National Legal and Policy Center -- Organized Labor Accountability
Project
UNION CORRUPTION UPDATE
March 31, 2003 -- Vol. 6, Issue 7
For Influential Leaders & Important Decision Makers:
Information on America's most corrupt & aggressive unions
ULLICO
Union Pension-Owned Company Set to Lose $20-$30 Million
Its stock windfall from the bankrupt Global Crossing now gone, the union
pension-owned Ullico company lost money in 2002 for the first time in 11
years, its CEO, Robert Georgine, admitted on Feb. 21. In a meeting
with the Board of Directors, Georgine, former head of the AFL-CIO's Bldg.
& Construction Trades Dept., blamed chief financial officer John Grelle
for the losses. Days later, Grelle resigned in protest, blasting Georgine
for not selling the company jet, which costs $3 million a year.
There was no indication if Grelle also called on Georgine and other union
boss directors of Ullico to return the
more than $6 million they made in inside deals of Ullico stock in 2000 and
2001. In the late 90s, Ullico was able to buy Global Crossing
stock at its initial public offering (IPO) price. By 1999, a $7.6
million investment had mushroomed to $335 million. After pricing its
own stock at a set $25 per share, Ullico directors changed the rules, setting
a new price at the beginning of each year.
In the Fall of 1999, Ullico sold $127 million of that windfall. With
Ullico's stock set to increase from $54 to $146 a share, many of the union
boss directors, including Georgine, bought their own company stock at the
lower price. As the telecom bubble deflated over the next two years,
Global Crossing spiraled toward bankruptcy, and Ullico's stock took a tumble,
the Ullico directors who had bought their stock at $54 a share were given
two opportunities to sell it back, the first time for $146 a share, the
second time for $75. As Georgine and the other Ullico officials made
$6.7 million in profits, the union pension funds that own Ullico could not
take advantage of the same deal.
By the time the books are closed on 2002, Ullico is expected to have lost
between $20 and $30 million. On March 3, the insurance rating service,
A.M. Best, downgraded Ullico to "vulnerable." Georgine claims that
hiring a management-consulting firm will help. But the board reportedly
also discussed slashing Ullico staff salaries by 25 percent. [Business Week
3/17/03]
"Special" Cmte. Votes for Release of Thompson Report, but Waffles on
Returning Profits
An advisory committee of Ullico board members who didn't participate in
the stock deals recommended the public release of an internal report on the
scandal that Ullico CEO Robert Georgine has quashed. But the committee
also voted against requiring board members to return their insider profits.
Georgine picked his friend, former Illinois
governor James Thompson, to conduct an internal investigation last April.
Georgine apparently did not like Thompson's conclusions
last November, because he invoked attorney-client
privilege to keep the report from the public, and federal investigators.
The special committee voted to recommend the report's release on March
25, three days before a scheduled meeting of the full Ullico board.
But the committee voted against requiring those union officials sitting
on the board to return the money they made buying and selling their own
Ullico stock before the price of that stock was scheduled to be lowered
in 2000 and 2001. [New York Times 3/28/03]
LONGSHOREMEN (ILA)
Peter Gotti, frmr. Union Boss, Convicted of Racketeering, Extortion
Seven members of the Gambino crime family, including the reputed acting
boss, Peter Gotti, were convicted on March
17 of racketeering and extortion within the Intl. Longshoremen's Assn.
One of those convicted was Anthony "Sonny" Ciccone. Though prohibited
by a 1991 federal civil consent decree barring him from union affairs, Ciccone continued to oversee the Gambinos' criminal
interests in the ILA, including Locals 1 and 1814 on the Brooklyn and
Staten Island waterfronts.
According to the June 3 indictment, Ciccone acted as a go-between with
the Gambino and Genovese crime families by using intimidation to place a
Genovese associate on the ILA's Exec. Council, with the ultimate goal of
installing him in the ILA presidency in an election closed to the members.
Ciccone was also accused of intimidating trustees of the ILA's health plan
into awarding a contract to GPP/VIP, a firm owned by his friend, Vincent
Nasso. In exchange for the contract, Nasso kicked back $400,000 to
the two families. Ciccone also infiltrated Locals 1 and 1814, and
used threats to control the management of the Locals, and the placement
of officers and members in particular jobs.
In addition to these convictions, Ciccone and Primo Cassarino were convicted
of extorting a well-known movie star and director, Steven Seagal, into including
Gambino member Julius Nasso in his next project, and paying $150,000 to
a Gambino associate for every film he made.
In all, Ciccone was convicted of racketeering, racketeering conspiracy,
extortion, wire fraud, money laundering conspiracy and money laundering.
Besides Peter Gotti and Ciccone, also convicted were: Richard Gotti, Cassarino,
Richard Bondi and Jerome Bracanto. [Newsday 3/18/03]
TEACHERS (NEA)
Ex-Mass. State Financial Director Investigated for $800K Theft
Massachusetts Attny. General Thomas F. Reilly announced the indictment
of the former financial director of the Mass. Teachers Assn. (MTA) for reportedly
embezzling $802,000 from the state affiliate of the National Education Assn.
(NEA) union.
Richard Anzivino began working in the MTA's finance and accounting office
and became its director in 1995. Starting in 1996, until his discovery
by MTA officials in September 2002, he cashed or deposited 270 MTA checks
from, and into, his personal accounts.
Anzivino reportedly hid his embezzlement by keeping the checks under $5,000,
so that only his signature was needed. He also wrote the checks from
"transfer" account, and at the end of the fiscal year, he would spread the
stolen funds over various expense accounts. The 270 checks Anzivino
allegedly used represent only a fraction of the 68,000 checks issued by
the MTA from 1996-2002, when the embezzlement reportedly took place.
The outside firm auditing the MTA's accounts missed the embezzlement every
year until the MTA's bank informed exec. director Edward P. Sullivan last
September about suspicious transactions. Anzivino reportedly admitted
to the theft, and was fired.
The Suffolk County grand jury indicted Anzivino on seven counts each of
larceny and corporate fraud. [Mass. Attny. General 3/27/03, Boston Globe 3/27/03,
3/28/03]
TEAMSTERS (IBT)
New Indictments of Boston Teamster Boss
George Cashman, president of Intl. Bhd.
of Teamsters Local 25, now faces charges that he extorted employer kickbacks,
put his personal interests above the union's pension fund, and undermined
his own union's organizing efforts.
The charges were outlined in a 10-count indictment unsealed by the U.S.
Attny. for Mass. on March 13. Count One of the indictment lays out a
conspiracy by Cashman and business owner Thomas DiSilva to funnel payments
from Cardinal Health, Inc. to DiSilva, in exchange for Cashman using his position
as a Teamster pension trustee to settle a lawsuit over Cardinal's obligations
to the pension fund.
To settle a strike at Cardinal's warehouse in Peabody in Feb. 1998, officials
of Teamster Local 42 agreed to return to work through a 3rd party labor
leasing company. Cashman, in his role as an IBT regional vice president,
procured the leasing contract for DiSilva. After the strikes, Cardinal
withdrew from the New England Teamsters and Trucking Industry Pension Fund.
Fund officials sued Cardinal, claiming a loss of $1 million in unfunded pensions
for Teamster members.
In March 1999, Cashman allegedly met a representative of Amer. Intl. Security
Corp., which provided security to Cardinal during the strike, in a Boston
hotel. In that meeting, Cashman allegedly offered to settle the lawsuit
for $400,000 in return for Cardinal providing $100,000 in business to DiSliva,
who had lost his leasing contract with the company. By June, Cardinal
had paid the pension fund, but had not paid DiSilva. According to
the indictment, Cashman personally threatened Cardinal's attny. and a frmr.
Cardinal executive, and threatened to erect picket lines and reinstate Teamster
members at the warehouse if DiSilva didn't get his money. In Oct.,
the attny. and executive paid DiSilva $50,000 each. DiSilva then allegedly
paid the security official $20,000.
In addition to the conspiracy count under 18 U.S.C., Sec. 371, Cashman
and DiSilva also face three counts of extortion under 18 U.S.C., Sec. 1951
& 52, four counts of mail fraud concerning the postal delivery of the
checks under 18 U.S.C., Sec. 1341 & 42. Cashman is also charged
with accepting personal kickbacks to the detriment of the pension fund under
18 U.S.C., Sec. 1954, and taking payments from Cardinal to influence a labor-mgmt.
dispute in violation of the Taft-Hartley Act, 29 U.S.C., Sec. 186(b)(1)
and (d)(2).
Cashman and DiSilva are already scheduled
to go on trial on April 22 for allegedly placing non-employees on the
payrolls of various companies in order to collect health benefits belonging
to qualified Teamster members. Cashman is still under investigation
for reportedly extorting no-show jobs from film producers in Massachusetts.
[U.S.A.O. Mass. 3/13/03, Boston Globe 3/15/03]
ELECTRICAL WORKERS (IBEW)
Confirmation of Convicted Union Boss on Hold in IL Senate
Two months after Illinois Gov. Rod Blagojevich nominated him for Director
of the state labor department, Michael Fenger's confirmation is on hold
in the state Senate. But that hasn't stopped the Rockford-area union
boss, convicted in 1997 of slashing the tires of a non-union truck, from
setting up shop as the acting director.
Fenger was the business manager of Intl. Bhd. Of
Elec. Wrkrs. Local 364 when several militants surrounded the truck of
a non-union worker as he tried to leave a Wal-Mart construction site.
With the truck stopped, two police officers saw Fenger use a five-in. awl
to puncture all four tires. Sterling police were videotaping the protest and
recorded him puncturing at least one of them. Fenger denied any involvement
in the tire-slashing, but later pled guilty to two misdemeanor charges of
property damage and reckless conduct.
The Senate Appointments Committee has cancelled meetings on all of Blagojevich's
appointments, including Fenger. According to the governor's office,
if the Senate doesn't act on Fenger's nomination in 60 session days, his
appointment will automatically be ratified. That could leave Fenger
as acting labor director until next srping. [Rockford Register Star 3/21/03]
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ADDITIONAL BRIEFS NOT INCLUDED ON THE FAX EDITION OF THIS UNION CORRUPTION
UPDATE:
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ROOFERS
Intl. Union Seeks Takeover of Philly Local
Three and a half years after a federal judge
ended court supervision of Intl. Roofers Union Local 30, officials from
the Washington. D.C. headquarters have sued to take over the Philadelphia
local, claiming that corruption has overwhelmed it again. On March
26, U.S. Dist. Judge Franklin S. Van Antwerpen (E.D. PA, Reagan) heard arguments
on the International's request for a preliminary injunction allowing Tom
Pedrick, an intl. vice president and former Local 30 leader, to administer
the union pending an internal hearing.
Washington, D.C. officials sent Pedrick to Philadelphia to replace the
Local's elected officials, including business manager and financial secy.
Michael McCann and president David McBride, claiming that local officials
failed to deal with "allegations of physical violence, threats of physical
violence, and extortion at job sites." The officials also claim that
the Local owes the International some $142,000 in back dues, even as their
spending increased by more than $500,000 in 2002.
Local 30's lawyer, Stuart Davidson, dismissed the charges of violence as
"bizarre," attributed the back dues to the seasonal nature of roofing work,
and the rising expenses to increased organizing. Davidson claimed
that the International's charges of corruption as "unfounded and politically
motivated." [Philadelphia Daily News 3/26/03]
TEACHERS (AFT)
V.P. Who Missed Massive Embezzlement from DC Teachers Union Put on Leave
Calling her "a distraction," temporary administrator George Springer placed
Esther Hankerson on leave with pay from her job
as general vice president of the Washington Teachers Union (WTU), which
is apparently missing at least $5 million thanks principally to its former
president, Barbara Bullock. "Her presence continued to be a problem
in terms of our ability to do the work we needed to do," said Springer,
appointed by the American Fedtn. of Teachers (AFT) to oversee the Local.
But many WTU members are still angry that Hankerson continues to draw an
annual salary of $87,138. In 1997, Hankerson
was notified by the union's bank that Bullock had forged Hankerson's signature
on an $8,000 check. Despite Bullock's admission to the forgery, Hankerson
did not report the incident to anyone. Springer admits that he has
the authority to dismiss Hankerson, but has said only that the AFT is "trying
to work out the details with her attorney." [Washington Post 3/20/03]
ASBESTOS WORKERS (HFIA)
Ex-Atlanta Apprentice Coordinator Confesses to Embezzling from Training
Fund
Tony Mancel Davis pled guilty on March 18 to embezzling nearly $40,000
from a union apprentice training fund in an Atlanta federal court.
The fund was administered by Local 48 of the Int'l Assn. of Heat & Frost
Insulators & Asbestos Workers.
From June 1998 to October 2001, David used his position as coordinator
of the fund to reimburse his food, clothing and travel expenses of $8,310,
and stealing $31,647 in illegal salary advances, duplicated salary and fraudulent
overtime. The fund has about 200 participants and $56,000 in assets.
David is scheduled to be sentenced in the U.S. District Court for Northern
Ga. on June 2. He faces a maximum prison sentence of five years on
each of the two embezzlement counts and $250,000 in fines. As part
of his plea agreement, Davis agreed to repay the full amount he embezzled.
David was charged on Feb. 24 after an investigation by the Atlanta branch
of the U.S. Dept. of Labor's Employee Benefits Security Administration.
[EBSA 3/26/03]
STAGE EMPLOYEES
Granddaughter of SD Union Founder Sentenced for Embezzlement
Her grandfather chartered Local 220 of the Intl. Alliance of Theatrical,
Stage & Picture Operators in 1911. On March 10, JoAnn Patricia Vaughn was sentenced to five years
probation for embezzling $29,000 from the union when she was its treasurer.
Chief U.S. Dist. Judge Lawrence Piersol (S.D., Clinton) ordered her to serve
the first six months of that probation in home confinement.
According to Local 220 president Jeff Gortmaker, Vaughn lost her house
in a fire, and both her husband and father died before she began embezzling
the funds. Michael Ridgway, the Asst. U.S. Attny. who prosecuted the
case, said that Vaughn had begun making monthly payments to the union. [Sioux
Falls Argus Leader 3/12/03]
ALLIED INDUSTRIAL WORKERS (PACE)
Ex-Secy.-Treasurer Indicted for Embezzlement in Missouri Federal Court
On March 13, in the U.S. District Court for the Eastern District of Missouri,
Steve Floyd, former secretary-treasurer of Paper, Allied-Industrial, Chemical
and Energy Workers International Union (PACE) Local 05-152, was indicted
on three counts of embezzling $27,882 in union funds and one count of falsifying
union records. The charges were brought following an investigation by the
St. Louis branch of the U.S. Office of Labor-Management Standards. [OLMS
3/25/03]
CARPENTERS (UBC)
Ex-Office Manager Confesses to Embezzlement in Michigan Federal Court
On March 11, in the U.S. District Court for the Eastern District of Michigan,
Dana Moore, former office manager of the United Bhd.
of Carpenters Great Lakes Regional Industrial Council, pled guilty to
one count of embezzling union funds. A one-count information charging Moore
with embezzling $20,079 was filed on February 4, 2003, following an investigation
by the Detroit branch of the U.S. Office of Labor-Management Standards.
[OLMS 3/25/03].
ELEVATOR CONSTRUCTORS (IUEC)
More Sentences Announced in Multi-Million Dollar Racketeering Scheme in
NYC
The U.S. Ofc. of Labor-Mgmt. Standards announced the following plea and
sentencing in the $6 million racketeering case
against 26 bosses and members of the Intl Union of Elevator Constructors Local
One The two defendants were charged following a joint investigation
by the New York branch of the U.S. Office of Labor-Management Standards, the
U.S. Department of Labor's Employee Benefits Security Administration, the
FBI, and the IRS. They were sentenced in the U.S. District Court for
the Eastern District of New York.
On March 12, Thomas McCarthy, a member of Elevator Constructors Local One,
was sentenced to one year probation and ordered to pay $4,600 in restitution
and perform 50 hours of community service. He had earlier pled guilty to
misdemeanor charges for conspiracy to demand and receive illegal payments.
On March 10, Terrance Carr, organizer and former warden of Elevator Constructors
Local One, pled guilty to a superceding information charging him with making
false statements in violation of 18 U.S.C. 1001. He had lied to investigators
regarding his involvement in a no-show job scheme. [OLMS 3/25/03]
RETAIL UNION (RWDSU)
Ex-Florida President Sentenced for Embezzlement
On February 28, in the U.S. District Court for the Middle District of Florida,
Jack Hatch, former president of Retail
Wholesale and Department Store Union Local 43, was sentenced to five months
imprisonment followed by three years of probation, the first five months
of which will be under house arrest with an electronic monitor. He
was also ordered to pay restitution of $37,782.49. He had pled guilty to embezzlement on September
18, 2002, following an investigation by the Atlanta branch of the U.S. Office
of Labor-Management Standards. [OLMS 3/25/03]
PLUMBERS & PIPEFITTERS (UA)
Brother of Minneapolis Plumbers Chief Sentenced
U.S. District Judge Ann Montgomery (Minn., Clinton) sentenced Joseph Martin to two years of probation
after he testified against former Minneapolis
city councilman Joe Biernat for accepting free plumbing work from Martin's
union. He had also agreed to testify against his brother, Thomas,
the former business manager for Local 15 of the United Assn. of Plumbers
and Pipefitters. But Thomas pled guilty to embezzling union funds to
pay for the work on Biernat's home in November. Later that month, Biernat was convicted for his role in the scheme.
[Minneapolis Star Tribune 3/19/03]
UNION DEMOCRACY / PLUMBERS & PIPEFITTERS (UA)
Pennsylvania Local Agrees to New Election
On March 5, in the U.S. District Court for the Eastern District of Pennsylvania,
a stipulation of settlement agreement between the U.S. Department of Labor
and Local 354 of the United Assn. of Plumbers and Pipefitters was approved.
Pursuant to this stipulation, OLMS will supervise new nominations and a
new election for the position of business manager-financial secretary-treasurer.
The Department had filed suit against the local in August 2001 after an
investigation by the Pittsburgh branch of the U.S. Office of Labor-Management
Standards disclosed that a union officer and union employees campaigned
on time paid for by the union prior to the local's April 7, 2001 office.
[OLMS 3/25/03]
Union Corruption Update is made possible by the generous contributions
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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
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