IRON WORKERS (IAIW)
More Guilty Pleas as Investigation Expands of Big Labor's "Arthur
Andersen"
A 2nd accountant confessed on Aug. 22 to hiding 7 years of massive
embezzlement by the Iron Workers hierarchy in Wash. D.C. The latest confession
by Francis J. Massey has increased the suspicion surrounding the accounting
firm, Thomas Havey LLP, which brags on its web site
of "serv[ing] more international and local labor organization clients [700]
than any CPA firm in the country." Massey himself "served as an instructor
and lecturer regarding the LM-2 Report...both at Havey Company in-service
training and at training and seminars provided by the Havey Company for
various labor unions." On June 24, NLPC petitioned
the U.S. Dept. of Labor's Office of Labor-Mgmt. Standards to begin auditing
all those unions using Havey's services.
Massey pled guilty before Thomas F. Hogan, Chief Judge of the U.S. Dist.
Ct. for D.C. (Reagan), to one count of aiding and abetting a conspiracy
of fraud and falsification in violation of U.S.C. 18, Sec. 371. With that
plea, federal prosecutors submitted a Proffer of Facts laying out the conspiracy
by top bosses of the Intl. Assn. of Iron Wrkrs. (IAIW) that began in 1992.
The trail of corruption started early for Jake West, who moved from
California to Washington in 1985 to be appointed General Secretary of the
IAIW. By 1988, the IAIW president, Juel Drake, had developed an illness
that left him mentally unable to handle the office, leaving him dependent
on West. In Jan. 1989, acc. to the proffer, West persuaded Drake to reimburse
him from the union's account for $25,555 in four-year-old "moving expenses"
that, in fact, West had never incurred. The next day, Drake resigned and
West was appointed General President.
By August 1991, West was running for election to the union presidency. His opponent, Ray Corbett, distributed copies of the IAIW's LM-2 financial form filed with the U.S. Dept. of Labor, and questioned the dramatic change in expense reimbursements reported for West due to his so-called "moving" costs. West still won the race at the Aug. convention, along with the rest of his slate: LeRoy Worley, General Secretary and James Cole, General Treasurer. By this time, West's longtime friend, Victor Van Bourg, was ensconced as General Counsel, and had faced questions from Corbett about the professional fees paid to him and his law firm by the union.
The Havey firm had been angling for the IAIW's business since 1989, when their accountants began preparing West's personal tax returns for free. It seemed to have paid off in early 1992, when the IAIW retained Havey's services. But when Havey accountants Massey, Alfred Garappolo and Craig Stevens began their first audit in the summer of ‘92, they found numerous and large expenses incurred by the Union officers at the Prime Rib restaurant with no documentation of business purpose.
In Sept., the Havey accountants met with West, Worley, Cole and Van Bourg. According to prosecutors, the officers insisted that their personal dining expenses be left off the LM-2, solely because they didn't want opponents like Corbett using the report against them. At first the accountants argued that such disbursements had to be reported in detail on the LM-2. Finally, acc. to the proffer, Van Bourg asked the lead accountant what he would say if ever subpoenaed to testify about their meeting. When he replied that he would tell the truth, Van Bourg turned to West and recommended terminating the Havey company's services.
After that meeting, prosecutors charged, Massey and other Havey accountants counted the Prime Rib dining charges as "Office/Administrative" expenses, for which no schedule detailing the individual expenses was required. According to the proffer, senior partners of the Havey firm knew of Massey's falsification. Massey continued to place the officers' dining and entertainment expenses in the "Office/Administrative" category until 1995, when the Dept. of Labor began requiring that those expenses also be detailed in a separate schedule. According to prosecutors, Massey recommended moving the personal expenses into the "Educational/Publicity" category, for which no schedule was required. The Union officers agreed and added two organizers, Fred Summers and Darrell Shelton, to the embezzlement scheme.
By the end of 1998, the Union officers had spent some $460,000 in union money at the Prime Rib alone. The Union had also paid more than $200,000 for golf fees and dining charges at the Manor Country Club and Swan Point Yacht and Country Club, both in Maryland, and the Canyon Country Club in Palm Springs, Calif. According to prosecutors, the officers spent, and Massey covered up, more than $1 million in dining and entertainment expenses from 1992 to the end of 1998.
But in 1998, a fed. investigation of then D.C. Police Chief Larry D. Soulsby turned to West, a frequent dining companion. In April, the Havey company was served with its first subpoena of records relating to the IAIW. Massey began altering and deleting handwritten notes from Havey work papers mentioning the personal expenses.
In the course of the investigation, Summers, Shelton and Cole have pled guilty to embezzlement. Van Bourg died in Nov. 2001. West was forced to resign the IAIW presidency in Feb. 2001, and is awaiting trial, along with Worley. From the Havey firm, Garappolo pled guilty for his role in the falsification of LM-2s in June of this year. Massey is scheduled to appear before Judge Hogan on Oct. 31, for a status report on his promised cooperation with the continuing investigation. [U.S.A.O. Dist. Columbia, 8/22/02]
OFFICE & PROFESSIONAL EMPLOYEES (OPEIU) / ELECTRICAL
WORKERS (IBEW)
Pension Cleanup Continues at Capital Consultants in Ore.
Capital Consultants' chief salesman, Dean Kirkland, was indicted Aug.
22 on 20 counts of giving various kickbacks to two union pension fund bosses,
one of them his father. The indictment was handed down in the U.S. Dist.
Ct. in Portland, Ore., where Capital is based.
The latest indictments bring to six the number of union and pension officials charged with wrongdoing in the firm's 2000 collapse that cost numerous union pension funds a large share of the $500 million lost. Already convicted are the head of Capital, Jeffrey Grayson, and his son Barclay, and John D. Abbott, who admitted in Feb. 2001 to taking nearly $190,000 from the elder Grayson to steer the investments of five Laborers union trust funds to Capital.
In the latest indictment, Dean Kirkland is alleged to have paid for hunting trips for his father, Gary, and Robert Legino to the western U.S., Canada, Africa, Argentina and Mexico between 1997 and 2000. Kirkland was a trustee of three pension plans operated by the Office & Professional Employees Intl. Union: the Local 11 401(k) plan, the Western States Local Union Trust, and the Western States Pension Trust. By the time the fed. govt. took over Capital Consultants in 2000, those funds had about $60 million tied to Capital Consultants. Robert Legino was a trustee of the Intl. Bhd. of Electrical Wrkrs. 8th Dist. Pension Fund, the 8th Dist. Pension Fund Annuity Plan, and the Electrical Industry Benefit Vacation and Paid Holiday Fund. By 2000, those funds had at least $65 million invested in Capital.
Other gifts from the younger Kirkland included Denver Broncos tickets and five rifles. All three are charged with violating U.S.C. 18, Sec. 1954, which makes it illegal to offer gifts for the purpose of influencing employee benefit investments. [U.S.A.O. D. OR 8/28/02]
POSTAL WORKERS (APWU)
Las Vegas Boss Sentenced for $200K Theft
Deborah Partida, ex-secy.-treasurer of Amer. Postal Wrkrs. Union Local
761, and ex-treasurer of the APWU's Nev. State Assn., was sentenced on
Aug. 23 to 18 months in prison and ordered to pay back the nearly $200,000
she stole from the Local and state assn. from 1995 to 1999. She was sentenced
by U.S. Dist. Judge Roger Hunt (Clinton) in Las Vegas.
According to the May 17 plea agreement, Partida was Local 761 Treasurer from the middle of 1995 until Sept. of 1999. She was entitled to a salary of $150 a month. As soon as she took office, Partida began using the Local's checking account and credit cards for her personal benefit. In some cases, she forged the local vice-president's name on checks, then deposited them into a checking account which they shared. Partida, however, spent all of the embezzled funds herself.
In 1996, Partida took on the second office of Treasurer of the APWU Nevada State Assn., where she embezzled a lesser amount until the Fall of 1999, when the State Assn. President found their financial records to be poorly maintained with many missing documents. By this time, a Local 761 dissident had raised allegations of financial misuse against Partida, which prompted an investigation by the San Francisco Ofc. of the U.S. Dept. of Labor's Ofc. of Labor-Mgmt. Standards. OLMS found that Partida had embezzled $223,175 from the union's accounts.
Partida was indicted March 12 of this year on two counts of embezzlement, from the Local and State Assn., in violation of U.S.C. 29, Sec. 501(c); and two counts of falsifying the Local's LM-2 and the state assn. LM-3 forms, by under-reporting her disbursements, in violation of U.S.C. 18, Sec. 1001. On May 17, she pled guilty to one count of embezzlement that included both the Local and state assn., while federal prosecutors dismissed the earlier counts. [U.S.A.O. Dist. Nev. 8/28/02, DOL OLMS 8/28/02]
ULLICO / CARPENTERS / COMMUNICATIONS WORKERS
Pension Plan Insiders Hit with Unfair Labor Practice Charges
Keeping the heat on the union-owned Ullico, under fed. investigation
for insider stock trading, the National Right to Work Legal Defense Fndtn.
filed charges against the Ullico Board on Aug. 13 with the Natl. Labor
Relations Bd. (NLRB)
As reported in previous issues of UCU, a fed. grand jury in Wash., D.C. is investigating allegations that from 1999 to 2001, several intl union presidents used their positions on the Ullico Bd. to sell their personal Ullico stock at a dramatically higher price than its worth, but would not allow larger shareholders such as union pension funds to sell their stock during the same period. As a result, those shareholders were stuck with Ullico's stock, heavily leveraged in the telecom firm Global Crossing, which rode the wave of the telecom bubble to bankruptcy in 2001.
The Fndtn. charges that as an employer providing financial support to several unions through their presidents, Ullico violated Sec. 8(a)2 of the Natl. Labor Relations Act (NLRA), which bars employers from "domina[ting] or interfer[ing] with the formation or administration of any labor organization or contribut[ing] financial or other support to it..." [NRTWLDF]
SHEET METAL WORKERS
Duo of Officers in Mo. Charged w/ Embezzlement, False Time Claims
On Aug, 14, in the U.S. Dist. Ct. for the E. Dist. of Missouri, Donald
Stevens, former secy.-treasurer of Sheet Metal Workers Local 93 in St.
Louis, was indicted on charges of embezzling $41,550 from the Local 93
Sheet Metal Welfare Fund from July 1999 to Mar. 2001. The next day, Gregory
Carpenter, former president/organizer of Sheet Metal Workers Local 93,
was charged with embezzling union funds by submitting false lost time claims
to his union. Stevens pled not guilty before U.S. Magistrate Judge David
Noce on Aug. 27. The charges were brought following an investigation by
the St. Louis Ofc. of the U.S. Ofc. of Labor-Mgmt. Standards [DOL OLMS
8/28/02, St. Louis Post-Dispatch 8/28/02]
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AFL-CIO, HOTEL & RESTAURANT EMPLOYEES
FBI Investigating Harassment by Union-Trained "Petition Blockers"
in Mass.
The Justice Dept. in Boston is investigating allegations of harassment
by union-trained "petition blockers" aimed at a statewide pro-marriage
organization. Massachusetts Citizens
for Marriage (MCM) requested the investigation during a petition drive
to amend the state constitution by defining "marriage" legally as "the
union of one man and one woman."
As supporters worked last Fall to gain enough signatures to get the amendment on the 2004 ballot, they and petition signers were allegedly pushed, yelled at, and spat upon by "blockers" who also wrote down the license plate numbers of petition gatherers. In a letter to U.S. Attny Michael Sullivan, then-MCM Chairman Bryan G. Rudnick charged that "training sessions were held at the Hotel and Restaurant Workers union facility at 58 Berkley Street, where activists were encouraged to report the locations of signature gatherers. A flyer with the home addresses of 18 of the leaders of the pro-marriage petition was also handed out at this ‘training' session." According to MCM officials, the FBI has informed them that an investigation is underway.
According to a number of legislators, the Mass. AFL-CIO has strongly lobbied the state House and Senate to keep the amendment off the 2004 ballot, even though MCM has gathered more than the required number of signatures. [MCM]
STAGE EMPLOYEES (IATSE)
Tenn. Stagehand Boss Admits Theft for Friend
Tony Evans, ex-Fin. Secy.-Treasurer of IATSE Local 197 in Knoxville,
Tenn., pled guilty on Aug. 14 to embezzling $16,319 for himself and his
friend. According to the plea agreement, Evans has fully repaid those funds.
Evans' began his misuse of union funds in Sept. 1998, as Administrator of the Pension Plan of the Intl. Alliance of Theatrical Stage Employees and Moving Picture Operators, Local 197. On Sept. 18, 1998, Evans wrote a check for $2,500 for "office furniture" that was never bought. Evans repaid that amount on Oct. 14, with a check written on the account of a friend, Sally Hutcheson.
In Jan. 1999, Evans became Fin. Secy.-Treasurer of the Local. Starting on Jan. 27 and ending on Jan. 4, 2000, Evans wrote 11 checks from the union's acct. to Hutcheson for a total of $6,333. Continuing his theft until Aug. 2000, Evans paid $3,614 to cover his credit card bills, $1,029 for a Dell computer for Hutcheson, $3,950 to a separate acct. he opened with the union members' knowledge, and $1,392 to buy personal property for Hutcheson.
Evans began repaying the funds after an investigation by the Nashville ofc. of the U.S. Ofc. of Labor-Mgmt. Standards. [U.S.A.O. E.D. Tenn. 8/14/02, DOL OLMS 8/28/02]
ELEVATOR CONSTRUCTORS (IUEC)
Ex-VP in NYC Sentenced for Role in Racketeering, No-Show Scheme
On August 7, 2002, in the U.S. Dist. Ct. for the E. Dist. of New York,
Robert Shannon, former executive board member/trustee of Elevator Constructors
Local One, was sentenced to 400 hours of community service and three years
probation, fined $5,000, and ordered to make restitution of $5,107. He
had pled guilty on May 30 to Unlawful Labor Payments in violation of 29
U.S.C. 186. The plea was in connection with
the investigation of corruption in Local One relating to a no-show scheme
at 19 construction sites in New York City. Union officials acquired
money by falsely claiming that certain union members had worked certain
hours, when in reality they had not, and in many cases were actually working
at other construction sites. The charges had been brought following a joint
investigation by the New York Dist. Ofc. of the U.S. Dept. of Labor's Ofc.
of Labor-Mgmt. Standards, the FBI, and the IRS. [DOL OLMS 8/28/02]
ASBESTOS WORKERS
Ex-Fin. Secy. Confesses to Embezzlement in Texas
On Aug. 9, 2002, in the U.S. Dist. Ct. for the Western District of
Texas, Michael Van Bibber, former business manager/financial secretary
of Asbestos Workers Local 87, pled guilty to embezzling $30,260.57 in union
funds. He admitted to charging personal expenses to the union's credit
card, obtaining duplicate expense reimbursements, and taking cash from
union receipts. He had been indicted on June 5, 2002, following an investigation
by the New Orleans Dist. Ofc. of the U.S. Labor Dept. Office of Labor-Mgmt.
Standards. [DOL OLMS 8/21/02]
POSTAL WORKERS (Mail Handlers)
Frmr. Miss. President, Treasurer, Confess to Partnership of Theft,
Falsification
On Aug. 7, 2002, in the U.S. Dist. Ct. for the Sou. Dist. of Miss.,
James R. Dawson, Sr., president of Postal Mail Handlers Local 325, pled
guilty to embezzling $9,401 in union funds. He admitted to obtaining unauthorized
cash advances with the union's credit card and using the money for gambling.
Loyd C. Manning, the union's former treasurer and current comptroller, pled guilty to filing a false report. He admitted signing the union's Form LM-2 for the year 2000 knowing it contained false information in that Dawson's embezzlement of union funds was not reported. Dawson and Manning had been indicted on May 21, 2002, following a joint investigation by the U.S. Labor Dept. Ofc. of Labor-Mgmt. Standards in New Orleans and the DOL Inspector General. [DOL OLMS, 8/21/02]
POSTAL WORKERS (Amer. Postal Wrkrs, AFL-CIO)
Ex-Union President in Chi. Area Pleads Guilty to Mail & Credit
Card Theft
A frmr. postal union president and his wife pled guilty Aug. 21 in
the U.S. Dist. Ct. in Chicago to embezzling credit cards through the mail
facilities where they worked.
Paul Shyongpan was President of American Postal Workers Union (APWU) Local 4545 when, in Nov. 1998, he began opening mailed credit card offers, removed the cards, and forged signatures on them, while his wife did the same at a different post office, acc. to the plea agreement. Until May 2001, Shyongpan and his wife purchased major home appliances, electronic and stereo equipment, video games, clothes, gift certificates and gift cards worth at least $70,094 using the stolen cards.
After an investigation, postal authorities fired Shyongpan in May 2001 and escorted him from the Arlington Heights office where he worked as a sorter. According to post office manager Jim Wizniak, Shyongpan had been the local president for at least five years. He and his wife's guilty pleas came just six days after their indictment. They will be sentenced on Nov. 21. They are required to make full restitution of the embezzled credit card funds. They also face a potential of five years in prison and a $250,000 fine. [U.S.A.O. N.Dist. E. Div. IL, Chicago Tribune 8/16/02]
AFL-CIO
Ex-Ofc. Secy. in New Orleans ‘Fesses to Embezzling Charge Accts,
Petty Cash
On Aug. 14, in the U.S. Dist. Ct. for the Eastern Dist. of La., Joyce
Griffin, former office secretary for the New Orleans Metal Trades Council
of the AFL-CIO, pled guilty to embezzling $2,383 in union funds. She admitted
to charging personal items to the union's charge accounts and taking cash
from the union's petty cash fund. She had been charged in a one-count information
on April 25, 2002, following an investigation by the N.O. Dist. Office
of the U.S. Labor Dept. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 8/21/02]
POSTAL WORKERS (APWU)
DOL Takes Action Against DC Postal Union for 8-Year Failure to File
LM-2 On Time
On August 9, 2002, suit was filed in the U.S. Dist. Ct. for the Dist.
of Columbia against Postal Workers Local 140, for failing to file its annual
financial report. Local 140 has filed its annual report late every year
for the last eight years and during the last six years it has filed, on
average, 357 days late. It has failed to file the report that was due on
March 31, 2002, despite reminders by OLMS and warnings that failure to
file would result in legal action. The complaint seeks an order compelling
Local 140 to file its annual financial report for fiscal year 2001 and
enjoining it from further violating the reporting provisions of the Labor-Management
Reporting and Disclosure Act. [DOL OLMS 8/28/02].
UNION DEMOCRACY
NJ Postal Union Bosses Used Members’ Money to Laud Selves in Campaign
On June 27, 2002, the U.S. Dist. Ct. for the Dist. of New Jersey granted
the U.S. Department of Labor's motion for summary judgment concerning the
April 2000 election of officers in the North Jersey Area Local of the American
Postal Workers Union. The court found that the local violated Section 401(g)
of the Labor Mgmt. Reporting and Disclosure Act by making two mailings
to the membership at union expense and on union letterhead. One mailing
was laudatory of the incumbents and critical of an opposing candidate and
the other "provided gratuitous and damaging material" about the opposition
candidate. The court held that all members of the opposing candidate's
slate are entitled to a new election under the supervision of the Secretary
of Labor. The court case resulted from an investigation by the New York
ofc. of the U.S. Ofc. of Labor-Mgmt. Standards [DOL OLMS 8/28/02].
Union Corruption Update is made possible by the generous contributions from readers like you. NLPC, PO Box 6821, Falls Church, VA 22040. Thank you. 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.
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. All back issues of the Union
Corruption Update can be viewed at NLPC's website (http://www.nlpc.org).
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