Sweeney, however, did not explain why he failed to publicly oppose the scheme in which Ullico directors were allowed to buy Ullico stock "low" in late 1999, knowing that its value would be readjusted upward in 2000. Ullico's stock was highly leveraged on Global Crossing, which rose with the telecom bubble, then deflated in 2000 and 2001. But in both years, Ullico directors were able to sell back their Ullico stock "high," before its price was lowered to reflect the falling
value of Global Crossing. Because only small shareholders could participate in the deals, the huge pension funds underwriting Ullico were stuck with its stock as it fell, along with Global Crossing's spiral toward the 4th largest bankruptcy in U.S. history.

Sweeney did not take part in the stock-purchasing scheme in 1999. Presumably, he understood the ethical problem of directors using inside information to make as much as $14 million in profits from their own company's falling stock. But according to the AFL-CIO's LM-2 disclosure form filed with the U.S. Dept. of Labor, the AFL-CIO owed more than $15 million in loans to Ullico in 1999. Subsequent forms reveal that at the end of 2001, that figure had risen to nearly $25 million, with no record of repayments.

"These easy loans with no repayments certainly raise the suspicion that Sweeney was in no position to publicly protest this insider scheme he knew was wrong in '99," said NLPC Chairman Ken Boehm. "But since Sweeney said nothing about this scandal until the press and fed. govt. began poking into it, it's real late for him to stand up for the workers whose pension funds have taken the biggest hit of all."

In another development, the Wall Street Journal reported that the MD Insurance Admin. began investigating Ullico this fall, when Insurance Commissioner Steven Larsen subpoenaed records of the stock deals. Ullico has refused to comply, but has asked a Baltimore City Circuit Court to quash the subpoena. Still pending is a possible investigation by the NY Insurance Commission, which NLPC Chairman Boehm prompted this summer. If MD officials determine that Ullico, headquartered in that state, has proven "untrustworthy or not of good character," the company could lose its license to sell insurance in that state. [The Wall Street Journal 12/3/02, 12/4/02]

LONGSHOREMEN (ILA)
Jacksonville ILA Official Charged with Protecting Rapist
As George Spencer campaigns for the presidency of Intl. Longshoremen Assn. Local 1408, he also awaits trial for witness tampering to shield a union member from rape charges. He is currently the financial officer and secy. of the Local, which the FBI was investigating for possible labor law violations last year.

As FBI agents monitored conversations in the union hall, they recorded Spencer offering $5,000 to persuade a woman raped by local member Jerome Williams not to testify at his trial. But reportedly, Spencer offered the bribe to a local undercover officer posing as the woman's girlfriend. And FBI agents turned their tapes over to state prosecutors, who arrested Spencer in Jan. for felony witness-tampering. Williams was convicted of rape and armed kidnapping last May. Circuit Judge Michael Weatherby labeled him a sexual predator, and sentenced him to life in prison.

Spencer is still running for Local president, with the election scheduled for Dec. 16., two weeks after he appears in court. It is not clear whether the union's bylaws would bar Spencer from the ofc. if he is convicted. Elected officers must not have been convicted of any one of 12 crimes, incl. murder, rape and extortion. But witness-tampering isn't named. The union itself is also facing a class-action lawsuit by two women alleging sexual discrimination and harassment by George and his brother, Charles, the current p[resident. [Florida Times-Union 11/26/02]

GOVERNMENT WORKERS (AFSCME)
Convicted HI Union Chief Struggles to Hold Reins of Power
Despite his conviction on over 100 counts of embezzlement and fraud, and suspension from his office, Gary Rodrigues continued to wield authority over the Hawaii state govt. workers union, engineering the selection of his hand-picked successor.

On Tuesday, Nov. 19, Ex-United Public Wrkrs. (UPW) Director Gary Rodrigues was convicted of accepting kickbacks from insurers doing business with the union, and arranging "consultant" fees for family members who did little or no union work. Rodrigues' daughter, Robin Sabatini, was also convicted. On Thursday, the 21st, the Amer. Fedn. of State, County & Municipal Employees (AFSCME) announced that it had suspended Rodrigues, and informed UPW President George Yasumoto that he had the power to appoint a temporary successor.

The next day, however, Rodrigues showed up at UPW HQ in Honolulu, and convened a state exec. bd. meeting despite Yasumoto's insistence that he had no power to call such meetings. Then, instead of accepting Yasumoto's appt. of Dayton Nakanelua as UPW Director, the Bd. approved Rodrigues' choice of Dwight Takeno as temporary dir. until the statewide convention in the fall of 2003.

UPW workers angry at the Rodrigues maneuvering have begun circulating a petition asking AFSCME officials in Wash., D.C. to oust Takeno, block the possible payment of up to $750,000 in back sick leave and vacation benefits, and place the UPW into receivership. The petition also asks that the constitution be amended to require direct voting by members for all state and unit offices.A delegation from AFSCME HQ is in Honolulu investigating the siuation.

On Dec. 2, U.S. Dist. Judge David Ezra (U.S.D.C. HI, Reagan) prohibited Rodrigues from all contact with UPW officials without the permission of fed. probation officials. When he is sentenced on May 12, Rodrigues could be barred from holding office in the UPW for 13 years under the Labor-Mgmt. Reporting & Disclosure Act. But the law also allows someone convicted of embezzlement and other crimes of union corruption under the Act to request a shorter ban
of as little as three years. [Honolulu Advertiser]

TEACHERS
DC Teachers Over-Charged more than $700K
Nearly 5,000 Washington, D.C. teachers were charged nine times their regular dues this summer. That discovery in Oct. has led to the resignations of several local officials and an investigation by the the U.S. Attny in D.C. But as reports of other financial improprieties have arisen from an audit by the Amer. Fedn. of Teachers (AFT), questions have also arisen as to why the AFT did nothing for five years after the Wash. Teachers Union (WTU) failed to submit a local audit as required under AFT rules.

After WTU president Barbara Bullock resigned, interim president Esther Hankerson urged members, in an Oct. 28 letter, not to talk to news media about the union's financial problems but to direct inquiries to her. But Hankerson has not returned more than a dozen phone calls by local reporters, and a person who answered Hankerson's cell phone claimed the reporter had the wrong number.

The dues over-charge came after the union gained a new contract containing a retroactive pay raise. Local officials assessed each teacher a retroactive dues increase of $16. But when the dues were deducted from teachers' paychecks, $160 was taken. WTU officials admit that between 5,000 and 5,500 people were hit with the excessive deduction, adding up to a windfall for the union of $720,000 to $792,000. Teachers then complained to the AFT, which is supposed to receive an audit from its local affiliates every two years. The last WTU audit was in 1995. Spurred by the teachers' complaints, the AFT Exec. Bd. began an investigation that led to its asking for the resignations of Bullock, Treasurer James Baxter, and Bullock's chief asst. Gwen Hemphill. It is unclear if Baxter and Hemphill have resigned.

Meanwhile, only a third of the teachers have been reimbursed so far, and several teachers complain that the union has applied the over-charge to future dues payments, rather than repaying it outright. [Washington Post 11/23, 2002]

UNION DEMOCRACY
Appeals Court Upholds IRB's Power to Enforce Teamster Constitution
The oversight power of the Fed. Govt. over the Intl. Bhd. of Teamsters includes enforcement of the IBT constitution, as well as fed. labor law. A 3-judge panel of the 2nd Circuit Ct. of Appeals held on Oct. 23 that the fed. Independent Review. Bd. (IRB) rightly barred two Calif. Teamsters officials from union membership for denying local bus. agents the right to run for union office.

Before 1990, bus. agents of the Orange-based Local 952 paid their dues by automatic deductions from their paychecks. But upon taking office, Secy.-Treas., Edward J. Mireles ordered those agents to begin paying their dues directly, and to miss monthly payments, so that they would be ineligible under local rules to run for union office. Paul J. Roa enforced the scheme. As a result, most of the union's agents were ineligible to challenge Mireles in the '92, '95 and '98 officer elections.

The IRB, formed in 1989 to settle a fed. racketeering suit against the IBT, learned of the scheme and referred the case to IBT officials. But after a first panel failed to reach a decision, a second upheld the charges against Mireles, but not his enforcer, Roa. When IBT officials, incl. President James P. Hoffa, upheld that panel's finding, the IRB took over the case. At an April 2000 hearing, 10 witnesses confirmed the scheme, and the Bd. examined computer records showing a massive change from the "check-off" system of paying dues by bus. agents to a "self-pay" system within 3 mos. after Mireles' assumption of office.

The IRB found both Mireles and Roa guilty in Oct. 2000, and barred them from holding union office for 7 and 4 years, respectively, and from IBT membership for 4 and 2 years, respectively. U.S. Dist. Judge Loretta A. Preska (S.D. NY, G.H.W. Bush) upheld the IRB. Mireles and Roa appealed to the 2nd Circ., claiming that their actions did not violate the Labor Mgmt. Reporting & Disclosure Act (LMRDA), and that the IRB was limited to violations of the LMRDA in the IBT.

The panel, consisting of circ. judges Dennis Jacobs (G.H.W. Bush), Robert D. Sack (Clinton), and Robert A. Katzman (Clinton), upheld the IRB's and Judge Preska's earlier decisions. The appellate judges cited the Consent Decree creating the IRB in 1989, which granted the Bd. power to investigate any "conduct which brings reproach upon the IBT" in violation of Art. II, Sec. 2(a) of the IBT constitution. As they described it, Mireles and Roa "secretly narrowed the field of possible officers, partially insulated an officeholder from challenge, and thereby impaired the system of open competitive election to union office. We think this enough to bring reproach upon the union." [U.S. v. IBT, Mireles & Roa, U.S. Ct. Appeals, 2nd Circ., 10/23/02]

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

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ALLIED INDUSTRIAL WORKERS (PACE)
Frmr. Officer Sentenced for Embezzlement from OH Union
U.S. Dist. Judge James Carr (U.S.D.C. N.D. OH, Clinton) sentenced Barbara Ryan to 15 mos. in prison on Dec. 2 for embezzling $117,734 from the union she served as secy./treasurer from 1992-2000. She was also sentenced for using her job in the payroll dept. of the BP Chemicals plant in Lima to steal $33,578. Ryan's attny. claimed that she has repaid all of the funds she embezzled from Local 626 of the Allied Industrial, Chem. & Energy Workers union (PACE), and BP Chemicals. [Lima News 12/3/02]

OPERATING ENGINEERS (IUOE) / ELEVATOR CONSTRUCTORS (IUEC)
NYC Developer Sentenced for Obstruction in $10 Million Fraud Probe
On Nov. 22, Edward Carroll, a prominent figure in construction development in New York City and the vice pres. of 2 BW Development, was sentenced in U.S. Dist. Ct. for the E. Dist. of NY for obstruction of justice. The charges were filed in connection with Carroll's appearance before a federal grand jury on Dec. 11, 2001 and Jan. 8, 2002, where he provided false information to the grand jury.

Carroll was sentenced to five months in jail, five months home detention, and ordered to pay a $150.00 fine. Carroll also lost his architecture license as a result of the conviction. The investigation is in connection with the $10 million fraud case arising out of the renovation of the Metropolitan Transportation Authority's new headquarters. For a full record of the crimes charged in the Apr. 16 indictment, see http:www.nlpc.org/olap/UCU3/05_09_01.htm .

Individuals affiliated with Elevator Constructors Local One and Operating Engineers Local 14 were part of the indictment filed on April 16, 2002. The charges were brought following a joint investigation by the FBI and the NY branch of the U.S. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 12/4/02]

LABORERS (LIUNA)
Des Moines Contractor & Ofc. Secy. Indicted as Accomplices in Embezzlement
A construction company owner and union secy. were indicted Nov. 19 on charges that they conspired with a union president to embezzle funds from a Des Moines Laborers union.

On July 25, Fred T. Risius, president of Local 177 of the Laborers Intl. Union of N. Amer., pled guilty to stealing over $100,000 from the union. Contractor Clyde Starkey and Local 177 ofc. secy. Joleen Coughlon were indicted for aiding Risius in part of his thefts. From Dec. 7, 1999, until July 5, 2001, Risius wrote $29,280 in checks from the union's Bldg. Maintenance Fund to Starkey's company, which Starkey allegedly cashed, then kept 40% while kicking back the rest to Risius. From Feb. 17 until July 13, 2000, Coughlon allegedly used her position to embezzle $6,445. She also allegedly received a laptop computer and digital camera worth $2,605 from Risius courtesy of the Bldg. Maintenance Fund.

Starkey and Coughlon were both indicted for conspiracy to embezzle union funds in violation of 29 U.S.C. Sec. 501(c). Coughlon was indicted on five separate counts of embezzlement, and one count of falsifying union records to conceal her embezzlement, in violation of 29 U.S.C., Sec. 439(c). They were indicted in the U.S. Dist. Ct. for Southern Iowa. [U.S.A.O. S.D. IA 11/19/02]

PLUMBERS & PIPEFITTERS (UA)
Minn. Bus. Mgr. Implicates 2nd Elected Official in Misuse of Union Funds
Thomas J. Martin pled guilty on Nov. 25 to misusing union funds just four days after City Councilman Joseph Biernat was convicted of accepting $2,700 in free plumbing work from Martin's union, Local 15 of the United Assn. of Plumbers & Pipefitters. As he pled guilty, Martin revealed that he had also used $3,175 in union funds to pay for plumbing at a second elected official's home in 1998. He did not reveal the identity of the official in the U.S. Dist. Ct. for Minn., but an attny. for ex-county commissioner Mark Andrew confirmed that FBI agents had questioned the frmr. state head of the Dem. Farmer-Labor party about plumbing work done at his home in May 1998.

In his plea, Martin admitted stealing from the union's Industry Advance Fund to pay for Biernat's plumbing. In exchange for his guilty plea to the two counts of misusing union funds, fed. prosecutors have apparently agreed to drop charges that Martin stole about $37,000 from the union of which he once served as Bus. Mgr. U.S. Dist. Judge Ann Montgomery (U.S.D.C. MN, Clinton) ordered a pre-sentence investigation but set no sentencing date. [Minneapolis Star Tribune
11/26/02, 11/27]

OFFICE & PROFESSIONAL EMPLOYEES (OPEIU) / ELECTRICAL WORKERS (IBEW)
Obstruction Added to Indictment of Capital Consultant Salesman
Frmr. investment salesman Dean Kirkland was indicted for obstruction of justice and wire fraud in the Capital Consultants scandal, which cost union pension funds some $350 million when the Portland firm collapsed in 2000.

Kirkland was already under indictment for giving kickbacks in the form of sports tickets and hunting trips to two union officials, one of them his father, in exchange for their steering of pension funds to Capital. On Nov. 21, The U.S. Attny. for the Dist. of Ore., announced the addition of 11 new counts to the indictment. One count alleges that Kirkland destroyed company records after being subpoenaed in Oct. 2000 in violation of 18 U.S.C., Sec. 1503(a).

The rest of the new counts charge Kirkland with falsifying expense reports. In one case, Kirkland allegedly altered an invoice for a hunting club membership in Minn. to read $3,426, instead of the $426 actually charged foir membership. Also indicted and facing trial in March 2003 is the father -- Gary Kirkland, frmr. trustee of two pension and benefit funds affiliated with Local 11 of the Ofc. & Prof. Employees Intl. Union -- and Robert Legino, a frmr. trustee of benefit plans affiliated with the 8th Dist. of the Intl. Bhd. of Electrical Wrkrs. [The Oregonian 11/22/02, U.S.A.O. Dist. OR 11/21/02]

SERVICE EMPLOYEES (SEIU)
Brooklyn Landlord Gets Light Sentence for Mob Scheme to Bribe Union Officials
Brooklyn Landlord Abe Weider received only 4 yrs. probation on Nov. 20 for his part in a Mafia conspiracy to bribe their way into replacing the union at Weider's real estate development. Weider faced between 3 and 4 years in prison under fed. sentencing guidelines,  but U.S. Dist. Judge Leo Glasser (U.S.D.C. E.D. NY, Reagan) described Weider's crime as "a marked deviation from an otherwise law-abiding life."

Weider was indicted, along with 45 reputed members of five NY crime families, on Apr. 26 for attempting to use bribery to replace Local 32B-J of the Service Employees Intl. Union with a union friendly to the mob. Weider was charged with paying the $350,000 bribe because he was "petrified" at the prospect of labor unrest at Vanderveer Estates, acc. to his attny., Victor Rocco, who described Weider as the "victim" of the official taking the bribe. Asst. U.S. Attny. Paul Schoeman reminded Judge Glasser that Weider illegally fired 42 workers who spent nearly a year getting their jobs back. [New York Daily News 11/21/02]

CARPENETERS
Ex-Fin. Secy. Admits Stealing $14,000 from Minn. Union
On Nov. 27, in the U.S. Dist. Ct. for the Dist. of Minn., Jerome J. Dube, frmr. fin. secy. of United Bhd. of Carpenters Local 1865, pled guilty to one count of embezzling $310.46 in union funds and admitted a total embezzlement of union funds in the approximate amount of $14,176. The charges had been brought following an investigation by the Minneapolis branch of the U.S. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 12/4/02]

MACHINISTS (IAM)
Ex-WI President Confesses to Embezzlement
On Nov. 19, in the U.S. Dist. Ct. for the East. Dist. of Wisc., Steven Pautz, ex-pres. of Lodge 251 of the Intl. Assn. of Machinists, pled guilty to one count of embezzling $450 in union funds. In the plea agreement, Pautz agreed that the U.S. Attny. could establish the total amount stolen by Pautz to be $12,257, which could also affect Pautz's sentence. The charges were brought following an investigation by the Milwaukee branch of the U.S. Ofc. of Labor-Mgmt. Standards. [U.S.A.O. E.D. Wisc. 11/19/02, DOL OLMS 12/4/02]

GOVERNMENT WORKERS (AFGE)
Calif. Govt. Union Official Charged with Felony Theft
On Nov. 22, in the Imperial County Superior Court in El Centro, California, a criminal complaint was filed charging Edward Adams, former president of Amer. Fedn. of Govt. Employees Local 2554, with one count of Felony Grand Theft of $6,540 in union funds. The charges were brought following an investigation by the Los Angeles branch of the U.S. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 11/27/02]

AUTO WORKERS (UAW)
Ex-Cleveland Boss Sentenced for Embezzlement
On Nov. 22, in the U.S. Dist. Ct. for the N. Div. of Ohio, Martin J. Mone, former fin. secy. of United Auto Workers Local 1052 in Cleveland, Ohio, was sentenced to four years probation and ordered to pay full restitution in the amount of $6,264.97. Mone pled guilty to one count of embezzlement on Sept. 13, 2002 following an investigation by the Cleveland branch of the U.S. Ofc. of Labor-Mgmt. Standards. [DOL OLMS 11/27/02]

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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