Corruption: The side heard less often??

Union Directors Colluding to Keep Internal Report from Grand Jury

"Directors of the Union Labor Life Insurance Company (ULLICO) are attempting to keep a report on their insider stock deals under cover of "attorney/client privilege," and away from the U.S. Attny in Washington, D.C. ULLICO pres. and ex-chief of the AFL-CIO's Bldg. & Construction Trades Dept., Robert Georgine, allowed the union boss directors to buy and sell ULLICO stock before its value was reset at the beginning of each year. Thus, with ULLICO's stock highly leveraged on the telecom firm Global Crossing, directors could buy ULLICO stock "low," before its value rose along with Global Crossing's in 1999. As the telecom bubble deflated in 2000 and 2001, they were allowed to sell back their stock "high," before its price was readjusted downward as 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, the huge union pension funds, which largely own ULLICO, were stuck with its falling stock.

With a fed. grand jury investigating the scheme, ULLICO directors appointed ex-Ill. Gov. James Thompson on April 29 to conduct an internal review of the sales. Georgine and the other directors appear to have disliked Thompson's result. On Sept. 11, the Board voted to limit access to the report, with the directors allowed to hear Thompson speak about it, but not allowed to read it themselves. Thompson objected, and ULLICO decided to make it available for directors to read at Thompson's law ofc. a week before Thompson was to formally deliver the report at a Nov. 20 board meeting.

But just days before, Georgine cancelled the ULLICO board meeting, and Thompson wrote a letter to all ULLICO board members, offering to present the report to them individually. But even Thompson agreed with ULLICO lawyers that the report is protected by attorney/client privilege, thus keeping it out of the hands of the U.S. Attny. for Wash., D.C. Thompson told the Wall Street Journal that the 70-plus page report recommends changes in "corporate governance procedures."

Experts on corporate responsibility say that directors have a legal obligation to discuss such reports of potential wrongdoing among themselves. Another defense that ULLICO board members are now hiding behind is that the ULLICO purchase of Global Crossing stock was made by paid investment advisers, thus relieving the union officials of responsibility. But acc. to Aaron Bernstein of Business Week, those advisers were never informed of Georgine's letter to the board offering the ULLICO stock to them before its price was readjusted to reflect the company's investment in the then-booming Global Crossing.

Ominously, Thompson agreed to delay until Nov. 26 his presentation of the report, so that Thomas Green, a criminal lawyer just retained by ULLICO, could "provide Mr. Thompson with information about the situation," acc. to Wall Street Journal reporter Tom Hamburger."

Houston Union Agrees to Return Charity Funds never Given to Toys for Tots

HI State Union Chief Convicted of Fraud, Embezzlement

United Public Workers (UPW) chief Gary Rodrigues was found guilty by a Honolulu jury on Nov. 19 of fraud and embezzlement that cost UPW members nearly $200,000. Rodrigues reacted by pointing at the fed. prosecutors and saying, "Get a good look at their faces, remember their faces," then later grabbing a microphone from a reporter's hand and smashing it on the ground.

Rodrigues was convicted of accepting kickbacks from 1996-2000 from insurers who did business with the union, which is affiliated with the Amer. Fedn. of State, County & Municipal Employees. Rodrigues also set up consultant contracts with family and friends, supposedly to review the union's benefits programs, but who did little actual work. Also convicted was Rodrigues' daughter, Robin Sabatini, who formed her own company, Four Winds RSK Inc. to take on the union business referred by her father, but spent only one to four days a month on her business, while making more than $142,000 a year.

During the trial, fed. prosecutors presented testimony from Rodrigues' ex-girlfriend and an insurance agent about the agent's weekly payments to Rodrigues, and Rodrigues' payment of "consulting" fees to the girlfriend's father to repay a personal loan. Sabatini's frmr. employer testified to her "consulting" contracts with her father. The two defendants' lawyers called no witnesses, but argued that prosecutors had failed to prove their case.

It took the jury 15 minutes to read their guilty verdicts on all 101 criminal charges against Rodrigues and Sabatini. Rodrigues' lawyer said he would appeal the convictions. [Honolulu Advertiser 11/20/02]

Uncovered Audit Reveals More Problems in NYC's DC37

A three-year-old audit of a NYC local govt. union came to light in early Nov., revealing unexplained cash payments to the union's frmr. president, payments for his wife's airplane trips, and nearly $2 million spent on a new HQ that remains a dilapidated shell. Disturbingly, neither the NYC D.A. or a union trustee took any action after the audit was completed in 1999.

For 30 years, until he finally lost an election this spring, James Butler was president of Local 420 of the Amer. Fedn.. of State, County & Municipal Employees (AFSCME). Local 420 is part of the corruption-riddled Dist. Council 37, where more than two dozen officials have been convicted of embezzlement and vote-rigging.

In 1999, KPMG accountants conducted an extensive audit of all 56 Dist. Council locals covering 1995 through 1998. Acc. to the auditors, Butler charged $27,430 to the union for travel and lodging without any documentation of connection to the union. KPMG also found $58,720 in charges by a number of Local 420 officials for food and drinks, also without any documentation. Butler's wife, Eloise, took 32 trips, incl. eight 1st-class flights to Bermuda and the Caribbean. Finally, the auditors found that the union had spent $1.8 million for a new headquarters that is still far from completion.

Butler kept the report secret, and argued that he had done nothing wrong since the Local 420 board had approved all the expenditures. Citing that approval, NYC D.A. Robert Morgenthau and Lee Saunders, appointed by the natl. AFSCME union to oversee DC37, took no action against Butler.

Butler finally lost an election to Carmen Charles this spring, and Charles made the audit public. [New York Times 11/9/02]

Were NYC Union Workers Forced to Work for Union-backed Candidate?

Manhattan D.A. Robert Morgenthau is investigating charges that N.Y.C. service union bosses pressured their staffers to work for mayoral candidate Mark Green on union time, and contributed to Green's campaign from members' regular dues, as opposed to political action committee money. The grand jury investigation comes more than a year after N.Y. union dissident Paul Pamias first filed his complaint with the D.A.

Two frmr. officials of Local 32BJ of the Service Employees Intl. Union (SEIU) said that higher-ups in the Local threatened staffers with reprimands unless they volunteered to help the Green campaign in the Dem. primary in 2001, and that they did such work on union time, which is illegal under local election law. Contributing members' regular dues to Green could violate the U.S. Sup. Ct. decision, Communications Wrkrs. v. Beck. In that 1988 ruling, the High Ct. held that it was illegal for unions to spend forced dues for political activities with which the dues-payer disagreed.

Last summer, Dominick Bentivegna told a Congressional hearing, "the staff was forced to take personal days and vacation days to campaign for Mark Green. If they had no days left, they were forced to borrow against next year's." Bentivegna is one of two frmr. 32BJ officials who has been subpoenaed to appear before the grand jury. The other is frmr. bus. agent Grace Powell who has since been transferred to Ohio. [New York Times 11/16/02]

Minneapolis City Councilman Convicted of Aiding Union Theft

A fed. jury convicted Minneapolis City Council member Joseph Biernat of aiding union embezzlement on Nov. 21. In 1999, Biernat accepted $2,700 in free plumbing work, on a house he owned, from Thomas J. Martin, ex-bus. mgr. of Local 15 of the United Assn. of Plumbers and Pipefitters. Martin is scheduled to go on trial Dec. 3 for 10 related charges of stealing from the union. Biernat was also convicted of lying about whether he had received property improvements from at one other than his family. [Minneapolis Star Tribune 11/21/01]

Adminr. Sentenced for Embezzling NY Electricians' Pensions

On Oct. 10, in the U.S. Dist. Ct. for the Southern Dist. of NY, Barbara Monfre, administrator of the Electrical Workers (IBEW) Local 3, Elevator Division Retirement Plan, was sentenced to 2 yrs. imprisonment and was ordered to pay restitution in the amount of $314,547. She was arraigned on March 22, 2002, on charges of embezzling approximately $289,000 in benefit plan funds following a joint investigation by the NYC branch of the U.S. Ofc. of Labor-Mgmt. Standards and the U.S. Dept. of Labor's Pension and Welfare Benefits Admin. [DOL OLMS 11/13/02]

fishin, The San Jose Mercury News had a list of 50 or so Silicon Valley high tech companies where the honchos and board members reaped millions through their stock options, while the investors and employees lost big time. This was "theft" the legal way, but they never talk about "ethics." All, good, church-going christians/religious folks, too! People do not have any qualms about enriching themselves at the expense of their fellow humans. IMHO, that's fraud of the worst kind. c.i.

I have no doubt these transgressions occur within the labor unions but I would add up the total amount and how many people are effected. It's significance compared to what was bilked from investors, employees and customers by these corporations is chicken feed. It doesn't make any more sense to indict all the labor unions for the criminal acts of a few and it looks to me like they are much more isolated than the cooking of the books by giant corporations. Should their be more oversight of both? What's your solution?

Incidentally, Newport Beach has had more than their share of city scandals -- banking scandals involving city officials (three banks closed down), and construction and business scandals often involving city officials. Hmmm, right in the center of the conservative right's entrenchment. Won't hear that out of Congressman Cox.

The center of the telephone art fraud involving telemarketing was just across the bay from where I worked in the 1980's where people were bilked out of millions of dollars being sold phony Dali's, Chagalls and the like. It's given rise to the phrase, "The Newport Mafia."

My experience working with unions is that they are often, in effect, big businesses. Some of the unions in Canada control significant parts of the economy through the investments of their membership's pension funds. The unions are only as good, or corrupt, as their leaders. They should not be held to any different standard of measurement, than any other organization.

The difference I see, is that in some unions, the members have more control of their leadership than employees do of their employers and corporate boards of directors. This allows, in some cases, the union membership to prevent corruption. It becomes more difficult as the individual unions increase in size, and an individual member's voice becomes proportionately smaller.

Just as I'm unwilling to say that all unions are corrupt, I'm unwilling to say that all corporations are corrupt. Each one needs to be evaluated on its own actions.

This is a case, to my eye, of smaller is better.

Right, ehBeth -- when was the last time you heard that corporate leaders were voted into their office? Take some time and compare the construction of corporations to a communist government.

Thanks, but i took those courses already.

My point has nothing to do with politics. My point is there are good and bad examples of union leadership as well as corporate leadership. Nothing new in that, or in fishin's postings.

It is the bugaboo of our society -- leadership and money go hand in hand. Those who have the gold make the rules. It's how that gold makes its way into their hands that is the big problem and ho much money. Enron, for example, has bilked California taxpapers out of billions of dollars just like the stockbrokers bilked Orange County out of billions. These people don't, by and large, go to jail but what I'm seeing here is the union leaders do go to jail for stealing what amounts to less than peanuts.

Money and power are money and power.....(or is that"is"?)

I don't see how one is any different than the other. Union's are controlled (in theory at least..) by their membership. Corportations are controlled by their stockholders. The only difference there is that the Union members should in most cases, be in direct contact with what is happening daily.



Corporate leaders are voted into office every day. Every public corportaion elects their Board of Directors at their annual stockholders meetings. That Board of Directors is responsible for hiring/firing their corporate President, CEO, etc.. Hardly the model for Communism.

In reference to you earlier comment, if you'd like I can provide several thousand other stories just like the first few that lead this thread off. All of those stories just happened to be some from one 2 week period in time and they were only 1/4 of all the stories in that 2 week period.



Exactly the point I was making with the initial question to start the thread off with. It isn't new. No one seems to want to talk about this side of the story though.