OPERATING ENGINEERS (IUOE) / ELEVATOR CONSTRUCTORS (IUEC)
Seven Bosses, Contractors Indicted in $10 Million Fraud
A Manhattan developer and several union bosses defrauded the N.Y. Metro. Transp. Auth. (i.e., taxpayers) and a landlord of more than $10 million by billing for phantom workers at inflated rates, according to an indictment unsealed Apr. 18 in U.S. Dist. Court in Brooklyn. Seven people, including developer Frederick Contini and Int'l Union of Operating Eng'rs Local 14 shop steward Morris "Mickey" or "Fat Boy" DiMinno, were charged in a 55-count fraud and money laundering indictment. Contini allegedly conspired with DiMinno and other union bosses to set up a shell company that billed MTA and the landlord, Zar Realty Mgmt., for non-existent elevator operators at MTA's new headquarters a 2 Broadway in Manhattan.

The other five defendants are James Roemer, Local 14's treasurer; Matthew J. Downey and David Coakley, members of Int'l Union Elevator Constructors Local 1; Constantine Vafias, a Brooklyn-based construction contractor; and John "Johnny Rhino" Vitiello. Downey and Coakley were among 27 Local 1 members and associates charged in Feb. 2002 with stealing $6 million in wages and benefits through no-show jobs at N.Y.C. construction sites. [USAO E.D.N.Y. 4/18/02; Bloomberg News 4/18/02] For a detailed account of the indictment, including how $150,000 of the $10 million went to purchase a winery in Italy for Contini and Vafias, see http://www.nlpc.org/olap/ucu3/05_09_01.htm.

FIRE FIGHTERS (IAFF)
Cleveland Boss Gets 18 Months for $144,900 Theft
U.S. Dist. Judge Donald Nugent (N.D. Ohio, Clinton) sentenced Richard Adams Apr. 19 to 18 months in federal prison for stealing $144,939.46 in union funds and donations, including money collected for the family of a slain police officer. Adams, who was the treasurer of Int'l Ass'n of Fire Fighters Local 639 in Parma, Ohio, for 13 years, often told members that their money was safe and earning 13% interest in bank accounts. Instead, Adams looted the local's accounts for his own purposes and left the local $12,000 in debt when he was ousted in Dec. 2000. For a previous detailed account of Adams' scheme, see http://www.nlpc.org/olap/UCU3/05_06_23.htm.

Local 639 president Nick Kashi told Nugent that the local could have fulfilled dreams but for Adams. "Would we own a union hall today to hold our meetings, children's Christmas parties and other union-sponsored events to raise money for local charities and public relations events? The possibilities are almost endless. We will never know where our union could have been today," he said. Later Nugent told Adams, "The members will never be made whole. They had plans. They thought things were being done. This is really a black eye on the firefighters, even though they didn't have anything to do with it."

Union officials learned something was wrong in Oct. 2000, when the IAFF dropped the local for not paying dues. Adams has paid back $64,000 to the local, and Nugent ordered him to repay $40,000 by Apr. 26. Adam's attorney John B. Gibbons urged Nugent to give Adams only a year and a day in prison because he cooperated with authorities. He pled guilty to a related bank fraud count on Jan. 28. But, Asst. U.S. Atty. John Siegel said the cooperation did not warrant such a light sentence. [Plain Dealer (Cleveland) 4/20/02]

ROOFERS (RWAW)
Ohio Boss Get 21 Months for $130,500 Gambling-Related Theft
After confessing that casino gambling on the Ohio River and in Las Vegas as well as sport wagering led him to embezzle $130,507 from the United Union of Roofers, Waterproofers & Allied Workers Local 86 in Columbus, Ohio, Robert D. King, Jr.,  was sentenced Apr. 17 to 21 months imprisonment and three years probation. He stole $88,757 from the local plus $41,750 from local's benefit funds. He was ordered to make full restitution. He pled guilty to two embezzlement counts Dec. 11 before U.S. Dist. Judge George C. Smith (S.D. Ohio, Reagan). King stole the money from Aug. 1999 to Jan. 2001 by writing himself checks from Local 86's general and apprentice-training accounts.

King served as the local's business manager and financial secretary for six years until the union ousted him in Jan. 2001. Local officials became suspicious because King's sloppy record-keeping. The int'l union audited the books and confronted King with numerous discrepancies. The case was then turned over to the Dep't of Labor. [DOL 4/17/02; Columbus Dispatch 12/12/01]

IRON WORKERS (BSORIW)
International Boss Admits $103,100 Embezzlement
Raymond Robertson, ex-general vice president of the Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers and ex-director of its Nat'l Training Fund, pled guilty Apr. 11 in U.S. Dist. Court in Washington, D.C., to one count of conspiracy to defraud an employee benefit plan, one count of aiding and abetting embezzlement from an organization receiving federal funds, and six counts of embezzlement from an employee benefit plan. He agreed to pay a $30,000 fine and $103,170 in restitution and to assist the government in other probes.

Robertson is the seventh to be charged in the federal probe of BSORIW. Four other bosses have pled guilty to embezzlement or related charges. A fifth, ex-BSORIW president Jacob "Jake" West, is awaiting trial on charges related to a $50,000 union embezzlement and he also been linked to the ULLICO insider trading scandal. Others charged in the scandal are: Darrel E. Shelton, ex-general organizer, who pled guilty to embezzling as much as $120,000; Fred G. Summers, ex-executive director of organizing, who admitted embezzling more than $50,000; James E. Cole, ex-general secretary , who pled guilty to embezzling more than $10,000; and Michael J. Brennan, the ex-head of the Iron Workers Political Action League, who pled guilty to charges involving the theft of $7,000. Finally Kerry J. Tresselt, ex-bookkeeper, pled guilty to embezzling more than $350,000 from BSORIW’s training fund. [DOL 4/11/02]

PLUMBERS & PIPE FITTERS (UA)
Feds Indict Minneapolis City Councilman & Union Boss
Stolen union money paid for plumbing work at property owned by Minneapolis City Councilman Joe Biernat (DFL), according to federal charges against Biernat, a boss of United Ass'n of Plumbers & Pipe Fitters Local 15 in Minneapolis, and the boss' brother. The indictments unsealed Apr. 18 allege that in 1999, Thomas J. Martin, ex-Local 15 business agent used $2,700 in union funds to pay for Biernat's plumbing work at the same time the council member and his colleagues were approving Martin's appointment to the city board that licenses plumbers. The specific charge is conspiracy to extort under color of official right in violation of 18 U.S.C. § 1951 (Hobbs Act). Biernat also was charged with making a false statement to the FBI, aiding and abetting union embezzlement, and mail fraud.

Allegedly, Martin arranged for a plumbing estimate at Biernat's property on Mar. 17, 1999. The same day, Biernat chaired a council committee meeting that approved Martin's appointment to the Minneapolis Plumbers Examining Bd. Nine days later, Biernat voted in favor of the appointment at a council meeting. Four days after that, Martin arranged for additional plumbing work to be done at Biernat's house. On May 19, 1999, Martin arranged for the $2,700 from Local 15 to pay for the work. Once on the licensing board, Martin would be in a position to directly influence who would be able to work as a plumber in Minneapolis. Three city officials and two plumbers sit on the board, which examines qualifications of applicants for certificates.

Martin was indicted on charges of conspiracy to extort, mail fraud, and three counts of union embezzlement. The criminal complaint alleges that he took a total of about $17,700, spending the money for plumbing work at Biernat's house and at the homes of his relatives. He was ousted in Mar. 2002, shortly after the FBI seized documents at the local's office. His brother, Joseph W. Martin, was also indicted on a charge of aiding in the theft of some $9,000 for work at his home. Gerald Yost, Joseph Martin's attorney, said that they had negotiated with federal prosecutors for weeks but that talks failed in mid-Apr. The indictments resulted from Dep't of Labor audit of the local.

The Martin brothers were arrested on Apr. 18 and released on unsecured bonds. Biernat, a councilman since 1993 and up for reelection in 2005, was not arrested. Instead, Biernat attended the City Council meeting as usual on Apr. 19, speaking in favor of an affordable-housing project. Afterward, he declined to answer questions about the indictment but said he felt good about the support he had received from colleagues and friends. He reportedly has no plans to leave the council. "I'm here to do my job. I'm passionate about the work I do," he said. Hours later, he stood quietly in federal court, where U.S. Magis. Judge J. Earl Cudd (D. Minn.) entered his pleas of not guilty. Biernat was released on a $25,000 personal recognizance bond, which means he would pay only if he failed to appear in court or violated standard conditions of release.  Biernat is scheduled to appear in court next on May 15 for a hearing on motions that either his attorney or the government may file in the next two and a half weeks. A trial date is set for July 1.

Biernat is the second City Council member to face corruption charges in recent years. Ex-City Council Member Brian Herron (DFL) resigned in 2001 after admitting to taking money from a grocer in exchange for the promise of regulatory help. Herron is serving a one-year sentence in federal prison in Duluth. After Herron's plea, the city attorney brought in Chicago attorney Joe Duffy to conduct an independent look into city regulatory services. In Feb. 2002, Duffy concluded his report, saying the corruption was limited to Herron.

Responding to media questions, U.S. Atty. Tom Heffelfinger said that, if in the wake of Herron's conviction, Biernat is also convicted, "that does require, I think, the city to look carefully at the conduct of its own elected officials." However, Minneapolis Mayor R.T. Rybak, called Biernat’s indictment an accusation, said he is not planning an immediate city investigation. [Star Trib. (Minneapolis) 4/19, 4/20/02]

OPERATING ENGINEERS (IUOE)
Feds Probing Illinois Agencies & Local
Federal prosecutors in Springfield, Ill., have reportedly opened a criminal investigation into a 2001 labor dispute at E. Ill. Univ., and have subpoenaed records from the office of Ill. House Speaker Michael Madigan (D), the Ill. Bd. of Higher Educ., the Ill. Educ. Labor Relations Bd., the Ill. Dep't of Labor, and others. Reportedly, the subpoenas were delivered to the IBHE only a day after the Mar. 19, 2002, primary (in which Madigan's daughter Lisa, also a state senator, won the Democratic nomination for Ill. Atty. Gen.) and sought documents relating to negotiations between EIU, located in Charleston, Ill., and Int'l Union of Operating Eng'rs  Local 399 in Chicago. The subpoenas reportedly sought materials related to the role any state employee might have played concerning a new labor contract. Reportedly, the federal grand jury in the case is also currently taking testimony from a number of individuals.

An EIU spokesman confirmed that "the FBI was investigating a matter relating" to EIU's contract negotiations with Local 399. Steve Brown, the Speaker's spokesman, said Madigan's office was subpoenaed for documents as a result of a meeting in which he summoned EIU and Local 399 representatives to his office to resolve the dispute. Meetings with Madigan and his staff were reportedly coordinated via EIU's lobbyist Loretta Durbin, wife of U.S. Sen. Dick Durbin (D-Ill.). In another eyebrow-raising link, Local 399's lobbyist Janis Cellini, a "prominent GOP insider" and sister of Republican "power broker" William Cellini, is also board member of IELRB (a subpoenaed state agency). [Chi. Trib. 4/10, 4/11/02; Chi. Sun-Times 4/12/02]

TEAMSTERS (IBT)
Judge Upholds Ban of Hoffa Ally
On Apr. 18, U.S. Dist. Judge Loretta A. Preska (S.D.N.Y., G.H.W. Bush) upheld the lifetime union membership ban imposed on Michael C. Bane, ex-president of Int’l Bhd. of Teamsters Local 614 in Pontiac, Mich. Preska, who oversees a 1989 consent decree which governs IBT, denied Bane’s appeal of the decision of IBT’s court-supervised Indep. Rev. Bd., which is charged with rooting out corruption and organized crime influence within IBT. In July 2001, IRB found that Bane had intentionally misled an IRB investigation of Bane’s association with organized crime figures. As result, IRB found Bane should be permanently barred from membership in any position in the IBT or any IBT-affiliated entity

Bane appealed  IRB's decision to Preska, arguing the penalty was "vastly disproportionate" to his conduct and in comparison to sanctions imposed in other similar cases related to enforcement of the consent decree.  Rejecting Bane’s assertions, Preska said the court would not overturn the IRB's choice of a penalty unless it found the remedy "unwarranted in law or without justification." In this case, the judge said, a lifetime ban on membership and employment with the union is "a permissible sanction because it is authorized by the IBT Constitution and the [consent decree] rules."  She added, "There is no dispute that the IBT constitution provides that a member may be stripped of membership rights if found guilty of misconduct."

In imposing the sanction, IRB reportedly took into account Bane's relatively high-level position in the union as the head of a large IBT local. IRB cited the sanction it had imposed on disgraced and expelled ex-IBT president Ron Carey who similarly was stripped of his union membership in 1998 for his part in the money-laundering scandal which brought down him and his administration in 1997. The judge there upheld the life ban because of "Carey's position as the highest union official--his misconduct was more serious."  Preska also likened Bane to the Carey ban and "such an abuse of trust by a powerful administrative official undermines the faith of the public and the IRB members in the ability of the union to conduct its day-to-day affairs in a trustworthy and honest way."

Further, Preska said that Bane’s "failure to cooperate and to provide truthful testimony concerning his ties to [organized crime figures] strikes at the very heart of the consent decree's goal of freeing the union from 'the hideous influence of organized crime.'" She added, "Indeed, by intentionally giving misleading testimony, Bane intended to prevent the IRB from discovering the full scope of his association with organized crime members. Bane's misconduct was thus extremely serious and warranted the most severe sanction."

Bane, who was convicted of embezzlement in the 1970s, has been affiliated with Local 614 for over 30 years and became its president in 1990. Current IBT president James P. Hoffa is a Local 614 member and served as the local’s attorney before taking over the IBT; he is also reportedly an associate of Bane. [BNA 4/22/01]

HOTEL & RESTAURANT EMPLOYEES (HERE)
Government Takes Over Corrupt New Jersey Local
U.S. Dist. Judge Garrett M. Brown, Jr. (D.N.J., Reagan) Apr. 17 appointed a monitor to purge organized crime influence from Hotel Employees & Restaurant Employees Int'l Union Local 69 in Secaucus, N.J.  Brown signed a consent order giving monitor Kurt Muellenberg broad powers to oversee Local 69. Muellenberg was the monitor over the int'l HERE when it was under DOJ control from 1995-2000. HERE recently removed all of Local 69 bosses and installed a trusteeship, alleging that some $642,000 was wrongfully diverted.

Prosecutors now allege that Local 69 has been influenced by the Genovese crime family for at least 15 years. Prosecutors filed a civil complaint under the Racketeer Influenced & Corrupt Orgs. Act that said the local's bosses had embezzled funds, extorted money from an employer, and "fostered a climate of intimidation." Asst. U.S. Atty. Michael Chagares said, "The purposes of this action are to rid Local 69 of corruption and organized crime influence, and to return this union back to its honest, hard-working members."

Brown has previously barred several officers from Local 69, including John Agathos, who served as president from 1983-98, and his son, John Jr. Both allegedly allowed the Genovese family to influence the local. [Bloomberg News 4/17/02]

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ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:

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LONGSHOREMEN (ILA)
Louisiana Boss Gets Year for Embezzling $91,400
U.S. Dist. Judge Tucker L. Melançon (W.D. La., Clinton) sentenced Willie R. Walker, ex-secretary-treasurer of the Int'l Longshoremen's Ass'n Local 1349 in Lake Charles, La., Apr. 18 to one year and one day in federal prison for a $91,423.11 union embezzlement. Walker pled guilty Jan. 25 to one-count of union embezzlement after being indicted Nov. 16 on the one embezzlement count and one count of falsifying union records. Melançon also order the ex-boss to pay $68,423.11 in outstanding restitution and three years on supervised release after prison.  .

Walker embezzled the funds for his personal use between Jan. 1997 and Dec. 2000. He took money on a monthly basis by signing his name on checks to himself for fictitious union expenses to himself and by forging the name of James Pettieway, Local 1349's ex-president. Wayne Blanchard, Walker's attorney, asked Melançon to impose a sentence less stringent than the sentencing guideline range of 12 to 18 months in jail. Walker took out a $21,000 loan to help make restitution and tried to take additional loans, which Blanchard argued qualified as an extraordinary effort to make up for his crimes and under the guidelines such extraordinary actions would make Walker eligible for special consideration.

Asst. U.S. Atty. Stephanie Finley didn't object to Blanchard's argument. But Melançon said he is bound to follow the guidelines, even though he sometimes thinks they are wrong. He said the government's position in this case amounts to "punting." Under that logic, Melançon said, "I could do anything I want as long as the government doesn't object. I can't cheat intellectually a little bit in my own mind," he said. Walker might have done all he could to make amends for his crimes, Melançon said, but that doesn't qualify as extraordinary. Melançon told Walker that he cannot overlook the fact that money was stolen from fellow union members. "You violated a pretty sacred trust," the judge said.

Blanchard further argued that Walker should only be sent to a halfway house, saying he should get credit for taking responsibility for the crime and making early efforts to pay the money back. Melançon aptly retorted that Walker tried to do right only after being "caught with his hand in the cookie jar." [Advocate (Baton Rouge) 4/19, 4/22/02; USAO W.D. La. 4/18/02]

IRON WORKERS (BSORIW)
Atlanta Boss Gets Six Months for $90,000 Thefts
Steven Jones, ex-business manager  and ex-secretary-treasurer of Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers Local 387 in Atlanta, was sentenced Apr. 11 to six months imprisonment and three years probation and was ordered to pay restitution of $90,000. He admitted Oct. 11 to embezzling $29,724.73 from the union  and $39,949.42 from an union apprenticeship fund.[DOL 4/11/02]

FIRE FIGHTERS
Convicted Illinois Embezzler Seeks to Withdraw Guilty Plea; Judge Postpones Jail Term
Confessed union and benefit fund embezzler, Patrick Stiles, was due to surrender Apr. 23 to serve a two year prison term, but Kane County (Ill.) Circuit Judge Donald Hudson agreed Apr. 22 to let Stiles stay free on bond until his motion to allow the ex-boss to withdraw his guilty plea  is considered. The motion seeks to have his conviction vacated so the case can go to trial, said defense attorney Philip Collins III. "A lot of innocent people plead guilty, oftentimes when they could show reasonable doubt, and we believe there's reasonable doubt here," said Collins, who replaced Fred Morelli Jr. as Stiles' attorney. Asst. Kane County State's Atty. Joseph Cullen said his office would oppose Stiles' attempt to withdraw his plea. A hearing on the motion has yet to be scheduled.

Stiles pled guilty Mar. 21 to one count of felony theft in a plea agreement. He was sentenced to two years in prison and ordered to pay $244,000 to the Aurora Firefighters Local 99 and the Aurora Firefighters Relief Ass'n. Aurora police testified in Oct. 2001 that Stiles stole some $350,000 from the two union organizations, but the restitution was based on a $275,000 settlement in a related civil suit brought by Local 99 and the Relief Ass'n against Stiles. In that settlement, Stiles agreed to turn over about $64,000 in retirement funds. Stiles, who resigned Jan. 15, 2001, after 11 years with the Aurora Fire Dep't, was secretary-treasurer of the Relief Ass'n, which aids members who get injured or sick, and held the same post in the local.

If Hudson allows Stiles to withdraw his plea, prosecutors could reinstate the all initial charges against him. If convicted, Stiles could face a sentence ranging from probation to 15 years in prison. [Chi. Trib. 4/24/02]

GOVERNMENT EMPLOYEES (AFSCME)
Forgery, $36,000 Larceny Garners 3 Years for Connecticut Bookkeeper
Darrell Dove, an ex-bookkeeper for a New Britain, Conn.,  city employees union began a three-year prison term Apr. 12 for embezzling $36,631. Dove's sentence could have been lighter if he had paid back money to Am. Fed'n of State, County & Mun. Employees Local 1303, where he worked until his arrest in 2000 on state larceny and forgery charges. But Dove had paid nothing back. Conn. Superior Court Judge Howard Owens said that Dove lacks both the resources and the will to pay.

City police said Dove embezzled the money from the Local 1303's office from June 1999 to Mar. 2000 by forging signatures of the union president and vice president on union checks and then cashing them. Dove was caught because he made the stolen checks cashable to him. The scheme was uncovered during a routine audit of the local in 2000.

Asst. State Public Defender Chris Eddy said Dove stole the union funds due to a gambling problem. As part of the plea bargain agreement securing Dove's guilty plea, Asst. State's Atty. Louis Luba agreed to drop other charges, including those connected to a separate incident in which Dove allegedly stole money from a credit union. [Hartford Courant 4/13/02]

LABORERS (LIUNA)
Michigan Boss Charged with $32,700 Embezzlement
On Apr. 9, Edward Wiebeck, Sr., ex-business manager of Laborers' Int'l Union of N. Am. Local 503 in Jackson, Mich., was charged with one count of embezzling $32,790.82 in union funds.  [DOL 4/9/02]

GOVERNMENT EMPLOYEES (AFGE)
Connecticut Boss Used Union to Pay for $15,900 of Personal Expenses on Government Credit Card
U.S. Dist. Judge Robert N. Chatigny (D. Conn., Clinton) sentenced Ralph Varnado, ex-president of Am. Fed'n of Gov't Employees Local 1674 in West Haven, Conn., Apr. 12 to five years probation and six months of home confinement and was ordered to make total restitution of $15,973.99. He pled guilty Sept. 17 to one count of violating 18 U.S.C. § 641, embezzlement of public money. Varnado, also an employee of a Veteran's Affairs Med. Ctr., confessed that on numerous occasion in 1999 and 2000 he misused used his government-issued credit card to pay for personal expenses. Further, Varnado abused his position of trust as local president by embezzling over $15,000 from the local's account to cover these credit card payments, as well as other personal expenses. At sentencing, Chatigny state that there was a "strong argument" for imposing a prison sentence given Varnado's repeated acts of embezzlement over a period of time. But Chatigny concluded that sentence of probation was appropriate to allow Varnado to remain employed and meet his restitution obligations. [USAO D. Conn. 4/12/02; DOL 4/12/02]

AUTO WORKERS (UAW)
Cleveland Boss Indicted on Seven Union Corruption Counts
Cuyahoga (Ohio) County grand jury indicted Rollie McHugh, ex-financial secretary of United Auto Workers Local 2358, Mar. 29 on one count of theft, two counts of forgery, two counts of uttering, and two counts of tampering with records for allegedly embezzling between $500 and $5,000. The charges result from a federal probe. The Cleveland-Local 2358 is now merged into UAW Amalgamated Local 70 in Bedford, Ohio. [Plain Dealer 4/18/02; DOL 3/29/02]

POSTAL WORKERS (APWU)
Boss Indicted on Two Counts, Allegedly Embezzled $8,163 from North Carolina Local
On Apr. 17, Hugh C. Credle, ex-president of Am. Postal Workers Union Local 1616 in Roanoke Rapids, N.C., was indicted on one count of embezzling $8,163 in union funds and one count of making false entries in union records. [DOL 4/17/02; USAO E.D.N.C. 4/24/02]

STEELWORKERS (USWA)
Tennessean Order to Pay $5,700 in Restitution
On Apr. 15, Michelle Arington, ex-bookkeeper of United Steelworkers of Am. Local 9-194-L, was sentenced in U.S. Dist. Court for the Middle Dist. of Tenn. to five years probation and was ordered to make restitution of $5,707. As a special condition of probation, she must disclose her conviction to any employer for whom she is handling funds. She was indicted Aug. 21 and later pled guilty to one count of embezzling union funds and one count of making false entries in union records. [DOL 4/15/02]

ALLIED-INDUSTRIAL WORKERS (PACE)
Nashville Boss Charged with $5,500 Union Embezzlement
Robert M. Bruce, ex-financial secretary of Paper, Allied-Indus., Chemical & Energy Workers Local 5-0080 in Nashville was indicted Apr. 9 on one count of embezzling $5,546 in union funds and one count of making false entries in union records. [DOL 4/9/02]

AUTO WORKERS (UAW)
Boss Charged with Stealing $4,100 from Indianapolis Local
On Apr. 17, in Marion County (Ind.) state court, James M. Johnson, ex-president of United Auto Workers Local 361 in Indianapolis, was charged in a one-count information with theft for embezzling approximately $4,150 in union funds. [DOL 4/17/02]

GOVERNMENT EMPLOYEES (AFSCME)
Western Wisconsin Boss Charged with Theft
On Apr. 10, in Dunn County (Wis.) state court, Judy Hase, ex-secretary-treasurer of Am. Fed'n of State, County & Mun. Employees Local 727-D in Menomonie, Wis., was charged in a criminal complaint with theft for embezzling $389 in union funds. [DOL 4/10/02]

GOVERNMENT EMPLOYEES (PEGC) / UNION DUES
Court Orders California Union to Pay $300,000 in Illegal Seized Union Dues
U.S. Dist. Judge Garland E. Burrell, Jr. (E.D. Cal., G.H.W. Bush) ordered the Prof'l Eng'rs in Cal. Gov't to return nearly $300,000 to state employees who were  illegally forced to pay for lobbying and other union political activities.  Burrell ruled that the union had seized almost $100 per employee over a seven-month period in 1999 and ordered  the union to pay nominal and compensatory damages to 3,200 non-union employees, totaling approximately  $298,000.

"Today's ruling shows that California's union officials cannot get away with ripping off the working men and women of this state," said Stefan Gleason, vice president of the Nat'l Right to Work Legal Def. Fdn., which provided free legal aid to the employees.

NRTWLDF attorneys originally filed the class-action suit Sept. 1999 on behalf of Richard Wagner, an investigator for the Cal. Air Res. Bd. in the Sacramento area, and Kristin Schwall, a water quality engineer from San Diego.  In Feb. 2002, the case was deemed a class-action suit, enabling all 3,200 non-union government workers under the PECG's statewide memorandum of understanding - also  known as a collective bargaining agreement - to join  the suit.

PECG is one of California's most politically active unions.  At unusually high levels, union officials have seized union dues and used them to fund its ballot initiatives and other political activities. The court held that 56% of the amount charged to non-union employees was not lawfully chargeable to non-members, as it was for politics and other activities not shown to be related to bargaining.  In union budgets since 1999, the percentage of dues spent for politics has risen to more than 75% of full union dues.  In recent weeks, the state engineers filed a related class-action complaint seeking a similar rebate for dues illegally seized since Apr. 2001.

According to the constitutional protections construed by the Supreme Court in decisions of Abood v. Detroit Bd. of Educ. and Lehnert v. Ferris Faculty Ass'n, the union may  not collect compulsory dues spent on activities unrelated to collective bargaining.  Politics, lobbying, organizing, public relations, and other non-bargaining activities are explicitly non-chargeable to employees who have exercised their right to refrain from union membership.  [NRTWLDF 4/23/02]

TEACHERS (NEA)
Landmark Files DOL Complaint Against NEA
The Landmark Legal Fdn. filed a complaint with the Dep't of Labor Apr. 22 charging the Nat'l Educ. Ass'n with concealing the union's use of millions of dollars in tax-exempt teachers' dues and fees for political activities since at least 1994. The Labor Mgmt. Reporting & Disclosure Act (a.k.a. the Landrum-Griffin Act) requires unions to report their revenues and expenditures annually  to DOL on forms such as LM-2. Unions must report their financial activities in sufficient detail to accurately reflect the union's operations. A union and its leaders may be liable for substantial civil and criminal penalties for violating the LMRDA.

LLF analyzed thousands of pages of internal union documents, as well as the NEA's DOL and other federal filings since 1994, which show the expenditure of millions of dollars in tax-exempt revenue to recruit and support candidates for local, state, and federal elective office. None of these expenditures are specifically reported, thereby making it impossible for NEA members to  determine the full extent of the union's political activities. LLF's complaint also details the union's failure to document its direct participation in a nation-wide coordinated campaign with Democratic Party campaign organizations, the AFL-CIO and Emily's List during the same period.

"The LMRDA was enacted to ensure that union members could make informed, responsible decisions about their union's leadership  and its activities," explained LLF president Mark R. Levin. "The NEA's leadership spends millions of tax-exempt dollars on political activities every year, in coordination with the Democratic National Committee, yet reports none of it on its Labor Department filings."

LLF's DOL complaint follows earlier complaints filed in 2000 and 2001 with the IRS and the Fed. Election Comm'n concerning NEA's unreported political expenditures and activities. "The NEA obviously doesn't want America's teachers, parents and taxpayers to know how it is using tax-exempt membership dues and fees," explained Levin. "But federal labor reporting laws require the union to tell truth, the whole truth and nothing but the truth about its political activities and expenditures." [LLF 4/22/02]

GOVERNMENT EMPLOYEES (AFSCME)
Elections Shenanigans Reported at DC37 Local
James Butler, 30-year president of Am. Fed'n of State, County & Mun. Employees Local 420, reportedly avoided ouster Apr. 8 when the chairman of his hand-picked election committee, Rev. Alvin Meads, ordered a new union election under, at best, dubious circumstances.  Local 420 is part of AFSCME's corruption-riddled Dist. Council 37 in N.Y.C.  Carmen Charles, Local 420's vice president who narrowly defeated Butler on Feb. 27, charged that the committee's report finding fault with the original vote and the aborted head count were maneuvers to help Butler to cling to power. "Butler realized we had the majority of the people so they refused to count. It's a disgrace to democracy," Charles said.

An important sign of discord among Butler's supporters came when William J. Sipser, whose family has represented Butler throughout his tenure, resigned Apr. 9 as Local 420's attorney. "As a result of last night's membership meeting, irreconcilable conflicts and differences have arisen that make it impossible for me to continue as counsel to Local 420," he wrote to the local.

On Apr. 15, Charles filed a complaint with AFSCME contending that the committee should not have ordered a new election. She plans to present AFSCME's judicial panel a videotape of the meeting that reportedly shows that the people voting against a new election (by standing on one side of the meeting room) far outnumbered those voting for a new election.

In her campaign, Charles tapped into growing discontent among members over the local's high dues, Butler's $250,000 salary, Butler's poor health, Butler's alleged remark calling Charles a "stupid immigrant," and the mysterious nonuse of millions of dollars of members dues collected since 1995 to pay for new headquarters.

Butler rejected Charles' requests to use a neutral election committee, a mail-in ballot, and a third party election monitor. Such reforms are now commonplace in many DC37 locals since DC37's vote-rigging scandal erupted in 1998. Despite having to play by Butler's rules, Charles won 580 to 526 in a walk-in election at a community center in Butler's political base of Harlem. Butler then asked the election committee to set aside the election on grounds that Charles had intimidated voters, campaigned on city time, and received preferential treatment from management. Butler further charged that an article in N.Y.C.'s Chief-Leader stating that Butler had called Charles a "stupid immigrant" and  poisoned the election. He further alleged that the Charles slate's sample ballots were mistakenly counted.

The election committee then held three long meetings to air Butler's accusations. According to AFSCME's election manual, the election committee presents its findings to the membership and it is the membership who makes the final decision on whether to rerun the election, which was the purpose of the Apr. 8 membership meeting. That's when Meads call for a vote by members dividing themselves to each side of the room. When more members lined up on the no new election side, a flummoxed Meads reportedly declared he could not do a count and abruptly decided himself that a new election was called for. [Chief-Leader (N.Y.C.) 4/19/02]

STAGE EMPLOYEES (IATSE)
Union Revokes Las Vegas Local's Charter
The Int'l Alliance of Theatrical Stage Employees has taken the extraordinary step of revoking the charter of IATSE Local 720 in Las Vegas. IATSE's general executive board said it took the action following a Mar. 20 hearing to review allegations that included breakdown in the democratic process, lack of organization and various violations of the union's constitution. However, no charges were filed against individuals.

IATSE president Thomas Short said the hearing was prompted by correspondence from Local 720, including a request that IATSE assume control of the local.  Short said that the revocation was "a result of the infighting and the political shenanigans and the revolving door of officers," at the local.

Short claimed a trusteeship would not remedy the problems. "It was abundantly clear that this goes far beyond a trusteeship," he said. "It was total turmoil." He added, "The inadequacy of a trusteeship lies not in the fact that the trustees' control over the affairs of Local 720 would be of limited duration [18 months by law], but in the need for the new organizing and membership campaigns to promise existing and future members a functional and stable union. Local 720 is not that union now and a trusteeship cannot transform it into that kind of union. The democratic procedures in Local 720 have broken down and cannot be restored."

IATSE said Local 720's building and assets will be used solely to benefit present and future members in the Las Vegas area. It also said it will conduct monthly membership meetings and create an advisory committee to assist in organizing new members and creating work opportunities for members. Short said no new charter will be granted for a new local. The revocation  is a first for Short, who has served as president since 1994. [Daily Variety; Hollywood Reporter 4/17/02]

MARINE ENGINEERS (MEBA)
Ex-U.S. Attorney Representing Indicted Florida Union Boss, Conflicts Alleged
Alleging freshly discovered evidence of "unethical" conduct, the Dep' t of Justice is asking a federal judge in W. Palm Beach to block ex-U.S. Atty. for the S. Dist. of Fla. Thomas E. Scott, Jr., and co-counsel Steven E. Chaykin from representing indicted Broward union boss Walter J. "Buster" Browne. DOJ accuses Scott's firm, Cole Scott & Kissane, and Chaykin's firm, Zuckerman Spaeder, with simultaneously representing Browne and "key" government witnesses expected to testify against Browne. The witnesses: unnamed accountants at a accounting firm Poole Goldstein, auditors of the books for Browne's Nat'l Fed'n of Public & Private Employees since 1997, and Donna Fisher, a now retired union official who worked for Browne as president of the private division.

"The proposition at bar - that the court allow the defendant to substitute counsel who will represent the accused and the witnesses against him - would unethically divide counsels' loyalty and render their proposed assistance ineffective," writes DOJ trial attorney Julia J. Stiller. "Because this court has an independent interest in ensuring the integrity of the proceedings against defendant Browne, the government urges the court" to exclude Scott and Chaykin.

In a response filed Apr. 10, Chaykin conceded those client relationships exist. But he downplayed the seriousness of the matter. He said it was part of "the government's relentless effort to deprive Mr. Browne of his Sixth Amendment right to counsel of his choice." Chaykin adds, "The challenged representations are not adverse, and the interests of the clients will not be compromised by the law firms' representation of Mr. Browne."

Browne, an ex-Port Everglades commissioner, is the politically formidable president of NFPPE, which is an affiliate of Dist. 1 of the Marine Eng'rs Beneficial Ass'n. In Nov. 2001, Browne and his sister, Patricia Devaney, were indicted by a federal grand jury in Ft. Lauderdale on charges of running a racketeering and payroll embezzlement scheme that stole hundreds of thousands of dollars from the union and four local companies. Devaney used to work as Browne's administrative assistant.

Early on, Barry G. Roderman of Ft. Lauderdale was Browne's lawyer. On Jan. 29, however, Scott and Chaykin announced they were taking over Browne's defense. Scott represented Browne twice before in criminal cases - in 1993 when a federal judge acquitted Browne of mail fraud, and, in 1996, when Browne pleaded guilty in Washington, D.C., to a misdemeanor federal charge of mail tampering in an alleged scheme to rig a 1988 union vote. DOJ immediately moved to remove Scott from the latest case. They argued, among other things, that Scott had a conflict of interest because Browne's indictment was assembled during Scott's service as U.S. Attorney in DOJ's Miami office. Scott served in that role during the Clinton Administration from Aug. 1997 until May 30, 2000.

But Scott, who's also a ex-U.S. Dist. Judge (S.D. Fla., Reagan (1985-1990)), recused himself from involvement in DOJ’s investigation of Browne shortly after taking office. And because of that, and despite the government's insistence that Scott remained conflicted because his office nonetheless had limited official duties in the case, Chief U.S. Magis. Judge Linnea R. Johnson (S.D. Fla.) in West Palm Beach ruled for Scott on Mar. 5. She held that federal conflict of interest laws don't forbid Scott from accepting Browne as a client. Trial is now set for May 6.

Meanwhile, DOJ is appealing Johnson's ruling about Scott to U.S. Dist. Judge Daniel T.K. Hurley (S.D. Fla., Clinton). DOJ’s pleading also asserts "additional newly discovered grounds" for excluding Scott and Chaykin. According to court papers, federal authorities started to piece together the alleged conflicts after spotting Scott's law partner, Richard Cole, in the courtroom gallery during the hearing when Johnson ruled that Scott could represent Browne. Cole had represented the union's accountants through the union's insurance company and was "present when the government questioned the accountants," the court papers say. But no one working DOJ’s case knew that Cole was Scott's law partner until Cole was asked about it in court that day, the government says. DOJ checked the websites of both Cole Scott & Kissane and Zuckerman Spaeder, a national firm, for more information. The court papers say those checks disclosed a similar client conflict for Chaykin and his firm, Zuckerman Spaeder.

"The Zuckerman Spaeder site posts a banner headline proclaiming 'Federal Judge Finds Pension Plan Retaliated Against Former Union Officers: Awards them More than $2 Million," the appeal says. The posted story describes how a Zuckerman Spaeder lawyer in Md. won $2.4 million, plus $240,000 in fees, for successfully representing Donna Fisher - the former union subordinate to Walter Browne who's now a government witness - in a civil lawsuit involving MEBA's pension plan. Zuckerman Spaeder continues to represent Fisher during an appeal of that case.

DOJ argues that Fisher has been questioned by federal authorities, and will be called to testify in a substantial way at trial about Browne's "overall conduct as it relates to specific racketeering acts." And because of that, the government alleges, Zuckerman Spaeder has an "irreconcilable" loyalty problem with both Browne and Fisher. "The interests of the defendant diverge from those of the witnesses," says the appeal. "It is in Browne's interest to discredit Ms. Fisher, who has long fought to distance herself from corrupt union leadership, and attack her conduct as president of the private division."

Scott's law firm faces the same kind of conflict in its representation of the Poole Goldstein accounting firm, the appeal says. Federal agents have questioned Poole Goldstein accountants who audited the books of Browne's union and subpoenaed their work papers. The accountants' "extensive knowledge" of the union's finances, and their "interactions" with Browne will be featured at trial, the government appeal says. "It benefits Browne to shift the blame for the financial mismanagement of the union away from himself and onto the accountants, who by comparison would undoubtedly be exposed to [civil] liability through charges of professional incompetence," the appeal says.

"Permeating these inconsistent interests are counsel's own pecuniary interests in retaining significant clients," says DOJ’s appeal. "Donna Fisher is worth $240,000 in attorney's fees to Zuckerman Spaeder and is part of a $2.4 million verdict being challenged on appeal. Likewise, for a firm [Cole Scott & Kissane] that heralds insurance defense as the 'mainstay' of its practice, the relationship between the accountants and insurance company with Cole Scott & Kissane is presumably substantial."

Additionally, DOJ is concerned about the potential for Browne's defense counsel to "improperly use privileged communications" from their other clients. "It ... does not take a considerable leap in logic to assume that lawyers at Cole Scott & Kissane reviewed the [subpoenaed] work papers prior to their submission and have, as well, questioned the accountants, especially in light of the accountants' cautionary warnings to the union that its internal controls were weak," the appeal says. [Miami Daily Business Rev. 4/12/02]

PAINTERS (IBPAT)
Florida Boss Allegedly Concealed Records
On Mar. 13, in U.S. Dist. Court for the S. Dist. of Fla., David Lareau, ex-business manager of Int'l Bhd. of Painters & Allied Trades Local 160,  pled guilty to willfully and knowingly withholding and concealing union financial records in violation of 29 U.S.C. § 439(c). He had been charged in an information on Dec.17. [DOL 3/13/02]

GOVERNMENT EMPLOYEES (AFGE)
DOL Files Election Complaint Against Maryland Council
On Apr. 9, an election complaint against Am. Fed’n of Gov’t Employees Council 169 in Bowie, Md. was transmitted to the Dep’t of Labor’s Chief Administrative Law Judge. The complaint resulted from a DOL investigation into the council's Oct. 28, 2000, officer election. The investigation disclosed that the council denied the membership of Local 62, a council affiliate in Philadelphia, the opportunity to vote in the election when the council failed to count the 478 votes cast by the Local 62 delegate, which may have affected the outcome of one vice president position. [DOL 4/9/02]

TEAMSTERS (IBT)
IRB Probing Scandal-Scarred Boston Local
Reportedly, the Teamsters’ court-monitored Indep. Rev. Bd. recently began interviewing officials and poring over records at embattled Int’l Bhd. of Teamsters Local 25. IRB investigators were reportedly at the local's Charlestown headquarters Apr. 11 looking into allegations of racketeering and strong-arming by members of Local 25, including president George W. Cashman. Cashman and five others were recently indicted on 179 counts of bribery and embezzlement for attempting to defraud the IBT pension and health funds. The IRB’s arrival is ominous for Cashman and Local 25, because, among other things, the IRB can expel individuals from the union, as it did to disgraced ex-IBT boss Ron Carey.

Cashman and the local have also reportedly been the subject of an ongoing probe by a federal grand jury and the Dep’t of Labor for allegedly shaking down movie and television producers to rent member-owned equipment, add unnecessary workers and pay unearned overtime and expenses in exchange for labor peace. DOL investigators have also been reportedly probing allegations of intimidation and assault of rival union members by Local 25 movie crew members. In addition, DOL investigators are reportedly probing allegations of bribery and extortion from other trucking and moving companies in the Bay State. [Boston Herald 4/12/02]

UNION DUES
Court Strikes Down Union-Backed Initiative
The Oregon Supreme Court Apr. 11 ruled that a 1998 voter-approved ballot initiative on the use of payroll deductions was unconstitutional because it violated the single-subject requirement for constitutional amendments. Measure 62 essentially ensured the right of public and private sector unions to collect political campaign funds through payroll deduction. The measure, backed by unions, was seen at the time as a counterpoint to Measure 59 that would have prohibited the use of payroll deduction to collect funds to be used for political purposes. Measure 59 was narrowly defeated.  [BNA 4/15/02]

LABORERS (LIUNA) / OFFICE & PROFESSIONAL EMPLOYEES (OPEIU) / PLUMBERS & PIPE FITTERS (UA) / ELECTRICAL WORKERS (IBEW)
Oregon Fund Manager Agrees to Plead Guilty
Jeffrey L. Grayson agreed Apr. 16 to plead guilty to two felony counts in connection with the collapse of his union pension management firm, Capital Consultants LLC of Portland, Or., which will likely result in a prison term. Grayson is cooperating with federal prosecutors in hopes of getting a lighter sentence and has provided new information on Andrew Wiederhorn's role in the firm's downfall. Wiederhorn was the chief executive officer and controlling stockholder of Wilshire Credit Corp., which defaulted on $160 million in loans and contributed to the collapse of Capital Consultants. Total client losses, mostly from union members, are estimated to be $355 million.

The U.S. Atty.'s Office in Portland filed revised charges against Grayson, accusing him of two felonies: one count of mail fraud and one count assisting the filing of a false tax return. The charges, filed as a criminal information, described Wiederhorn's involvement in deals that allegedly compromised Grayson's independence as an investment manager. Wiederhorn has not been charged, but the U.S. Attorney has notified him that he is the subject of an ongoing grand jury investigation.

"Grayson," said the charges, "received financial benefits from Wiederhorn and others which influenced his actions and decisions on behalf of investors." Marc Blackman, a criminal defense attorney for Wiederhorn, said his client did nothing wrong. Wiederhorn, he said, got approval from leading attorneys and accountants for all the deals he did with Capital Consultants.

Blackman suggested that Grayson, who has multiple sclerosis and uses a wheelchair, is cooperating with authorities because he is in poor health and "faced the possibility of dying in prison," given the potential criminal charges against him. Under those circumstances, Blackman said, "He'd say whatever he thought the government wanted to hear."

Grayson began cooperating with the U.S. Attorney after his son, Barclay Grayson, was sentenced to an unexpectedly long two-year prison term. Harvey Silets, a Chicago criminal defense lawyer representing Grayson, said his client hoped to get his son a reduced sentence. "Mr. Grayson," Silets said, "is attempting to resolve some critical issues in his life." Grayson and his son had been estranged since the government seized Capital Consultants in Sept. 2000. The two charges against the elder Grayson carry a total maximum penalty of eight years imprisonment.

The charges against Grayson will supercede his indictment in Oct. 2001 on 22 counts of fraud, conspiracy, money laundering, witness tampering and paying illegal gratuities to a pension fund trustee. According to the new charges, Grayson was influenced by his relationship with Wiederhorn to make decisions that led to client losses now estimated at $355 million. "Grayson, and others, devised a scheme . . . to defraud his investors of their right to honest service," the court document states.

Union trust funds suffered most of the losses on loans from Capital Consultants to Wiederhorn's Wilshire Credit Corp. The five union hit the hardest: Or. Laborers Union, Idaho Laborers Union, the Office & Prof’l Employees Int’l Union Local 11 in Portland, United Ass’n of Plumbers & Pipe Fitters Local 290 in Portland, and the Eighth District of the Int’l Bhd of Elec. Workers, which covers Idaho, Utah, and Colorado

Grayson is the third player in the scandal to plead guilty. Barclay Grayson pled guilty in Mar. 2001 to one count of mail fraud and will begin his sentence in May 2002. He was president of Capital Consultants.

John D. Abbott, an ex-co-chairman of the Or. Laborers-Employers Pension Trust and four other LIUNA trust funds, pled guilty in Feb. 2001 to taking nearly $190,000 in illegal payoffs from Jeffrey Grayson and filing a false income tax return.  Abbott, also ex-secretary-treasurer and business manager of the LIUNA's Dist. Council of Or., S. Idaho, and Wyo., was sentenced in Nov. 2001, to two concurrent terms of 15 months in prison and one year probation. He must pay $195,400 in restitution plus back taxes. Prosecutors say Grayson "willfully counseled, advised and aided in the preparation and presentation" of Abbott's return, which allegedly understated the labor official's earnings by $76,000.

Capital Consultants' demise set off a flurry of investor lawsuits against Grayson, Wiederhorn, union trustees, and others. Wiederhorn; his former company, Wilshire Financial Services Group; and other related defendants have tentatively agreed to pay $40 million to settle the claims. The suits claimed that Wiederhorn and Grayson had "an undisclosed corrupt relationship" that skewed Grayson's investment decisions. They said the loans and other financial favors from Wiederhorn to Grayson amounted to "bribes and kickbacks."

Grayson’s new criminal information further details the transactions between Capital Consultants and Wilshire that began in 1994. By 1998, Capital Consultants had loaned Wilshire Credit $160 million, making the Wiederhorn firm by far the largest borrower from Grayson's company. The loans represented more than 15% of Capital Consultants' total assets, an unusually high concentration of investment. Wiederhorn was on the rise at the time, running a promising finance company that specialized in buying and selling high-risk mortgage loans. Grayson used client money to help fund Wiederhorn's Wilshire Credit.

Wilshire Credit, in exchange, helped bail out troubled companies financed by Capital Consultants or agreed to purchase problem loans from Grayson's firm.  In the summer 1994, Portland ship-repair firm West State Inc. was in dire need of additional capital despite the millions of dollars Capital Consultants had already poured into the operation. In June of that year, Wilshire Credit stepped in and loaned $3.65 million to West State through an affiliated company, Astoria Metals. Investors later accused Grayson of simply routing his clients' money through Wilshire Credit and paying Wilshire Credit more than $500,000 for its troubles.

The pattern repeated itself months later, when Wilshire Credit loaned $2 million to Cascade General, another struggling ship-repair firm backed by Capital Consultants. The Grayson-Wiederhorn relationship became more direct in December 1995 when Grayson needed $1.7 million to settle a suit filed against him and his company by the Dep’t of Labor. Wiederhorn arranged for a San Francisco firm, C.F. Credit, to loan Grayson the money. C.F. Credit, co-owned by Wiederhorn's uncle C.F. Coleman, has since admitted that it reloaned money to Grayson that it had received from Wilshire Credit. Grayson later borrowed additional funds directly from Wilshire.

Wilshire Credit agreed in December 1997 to buy another failing loan from Capital Consultants -- a $3 million debt owed by defunct sandwich-maker The Hand That Feeds You. This time around, however, Wilshire Credit wanted some guarantee of repayment. Grayson agreed to put up his West Hills home and his stock in Capital Consultants as collateral.

The new criminal information against Grayson said the allegedly secret deals between Grayson and Wiederhorn "conflicted with Grayson's fiduciary duty, through Capital, to render honest service to investors." It adds, "Grayson's decisions regarding loans by Capital to Wilshire Credit were influenced by his conflicting interest in the reciprocal transactions." [Oregonian 4/17/02; Bloomberg 4/18/02]

AFL-CIO / CARPENTERS (UBC) / ELEVATOR CONSTRUCTORS (IUEC) / LABORERS (LIUNA) / OPERATING ENGINEERS (IUOE) /  PAINTERS (IBPAT) / PLUMBERS & PIPE FITTERS (UA) / IRON WORKERS / (BSORIW) / BRICKLAYERS (BAC)
Building Trades Avoid Split, Growing ULLICO Scandal Cited
A week after Edward C. Sullivan was on the verge of losing control of the AFL-CIO's Building & Construction Trades Dep’t, it appeared Apr. 15 that the embattled union boss will hold on to BCTD’s top job but with some key administrative changes. At the top of that list are some initiatives pushed by United Bhd. of Carpenters boss Douglas J. McCarron as conditions for his union to return to BCTD. But for now, UBC’s status remains unchanged, and there are no immediate plans for it to return to the department.

Reportedly, after two days of marathon meetings Apr. 4 and Apr. 8, BCTD presidents -- which include bosses of the 14 building trades unions -- agreed to allow weighted voting privileges on certain contract issues and in deciding per capita contribution issues. Unions with larger memberships would have a stronger voice in those decisions. The presidents also voted to reinstate the administrative committee. That panel, which operated when Robert A. Georgine was BCTD president, included the top five per capita tax-paying unions and had a substantial role in directing the department's activities. The committee was disbanded in 2000 after Sullivan, who comes from the small Int’l Union of Elevator Constructors, became president.

The presidents also appointed a committee to review the department's current jurisdiction plan and to make recommendations for any turf changes after 60 days. ''This is a big sticking point,'' especially for the larger unions, says one source. If not resolved to the satisfaction of larger unions, the plan could be the opening for one to withdraw from the BCTD, says the source.

McCarron also has called for Sullivan and BCTD secretary-treasurer Joseph Maloney to resign. But Sullivan has been adamant that he and Maloney intend to serve out the five-year term they each were elected to in July 2000. Building trade officials declined comment, saying the changes would be formally announced April 15 at BCTD's annual legislative conference in Washington, D.C.

The timing of that conference put additional pressure on the 14 general presidents to iron out some of the explosive differences that have plagued BCTD for more than a year. After numerous meetings over the past several months, it appeared likely that some of the larger unions -- including the Laborers’ Int’l Union of N. Am., Int’l Union of Operating Eng’rs and Int'l Bhd. of Painters & Allied Trades -- were ready to split off from the department and form a separate entity.

Bylaws for the new Building Trades Fed’n were circulated. UBC, which withdrew from the AFL-CIO in Mar. 2001 and consequently had to drop out of the BCTD, also was to be a part of this group. Other unions, including the United Ass’n of Plumbers & Pipe Fitters; Int’l Ass’n of Bridge, Structural, Ornamental & Reinforcing Iron Workers, and Int'l Union of Bricklayers & Allied Craftworkers, also were potential candidates for membership.

But seemingly overnight, the tide changed and any split was avoided -- at least for now. But observers maintain that several presidents were distracted by a grand jury investigation into questionable stock transactions by several current and former building trades presidents involving the union-dominated ULLICO insurance and investment firm. Both McCarron and UA president Martin J. Maddaloni admitted to profiting from the sale of shares in ULLICO, but they say they believe their trades were proper. [Eng’g News-Record 4/15/02]

AFL-CIO / FIRE FIGHTERS (IAFF) / ELECTIONS & POLITICS
Campaign Finance Regulatory Mess in San Diego, Tainted Unions Fight Back
The Labor Council of San Diego & Imperial Counties (a.k.a., Committee on Political Education) and two other political committees appear to have violated San Diego campaign law by accepting contributions from groups or corporations and then spending money on behalf of City Council candidates, according to San Diego Elections Officer Joyce Lane. "They all think they're operating under the law, but there is a lack of clarity in this area," Lane said. "Our ordinance is pretty strict on its face. I hope the Ethics Commission will be able to provide some clarification. I do think it's really murky."

Recently, allegations of wrongdoing have flown back and forth between the Labor Council and the two other committees, the Lincoln Club, a Republican business group, and the San Diego County Republican Cent. Committee during the race for the 2nd District City Council seat.

The Labor Council did not accept money from groups during 2001 or 2002, but has in the past. It spent $14,200 on behalf of Donna Frye in the 6th City Council District special election in 2001. The two GOP committees have collected donations of up to $5,000 from organizations and corporations in recent years. Together, they then spent $45,000 on behalf of two Republican council candidates in the Mar. 2002 primary election, records show.

Under a city ordinance, committees that make independent expenditures cannot accept contributions from corporations or other organizations, only from individuals. And those contributions are limited to $250 per person per election.  Independent expenditures are those made by organizations on behalf of candidates; by law, however, they cannot be coordinated with candidates' campaigns.

A Lincoln Club spokesman called the ordinance unconstitutional. Charlie Walker, executive director of the San Diego Ethics Comm’n, said he believes the law is constitutional. He said such laws are narrowly crafted to protect local races "against a corrupting influence with big money." Representatives of all three committees contend that their groups are operating under guidelines or exemptions worked out previously with the offices of the city clerk or the city attorney.

Lane said the practice of collecting political donations from groups "is probably widespread" among political committees participating in local races. The practice apparently has been going on, unchecked, for years. "We missed it," she said. "It was overlooked."  Lane also said she has a record of a 1986 lawsuit settlement agreement that appears to exempt the labor group from certain provisions of the ordinance. "We're doing what the City Clerk's Office told us to do," Donald Cohen, spokesman for the Labor Council said.

April Boling, treasurer for the Lincoln Club, disputed Lane's interpretation of the Labor Council's settlement agreement, saying it "does not apply to this particular alleged violation."  Boling said her organization also segregates its funds, so that only donations of $250 per individual are funneled into local races, as advised by the City Attorney's Office years ago. Lane said she has no record of such an advisory. Boling, who also is the Republican Cent. Committee's treasurer, said a memo exempting that committee from the ordinance is on file with the city attorney.

Scott Barnett, executive director of the Lincoln Club, said his organization has tried to comply with the law even though the group believes the ordinance could be challenged. If the Lincoln Club is found to be in violation, he said, then the Labor Council should be as well, because the rules should apply equally to all committees.  "Who knows how many operate under similar understanding under the law?" Barnett asked. "If there's a new interpretation that disallows what the Lincoln Club and labor have been doing, then the rules need to be made clear. Our goal has always been to meticulously follow the rules as best we can."

The potential violations by the two Republican committees were referred to the Ethics Comm’n in early Apr. They were brought to Lane's attention by officials with the Int’l Ass’n of Fire Fighters Local 145, after Barnett wrote a letter to the editor accusing the city firefighters union of skirting the law.

Local 145 and other labor groups spent a combined $64,000 on behalf of Michael Zucchet's campaign for the 2nd District seat in the March primary. Zucchet, Local 145's legislative director, is running against Kevin Faulconer, a public relations executive on leave from his job.

Barnett alleged that since 1993, the firefighters union has not listed the source of money it received and then used to make independent expenditures. Union bosses said the City Clerk's Office told them they did not need to list that information. The source, they said, is members' dues.  Lane said she can find no record indicating that the city told Local 145 they did not need to file that information. She said she is seeking clarification from the state Fair Political Practices Commission on what must be filed. [S.D. Union-Trib. 4/23/02]

LONGSHOREMEN (ILA)
Miami Unions Indicted in Drug Smuggling Case
Federal prosecutors announced Mar. 29 the unsealing of an indictment charging Emmett Martin, Kenneth Johnson, Willie Lloyd, Bradley Pearson and Maurice Johnson with the following: 1) conspiracy to import cocaine; 2) conspiracy to possess with intent to distribute cocaine; 3) four counts of attempted possession with the intent to distribute cocaine; 4) four counts of attempt to import cocaine into the United States; and 5) one count of carrying a firearm in relation to a drug trafficking crime.  Emmett Martin, Kenneth Johnson, Willie Lloyd, and Bradley Pearson are members of the Int’l Longshoremen Ass’n. If convicted, each defendant faces possible terms of life imprisonment and up to $4 million in fines.

These arrests are the result of an Organized Crime Drug Enforcement Task Force / High Intensity Drug Tracking Area investigation conducted by the U.S. Customs Service with support from the Drug Enforcement Admin. and the Miami-Dade Police Dep’t. This investigation focused on individuals involved in the agreement to smuggle cocaine through the Port of Miami and its subsequent off-loading with the assistance of port employees. Once the containers were removed from the ships and placed on the dock, port employees would break into the containers, remove the cocaine and then smuggle the cocaine off the port in personal vehicles. [USAO S.D. Fla. 3/29/02]

NATIONAL LABOR RELATIONS BOARD
ULP Charge Filed Against Labor Board
The Nat’l Labor Relations Bd Prof’l Ass’n filed an unfair labor practice charge Apr. 15 against NLRB, claiming that NLRB has engaged in "regressive bad-faith bargaining" during 18 months of negotiations over a new contract for board attorneys.  In the charge, the NLRBPA said the board has withdrawn "without good cause" from its previous proposals and instead has offered "regressive proposals" with regard to a variety of contract issues, including work assignment procedures, transfers, grievance procedures, and flexible work arrangements. The charge was filed with the Federal Labor Relations Authority, the agency that handles labor-management relations within the federal government. NLRB handles unfair labor practice charges in the private sector.

The contract between the union and the board was reopened in Oct. 2000. The contract had not been comprehensively negotiated since 1989. The attorneys’ union continually had extended the contract since 1989, he said, but the parties reopened the contract when it became clear it was outdated. [BNA 4/16/02]

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In addition to the unions and organizations covered in this Union Corruption Update, readers can look forward to news and information on other corrupt and abusive unions in future editions.

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