That still leaves Morton Bahr, President of the Communication Wrkrs. of Amer. (CWA), Robert Georgine, frmr. head of the AFL-CIO's Bldg. & Construction Trades Dept., United Assn. of Plumbers & Pipefitters pres. Martin Maddaloni, and frmr. Intl Assn. of Iron Wrkrs. pres. Jake West, as four of the leading union chiefs still clinging to their stock profits from ULLICO. The union-owned insurance company saw its stock first skyrocket, then plunge, as ULLICO directors bought into Global Crossing, whose stock rose during the telecom bubble, then crashed into bankruptcy in 2001.

The five officials mentioned above, and other ULLICO board members, were allowed to buy and sell ULLICO stock before its value was reset at the beginning of each year. Thus, board members could buy ULLICO stock "low," before its value rose along with Global Crossing's in 1999, then sell back their stock "high," before it was readjusted downward as the telecom bubble burst in 2000 and 2001 and Global Crossing spiraled toward the 4th largest bankruptcy in history. But ULLICO's rules only allowed individuals, with a relatively small number of shares, to participate. As a result, large pension funds were stuck with ULLICO's falling stock. ULLICO officials are now under investigation from the U.S. Dept. of Labor and Dept. of Justice.

"I have determined to return to ULLICO all profits received through my participation in the stock-repurchase program," UBC President McCarron wrote to ULLICO Chairman Georgine. There has been no comment from Georgine or CWA President Bahr as to whether they will follow McCarron. [Wall Street Journal 11/1/02]
 
TEACHERS (AFT)
D.C. Teacher Boss Forced to Resign amid Allegations of Financial Wrongdoing
Barbara Bullock resigned as president of the Wash. Teachers Union (WTU) in late Oct., after natl. union officials found financial irregularities possibly involving "hundreds of thousands" of dollars. The case has been referred to the U.S. Attny. in Washington. Also forced out were WTU treasurer James Baxter and special asst. Gwendolyn Hemphill, who at the same time, resigned as co-chair of D.C. Mayor Anthony Williams' reelection campaign.

According to Edward J. McElroy, secy.-treas. of the Amer. Fed. of Teachers (AFT), a local member contacted the AFT after her monthly dues deduction went from $16 to $160. When AFT officials couldn't resolve the problem, they commissioned an audit of the WTU, which found other dues over-charges and "a number of checks and credit card expenditures" lacking proper explanations. It was after this audit that the AFT Executive Bd. asked the three officials to step down, and turned over their findings to the U.S. Attny.

Ironically, Bullock won the WTU presidency in 1993 after the AFT declared the election of Jimmie C. Jackson invalid due to "many irregularities" in the voting and ordered a second election, which Bullock won. [Washington Post 10/30/02]

GOVERNMENT WORKERS (AFGE)
Fed. Govt. Union Boss Charged with Embezzlement in NJ
Verlia Jones was charged on Oct. 18 with double-dipping embezzlement in her dual offices at the local and dist. level. The criminal complaint was filed in the U.S. Dist. Ct. for N.J.

Jones was elected president of Local 1012 of the Amer. Fed. of Govt. Employees (AFGE) in Feb. 1998. While in ofc. until Jan. 2001, acc. to the complaint, Jones stole nearly $45,000 through union checks payable to, and cashed by, herself. She also used the Lyons-based Local's checking acct. to cover numerous personal expenses charged to her credit cards. In Oct. 1999, Jones was elected to the ofc. of Treasurer of the 2nd Dist. Veterans Admin. Council, also located at the VA Medical Center in Lyons. Until she left ofc. last May, Jones withdrew $14,500 from the Council's checking acct.

On May 9, Jones signed a statement, admitting her embezzlement to investigators with the Newark  branch of the U.S. Ofc. of Labor-Mgmt. Standards. Jomes is charged with having embezzled a total of $59,513 from AFGE on fed. govt. property, in violation of 18 U.S.C. Sec. 661. [U.S.A.O. D. N.J. 11/1/02]

HOTEL EMPLOYEES & RESTAURANT EMPLOYEES (HERE)
Investigation of HI Union Non-Profit Deepens
As one person was sentenced for defrauding a union-controlled non-profit group, another was indicted for witness-tampering in relation to a search of that non-profit and the union that controlled it.

On Oct. 30 of this year, the U.S. Attny. for the Dist. of Hawaii charged Aaron Rutledge with persuading an unnamed individual to destroy and withhold records and "objects" sought by fed. investigators on Oct. 30, 1997. That day, the agents were searching the offices of the non-profit, Unity House, and Local 5 of the Hotel Employees & Restaurant Employees union (HERE). They also searched the home of Aaron's grandfather, Art, frmr. chief of Local 5 and founder of Unity House, a non-profit established to benefit members of Local 5 and the Hawaii Teamsters union. Reportedly, the agents seized computer files and bundles of cash that day.

The day after Aaron Rutledge's indictment, Roberta Cabral was sentenced by Sr. Judge Manuel L. Real (U.S.D.Ct., Cent. Dist., CA, Johnson) to ten months in prison, 2,500 hrs. of community service, and restitution of $25,000 to Unity House. Cabral admitted on June 17 to defrauding Unity House by padding the budget of a documentary funded by the non-profit organization. [U.S.A.O. D. HI, 10/30/02, 10/31/02: Honolulu Advertiser 10/31/02]

STAGE EMPLOYEES
Ex-SD Treas. Indicted for Embezzlement
On Oct. 22, in the U.S. Dist. Ct .for South Dakota, Jo Ann Vaughn, frmr. treasurer
of the Intl. Alliance Theatrical, Stage & Picture Operators Local 220, was indicted on one count of causing a false report in violation of 18 U.S.C. 1001, and one count of embezzling approximately $33,000 in union funds. Vaughn pled not guilty. The charges were brought following an investigation by the Minneapolis Resident Investigator branch of the U.S. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 10/30/02]

STEELWORKERS (USW)
3rd Va. Official Sentenced for Embezzling from Union Relief Fund
Chief U.S. Dist. Ct. Judge Samuel Wilson (U.S.D.Ct. W.Dist. Va, G.H.W. Bush) sentenced William Fricker on Oct. 25 to 4 yrs. probation, 6 mos. of home detention, and restitution of $6,300 he stole from  the union he headed and its disaster relief fund.

Fricker pled guilty on July 12 to embezzling funds from United Steel Workers Local 9336, as well as a disaster relief fund to benefit workers and their families after a fatal 2000 explosion at the Intermet New River Foundry in Radford, Va. At his sentencing hearing, Fricker tried to deflect his responsibility, saying that he wasn't used to leading the union, and that he had merely made some "bad decisions." But U.S. Asst. Attny. Joseph Mott pressed him: "That was just you wanting to get more than you were entitled to, right?" Mott asked, to which Fricker replied, "Yes."

Also testifying at the hearing was current local official Joseph Patrick Roddy, who said that the more than $17,000 stolen from the relief fund by Fricker and four other officials could have helped families who lost their homes and were forced to declare bankruptcy after the explosion left many workers jobless. "I think the saddest thing is the officers who are charged to take care of the men and women of this plant took care of themselves first," Roddy told the court. [Roanoke Times & World News  10/26/02]

AUTO WORKERS (UAW)
MI Workers Accuse Local Bosses of Falsification, Misspending of Dues
Four members of United Auto Wrkrs. (UAW) Local 869 filed unfair labor practice charges against the hierarchy on Oct. 31. The Natl. Labor Relations Bd. (NLRB) is now investigating the allegations of kickbacks, pay for unperformed work and nepotism.

The four employees charge that local officials punch in for their shifts, then immediately leave and return later through entrances without time clocks. Particularly, the workers charge, Local 869 committeeman David Joiner took payment for time worked on Sundays at the Daimler/Chrysler stamping plant in Warren that he actually spent at membership meetings and picnics. One time sheet shows Joiner on the job for 12 hrs. on Sunday, Aug. 25, the same day as a 2 1/2 hr. membership meeting. Joiner claims that he went to the meeting on his lunch hr., and that he left early.

The workers also charge that union officials took gifts and favors, such as parking privileges, from Daimler/Chrysler and parts suppliers, and that a contract to paint the union hall was awarded to the brother of Local 869 pres. Pat Peralta without bids or the members' approval.

Although it is not included in the NLRB charges, the four workers are also pushing for an investigation of the union's finances. An examination of Local 869's LM-2 financial forms filed with the U.S. Dept. of Labor shows that the union's cash balance fell from $ 250,000 at the beginning of 2000 to $84,791 at the end of 2001.

A more recent financial report  showed cash assets of the Local at the end of Aug. to be only $37,600. Local 869's new fin. secy., David Edgar, claimed that that had been no wrongdoing. The treasury depletion, he said, was due in part to the costs of sending delegates to the UAW's Las Vegas convention in June, local elections and picnics. [Detroit News 11/3/02]

QUOTABLE QUOTE/ AUTO WORKERS
Ex-UAW Chief Downplays Misspending of Members' Money
"Some local unions go wild on spending money just like other institutions...It's not corruption, it's extravagance."

Ex-UAW President Douglas Fraser, commenting on 85% drop in MI Local 869's cash balance, defended by local officials as attributable to cost of sending local delegates to Las Vegas convention and picnics. [Detroit News 11/3/02]

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

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POSTAL WORKERS (Mail Handlers)/LABORERS (LIUNA)
Miss. Man Sentenced for Misusing Union Credit Card
James R. Dawson Sr. was sentenced to three years of supervised probation, and fined $1,700, for union embezzlement on Oct. 18 in the U.S. Dist. Ct. for the Sou. Dist. of Miss. Dawson was President of Local 325 of the Natl. Postal Mail Handlers, a division of the Laborers Intl. Union of N. Amer., when he made $9,400 in unauthorized cash advances from the union's credit card from May 1997 through Nov. 2001. He pled guilty to violations of 29 U.S.C., Sec. 402(i) and 402(j) on Aug. 7. Dawson had previously made full restitution to the local union. [DOL OLMS 10/30/02, U.S.A.O. S.D. Miss.]

ALLIED-INDUSTRIAL WORKERS (PACE)
Frmr. Teasurer Pleads Guilty in NY Fed. Ct.
On Oct. 24, in the U.S. Dist. Ct. for the W. Dist. of NY, David S. Koch, frmr. treasurer of PACE Local 236, pled guilty to one count of violating 29 U.S.C. 439(a). He admitted that he failed to file the union's annual financial reports for the fiscal years ending April 30, 2000 and April 30, 2001. He made a $4,000 restitution payment to the union prior to the plea being entered. The charges were brought following an investigation by the Buffalo branch of the U.S. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 10/30/02]

ELECTRICAL WORKERS (IBEW)
Ex-Madison, WI, Bus. Agent Charged with Embezzlement
On Oct. 24, in the U.S. Dist. Ct. for the W. Dist. of Wisc., an information was filed charging Michael E. Koehler, frmr. bus. mgr. of the Intl. Bhd. of Electrical Workers (IBEW) Local 965, with embezzling union funds. According to the Local's 2000 LM-2 financial disclosure form filed with the U.S. Dept. of Labor, Koehler was the highest-paid official in the union, collecting an annual salary of $106,395, along with bus. expense reimbursements of $37,293. The charges were brought following an investigation by the Milwaukee branch of the U.S. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 10/30/02]

HOTEL & RESTAURANT EMPLOYEES (HERE)
Union Secy. Charged with Theft, Record Tampering
On Oct. 18, in the Hamilton County (Ohio) Ct. of Common Pleas, Michelle Back, former office secy. of Local 12 of the Hotel Employees and Restaurant Employees International Union (HERE), was indicted on one count of theft of $400 in union funds and one count of tampering with bookkeeping records to hide that theft. Back's offenses are alleged to have taken place between June 22 and July 30. These charges were brought following an investigation by the OLMS Cincinnati District Office. [DOL OLMS 10/30/02:  Hamilton County (OH) Prosecuting Attny. 10/18/02]

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).  Also available is a union-by-union and state-by-state index of all Union Corruption Update articles. If you have story ideas or suggestions for future editions of Union Corruption Update, please email NLPC at nlpc@nlpc.org.  Thank you.
 
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