Labor Pains: Because Being in a Union can be Painful

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  1. UAW “Flower Funds” are the Latest in Union Corruption Scandals

    Once again, the United Auto Workers has found itself in hot water. Federal investigators have launched a probe into the union’s so-called “flower funds.” Allegedly intended to collect money to provide flowers at the funerals of auto makers, these funds may have a more nefarious purpose.

    Investigators are looking into the possibility that senior UAW officials who control the funds—including presidents, vice presidents, and regional directors—were threatening high level staff into contributing to them. If these staff members refused to donate, they could fear being demoted back to the assembly lines. Even worse, it looks like UAW officials were funneling money from the flower funds into their own bank accounts.

    Let’s not forget that this investigation is just the latest probe in an ongoing corruption scandal at the union. Last year, federal investigators found that over $9 million was funneled to UAW officials through the union’s training centers. Fiat Chrysler Automobiles (FCA) officials bribed UAW staff with extravagant vacations and presents, including “a $30,000 party for a UAW official, complete with ultra-premium booze, $7,000 worth of cigars and $3,000 in wine with custom labels honoring the union boss.” So far, this probe has resulted in the conviction of seven high ranking UAW and FCA officers.

    To make matters worse, during the investigation the union was constructing a luxury cabin in Michigan for former UAW president Dennis Williams–who was also implicated in the scandal. Williams’ residence was financed with money from the union’s $721 million strike fund—which is funded by worker dues. To top it all off, the cabin was built using non-union workers.

    Erik Gordon, a professor at the University of Michigan, explained how the flower funds scandal could be the final straw for UAW employees: “This positions the union not as the workers’ friend but as a big powerful thing that would extort money from its own members.”

    Any union looking for an example of “what not to do” need look no further than the UAW. Members would be wise to take notice.

     

    Categories: UAW
  2. Ex-LIUNA Employee Comes Out Against Union “Culture of Mismanagement”

    A LaborPains post from December 2017 stated that Roderick Bennett, former Chief of Staff for the Laborers International Union of North America (LIUNA) was charged with “one count of embezzling $141,335 from the union.” Since then, Bennett has plead guilty to this charge. He has also volunteered new information regarding what he describes as an “extremely loose and lax ‘fiduciary management environment’ that has long existed within the union’s leadership team.”

    According to a press release from the public affairs firm representing Mr. Bennett, the former LIUNA employee “wishes to ‘go public’ with what he knows to be inappropriate behavior on the part of his former colleagues with regard to the use of the LIUNA-issued credit card.” 

    Bennett provided statements for this credit card—spanning from January 2014 to December 2016—that denote personal expenses made by union officers. From lavish steakhouse dinners to international travel for non-employees, below are some of the most egregious purchases:

    • William Bergfeld April 9, 2016, Joe’s Stone Crab purchase of $4,491.48 in the District of Columbia
    • William Bergfeld May 5, 2016, Best Buy purchase for $4,769.97
    • Armand Sabitoni  February 18, 2015 purchases of Hilton Hotel services totaling $3,456.91
    • Armand Sabitoni  May 21, 2015, purchase of four airline tickets to Rhode Island costing a total of $1,972.20
    • Sandra Khoury November 11, 2014, Bobby Van’s Steakhouse purchase for $11,515.52
    • Sandra Khoury, July 14, 2014, purchase of an airline ticket to Germany (for someone named Sylvia Khoury, believed not to be a LIUNA employee) for $1,874.50
    • Sandra Khoury, July 14, 2014, purchase of a second airline ticket to Germany (for someone believed not to be a LIUNA employee) for $1,874.50

    Apparently, it was common practice for employees to put expenses, both personal and business, on the union credit card in order to earn American Express points. Since there was no protocol for how these points were spent, employees would then use them freely.

    Bennett admits to participating in this system, but claims the “federal government should be looking at the entire culture of mismanagement that was occurring at the union.” It’s unclear whether or not this information will result in a separate investigation, but this insight into LIUNA’s questionable financial practices should be a red flag for union members. 

    Categories: Uncategorized
  3. Labor Racket Weekly: IBEW Edition

    The International Brotherhood of Electrical Workers (IBEW) Local 98 faces several charges of conspiracy, embezzlement, and fraud after an FBI investigation led to the indictment of Philadelphia’s most notorious union boss Johnny “Doc” Dougherty and members of his crew.

    Below are some of IBEW’s latest rackets and the recent sentencing for Rocco Fazzolari of NY, who plead guilty to embezzling union funds back in September:

    In Pennsylvania, John Dougherty, Business Manager of IBEW Local 98 was charged in an indictment with one count of conspiracy to embezzle from a labor union and employee benefits plan, 34 counts of embezzlement of union funds, 23 counts of wire fraud theft from the union, two counts of wire fraud theft from political action committee, two counts of filing a false LM report, two counts of falsifying union records, five counts of filing false federal income tax returns, one count of conspiracy to accept unlawful payments from an employer, eight counts of accepting unlawful payments from an employer, one count of conspiracy to commit honest services fraud and federal program bribery, 11 counts of honest services wire fraud, and one count of honest services mail fraud.

    In Pennsylvania, Brian Burrows, President of IBEW Local 98 was charged in an indictment with one count of conspiracy to embezzle from a labor union and employee benefits plan, 14 counts of embezzlement of union funds, two counts of filing a false LM report, two counts of falsifying union records, and five counts of filing false federal income tax returns.

    In Pennsylvania, Michael Neill, Apprentice Training Director of IBEW Local 98 was charged in an indictment with one count of conspiracy to embezzle from labor union and employee benefits plan, four counts of embezzlement of union funds, one count of theft from an employee benefit plan, and four counts of filing false federal income tax returns.

    In Pennsylvania, Marita Crawford, Business Agent and Political Director of IBEW Local 98, was charged in an indictment with one count of conspiracy to embezzle from a labor union and employee benefits plan, four counts of embezzlement of union funds, three counts of wire fraud theft from the union, two counts of wire fraud theft from political action committee, one count of filing a false LM report, and one count of falsifying union records

    In New York, Rocco Fazzolari, former President of the International Brotherhood of Trade Unions Local 122 (an independent union located on Long Island, N.Y.), was sentenced to 37 months in prison and three years of supervised release, and he was ordered to pay $1,288,810 in restitution. On September 26, 2018, Fazzolari pleaded guilty to embezzlement of union funds, embezzlement of benefit plan funds, and conspiracy to embezzle plan funds.

    Categories: Crime & CorruptionLabor Racket Weekly
  4. Did Unions Drive Amazon Out of NYC?

    Mayor Bill de Blasio claims that Amazon’s tragic break up with NYC was simply “scuttled by a few very powerful people sitting in a boardroom in Seattle.” But it takes two to tango and de Blasio would be wise to consider what the city—or more specifically, what the city’s labor unions—did to push Amazon away.

    Even after Amazon made concessions to the city’s most prominent unions, including promises to hire an estimated 5,000 unionized construction workers, some unions still demanded more. As the American Prospect recently reported, “The AFL-CIO, the Teamsters and the Retail, Wholesale, and Department Store Union (RWDSU) were intent on using Amazon’s New York ambitions as a way to get a union inside Amazon.”

    Stuart Applebaum, President of RWDSU, along with the AFL-CIO and Teamsters, called on Amazon to agree to a neutrality pledge, which would allow 2,500 workers to organize at the retail giant’s new location.

    But some unions weren’t on board. 32BJ, an SEIU local in NYC, worried that the unions’ continued demand for neutrality “could fan the anti-Amazon flames” and encourage the company to pull out of the deal. Someone should tell Applebaum that if your tactics are too radical for the SEIU, it might be time to reevaluate!

    Shortly after, Applebaum and the AFL-CIO leadership made another push for neutrality at a meeting with NY Governor Cuomo and Amazon officials. Just hours after the meeting, Amazon announced it would be pulling out of the deal.

    To make matters worse, this isn’t the first time Applebaum and the RWDSU have helped kill a development project and cost the city thousands of jobs.

    About a decade ago, Applebaum opposed the Kingsbridge Armory development in the Bronx because the developers wouldn’t sign a living wage/union neutrality agreement. The armory development, which would have created 1,000 construction jobs and hundreds of permanent positions, was subsequently terminated. The site sat empty for years while the city languished under high unemployment in the midst of the Great Recession.

    With Amazon’s departure, New Yorkers can once again thank the hubris of union leaders for stripping the city of 25,000 job opportunities.

    Categories: AFL-CIOBuilding and Construction Trades CouncilSEIUTeamsters
  5. Labor Racket Weekly: December Round-Up

    Union bosses across the country ended 2018 on a low note. From embezzling union funds to committing fraud, below are some of the worst labor rackets from the end of last year:

    In Rhode Island, Adam Conheeny, former police officer and former Treasurer of Fraternal Order of Police (FOP) Lodge 8, was sentenced to three months of imprisonment followed by two years of supervised release. Conheeny previously paid $20,000 in restitution. He admitted to using an FOP debit card, writing checks from a union account payable to himself, and withdrawing cash from an FOP bank account for his own personal use, totaling approximately $31,413.

    In Michigan, Nancy Adams Johnson, former senior official in the Chrysler Department of the United Auto Workers (UAW), was sentenced to 12 months and 1 day in prison and 12 months of supervised release.  She was also ordered to pay a $10,000 fine and a $100 special assessment. Johnson plead guilty to one count of conspiracy to violate the Labor Management Relations Act, stemming from her receipt of over $45,000 in prohibited payments and things of value from Alphons Iacobelli, former Vice President of Fiat Chrysler Automobiles US LLC (FCA), and others acting in the interest of FCA.  The payments were made using the bank account and credit card account of the UAW-Chrysler National Training Center (NTC), which was established to provide for the education, training, and retraining of Chrysler workers.

    In New Jersey, Lawrence Ackerman, the Chief Operating Officer of “shell” companies including Atlantic Business Associates (ABA) and Atlantic Medical Associates (AMA), plead guilty to a superseding information for Health Care Fraud, as well as Aiding and Abetting. Ackerman executed a scheme to defraud Horizon Blue Cross Blue Shield (BCBS) of New Jersey involving enrollment of ineligible participants who were purported employees of ABA and AMA, both sham companies, in the benefit plan of United Auto Workers (UAW) Local 2326 which had an insurance contract with Horizon BCBS.  Ackerman entered into a collective bargaining agreement (CBA) with Local 2326; however, neither ABA nor AMA had any full-time employees eligible for participation in the benefit plan as required by the CBA and benefit plan trust agreement. The resulting loss to Horizon BCBS was approximately $481,500.

    Categories: Labor Racket Weekly
  6. BLS Data Shows Union Membership Drops to All Time Low

    Today, the Bureau of Labor Statistics released new data on 2018 union membership. According to the most recent statistics, the percent of wage and salary workers who are union members has hit its lowest point since the BLS started tracking the number.

    Overall union membership has dropped to 10.5 percent of workers, .2 percent lower than in 2017.  Per state membership numbers show an even steeper decline, with 29 states and the District of Columbia recording less than 10.5 percent of workers as union members. In eight states, that number was less than 5 percent.

    While public-sector union membership has only declined by .5 percent, this number will likely continue to decrease as the impact of the Supreme Court’s recent decision in Janus v. AFSCME plays out.

    In the eight months since the Court handed down their decision—which ruled unions could no longer deduct “fair share” fees from worker’s paychecks without consent—unions have implemented every tool in their war chest to mitigate membership declines. This includes imposing controversial opt out windows and working with politicians to pass laws that hinder workplace democracy.

    But as more current and new employees realize what Janus means for themthis slow decline in public-sector union membership will almost certainly pick up speed.

    One thing is for sure, workers who are tired of watching their dues go to support an increasingly left-leaning political agenda have finally been given a way out—and they’re taking it.

    Categories: Janus v. AFSCMEUncategorized
  7. Unions Should Brace for Another Landmark Supreme Court Decision in 2019

    Thanks to the Supreme Court’s decision in Janus v. AFSCME, public-sector unions can no longer compel workers to pay so-called “fair share fees.” However, these unions still have the sole power to negotiate on behalf of their workers. Known as “exclusive representation,” federal labor law requires unions to represent every worker in a bargaining unit, regardless of whether or not someone is a dues-paying member.

    Fortunately for workers, several court cases have the potential of redefining exclusive representation this year. University professors from Ohio, Minnesota, and Maine are all challenging their faculty unions’ exclusive representation status. One non-union professor brought a suit after she was prevented from serving on faculty committees by a union contract. The other educators cite disagreements with their union’s political advocacy or collective bargaining agenda.

    Two more cases involving the Service Employees International Union are making a splash at the federal level. The 9th circuit court is currently hearing a case in Washington State challenging the SEIU’s exclusive representation over four home caregivers. A similar case brought by caregivers in Minnesota is already being petitioned for the Supreme Court. The petition argues that “for those who do not want that union speaking on their behalf, exclusive representation results in a ‘significant impingement on [their] associational freedoms.’”

    Ironically, union leaders have never been thrilled about having to represent workers who opt out of fair share fees. Donald Taylor, president of the hospitality workers union Unite Here, once referred to such workers as “freeloaders” and “welfare queens.” But unions who have benefited from a monopoly on collective bargaining for years aren’t ready to give it up–even if they can no longer charge for it.

    Janus was only half the battle in the fight for workplace democracy. If one of these cases makes it to the Supreme Court, it could mean a final victory for public-sector workers who still find themselves beholden to a union they have chosen not to be a part of.

    Categories: Janus v. AFSCMELegalSEIUUncategorized
  8. Labor Racket Weekly: UAW Edition

    This holiday season instead of presents, the Michigan court system is handing out jail time. The below court sentences are the result of a corruption probe into the United Auto Workers (UAW) and their relationship with Fiat Chrysler Automobiles (FCA). The investigation revealed a scandal that went all the way to the top.

    Here’s a list of people who can expect to get coal in their stocking this year:

    In Michigan, Virdell King, a former senior official in the Chrysler Department of the UAW and former assistant director for the UAW-Chrysler National Training Center (NTC), was sentenced to two months in prison and 12 months of supervised release.  She was also ordered to pay a $5,500 fine and a $100 special assessment. King plead guilty to one count of conspiracy to violate the Labor Management Relations Act stemming from her receipt of over $40,000 in prohibited payments and things of value from Alphons Iacobelli, former Vice President of FCA, and others acting in the interest of FCA.  Additional purchases included luggage, electronics, clothing, and other golf equipment for the personal benefit of King and other UAW officials.  The payments were made using the bank account and credit card account of the UAW-Chrysler National Training Center (NTC), which was established to provide for the education, training, and retraining of Chrysler workers.

    In Michigan, Jerome Durden, former financial analyst in the Corporate Accounting Department of FCA and former Controller of the UAW-Chrysler National Training Center (NTC), both located in Detroit, Mich., was sentenced to 15 months in prison and 36 months of supervised release.  He was also ordered to pay restitution in the amount of $8,811 for the tax charge and a $125 special assessment.  Durden plead guilty to one count of conspiracy to defraud the United States by preparing and filing tax returns for the NTC between 2009 and 2015 that falsely concealed millions of dollars in prohibited payments directed to former UAW Vice President General Holiefield (now deceased), former FCA Vice President Alphons Iacobelli, and others.  Durden also plead guilty to one count of failure to file an income tax return for 2013.

    In Michigan, Michael Brown, a former management employee at FCA and former Co-Director of the United Auto Workers (UAW) – Chrysler National Training Center (NTC), was sentenced to 12 months in prison and 12 months of supervised release.  He was also ordered to pay a $10,000 fine and a $100 special assessment. Brown plead guilty to one count of misprision of a felony for his knowledge of a conspiracy between FCA executives acting in the interest and on behalf of FCA and UAW officials to provide prohibited payments and things of value to UAW officials and concealing such knowledge by deliberately providing misleading and incomplete testimony in the federal grand jury about the conspiracy.

    In Michigan, Keith Mickens, former senior official in the Chrysler Department of the UAW, was sentenced to 12 months in prison and 12 months of supervised release.  He was also ordered to pay a $10,000 fine and a $100 special assessment. Mickens pleaded guilty to one count of conspiracy to violate the Labor Management Relations Act (LMRA), for receiving over $7,700 in prohibited payments and things of value from Alphons Iacobelli, former Vice President of Fiat Chrysler Automobile , and others acting in the interest of FCA, and in obtaining a check in the amount of $13,500 payable to Monica Morgan Photography and used by the late-UAW Vice President General Holiefield and his spouse, Monica Morgan, to pay the remaining balance due on the installation of a swimming pool at their residence. Additional purchases included luggage, electronics, clothing, and other golf equipment for the personal benefit of Mickens and other UAW officials.  The payments were made using the bank account and credit card account of the UAW-Chrysler National Training Center (NTC), which was established to provide for the education, training, and retraining of Chrysler workers.

     

    Categories: Labor Racket WeeklyUncategorized