A panel of the AFT's governing bd. held a hearing at its Wash., D.C. headquarters on Jan. 15, and is expected to vote on placing the WTU under "administratorship" this week. AFT rules require local affiliates to submit an audit of their finances every two years. But after taking over the WTU as its president in 1994, Barbara Bullock never provided one, despite repeated requests from the AFT. In fact, the WTU had failed to pay its monthly dues of $50,000 to the AFT since the fall of 2000. Yet, AFT officials never suspected wrongdoing, but simply assumed that Bullock was holding on to the money to collect extra interest.
On Jan. 16, the AFT released the results of its own internal audit, documenting at least $5 million in stolen WTU funds by eight WTU staffers, incl. Bullock, her frmr. asst., Gwendolyn Hemphill and ex-treasurer James Baxter. Ominously, the auditors said that with many union records missing, the amount stolen is likely to increase, "and this increase could be substantial."
Bullock charged at least $1.8 million to the WTU's American Express card for unauthorized expenses, incl. a host of luxury items, such as clothing, electronic equipment, antiques and paintings.
In violation of federal election law, Bullock also contributed $9,000 to the Dem. Natl. Cmte. and $2,000 to Hillary Clinton's senate campaign in 2000. By charging those contributions to the WTU's American Express card, Bullock violated the Fed. Elect. Campaign Act by making a contribution to a fed. candidate directly from the union, instead of its pol. action cmte. Bullock also wrote checks for her personal benefit of at least $381,000.
Hemphill allegedly stole at least $492,000 through unauthorized credit card charges and checks to pay for tens of thousands of dollars in artwork, antiques, clothing, electronic equipment, and jewelry. Hemphill also engaged in a series of kickback schemes with other WTU staffers and relatives. According to an affidavit by FBI special agent Katherine Andrews, Hemphill funneled over $20,000 to a business owned in part by her son-in law, Michael Martin. Many of the payments failed to mention any services rendered. Bank records indicate that more than $10,000 from Martin's business were then paid out to Hemphill. According to the AFT auditors, Bullock's chauffeur. Leroy Holmes, received more than 200 checks totaling more than $1.2 million from Hemphill. He cashed the checks, then split much of it with Hemphill.
According to witnesses in the WTU office, treasurer Baxter only showed up only when he needed to "sign checks." Yet, he stole at least $537,000 in credit card purchases and checks for "professional fees" and "professional services." He used the union's American Express card to pay dining and entertainment expenses, auto repairs, artwork and "pension payments."
Meanwhile, FBI agents are now investigating Esther Hankerson, who worked alongside Bullock as general vice-pres. from 1994 until her appointment as interim-pres. in Oct. of last year. While union staffers, incl. Hankerson, regularly received financial statements showing that the WTU failed to deposit funds into the union's pension plan for several years, Hankerson insists that she didn't know of the pension shortfall. Hankerson supports an AFT takeover of the local union.
The U.S. Attny. for Wash., D.C. has yet to announce a formal indictment of Bullock, ex-treasurer James Baxter, and ex-asst. Gwendolyn Hemphill. [Washington Post 1/17/03, 1/15/03, 1/9/03: FBI 12/18/02]
TEACHERS (NEA)
Convicted Ga. Teacher's "heart was larger than my pocket"
Claiming that he embezzled nearly $39,000 to help other people, Jerome
Amis was sentenced on Jan. 8 to three months in a minimum security prison
for embezzling funds from the Henry County chapter of the Ga. Assn. of
Educators (GAE). The high school social studies teacher and McDonough
City council member was indicted by a county grand jury on Nov. 13. Within
the next 10 days, Amis resigned from both positions.
On Jan. 8, Amis pled guilty to embezzlement by writing numerous GAE checks to himself. But before his sentencing, Superior Court Judge Hal Craig heard from numerous friends of Amis, including two ministers, the Mayor of McDonough, and a member of the county school board, who asked that Amis be released from prison as soon as possible so that he could continue working with youth. Finally, Amis told Judge Craig, "My heart was larger than my pocket, and there were times when I was trying to help people [and] did something wrong."
Flint Judicial Dist. Attny. Tommy Floyd recommended three years in prison, 12 years of probation, and full restitution of the stolen funds. Judge Craig sentenced Amis to 15 years of probation, with three months in a "probation detention center," and ordered Amis to repay the GAE members. Amis's attny. said that the frmr. teacher has no substantial source of income, but would sell his house if necessary. [Henry County Daily Herald 1/9/03]
LONGSHOREMEN (ILA)
RI Lawmaker Subpoenaed in Extortion Case Against State ILA Bosses
State Rep. Paul Moura was called before a RI grand jury on Dec. 16
to testify about two statewide union bosses arrested for extortion at the
Port of Providence. Moura is also a field agent for the AFL-CIO.
The two officials of the Intl Longshoremen's Assn., president Raymond Silva and his brother, vice-president Domingo "David" Silva, were arrested by RI state police on Oct. 22. The investigation began last Feb, when State Line Scrap Co. president David Borque told police that ILA members were threatening him for refusing to hire a "no-show" ILA member for 30 hrs a week.
Borque wore a hidden microphone during subsequent meetings with the Silvas, Moura, a member of the Providence port board, and secy.-treasurer John Carnevale. The Silvas were apparently overheard threatening "numerous consequences" if Borque refused to give in to the demands, including physical harm to Borque, his family and employees. At one meeting, Moura arrived just as Raymond Silva jumped from his chair with his fist "cocked back" near Borque's face. Allegedly, Moura restrained Silva, guided him back to his seat, then immediately left "as though he did not want to witness any violence" acc. to a state police affidavit.
The morning before the arrest, Borque and several of his employees arrived at the port. Minutes later, the Silvas and 10 other union militants began walking toward Borque. State detectives identified themselves, but the Silvas swore at them, with Raymond allegedly stating, "...this is an ILA issue, not a state police matter."
At 9 a.m., acc. to the police, Moura arrived and brushed off a detective, allegedly saying, "Who are you? I just need to talk to David [Borque]." In a private meeting with Borque, Moura allegedly patted him down, apparently looking for a microphone.
Answering the subpoena on Dec. 16, Moura spent about two hours at the Kent County Courthouse. [Providence Journal-Bulletin 10/24/02, WJAR-TV 12/16/02]
GOVERNMENT WORKERS (AFSCME)
NY DC 37 Says "Never Mind" about Pension Fund Audit
The new administrator for the $200 million pension fund of Dist. Council
37 says that a special audit ordered by the Council's Exec. Dir., never
existed. Lilian Roberts ordered the audit
last May, after the previous pension dir. left after 24 years on the job.
The affiliate of the Amer. Fedtn. of State, County & Municipal Employees
(AFSCME) represents all 125,000 New York City employees.
Last May, newly elected treasurer Mark Rosenthal supported the audit he called for as a dissident back in 1999. Then, DC 37 was mired in a huge scandal of embezzlement and contract vote-rigging that snared dozens of convicted local officials. Rosenthal criticized fund administrators for awarding its prescription drug contract to a company employing the daughter and ex-wife of AFSCME president Gerald McEntee without taking any bids. After the complaints, pension officials sought bids, and one company bid $7.5 million less than the established company. That company, Natl. Prescription Administrators, lowered its bid by $7.5 million and was allowed to keep the contract. NPA has since been bought by Express Scripts.
Rosenthal told The New York Sun he disagreed with the decision to drop the audit, but refused further comment, simply saying, "I was overruled, what can I tell you."
Cong. Charles Norwood (R-GA), chairman of the House subcommittee on workforce protections, called the Council's decision "unacceptable." While declining comment on the audit issue, U.S. labor dept. spokeswoman Sue Hensley did say that DC 37 has a long history of filing their required financial disclosure forms late, usually by nine months.
Pension fund officials are also facing a four-yr.-old lawsuit by two ex-employees, accusing Fund administrators of illegally diverting money toward the union's political activities, paying for unnecessary trips to Atlantic City, Las Vegas and Hawaii, and inflating the union's membership figures to obtain overpayments from the city. But the Council's Assoc. Dir., Oliver Gray, said that an audit by the union's own auditors and the city comptroller, were enough to ensure that no mismanagement was taking place. A union lawyer claimed that those allegations are no longer part of the suit. [New York Sun 1/14/03, 1/17/03]
DEPARTMENT OF LABOR (DOL) / UNION DEMOCRACY
DOL Reconsidering Argument Against Union Democracy
On order from the U.S. 1st Circ. Ct. of Appeals, officials at the U.S.
Dept. of Labor are reconsidering their support of United
Bhd. of Carpenters (UBC) chief Douglas McCarron's bid to transfer bargaining
powers from the UBC's locals to its regional councils. Since withdrawing
the UBC from the AFL-CIO in 2001 in a dispute over back dues, McCarron
has hosted Pres. Bush at two Labor Day picnics, and has actively supported
Bush's efforts to allow Alaskan oil drilling. McCarron was one of just
a few union officials invited to the President's economic forum in Waco,
Texas, last summer.
In 1996, McCarron consolidated all the union's collective bargaining powers into 55 "regional councils." The councils were controlled by exec. secy. treasurers (ESTs) who filled their staff with the same council delegates who supposedly controlled the ESTs.
In 1999, a group of New England carpenters filed a complaint with DOL, charging that the McCarron scheme violated the members' right to vote directly for those officials responsible for collective bargaining. President Clinton's labor secy., Alexis Herman, claimed that under the Labor Mgmt. Reporting & Disclosure Act (LMRDA), only local unions were required to have elections of officers.
As the dissidents' appeal made its way through the federal courts, Pres. Bush's new labor secy., Elaine Chao, maintained that argument, even claiming that overturning McCarron's councils could "undermine self-government within the labor movement." But the 1st Circ. Ct. ruled in Feb. that DOL contradicted its own 30-yr.-old regulation that any union body performing collective bargaining was required to be elected by the membership. The three-judge panel of Juan Torruella (Reagan), Sandra Lynch (Clinton) and Kermit Lipez (Clinton) ordered DOL to reconsider its position. That reconsideration is still pending. [Harrington v. Chao, 280 F.3d: 2002 U.S. App.: The New Republic 12/16/02]
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TEAMSTERS (IBT)
Independent Rev. Bd. Forces IBT Takeover of NY Local
Following a recommendation by the court-appointed Independent Review
Board (IRB), The Intl. Bhd. of Teamsters Dan Kane, Sr. to take over a corrupt
NY local on an emergency basis.
The takeover of the 4,000 member Local 456 comes less than a month after the union's frmr. business mgr., Richard Jedlicka, was arrested on charges that he extorted no-show jobs from a construction company in 1996 And ‘97. Roy Barnes, the lawyer for Local 456, insisted that the IRB's charges had nothing to do with the Jedlicka case. But neither could he say what the IRB was charging against Local officials.
This is the second time that the IRB has tried to clean up the local union. In 1999, the IRB concluded that then-local president Edward Doyle Sr. with taking a $2,000 bribe. He resigned, but his brother, Bernard, was promptly elected to replace him, and his son, Edward Jr., was elected secy.-treasurer. And while Kane is presently in charge as trustee of Local 456, union lawyer Barnes pointed out that none of the current officers, or any of the Exec. Board's seven members have been suspended.
IBT spokesman Brett Caldwell said that the IBT will appoint a three-member panel that will hold a hearing on the charges within 60 days. If that IBT panel upholds the charges, then the local officers will be ousted, and new elections held. [Journal-News 1/8/03]
Ex-Ky. President Sentenced for Using Union Funds to Pay for Car
Kenneth Stacy was sentenced on Jan.
10 to one yr. of probation for embezzling $10,360 from Local 651 of
the Intl. Bhd. of Teamsters. Stacy had pled guilty on Sept. 26 to using
the funds to pay off the lease on his personal car. Fed. prosecutors said
Stacy had already made restitution to the union. He will also serve four
months of home detention and pay a fine of $10,000. He is also barred from
serving as a union officer for 13 yrs. [WKYT TV 1/10/03]
STEELWORKERS (USW)
Ex-Local Pres. Pleads Guilty in PA Fed. Ct.
Albert Dishong confessed on Jan. 10 to embezzling about $30,000 from
a Johnstown steelworkers union. He entered his plea in the U.S. Dist. Ct.
in Pittsburgh.
Dishong became president of Local 2635 of the United Steel Wrkrs. union in Jan. 1998. In April 2000, he defeated Dennis Conahan in an election. But a union panel found that Dishong took advantage of his office by obtaining the names of laid-off workers, and including his campaign stickers in meeting notices. A new election was ordered and Conahan won by 105 votes. As Conahan took office, an audit of the Local's finances revealed that Dishong had submitted false vouchers for work time lost doing union business. "He was double-dipping," said Conahan.
Under the plea agreement, Dishong pled guilty to one count of violating 29 U.S.C., Sec. 501(c). He will be required to pay restitution, although U.S. Dist. Judge Terrence F. McVerry (W.D. PA) may not require full repayment of the stolen funds at Dishong's April 4 sentencing. Asst. U.S. Attny. Paul Brysh said that he will recommend a light sentence for Dishong because of his acceptance of responsibility. [U.S.A.O. W.D. PA 1/10/03, Johnstown Tribune-Democrat 1/14/03]
POLICE UNIONS
Ex-Treasurer Charged with More Embezzlement in WI State Court
The Ex-Treasurer of the Appleton Prof. Police Assn. was ordered on
Jan. 13 to stand trial for a second round of embezzlement charges. Woodard
had been convicted of embezzling $7,919 from the union in July 2001, and
was sentenced to 60 days in jail. But subsequent audits revealed that he
had embezzled three times that much between 1996 and 2000. Woodard will
enter his plea for the alleged theft of $24,000 from the union on Jan.
21 in the Outagamie County Circuit Ct. [Appleton Post Crescent 1/14/03]
SERVICE EMPLOYEES
NLRB Complaint Issued Against Union for Fining Workers during CA
Janitors' Strike
After two years of foot dragging, the National Labor Relations Board
(NLRB) issued a complaint against a powerful California union for illegally
coercing 43 janitors, 31 of whom have been fined up to $500 each, for exercising
their right to continue working during the so-called "Justice for Janitors"
strike in April 2000.
With the help of attorneys from the National Right to Work Foundation, the janitors employed by American Building Maintenance Janitorial Services Company and two other janitorial services, filed unfair labor practice charges with the NLRB against Service Employees International Union (SEIU) Local 1877 alleging unfair labor practices.
In July 2000, Local 1877 union officials started levying the illegal fines and demanded that the janitors pay the fines or perform "community service" such as scrubbing floors at the union hall after a "rolling" strike against various employers during contract negotiations. SEIU union officials hit them with the illegal fines and demands because the janitors chose to work rather than sacrifice crucial family income. Foundation attorneys forced the same union to rescind similar fines against Oakland janitors in 1997.
The NLRB will also prosecute the SEIU officials for failing to notify
the janitors of their right to refrain from formal union membership
and pay a reduced fee that covers only the cost of activities directly
related to collective bargaining. The Foundation-won Supreme Court decision
in Communications Workers v. Beck and subsequent NLRB rulings prohibit
union officials from requiring formal union membership or the payment of
full union dues as a condition of employment. [NRTWLDF 1/13/03]
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.
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