RAILWAY SUPERVISORS (URS)
Pennsylvania Embezzler Gets Five Months for $100,000 Theft
U.S. Dist. Judge Alan N. Bloch (W.D. Pa. Carter) sentenced Richard
P. Miller Aug. 9 to five months in prison for embezzling funds from
United Railway Supervisors Local 202. After a Dep't of Labor probe, Miller,
of Beaver, Pa., pled guilty in May to double billing union expenses, pocketing
excess reimbursements, and withdrawing money from the local's checking
account for personal expenses. Bloch also sentenced Miller to five months
of community confinement plus three years of supervised release and barred
him from serving as an officer in or representing any labor organization
for thirteen years. Bloch further fined Miller $10,000 and ordered him
to repay $100,000, which will be divided among those who were members of
the union when it dissolved in 1999. [Pitt. Post-Gazette 8/10/01]
TEAMSTERS (IBT)
Minnesota Local Liable to Overnite for Property Damage
The Minn. Court of Appeals ruled Aug. 14 that Int'l
Bhd. of Teamsters Local 120 is liable for damage to an Overnite
Transp. Co. facility in Blaine, Minn., caused by striking employees
in 1999 who were not IBT members, and for two-thirds of the firm's increased
security costs. IBT was certified to represent Blaine employees in 1995,
but most of the employees are not IBT members because the union made an
election promise not to charge fees or dues until it secured a contract,
which IBT has failed to do. The amount of Local 120's liability was not
reported.
Affirming a decision by the Anoka County Dist. Court, the appeals court found the union had an agency relationship with the picketers, and thus, was vicariously liable for the damage caused by their misconduct. Further, Judge Daniel Foley said, "[T]he evidence indicates that while the union was aware of the picketers' repeated acts of misconduct, it was either 'unwilling or unable to take the necessary steps to control its pickets.'"
During the 1999 strike, the trial court issued a permanent injunction, enjoining both sides from committing damaging, injurious, or threatening acts. The court heard testimony and viewed videotapes of strike-related activity and decided both sides violated the injunction, with the union committing more violations. The court decided that the picketers deliberately caused damage to Overnite property and that the union was vicariously liable regardless of whether the picketers were union members. Also, finding both sides responsible for Overnite's increased security costs, the court ordered the union to pay two-thirds of the employer's increased security costs.
John Raudabaugh of Matkov, Salzman, Madoff & Gunn in Chicago and Douglas P. Seaton and Alec J. Beck of Seaton, Beck & Peters in Edina, Minn., represented Overnite. Martin Costello of Hughes & Costello in St. Paul represented the Local 120.[BNA 8/20/01]
FOOD & COMMERCIAL WORKERS (UFCW)
Union Corruption Issue Defeats Nebraska Union
In an Aug. 16 representation election, employees of the Neb. Beef processing
plant in Omaha voted against representation by the United Food & Commercial
Workers Int'l Union. Employees vote 57% against union representation, according
to the Nat'l Labor Relations Bd.'s Overland Park, Kan., regional office,
which oversaw the vote. Donna McDonald, president of UFCW
Local 271, said the union intends to file objections to the election.
She attributed UFCW's loss to the "fear factor" engendered by the employer's
"strong anti-union campaign." [BNA 8/20/01]
This campaign reportedly made effective use of the union corruption
issue. When employees left the plant on Aug. 15, the employer provided
them with a 36-page, English and Spanish notebook, with a cover stating:
"Vote No, No Union." It listed UFCW bosses' salaries and text about bosses
who had been charged or convicted of embezzlement or corruption. [Omaha
World-Herald 8/16/01]
UCU readers may recall that UFCW is the union in which ex-int'l secretary-treasurer Joseph C. Talirico pled guilty in 1998 to embezzling some $925,000 from UFCW Local 1 in N.Y., including $10,000 for hair transplant and travel on UFCW's jet to have the transplant done. Four members of his family were also part of the $1.7 million scandal, which included union funds paying for extensive remodeling and landscaping of their homes.
COMMUNICATIONS WORKERS (CWA)
NLRB will Prosecute Maryland Union Dues Case
The Communications Workers of Am. and Verizon Communications face a
federal prosecution for allegedly illegally seizing some $150,000 in forced
union dues from employees following a 2000 strike. Agreeing with arguments
presented by Nat'l Right to Work Legal Def.
Found. attorneys, the Nat'l Labor Relations Bd. issued the federal
complaint after employees Kenneth Olszewski and Nancy Simms of Md. filed
unfair labor practice charges on behalf of thousands of employees in 2000.
They filed the charges after Verizon helped CWA bosses collect dues for a one month period (Sept. 2000) following the strike in which no collective bargaining contract was in place. When no such forced-fee agreement is in effect, bosses can't compel the payment of any dues from employees who exercise their right not to join a union.
NRTW estimates that CWA illegally seized a total of $150,000 from about 3,000 employees who chose to refrain from CWA membership. NRTW attorneys are demanding that all illegally collected union fees be returned to the employees, with interest. NLRB is also seeking to force CWA to post notices informing employees of their rights and CWA's violation of those rights. NRTW also persuaded NLRB to issue a complaint against Verizon itself. According to NLRB's complaint, "Verizon has provided illegal assistance and support to the union" by sending union bosses illegally demanded union dues, seized through paycheck deductions.
A hearing in Baltimore before an administrative law judge has been scheduled for fall 2001. In 1997, NLRB prosecuted CWA for the same type of scheme. [NRTW Media Release 8/6/01]
GOVERNMENT EMPLOYEES / HOTEL EMPLOYEES
Grand Jury Probing Boston Director
The U.S. Atty.'s Office in Boston has reportedly begun presenting evidence
to a federal grand jury in the probe of apparent kickbacks from a racketeer
to Mass. Bay Trans. Auth. Retirement Fund executive director John J. Gallahue,
Jr. MBTA's Fund covers some two dozen different unions, including the Boston
Carmen's Union, of which Gallahue formerly served as president. Prosecutors
are reportedly examining possible wire and mail fraud charges against Gallahue
for allegedly helping Francis K. Fraine, an arsonist with links to fugitive
and reputed mob boss James J. "Whitey" Bulger, get $7 million in loans
from the pension fund between 1998 and 2000.
Fund board member, Janice Loux, who is also president of Hotel Employees & Restaurant Employees Int'l Union Local 26 and one of Gallahue's strongest supporters on the board, reportedly appeared before the grand jury, and at least one other board member has reportedly testified. Others are expected to be subpoenaed soon.
Gallahue's 18-year tenure of the $2 billion pension fund is already in jeopardy, with the board scheduled to deliberate this week about an outside law firm's review of Gallahue's dealings with Fraine. The FBI began investigating Gallahue last fall after the Boston Herald ran stories detailing Fraine's background as mastermind of several arsons in the 1970s, a felon convicted on a racketeering charge in Ohio in 1979, and a longtime operative for Bulger's organization: a highly unusual profile for the recipient of $7 million in loans from a public employees' pension fund. Those loans took place at a time when Gallahue was conducting personal financial dealings with Fraine which were not disclosed to the board.
For example, the Herald reported that within days of Gallahue's Oct. 1998 purchase of a house on Lyman Road in Milton, Fraine began working on it. Records reviewed by the Herald indicate Fraine used money from MBTA Retirement Fund loans to pay for at least $ 8,000 in costs of renovating and expanding Gallahue's home. The architect who last year designed the second-floor addition, for example, sent the bill to Adam Corp., a firm controlled by Fraine. Prior to that, in 1998, Fraine returned a disputed $100,000 downpayment to Gallahue's then-girlfriend, Anne F. Holloran, three weeks after Gallahue arranged the first loan from the MBTA Retirement Fund for $ 1.9 million.
The Herald also reported that internal MBTA Retirement Fund records indicate Gallahue misled and in some cases lied to his board in order to steer the loans to Fraine. Within days of the first Herald stories, the board voted to hire the law firm Foley, Hoag to review all aspects of the Fraine loans and Gallahue's conduct. The man who led Foley, Hoag's review, Nicholas Theodorou, a former federal prosecutor, reported his findings to the board Aug. 1 at a meeting that lasted about eight hours. Gallahue's attorney, Richard Gargiulo, made his own presentation to the board the following day. MBTA Retirement Fund meetings are closed to the public. But according to sources, Theodorou reported that he corroborated much of what the Herald reported last fall about Gallahue.
However, Theodorou's findings reportedly exonerated board chairman Edward F. Sheckleton of any wrongdoing. The Herald reported last fall that Fraine had also been involved in and paid for thousands of dollars in construction work at two homes owned by Sheckleton. In a recent Herald interview, Robert Jubinville, Sheckleton's attorney, said the board chairman believes he was billed for all the work done at his two homes and has produced checks to show he paid those contractors.
For example, Sheckleton paid $3,500 for the central air conditioning work done at his Plymouth home, a figure he believes covers the entire job, Jubinville said. Jubinville said other contractors identified in Herald stories as being paid by Fraine for work on Sheckleton's houses have either denied it or refused to respond to his inquiries. [Boston Herald 8/13/01]
STEELWORKERS (USWA)
South Carolina Parade Still Facing Scrutiny
Corruption still hangs over last year's event, but union organizers
say a complaint over funding won't stop this year's Labor Day parade in
Georgetown County, S.C. Sec'y of State Jim Miles recently said his office
will soon decide whether the Georgetown County Labor
Council violated S.C.'s Charitable Funds Act when it received tax funds
to hold the 2000 parade. In 2000, the County Council voted give GCLC $3,000
to hold the parade and "labor rally." "When one solicits from the public,
the reason for the solicitations must be correct, one must not misrepresent.
That is an issue...we looking at," said Miles.
In response to a complaint from County Council Member Tom L. Swatzel, Miles' office issued a notice of violation that GCLC failed to register with the office as a charitable organization. The violation was reportedly due to GCLC's solicitation of employers and individuals to support GCLC's parade but were told to make their checks out to Steelworkers of Am. Local 7898. Lead organizer James Sanderson is president both of Local 7898 and GCLC. These checks were deposited in a bank account opened nearly two months after the solicitations were made. The name on the account was "USWA Labor Day Fund." Further, the County Council's $3,000 to GCLC was deposited in the USWA account. While GCLC later registered with the state, Local 7898 has never registered as a charitable entity. Swatzel believes the Act would not allow a union to register as a charitable organization. Thus, GCLC never received any of solicited funds, and Local 7898 may have wrongfully obtained these charitable donations. [Coastal Observer (Pawleys Island, S.C.) 8/16/01]
QUOTABLE QUOTE
"Mary Jo White, U.S. attorney
in Manhattan, [has not] showed much stomach for taking down [Ron]
Carey. Some involved in the congressional probe [of the Teamsters]
say White, a Clinton appointee, was a hindrance, turning over key documents
only under congressional subpoena. Richard
Trumka, the AFL-CIO, secretary/treasurer, was never indicted. He refused
to appear before the congressional committee. When questioned by a federal
elections officer, in grand gangster tradition, he took the fifth. Carey
was indicted only after Clinton left office, and no one from the DNC was
charged. The statute of limitations is about to expire, and the Bush administration
has yet to replace White."
- Columnist Nolan Finley, Detroit News, Aug. 12, commenting on the sorry federal probe into the 1996 Teamsters money-laundering scandal.
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ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
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TEAMSTERS (IBT)
Feds Raid Boston Boss' House
Federal investigators probing movie industry kickbacks and shakedowns
by Teamsters seized business records and about $50,000 in cash in a predawn
raid at the home of one of Int'l Bhd. of Teamsters
Local 25 president George W. Cashman's top
lieutenants. The July 21 raid on the Charlestown home of William O'Brien,
a longtime transportation captain in Local 25's movie crew, is the latest
twist in the two-year-long racketeering investigation into Cashman and
his aides. Reportedly, O'Brien was not home when Dep't of Labor agents
from the Office of the Inspector Gen. burst into the house armed with warrants.
In the house, agents found scores of hidden personal records allegedly
detailing activities by the union members and vendors on movies made in
New England over the past decade. Agents also reportedly found numerous
envelopes stuffed with cash, totaling roughly $50,000.
A Boston Herald source said prosecutors are working to determine where the money came from but would not confirm if it was tied to kickbacks. While allegations of shakedowns of the film industry kicked off the probe, the investigation has widened into other areas, including similar charges related to other industries such as trucking firms and air freight carriers, as well as Cashman's dealings as a member of Massport's board of directors and his ties to state officials.
O'Brien is the second movie crew member whose home has been raided. In June 2000, agents burst into the Weymouth home of ex-con and reputed mobster James P. Flynn, who oversees the movie crew and decides who gets the plum jobs, which pay more than $2,000 a week plus thousands more in expenses and overtime. Investigators have also carted thousands of records out of Local 25's office and continue to pore through the documents.
Another new development in the case, is that investigators are reportedly looking into grants Local 25 has received from ex-Gov. Paul Cellucci's (R) administration over the past three years. Cellucci, now U.S. Ambassador to Canada, earmarked $125,000 in each of the last three budgets for Local 25. [Boston Herald 8/15/01]
FOOD & COMMERCIAL WORKERS (UFCW)
Californian's Plea Deal on Embezzlement Charged Delayed
Alan L. Axt, ex-vice-president of the United
Food & Commercial Workers Local 1288 Federal Credit Union, who is accused
of embezzling $237,335 , was given an extra two weeks Aug. 13 to consider
a plea deal being offered by federal prosecutors. Axt's attorney, David
Gottlieb, asked U.S. Dist. Judge Oliver W. Wanger (E.D. Cal., H.W. Bush)
to set the matter for Aug. 27 to give him more time to review the government's
offer. Axt, who is free on his own recognizance, was named in a one-count
grand jury indictment in June and accused of taking the money between Mar.
1999 and Nov. 2000, while he was vice-president of member services at the
Fresno, Cal. based credit union. Wanger set Sept. 25 as a trial date if
a plea agreement cannot be reached. [Fresno Bee 8/14/01]
ELECTRICAL WORKERS (IBEW)
Member Sues Pittsburgh Local
A Pittsburgh Port Auth. employee and senior member of the Int'l Bhd.
of Electrical Workers has sued the Authority and IBEW Local 29 in U.S.
Dist. Court, saying he has been denied overtime work and his grievances
have been ignored. Robert Exler of Harmar, Pa., has been a Port Authority
employee since 1968 and says Local 29 violated the collective bargaining
agreement of hourly workers by denying him the opportunity to arbitrate
or appeal.
Under the terms of the agreement, senior members are to be used for work whenever possible. Exler says he is the most senior member of IBEW Local 29, but says it has denied him overtime work. He also claims Local 29's business agent "intentionally denied [him] of his rights by not allowing the grievance procedure to occur."
Exler says the Authority was told about the problem but ignored it, saying its policy was to deal only with Local 29 concerning labor disputes between the parties. He claims the Authority violated its duty to enforce the bargaining agreement. Exler is asking for a judgment in excess of $100,000 in lost overtime pay and damages. [Pittsburgh Post-Gazette 8/16/01]
AUTO WORKERS (UAW)
Michigan Employees Hit Union with Federal Charges
A Brighton Interior Systems employee today filed class-action charges
against the United Auto Workers after union bosses illegally coerced hundreds
of workers into joining the union. Stephen Yokich, UAW international
president, was among the union officials served. With the assistance
of Nat'l Right to Work Legal Defense Found.
attorneys, Erik Daly, an employee at the Brighton auto parts factory, filed
the unfair labor practice charges with the Nat'l Labor Relations Bd. against
the UAW and UAW Local 599 in Flint, Mich.
"UAW bullies are forcing these workers to join the union under the threat of being fired from their jobs," said NRTW's Randy Wanke
In violation of the 1988 NRTW-won U.S. Supreme Court decision, Communications Workers v. Beck, UAW bosses demanded that all employees formally join the union and pay full union dues as a condition of employment. Under Beck, union officials may not compel workers to pay for politics and other activities unrelated to collective bargaining activities. The UAW union, which admits that at least 21% of each member's union dues goes toward politics and similar activities, issued an illegal ultimatum to Brighton employees telling them to sign membership cards or "join the unemployment line."
The charges state that since Local 599's monopoly bargaining contract at Brighton went into effect in July 2001, the union has (with the support of its International union parent) "engaged in a campaign of misrepresentations, coercions, and omissions" such that "not a single employee in this bargaining unit can be considered to be a voluntary member."
Not only are the union's demands blatantly unlawful, but under numerous precedents, unions must specifically inform employees of their right to refrain from formal, full dues-paying union membership before seizing any forced union dues.
NRTW attorneys are asking the NLRB to issue a formal complaint against UAW and Local 599 and UAW International unions and declare all union membership and dues deduction cards at Brighton to be null and void. NRTW is also demanding that union bosses provide retroactive refunds of all dues improperly collected and that they be prohibited from collecting any additional dues until they inform employees of their rights and halt their systematic violations of law. [NRTW Media Release 8/22/01]
POLICE UNIONS
Jury Finds California Bosses Not Guilty of Defamation for Accusing
Rival Union of Corruption
A California jury decided Aug. 21 that three members of the L.A. Sheriffs
Prof'l Ass'n were unaware that an e-mail they sent deputies last fall accusing
a rival union of corruption was false. LASPA vice-president Scott Mckenzie
and his union were sued for defamation in March by the Ass'n for L.A. Sheriffs
Deputies, which sought $1.1 million in compensation. ALADS claimed
its reputation was damaged by the e-mail, which alleged that ALADS was
under FBI investigation for a list of offenses ranging from racketeering
to bribery of public officials. ALADS also named LASPA president Alex Villanueva
and deputy Steven Miller as parties in the suit.
The jury found that Mckenzie and Villanueva did publish false and defamatory information about ALADS in the e-mail, but did not know it was incorrect at the time the message was transmitted. The FBI was investigating ALADS at the time, but it was not engaged in an "extensive investigation" as the e-mail alleged, the defendants' attorney Gregory Emerson told the jury.
ALADS attorney Michael Glassman said "it was important for ALADS to have a jury finding that showed the statements contained in the e-mail concerning the FBI investigation were false and defamatory." [City News Serv. 8/21/01]
AIR TRAFFIC CONTROLLERS (NATCA)
San Francisco Boss Indicted for Bank Robbery
President of the Nat'l Air Traffic Controllers Ass'n's San Fran. Local
and veteran S.F. Int'l Airport air traffic controller believed by police
to be the "Robust Robber" was indicted Aug. 16 in a string of bank holdups
that authorities said he blamed on financial problems. Rick L. Davis was
named in a nine-count indictment returned by a federal grand jury in Oakland
that said he netted $40,000 during a 10-month spree in Fremont, Union City,
and Concord. Police dubbed him the "Robust Robber" because of his stocky
build.
Davis' attorney, Randy S. Pollock of Oakland, said that she has asked for a court date of Aug. 27, at which time Davis -- who police say confessed committing the robberies -- intends to plead not guilty to all counts.
He is now on unpaid suspension, the latest in a string of personal problems, his attorney said. In 1996, Davis was seriously hurt when his car hit a cow in Hawaii, where he had been living with his wife and two sons. Davis later divorced and filed for bankruptcy. Davis told police he robbed banks to help pay for airline tickets for his children to visit him, authorities said.
According to the indictment, Davis robbed the Bank of the West in Fremont of $4,471 on Oct. 17, the Wells Fargo Bank in Fremont of $1,722 on Nov. 16, and then tried to rob the Citibank on Decoto Road in Union City on Nov. 24. He then allegedly returned to the same Bank of the West in Fremont on Dec. 15 and stole $5,707 and robbed the Wells Fargo Bank in Union City of $8,070 on Jan. 16. Exactly a month later, police said, he returned to the same Wells Fargo and stole $4,706. After a three-month hiatus, authorities said, Davis robbed the Wells Fargo Bank on Paseo Parkway in Fremont of $8,103 and the Fremont Bank of $3,917. But his alleged streak ended on Aug. 3 when off-duty Concord police Officer David Espinosa spotted Davis as he robbed the Bank of America in Concord of $3,199 and took him into custody outside [S.F. Chron. 8/17/01]
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