LABOR LAW REFORM
Finally, LM-2s are on the Internet!!
At long last, the Dep't of Labor unveiled June 3 its Internet disclosure system for unions' annual financial reports, such as the LM-2 form. The website, http://www.union-reports.dol.gov, allows easy access to union financial reports maintained by DOL's Office of Labor-Mgmt. Standards. Union members, investigative journalists, non-incumbent union candidates, employers, and anyone else may now view, via the Internet, the union reports and conduct data searches free of charge.

"What used to take weeks will now take seconds. It's a major breakthrough for holding unions and union bosses accountable," said NLPC Chairman Ken Boehm, commenting on the difficult process of securing copies of union annual reports, at the cost of the copies, from DOL before the new website became accessible. "It's free and you don't have to drive to to your local DOL office to see these reports. This will be a great resource for union members and anyone else wishing to keep track of the shenanigans that go on within unions. I encourage everyone to log on to DOL's new site today," said Boehm. "You never know what kind of corruption you might find."

The Labor-Mgmt. Reporting & Disclosure Act of 1959 and the Civil Service Reform Act of 1978 require certain union reports to be filed with DOL. Individuals can view and print copies of actual union annual financial reports (for year 2000 and later) in pdf format. These reports are searchable by a variety of criteria, including union name and location. The site also features a powerful union data search system. Step-by-step instructions guide users through selecting the unions to be included in the search, the time period covered by the search, which data will appear on the resulting listings, and how the data will be sorted. Users may also conduct searches on union officers and employees, either by union or by the name of the officer or employee. [DOL 6/3/02]

"The Bush Labor Department deserves a lot of praise for finally  opening this website to the public. Congress has appropriated funds for this website since at least 1997, but the Clinton Labor Department routinely missed deadlines and delayed. This is the first step toward improving union integrity; hopefully the Bush Labor Department is up to the next challenge of improving the union annual report forms themselves," added Boehm. In May 2002, NLPC filed a petition with  DOL proposing ways to better protect the integrity of union treasuries and make unions more accountable to members.

TEAMSTERS (IBT)
IRB Ousts Hoffa's "Duke" for Nepotism
On May 30, the Int'l Bhd. of Teamsters' court-monitored oversight panel barred William Hogan, Jr., Chicago's most powerful Teamster and close ally of IBT boss James P. Hoffa, from the union for life due to a plot to drive down wages and benefits for Las Vegas IBT Local 631 to help a Chicago-based firm in which his brother had a stake. Also banned for life was Dane Passo, a Chicago Teamsters who became Hoffa's right-hand-man at IBT headquarters in Washington. The Indep. Review Bd.'s action came as Hoffa endorsed Ohio's GOP governor and appeared with the likely GOP gubernatorial nominee in Md., all in an effort to reportedly persuade President Bush to seek IRB's disbandment. IRB was founded in 1989 to help settle a racketeering suit by the government charging that IBT were controlled by organized crime.

IRB ruled that Hogan and Passo, colluded with United Serv. Companies to have the firm's nonunion employees perform work at Las Vegas trade shows and conventions at less than half the hourly wage of Local 631 members, thus allowing other contractors to pay the same wages even to union workers. Hogan's brother, Michael, was USC's vice-president. Reportedly, Hogan and Passo, engineered Hoffa's firing of Local 631 officials who opposed the deal. Only when IRB began investigating did Hoffa stop Hogan and Passo's campaign. Disturbingly, Hoffa responded to the warnings about Passo's links to organized crime by his internal ethics watchdog by raising Passo's salary and keeping Passo as his "special representative" to the besieged Las Vegas Local.

Hogan is ex-secretary-treasurer of IBT Local 714. In 1996, following an IRB probe, the local was put in trusteeship. Among other things, IRB found that the local was being run for the benefit of the Hogan family and not its members. The report contained a number of allegations of nepotism and conflict of interest by Hogan and other officers who were Hogan family members. When the trusteeship was imposed, Hogan was a candidate for IBT int'l secretary-treasurer, on Hoffa's slate against disgraced ex-boss Ron Carey. Hogan subsequently dropped out of the race. His various union salaries added up to some $210,000 a year. Passo ran Hoffa's campaign effort in Chicago. [BNA, Chi. Trib. 5/31/02, New Republic 4/1/02]

LONGSHOREMEN (ILA)
Gotti Clan Indicted for Infiltration of New York Locals
On June 3, federal and N.Y. authorities announced the arrests and indictments of seventeen members and associates of the Gambino Organized Crime Family of La Cosa Nostra for racketeering, extortion, wire-fraud, loan sharking, operating illegal gambling businesses, money laundering, witness tampering and other related crimes. The 68-count indictment outlines the Gambino family's influence, through extortion and wire fraud, over the Int'l Longshoremen's Ass'n Locals 1 and 1814, as well as firms on the Brooklyn and Staten Island waterfronts. Allegedly, waterfront employees and their relatives, several business owners, and an individual in the film industry were extorted.

Among the defendants are two of John J. Gotti's brothers and his nephew. According to prosecutors, the defendants are: Gambino boss Peter Gotti; captains Anthony Ciccone and Richard V. Gotti; soldiers Richard G. Gotti, Primo Cassarino, Jerome Brancato, and Peter Piacenti; associates, Frank Scollo (who is also ILA Local 1814 president and ILA int'l vice-president), Vincent Nasso, Julius Nasso, Richard Bondi, Salvatore Cannata, Thomas Lisi, Carmine Malara, Anna Eylenkrig, Anthony Pansini, and Jerome Orsino, Jr.

Allegedly, after John A. Gotti was convicted in 1999 of rackets charges, his uncle, Peter Gotti became the acting boss of the Gambino crime family. Historically, the Gambino family and the Genovese crime family allegedly divided up control of the N.Y. and N.J. waterfronts, with Brooklyn and Staten Island falling under the Gambino family's control.

The families allegedly coordinated efforts to select ILA bosses at the highest levels. Ciccone, Cassarino, Vincent Nasso and Scollo, together with members of the Genovese family, intimidated trustees of MILA, the ILA's health plan, to award prescription pharmaceutical service contracts to a company partly owned by Vincent Nasso. The families then allegedly split a kick-back of some $400,000 for the contract award.

Further, Ciccone and several defendants allegedly extorted owners of waterfront firms, including Howland Hook Container Terminal and a trucking company, both in Staten Island as well as firms in Brooklyn. As part of this criminal activity, Scollo is charged with personally collecting thousands of dollars in extortion money from the owner of Howland Hook on a monthly basis between Apr. 2000 and Aug. 2001. Ciccone is charged with personally collecting thousands of dollars in extortion money from the trucking firm owner on a bimonthly basis, from 1999 to May 2002.

At least two of the defendants, Cassarino and Scollo, are also charged with extorting thousands of  dollars from a relative of an individual seeking employment on the waterfront, in exchange for a waterfront job. In another count, the indictment charges that during the summer of 2001, an employee of the Howland Hook company was heavily pressured to step down from his job so that a relative of Anastasio could be installed to take his place. In a third count, the indictment alleges that Ciccone and Cassarino demanded that an injured longshoreman pay them a portion of the monetary settlement he received as a result a work-related injury.

The indictment also charges that from Sept. 2000 through May 2002, Ciccone, Cassarino, and both Nassos attempted to extort a well-known movie star and film director. Allegedly, the four attempted to use Ciccone's position as a captain in the Gambino family to pressure the victim either to pay them money or to include Julius Nasso in the victim's next film project. In one incident, the victim was directed to pay Ciccone $150,000 for each film he made.

Also, in Feb. 2002, Ciccone and Cassarino allegedly directed a witness who had been subpoenaed to testify in this case before a federal grand jury to refuse to answer questions because it would open a "Pandora's box" for Ciccone and his crew.

"This case is a major step in our efforts to clean up the wide-spread corruption of a vital segment of New York's economy -- our waterfronts, and as important, to dismantle the Gambino crime family's influence," N.Y. Atty. Gen. Elliott Spitzer said. [N.Y. Atty. Gen. Office 6/3/02; N.Y. Times 6/5/02]

ELEVATOR CONSTRUCTORS (IUEC)
First Guilty Plea in Massive New York Probe
Robert Shannon, vice-president and business agent of Int'l Union of Elevator Constructors Local 1 in N.Y.C., pled guilty May 30 to labor corruption charges, becoming the first to fall in a massive federal probe into no-show job schemes. Shannon admitted that he took thousands in no-show job money between Feb. 1997 and Mar. 1998. Under the plea, he is expected to serve under two years in prison and pay thousands in fines.

Disturbingly, while Shannon agreed not to serve as a union bosses for seven years but he can remain a Local 1 member as part of the plea deal. Shannon was indicted Feb. 7 with twenty-five other Local 1 bosses and members for ripping off millions through no-show schemes from nineteen construction sites around N.Y.C. Even more troubling, Shannon, a close associate of Local 1 president John Green, did NOT agree to cooperate in the probe. "Shannon made a personal decision to put this behind him," said Shannon's attorney, Frank Murray. "There was no agreement to cooperate. It was just a straight plea." [N.Y. Post  5/31/02]

IRON WORKERS (IAIW)
Accounting Partner Pleads Guilty
Mirroring the the Enron-Authur Andersen scandal, a partner in the union accounting firm of Thomas Havey LLP confessed June 6 to two felony counts arising from an ongoing criminal probe into the Int'l Ass'n of Iron Workers and its Nat'l Ironworkers & Employers Apprenticeship Training & Journeyman Upgrading Fund. Havey partner Alfred S. Garappolo pled guilty to one count of accessory after the fact to embezzlement and one count of concealing a material fact. Garappolo, who worked in Havey's Washington, D.C. office, admitted that from Jan. 1999 to July 2001 he helped Kerry J. Tresselt, bookkeeper of a union training fund conceal her embezzlement of some $350,000 payroll checks from the Fund in 1998. Tresselt also happens to be the daughter of the ex-trustee of the Fund, Raymond J. Robertson, who is also ex-general vice-president of IAIW.

Garappolo, a Md. resident, also admitted concealing the amount of money the union spent on entertainment expenses for IAIW president emeritus Jacob "Jake" West and others. Garappolo is the ninth individual to be charged in the growing scandal. Six other union bosses or employees including, Robertson and Tresselt, have pled guilty. West and ex-IAIW general secretary LeRoy Worley have been indicted and are awaiting trial. [Wash. Post 6/7/02] West has also been linked to the Ullico, Inc. insider trading scandal. For more details on the Tresselt scheme, see http://www.nlpc.org/olap/UCU3/05_11_03.htm.

POSTAL WORKERS (APWU)
Las Vegas Boss Admits $200,000 Theft
Deborah Partida, ex-secretary-treasurer of Am. Postal Workers Union Local 761 in Las Vegas and ex-treasurer of the Postal Workers Nev. State Ass'n, pled guilty May 17 to one count of union embezzlement. According to the plea, she embezzled some $200,000 from the two unions by making unauthorized payments by check and credit card to herself and her creditors. She was indicted on Mar. 12 on two counts of embezzling $132,824 from Local 761 and $1,764 from the 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 5/17/02]

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

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LABOR LAW REFORM
Judge Slaps Down Union Challenge to Oklahoma Right to Work Law
A federal judge in Oklahoma June 5 upheld the central provisions of the state's newly adopted right-to-work law, which guarantees Oklahoma workers the right to choose whether to pay union dues.  Oklahoma voters approved the constitutional amendment on Sept. 25, 2001.  In November, seven unions and a pipeline services company in the state filed a federal lawsuit, claiming  that certain provisions of the amendment were preempted by federal labor law, and that the whole statute should be thrown out. (Local 514, Transport Workers Union v. Keating, E.D. Okla., No. CIV-01-633-S, 6/5/02).

However, Judge Frank H. Seay (E.D. Okla., Carter) held that while the Right to Work law cannot be enforced with regard to the limited number of employees laboring under the Railway Labor Act, the law clearly and constitutionally applies to employees who work for private companies under the National Labor Relations Act.  The vast majority of Oklahoma employees fall under the NLRA's jurisdiction, and are thus protected by the Right to Work law.  Clarifying the limits of the Right to Work law's jurisdiction, Judge Seay upheld the remaining portions of the law.

"Judge Seay made the right call," Oklahoma Labor Commissioner Brenda Reneau Wynn said in a June 6 statement. "I'm gratified on behalf of the hundreds of thousands of Oklahomans who approved the measure last September," she said. "This was certainly a battle worth fighting to help lay the necessary groundwork for our children to have a better future with more opportunities for success,"

"Union officials despise the notion of allowing employees to decide for themselves whether to join or support a union," Stefan Gleason, vice president of the National Right to Work Legal Defense Foundation in Springfield, Va., said in a June 6 statement. "Big Labor's trumped-up lawsuit was just another insult to the voters of Oklahoma who rejected the unions' cynical campaign lies and tactics last fall," he said. NRTW attorneys represented several workers who intervened in the case in support of the law. [BNA 6/7/02]

TEAMSTERS (IBT) / MACHINISTS (IAM)
Government Recovers $8.583 Million in Chicago Racketeering Case
William V. Close, ex-trustee of the pension funds of Int'l Bhd. of Teamsters Local 710 and Auto. and Int'l Ass'n of Machinists Local 701 (a.k.a. Auto. Mechanics Union Local 701), both of which are in Chicago, was sentenced May 30  along with pension fund managers Christopher P. Roach and Richard S. Tringale on federal racketeering conspiracy and pension fund kickback charges arising out of hundreds of thousands of dollars in commission kickbacks.

Roach and Tringale previously pled guilty to conspiracy to violate the Racketeer Influenced & Corrupt Organizations Act, and to paying kickbacks to trustees of employee benefit plans. Roach also pled guilty to tax charges stemming from the money laundering and commission kickback scheme.   Close, previously pleaded guilty to receiving illegal kickbacks and money laundering. Roach was sentenced to serve three years in prison.  Tringale was sentenced to a term of three years and one month in prison. Both were ordered to forfeit to the government over $7.4 million in commissions earned in the scheme. Close was sentenced to a term of one year and elevens months' imprisonment and ordered to forfeit over $443,000 in illegal kickbacks received in the scheme. The sentences reflected downward departures from the usual sentencing guidelines as a result of the defendants' cooperation in other investigations and cases. Additionally, Roach was also sentenced on tax charges stemming from his having caused his corporation, Christopher Roach, Inc., to under-report commission income related to the scheme for tax years 1995 and 1996, in the total amount of over $740,000.

Asst. U.S. Atty. Jeanne M. Kempthorne told the Court that had the case proceeded to trial, the Government's evidence would have proven that Roach and Tringale controlled a Detroit-based brokerage firm known as East/West Institutional Servs., Inc. through which they contracted with clearing brokers to pay them commissions generated by investment trades of union pension plan assets.  During the period of the conspiracy, from about March 1994 to Aug. 1997, Roach and Tringale made promises and threats to investment advisors that Locals 701 and 710's pension fund business would be won or lost depending on whether the investment advisors agreed to funnel commissions through the clearing brokers to East/West.

Roach and Tringale paid hundreds of thousands of dollars in kickbacks to two union pension fund trustees, Close and Robert J. Baker, who died in 1997. Both trustees influenced and voted on the selection of investment advisors to the Local 710 and 701 pension funds.  Millions of dollars of commissions were transferred from bank accounts in the U.S. to Cayman Nat'l Bank in the Cayman Islands and then distributed to accounts in various names for the benefit of Baker, Close, Roach, and Tringale.  Close then transferred the funds to accounts in England and the Isle of Man.

The investigation began as a result of disclosures by Fleet Bank in Boston and led to the charges being filed against the individuals in Chicago. Close new resides in Juno Beach, Fla. Roach and Tringale currently reside in Detroit and Sarasota, Fla. [USAO D. Mass. 5/31/02]

LONGSHOREMEN (ILA)
DOL Sues Indiana Fund, $3.4 Million in Violations Alleged
 The Dep't of Labor filed suit May 24 against the trustees and service providers of the pension, welfare and off-season supplement plans of Int'l Longshoremen's Ass'n Local 1969 in Portage, Ind., for violations of Employee Retirement Income Security Act of 1974. DOL alleges the trustees authorized multi-million dollar payments to parties-in-interest in connection with two Nev. real estate deals. Named in the suit were trustees Andre Joseph, Raymond Sierra, David Lynch, and Edward Rentz as well as Michael A. Daher, sole owner and investment advisor with Leader in Marketing Fulfillment, Inc. (LMF) and John Sherwood Dunsmoor who had power of attorney over the pension plan account.

Daher and Dunsmoor equally owned Qualified Investment Limited (QIL), a Nev. firm formed in connection with the plans' investments in real estate. Both were indicted and have already pled guilty to various criminal charges with respect to the plans' real estate investments. The suit, filed in U.S. Dist. Court for the N. Dist. of Ind., alleges ERISA violations involving loans of $3.475 million by the plans through QIL for a residential development known as Grapevine Villas in Mesquite, Nev. DOL also alleges the plans improperly purchased a parcel of undeveloped property, also in Mesquite, known as the Chardonnay property. DOL alleges that the plans' investments in these properties violated ERISA, because they involved prohibited transactions between the plans and parties in interest to the plans.

The suit further alleges the trustees breached their responsibilities when they used plan funds to pay union and non-plan expenses. The suit is asking that the trustees be removed from their positions with the plans and permanently barred from serving any ERISA-protected plans. It also seeks to offset the trustees' own individual plan accounts to help restore the losses to other participants and asks the court to name an independent fiduciary to administer the plans and undo the prohibited transactions. [DOL 5/29/02]

TEACHERS (NEA)
Teacher Union Head Whines in Public, then Sues Group Quoting Him
First, the head of the Michigan Education Association (MEA) calls a press conference to complain about the Mackinac Center's successes in promoting charter schools, educational choice and other reforms in public schools.  Then when Mackinac quotes him in a fund-raising letter, the MEA sues Mackinac.

The MEA doesn't claim that their president, Luigi Battaglieri, was misquoted.  Instead, the union's lawyers claim that Mackinac "misappropriated" Battaglieri's name.

At the press conference announcing the start of their own "think tank," Battaglieri said, "quite frankly, I admire what they [Mackinac] have done over the last couple of years entering into the field as they have and being pretty much the sole provider of research to the community, to the public, to our members, to legislators and so on."  In December, Mackinac President Lawrence Reed quoted Battaglieri saying, "quite frankly, I admire what they have done," then added, "Mr. Battaglieri, whose union is generally at odds with the Mackinac Center, said this with respect to how Mackinac Center research has shaped education reform in Michigan and around the nation."

Writing about the lawsuit in the Detroit News, Thomas Bray writes, "If it's not fair to quote a well-known public figure like Battaglieri at a press conference he himself called, then we can forget about the First Amendment.  It won't be long before newspapers will be prohibited from quoting anything a politician, union official or businessman doesn't want to see in print." [Detroit News 6/2/02]

LABORERS (LIUNA)
Magistrate Releases Niagara Falls Bosses from Jail
Surprisingly, U.S. Magis. Judge Leslie G. Foschio (W.D.N.Y.) released three ex-bosses of Laborers' Int'l Union of N. Am  Local 91 in Niagara Falls from jail  May 23 after, ruling that federal prosecutors did not give him enough information to prove the men would be a danger to the community. Nevertheless, Foschio warned Mark Congi, Andrew Shomers, and Salvatore Bertino, that they would be put back in jail if they harass witnesses or anyone else connected to their case. Congi, ex-president, Bertino, ex-vice president; and Shomers, ex-job steward, were among fourteen Local 91 bosses who were indicted by a federal grand jury May 17 on racketeering and extortion charges. Held without bail since the arrests, they appeared in court in orange jail uniforms. The other eleven bosses indicted with them were released May 17, the day of their arrests.

Asst. U.S. Atty. Charles B. Wydysh tried to convince Foschio the three must stay jailed for the safety of witnesses and people who allegedly had run-ins with them. Wydysh said the three men are charged with making death threats and, in some cases, physically attacking workers and contractors who had disagreements with Local 91. Wydysh said Congi boasted that he was the "strong arm" for Local 91, and that Shomers and Bertino "did his dirty work." But Foschio said the information presented by Wydysh -- who did not name the alleged victims -- was "dated and inconclusive." [Buffalo News 5/24/02]

TEAMSTERS (IBT)
NLRB to Prosecute Alaska Local for Beck Violations
Responding to  charges brought by Joshua Deuter, an employee of First Student Inc., the Nat'l Labor Relations Bd. decided June 5 to prosecute Int'l Bhd. of Teamsters Local 959 in Anchorage, Alaska, for illegally forcing employees to pay full union dues, including dues spent for politics, and threatening employees by saying that circulating a deauthorization petition was a criminal act.  Benefiting from free legal help from the Nat'l Right to Work Legal Def. Fdn., Deuter filed unfair labor practice  charges against the local in Feb. 2002. NLRB has set a trial date for Aug. 8.

In Dec. 2001, in an effort to prevent workers from  signing a deauthorization petition (which calls for an NLRB-supervised election to throw out the mandatory dues clause from the collective bargaining agreement), a union shop steward threatened Deuter.  According to NLRB's complaint, Deuter and others were told that the petition was "illegal, a criminal act," and that the union "could press internal charges against employees for circulating the petition."

"In an effort to amass a political war chest, Teamsters officials are demanding that workers shut up  and pay up," said Stefan Gleason, NRTWLDF vice president. "Unfortunately, this is not an isolated incident.  Union bosses routinely break the law to try and shake down workers to pay for their political activities."

Since Oct. 2001, IBT bosses have required employees to pay full union dues solely by deduction from their paychecks and have failed to inform employees of their rights not to join and not to pay full dues.  The actions of Local 959 bosses violated employee rights established by the U.S. Supreme Court 1988 decision CWA v. Beck.  Under Beck, workers who are not  protected by a state right-to-work law may resign from formal union membership and halt and reclaim the portion of forced union dues spent on politics and other activities unrelated to collective bargaining.

IBT is one of the most politically active unions in the America.  Every year, union officials seize millions of dollars in compulsory dues to support candidates and causes that many of their members find objectionable, according to NRTWLDF.  Polls have consistently shown that a majority of rank-and-file union members object to having their dues spent for political  activities.  [NRTWLDF 6/5/02] According to Local 969's most recent LM-2 on file with the Dep't of Labor, the local's president, Robert Thornton, received total disbursements of $82,675 from the local for the year ending Dec. 31, 2000, including gross salary (before taxes and other deductions) of $71,150.  For the same period, Gerald Hood, the local's secretary-treasurer received $134,159 in total disbursements, including $114,232 in gross salary. Likewise, local vice-president Kenneth Coleman, Jr., was paid $81,240 in total disbursements of which $62,078 was gross salary.

FIRE FIGHTERS
Plea Retraction Denied, Illinois Boss Starts Jail Term $275,000 Theft
A former Aurora, Ill. union boss began serving a two-year prison term on May 29 after a Kane County (Ill.) Circuit Court judge denied his motion to withdraw a guilty plea made in connection with the embezzlements from the Aurora Firefighters Local 99 and its employee benefit fund. Judge Donald C. Hudson ordered that Patrick Stiles immediately be taken into custody to start serving the prison term that was agreed upon in the plea deal that led to his conviction for felony theft.  Stiles' attorney, Philip Collins III, said he was not sure whether Stiles would appeal the verdict, because Stiles could be on parole within a year. He also will be eligible for a work-release program, Collins said.

Last month, Collins filed a motion to withdraw Stiles' guilty plea, arguing, among other things, that legal services provided to Stiles by his former attorney Fred Morelli Jr. were not adequate. After the hearing, Collins said he was not impugning Morelli but rather was arguing "that every once in a while you get one blown by you." Morelli took the stand to answer questions about his work for Stiles. Hudson determined his representation was adequate, said Asst. State's Atty. Joseph Cullen.

Stiles has been ordered to make $244,000 in restitution to the union and the Aurora Firefighters Relief Ass'n. Police previously testified that Stiles had embezzled $350,00 from the  organizations, but the restitution was based on a $275,000 settlement in a related civil suit brought by the local and the Relief Ass'n. As part of that settlement, Stiles agreed to turn over about $64,000 in retirement funds. He resigned Jan. 15, 2001, after eleven years with the Aurora Fire Dep't.

Hudson also rejected Collins' argument that Stiles could prove that he essentially was being blamed for loose accounting practices by the union and could be found not guilty by a jury. Collins argued that union bosses were so worried about the results of an audit in Jan. 2000 and IRS punishment for their accounting practices that they blamed Stiles. "It would appear that the union did all it could to put this off on Pat Stiles," Collins said.  This was the first report of any IRS involvement in the case, which became public in early 2001.

But Gregory Frieders, Local 99's president, said it was the independent audit that raised questions about Stiles' management of the union account. "We never feared any trouble from the IRS," he said. "If we did anything wrong and were fined or penalized, we'd pay it." The union discovered through the audit that it owed the IRS, Frieders said. It reported its findings to the IRS and made a payment, and it also changed its accounting practices, he added. "It was a misappropriation of funds, and [Stiles] was spending money that was not his for personal use," Frieders said. [Chi. Trib. 5/30/02]

MAINTENANCE OF WAY (BMWE)
Utah Spouse Sentence for $49,700 Fraud
U.S. Dist. Judge. J. Thomas Greene, Jr. (D. Utah, Reagan) sentenced Jill C. Gonzales, the spouse of an ex-secretary-treasurer of Bhd. Maintenance of Way Employees Local 1227 in Ogden, Utah, May 23 to six months home confinement and 24 months probation (concurrent with the home confinement) for stealing $49,709.46. She pled guilty to mail fraud on Mar. 13. Green also ordered her to pay full restitution; $27,861 in of the total embezzlement amount was outstanding at sentencing. [DOL 5/23/02]

ELECTRICAL WORKERS (IBEW)
Southern Indiana Boss Indicted for Embezzling $26,804
A federal grand jury indicted Darvin Collins, ex-business manager of Int'l Bhd. of Elec. Workers Local 16 in Evansville, Ind., May 22 for embezzling $26,804.50 from September 1998 to June 1999. Collins was charged with one count of embezzling $25,370 from the local's Target Fund. The purpose of the Fund was to encourage contractors to employ union electricians; the local would remit funds to a contractor who agreed and did employ unionists. Collins allegedly received $25,370 in kickbacks from the Fund paid to a contractor. Second, Collins was charged with one count of embezzling $1,434.50 in local dues money by diverting a dues check from the local into his personal account.  Further, he was charged with two counts of falsifying union records to cover up the two schemes. [USAO S.D. Ind.; DOL 5/22/02]

STEELWORKERS (USWA)
New York Boss Admits $12,500 Embezzlement
Anthony Brock, ex-treasurer of United Steel Workers of Am. Local 04-06989 in Auburn, N.Y., pled guilty May 29 to embezzling $12,573 from the union between May 1995 and May 1997.    The union's most recent LM-4 form filed with the DOL lists only $8,932 in total receipts. The case has been assigned to U.S. Dist. Judge Howard G. Munson (N.D.N.Y., Ford). [USAO N.D.N.Y., DOL 5/29/02]

MAIL HANDLERS (NPMHU) / LABORERS (LIUNA)
$9,400 Allegedly Stolen from Mississippi Local, Two Bosses Indicted
On May 21, James Dawson, Sr., president of Local 325 of the Nat'l Postal Mail Handlers' Union, a division of the Laborers' Int'l Union of N. Am.,  and Loyd Manning, comptroller and ex-treasurer of the local were indicted on union corruption charges. Dawson was indicted on one count of embezzling $9,401 from the Jackson, Miss., based local. Manning was indicted on one count of filing a false report. [DOL 5/17/02]

COMMUNICATIONS WORKERS (CWA)
Ohio Boss Accused of Embezzling $6,700 (information added 06/17/02)
Judith F. Hamilton, ex-secretary-treasurer of Int'l Union of Electronic Workers-Communications Workers of Am. Local 713, pled guilty May 7 to embezzling $6,766.40 in union funds.  Hamilton will be barred from any office or employment with a union as a result of her confession.  The crimes ran from Mar. 1997 to Aug. 2000.  Hamilton agreed to repay $4,666.40 to the local ($6,766.40 less $2,100 in back pay the local owes her). The case is assigned to U.S. Dist. Judge John D. Holschuh (S.D. Ohio, Carter). [DOL 05/09/02; USAO S.D. Ohio 6/7/02]

PAINTERS (IBPAT)
Florida Boss Sentenced, Pays $5,400 in Restitution
U.S. Dist. Judge Wilkie D. Ferguson, Jr. (S.D. Fla., Clinton) sentenced David Lareau, ex-business manager of Int'l Bhd. of Painters & Allied Trades Local 160, May 24 to two years probation and was fined $1,000. He has already paid $5,460 in restitution and pled guilty Mar. 13 to willfully and knowingly withholding and concealing union financial records. He was charged on Dec. 17. According to the plea, the records at issue were vouchers and receipts related to the local's "Painters in Politics PAC" (a.k.a. "Paint PAC of South Florida").  Also as part of the plea, Lareau agreed to return to the PAC all records of the PAC within his control, and he agreed to no longer seek or serve in any office or official post in any union or labor organization. The details of the scheme were not detailed in the plea. [DOL 5/24/02; USAO S.D. Fla. 5/7/02]

TEXTILE EMPLOYEES (UNITE)
Southeast Boss Charged with $4,500 Embezzlement
On May 29, in the U.S. Dist. Court for the Middle Dist. of N.C., Sullivan Hamlet, ex-president of Union of Needletrades, Indus. & Textile Employees Local 2603 based in Union City, Ga., was indicted on one count of embezzling $4,567 in union funds. [DOL 5/29/02]

CARPENTERS (UBC)
Northern New Yorker Charged with $3,900 Embezzlement
Kelli S. LaLonde (a.k.a. Kelli Sue Cole), an ex-bookkeeper of United Bhd. of Carpenters Local 278 in Watertown, N.Y., was charged May 14 in a criminal complaint with embezzling $3,926.63 in union funds. Her scheme ran from Aug. 1998 to Sept. 2000.  She allegedly stole some $3,000 by simply failing to deposit union members dues payments.

Further, on Aug. 4, 2000, LaLonde allegedly negotiated two unauthorized checks drawn on the local's account for a total  of $750.  She allegedly altered the checks twice to conceal the disbursement to herself. Specifically, she allegedly prepared checks for paying quarterly taxes to "Watertown Savings Bank" and to "Carpenters Local 278 JATF" (a training fund account) and then altered to payee to show "Petty Cash" so that she could cash both checks in the amounts of $335 and $415.  When the cancelled checks were returned to the local's office, LaLonde then allegedly altered both checks to show the original payee and the endorsement of the payee.

Separately, she also allegedly misappropriated $176.63 from checks properly written to "petty cash."  In her Mar. 27 statement to Dep't of Labor agents, LaLonde reportedly confessed that she altered the two checks and that she had failed to keep accurate records of members' dues payments, but she denied taking funds from petty cash. U.S. Magis. Judge David E. Peebles (N.D.N.Y.) signed off on the criminal complaint.  As of May 30, LaLonde "has not yet been located," according to the U.S. Atty.'s Office in Syracuse. [USAO N.D.N.Y. 5/30/02; DOL 5/14/02]
 
AFL-CIO
New Orleans Staffer Accused of $2,300 Embezzlement
Joyce Griffin, ex-office secretary of the New Orleans Metal Trades Council of the AFL-CIO, was charged Apr. 25 in a one-count information with embezzling $2,383 in union funds. [DOL 4/25/02]

ARTISTS & ACTORS (AAAA)
Union and its Benefit Fund at Odds in Financial Mismanagement Suit
A major rift about health benefits due recording artists between the leadership of the Am. Fed'n of Television & Radio Artists (AFTRA) and the trustees of the union's related Health & Retirement Fund has brought into the public spotlight long running charges of the Fund's inept and incomplete record-keeping. AFTRA is a subunit of the Associated Actors & Artistes of Am.  The fight pits Greg Hessinger, AFTRA's nat'l executive director, against its Fund unit, responsible for collecting and distributing benefits to featured recording artists, whether they are AFTRA members or not.

The dispute also threatens to proposed settlement of a nine-year-old lawsuit waged by fifteen artists, alleging breach of fiduciary duty. At stake is not only a payout for the fifteen named plaintiffs in return for dropping the charges, but also the treatment of many thousands of eligible artists not active in the suit. In 1992, the fifteen named plaintiffs sued the Fund for fiduciary irresponsibility for basically botching its mission from 1959 to 1992 due to inept or nonexistent record-keeping and failure to enforce legal obligations requiring record companies to contribute payments to both recouped and unrecouped artists.

The rift comes as lawyers for the Fund and half their trustees, mostly representatives from broadcast networks (AFTRA's main constituency) rejected Hessinger's requests May 22 to further modify the proposed settlement. At the meeting, the trustees rejected Hessinger's call for modification of a blanket release of the settlement and more open-ended, non-prejudicial terms for future claims by the eligible artists. Hessinger had initiated the call for changes after discussions with alarmed artists and activists.

"I told the trustees, 'You have a choice: Either agree to the changes, or try and get the settlement approved over the objections of this union,' " Hessinger tells Billboard. "They rejected them, so AFTRA is going to actively oppose the settlement. So we're gonna file papers saying we oppose the settlement because it adversely affects class-action participants and infringes on the union's right as a collective bargaining agent to determine what our own contracts mean."

Five of the fifteen named plaintiffs artists have rejected the proposed settlement, and another has not yet accepted. The settlement goes before U.S. Dist. Judge Clarence Cooper  (N.D. Ga., Clinton) on June 20 for final approval. There's also a growing list of artists from the class action who have written to reject the settlement, including Bruce Hornsby, Frankie Laine, Kenny Loggins,  Patti Page, and Dionne Warwick. [Billboard 6/1/02]

COMMUNICATIONS WORKERS (CWA)
Georgia Boss Sentenced for False Recordkeeping
On May 30, Jimmy Reed, ex-secretary-treasurer of Communications Workers of Am. Local 3295 in the Atlanta area,  pled guilty to a one-count information charging him with false recordkeeping. He was charged Apr. 18. Reed was sentenced to six months home confinement to run concurrently with six months probation. [DOL 5/30/02]

LABORERS (LIUNA) / OFFICE & PROFESSIONAL EMPLOYEES (OPEIU) / PLUMBERS & PIPE FITTERS (UA) / ELECTRICAL WORKERS (IBEW)
Judge Refuses to Erase Fund Manger's Prison Sentence
Convicted union pension fund manager Barclay Grayson's attorney and prosecutors argued for three hours May 30 that Grayson, who has emerged as the government's lead witness in the Capital Consultants scandal, deserved to have his prison sentence eliminated. Thankfully, U.S. Dist. Judge Anna J. Brown (D. Or., Clinton) didn't buy it. She sentenced the one-time president of Capital Consultants to eighteen months in federal prison for his role in the investment scam that cost the firm's clients, including many union pension funds, about $355 million.

Grayson was initially sentenced to two years in Nov. 2001, but prosecutors asked that his sentence be reduced to probation and nine months home confinement based on the "substantial assistance" he's been in the ongoing criminal investigation. His importance to the government increased earlier this month when his father, Jeffrey Grayson, suffered a stroke that has left him unable to communicate.

Brown agreed to cut Grayson's sentence by six months. She credited him for the pivotal role he played in convincing his father, Capital Consultants' ex-CEO, to plead guilty and cooperate with the government. She also acknowledged that Barclay Grayson has put himself at some risk by pledging to cooperate with investigators.

Midway through the hearing, Brown cleared the courtroom so that Grayson and his attorney, Steve Ungar, could elaborate in private on recent threats he's received. "Barclay Grayson has been placed at risk in his opinion," Ungar said. "Obviously, there are other targets and suspects in this case. Some are displeased that they might be implicated."

Grayson, 32 and father of three, sat downcast, his head bowed, through most of the hearing. He did say in a statement to the judge that he's "been on a different path in life since September 2000," the month federal regulators seized control of Capital Consultants and ousted the Graysons. He added that he testified against his father and later persuaded his father to cooperate with investigators. "For me this was traumatic beyond words," he said. "What carried me through was the knowledge that I was doing the right thing."

Capital Consultants collapsed amidst charges that it was concealing huge losses by employing a Ponzi-like scheme involving various business entities. Barclay Grayson also played a key role in the civil litigation surrounding Capital Consultants' collapse. A handful of defendants in those lawsuits have tentatively agreed to pay more than $109 million to settle the cases.

"I don't doubt your remorse," Brown said in response. However, she said, the seriousness of the Capital Consultants crimes demanded a prison sentence.

"Barclay is extremely disappointed and devastated by the court's sentence," Ungar said. Grayson is tentatively scheduled to report to the Sheridan federal prison on June 14. He could appeal the sentence. John D. Abbott, the ex-Laborers union boss who took nearly $200,000 in illegal payoffs from Jeffrey Grayson, already is serving a 15-month sentence at Sheridan.

Prosecutors will continue to rely on Barclay Grayson as their key witness. Investigators continue to look into the actions of twelve people involved with the Capital Consultants case. They include borrowers, union bosses, former employees, and attorneys and accountants involved in the transactions. [Oregonian 5/31/02]

GOVERNMENT EMPLOYEES
Union Seeks Dues for ACLU Support
Officials of the Public School Employees in Sunnyside, Washington, have ordered a part-time school bus driver and Pentecostal pastor to send his annual dues to the American Civil Liberties Union, despite his religious objections to the national organization and its opposition to school prayer.

The Rev. Ivan Poisel, pastor of the Church of God Pentecostal congregation, has asked the union to donate his $15 in dues to a local food bank called Second Harvest.  But union officials have rejected his request.  Both parties are expected to appear at a hearing next month before the state's Public Employee Relations Committee (PERC), which will decide where Mr. Poisel's money will go.  PSE has gone before the state's employee relations committee several times.  In most cases, PERC has ruled in favor of the employees, allowing them to send their dues to a county food bank, a local Drug Abuse Resistance Education (D.A.R.E.) program and a local Crisis Pregnancy Center.

"I feel like this is religious persecution because I've taken a stand," Mr. Poisel said in an interview June 5. "The union's demands are ridiculous."

The issue centers on a state law that requires union officials and public-school employees who identify themselves as religious objectors to mutually approve a charity before any dues are sent to support it.  PSE, which represents about 26,000 Washington state school employees, requires public-school employees to either be union members or pay mandatory fees. State and federal law protect religious liberty by allowing people to become "objectors" and designate a charity to receive 100 percent of their dues.

"Cases like Rev. Poisel's are all too common," said Bob Williams, president of the Evergreen Freedom Foundation, a public-policy-research organization that is overseeing the pastor's case. "Union officials don't care about accountability because they have a monopoly over workers." [Wash. Times 6/6/02]

LABORERS (LIUNA) / TEAMSTERS (IBT) / PRODUCTION EMPLOYEES
Judge Enjoins Inter-Union Infighting to Protect Trouble Local's Integrity
U.S. Dist. Judge Robert W. Sweet (S.D.N.Y., Carter) granted a motion May 30 by the Mason Tenders Dist. Council of Greater N.Y. to enjoin two banned Int'l Bhd. of Teamsters' bosses and the unaffiliated local union they currently head from contacting employees represented by the Mason Tenders or soliciting their membership in Production & Maintenance Employees Union Local 116. The Mason Tenders is a subunit of the Laborers' Int'l Union of N. Am.

Sweet found such contact and solicitation would undermine the operation of a 1994 consent decree designed to protect the membership of the Mason Tenders "from contact with labor racketeers." That consent decree, Sweet said, enjoined Mason Tenders' members from "knowingly associating with 'any person prohibited from participating in union affairs.'" Sweet held that the prohibition applied to association with Vincent Sombretto and Edwin Gonzalez, both currently officers in Local 116, who had been previously banned from the IBT

The Mason Tenders signed the decree after LIUNA placed it in trusteeship because of concerns that "criminal elements" controlled the activity of some local unions. Sombretto and Gonzalez were expelled from the IBT in 1994 and permanently enjoined from participating in its affairs. Sweet noted that the two bosses were "banished" from IBT "because of a wide range of misconduct, including embezzlement, other financial misconduct, negotiation of sham collective bargaining agreements and assisting independent unions, including one that was formerly controlled by labor racketeer Jack McCarthy."  Gonzalez became the treasurer of Local 116 in 1999, and Sombretto has been the local's president since 1996. Local 116 is not affiliated with MTDC, LIUNA, or IBT.

Sweet granted the injunction to protect the court's consent decree and because the Mason Tenders established that the activities of Sombretto, Gonzales, and Local 116 threaten irreparable injury to MTDC, by undermining the reforms brought by the consent decree. Lowell Peterson of Meyer, Suozzi, English & Klein, represented the MTDC. Note that Harold M. Ickes is a partner in Meyer Suozzi. Annmarie P. Venuti, Manhasset, N.Y., represented Local 116, Sombretto, and Gonzalez. Andrew W. Schilling, U.S. Atty.'s Office, New York, N.Y., represented the government. [BNA 6/3/02]

CARPENTERS (UBC)
Judge Enjoins Illinois Union's Picketing
On May 16, U.S. Dist. Court Judge Philip G. Reinhard (N.D. Ill., G.H.W.Bush) enjoined the Chicago and N.E. Ill. Dist. Council of Carpenters from picketing the jobsites of a construction firm and from attempting to pressure the firm, K. Reinke Jr. & Co., to return to a multiemployer bargaining ass'n, the Residential Construction Employer's Council. Reinhard issued a temporary injunction under the Nat'l Labor Relations Act, as requested by NLRB Regional Director Ralph R. Tremain.

Reinhard found that NLRB had "reasonable cause to believe that the [union] has engaged in, and is engaging in, acts and conduct in violation of Section 8(b)(4)(i)(ii)(A) of the [Labor Management Relations] Act," which prohibits strikes, picketing, boycotts, or threats that are intended to force an employer to join an employer organization.   Round held that NLRB met this evidentiary burden, by presenting evidence from which the union's improper motive in picketing the firm could be inferred. Specifically, Tremain presented evidence that for nine months, the union disputed the firm's withdrawal from the RCEC and that the union's articulated reason for picketing--to protest an alleged shortfall in company contributions to fringe benefit trust funds--was not credible.

NLRB was represented by Deborah Stefanik, Peoria, Ill. The union was represented by Terrance McGann of Whitfield & McGann. K. Reinke & Co. was represented by Joshua D. Holleb of Klein Dub & Holleb Ltd., Highland Park, Ill. [BNA 5/29/02]

POLICE UNIONS
Maryland Unions Hire Convict as State Lobbyist
A Md. state lobbyist released from federal custody two weeks ago after serving a sentence for a felony fraud conviction is wasting little time in returning to work. Gerard E. Evans said May 25 that he has registered with the Md. State Ethics Comm'n to represent five clients in Annapolis and expects to sign up several more soon. His clients include the Baltimore chapters of the state's largest police union, plus Baltimore Orioles owner Peter G. Angelos, the Prince George's County and groups of Md. horse trainers and horse breeders.

Evans was convicted in 2000 of fraud for scheming to win lobbying fees from out-of-town companies by misrepresenting or exaggerating the threat of legislation that would have hurt the companies. He was sentenced to thirty months in federal prison, but was transferred to a halfway house in Washington after less than a year in custody in Cumberland, Md. His sentence was reduced by a year when he agreed to complete a drug and alcohol abuse program, and he was released from custody May 10.

Evans misconduct gave rise to a new state law which includes a provision that lobbyists convicted of ethics violations cannot return to lobbying. But that measure does not apply to Evans because his conviction preceded the new law. Some lawmakers saw no problem with Evans returning to work now that he has served his sentence. "He is complying with the law," said Md. House Speaker Casper R. Taylor Jr. (D).  [Baltimore Sun 5/26/02]

GOVERNMENT EMPLOYEES (AFGE)
Jury Acquits Cincinnati Boss of $8,600 Reimbursement Scheme
Emmanuel Graham, ex-president of Am. Fed'n of Gov't Employees Local 2031 in Cincinnati, was acquitted May 16 on 14 misdemeanor counts of violating 18 U.S.C. § 641. Graham was charged in June 2001 in a 32 count indictment charging violations of 18 U.S.C. § 287 by filing false claims for travel and per diem with the Veterans Admin. when he had already been reimbursed for those expenses by the local and 16 counts of violating § 641 for theft of government money corresponding to those claims. The alleged conduct ran from Apr. 1997 to June 2000; the amount in questions as $8,608.63. Pursuant to an agreement, Graham was tried on the misdemeanor charges only and the felony charges were dropped at the conclusion of the court proceedings before U.S. Magis. Judge Jack Sherman, Jr. (S.D. Ohio). [USAO S.D. Ohio 6/3/02; DOL 5/16/02]

AIR TRAFFIC CONTROLS (NATCA)
San Francisco Boss to Sentenced for Bank Robbery
U.S. Dist. Judge D. Lowell Jensen (N.D. Cal., Reagan) sentenced Rick L. Davis, former president of the Nat'l Air Traffic Controllers Ass'n's San Francisco Local to 51 months in prison on May 24 for a 2000-01 bank robbery spree that netted nearly $40,000. Davis, termed the "Robust Robber" by police because of his stocky build, apologized for his crimes in court. He pled guilty Oct. 26 to six counts of bank robbery after undergoing a psychiatric evaluation. In exchange for his plea, two more bank robbery counts and a third count for an attempted heist were dismissed. . The case drew national attention because of Davis' job as an airtraffic controller and his position at the time as president of the local union. Jensen also ordered Davis to pay about $36,000 in restitution to the banks he robbed and told to surrender on July 24 to begin serving his sentence.

He told police that he started robbing banks to help pay for airline tickets for his children to visit him. Davis said he also needed money to keep up with the cost of living in the Bay Area and to pay medical bills stemming from a 1996 collision with a cow in Hawaii, where he had been living with his wife and two sons. Davis later divorced and filed for bankruptcy.

Clad in a dark suit and light slacks, Davis asked the judge for leniency, saying his oldest son will soon be attending college and that other relatives need him to be close by. Davis' attorney, Randy S. Pollock, also asserted that he should receive a lighter sentence because of "diminished capacity" stemming from brain damage sustained from the cow accident. Davis blamed his actions on a lack of control and depression. The judge noted that at work, Davis "coped very well. He was a good air traffic controller." [S.F. Chron. 5/24/02]

Union Corruption Update is made possible by the generous contributions from readers like you. NLPC, PO Box 6821, Falls Church, VA 22040. Thank you.

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Union Corruption Update is part of NLPC's Organized Labor Accountability Project which is investigating and exposing corruption in the Teamsters, LIUNA, AFL-CIO and many other union organizations. NLPC is a nonpartisan, nonprofit foundation promoting ethics and accountability in government through research, education and legal action.

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