LABORERS (LIUNA) / NOVELTY WORKERS (IUANPW)
Chicago Jury Convicts Boss Serpico and Girlfriend
After three days of deliberations, a federal jury in Chicago convicted
ex-union boss John Serpico July 16 on
six of seven mail fraud counts. Two of Serpico's longtime associates, Maria
Busillo and Gilbert Cataldo were
also found guilty. Busillo, the longtime girlfriend of the married Serpico
was convicted of mail fraud and making false statements to a bank. Cataldo
was convicted of mail fraud. As an ex-int'l vice president of the Laborers'
Int'l Union of N. Am. and ex-head of the Central States Jt. Bd., Serpico
is the most significant Chicago union boss to be convicted on corruption
charges in years. CSJB is a labor organization which handles funds for
eight locals including locals of LIUNA and the Int'l Union of Allied Novelty
& Production Workers. Serpico was CSJB president from 1975-94 and is
now its $50,000-a-year consultant. Busillo is the current CSJB president
and IUANPW secretary-treasurer. Serpico also held influence with prominent
politicians including several Ill. governors, who appointed him to the
Ill. Int'l Port Dist. He was IIPD's longtime chairman until 1999 when he
was indicted. He was purged from LIUNA in 1995.
Asst. U.S. Atty. David Glockner said Serpico and Busillo engaged in a 12-year scheme trading their control over union pension, benefit, and other funds to obtain some $5 million in loans for personal business ventures. From 1978-90, the two obtained seventeen loans from eight banks that received substantial union deposits, in some cases just days after the banks made the loans. The key dealings were with Capitol Bank & Trust. In return for some $5 million in personal loans at favorable rates, the two deposited about $4 million in union funds in Capitol. The bank also managed $16 million in union pension and welfare plans. Capitol pled guilty in 1996 to the scam and was fined $800,000. Its two owners were forced to sell it and were banned from banking. At Serpico's trial, ex-Capitol president Robert Hahn testified for the government. Among Capitol's actions was a $1.8 million loan to Serpico and his partner, ex-U.S. Rep. Morgan F. Murphy (D-Ill.), on a film studio project despite cash-flow woes and no clients. The building was later bought by Oprah Winfrey and turned into Harpo Studios.
Busillo allegedly obtained loans for a condominium on Marco Island, Fla., and her $900,000 house in Glenview, Ill. She reportedly obtained the loan on the house even though the monthly mortgage payment exceeded her gross income. Serpico and Cataldo, an ex-Chicago housing comm'r and ex-IIPD executive director, were convicted of sharing in kickbacks of more than $330,000 after CSJB secured a $6.5 million loan for a failing hotel project in Champaign, Ill. The money went to Cataldo for consulting fees for architectural and engineering work. The one count on which the jury acquitted Serpico was a $480,000 loan he allegedly helped obtain for a reputed mobster.
"[Serpico] was a corrupt union official as was Ms. Busillo, and they misused union assets for their personal benefit," Glockner said. Glockner wants prison for all three, who are free on bond. U.S. Dist. Judge Blanche M. Manning (N.D. Ill., Clinton) set sentencing for Nov. 1. Glockner added that Serpico and Busillo would be "out of the labor union business for life as they should be."
Matthias Lydon, Serpico's lead attorney, said he was bewildered at how the jury convicted Serpico on the kickback charges. Lydon, of Winston & Strawn, contended the evidence was nonexistent. He also maintained the loans-for-deposits scheme wasn't illegal unless the prosecution proved that Serpico "either acted to the detriment of the union or got some under-the-table benefit." Neither occurred, he argued. He vowed he would seek to overturn the jury's decision. [Chi. Trib., Chi. Sun-Times 7/17/01, BNA 7/18/01]
**AFL-CIO/DNC Election Scandal**
Judge Helps AFL-CIO/DNC Suppress Public Documents
U.S. Dist. Judge Gladys Kessler (D.D.C., Clinton) blocked the Fed.
Election Comm'n July 16 from re-releasing public
documents from FEC's probe of 1996 campaign efforts
of AFL-CIO, the Democratic Nat'l Committee, and other liberal entities.
Kessler's preliminary injunction, sought by AFL-CIO/DNC, came a day before
FEC planned to re-release the documents, which may contain evidence of
union embezzlement crimes whose statutes of limitations are due to run
this Fall. Despite this, Kessler's order will remain in effect until at
least Oct.; she claims no one will suffer a great injury from the delay.
AFL-CIO/DNC claim the documents contain "proprietary information," including
campaign strategies and employees' names. [AP 7/16/01; BNA 7/17/01]
The Nat'l Legal & Pol'y Ctr., a union corruption watchdog, has already obtained some documents from the court record and under the Freedom of Information Act. NLPC is piecing together AFL-CIO/DNC's corruption puzzle and will release as many liberal campaign strategies and employees' names as possible. FEC partially denied NLPC's July 3 FOIA request for the challenged documents due to the injunction. NLPC is appealing the denial and will fight to bring all 55,000 documents of the taxpayer-funded probe into the public domain.
Rep. Charlie Norwood (R-Ga.), chairman of a House subcommittee that oversees Beck issues, is also seeking the documents to better understand how unions may use dues for political activity in violation of Beck. In a July 18 letter encouraging the FEC to appeal the injunction, Norwood contended that Kessler's order, in so far as it denied Congress access to the documents, is invalid. Further, raising embezzlement and statute of limitation concerns, Norwood said: "If these documents are found to provide evidence of criminal wrongdoing, this order amounts to concealment of evidence in a federal investigation and will be pursued as such."
ELECTRICAL WORKERS (IBEW)
Judge Allows DOL's McAuliffe Suit to Proceed
U.S. Dist. Judge Alexander Williams, Jr., (D. Md., Clinton) allowed
the Dep't of Labor to proceed with its suit June 15 alleging that trustees
of the Nat'l Elec. Benefit Fund, which
is linked to the Int'l Bhd. of Elec. Workers, breached their ERISA fiduciary
duties by investing in Am. Capitol Group I Assets LP, a Fla. real estate
firm, tied to Democratic Nat'l Committee chairman Terence
R. McAuliffe and his wife. In 1999, DOL sued trustees Jack Moore and
John Grau alleging imprudent real estate deals.
Williams denied the defendants' motion for summary judgment rejecting their argument that they didn't breach their duties because the deals had beneficiary results. Williams said, while "[m]uch of the Defendants' brief is devoted to heralding the beneficial results", this is not the correct legal standard. "Moreover," Williams added, "it is unclear what was the basis for Moore's belief that [Am. Capitol] was 'doing well.'" He found that genuine issues of material fact exist as to whether NEBF's investment in Am. Capitol was a prudent investment. He noted that NEBF had not obtained an independent appraisal of the fair market value of Am. Capitol. He also found that genuine issues of material fact existed on whether NEBF had suffered losses as a result of the Am. Capitol investment.
The case is currently scheduled to go trial Oct. 30, 2001. DOL was represented by Joan M. Roller, Myrna A. Butkovitz, and Richard T. Buchanan. Moore and Grau were represented by James M. Kefauver of Shulman, Rogers, Gandal, Pordy & Ecker, Rockville, Md. [BNA 7/12/01; Chao v. Moore, No. AW99-1283 (D. Md. 6/15/01)]
Tennessee Boss Faces Theft Trial
An ex-union boss, his wife, and his secretary, who are accused of stealing
more than $16,800 from the Int'l Bhd. of Elec. Workers Local 429 in Nashville,
are set to go on trial Aug. 14. A May 11 federal indictment charges ex-financial
secretary Robert M. Emery, Sr., and secretary Terri J. Myatt with
union embezzlement. Emery's wife, Patricia A., is accused of aiding and
abetting union embezzlement.
The indictment accuses Emery of stealing $5,693 for himself and $5,340 for his wife and helping Myatt steal $5,818 from union coffers. The thefts allegedly occurred June 1996 to July 1998. The indictment does not state how the funds were taken or for what they were used. Emery was voted out as the local's financial secretary in 1998. [Tennessean 7/10/01]
GOVERNMENT EMPLOYEES (CSEA)
New York Boss Forged Checks for $111,000
Ex-Albany boss, Nancy Groome, admitted July 11 that she embezzled more
than $111,000 from Civil Serv. Employees Ass'n Local 316. She pled guilty
to one count of union embezzlement and told U.S. Dist. Judge Thomas J.
McAvoy (N.D.N.Y., Reagan) that she forged union checks to pay for groceries,
car insurance, and other personal expenses. Allegedly, she forged 319 checks
between 1993-99.
Groome wrote checks on a union account made out to herself. She also wrote checks to vendors for union-related training trips that she never took. She was Local 316's treasurer from 1980 until Mar. 2000. The checks were reportedly forged between July 22, 1993, and Nov. 2, 1999. CSEA rules require that checks be signed by the union president and the chief financial officer, but Groome reportedly forged those signatures. The missing funds were discovered during a union audit. She reportedly faces prison time and $111,476 in restitution when she is sentenced Nov. 1. [Times Union (Albany) 7/13/01]
TEAMSTERS (IBT)
IRB Bars Michigan Boss for Life
The Int'l Bhd. of Teamsters' Indep. Rev. Bd. stripped Michael
C. Bane, president of IBT Local 614 in Pontiac, Mich., of his office
July 19 and barred him from the union for life because Bane didn't cooperate
with IRB's probe and intentionally gave misleading testimony in a sworn
statement about his ties with three men identified as mob figures by federal
agents. Absent of "any mitigating factors," IRB held "the only suitable
remedy" was to permanently bar Bane from IBT and all IBT-affiliated entities.
The ruling must be affirmed by U.S. Dist. Judge Loretta A. Preska (S.D.N.Y.,
H.W. Bush). Bane and his father, Joseph Bane, Sr., who was convicted of
racketeering in the late 1970s, have run the local for most of the past
30 years. IBT boss James P. Hoffa is a member
and ex-attorney of Local 614; he is also reportedly a close associate of
Bane, Jr. [AP 7/21/01; BNA 7/24/01]
HOTEL & RESTAURANT EMPLOYEES (HERE)
Quindel Rejects Wilhelm Charges
Predictably, Barbara Zack Quindel, the tainted
election officer, has dismissed charges that John
W. Wilhelm, Hotel Employees & Restaurant
Employees Int'l Union boss, tinkered with HERE Local
1's election rules and used int'l union resources to benefit a slate
of candidates he favored. Quindel was appointed by the int'l union. Quindel,
who oversaw the failed 1996 Int'l Bhd. of Teamsters election, "supervised"
the Chicago local's June 27 election and told BNA July 23 that she denied
the election protests from the two losing slates. She didn't give an reasons
for her rejection. Both slates said they would appeal her decision; they
must first appeal to Wilhelm himself. Patrick Deady, attorney for ex-Local
1 boss Terry Maloney, said his client is not optimistic about his prospects
before Wilhelm and is prepared to take the issue to the Dep't of Labor.
[BNA 7/25/01]
FOOD & COMMERCIAL WORKERS (UFCW)
California VP Nearing Deal in Theft Case
David Gottlieb, attorney for Alan L. Axt,
ex-vice president of the United Food & Commercial Workers Local 1288
Fed. Credit Union, told U.S. Dist. Judge Oliver W. Wanger (E.D. Cal., H.W.
Bush) that Axt will plead guilty to charges that he embezzled $237,335.
Axt, who is free on his own recognizance, was indicted in June on one-count
of taking the funds from the Fresno, Cal., credit union between Mar. 1999
and Nov. 30, 2000. Wanger set Aug. 13 as the date for a possible plea change
and Sept. 25 as a trial date if a deal can't be reached. [Fresno Bee 7/24/01]
LONGSHOREMEN (ILA) / LABORERS (LIUNA)
Two Accused of Siphoning Funds
A man federal prosecutors identified as the ex-acting boss of the Genovese
crime family is accused of a money-laundering conspiracy: Liborio S. "Barney"
Bellomo was indicted in U.S. Dist. Court in Brooklyn on July 12. The charges
reportedly stem from efforts by Bellomo and Thomas Cafaro, an alleged Genovese
crime family associate, to launder money they siphoned from the Int'l Longshoremen's
Ass'n benefit funds in 1996-97. Cafaro was also charged. The charges were
added to an April indictment, which was among several that charged more
than two dozen crime family figures with racketeering and other crimes.
While Cafaro was charged in the earlier indictment, Bellomo was not.
In 1997, Bellomo was sentenced to 10 years in prison for an extortion conspiracy. He had pled guilty to conspiring to extort $200,000 in 1989-91 from a garbage hauling firm. He also admitted conspiring to extort from bosses of the Mason Tenders Dist. Council of Greater N.Y. Local 46, which is unit of the Laborers' Int'l Union of N. Am. Murder and racketeering charges against him were dropped in a plea deal. [N.Y. Times 7/14/01]
QUOTABLE QUOTE
"It would probably come as a shock to most dyed-in-the-wool New Mexico
Democrats that their beloved party isn't really theirs. More accurately,
it's a division of the AFL-CIO."
- Editorial, Albuquerque Journal, July 24, 2001, on a AP article analyzing FEC documents (some released during the brief period AFL-CIO/DNC records were public) revealing "a political structure that gave the AFL-CIO literal veto power over the DNC's campaign decisions."
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ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
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ELECTRICAL WORKERS (IBEW)
Four New York Racetrack Tellers Indicted for Money-Laundering
Four N.Y. racetrack tellers used the flow of cash through betting windows
to launder money, law enforcement officials alleged in indictments announced
July 19. The four face multiple counts that could bring an aggregate sentence
of more than 10 years for each. Three of the men were arrested July 18
and arraigned in Saratoga County Court in Saratoga Springs. They are: Robert
E. Lodati, Robert J. Marshall, and Joseph Rabito. They were released
on bail ranging from $20,000 to $35,000. A fourth, Peter Oster, turned
himself in turned himself in July 25, he was arraigned in Saratoga County
Court before Judge Jerry Scarano and released on a $25,000 bail bond. Lodati
is the president of the the betting clerks' union, Div. of Mutuel Employees,
which is a unit of the Int'l Bhd. of Elec. Workers Local 3 in Queens. Marshall
is reportedly DME's vice president.
The indictments charge them with laundering $300,000, exchanging small
bills for large ones, over six months for state police investigators posing
as drug dealers, in transactions that were recorded on videotape and audiotape.
The clerks allegedly pocketed a cut of 5% to 10% every time they made the
swaps. Law enforcement said the sting operation began after they learned
that tellers were laundering money for a gang acting as a front for the
Gambino crime family. The probe is continuing and may produce more indictments.
The U.S. Atty.'s Office in Brooklyn is also exploring possible tax fraud
charges. [N.Y. Times, Daily News, Newsday 7/20/01, Times Union (Albany)
7/26/01]
GOVERNMENT EMPLOYEES (AFSCME)
Michigan Employer Stole Union Dues
Larry Fleming, the owner of Richmond Residential Care Ctr. in Palmer,
Mich., admitted to embezzling his employees' union dues. He pled guilty
July 25 in state court to one count of embezzlement by a trustee or agent
under $200. Fleming is scheduled to be sentenced Sept. 26 on the misdemeanor
charge. Under a plea agreement, four additional misdemeanor embezzlement
charges were dropped. Mich. State Police detective Sgt. Walley Helmila
said Fleming had withheld about $925 in union dues paid by his employees.
Twelve of the center's workers are members of the Am. Fed'n of State, County
& Mun. Employees. [Detroit News 7/26/01]
Maryland Employees Move to Decertify AFSCME Local
Employees at the Wash. Suburban Sanitary Comm'n have turned to the
Dep't of Justice and an independent union to help rid them of Am. Fed'n
of State, County & Mun. Employees, which they say has neglected members
and refused to account for spending of their dues. Their complaint to DOJ
charges that AFSCME Local 2898, in Md.'s Montgomery and Prince George counties,
denied workers legitimate elections, financial reports, and access to audit
statements. Further, the employees say AFSCME has failed to file and handle
job-related grievances on time and to fulfill its responsibilities in negotiating
for salaries and benefits. The employees have also asked the Md. Classified
Employees Ass'n to form a new chapter.
About 280 WSSC employees signed the decertification petition to oust AFSCME. Additionally, two of its local officers, ex-vice president Thomas Kelly and ex-secretary-Treasurer Paul Linton, resigned this spring, citing disagreements with AFSCME bosses and personal frustration in their efforts to ensure fair representation of fellow employees. In his Mar. resignation letter to Local 2898 president John D. Swann, Linton said he had received no bank statements, despite repeated requests stretching back to Nov.
In June, Swann charged two WSSC employees, mechanics Joseph T. Diggs and James Cudmore, who had circulated the decertification petitions with violating AFSCME's constitution by assisting a competing organization and "urging others to institute actions outside the union...without first exhausting all internal remedies." Suzanne Levin, attorney for the two employees, said she cannot imagine what else her clients could have done in the face of AFSCME's "egregious" disregard for accountability to members. "AFSCME is merely trying to squelch their rights to freedom of speech and association" that are protected by the Constitution and AFSCME's own members' bill of rights, Levin said.
MCEA president Ruth A. Ogle said her union has a 65-year history as a member-run organization, and "members are the ones who make the decisions" without any competing considerations or regard for outside politics. Ogle said there's a "pattern" at the WSSC of employee grievances being filed but "never coming to any resolution."
C.J. Ross, administrator of the Md. AFSCME council disputing whether the decertification petition was filed properly. If an arbitrator decides the petition is valid, WSSC workers will hold new elections to select a union. [Wash. Times 7/26/01]
TEAMSTERS (IBT)
IBT Selects diGenova for Review Board
The Int'l Bhd. of Teamsters July 20 named ex-federal prosecutor Joseph
diGenova as IBT's designee on the three-member Independent Review Board.
U.S. Dist. Judge Loretta A. Preska (S.D.N.Y., H.W. Bush) earlier had extended
the term of the current board by one month or until the IBT and the Dep't
of Justice either renewed the appointments of their individual board
designees or made new appointments. IBT's outgoing appointee is W. Va.
labor lawyer Grant Crandall.
Under IRB's rules, IBT appoints one member, DOJ another, and these two individuals then determine the third member. DOJ's current appointee to the panel is ex-U.S.Dist. Court Judge Frederick B. Lacey (D.N.J., Nixon), who served initially as the court-appointed independent administrator in the first years of DOJ-IBT consent decree signed in 1989. The third panel member, whose term now has been extended until Aug. 20, is William Webster, the ex-head of the FBI and CIA. Preska gave the union and DOJ until Aug. 20 to either reappoint their current designee or make another appointment
An ex-U.S. Atty. for the Dist. of Columbia, diGenova was special counsel to the U.S. House Education & Workforce Committee during the probe by the committee's Subcommittee on Oversight & Investigations of the IBT's failed 1996 election. He is a partner with his wife, Victoria Toensing, in the Washington, D.C., firm of diGenova & Toensing. IRB Members are paid an annual salary of $100,000 plus expenses. In addition, each receives $35,000 annually in lieu of pension and health benefits. [BNA 7/24/01, Det. News 7/22/01]
BRICKLAYERS (BAC)
DOL Wins Suit Against Detroit Trustees
In a consent order/judgment obtained Jan. 19 by the Dep't of Labor,
involving two Detroit area unions' pension and welfare funds, trustees
agreed to restore monies to the plans and to establish new procedures for
paying for the plans' legal expenses. Under the order, the plan trustee
defendants agreed to restore a total of $30,528 to the affected plans of
the Tile, Terrazzo & Marble Industry and the Int'l Union of Bricklayers
& Allied Crafts Local 32 Unions, based in Troy, Mich., for paying a
participant's medical expenses not covered under the policy limits of the
welfare plan, and for paying trustee travel expenses for which incomplete
accounting was given. Further, plan trustees John Lanzetta, John Mason,
and Robert Michielutti will resign their positions. Lanzetta and Michielutti
also were barred permanently from serving in any fiduciary capacity to
these plans or to any other plan covered by ERISA.
The new procedures for the paying of legal bills require that all bills include the identity of the attorney who performed the work, the hourly rate charged and a description of the work performed. In addition, for any cases involving participating employers delinquent in remitting their contributions to the plans, any law firm, which may be engaged by the plan, must prepare a monthly written report for the trustees, indicating the amount of money at issue and listing the total legal fees charged to each case. The procedures also require charges for legal work of a general research nature to be preapproved by the trustees and, where appropriate, for the plan to only pay for a portion of the expense if the research is shared with other clients of the law firm.
Joseph Menez, director of the Cincinnati Reg'l Office of DOL's Pension & Welfare Benefits Admin., said, "We are obviously pleased to get plan assets back for both of these plans, and to institute a formal arrangement to monitor and evaluate payment of legal billings by the plan trustees to insure that the services provided justify the fees paid." Menez said the agency is vigilant in protecting the rights of participants and beneficiaries of private sector pension and welfare plans.
The consent order/judgment was entered in U.S. Dist. Court in Detroit on Jan. 18. The complaint was filed Dec. 15, 2000 in the same court. As of Apr. 30, 1996, the pension plan reported 793 participants and $24,586,371 in assets, and the welfare plan had 613 participants and $909,059 in assets. [PWBA Media Release 1/19/01]
TEACHERS
Florida Boss Arrested for Child Pornography
Anthony J. Gentile, Broward Teachers Union president, was arrested
on child pornography charges July 26 after reportedly arriving for a rendezvous
with a 14-year-old girl. Gentile was charged in Broward Cir. Court with
one count of sexual performance by a child, one count of computer pornography,
and four counts of transmitting harmful material to a minor -- third-degree
felonies punishable by a maximum of 40 years in prison and a $35,000 fine.
Authorities are determining whether to file federal charges. Gentile has
been president of BTU since 1979.
The "girl" was Detective Richard Love with Law Enforcement Against Child Harm task force. Gentile was arrested at 10 a.m. outside a Ft. Lauderdale store where investigators say he planned to meet the girl. He left the county jail at 3:30 p.m. on $16,000 bail.
The case originated in May when AOL screen name "TJGENT234" contacted an FBI child pornography sting called Innocent Images in Birmingham, Ala., LEACH Lt. Paul O'Connell said. The FBI notified LEACH, which assigned Love to contact the computer user, posing as the 14-year-old girl. Gentile is accused of discussing sex acts in ten e-mail conversations with the person he thought was a girl in June and July. On four occasions, he transmitted pornographic images of adults having sex and one of a girl under 18 having sex with a man, court records allege. Another detective posing as the girl, Joyce Fleming, agreed to talk with him on the phone. On July 26, the girl agreed to meet Gentile in a parking lot and was arrested. Authorities seized his desktop and laptop computers at BTU headquarters July 26 because they are suspected of having been used to send the photographs, O'Connell said.
BTU and Florida union bosses, as well as Broward School Board members, shockingly supported Gentile after the arrest, lauding him as "a community leader" who fought for education. He "has strived to make Broward County and surrounding communities a better place to live," John Ristow, BTU communications and publications manager. Board member Judie Budnick called Gentile an outstanding citizen. "He's put in hours of tireless effort to improve our system." BTU bosses said they'll ensure that no operations are affected: including current negotiations for all 13,000 teachers for the 2001-2002 school year, which resume on July 30.
Gentile has lobbied in Washington and Tallahassee for increased education funding. He has been a staunch advocate for the fair treatment of educators accused of wrongdoing, most notably when the Board sought to fire two teachers arrested for lewd acts in an adult club in 1999. Gentile is also a major force in local education policy-making. He has served on numerous advisory committees on construction and education for minorities and helped recommend companies for the district's insurance contracts.
As the leader of one of the county's largest and most politically active unions, Gentile is influential in county politics and served on the Democratic Executive Committee. He also has served on the boards of the NAACP, Nat'l Conference of Christians & Jews, Nat'l Org. for Women and the United Way. He is married and has two adult children and one child in high school. [Sun-Sent. (Ft. Lauderdale) 7/27/01]
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