Written by Ohio Univ. professors Richard K. Vedder and Lowell E. Gallaway, the study is entitled Do Unions Help the Economy? The Economic Effects of Labor Unions Revisited. It's available on NLPC's website: http://www.nlpc.org/olap/lrev/economy.pdf. According to Vedder and Gallaway, union labor monopolies in manufacturing, transportation, mining, and construction have decimated employment in those industries, increased the supply of employment in less unionized fields, and lowered their wage growth.
For instance, the rate of job growth in such low union-density industries as retail and services from 1983 to 2000 was more than twice that of highly unionized industries like manufacturing. Those union-monopolized industries lost about ten million new jobs compared to their less unionized counterparts. Then, demonstrating the impact of labor monopolies on income growth, Vedder and Gallaway show that for every 1% increase in union density, per-capita income growth falls 1.24%. Thus, if all states had the same union density rate as North Carolina's, the lowest in country, their income growth would have been about 17% higher than it really was. Poorest of all was Michigan, where per-capita income would be nearly $6,000, or 21% higher, than today if that state's unionization rate was equal to that of North Carolina. The cumulative effects of union labor monopolies dating back to the 1930s have reduced the total national income by more than $50 trillion, Vedder and Gallaway conclude.
The professors go on to highlight the disastrous effects of union monopolies in the steel and mining industries. After U.S. Steel granted monopoly bargaining rights to the Steelworkers in 1937, for instance, manhours worked plummeted by 51% in just over one year. In coal, the United Mine Workers were already the largest union in the country before the 1930s. Due to excessively pro-union laws passed during the so-called New Deal, UMW president John L. Lewis gained an even greater share of the mining labor force. Ironically, however, that labor force began its long decline, from 471,000 in 1937, to 150,000 when Lewis gave up his UMW presidency in 1960. By 1999, only 70,000 production workers were left in coal mining, barely one-tenth of the jobs number in 1919, when Lewis first assumed the UMW presidency.
"It breaks new ground," stated Investor's Business Daily in profiling the study. "Surprisingly little has been written about the effects of unions on the economy as a whole, or on how unions distort market activity.” NLPC President Peter Flaherty said "America continues to suffer, in terms of lost jobs, wages, and wealth, because of poor policy decisions made decades ago. NLPC help put this study together so that today's policy makers would be aware of the true costs that labor unions impose on our economy.” [IBD 6/11/02]
IRON WORKERS (IAIW)
Accounting Firm's Contract with Union Allegedly Depended on Its
Willingness to Cover Up Corruption
The similarities between the Enron-Authur
Andersen scandal and the Iron Workers-Thomas Havey scandal continue
to grow. The Dep't of Labor has released new information about the June
4 guilty plea of Alfred S. Garappolo, a partner
in the union accounting firm of Thomas Havey LLP, to two felony counts
arising from a growing criminal probe into the Int'l Ass'n of Iron Workers
and its related funds. First, he confessed to being an accessory after
the fact to embezzlement from an employee benefit plan in violation of
18 U.S.C. § 3. He pled guilty to assisting Kerry
J. Tresselt, a bookkeeper and daughter of ex-IAIW vice-president Raymond
J. Robertson, in order to hinder or prevent her apprehension, trial,
and punishment for her embezzlement from the union training fund. Tresselt
pled guilty in Nov. 2001 to embezzling $350,000.
Second and more importantly, Garappolo admitted to concealing and covering up a material fact in a matter within DOL's jurisdiction in violation of 18 U.S.C. § 1001. Here is the new and shocking information. Garappolo admitted to knowingly and willfully concealing and failing to disclose to DOL agents statements made at a Sept. 1992 meeting by IAIW's ex-general counsel Victor Van Bourg to IAIW's ex-president and current president emeritus Jacob "Jake” West. Allegedly, Van Bourg told West that the Havey firm should be replaced if Havey accountants did not assist the scheme to underreport and conceal the true nature and amount of the union's disbursements for its officers on the union's annual financial report (LM-2) filed with DOL.
Further, the plea agreement documents charge that after the meeting, Havey accountants aided and assisted in the preparation of union reports that concealed the true amount of union disbursements for IAIW bosses West, LeRoy Worley, and James E. Cole. West and Worley ex-IAIW general secretary, are awaiting trial on assorted union corruption charges. West has also been linked to the Ullico, Inc., insider trading scandal.
Cole, also an ex-IAIW general secretary, pled guilty in June 2001 to embezzling more than $10,000. He allegedly used union funds for a Scotland vacation, a high school reunion trip, and anniversary flowers for his wife. Also, Cole allegedly arranged for BSORIW to pay for country club memberships that he and his wife often used for personal use. In total, nine individuals have been indicted and seven have pled guilty in the IAIW scandal to date. [DOL 6/4/02]
International Boss Allegedly Padded Pension
On June 3, the U.S. Atty.'s Office in D.C. unsealed a May 17 indictment
which charged LeRoy Worley, ex-IAIW general
secretary, with embezzling more than $37,000 from an employee benefit fund
in violation of 18 U.S.C. § 664. Worley reportedly resigned
and retired when he was 58 and had worked between 17 and 18 years for IAIW.
However, he was allegedly paid a full pension from the Iron Workers Staff
Retirement Pension Fund as if he had retired at age 60 and as if he had
worked 20 years for IAIW. The indictment further charged that his annual
salary preceding his retirement was about $152,000, yet he was paid a pension
as if his annual salary preceding retirement had been $169,184. Worley
is one of nine individuals indicted in the federal probe of the union and
its related funds. Seven have already pled guilty. Worley is awaiting trial
as is IAIW president emeritus Jacob "Jake” West.
[DOL 6/3/02]
LONGSHOREMEN (ILWU)
Californian Sentenced for $42,400 Theft
U.S. Dist. Judge Phyllis J. Hamilton (N.D. Cal., Clinton) sentenced
Robin Neither June 12 to six months
home confinement with electronic monitoring and five years probation and
ordered to her make full restitution of $42,487. Neither is an ex-bookkeeper
for Int'l Longshoremen & Warehousemen Union Local 10 in San Francisco
and had previously pled guilty. She was indicted Oct. 16 for embezzling
union funds for personal use, and falsifying official union records. She
made false entries in the local's payroll register which was used to provide
false information to the Dep't of Labor. [DOL 6/12/01; USAO N.D. Cal. 11/7/01]
ASBESTOS WORKERS (HFIA)
Texas Boss Indicted for $30,200 Theft
On June 5, the U.S. Atty. for the W. Dist. of Tex. indicted Michael
Van Bibber, ex-business manager and financial secretary of Int'l Ass'n
of Heat & Frost Insulators & Asbestos Workers Local 87 in San Antonio.
According to USAO Public Affairs Officer Darryl Field, Van Bibber allegedly
embezzled $30,261 in union funds between Aug. 6, 1997 and Aug. 31, 1999.
[USAO W.D. Tex. 6/13/02; OLMS 6/5/02]
GOVERNMENT EMPLOYEES (AFSCME)
New Jersey Boss: 13 Months for $23,000 Theft
U.S. Dist. Judge Joel A. Pisano (D.N.J., Clinton) sentenced Stephen
Burks, ex-comptroller of Am. Fed'n of State, County, & Mun. Employees
Council 71 in Williamstown, N.J., June 11 to thirteen months in prison.
He also fined Burks $2,000. Burks was indicted May 15, 2001 and pled guilty
Mar. 4 to embezzling more than $23,000 from Sept. 1997 to Jan. 1999. He
previously made restitution of $24,000. The local was within the jurisdiction
of federal anti-union-corruption laws because it represented employees
at private sector nursing homes. [DOL 6/11/02; USAO D.N.J. 3/18/02]
GOVERNMENT EMPLOYEES (AFGE)
Phoenix Boss Admits $26,500 Theft
On June 3, in the Maricopa County (Ariz.) Criminal Court, M.
Katherine Johnson, ex-secretary-treasurer of Am. Fed'n of Gov't Employees
Local 2552, pled guilty to one count of attempted theft. Per the plea agreement,
and subject to the pre-sentencing investigation and the sentencing judge's
approval, she will be placed on probation and pay restitution of $26,516.
She was indicted by a local grand jury on Feb. 27 knowingly converting
between $25,000 and $100,000 from the local. The Phoenix-based
local serves the Dep't of Veteran's Affairs. [DOL 6/3/02]
PAPER WORKERS (AWPPW)
Washington Staffer Admits $15,600 Theft
U.S. Dist. Judge Franklin D. Burgess (W.D. Wash., Clinton) sentenced
Geri E. Abbe, June 7 to two months of home confinement
with electronic monitoring, 200 hours of community service, and five years
probation. She embezzled $15,691 from the Ass'n of Western Pulp & Paper
Workers Local 5 in Camas, Wash. Abbe previously paid $14,754 in restitution
and pled guilty on Mar. 22.
According to her plea agreement, between Feb. 1998 and June 2001, Abbe
was Local 5's office secretary and her duties included filling out payroll
vouchers. On sixteen occasions she embezzled funds through bogus payroll
claims. For example, on Feb. 18, 1998, she submitted a payroll voucher
in which sought pay for 70 hours of work during the one-week period ending
on that date. However, in truth, she worked only 35 hours during that period.
After securing an local official's signature, Abbe issued the fraudulent
check to herself. She embezzled $14,245 via this scheme.
Additionally, on Apr. 26, 1999, without authorization, Abbe gave herself a one-cent per hour raise, and on Apr. 3, 2000, without authorization, she gave herself a three percent raise. As a result, between Apr. 26, 1999 and June 1, 2001 (when she was terminated) Local 5 paid her $1,446 to which she was not entitled. Abbe was the local's secretary for 32 years. [DOL 6/7/02; Oregonian 6/13/02; USAO W.D. Wash. 3/22/02]
FLINT GLASS WORKERS (AFGWU)
Kentucky Boss Sentenced for $14,400 Theft
U.S. Dist. Judge Jennifer B. Coffman (E&W.D. Ky., Clinton) sentenced
Raymond F. Pendygraft, ex-financial secretary
of Am. Flint Glass Workers Union Local 1009 in Danville, Ky., June 6 to
five years probation, including six months home incarceration with electronic
monitoring. Coffman also ordered him to pay full restitution of $14,419.23
along with the costs of monitoring. Pendygraft pled guilty to embezzling
union funds Feb. 20. [DOL 6/12/02; USAO E.D. Ky. 2/20/02]
- - - - - -
ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION UPDATE:
- - - - - -
LIQUOR & WINE SALES REPRESENTATIVES (LWSR)
Chicago Family's Ties to Benefit Fund & Bank Probed
The federal probe of Chicago's infamous Duff
family, whose ties to organized crime reportedly date back four decades,
continues and has expanded to include allegations of mismanagement of a
employee benefit plan of the Liquor & Wine Sales Representatives, Tire,
Plastic & Allied Workers Union in Chicago. The Duff's janitorial firm
is also under investigation for its City of Chicago contracts worth tens
of millions of dollars under Mayor Richard Daley (D). Reportedly, the probe's
focuses has expanded to include whether the Duff family has received favorable
rates on personal loans and other perks for maintaining the union funds
at the Park Ridge (Ill.) Community Bank (PRCB).
The U.S. Dep't of Labor's investigation began when a routine audit of the union's $3.2 million health and welfare fund turned up that about $750,000 was held in a single account at PRCB, far exceeding the $100,000 federal insurance limit. With $650,000 of the fund at risk, DOL cited the fund in 2001 for violating its fiduciary responsibility. Then it issued the subpoena for an extensive list of Duff family records at the Bank.
Land records reportedly show that at least three of the Duff family members and an attorney for the fund received loans from PRCB. In May 1997, James Duff borrowed $450,000 from PRCB and another $150,000 from a La Grange, Ill., bank to buy a $710,000 home in La Grange. He refinanced the home two years later with another lender when mortgage rates decreased. Further, in 1996, John Duff, Jr., and his wife reportedly purchased two condominium units in Hollywood, Fla., for $242,300. The couple reportedly has a $400,000 mortgage from PRCB on the condos.
It is noteworthy that John Serpico, an ex-Laborers boss, and his mistress Maria Busillo were sentenced in Mar. 2002 to prison terms on mail fraud charges related to a scam in which the two obtained some $5 million in personal loans at favorable rates from a Chicago area bank after depositing some $4 million from several unions' employee benefit funds that the Serpico and Busillo controlled. According to Asst. U.S. Atty. David Glockner, Serpico and Busillo frequently flew together in a union jet to "frolic" at Busillo's beachfront condo in Marco Island, Fla., "financed in part with a loan obtained by dumping workers' money into a corrupt bank."
Federal prosecutors have been investigating the Duffs for more than two years, a probe prompted by a July 1999 Chicago Tribune investigative report that found that the Duff's Windy City Maintenance, which had won tens of millions of dollars in government contract set-asides for woman-owned firms, was actually run by Duff family men. The Tribune also uncovered that a day labor firm controlled by the Duffs, Windy City Labor, was supplying non-union labor to liquor distributors whose employees were represented by LWSR, which is dominated and run by the Duff family, a possible labor violation.
The Duff family and its firms has been active in raising political donations on both sides of the aisle, including Daley. Two members of the family have had ties to organized-crime bosses. John Duff, Jr., once testified on behalf of mob boss Anthony "Big Tuna" Accardo, who was facing federal income-tax fraud charges. John Duff, Jr., later pled guilty to embezzling union funds in Chicago and Detroit and spent seventeen months in prison. In 2000, John F. Duff III was ousted from the Hotel Employees & Restaurant Employees Int'l Union after investigators alleged he knowingly associated with organized-crime figures who was a ghost payroller and ran an illegal Fla. bookmaking operation. [Chi. Trib. 06/18/02]
According to LWSR's most recent LM-2 on file with DOL, the union's president, Patrick Duff, received total disbursements of $126,523 from the union for the year ending Dec. 31, 2000, including gross salary (before taxes and other deductions) of $99,583. For the same period, John F. Duff, III, the union's secretary-treasurer received $123,440 in total disbursements, including $97,187 in gross salary.
OPERATING ENGINEERS (IUOE) / ELEVATOR CONSTRUCTORS
(IUEC)
Developer's Partner Pleads Guilty in $10 Million Fraud Case
Prosecutors secured their first guilty plea in titanic scandal involving
a Manhattan developer and several union bosses from Int'l
Union of Operating Eng'rs Local 14 and Int'l
Union Elevator Constructors Local 1 who allegedly 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. Edward Carroll,
vice-president of 2BW Development Corp., pled guilty June 4 to obstruction
of justice in violation of 18 U.S.C. §§ 1503, 3551. The charges
were filed in connection with false information that he provided to a federal
grand jury in the prosecution of the $10 million fraud scheme.
The money at issue was intended for legitimate labor costs, but a substantial
amount allegedly went to indicted developer Frederick
Contini, owner of 2BW Development, in the form of cash kickbacks for
his participation in the scheme. In one transaction, Contini received a
winery in Italy from the tainted funds. For a full record of the
crimes charged in the Apr. 16 indictment see http://www.nlpc.org/olap/UCU3/05_09_01.htm.
Carroll, who was partners with Contini, submitted false invoices to
the MTA from a subcontractor known as "Links.” These invoices purporting
to be from Links totaled in excess of $13 million and were prepared by
Carroll under the direction of Contini. When asked questions concerning
the handling of Links invoices, Carroll misled the grand jury by leading
it to believe that Links invoices had been handled like other invoices
in the normal course of business. [DOL 6/4/02]
TRANSIT WORKERS (ATU)
Richmond Transit Union Seeks Restitution of more than $7 million
to Pension Fund
Amalgamated Transit Union Local 1220 in Richmond, Va., recently
filed suit seeking to recover union pension funds taken by Alan
Bond, a high-profile Wall Street union fund manager who was convicted
June 10 on three counts of investment-advisory fraud and three counts of
mail fraud in federal court in Manhattan."I was very outraged," said Rufus
Cosby, Local 1220 president. The union first invested with Bond after he
was recommended by a consultant in 1997.
The charismatic Bond had risen from a modest upbringing to become a Harvard Business School graduate and regular on PBS's "Wall Street Week With Louis Rukeyser." Yet, this trial wasn't his first brush with the law: at the time of his indictment last year, he was out on bail awaiting trial on an earlier set of fraud charges. Bond managed to remain in business despite the 1999 indictment by persuading ATU bosses in Richmond and Birmingham, Ala. to stick with him. It was those union members' pension funds that Bond raided in the second scheme, for which he will be sentenced on Sept. 9. Cosby, who testified in Bond's trial, said he first learned of the federal case against his pension fund's manager in Aug. 2001. He said he did not inform his members, on the advice of legal counsel. As of June 13, 2002, they still had not been informed. Cosby said he plans to brief them soon. When Bond was arrested in Aug., the value of Local 1220's account he managed had dropped by about $7.3 million during the prior sixteen months, said Asst. U.S. Atty. Steven R. Peikin.
Local 1220 was one of three groups hit by Bond's "cherry-picking" scheme, according to court documents. Allegedly, Bond put successful stock trades made with union funds into his private account, while moving money losers into his clients' accounts. The money helped finance Bond's lifestyle, including 75 classic cars and credit card bills as high as $476,000 in one month. [Richmond Times-Dispatch 6/14/02; Wall St. J. 6/11/02]
LONGSHOREMEN (ILA)
More Details Emerge on Gotti Clan's Extortion of Longshoremen
The U.S. Atty's Office for the E.Dist. of N.Y. has released additional
details of the June 3 indictment of 17 members
and associates of the Gambino organized crime family for racketeering and
extortion within the Int'l Longshoremen's Ass'n. The three-year state and
federal probe revealed that despite the 1991 civil consent decree that
prohibited Anthony "Sonny” Ciccone from participating in ILA and
waterfront affairs, he continued to oversee the Gambino family's criminal
interests in the ILA (including Local 1814 and Local 1) and the Brooklyn
and Staten Island waterfronts. Those criminal interests extended
to job assignments on the waterfront, selection of high level ILA officials,
and receipt of kickbacks from ILA's national health plan. The following
additional details from the indictment focus on ILA aspects of the case
and amplify the report in the previous issue of the UCU:
The investigation revealed that the Gambino and the Genovese families coordinated efforts to control selection of ILA bosses at the highest level. Between Apr. and Aug. 2000, "Captain” Ciccone plus "soldiers” Primo Cassarino and Jerome "Jerry" Brancato, worked with Local 1814 vice president Frank "Red” Scollo to allegedly intimidate ILA bosses into placing a Genovese associate on the ILA's Executive Council, then to elevate him to the ILA presidency during a year when the election would be closed to the union's general membership.
The investigation also revealed additional cooperation between the Gambino and Genovese clans in a kick-back scheme involving ILA's national health plan, which is called "MILA.” In 1998, Ciccone, Cassarino, Vincent Nasso, and Scollo, allegedly intimidated MILA trustees into awarding a prescription drug service contract to GPP/VIP, a firm owned in part by Nasso. The Gambino and Genovese families then split a kick-back of approximately $400,000 from Nasso in exchange for the contract. Further, when it appeared that GPP/VIP's contract was not going to be extended in Nov. 2001, Ciccone, through Cassarino, allegedly directed Scollo, who had also become a MILA trustee, to "look into what happened with Vinny Nasso, why he lost that thing" and to "do whatever you gotta do."
Additionally, between Apr. 2000 and Aug. 2001, Ciccone, Cassarino, and Scollo ousted a Local 1814 delegate and allegedly replaced him with a handpicked candidate of Ciccone and his crew. According to the indictment, Cassarino and Local 1814 president Scollo met surreptitiously on numerous occasions in Scollo's car to discuss the details of the scheme.
Further, between June 2000 and Aug. 2001, Ciccone, Cassarino, Scollo and others, allegedly coerced Local 1 officials into following Ciccone's directives regarding the management of the local, including the placement of members in particular jobs. Ciccone reportedly enforced his rule on the waterfront by sending warnings to the Local 1 officers through Scollo, Cassarino and others. On one occasion he sent Cassarino to a Local official's personal residence to deliver his message, according to prosecutors.
Finally, between Oct. 2000 and Jan. 2001, Ciccone, Cassarino and Scollo allegedly extorted thousands of dollars from a relative of an individual seeking employment on the waterfront, in exchange for a waterfront job. During the summer of 2001, using Cassarino and Scollo, Ciccone allegedly attempted to force an employee of Howland Hook Container Terminal to step down from his job so that a relative of Gambino family member Anthony Anastasio could be installed in his place. The indictment also alleges that Ciccone and Cassarino demanded that an injured longshoreman pay them a portion of the monetary settlement he received as a result of a work-related injury.
"By controlling the union, its locals, its national health plan and various businesses on the waterfront, the Gambino organized crime family and its associates victimized rank and file union members and the consuming public,” said FBI Assistant Director-in-Charge Kevin P. Donovan. "Free enterprise was a rare commodity on the docks of New York. Eliminating the influence of organized crime will not be achieved by one investigation, one indictment or one successful prosecution but, rather, by maintaining law enforcement pressure on the mob's organization, it leadership and its sources of income."
DOL Inspector General Gordon Heddell added, "This investigation uncovered a well-disciplined, conspiratorial organization that had utilized a climate of fear and intimidation to exploit the ILA. The U.S. Department of Labor, Office of Inspector General, has participated in this multi-agency investigation to ensure that union workplaces are free from the influence of organized crime and to ensure that worker health plans are protected.” [USAO E.D.N.Y. 6/4/02]
TEACHERS (NEA)
Ohio Teacher Union Bosses Found Guilty of Religious Discrimination
Responding to charges brought by Gallia County Public Schools teacher
Donna Barnes, the Equal Employment Opportunity Comm'n found the Ohio Educ.
Ass'n guilty June 10 of religious discrimination for refusing to respect
Barnes' sincere religious objection to joining or supporting the union.
With free legal assistance from the Nat'l Right to Work Legal Def. Fdn.,
Barnes filed charges against the OEA three years ago. Barnes, a member
of the New Life Lutheran Church, objected to supporting the Nat'l Educ.
Ass'n affiliate because it promotes pro-abortion rights and pro-gay rights
positions. As part of the EEOC's determination, if the union does not respect
Barnes' status as a religious objector, the OEA will face a federal court
suit.
"Unfortunately, this is not an isolated incident. Teachers across the country, regardless of their faith, are being shaken down to pay for this radical agenda,” stated Stefan Gleason, Vice President of NRTWLDF.
Under Title VII of the Civil Rights Act of 1964, union officials may not force any employee to support financially a union if doing so violates the employee's sincerely held religious beliefs. To avoid the conflict between an employee's faith and a requirement to pay fees to a union he or she believes to be immoral, the law requires union officials to accommodate the employee ? most often by designating a mutually acceptable charity to accept the funds. [NRTWLDF 6/10/02]
NURSES (ANA)
DOL Files Suit for New Election at California Union
The Dep't of Labor filed suit June 14 against the California Nurses
Ass'n, an affliate of the Am. Nurses Ass'n, alleging wrongdoing in the
union's election held on May 16, 2001. Allegedly, ballots were not mailed
to approximately 73 members in good standing while 11 members not in good
standing were permitted to vote. Further, DOL charged that that the union's
procedure for obtaining a duplicate ballot was not adequately communicated
to the membership. The complaint seeks a new election for the position
of vice president under DOL supervision. [DOL 6/14/02]
GLASS WORKERS (GMP)
Minnesota Boss Charged with Forgery and $7,700 Theft
On June 14, in Winona County (Minn.) Circuit Court, a criminal complaint
was signed charging Jeffrey J. Scheuler with two counts of check forgery
and one count of theft in relation to an embezzlement of $7,743 in union
funds. Scheuler is the ex-trustee of Glass, Molders, Pottery, Plastics
& Allied Workers Int'l Union Local 63B, which is headquartered in Minneapolis,
and ex-chairman of Local 63B's Badger Foundry. [DOL 6/14/02]
POSTAL WORKERS (APWU)
New Mexico Boss Ordered to Pay $7,600 in Restitution
Ygnacio Angel, ex-president of Am.
Postal Workers Union Local 402 in Las Cruces, N.M., was sentenced June
2 to six months home confinement with electronic monitoring and two years
probation for crimes related to a $7,646.16 union embezzlement. He was
also ordered to make full restitution and has already repaid $6,000. He
previously pled guilty to one count of falsification of union records.
[DOL 6/2/02]
GOVERNMENT EMPLOYEES (AFSCME)
Western Wisconsin Boss Pleads No Contest to $1,000 Theft
On June 4, in Dunn County (Wis.) Circuit Court, Joanne
"Judy” M. Hase, ex-secretary-treasurer of Am. Fed'n of State,
County & Mun. Employees Local 727-D in Menomonie, Wis., pled no contest
to the theft of about $1,000 in a business setting. She was placed on probation
for one year, with the rest of her sentence withheld. [DOL 6/4/02]
NEWSPAPER UNION
Richmond Union Gets Shoplifting Reporter's Job Back
A divided panel of the U.S. Court of Appeals for the Fourth Circuit
upheld June 10 an aribtrator's reinstatement of a reporter who used her
press pass to steal $900 worth of quilting supplies. In Feb.1999, copy
editor Pamela Mastrapaolo used her credentials with the Richmond Times-Dispatch
to gain free admission to the Mid-Atlantic Quilt Festival in Williamsburg,
even though she wasn't assigned to cover it. She was caught stealing fabric
and other quilting supplies, and was charged with two felony counts of
larceny.
After initially suspending her without pay, the publisher, Media General, fired her in June 1999 after she agreed to plead guilty to one misdemeanor and one felony count. After she was fired, the judge reduced her felony to a misdemeanor, and the union representing Mastrapaolo sought to have her reinstated, claiming that she could only be fired for a felony conviction. An arbitrator agreed with the union, the Richmond Prof'l Newspaper Ass'n.
Appealing first to the U.S. Dist. Court for the E. Dist. of Va., then to the Fourth Circuit, Media General argued that the union contract expressly allows the company to fire employees for "gross misconduct,” and that the arbitrator was more influenced by personal sympathy for Mastrapaolo than adherence to the bargaining contract. But writing for the majority, U.S. Circuit Judge William B. Traxler (4th Cir., Clinton) wrote that the scope of judicial review of labor arbitration is narrow, and that so long as the arbitrator's opinion "drew its essence from the collective bargaining agreement,” the court is bound to uphold it.
Although Mastrapaolo herself had pled guilty to a felony when Media General fired her for that reason, the subsequent reduction of that felony to a misdemeanor at her sentencing negated the publisher's reason for termination, according to the arbitrator. Although Traxler along with U.S. Circuit Judge William W. Wilkins, Jr. (4th Cir., Reagan) agreed that Mastrapaolo's conduct warranted her firing, they refused to overturn the arbitrator's decision. Even that admission from Traxler and Wilkins was too much for the lawyer representing the union, who claimed that the U.S. Supreme Court has held arbitrators to be more qualified than judges to decide labor disputes and that the best thing courts should say about the merits of arbitration rulings is nothing at all.
Dissenting, U.S. Circuit Judge Roger L. Gregory (4th Cir., G.W. Bush) criticized the majority for simply explaining the arbitrator's reasoning without "explain[ing] how that reasoning is plausible.” Regardless of the subsequent reduction, Gregory wrote, "by pleading guilty to a felony, she [Mastrapaolo] clearly admitted that she engaged in felonious conduct.” Media General has not yet said whether it will appeal to the U.S. Supreme Court. [BNA 6/13/02; Richmond Times-Dispatch 6/14/02]
TEAMSTERS (IBT)
Did Boston Teamsters Plot with Corrupt Government Agents to Frame
Federal Investigators?
Federal agents probing racketeering allegations against Boston-area
Teamster bosses, including indicted Int'l Bhd. of
Teamsters Local 25 president George W.
Cashman, are now eyeing charges against other government agents for
trying to frame the investigators, according to the Boston Herald.The U.S.
Dep't of Labor's Office of Labor Racketeering is investigating allegations
that current and former members from the U.S. Customs Service, and Massachusetts
State Police, used Richard "The Fat Man" Chicofsky, an ex-FBI informant,
to levy bogus corruption charges against two federal investigators to get
them removed from the corruption probe of Local 25.
Cashman along with four other individuals and three firms were indicted Jan. 16 on 179 counts of embezzlement and bribery. Cashman and other bosses and individuals linked to Local 25 have been the subject of a nearly three-year grand jury probe into allegations of kickbacks, shakedowns, and extortion of television and movie producers who film in Mass., as well as strong-arming and intimidation of rival union members. Further, a Feb. report by retired state Mass. Superior Court Judge Robert Barton found that the alleged union featherbedding and extortion added $1 million to $2 million to the cost of production in Mass., not to mention the lost revenue from Hollywood producers staying away from the bay State.
The investigation into the frame attempt is focusing on members of the Customs money laundering group, one of whose members used Chicofsky as an informant. Chicofsky has alleged the Customs agent extorted money from him for drugs. Some of those being investigated are also former members of the Metropolitan Police, who were represented by Local 25 before being merged with the state police.
The obstruction of justice probe came to light last week when attorneys for Cashman petitioned U.S. Magistrate Judge Joyce Alexander (D. Mass.) for the personnel records of the two agents who were falsely charged. Assistant U.S. Attorney Theodore Chuang referred to the obstruction of justice probe in his opposition to the motion for the files and Alexander turned down the request. According to the Herald, the federal grand jury investigating Local 25 was moved from Boston to Worcester because witnesses were being intimidated after testifying. [Boston Herald 6/12/02]
LABORERS (LIUNA)
Ohio Local Must Pay $2.2 Million for Racial Discrimination
Back in the early 1980s, Ron Colvin was trying to get a job as a laborer
with Local 496 of the Laborers Int'l Union
of N. Am. in Madison Village, Ohio. However, according to Colvin,
now head of the local NAACP chapter, Local 496 officials refused to hire
him and 52 other black workers for the construction of the Perry Nuclear
Power Plant. Now, almost 18 years later, a federal court has ordered LIUNA
bosses to close their local hiring hall, sell all its belongings and pay
$2.2 million in damages for its discrimination. Edward Krammer, the attorney
representing Colvin, said that this was the first time a union had agreed
to close its doors as punishment for their discrimination.
When construction of the plant began in 1974, only union members were allowed to work on the project, and Local 496 had the pleasure of referring workers to the contractor, Cleveland Electric Illuminating Co. In 1974, Local 496 had 16 blacks out of 100 members. But by 1980, the union had grown to more than 500, with only 18 blacks, and by 1984, there were only 16 blacks in a local with more than 600 members.
Colvin and 52 other plaintiffs filed their case against the union in 1984. It has gone to the U.S. Court of Appeals for the Sixth Circuit four times. Of the $2.2 million settlement, Colvin and the other workers have previously received $1.6 million. Selling the union hall, photocopier and telephones is expected to net another $250,000, leaving $500,000, which Local 496 is obligated to pay. [News-Herald (Willoughby, Ohio) 6/13/02]
ELECTRICAL WORKERS (IBEW)
Court Holds that Philadelphia Trustees Violated ERISA
U.S. Dist. Judge James M. Kelly (E.D. Pa., Reagan) ruled May 23 that
trustees of the Int'l Bhd. of Elec. Workers Local Union 98 Pension Fund
abused their discretion by deferring review of an application for disability
benefits and then retroactively applying new eligibility requirements.
By retroactively applying a plan amendment to Andrew Carney's pending claim,
"the Trustees changed the eligibility requirements on Carney after he put
in an application which clearly satisfied the eligibility requirements
for disability benefits at the time of his application" and violated the
Employee Retirement Income Security Act, wrote Kelly.
In July 1991, Carney injured his hand and became unable to work as an electrician for Local 98 which is located in Philadelphia. In June 1996, he applied to the Pension Fund for disability retirement benefits. Carney was examined by a physician designated by the plan, who reported that he was totally disabled. As a result, the court said, Carney met all of the eligibility requirements for disability retirement benefits under the plan and awaited final approval by the trustees.
The trustees deferred review of Carney's application several times. While the application was pending, the trustees amended the plan to require that participants had to qualify for Social Security disability insurance benefits in order to qualify for plan benefits. Carney applied for and was denied Social Security disability insurance benefits. In July 1997, the trustees denied Carney's claim for benefits, citing the new requirement under the amended plan.
Kelly held that the trustees violated ERISA by failing to abide by their own plan procedures in deferring review of Carney's claim. The plan provided that applications must be reviewed within 180 days. The trustees took a year to review Carney's application and did not communicate or investigate their suspicions, the judge said. He added that retroactively applying the requirements of the plan amendment, which was enacted after Carney had applied for benefits, was an ERISA violation. Edward J. Foley Jr., of Conshohoken, Pa., represented Carney. Laurence B. Baccini and Michael S. Fitzsimmons of Wolf, Block, Schorr & Solis-Cohen, Philadelphia, represented the Pension Fund. [BNA 6/4/02]
QUOTABLE QUOTE / IRON WORKERS (IAIW)
"Over the coming months you will no doubt hear more about the Enron
scandal and the many thousands of people that have lost their pensions
because of corporate greed.”
- Joseph J. Hunt, Int'l Ass'n of Iron Workers president, writing in latest issue of the union's magazine.
The quote is outrageously off base. What about union greed, Mr. Hunt? For instance, Hunt's predecessor, Jacob "Jake” West, who shamelessly continues to serve as IAIW's president emeritus, is at the heart of the the Labor Movement's own "Enron Scandal.” That is the insider trading scandal of Ullico, Inc., a union-dominated insurance company. West potentially made hundreds of thousands from a tainted deal which allegedly shafted union members' pension and related funds.
Further, Hunt heads a union suffering from a union embezzlement scandal that has already led to the indictment of nine individuals including West. Seven defendants have already pled guilty, and the embezzled sums from the union and its related funds range from $7,000 to $350,000. West is scheduled to go trial this summer on 51 counts of embezzlement, conspiracy, obstruction of justice, and related crimes. West allegedly embezzled some $50,000.
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