-Ariz.) has been trying to get UAW and other union bosses to agree to some funding disclosure so members would know how much of their money is used for political activities or other ventures. Unions have resisted, and the AFL-CIO recently opposed McCain's package. "It's difficult, extremely difficult to get the unions to agree to some kind of disclosure," Buse said. "They believe their internal communications are sacrosanct. They won't agree to it unless we make corporations do it, but corporations aren't the same type of a group." [Det. Free Press 2/21/01]
PLASTERERS (OP&CMIA)
Colorado Office Worker Indicted on 265 Counts
A federal grand jury in Colorado indicted Shelly S. Pfeifer on 265
counts of union embezzlement. She allegedly embezzled more than $16,000.
Pfeifer is charged with pocketing union dues from 265 members of Operative
Plasterers' & Cement Masons' Int'l Ass'n Local 577 in Denver. Her arraignment
is set for Mar. 21. [Denver Post 3/1/01]
LABORERS (LIUNA)
Oregon Boss Guilty of Racketeering in Pension Case
John D. Abbott, an ex-Laborers' Int'l Union
of N. Am. business manager in Portland, Or., pled guilty Feb. 26 to criminal
charges of receiving payoffs from Jeffrey Grayson, owner of an investment
company, Capital Consultants LLC, that managed a share of LIUNA's pension
funds. Allegedly, Capital misused union trust funds. Dep't of Labor and
others placed Capital in receivership last year. An estimated 75% of the
$927 million under Capital's management was union pension plans, including
Taft-Hartley plans covering pension, health and welfare, and vacation benefits.
Civil suits have been filed by DOL, SEC, and union trusts against Capital. Members of some unions have filed actions against fund trustees. Further, federal agencies are investigating criminal charges against Grayson and others.
Abbott was business manager of the Or., S. Idaho & Wyo. Dist. Council of Laborers until he resigned in 1998. He was a trustee of a number of LIUNA funds. He pled guilty to accepting gratuities in cash and other consideration of $194,940 from Grayson in exchange for helping place pension funds with Capital. He pled guilty to racketeering charges under Title 18 U.S.C. § 1954. He also pled guilty to understating his 1997 income on his federal tax return by $76,560 in gratuities from Grayson.
Asst. U.S. Atty. Lance Caldwell said he had witnesses who could testify that prior to some of Abbott's visits to Grayson, Capital employees would be sent to the bank with checks for large amounts of cash. The cash was delivered to Grayson's office and placed in a basket in his wheelchair. When Abbott emerged from Grayson's office, witnesses said they saw bulges in his pockets that appeared to be bundles of cash, Caldwell said.
Abbott agreed to cooperate with the federal probe of Grayson. In exchange, prosecutors agreed to reduce the severity of the charges. Prosecutors will recommend a 15-month sentence. The agreement also bans Abbott from working or consulting for a labor organization or employee benefits plan for at least 13 years. [BNA 3/1/01]
Chicago Murderer's Candidacy Denied
Kenneth E. Bates, convicted of shooting a woman in 1985, has been banned
from holding office in LIUNA Local 2 in Chicago.
He was nominated to run for executive board member. LIUNA's
"in-house trial judge" Peter Vaira, ruled Feb. 23 that Bates is disqualified
as a candidate because of his conviction. Federal labor law bars anyone
convicted of murder and certain other felonies from holding union office
for 13 years after being released from prison. But the federal judge who
imposed the sentence can drop the restriction, which Bates said he'll attempt
to have done. He was sentenced to prison in 1986 and released in 1997.
Jim McGough of Laborers for Justice, a dissident group, challenged Bates' nomination. McGough has dubbed the opposition the "Organized Crime Slate." Local 2 is part of the Chicago Laborers Dist. Council which voted in 1999 to cooperate with the DOJ and LIUNA's controversial "reform" effort. [Chi. Sun-Times 2/27/01]
TEAMSTERS (IBT)
New Info on McAuliffe's Role in Money-Laundering Scandal
Terry McAuliffe, top Clinton fundraiser
and DNC Chairman, may not have been the uninvolved bystander he claims
he was in the money-laundering scandal that led to the indictment of ex-Int'l
Bhd. of Teamsters boss Ron Carey. McAuliffe
has said he had nothing to do with the alleged scheme by which Democratic
contributors gave to Carey's 1996 campaign, in exchange, IBT gave large
sums to the Democratic Party. But the Phil. Inquirer cites sworn testimony
from Democratic and union sources that McAuliffe was, in fact, a "prime
mover" and "main intermediary" in raising the money from Democratic donors
for Carey's campaign. ["Special Report with Brit Hume," Fox News 2/20/01]
IRON WORKERS (BSOIW)
Iron Workers' Top Boss Resigns
The president of the Int'l Ass'n of Bridge,
Structural & Ornamental Iron Workers, Jake West, resigned Feb.
23 amid corruption allegations. West became president in 1989 and had appeared
to be moving toward seeking another 5-year term this July. His annual salary
was more than $200,000 and will be the unpaid president emeritus of the
D.C.-based union. He was succeeded by Joe Hunt, Jr., who was general treasurer.
West's resignation comes as the FBI and U.S. Atty's Office in D.C. continue to investigate his ties to ex-D.C. police chief Larry D. Soulsby. Prosecutors have tried to determine whether West used union money to bestow favors on Soulsby and whether the ex-chief did anything in return. Prosecutors alleged unnamed D.C. police officials were treated to meals and entertainment with money embezzled from BSOIW. Sources have said that Soulsby was on at least one golf outing with West that was paid for with embezzled union funds.
Authorities began looking at BSOIW in 1998 because Soulsby was a frequent companion of West. That led to an examination of BSOIW's records and to charges that four union boss stole union funds to pay for personal expenses. Three bosses have pled guilty and agreed to aid in the probe: Darrel E. Shelton, ex-BSOIW organizer, who admitted embezzling up to $120,000; Fred G. Summers, ex-executive director of organizing, who admitted embezzling more than $50,000; and Michael J. Brennan, ex-head of the Iron Workers Political Action League, who admitted taking part in the theft of $7,000. A fourth, general secretary James E. Cole, was indicted in Jan. on charges that he embezzled more than $10,000. He has pled not guilty; his trial is June 18. [Wash. Post 2/25/01]
HOTEL EMPLOYEES (HERE)
Wilhelm Imposes Trusteeship on Hawaiian Local where Int'l VP Defeated
The Hotel Employees & Restaurant Employees Int'l Union placed HERE
Local 5 Feb. 26 into trusteeship after a dispute between a top boss and
the executive board prevented the negotiation of contracts covering hotel
employees in Hawaii. HERE boss John Wilhelm
appointed Sherri Chiesa, HERE's western regional director, to run the local.
The trouble arose after Eric Gill, a kitchen steward at the Hilton Hawaiian Village, defeated longtime incumbent secretary-treasurer Tony Rutledge by several dozen votes in an election held last spring. The majority of executive board members who were elected had run with Rutledge. Since the election, Gill and the board have been at odds. Since his defeat, Rutledge has kept his post as a HERE int'l vice president, to which he was elected at HERE's 1996 convention. [BNA 3/2/01]
LABOR LAW REFORM / ELECTIONS & POLITICS / UNION
DUES
President Bush Issues Beck Order
President Bush signed an executive
order Feb. 17 to require government contractors to notify employees
of their rights under the U.S. Supreme Court's 1988 holding in CWA v. Beck.
The order, along with three other orders, "are based on the principles
of fair and open competition, neutrality in government contracting, effective
and efficient use of tax dollars and the legal right of workers to be notified
of how their dues may be used," according to the White House press secretary's
statement. With respect to the Beck order, the President agrees with the
ruling "affirming the right of workers to be notified and object, if they
so choose, to their union dues being used for purposes other than collective
bargaining," the statement said. [BNA 2/21/01]
ELECTIONS & POLITICS
Chavez Forms Union Watchdog
Linda Chavez, President Bush's
first nominee for Labor Secretary announced Feb. 21 she is forming an watchdog
group to monitor the involvement of unions in political campaigns. The
goal is to "make sure that [unions] do not have undue influence on our
political offices," she said during a lecture on unions sponsored by the
Heritage Foundation. Chavez said her group will monitor unions' political
contributions to ensure compliance with election and tax laws. [BNA 2/23/01].
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LABOR LAW REFORM / ELECTIONS & POLITICS / UNION
DUES
McConnell Outlines Strategy on Campaign Finance Regulation
Sen. Mitch McConnell (R-Ky.) acknowledged
Feb. 16 at the Conservative Political Action Conference that he has abandoned
his decade-long filibuster against campaign finance reform legislation.
But McConnell said the "McCain-Feingold bill" (S27) still could be stopped
by a veto from President Bush. The reason for such a veto, he indicated,
would be the measure's failure to include a "paycheck protection" provision
to limit unions' political power. "Let's keep up the fight against
McCain-Feingold," McConnell told a cheering crowd "We can stop it if you'll
be energized and go after it."
McConnell signaled that he has not softened his opposition to the campaign finance regulation bill sponsored by Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.). The bill, set to be debated in the Senate this month, would ban unregulated "soft money" contributions to political parties and restrict so-called issue ads that refer to candidates in the weeks before an election.
McConnell acknowledged that the 2000 elections cut the number of regulation opponents, making a filibuster impossible. Instead, McConnell said, his forces would employ a new strategy, including offering "lots of amendments" on the Senate floor. He admitted though that amendments he supports, such as paycheck protection, are "not likely to pass." The last line of defense would be a veto by the Bush White House. McConnell indicated he would argue that a regulation bill that does not limit unions should not be signed. "I'm hopeful that the administration would not allow such a thing to become law," he said.
McConnell said conservatives oppose limits on issue-advocacy organizations seeking to influence elections on First Amendment grounds. However, McConnell said, there was "one great abuse" that must be curbed -- the ability of unions to use their members' dues for political purposes. He said unions "scoop up money from members" and give 100% of it to support Democratic candidates. Conservatives believe that a paycheck-protection provision would cut union money from rank-and-file members, who they claim do not support the liberal political agenda of the union hierarchy.
Paycheck protection is a shorthand term used by supporters of a proposal to require unions members to give permission to allow their dues to be used for political purposes. Union officials note that federal law already allows their members to opt out of political activities if they choose to do so.
McConnell's comments came on the heels of an announcement by the AFL-CIO that it, too, opposes some major aspects of the "McCain-Feingold bill." It indicated it would fight any attempt to add a paycheck-protection amendment. But it said it also objects to provisions in the bill as introduced, which would ban corporate- and union-sponsored issue ads in a preelection period and place new restrictions on "coordination" among candidates, political parties, and outside groups. [BNA 2/20/01]
Utah Legislature Passes Paycheck Protection
The Utah legislature today put its stamp of approval on a comprehensive
paycheck protection measure similar to, but tougher than, California Proposition
226, narrowly defeated in 1998. The Utah measure, the "Voluntary
Contributions Act," like 226, requires up front written consent before
money is deducted from a private sector worker's paycheck for political
purposes. It is stronger than 226 insofar as it outright prohibits public
employers in the state from making payroll deductions for political purposes
under any circumstances, thus getting government out of being the political
bag man for public sector unions altogether. Governor Michael Leavitt (R)
has publicly indicated he would sign the bill. In a sign of strength
for conservatives, the powerful Utah Education Ass'n "threw in the towel"
in their effort to defeat the measure even before it got to the Senate
floor, according to a report in the Deseret News. The union instead
promises to fight the measure in court. Similar laws in Michigan,
Washington State, and Idaho have withstood legal challenge.[Am. Tax Reform,
2/15/01]
ELECTRICAL WORKERS (IBEW)
Rhode Island Union Fund Manager Pleads Guilty
Union pension manager Todd J. LaScola
pled guilty in U.S. Dist. Court in Providence, R.I., Feb. 26 to embezzling
from his clients to subsidize a lavish lifestyle and to shore up a failing
union investment. LaScola admitted defrauding several clients of more than
$6 million to pay for a $9,600 diamond engagement ring, among other personal
items.
At his peak, the cigar-smoking LaScola pledged $500,000 to his alma mater, St. Raphael's Academy. His business had an office in Switzerland. At its downtown office, Governor Almond (R) made fundraising calls for his campaign. But his success began to unravel in late 1997, prosecutors said, when he began to invest pension money from Int'l Bhd. of Elec. Workers Local 99 against its investment guidelines.
First, LaScola invested the money in an Argentinean government bond that turned out to be fraudulent, prosecutors said. Then, he violated the union guidelines again by investing in risky Fla. real-estate developments. LaScola reportedly received illegal commissions from the investments. When Local 99 found out its pension fund was performing badly, he diverted $6 million from other investors to cover up the results, then lied to those clients about the performance of their investments.
After a lengthy probe involving several federal agencies, LaScola was indicted on 55 counts of embezzlement and fraud, barred from the investment business and sued by various former investors. Before U.S. Dist. Judge Mary M. Lisi, LaScola pled guilty to one count of embezzlement, three counts of mail fraud and five counts of wire fraud. He acknowledged transferring money from investors without their knowledge. He was released pending his sentencing on May 25, when he faces as much as five years in prison and fines on each of the nine counts.
Joseph J. Rodio, Local 99's attorney, said the union kept the $6 million that LaScola illegally diverted from other clients and got legal fees under a settlement with an insurer and investment houses last month. Kimberly Zimmer, a SEC attorney, said the agency is seeking to collect from LaScola on a $6 million civil judgment against him in June 2000. [Providence J.-Bull. 2/27/01]
TEAMSTERS (IBT)
Obituary: Detroit Boss Anthony J. Giacalone
Anthony J. ("Tony Jack") Giacalone, who was reputed to be a Detroit
gangster and was investigated in the disappearance of the ex-Int'l Bhd.
of Teamsters boss James R. Hoffa, died Friday at St. John Hosp. & Med.
Ctr. in Detroit. He was 82. The cause of death was not disclosed. The Detroit
Free Press reported early last week that Mr. Giacalone was being treated
for heart failure and complications from kidney disease.
Giacalone, who federal authorities contend was a high-ranking figure in Detroit organized crime, was investigated for possible involvement in Hoffa's disappearance on July 30, 1975. Hoffa told a relative on the day he disappeared that he was meeting Giacalone at the Machus R. Fox restaurant near Detroit. Hoffa has not been seen since.
Giacalone said he had had no plans to meet Hoffa that day. At the time of Hoffa's lunch date, Giacalone's alibi was that he was getting a haircut. He was never charged in Hoffa's disappearance. Giacalone was convicted of tax evasion in 1976 and sentenced to 10 years in prison. He was facing a federal indictment on charges including racketeering, conspiracy and extortion at the time of his death. [N.Y. Times 2/26/01]
PILOTS (APA)
Supreme Court Upholds $45.5 Million Fine Against Union
The U.S. Supreme Court refused Feb. 25 to overturn one of the largest
fines against a labor union, a $45.5 million penalty
against the Allied Pilots Ass'n at American Airlines for civil contempt
for failing to quickly end a 1999 sickout that forced the airline to cancel
thousands of flights.The APA has already put $20 million in escrow against
the possibility it would have to pay the fine. But the union estimates
the total fine would exceed its assets by approximately $10 million.
APA made it clear that if the company tried to collect the fine the union would consider it a very unfriendly act. "The next step is going to be a management decision," said APA spokesman James Philpot. Philpot noted that American was "in the middle of lots of important discussions" with the pilots on a number of issues, including the proposed acquisition of Trans World Airlines Inc. and the purchase of 20 percent of U.S. Airways as part of the U.S. Airways-United Airlines merger.
The fine may be the largest in American labor union history. A Virginia judge fined the United Mine Workers union $64 million for its actions in the Pittston Coal Co. strike in the early 1990s, but the fine was tossed out in a unanimous decision by the U.S. Supreme Court in 1993.
U.S. Dist. Court Judge Joe Kendall in Dallas ordered the fine in February
1999, less than 48 hours after the airline filed suit against the union.
Kendall cited the union for not ending a sickout that had forced American
to cancel more than 6,000 flights, stranding thousands of passengers and
crippling the airline's operations nationwide. American estimated the job
action cost the airline $1.2 million for every 100 flights it was forced
to cancel, for an estimated total of $250 million. In holding the union
in contempt, Kendall encouraged the union membership to "remember this
fiasco the next time they have union elections." The union has since elected
new leaders. At one point in his contempt order, Kendall went so far as
to describe the pilots union as extortionists little different from the
mob families in New York. The Fifth Circuit Court of Appeals upheld
Kendall's fine last year. American agreed to forgive the fine as part of
a new contract agreement with APA last fall, but the contract proposal
was rejected by the union membership in Sept. [Wash. Post 2/26/01]
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