LABORERS (LIUNA)
Illinois Boss Admits $470,000 Theft, Racketeering
Frank B. Zeuberis, ex-boss of Laborers'
Int'l Union of N. Am. Local 5 in Chicago Hts., Ill., pled guilty June 18
to a federal racketeering charge and admitted that he embezzled $470,106
in union funds. The ex-president and business manager admitted that he
gave himself, his wife and James A. DiForti unauthorized
and fraudulent salary increases, bonuses, and paid vacations. DiForti was
a reputed mob lieutenant who Zeuberis appointed as Local 5's secretary-treasurer.
Zeuberis also admitted that he solicited $5,000 to appoint a union member
as a business agent. The wife was not charged, and DiForti died in June
2000. Zeuberis faces up to 42 months in prison when he is sentenced Oct.
18. Zeuberis was indicted on 28 counts in Nov. 2000. [Chi. Trib. 6/19/01,
BNA 6/21/01]
AFL-CIO
New Hampshire Embezzler Sentenced to One Year
U.S. Dist. Judge Joseph DiClerico sentence "longtime labor activist"
and ex-N.H. AFL-CIO secretary-treasurer Daniel Courchesne
May 8 to 12 months in federal prison for embezzling union funds, possibly
to cover gambling debts. Reportedly, Courchesne stole approximately $127,000,
but no precise total was given at the sentencing hearing. Courchesne, who
pled guilty to one count of wire fraud in Nov. 2000, put some cash back
into union accounts thereby allegedly netting $53,150.
Asst. U.S. Atty. William Morse said Courchesne got a stiff sentence because he took funds as an elected official who held a private financial trust. The wire fraud charge carries an 8 to 14 month sentence, but because of his capacity as a union official, sentencing guidelines provide for 12 to 18 months. After prison, Courchesne will be on supervised release for three years. DiClerico did not fine Courchesne but ordered him to pay restitution.
DiClerico also ordered the boss to undergo counseling for gambling and pay for the treatment himself. Bankruptcy records show that Courchesne owed money on 24 credit cards. He listed $404,842 in total liabilities and $194,603 in assets. His annual household income was about $62,000. He and his wife filed for bankruptcy protection on Dec. 18.
The funds diverted to Courchesne's personal accounts included dues and fees from labor organizations and subsidies from the national AFL-CIO. He deposited funds coming into N.H. AFL-CIO's office in Concord into a personal account and into an account in the name of DPC Assocs., a firm that he controlled. He claimed the money was for legitimate lobbying expenses. Two signatures were needed to withdraw AFL-CIO funds; he used another boss' stamp to make withdrawals. Also, he transferred funds to the N.H. Cent. Labor Council in Manchester where he was authorized to withdraw funds on his own.
N.H. AFL-CIO president Mark MacKenzie said he that he was ignorant of Courchesne's heavy gambling or "any other afflictions." MacKenzie discovered money was missing when he introduced new auditing regime last year.
David Lang, Prof'l Firefighters of N.H.'s secretary-treasurer, said he was saddened that a career unionist had taken a wrong turn, for whatever reasons. Dennis Adams, business manager of United Ass'n of Plumbers & Pipefitters Local 131 and ex-president of the N.H. Bldg. Trades Council, said, "This is not right," and said he hoped Courchesne could pay back the money. Conditions of release require Courchesne to give probation officials access to all financial records. If he receives any lottery winnings, inheritances or other windfalls, he must use the proceeds to pay restitution. [Union Leader (Manchester, N.H.) 5/9/01]
LOCOMOTIVE ENGINEERS (BLE)
North Dakota Boss Stole $33,000, Charges Against Wife Dropped
Bryan D. Kroh pled guilty June 15 in U.S. Dist. Court in Bismarck,
N.D., to embezzling $33,468.52 from the Bhd. of Locomotive Eng'rs. The
ex-secretary-treasurer admitted to writing unauthorized checks to himself
and his wife, Dinah, as well as numerous checks to vendors and a bank.
Reportedly, there were 61 illegal transactions from Jan. 1996 to Mar. 1999.
The U.S. Atty.'s Office also filed charges against Dinah, a rare move,
for union embezzlement and aiding and abetting. But, both felony charges
against the wife will reportedly be dismissed at Bryan's sentencing.
Despite Bryan's 1991 felony conviction on one count of federal tax evasion, prosecutors will recommend a prison term of not more than nine months on the embezzlement charge. He received three years probation for the tax crime. The maximum penalty for union embezzlement is five years in prison and a $250,000 fine. Also, as part of his plea on the embezzlement charge, a second charge of giving false statements was dropped. But, prosecutors will ask the judge to order Bryan to pay restitution. [Bismarck Trib. 6/16/01]
IRON WORKERS (BSORIW)
Fourth International Boss Guilty of Union Corruption
James E. Cole, Int'l Ass'n of Bridge, Structural,
Ornamental & Reinforcing Iron Workers' general secretary, pled guilty
to one count of embezzling of union funds, one count of "failing to disclose
a material fact" in a report to the Dep't of Labor, and one count of "making
a false entry" in union records. In return, he will cooperate with the
ongoing federal probe of BSORIW, under the terms of a plea agreement approved
June 18 by U.S. Dist. Judge Thomas F. Hogan in Washington, D.C. Cole's
trial on 18 felony charges was scheduled to begin June 18. Cole is the
fourth BSORIW boss to admit to crimes against his union in the three-year
probe by the U.S. Atty.'s Office in D.C., FBI, and DOL.
Hogan did not set a sentencing date, but he ordered Cole to return to court on Sept. 26 for a status hearing. Cole faces a maximum sentence of up to seven years in prison and a fine of up to $450,000 when he is sentenced. But prosecutors may seek a shorter sentence if Cole provides them with substantial assistance. Currently under the plea agreement, Cole will pay a $15,000 fine within 30 days of signing the plea agreement and $15,000 in restitution for his embezzlements.
A federal grand jury indicted Cole in Jan., accusing him of embezzling more than $10,000. Among the allegations: he used union credit cards and other funds to pay for personal meals, trips, and entertainment for himself as well as his wife, family, and friends. For example, he allegedly used union funds for a Scotland vacation, a high school reunion trip, and anniversary flowers for his wife. Also, Cole allegedly arranged for BSORIW to pay for country club memberships that he and his wife often used for personal use.
Further, Cole allegedly submitted fraudulent claims for reimbursement of expenses he had not incurred and sought tax deductions for expenses he had not incurred. LM-2 reports to DOL were allegedly falsified by Cole to conceal the extent of union expenditures for himself, his wife, ex-BSORIW president Jake West, ex-gen. secretary LeRoy Worley, and ex-union bosses Fred G. Summers and Darrel E. Shelton. Specifically, he underreported the amount he and other bosses spent by concealing disbursements in general categories such as "office and administrative" expenses or "educational and publicity" expenses.
Additionally, Cole allegedly participated with Victor Van Bourg, ex-BSORIW gen. counsel, in obstructing the grand jury's investigation by withholding documents related to the LM-2s. The documents were reportedly withheld for more than two years until Van Bourg died and Cole no longer served as custodian of the records.
Beyond Cole, three others have pled guilty and are aiding in the probe: Shelton, ex-BSOIW organizer, admitted embezzling up to $120,000; Summers, ex-executive director of organizing, admitted embezzling more than $50,000; and Michael J. Brennan, ex-head of the Iron Workers Political Action League, admitted stealing $7,000. To date, none have been sentenced.
Cole has served as secretary since 1999 but intends to resign after 16 years as an int'l union boss. From 1985-98 he was treasurer. Prior to pleading guilty, Cole had planned to run for another term together with BSORIW president Joseph Hunt, Jr., at the union's convention Aug. 13-17 in Las Vegas. Hunt was elected by BSORIW's council after West resigned in Feb. Joe Blaze, a Toledo local boss who hopes to unseat Hunt, said Cole's guilty plea was "another nail in the coffin of the current administration."
The federal probe have been examining BSORIW's books since 1998 as an offshoot of an investigation into alleged D.C. police corruption. The link to both cases is West. Prosecutors are trying to determine whether West, a friend of ex-D.C. police chief Larry D.Soulsby's, used union money to do favors for Soulsby and whether Soulsby did anything illegal in return. [Wash. Post 6/19/01, BNA 6/20/01]
LABORERS (LIUNA)
Possible Tampering in Ohio Vote
Int'l union election officer Stephen B. Goldberg impounded ballots
and ordered a new election at two Laborers' Int'l Union of N. Am. locals
in the Columbus, Ohio, area due to possible ballot tampering. LIUNA Locals
216 and 423 recently completed an election for delegates to attend LIUNA's
convention this fall in Las Vegas. Twelve were nominated for nine slots.
Nine were local bosses running as a slate.
Goldberg ruled June 21 that, while he could not determine whether there was an intentional effort to tamper with ballots, there were numerous violations of election rules that "cast substantial doubt on the validity of the election." He cited several violations, including the fact that ballots were picked up early from a post-office box and left at a candidate's office, and that far more ballots than needed were printed. He added that the problems raise concerns about the locals' future ability to conduct fair elections.
Goldberg ordered the reg'l election coordinator in Pittsburgh, Michael J. Healey, to conduct another election with mail-in ballots. Healey said dates for the new election haven't been set but that members would receive an election packet in July.
"Whether this was a comedy of errors or purposely done, it casts the entire union election process in a bad light," said Jeff Nourse, one of three Local 423 members who ran the election.
The problems are just the latest for Local 423. Its election for vice president was overturned and repeated by the Dep't of Labor in 1998 because the local illegally elected a convicted felon. [Columbus Dispatch 6/23/01]
ELECTIONS & POLITICS / AFL-CIO
RNC to FEC: Open AFL-CIO Files
The Republican Nat'l Comm. asked the Fed. Election Comm'n June 13 to
release thousands of pages regarding a FEC case against AFL-CIO and the
Democratic Party. RNC complained of an unprecedented move by FEC to yank
all of the probe's files from the public record. In May, after a lengthy
staff review to remove confidential materials, FEC
made 6,024 pages public, but quickly reversed itself and suppressed the
documents four days later.
"Compounding the seriousness of this bizarre action by the commission is the fact that the removal-and presumably the explanation for the removal-was conducted in secret," RNC gen. counsel Michael E. Toner said in a motion demanding an explanation from FEC and asking that the papers be made public again. Toner added: "Because this motion involves a closed matter, the RNC trusts that all deliberations regarding this motion will be conducted at a public meeting of the commission."
The motion also indicated that the documents should have been placed on the record sooner because the case was closed nearly a year ago. Toner also suggested that the probe produced thousands of pages of documents involving the Democratic Nat'l Comm. that never have been placed on the public record and should now be made public.
DNC's gen. counsel, Joseph E. Sandler, said the withdrawal was prompted by vigorous complaints from DNC and AFL-CIO about certain records FEC included in the public file. "[W]e believe some of this material is absolutely exempt from disclosure under the Freedom of Information Act and we demand that [FEC] take it off the record," Sandler said. Sandler and AFL-CIO assoc. gen. counsel Laurence E. Gold want FEC to expunge the coordinated campaign plans detailing the strategy for state-by-state field operations, records showing how AFL-CIO and other unions "go about their business" politically, and the names of DNC and union operatives who provided information during the probe or are mentioned in various documents.
Gold said, "We believe strongly that they should not see the light of day." Although such documents regarding closed cases have been routinely available to the public in the past, Gold said, FEC's practices in this area have not necessarily complied with applicable laws. Gold argues that the Republicans should not be allowed to obtain "proprietary information" in a case where AFL-CIO was "exonerated." FEC investigators found "an extraordinary degree" of political coordination with the plans of each state Democratic Party and DNC apparently "subject to the approval of the AFL-CIO," but FEC decided to abide by a 1999 court ruling that took a narrow view of what constituted illegal coordination.
Ex-FEC general counsel, Lawrence M. Noble, said yesterday that he quit the agency last year largely because the panel decided not to appeal that ruling and because of its adoption of regulations that make it almost impossible to prove illegal coordination. Noble believes that the documents eventually would be released through normal FEC processes or through a Freedom on Information Act request. Noble is now the executive director of the Center for Responsive Politics. Kent Cooper, co-director of politicalmoneyline.com, said any FEC move to censor the records is too late. His organization made copies of all the pages before they were withdrawn. [Wash. Post 6/14/01; BNA 6/19/01]
QUOTABLE QUOTE
"[D]on't get your hopes up that equality and inclusion are qualities
practiced in the union halls. Go to the meetings and fight for change or
pay your dues, collect your check and watch while the American labor union
movement continues to go down the tubes, led by an unenlightened group
of middle-class, middle-aged, clueless white men."
- Ex-UMW and AFSCME employee Mary A. Uzelac, Letter to the Editor, Charleston (W. Va.) Daily Mail, 6/21/01.
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ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
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TEAMSTERS (IBT)
Supreme Court Denies Hamilton's Sentence Appeal
The U.S. Supreme Court turned down an appeal to hear the case of a
ex-Int'l Bhd. of Teamsters political director William W. Hamilton, Jr.,
who was convicted of union corruption in
1999. The court, without comment, refused to examine the conviction
for participating in a plan to use third-party
political groups to benefit IBT's ex-president Ron Carey. Hamilton
received a three-year prison sentence. IBT contributed about $800,000
from its members to third-party political groups, such as the liberal Citizen
Action, that ran get-out-the-vote efforts to benefit Democratic candidates
in the 1996 elections. The groups, in turn, contributed to Carey's
own campaign fund to help his fight for re-election against challenger
James P. Hoffa.
Hamilton selected which groups would get union money, but he argues that he never arranged a quid pro quo and never personally benefited from any donations. He was convicted of embezzlement, mail fraud and wire fraud in federal court in New York, and a federal appeals court upheld the conviction. Hamilton had asked the Supreme Court to overturn the convictions on the grounds that he believed the donations were proper. [AP 6/25/01]
PROFESSIONAL SPORTS (NHL)
Statute of Limitations Saves Corrupt Boss
The U.S. Supreme Court refused June 25 to revive claims by former NHL
players that they were victims of a conspiracy waged by NHL teams and the
ex-head of NHL Players' Ass'n, Alan Eagleson,
to keep salaries low. The Court let stand a two-year-old federal appeals
court ruling that players waited too long to sue. Eagleson served six months
in prison for hockey-related fraud. He pled guilty in Boston on Jan. 6,
1998, to three counts of mail fraud and was fined $1 million in Canadian
funds. The next day in Toronto, he admitted to three counts of fraud and
was sentenced to 18 months in prison.
The U.S. charges related to using money from international hockey tournaments for himself, family and friends and to diverting $15,000 from disability insurance proceeds belonging to ex Chicago Blackhawk Glen Sharpley. The Canadian charges stemmed from rinkboard advertising deals that defrauded the NHLPA, Hockey Canada and Labatt's Breweries.
Former NHL players Dave Forbes, Rick Middleton, Brad Park, Ulf Nilsson and Doug Smail filed a class-action lawsuit against the NHL and most of its individual teams in 1995 on behalf of about 1,000 NHL players who were employed during Eagleson's tenure. He headed NHLPA from its inception in 1967 to his resignation in 1990. The players alleged a conspiracy existed from the 1970s to the 1990s, in which NHL teams knew Eagleson was misusing union money but did nothing because he helped negotiate favorable contracts for the teams. They sought damages that some hoped would reach into the hundreds of millions of dollars.
The U.S. District Court in Philadelphia dismissed the players' lawsuit in Aug.1998, saying the retirees should have known by at least 1991 about the allegations against Eagleson and that the four-year statute of limitations in civil racketeering cases had run out by their 1995 filing date. According to the District Court, the players should have been aware of the problems as early as 1984, when a Sports Illustrated article discussing the allegations of Eagleson's wrongdoings was published, or 1989, when labor attorney Ed Garvey issued a damning report of Eagleson's union leadership after Garvey was hired by several players to investigate the NHLPA executive. In 1991, Eagleson's activities were detailed in a series of newspaper articles and allegations against him were widely read in NHL circles. The players, however, argued that because Eagleson was not actually indicted on criminal charges until 1994, the statute of limitations should be measured from then.
Eagleson only served jail time in Canada. His parole and the condition that he remain in Ontario after his six-month incarceration expired in July, 1999. He now lives in England with his wife Nancy but returns to the Toronto area frequently to visit his children and grandchildren. After his convictions, Eagleson was disbarred by the Law Society of Upper Canada and ousted from Canada's Sports Hall of Fame. He resigned from the Hockey Hall of Fame and the Order of Canada. [Toronto Star 6/26/01]
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