AFL-CIO / IRON WORKERS (BSOIW) / COMMUNICATIONS WORKERS
(CWA) / LABORERS (LIUNA) / OPERATING ENGINEERS (IUOE)
Grand Jury Probing Union Bosses' Tainted Stock Offer
More than two dozen union presidents were reportedly invited to buy
shares in Global Crossing, as the Bermuda-based telecom was first offering
its stock to the general public. Now a federal grand jury in Washington,
D.C., is probing stock transactions by directors of insurance and investment
firm ULLICO (f.k.a. Union Labor Life Ins. Co.),
a union-dominated firm founded by the AFL. ULLICO's board is chaired by
ex-AFL-CIO Building & Construction Trades Dep't president Robert A.
Georgine and includes many current and ex-union presidents.
Reportedly, the investigations focus on trading privileges that allegedly allowed ULLICO's board members to profit from the purchase and sale of its shares. The transactions were lucrative because the privately held company's stock price was reset each year based on its book value and the board members could anticipate the change. ULLICO's shares had risen on the strength of several deals, including a $500 million profit on a $7.6 million investment in telecom firm Global Crossing, which declared bankruptcy in Jan. 2002.
In Aug. 1998, ULLICO board members were allegedly given the opportunity to purchase shares of Global Crossing at or near the initial public offering price ($18 a share). They also were allegedly allowed to purchase shares of ULLICO in anticipation of the big gains on Global Crossing and to sell back to ULLICO shares of the stock before its value had been reset after Global Crossing shares went into a tailspin ($64 a share to $.30 a share). The union pension funds were allegedly not afforded the same opportunities. "The issue is all about the board members," said one union source. Many members of ULLICO's board "had the opportunity to profit" said another. [For a summary of the transactions, see http://www.nlpc.org/olap/ucu3/05_07_01.htm.]
If formal charges are made, they could ensnare several union bosses in an embarrassing legal quagmire. A key issue is whether the bosses who took part breached their fiduciary duties by profiting from ULLICO at the expense of their unions. "If people got greedy, they should be treated just like the Enron officials who did the same thing," said an unnamed union president with detailed knowledge of the case. "How can we criticize them if we're doing the same crap?" Three union bosses, or their spokesmen, have told the media that they avoided the tainted deal, thereby raising the pressure on the remaining bosses to come forward. The three: AFL-CIO, John J. Sweeney; Int'l Union of Operating Eng'rs, Frank Hanley; Laborers' Int'l Union of N. Am., Terence M. O'Sullivan. The AFL-CIO has also allegedly initiated a probe.
Reportedly, prosecutors began probing the deal as part of an investigation into the financial affairs of indicted ex-president of the Int'l Ass'n of Iron Workers Jacob "Jake" F. West. In Aug. a grand jury indicted West for embezzling more than $50,000 in union funds. A superceding indictment was returned in Dec. against West; it contained the same 49 initial counts and added one count of conspiracy to embezzle, defraud, and file false reports, and one count of obstruction of justice. The link between ULLICO's scandal and West's prosecution suggest that he may be cooperating on the ULLICO probe in order to work out a favorable plea agreement with prosecutors.
ULLICO's ties to Global Crossing were forged by an ex-Democratic Nat' Committee official, Michael R. Steed, who was director of investments for ULLICO in the early 1990s. When Global Crossing CEO Gary Winnick was looking for investors in Global Crossing in early 1997 he approached Steed, whom he previously dealt with in a L.A. real estate deal. Steed had introduced Winnick to his DNC friend, Terry McAuliffe. McAuliffe, now DNC chairman, invested $100,000 in Global Crossing and reportedly cashing out with approximately $18 million in profits.
Global Crossing reported welcomed the early union investment, seeing it as helpful in establishing credibility. The relationship also helped politically. In the late 1990s, Global Crossing needed the approval of state and federal regulators to purchase Frontier Tele. Inc. One union that is associated with ULLICO, the Communication Workers of Am., offered support for the deal, which may have speeded approval. Later, CWA issued a press release supporting Global Crossing's failed bid for US West.
In another CWA-related development, CWA president Morton Bahr suspiciously declined an invitation to testify Mar. 20 before a House Financial Servs. subcommittee, which was looking into whether certain accounting techniques masked the true financial picture of telecom companies, including Global Crossing. One inference is that Bahr may not have wanted to be fielding questions in the wake of the first reports of the ULLICO scandal. Another is that Bahr actually had a scheduling conflict--maybe a meeting with the grand jury? According to a State of N.Y. Ins. Comm'n document, Bahr was a ULLICO board member as of Sept. 30, 2000. [Eng'g News-Record 3/25/02; Wall. St. J. 3/15, 3/18/02; Business Week 3/18/02; Bloomberg News 3/18/02]
LABORERS (LIUNA)
DOL Alleges ULLICO Imprudently Invested $10 Million
The Dep't of Labor sued Washington, D.C.-based Trust Fund Advisors,
Inc., and its parent, ULLICO Mar. 22 for
imprudently investing more than $10 million in assets of two Laborers'
Int'l Union of N. Am. pension funds in a risky real estate project. LIUNA
hired TFA as a union fund manager for the Local Union and District Council
Pension Fund and Nat'l Indus. Pension Fund. TFA hired ULLICO to handle
all real estate investments made on behalf of clients of TFA. ULLICO-TFA
contracted with the pension funds in 1993-94 to handle their investment
in real estate. Admitted criminal and ex-LIUNA boss Arthur A. Coia was
elected to ULLICO's board in 1993 and was on the board as of Sept. 30,
2000, according to a State of N.Y. Ins. Dep't document.
The suit alleges that ULLICO-TFA violated the Employee Retirement Income Security Act of 1974 by imprudently investing more than $10 million of plan assets in a risky real estate project. In 1995, TFA and ULLICO used plan assets to purchase and develop a 120-acre tract of raw land in N. Las Vegas into saleable building lots. ULLICO-TFA, incorporated as LF Las Vegas Realty Corp., paid close to $6 million for the property and spent more than $4 million to develop it. The suit also alleges that TFA and ULLICO failed to properly investigate the merits of the Sommerset Ridge project (failed to obtain an appraisal) and, ultimately, abandoned the project in 1997 without selling any lots. The funds suffered losses when the property was sold in June 1999 to Capital Pacific Holdings for less than the money invested by the funds.
DOL is seeking a court order that requires ULLICO-TFA to reimburse the funds for all losses, plus interest, resulting from the breaches; and permanently bars them from violating ERISA in the future. The suit was filed in federal court in Washington, D.C. [DOL 3/25/02; BNA 3/27/02]
Texan Indicted for $94,400 Union Theft
A federal grand jury in Houston indicted Cheryl L. Rowe, ex-office
secretary for the Laborer's Int'l Union of N. Am. Local 80 in Texas City,
Tex., Mar. 15 on union embezzlement charges. Allegedly, Rowe embezzled
$93,430.22 in union dues she collected between July 1997 and July 2000.
[USAO S.D. Tex. 3/15/02]
CARPENTERS (UBC)
DOL Wins $597,700 for Michigan Funds (information added 4/22/02)
On Mar. 19, trustees and the ex-administrator of the Millwrights Local
1102 Supplemental Pension Plan and Health Plan, which are linked to United
Bhd. of Carpenters Local 1102 in Warren, Mich., agreed to restore $597,775
to the plans. Further, U.S. Dist. Judge Avern L. Cohn (E.D. Mich.,
Carter) ordered the trustees to resign their positions with the plans.
Cohn's judgment resolved a suit filed Aug. 23, 2000, by the Dep't of Labor against administrator Automated Benefit Services, Inc. and trustees Walter R. Mabry, Jerry D. Moore, Ronald M. Krochmalny, Keith R. Scrutton, Milford E. Woodbeck, Sr., and Roy Shields. Mabry is also the executive secretary-treasurer of UBC's Mich. Reg'l Council of Carpenters & Millwrights. Allegedly, the defendants violated pension laws by 1) paying unreasonable compensation and fees to ABS, 2) failing to prudently invest the plan's cash assets, 3) paying excessive fees relating to the collection of employer contributions to the plans, and 4) making mortgage loans to participants which did not comply with the terms of the pension plan document.
Cohn also ordered the pension plan to comply with the requirements of the Employee Retirement Income Security Act of 1974 in any future activity and gave Nat'l City Bank of Cleveland the authority to manage the mortgage loan portfolio of the pension plan. Reportedly, the bank then exercised that authority and sold the pension plan's portfolio for $1,173,813.40. [DOL 3/20/02]
ELECTRICAL WORKERS (IBEW)
$289,000 Allegedly Stolen from New York Fund
Barbara Monfre, pension fund administrator for the Int'l Bhd. of
Elec. Workers Local 3 in N.Y.C. was arraigned Mar. 22 in U.S. Dist. Court
in Manhattan on charges of embezzling approximately $289,000 from the local's
Elevator Div. Retirement Plans. [DOL 3/22/02]
FIRE FIGHTERS
Illinois Boss Gets 2 Years for Taking $350,000
Patrick Stiles, ex-boss of Aurora
(Ill.) Firefighters Local 99, pled guilty Mar. 21 to felony theft in connection
with the embezzlement of union and firefighters association funds and was
sentenced to 2 years in prison. The plea agreement, entered in Kane County
Circuit Court before Judge Donald C. Hudson, requires Stiles to pay $244,000
in further restitution to Aurora Firefighters Local 99 and the Aurora Firefighters
Relief Ass'n. Stiles was released on bail and ordered to turn himself in
to authorities on Apr. 23.
Aurora police testified at a bail hearing in Oct. that Stiles had stolen about $350,000 from the two organizations, but the restitution was based on a $275,000 settlement in a related civil suit. Stiles, a firefighter, resigned Jan. 15 after 11 years with the Aurora Fire Dep't. He was secretary and treasurer of the Relief Ass'n from 1995 to 1999 and held the same post at Local 99 from 1992 until his resignation.
"We won't feel it's complete until he pays the penalty--doing the time--and pays us back the money he owes us," said Local 99 president Gregory Frieders. Stiles agreed in Apr. 2001 to pay $275,000 to the two groups in a civil suit they filed. He agreed to turn over about $64,000 in retirement funds. The groups have received about $31,000 from his pension , but await payment from a deferred compensation fund. Stiles has made no further payments. Though a lien has been place on his home, unions officials said they doubt he has equity in that home.
When the allegations surfaced, only one signature was required to sign Relief Ass'n checks. Union checks required two signatures, but checks that only had Stiles' signature still were cashed, Frieders said. Since then, both organizations have reportedly revamped their accounting procedures. [Chi. Trib. 3/22/02]
HOTEL & RESTAURANT EMPLOYEES (HERE)
Buffalo Boss-Widow Pleads Guilty, Repays $144,400
Anna M. Ervolino, ex-vice president
of Hotel Employees & Restaurant Employees Int'l Union Local 4 in Buffalo,
pled guilty Mar. 22 to one count of willful and unlawful failing to disclose
for a benefit plan annual report a payment to a party in interest. She
and her husband, the late Frank Ervolino,
ex-local president, were indicted on May 16, 2000, on multiple charges
of embezzlement and conspiracy relating to the local, an associated union,
and their benefit plans. The indictments alleged that some $235,000
was stolen.
The indictments came a year after HERE's court-appointed monitor found that the couple embezzled some $491,472 from Local 4 and two other unions by allegedly working half-days, at most, and took a four-month annual vacation in Fla. as well as by other bogus salary, bonus, and loan scams. Frank was also the longtime head of the now defunct AFL-CIO Hospital & Nursing Home Council in Buffalo and the Laundry & Dry Cleaners Int'l Union, based in Pittsburgh. Anna has reportedly paid $144,470.79 in restitution to the plans. Frank died Nov. 2, without ever pleading guilty or facing trial. [DOL 3/22/02; Buffalo News 3/21/99]
POSTAL WORKERS (APWU)
Nevada Boss Indicted for $134,500 Theft
Deborah Partida, ex-secretary-treasurer
of Am. Postal Workers Union Local 761 in Las Vegas, was indicted Mar. 12
on two counts of embezzling $132,824 from Local 761 and $1,764 from the
APWU Nev. State Ass'n. She was also indicted on two counts of making
false statements to federal agents in violation of 18 U.S.C. § 1001.
[DOL 3/12/02]
QUOTABLE QUOTE
"14 years ago, the U.S. Supreme Court declared that union members can
be compelled only to pay dues and fees that are directly related to the
cost of collective bargaining and contract administration, that they cannot
be forced to finance a union's political and lobbying activity.
- Joseph Perkins, S.D. Union-Trib. columnist, Mar. 15, 2002.
- - - - - -
ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
- - - - - -
LABOR LAW REFORM / TEAMSTERS (IBT) / LABORERS (LIUNA)
/ HOTEL & RESTAURANT EMPLOYEES (HERE) / LONGSHOREMEN (ILA) / ELECTRICAL
WORKERS (IBEW) / PLUMBERS (UA)
Inspector General Sees an Increase in Racketeering Case Activity
In a Mar. 21 interview with the Bureau of Nat'l Affairs' Daily Labor
Report, the Dep't of Labor Inspector General Gordon S. Heddell said that
recently released Office of the Inspector General statistics show an increase
in labor racketeering case activity involving labor unions, with a specific
focus on the four unions that have been identified as under the influence
of organized crime -- the Int'l Bhd. of Teamsters, the Laborers' Int'l
Union of N. Am., the Hotel Employees & Restaurant Employees' Int'l
Union, and the Int'l Longshoremen's Ass'n. Reportedly, there currently
are 357 pending labor racketeering investigations under way at OIG, 39%
of which involve organized crime. Of the 357 investigations, 44% involve
pension and welfare benefit plans, according to the statistics.
In addition to labor racketeering, OIG is responsible for investigating organized crime's influence or control in employee benefit plans, labor-management relations, or internal union affairs. Heddell defended the DOL's Pension & Welfare Benefits Admin.'s enforcement strategy, saying the agency is directing its resources to areas in which the greatest potential for violations arises. Heddell said PWBA is following OIG's 1998 recommendation, Heddell said, citing, for example, a focus of resources on pension plans involving the "largest number of participants and the greatest number of dollars."
Heddell's assessment of PWBA is a brighter one than that voiced by his agency in 1997, when the office of inspector general called upon PWBA to improve its oversight of annual pension plan information filed by large financial institutions that hold the assets of several pension plans. More recently, the General Accounting Office agreed that PWBA has taken action to strengthen its enforcement activities, but concluded that further improvements are necessary.
Heddell predicted that, as part of the Enron fallout, issues such as the inadequacy of pension plan auditing are "going to surface." OIG has long opposed a loophole in ERISA that exempts from audits by independent public accountants pension plan funds that have been invested in institutions such as savings and loans, banks, or insurance companies that are regulated by federal or state governments. Heddell also objected to the fact that independent public accountants are "not required to report ERISA violations" to DOL.
Referring to the "close relationship" OIG shares with PWBA, Heddell pointed out that his agency also is in the business of protecting pension plan assets. "Abuses by pension service providers are particularly egregious," Heddell said, because the providers "typically service a multitude of plans" and the "amounts involved are significantly higher." Heddell cited as an example a recent case in which a Rhode Island union fund manager Todd LaScola was found guilty of misusing approximately $6 million of client's money to cover an unauthorized investment of Int'l Bhd. of Elec. Workers Local 99's pension fund assets.
According to OIG, investigations of this type involve plan assets of more than $1 billion that are at risk. DOL also was involved in a case in which trustees of the Nat'l Elec. Benefit Fund were ordered to pay $4.9 million to reimburse the fund to settle charges that they breached their fiduciary duties under ERISA by investing in a Florida real estate limited partnership, linked to Democratic Nat'l Committee chairman Terry McAuliffe. Heddell declined to comment on an ongoing investigation by his agency into the propriety of the United Ass'n of Plumbers & Pipe Fitters' investment of hundreds of millions of pension funds in Fla.'s Diplomat Hotel. [BNA 3/25/02]
Additionally, Heddell said DOL is eyeing highway construction projects for possible fraudulent use of federal funding following an infusion of hundreds of billions of dollars into the system under the 1998 Transportation Equity Act for the 21st Century. The 1998 law approved $ 400 billion for spending on highway projects, "whetting the appetites of people who see something in it for them that is not legal," Heddell said The highway construction industry is "vulnerable," Heddell said, citing "labor slowdowns, material and equipment breakdowns and shortages, and pressure on labor unions." There is a possibility of "embezzlement and misuse of funds at all levels," he cautioned. [BNA 3/27/02]
LABORERS (LIUNA) / NOVELTY WORKERS (ANPW)
Boss Serpico and his Mistress Sentenced for Fraud
On Mar. 15, U.S. Dist. Judge Blanche M. Manning (N.D. Ill., Clinton)
sentenced John Serpico, ex-president
of the Cent. States Joint Bd. and ex-vice president of the Laborers' Int'l
Union of N. Am. to six concurrent 30 months prison terms followed by three
years of supervised release. CSJB is a labor organization which handles
pension and other employee benefit funds for eight locals including locals
of LIUNA and the Int'l Union of Allied Novelty & Production Workers.
A jury convicted the powerful Chicago boss July 16 on six counts of mail
fraud. Manning also fined him $100,000, ordered him to make restitution
of $30,000, and ordered him to pay the cost of imprisonment. Serpico was
CSJB president from 1975-94 and, at the time of the conviction, was a $50,000-a-year
consultant. He was purged from LIUNA in 1995.
Serpico, 71, and his longtime mistress, Maria Busillo, 56, engaged in a 12-year scheme trading their control over union funds to obtain some $5 million in loans for personal business ventures. Asst. U.S. Atty. David Glockner said Serpico and Busillo frequently flew together in a union jet to "frolic" at Busillo's beachfront condo in Marco Island, Fla., "financed in part with a loan obtained by dumping workers' money into a corrupt bank."
Manning sentenced Busillo, also an ex-CSJB president and ex-ANPW president, to 15 months imprisonment followed by three years supervised release on each of two mail fraud counts and one count of making a false statement on a loan application of which she had been convicted, with the sentences to run concurrently. Manning also fined her $100,000 and ordered to pay the cost of imprisonment.
Further, Serpico and Gilbert Cataldo, an ex-Chicago housing comm'r and ex-lll. Int'l Port Dist executive director, were convicted of sharing in a kickback scheme of more than $330,000 after CSJB secured a $6.5 million loan for a failing hotel project in Champaign, Ill. Serpico was IIPD's longtime chairman until 1999 when he was indicted. Manning sentenced Cataldo to 21 months imprisonment followed by three years supervised release on each of three mail fraud counts of which he had been convicted, with the sentences to run concurrently. Manning also fined Cataldo $5,000 and ordered to perform 250 hours of community service.
"All three of these defendants have held themselves out for years and even throughout this trial as champions of labor and workers and pillars of the community," said Glockner. "The evidence in this case shows that they're simply crooks."
"Insufficient," is the way LIUNA dissident and Laborers for Justice leader Jim McGough described Serpico's sentence. Expressing outrage at the sentence's brevity, McGough told the Union Corruption Update, "Serpico raped and pillaged Laborers Local 8 and facilitated Organized Crime's control of the Laborers Union and Central States Joint Board."
Manning order the aging Serpico to surrender to prison June 28, but his attorney, Matthias Lydon, said he will seek his continued release pending appeal because of upcoming spinal surgery and an expected six-month recuperation period. After sentencing, Serpico, his hand raised to shield his face, ran into traffic outside the Dirksen Federal Building in an attempt to shake free from photographers. [DOL 3/15/02; Chi. Trib. 3/16/02]
FIRE FIGHTERS
Southern California Bosses Admit Embezzlement, NLPC Petitions for
Probe
Two former leaders of the Riverside County, Cal., chapter of a statewide
fire fighters union have reportedly been "disciplined" after an internal
union probe showed they embezzled at least $5,000 of the chapter's funds.
Union spokesman Terry McHale said the ex-officers admitted they spent chapter
money on personal uses -- for apartment rent and computers -- in 2001.
McHale said the men, whose names were not released, have signed agreements
to reimburse the union and have their paychecks garnished if they fail
to make payments on time.
However, he said the union has not asked authorities to investigate. Many members know the identities of the two allegedly admitted embezzlers, and their reputations have been stained at the Cal. Dep't of Forestry & Fire Protection, McHale claimed. "What was done was wrong, and it is being dealt with in the firmest possible way," alleged McHale. "We're an association of human beings, and sometimes human beings make mistakes."
Nevertheless, the Nat'l Legal & Pol'y Ctr., a union corruption watchdog, petitioned both the U.S. Dep'ts of Labor and Justice Mar. 20 to open a criminal investigation into this apparent union corruption. The money was reportedly taken from the chapter's benevolent fund, which is used to help burn victims and the families of ill, injured or deceased firefighters, which raises possibility that federal pension and benefit fund laws were violated. On Mar. 26, the U.S. Atty.'s Office in Los Angeles told NLPC that it has assigned Asst. U.S. Atty. Larry Ng to the case.
McHale confirmed the theft after an anonymous press release stated that money had been embezzled from the union. The release also said some bosses tried to cover up the theft and that county, state, and federal agencies had been notified. Roger Luebs, a county deputy district attorney, said that his office received the documents. However, Luebs did not say whether his office is looking into the case.
McHale said there was no cover-up and the theft was noticed and properly reported to state union representatives by Phil Rawlings, a Temecula-based firefighter who became chapter treasurer in Jan. The news release contained "absolutely false statements," McHale said, but he acknowledged that the term "embezzlement" could accurately describe the unauthorized use of the money in this case. McHale claimed an independent audit will be conducted of the chapter's finances and the results should be publicly available in May. [Press-Enterprise 3/15/02]
ELECTRICAL WORKERS (IBEW) / CORPORATE CAMPAIGNS
FBI and Police Investigating Austin Local for Racketeering, Death
Threats
Int'l Bhd. of Elec. Workers Local 520 in Austin, Tex. are under investigation
as a result of its intense representation battle that has produced a slew
of charges of unfair labor practices, an arrest, and allegations of death
threats, libel, racketeering, and slander. At issue is a $6.5 million City
of Austin contract awarded to a nonunion firm, Titus Elec. Contracting.
The local has tried pickets, a corporate campaign and formal complaints
accusing Titus of violating federal labor law. Titus, which launched the
publicity skirmish, has called police to the picket lines at least twice,
resulting in a trespassing arrest, and has accused union supporters of
phoning in death threats.
Now, the FBI is investigating whether racketeering laws have been violated, and Austin police are looking into the alleged death threats and have provided extra security. Titus say the union is resorting to old-fashioned racketeering tactics designed to intimidate them into signing a union contract and wrap them up in a costly game of whose legal war chest is bigger. The level of acrimony is reportedly unusual in Tex., where union-related confrontations are rare. Randy Jennings, the director of the Independent Elec. Contractors Ass'n, said the allegations of death threats bring a new dimension to the fight. "They usually just intimidate you," he said. "They win by getting you to use up your resources defending yourself."
Titus co-owner Titus Runyan said "I've got no problem hiring union people," he said. "I employ some now. They really do have things to offer, but not if this Jimmy Hoffa-style stuff is what you get with it." Runyan said each unfair labor practice claims costs him about $6,000 to defend whether it has merit or not. Because the Nat'l Labor Relations Bd. must investigate any claim filed by a worker, Runyan said, the local union can tie up a company's financial and managerial resources by filing an unlimited number of charges.
The lone arrest in the case was that of Johnny Sanders, charged with criminal trespassing after a Feb. 13 demonstration. Sanders said he was on public property, but Titus employees said he was getting too close to the door. The receptionist said he was photographed being menacing, and was dragging his finger across his throat in a threatening manner. "I was scratching my throat because I recently switched from a manual to an electric razor," Sanders said.
Two days later, Runyan said, a caller using profanity told him, "You want to file charges on us, you better get a bulletproof vest. You're going to stop a bullet." That night, an anonymous caller told a 911 operator that there was a dead man lying in Titus' parking lot. When authorities arrived, they found only security guard Ray Alcatar -- alive and well -- who said a car had been driving back and forth in front of the business for some time before the call was made.
One union member, Terry Gould, said the recent events have made him question his allegiance to the union. He said that when he went to work at Titus, his union asked him to break the company's rules in order to get reprimanded or fired. Doing so would enable the union to file more charges against Titus. Gould said he refused and was threatened with expulsion from the union. "They wanted me to get myself fired, and then file a lawsuit," Gould said. "I don't think that's right. I always thought that being union meant we were all Americans, and we could choose what we wanted to do. But this kind of thing isn't right. That's not the kind of union I thought I was a part of." [Austin Am. Statesman 3/15/02]
PLUMBERS & PIPE FITTERS (UA)
Minneapolis Boss Ousted, Trusteeship Imposed
United Ass'n of Plumbers & Pipe Fitters
Local 15 business manager Thomas Martin resigned Mar. 15 and the Minneapolis-based
local was placed into emergency trusteeship by its int'l union. UA's prepared
statement cited a union constitutional provision allowing the int'l union
to take control of the local's affairs "on being presented with a charge
that an officer of a local union may have committed dishonest acts involving
any of the local union's assets." UA int'l president Martin Maddaloni reportedly
received such a complaint involving the Local's "market recovery fund."
Unions use market recovery funds to help union contractors compete with
non-union firms that pay lower wages. Some developers say they prefer union
labor if the wage rates are competitive because it is believed union projects
get less scrutiny from local inspectors than when non-union labor is used.
The developments follow recent raid by federal authorities at Local 15' offices, where FBI agents seized documents pertaining to its dealings with Minneapolis City Hall and, in particular, work performed on properties owned by City Council member Joe Biernat (DFL). Agents also took documents related to three plumbing union programs and delivered subpoenas to four Local 15 employees to testify before a federal grand jury. The search warrant served at the union Mar. 7 demanded documents related to the market recovery fund, as well as the Plumbing Industry Advancement Program and the Minnesota Industrywide Joint Labor Mgmt. Committee Inc. Martin is reportedly listed as president of the Joint Labor Mgmt. Fund. The programs cover some union contracting costs and are funded by union dues. The purpose of the federal probe remains unclear.
Biernat is chairman of the council's Public Safety & Regulatory Servs. Committee, which oversees regulatory and inspections issues. His committee was the first to approve the appointment of Martin and non-union plumber Bill Fignar to the Plumber's Examining Board, which sets the standards required to obtain a city license, and decides which applicants may work in the city. Last week a subpoena delivered to City Hall sought information about Martin's appointment to the board.
UA representative Anthony Rohrer will act as trustee of Local 15 until a hearing is conducted within 21 days to determine whether the trusteeship should be continued. Tom Hansen, an organizer for Minnesota Pipe Trades, will act as the union's business manager. [Star Tribune (Minneapolis) 3/19/02]
GOVERNMENT EMPLOYEES (AFGE)
On the Eve of D.C. Boss' Sentencing, Broader Allegations Surface
The ex-president of the Am. Fed'n of Gov't Employees Local 1812 in
Washington, D.C., is scheduled to be sentenced Apr. 4 for felony misappropriation
of union funds. Hope Butler, who headed the
union local until June 2000, pled guilty Dec. 7 in to making false statements
to federal agents. She and her sister-in-law, Nadine
Crump Butler, were accused of embezzling union funds and then lying
about it in reports to the Dep't of Labor. Crump Butler pled guilty to
a misdemeanor charge of fraud. The scam reportedly netted some $20,600.
Local 1812 represents about employees for Voice of America and other Int'l
Broadcasting Bureau positions. IBB is an independent federal agency that
formerly operated as the broadcast portion of the U.S. Information Agency,
which merged into the State Dep't in 1999.
Charges against Butler and Crump Butler resulted from an internal audit and a request for an investigation by other union leaders. In a letter to the Washington Times, a high-ranking Local 1812 official said the case against Butler was merely the tip of the iceberg. The official, who asked that his name be withheld fearing reprisal, was one of the union leaders who had Butler's union accounts audited.
"[W]e believe that she was involved in a much larger conspiracy to commit fraud, involving key members of our union's district and national leadership," the official said. "We also believe that Hope Butler was aided and abetted in her illegal activities by members of the International Broadcasting Bureau's Office of Labor Relations and Office of Personnel, and that agency management interfered in the internal affairs of AFGE Local 1812."
Federal prosecutors say they plan to pursue charges against other union members or IBB employees only if more evidence develops. "I'm not at liberty to discuss any other pending investigations," said Channing Phillips, spokesman for the U.S. Atty.'s Office in Washington. "If new leads develop, we'll certainly pursue them."
Butler is accused of inducing union finance officers to sign blank checks, which she said would be used to pay Local 1812 expenses, at least 18 times in little more than a year. She then made out the checks to nonexistent expenses or to her sister-in-law, who used the business name "Crump & Associates" or "Nadine Crump" but performed no services for the union, according to prosecutors. In fact, the money was deposited in either Butler's personal account or an account belonging to Crump, according to court documents. Butler was accused of repeating the list of fraudulent invoices in the union's annual report to the Labor Department, which is a felony offense. [Wash. Times 3/26/02]
PAPER WORKERS (AWPPW)
Washington Staffer Admits $15,600 Embezzlement
Geri E. Abbe, ex-office secretary for Ass'n
of Western Pulp & Paper Workers Local 5 in Camas, Wash., pled guilty
Mar. 22 to one count of embezzling $15,690.80 in union funds. The U.S.
Atty.'s Office in Tacoma brought the charges on Feb. 22. The case has been
assigned to U.S. Dist. Judge Franklin D. Burgess (W.D. Wash., Clinton).
According to the plea agreement, between Feb. 1998 and June 2001, Abbe was Local 5's office secretary, and her duties included filling out payroll vouchers. On 16 occasions she embezzled funds through bogus payroll claims. For example, on Feb. 18, 1998, she submitted a payroll voucher in which sought pay for 70 hours of work during the one-week period ending on that date. However, in truth, she worked only 35 hours during that period. After securing an offical's signature, Abbe issued the fraudulent check to herself. She embezzled $14,245 via this scheme.
Additionally, on Apr. 26, 1999, without authorization, Abbe gave herself a one-cent per hour raise, and on Apr. 3, 2000, without authorization, she gave herself a three percent raise. As a result, between Apr. 26, 1999 and June 1, 2001 (when she was fired) Local 5 paid her $1,445.80 to which she was not entitled. She confessed to these embezzlement schemes when an agent for the Dep't of Labor's Office of Labor-Mgmt. Standards, Dan Lavik, interviewed her on Oct. 24, 2001. The plea agreement states that Abbe must make full restitution immediately. [USAO W.D. Wash. 3/22/02; DOL 3/22/02]
POLICE UNION
New York Boss Sentenced for Wire Fraud
U.S. Dist. Judge William H. Pauley III (S.D.N.Y., Clinton) sentenced
ex-treasurer of the NYPD's Detectives Endowment Ass'n Stephen
E. Gardell Mar. 18 to a year and a day on a federal wire fraud charge.
He allegedly leaked law enforcement secrets to the mob and in exchange
his mob friends built an $8,000 swimming pool at his home, comped him at
a casino, and gave him a fur coat for his wife, according to prosecutors.
Gardell quietly pled guilty to the fraud charge after being linked to a sweeping case of mob stock ripoffs and crooked brokers. Federal prosecutors in Manhattan had first charged Gardell with conspiring to move pension investments into a crooked mob-backed financial firm in exchange for a big payoff. The scheme was caught before any pension money was touched. Gardell was arrested in June 2000 along with 119 others in the pump-and-dump stock scheme. Weeks before his arrest, he put in for retirement and left with an $80,000-a-year pension.
Gardell asked that he be sentenced to home confinement so he could care for his ailing 87-year-old mother. In turning him down, Pauley said, "You violated the most sacred trust, a trust that is reposed in you by the community [and] by all law enforcement personnel." [Daily News (N.Y.) 3/19/02]
TREASURY EMPLOYEES (NTEU)
Arizona Boss Pleads Guilty, Concealed Embezzlement
U.S. Customs Inspector Gregory B. Floto,
who is the ex-president of Nat'l Treasury Employees Union Chapter 116 in
Nogales, Ariz., pled guilty Mar. 15 to filing a false report with the Dep't
of Labor to conceal his embezzlement of union funds, according to the Dep't
of Justice's Office of Public Affairs. According to DOL's Office of Labor-Mgmt.
Standards, Floto pled guilty to one count of making false statements in
violation of 18 U.S.C. § 1001. The specific amount of the embezzlement
was not disclosed.
Floto, who has been president of NTEU Chapter 116 since 1989, admitted to stealing thousands of dollars in union funds for his personal benefit between 1994-97. Floto confessed to using union checks to pay balances due on his credit cards bills for personal charges unrelated to union business, including charges for clothing, jewelry, and a family vacation. He also admitted using union checks to pay directly for painting his home and other home improvements. Further, he admitted double billing the union and the U.S. Customs Service for identical official travel expenses.
He concealed the theft by falsifying Chapter 116's check register and filing false audit documents with NTEU. He also filed false financial reports with DOL in which he grossly understated the amount of union funds received and claimed an audit had been conducted of the Chapter 116 records. As part of the plea agreement, Floto will resign his position with the U.S. Customs Service, as well as any position as an officer of NTEU. U.S. Dist. Judge Frank R. Zapata (D. Ariz., Clinton) scheduled sentencing for May 24. No agreement on a restitution amount was disclosed.
The case was prosecuted by the Dep't of Justice's Public Integrity Section, not the U.S. Attorney's Office in Ariz., and was investigated by OLMS and the U.S. Customs Serv.'s Office of Internal Affairs. Initially, Floto was reportedly indicted on Jan. 17, 2001, in the U.S. Dist. Court in Washington, D.C., on 7 counts of mail fraud/deprivation of honest services (3 counts), making false statements (3 counts), and obstruction of justice (1 count). [DOJ 3/15/02; DOL 3/15/02, 1/17/01]
INDUSTRIAL SERVICE EMPLOYEES (ISTHE)
New York Boss Accused of Abusing Pension & Health Plan
The Dep't of Labor filed suit Mar. 19 against the pension and health
plan officials of the Int'l Union of Indus. Serv., Transport & Health
Employees Dist. 6 in N.Y.C. for allegedly paying excessive administrative
expenses and improperly administering the plans. The suit, filed in federal
court in Manhattan, names as defendants: William Perry, administrator and
trustee of the plans and union president; trustees Jerome Vuoso, Ludovic
Marcovici and Francis Winn; and the union itself.
Perry allegedly violated his fiduciary duties under the Employee Retirement Income Security Act of 1974 by issuing, endorsing, and cashing 1,100 health plan checks made payable to others during the period 1993-99. He allegedly failed to collect rent for the health plan from the union for occupying a building substantially owned by the health plan through a holding company known as District 6 Realty Corp. Perry also allegedly used pension and health plan assets to reimburse the union for expenses not incurred in the administration of the plans. Further, Perry allegedly failed to diversify plan investments by investing over 90% of health plan's assets in the building occupied by the union. DOL accused the remaining trustees of failing to monitor, or to take steps to correct the improper actions of, Perry. DOL is asking the court to require the plan officials to restore to the plans all losses with interest or lost opportunity costs and to permanently bar them from serving any plan governed by ERISA. In addition, the suit seeks to require that the union and Perry undo any prohibited transactions with the plans. [DOL 3/21/02]
LABORERS (LIUNA)
Indictments Expected Soon for Western New York Local
A lengthy federal investigation into bombings, beatings, death threats
and other incidents allegedly tied to a Laborers'
Int'l Union of N. Am Local 91 in Niagara Falls, N.Y., is reportedly
nearing a conclusion. Although Local 91's attorney, Paul J. Cambria, Jr.,
insists that there is no evidence of labor racketeering, other defense
lawyers and law enforcement officials think that a series of felony charges
will be filed -- both against the local and individuals -- possibly within
the next two months.
The incidents under investigation include a 1997 bombing at a Town of Niagara home, which severely impaired the hearing of a construction worker; a 1998 beating and stomping attack on tile setters at a Wegmans supermarket construction site, a $100,000 vandalism incident at a Town of Niagara landfill as well as several other attacks. The sheriff and district attorney of Niagara County said intimidation by Local 91 has made some contractors and developers so fearful that they do not even bother trying to build projects in the county.
The Local 91 probe, which dates back at least two years, has gone on for so long that the U.S. Atty.'s Office for the W. Dist. of N.Y. began to present its evidence to a new grand jury in Nov. 2001. The term of the previous grand jury, which had been hearing evidence about Local 91 for well over a year, expired. Several well-known defense lawyers -- including Cambria, Terrence M. Connors, Michael S. Taheri, Daniel J. Henry Jr., George V.C. Muscato and Peter J. Todoro, Jr., -- have been hired to represent either the union or individual members. "I've heard there will be a number of indictments soon," said a defense lawyer involved with the case. "I also believe the federal government may be trying to take over Local 91, like they did with Local 210."
In 1995, LIUNA had a number of reputed mobsters leave leadership roles in Buffalo's Local 210. LIUNA then took control of Local 210, with the federal government closely monitoring the arrangement. A court-appointed overseer still files regular reports on Local 210 to U.S. Dist. Judge Richard J. Arcara (W.D.N.Y., Reagan). Richard Greer, LIUNA's Washington spokesman, said LIUNA has no plans, at this time, to take over Local 91. Greer said LIUNA is waiting to see what happens with the federal investigation.
Reportedly, Local 91 members seem to have been on their best behavior at Niagara County construction sites in the last two years, according to Niagara County District Attorney Matthew J. Murphy III and Sheriff Thomas A. Beilein. Murphy said the last time he heard about alleged intimidating conduct by Local 91 officials was at a Town of Wheatfield construction site last November. He said three Local 91 members were accused of harassing a state transportation official. The Local 91 members deny the allegations.
"Local 91 has been relatively quiet lately, but for years they caused great fear for developers and contractors all over Niagara County," Murphy said. "I've had developers tell me they are watching this investigation very closely, hoping that it will end any kind of intimidation in the county."
Murphy said police are also investigating allegations that three men associated with Local 91 attacked and broke the nose of Michael Hudson, the editor of a weekly Niagara Falls newspaper that has been extremely critical of the local. Hudson said the alleged assault took place in a men's room at the Niagara Falls Convention Center on Oct. 9, 2001. Hudson said the men who attacked him had been criticizing him earlier in the evening about the Niagara Falls Reporter's coverage of Local 91. He said he is sure that at least one of the men is a member of Local 91. [Buffalo News 3/18/02]
GOVERNMENT EMPLOYEES (AFGE)
Indianapolis Boss Accused of Forgery, $7,100 Embezzlement
On Mar. 21, 2002, in Marion County (Ind.) court, Mack Dykes, ex-president
of Am. Fed'n of Gov't Employees Local 1411 in Indianapolis, was indicted
on five counts of forgery and one count of theft for embezzling approximately
$7,100 in union funds. The local represents Dep't of Defense employees.
[DOL 3/21/02]
MAINTENANCE OF WAY (BMWE)
Utah Boss' Spouse Pleads Guilty to Mail Fraud linked to Union Corruption
On Mar. 13, Jill C. Gonzales, spouse of an ex-secretary-treasurer of
the Bhd. of Maintenance of Way Employees Local 1227 in Ogden, Utah, pled
guilty to mail fraud relating to a loss of union funds.The charge was brought
on Jan. 23. U.S. Dist. Judge. J. Thomas Greene scheduled sentencing
for May 17. Additional details were unavailable. [DOL 3/13/02; U.S. v.
Gonzales, No. 02-CR-46-ALL (D. Utah Mar. 13, 2002)]
TRANSPORTATION UNION (UTU)
Syracuse Boss Sentenced for $2,100 Theft
Michael G. Brown, secretary-treasurer of
United Transp. Union Local 1007 in Syracuse, N.Y., was ordered Mar. 20
to make full restitution to the local of $2,160.16, which he had already
done. No other forms of punishment were reported. He pled guilty on Feb.
13 to making false entries in union records to his conceal theft. A one-count
information was brought on Feb. 7 and alleged that the crimes occurred
from Jan. 1999 to June 2001. According to the plea agreement, Brown wrote
unauthorized union checks to himself for alleged reimbursed Local Committee
of Adjustment (LCA) expenses which he did not record in the local's LCA
ledger. He confessed that the funds belonged to the local and that he used
them for his own personal expenses. [DOL 3/20/02; USAO N.D.N.Y. 2/22/02]
TEAMSTERS (IBT)
Death Threats Alleged in Connection to Racketeering Probe of Boston
Local
The head of the Commonwealth of Mass.'s Film Office has allegedly received
death threats stemming from her helping federal prosecutors probing alleged
racketeering within Int'l Bhd. of Teamsters Local
25 in New England. Robin Dawson, who has testified before the federal
grand jury investigating allegations of union shakedowns and strong-arming
of movie makers filming in Mass., received the threats Mar. 22, sources
told the Boston Herald.
Allegedly, the threats centered around Dawson's appearance at an Oscar party Sunday night to benefit Massachusetts 9-11 Fund for families of victims of the terrorist attacks last fall. Reportedly, officials at the Four Seasons hotel, where the gala was held, beefed up security because of the threat.
Earlier in Mar., Stephen Crosby, Mass. Gov. Jane Swift's (R) chief secretary, tried to fire Dawson, charging she did not fully disclose who she dined with at state expense. But Dawson, backed up by the U.S. Atty.'s Office in Boston, said she was asked by prosecutors not to name the people she took to dinner because they were witnesses before the racketeering grand jury seated in Worcester. Prosecutors blocked Swift from canning Dawson, but in leaking the story, the administration made it publicly clear to the probe's targets that Dawson was a key witness, according to sources familiar with the investigation.
Agents from the the Dep't of Labor's Office of Labor Racketeering have been investigating the allegations against Local 25 officials including president George W. Cashman, a former Mass. Port Auth. Bd. board member who resigned after being indicted Jan. 16 on 175 counts of bribery and fraud. The allegations include shaking down movie and television producers in exchange for labor peace. Members of Local 25's movie crew allegedly padded overtime expenses, forced producers to lease member-owned equipment at inflated rates and threatened and intimidated other rival union members and crew. In one instance, Cashman allegedly approved the beating of a female snack truck driver who refused to turn her concession contract over to a Local 25 member on the set of the movie "What's the Worst That Could Happen?"
Records obtained under a Freedom of Information Act request by the Boston Herald showed that Dawson tried numerous times to warn ex- Mass. Govs. William Weld (R) and Paul Cellucci (R) that Local 25 strong-arm tactics were hindering filmmaking in Mass. [Boston Herald 3/28/02]
LIQUOR & WINE SALES REPRESENTATIVES (LWSR)
Federal Labor Law Probe Expands to Chicago City Hall
The federal labor law probe of the Chicago-based
Liquor & Wine Sales Representatives, Tire, Plastic, and Allied Workers
Union has reportedly expanded into a public corruption investigation.
A federal grand jury has subpoenaed records from Chicago's City Hall related
to a mob-connected family whose janitorial company has won tens of millions
of dollars in city-related contracts since Mayor Richard Daley (D) took
office.
In a subpoena dated Feb. 11, federal prosecutors asked the city's deputy budget director, Bill Cerney, to deliver "all employee expense tax records" filed by four companies, at least three of which are directly related to the Duff family, whose ties to organized crimes reportedly date back four decades and who has held fundraisers for the mayor and provided campaign workers for Daley-backed candidates. The request seeks records from the companies dating to Jan. 1, 1998. The companies are Windy City Maintenance, Windy City Labor Service, Remedial Environmental Manpower, and Remedial Daily Labor. The subpoena was obtained by the Tribune under the Ill. Freedom of Information Act. A federal grand jury also sought records on at least one Duff company, Windy City Maintenance, from the Metropolitan Pier & Exposition Auth., which oversees McCormick Place and Navy Pier, sources said. Windy City Maintenance, a janitorial firm, has held a cleaning contract with the MPEA since 1996, and the MPEA board is expected to decide whether to renew its contract in the coming weeks.
Federal prosecutors have been investigating the Duffs for more than two years, a probe prompted by a July 1999 Tribune investigation that found Windy City Maintenance, which had won tens of millions of dollars in government contract set-asides for woman-owned firms, was actually run by men within the Duff family. The Tribune also reported that a day labor company controlled by the Duffs, Windy City Labor, was supplying non-union labor to liquor distributors whose employees were represented by a union run by the Duff family, a possible labor violation. To date, the federal probe has focused on those labor violations by the Duffs' union, the Liquor & Wine Sales Representatives, Tire, Plastic, and Allied Workers Union. The latest subpoena suggests the investigation has now expanded.
After the Tribune investigation, Daley vowed his own investigation of the Duffs' companies. The results of the city probe concluded Windy City Maintenance was controlled by a woman, Patricia Green (Duff) when it first got city business but eventually was taken over by the Duff men. There was no evidence of willful wrongdoing, according to administration officials.
Patricia Green's husband, John Duff, Jr., testified in 1960 on behalf of reputed mob boss Anthony "Big Tuna" Accardo, who faced income-tax fraud charges. Duff's testimony helped the Accardo's defense but ultimately cost Duff his job as a city investigator. Duff later pled guilty in 1982 to embezzling union funds in Chicago and Detroit and spent 17 months in prison. One of his three sons, John Duff III, has also been allegedly associated with organized crime. [Ch. Trib. 3/19/02]
GOVERNMENT EMPLOYEES (NFPPE)
Union Corruption Causes Employees to Seek to Switch Unions
Employees of the City of Sunrise, Fla., are taking steps to fire their
union. Employees say they've lost faith in the Nat'l
Fed'n of Public & Private Employees after years of watching management
and commissioners increase their own benefits and salaries while neglecting
the workers. In Mar. 2002, 72% of the union and non-union employees
have signed cards indicating their interest in switching over to the Fraternal
Order of Police, general employees union member Paul Mink said. FOP
staff representative John Puleo said the FOP has already received 331 cards
expressing interest in switching to FOP. Before any switch could be final,
employees must take a formal vote.
NFPPE president Walter J. "Buster" Browne and his sister Patricia B. Devaney were indicted in Nov. 2001 on charges that they cheated their union out of more than $400,000. Browne is awaiting trial on charges of racketeering, embezzlement, and mail fraud.
People are just fed up, Mink said. "Walter Browne, and being he got indicted, and being they haven't done much for the general employees, people lost faith," Mink said. The employees have been without a contract for five months. [Sun-Sentinel (Ft. Lauderdale, Fla.) 3/22/02]
ELEVATOR CONSTRUCTORS (IUEC)
Defendant and Attorney Blast Prosecutors Handling of Media Information
"It's the sort of news leak that can get someone killed." That's how
the N.Y. Post summarized what William C. Barthold says about recent media
accounts of his purported role in a 137-count federal
indictment in which he and 25 bosses and members of Int'l Union of Elevator
Constructors Local 1 were charged in a massive no-show job scheme.
Even before the indictments were returned, The Post reported that a "little
black book" belonging to Barthold, jammed with explosive evidence that
includes telephone numbers and lists of no-show workers on the pad, was
in the hands of prosecutors. Barthold and 15 others on the list have
been charged with collecting money for work they did not perform.
Barthold and his lawyer, James DiPietro, downplayed the importance of the book in the feds' case. DiPietro said there are much more innocent explanations for the "smoking gun" evidence. Reportedly, the book contains a computer-generated list of 41 names with the words "members taking" in the bottom left-hand corner of the page. But DiPietro says the list isn't a coded reference to 41 union members taking no-show jobs, as the feds maintain, and that the mention of "members taking" relates to the time it took to download the list from a computer. "Law enforcement never informed the media that after the word 'taking' appears 12 seconds of elapsed time," DiPietro said.
The list, Barthold said, was provided to him by the union at a Manhattan job site. The names were out-of-work colleagues whom officials asked him to call in the event positions opened as the project progressed. Authorities say the fact that Barthold has a jobs list may be reason enough to suspect he was circumventing union hiring rules to further the no-show jobs scam. Union regulations say only the union secretary can give out jobs.
DiPietro said he will confront the no-show charges in Brooklyn federal court, and insisted that newspaper stories about the list could lead to violence against Barthold. "All of these people have their jobs, their homes, their pensions, health coverage and even more at stake, which can cause anyone to act irrationally," said DiPietro, who has reportedly defended some of N.Y.C.'s biggest mobsters. He added that the "leaks" about the list to the press came at a time when prosecutors hoped targets of the probe would cooperate before the indictments were obtained. "This reckless conduct was designed to cause other targets of their investigation to dislike my client and get them to cooperate with the government," he said. [N.Y. Post 3/22/02]
STEELWORKERS (USWA)
NLRB Reversed, High Court Says Organizer-Illegal Alien Not Eligible
for Back Pay
The Supreme Court ruled, 5-4, Mar. 27 that undocumented aliens working
illegally in the United States were not eligible for payments by employers
who mistreated them. The Court set aside a Nat'l Labor Relations Bd. award
of $66,000 in back pay, plus 13 years' interest, to Jose Castro, a Mexican
national who lied to get his job in a Cal. plastics factory and was laid
off for trying to organize a union. The Court said illegal aliens may not
collect "such relief" as back pay for jobs they were not entitled to hold.
"However broad the NLRB's discretion to fashion remedies ... it is not so vagrant and unbounded as to authorize this sort of an award," Chief Justice William H. Rehnquist (Reagan) said. He also said action by the NLRB, a federal agency, required Hoffman Plastic Compounds Inc. to violate a federal law against knowingly employing illegal aliens and contributed to keeping Castro in the United States illegally.
Others in the majority were Justices Sandra D. O'Connor (Reagan), Antonin Scalia (Reagan), Anthony M. Kennedy (Reagan) and Clarence Thomas (H.W. Bush). Justice Stephen H. Breyer (Clinton) wrote a dissent and was joined by Justices John Paul Stevens (Ford), David H. Souter (H.W. Bush), and Ruth B. Ginsburg (Clinton).
The decision, ending a 13-year legal nightmare for the company, was greeted "gleefully" at the Paramount, Cal., family-owned business. Its 85 employees produce plastic compounds used by other companies to mold electrical and construction parts. "Today the Supreme Court restored the proper balance between our country's labor laws and immigration laws," operations manager Roland Hoffman said in a telephone interview.
Castro used a friend's Tex. birth certificate to identify himself as a citizen when he obtained the job. He was laid off in Jan. 1989 because of organizing work for the United Rubber, Cork, Linoleum & Plastic Workers of Am., which became apart of the United Steelworkers of Am. in 1995. Because the dismissal allegedly violated federal labor laws, the NLRB ordered him reinstated and he worked at the company for four more years.
Rehnquist noted that rehiring a person once the employer learned he was undocumented was illegal under the 1986 Immigration Reform & Control Act, which took effect on July 1, 1987. That law requires all job applicants to prove they are legally eligible to work in the United States, bars applicants from using false papers to prove citizenship and forbids employers from knowingly hiring people in the country illegally. "The aim of our immigration laws is to preserve jobs for those lawfully in this country. The Supreme Court's decision furthers that goal. We feel vindicated after more than a decade of proceedings with the NLRB," Hoffman said. [Wash. Times 3/28/02]
FOOD & COMMERCIAL WORKER (UFCW) / UNION DUES
Ninth Circuit Chips Away at Beck Rights
On Mar. 25 an eleven-judge panel representing the the full U.S. Court
of Appeals for the Ninth Circuit chipped away at the Supreme Court's landmark
union dues decision, CWA v. Beck. The Ninth Circuit ruled that organizing
costs may be included in the agency fees charged to nonmembers covered
by a collective bargaining agreement's union-security clause, Mar. 25,
upholding a 4-1 Nat'l Labor Relations Bd. decision. Circuit Judge Stephen
R. Reinhardt (9th Cir., Carter), who is a ex-union attorney and ex-executive
committee member of the Democratic Nat'l Committee, wrote for the court
that a union "is permitted to charge all employees, members and nonmembers
alike, the costs involved in organizing, at least when organizing employers
within the same competitive market as the bargaining unit employer,"
A three-judge panel of the appeals court in May 2001 overturned NLRB's decision, applying the U.S. Supreme Court's decision in a Railway Labor Act case that a union cannot charge nonmembers for the union's organizing activity outside of the bargaining unit. However, the full court voted to rehear the case. Eleven of the approximately 45 Ninth Circuit judges represented the full court. Judge Kim M. Wardlaw (9th Cir., Clinton), the one judge from the three-judge panel who also participated in the en banc ruling, changed sides.
The Nat'l Right to Work Legal Def. Foundation Inc., which represented the nonmembers in the case, said it will ask the U.S. Supreme Court to review the case. "No worker should be forced to fund the recruitment of supporters to a private ideological cause," said NRTWLDF's Stefan Gleason. "This ruling is an outrageous affront to employee freedom and previous rulings of the U.S. Supreme Court."
United Food & Commercial Workers Local 7-R in Denver and Local 951 in Grand Rapids, Mich. are the exclusive bargaining representatives of two units of employees. Certain nonmembers claimed it was an unfair labor practice for the unions to charge them for organizing costs. NLRB in Sept. 1999 ruled that "at least with respect to organizing within the same competitive market as the bargaining unit employer," organizing is germane to collective bargaining. The board found that "there is a direct, positive relationship between the wage levels of union-represented employees and the level of organization of employees of employers in the same competitive market." The new Ninth Circuit decision enforced NLRB's interpretation of the Nat'l Labor Relations Act against the employees.
Circuit Judges Mary M. Schroeder (9th Cir., Carter), Harry Pregerson (9th Cir., Carter), Alex Kozinski (9th Cir. Reagan), Thomas G. Nelson (9th Cir., H.W. Bush), A. Wallace Tashima (9th Cir., Clinton), Sidney R. Thomas (9th Cir., Clinton), Barry G. Silverman (9th Cir., Clinton), Wardlaw, William A. Fletcher (9th Cir., Clinton), and Raymond C. Fisher (9th Cir., Clinton) joined in the decision. James B. Coppess of the AFL-CIO in Washington, D.C., represented Locals 7 and 951. Steven Goldstein in Washington, D.C., represented NLRB. Glenn Taubman and Richard J. Clair of the NRTWLDF represented the employees. [BNA 3/26/02; NRTWLDF 3/25/02]
PLUMBERS & PIPE FITTERS (UA)
Dissidents Win LMRDA Suit; Union Forced to Strike Anti-Speech Provision
from its Constitution
U.S. Dist. Judge James Robertson (D.D.C., Clinton) ruled Mar. 6 that
a provision of the United Ass'n of Plumbers & Pipe Fitters' constitution
calling for expulsion of any member who distributes "letters of falsehood
and misrepresentation" violates the Labor-Mgmt. Reporting & Disclosure
Act of 1959 (a.k.a., the Landrum-Griffin Act) and must be excised. Robertson
granted summary judgment to union members Charles Callihan and Wilmer Thomas,
who claimed that Section 199 of the union's constitution violated their
free speech rights under LMRDA, 29 U.S.C. § 411(a)(2).
Robertson ordered the union to excise the provision from its constitution and ordered the union to publish the court's ruling within 60 days in the union's membership publication. That notice, the court specified, should be mentioned in the publication's table of contents and printed in a type size no smaller than 22 point bold for the heading and 11 point for the body of the court order. Robertson also has scheduled a status conference for Apr. 2.
Callihan reportedly published a newsletter that often contained articles criticizing union officials. The business manager of Callihan's local filed internal union charges in Mar. 2000, alleging that Callihan had circulated a flyer, called "Members for Union Democracy" that contained "falsehoods about the Local Union" and other "inflammatory statements." The business manager subsequently dropped the charges.
Section 199 of the union's constitution provides that: "Any member of the United Association found guilty of sending out circular letters of falsehood and misrepresentation shall be expelled, and the Local Union that permits such action shall also be expelled." Callihan alleged that he faces constant criticism and hostile treatment because he has been branded a troublemaker and that he fears future prosecution under Section 199. Callihan and Thomas filed suit in Dec. 2000 challenging Section 199 of the union's constitution and alleging that the union had failed to advise members of their LMRDA rights.
Arthur L. Fox of Lobel, Novins & Lamont in Washington, D.C., represented Callihan and Thomas. Sally M. Tedrow and Dinah S. Leventhal of O'Donoghue & O'Donoghue in Washington, D.C., represented the union. [BNA 3/29/02]
However, John J. Dolfi, member of UA Local 354 in Youngwood, Pa., informed the Union Corruption Update that UA members are still having their rights violated. According to Dolfi, on Mar. 22, 17 days after Robertson's struck down Section 199, the Local 354's business manager continued an attempt to prosecute a dissident member under Section 199. At a hearing before the local's executive board, the business manager allegedly proceeded to pursue the imposition of penalties against the dissident. Reportedly, when presented, by the dissident, with Robertson's recent ruling, the board postponed the hearing until UA could file an appeal to Robertson's ruling. Allegedly, the business manger continued his prosecution against "free speech" citing instead Section 157 of the UA constitution, which is the UA member's initiation pledge. Dolfi commented: "This is a glaring and self evident transparent perversion of a members pledge of honor, duty, etc., by an alleged unethical, diabolical and vindictive union officer to stifle the freedom of speech as guaranteed under Title I of LMRDA."
Discrimination Suit against Chicago Local Moves Forward
U.S. Dist. Judge Blanche M. Manning (N.D. Ill., Clinton) ruled Mar.
13 that a black pipe fitter, Lawrence Malone, submitted sufficient
evidence that his union instigated, supported, encouraged, or ratified
such the presence of racist graffiti on portable toilets at a job site
to avoid summary judgment for the union on his racial harassment claim
under Title VII of the 1964 Civil Rights Act. Partially denying summary
judgment to United Ass'n of Plumbers and Pipe Fitters' Local 597 in Chicago,
Manning said Malone, a union member who worked at a job site in Robbins,
Ill., in 1995-96, could proceed with his Title VII claim, even though he
never had complained about the graffiti while he worked at the site or
produced conclusive evidence that union members actually were responsible
for the graffiti.
Malone did submit evidence, however, that in 1992, union business manager Francis McCartin delivered a racially tinged speech in which he made derogatory remarks about minority union members to a union audience that applauded him repeatedly. Malone also pointed out that union leaders took no steps to remove the offending graffiti until August 1996, after a black union member other than Malone complained. The court said the 1992 speech could be considered, despite Local 597's argument that a speech made more than three years before Malone encountered racist graffiti on the job should be inadmissible. "From any perspective, what remains from reading McCartin's speech is the factual issue of whether the union's leadership generated or fostered racial animus against its African-American membership," Manning wrote. "The union has offered no authority for [its] argument that the temporal separation between the time the speech was made and when the graffiti appeared on the toilets at the Robbins site bars Malone from raising this evidence in support of his claim."
Malone, who represented himself in the lawsuit, began working at the Robbins Recovery Facility in Nov. 1995 and belonged to Local 597. The parties did not dispute that during the period Malone worked at the site, racially derisive remarks were scrawled on the walls of most of the toilets. Although Malone acknowledged he did not know who wrote the graffiti, he speculated that his union co-workers were responsible. Malone also testified that there was a Ku Klux Klan poster on site, although he did not see it himself, and that he saw a rope looped to resemble a "lynch rope" at the job site. Malone did not complain to the employer or the union about the graffiti or other racial paraphernalia before he was terminated in June 1996.
About a month later, another black union member, James Ferguson, did complain about the graffiti. After relaying the complaint to the union's business agent workers at the site were instructed in Aug. 1996 not to write on the toilets and he had the existing graffiti painted over.
Malone subsequently sued the union and employer, alleging a racially
hostile work environment and discriminatory failure to promote. In an earlier
decision by U.S. Dist. Judge Elaine E. Bucklo (N.D. Ill., Clinton), the
court dismissed Malone's failure to promote claim against the employer,
citing Malone's admission that he had never applied for foreman. In July
1998, the court had denied the union's motion to dismiss Malone's Title
VII claims against Local 597. [BNA 3/26/02]
GOVERNMENT EMPLOYEES (CFA) / UNION DUES
Ninth Circuit Side with Union in Religion-Dues Suit
The U.S. Court of Appeals for the Ninth Circuit has ruled Mar. 22 that
Cal. professors may not challenge the new state law that allows state
and union officials to determine the acceptability of religious beliefs
when employees seek an exemption from the requirement to pay union
dues. The Cal. Faculty Ass'n initially sent a notice to 14,000 non-union
professors that a religious accommodation could be obtained only if they
were a member of an approved church - as stated in the statute. But
later, CFA attorneys filed a sworn declaration with the court that despite
its previous statements to 14,000 professors, the CFA union does not apply
the statute as actually written - or as advertised to this very day
on the union's web site. Based on that declaration filed with
the court only, the court ruled that the professors do not have standing
to challenge the law even if it violates employees' freedom of association
under the First Amendment.
"It is outrageous that union officials and state bureaucrats try to play God and decide which religions are approved and which are not," said Stefan Gleason of the Nat'l Right to Work Legal Def. Fdn. "If someone has a sincere religious objection to supporting a union thought to be immoral, his or her rights should be respected."
NRTWLDF attorneys filed the class-action suit in Feb. 2000 against CFA and the State of Cal. on behalf of 14,000 non-union Cal. State Univ. professors who must now pay $8.5 million annually in forced dues seized under a sweeping law signed by Cal. Gov. Gray Davis (D) in 1999.
The lead plaintiff, Dr. Charles Baird, distinguished professor of economics at CSU Hayward and a practicing Roman Catholic, had filed an objection to supporting CFA since his religious views did not allow him to support an organization that promotes conflict and uses coercion to achieve its goals. But the union's officials denied his objection. Meanwhile, Baird filed a charge at the Equal Employment Opportunity Comm'n in which the EEOC issued a decision finding cause to believe that the union had not properly accommodated Baird's religious beliefs. Under Title VII of the Civil Rights Act, employees who have a sincere religious objection to supporting a union - regardless of church affiliation - may divert their compulsory union dues to a charity instead. The plaintiffs are considering an appeal of the Ninth Circuit's decision to the U.S. Supreme Court. [NRTWLDF 3/22/02]
TEAMSTERS (IBT)
Hearing on Secondary Boycott of Overnite Set
A Nat'l Labor Relations Bd. administrative law judge in Atlanta will
hear testimony on Apr. 15 on Overnite Transportation
Co.'s allegations that the Int'l Bhd. of Teamsters engaged in an illegal
secondary boycott when union activists picketed a number of the freight
company's customers. The union engaged in numerous unlawful acts
as part of its strategy of "ambulatory picketing" at sites where Overnite
trucks were delivering or picking up goods from customers, says Overnite.
The hearing comes 30 months after IBT members struck the Richmond, Va.-based
carrier in what the union claimed was an unfair labor practice strike.
The ongoing job action, which has been marked by a barrage of litigation
before NLRB as well as in state and federal courts, appears no closer to
settlement today than it did when it began in 1999.
The secondary boycott charges against IBT relate to a series of picketing incidents that occurred between July 1999 and Feb. 2001 at customer locations in several states. The complaint names 12 union locals and two joint councils in the consolidated complaint. Some two dozen IBT bosses are named, including IBT vice president John Murphy, who heads IBT's organizing department, and vice president Phil Young, the director of the freight division. Among the customers that Overnite contends were subject to IBT's unlawful secondary boycott activity are J.C. Penney Co. and Mack Trucks Inc.
In addition to picketing Overnite terminals early in the strike, the union began using teams of mobile picketers who followed Overnite trucks when they left a terminal and set up temporary picket lines at a customer's facility while a delivery was being loaded or unloaded. While the Overnite truck and the union pickets were at the customer's property, trucks driven by IBT members employed by other carriers such as Yellow Freight or United Parcel Serv. would not cross the picket lines. [BNA 3/18/02]
FOOD & COMMERCIAL WORKERS (UFCW)
Trespasses Lead to Nationwide Ban of UFCW in Wal-Mart Stores
An Ark. state court judge issued an order permanently enjoining the
United Food & Commercial Workers Int'l Union from entering Wal-Mart
stores to solicit employees to join the union. The judge said the injunction
would apply to any of the company's 3,200 stores across the United States.
In late January, Judge Jim D. Spears, circuit judge for the Ark. Circuit
Court, 12th Judicial Circuit, granted Wal-Mart's motion for an order restraining
UFCW organizers from entering stores to distribute union literature and
solicit employees. In his March 15 final order and accompanying decision
memorandum, the judge makes permanent his injunction. UFCW is appealing
to the ruling. Spears' ruling cites Arkansas state criminal and civil trespass
law as the basis of his decision. The Mar. 15 ruling grows out of a UFCW
organizing "blitz" in Sept. 2001 during which union organizers entered
around 100 stores in Arkansas and other states over a few days to solicit
employees to join the union. [BNA 3/20/02]
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