Capital Research Center

 

 

Labor Watch

 

 

 

Union Corruption and Campaign Contributions

 

 

By Michael Moroney

October, 2000

 

 

 

When AFL-CIO secretary-treasurer Richard Trumka and AFSCME president Gerald McEntee addressed this year’s Democratic convention, journalists could only wonder at its meaning. Both union officials played major roles in the Teamsters embezzlement and money-laundering scandal that led to the conviction of seven persons and the removal of then-Teamsters president Ron Carey. In 1996, almost $1 million in Teamsters union funds that was partially laundered through the Democratic Party and other Clinton re-election groups helped re-elect Carey. During the convention, Newsweek reported that a communications company called the Share Group, formerly headed by Michael Ansara, one of the small fry convicted in the Teamsters probe, had been paid $1 million for campaign work for Vice President Al Gore, the DNC, and the Democratic Congressional Campaign Committee. Ansara transferred 59 percent of the company to his wife before his guilty plea, but he remains a contract employee and keeps an office there. Only after the Newsweek story broke did the Gore campaign terminate the firm’s contract.

 

Ansara has yet to be sentenced by a federal judge in New York and he is said to be cooperating with prosecutors in the investigation, which U.S. Attorney Mary Jo White claims is still being pursued. But reporters are questioning the integrity of Ansara’s cooperation because, until the story surfaced, he was being paid by a Democratic Party with much to gain from his silence. Similarly, Bill Hamilton, the Teamsters’ political director who was tried and convicted for his role in the scandal last year, reportedly continued to benefit from AFL-CIO public relations contracts during his trial. Among the remaining subjects of the U.S. Attorney’s investigation—in addition to Trumka, McEntee and Carey—are former White House deputy chief of staff Harold Ickes, principal Clinton/Gore financier Terry McAuliffe, McEntee’s deputy Paul Booth, Service Employees International Union (SEIU) president Andrew Stern and octogenarian Theodore Kheel, famed New York lawyer, labor power broker and mediator. Testimony in the Hamilton case, as well as other evidence, connects these labor powerhouses to criminal activity and leaves many observers wondering why they haven’t been indicted.

 

Details of the Teamsters scandal—and the way the Clinton Administration has treated other Justice Department investigations of corrupt labor unions—suggest that government prosecutors are dragging their feet as organized labor’s campaign contributions continue to pour in. Has the threat of criminal indictment tightened, rather than weakened, the bond between Democrats and labor unions? The unions have a lot at stake in this election, and they know it. The survival of many of the nation’s labor leaders depends on the Justice Department’s failure to pursue union corruption. If Gore loses in November, many top union officials will face reinvigorated Justice Department anti-racketeering lawsuits.

 

A Long History of Corruption

 

Conventional political wisdom holds that there is a historical and issues-driven affinity between "Big Labor" and the Democratic Party. Labor support for Republicans seems unnatural. But this assumes that labor’s recent decision to invest $500 million in the Democratic Party in each election cycle—more than 10 times the $45 million reported by AFL-CIO president John Sweeney—is driven purely by philosophical sympathy. A closer look suggests that the Democratic Party may be trying to squeeze every dollar possible out of organized labor before the Justice Department comes to any conclusions about evidence of criminal activity and rampant corruption involving various labor leaders. This includes misuse of union pension and benefit funds, often with the assistance of organized crime.

 

Historical perspective is helpful. Legendary CIO and Mineworker’s boss John L. Lewis has been called the "father" of the modern Democratic Party. Many labor leaders yearn for the days when he led their movement and swelled the membership ranks. But Lewis was a Republican. He supported FDR when it suited him, leading the labor movement into mass industrial unionism, then later denounced Roosevelt. Lewis was also a red baiter. Most of all, he was an opportunist. Revelations from the archives of the Soviet Union reveal Lewis’ knowing use of Communist Party operatives to achieve his organizational goals, which was once thought to be inadvertent.

 

Lewis was an organizational genius and political firebrand who built the Mineworkers union, which finally collapsed under the weight of extensive corruption in the 1970’s. Lewis’s handpicked successor, Tony Boyle was convicted of embezzling union funds and illegally using them in a federal election campaign. Many will remember that Boyle was later convicted of conspiracy to murder his union rival, Jock Yablonsky. Washington attorney Joseph Finley titled his 1972 book on Lewis’s legacy, The Corrupt Kingdom. Trumka eventually succeeded Boyle as president of the Mineworkers.

 

In 1957, the Senate Labor Rackets Committee, chaired by Arkansas Senator John McClellan, picked up where fellow Democrat Estes Kefauver left off and plunged into the organized crime-organized labor miasma. The Committee’s ground-breaking investigative work was spearheaded by committee chief counsel Robert Kennedy, who went after the bosses of organized labor and organized crime with the same vehemence he displayed in desegregating southern schools. Kennedy’s legendary confrontations with Teamsters boss Jimmy Hoffa continued after he became attorney general and led to unprecedented Justice Department convictions of union officials. In a 1977 book about Kennedy, Allard Lowenstein observed: "He knew a great deal about the curious, nonideological reality of power in the United States... the operatives from businesses, unions, city machines, the media. Like Tom Dewey and Estes Kefauver, he set out to expose the worst of it, to try to arouse the public and the government, and to reduce its scope."

 

Today, a naive understanding of the alliance between labor and the Democratic Party conceals the extent of union corruption. The Clinton Administration has cultivated a symbiotic relationship with organized labor. The still festering "Teamsters scandal" involves more prominent people than most Americans realize. As any rackets investigator knows, when one conspirator is forced to cooperate, the case comes together. To this point, the scandal participants are still hanging together.

 

Clinton and Ickes and the Teamsters

 

When Bill Clinton began campaigning in 1992, the Teamsters union was already under a federal court-ordered clean-up plan. A 1988 lawsuit by the Bush Administration was settled in March 1989 by a consent decree signed by the union and the government. The lawsuit was brought under the civil provisions of the Organized Crime Control Act of 1970, known as RICO (Racketeer Influenced and Corrupt Organizations).

 

During the 1992 Democratic Party convention in New York, New York Teamsters leader Barry Feinstein arranged a meeting between Harold Ickes, Clinton’s New York campaign chief, and newly elected Teamsters president Ron Carey. Feinstein had an interesting history. When then-Teamsters president Jackie Presser was under indictment in Cleveland for labor racketeering and embezzling union funds, Feinstein arranged a rally protesting the use of RICO against the Teamsters and other unions. In 1980, he participated in a scheme that bilked his public employee union welfare fund of over $3 million. The New York State Commission of Investigations, in a highly publicized hearing and a published report, recommended Feinstein’s removal from office, which he had inherited from his mother after she was convicted with members of the Lucchese crime family of taking kickbacks on Teamster pension fund transactions.

 

Ickes also had an interesting history. He was then a labor lawyer whose clients included many of the most corrupt unions in New York. In addition to the Long Island Federation of Labor, Ickes clients included Local 100 of the Hotel Employees and Restaurant Employees, whose president, Anthony "Chickie" Amodeo, was a convicted felon and a close associate of Gambino crime boss Paul Castellano. Amodeo’s second in command, Jackie DeRoss, had recently been convicted of labor racketeering in a case that proved that DeRoss was a capo regime in the Colombo crime family. Ickes knew RICO was targeting Local 100 and the Kennedy Airport Teamsters local, which his firm also represented.

 

Carey, elected Teamsters president in a late 1991 court supervised election, was a conservative Republican. But shortly after Carey and Ickes met, Carey’s Teamsters endorsed Clinton and began to funnel millions of Teamster dollars to his campaign.

 

While the Teamsters supported Clinton, they also petitioned the court to terminate government supervision. This was Carey’s top priority and clearly he hoped Ickes would help him win Clinton’s support. In return for acting as intermediary, Feinstein asked Carey to appoint William Genoese, a New York Teamster local official, as trustee of one of the Kennedy Airport locals which the government was suing under RICO. Genoese, an organized crime figure who continued to meet with Lucchese crime family members in charge of the lucrative New York air freight rackets, got the job.

 

Carey hoped politics might secure what evidence before a court of law could not. But the scheme failed when the Court learned that Genoese was a gangster, and the Justice Department was forced to conclude that Carey was an untrustworthy reformer. When Clinton took office, the Justice Department took no action to end the Teamster’s court supervision. Feinstein was later charged under the consent decree with embezzling $1 million in local union funds. He and his cohorts at Local 237—who as co-fiduciaries were legally responsible for negligence and complicity in the embezzlement—retained Harold Ickes as counsel. Feinstein denied the charges, then ultimately agreed to a court order permanently banishing him from the union. No criminal charges were ever brought against him. Moreover, while the misconduct in office and breach of trust by Feinstein’s associates were palpable, the review board never filed charges against them following his removal.

 

In 1993 and 1994, other Justice Department RICO investigations against unions ground to a halt. In one 1990 case in New York against the two Teamsters locals at JFK Airport, Justice tried to combine the Lucchese family dominated locals under one trustee. One local was represented by Ickes’s law firm. Carey told the Court and the Justice Department that he was going to supervise reform of that local. But according to Lucchese crime boss Alphonse D’Arco, Carey was a longtime business associate of the Lucchese crime family. D’Arco had gone into the witness protection program in late 1991 after he revealed major mob activity in the election that led to Carey’s victory. The FBI attests to D’Arco’s reliability and truthfulness. I personally interviewed D’Arco on these and other matters. D’Arco’s account is consistent with Carey’s association with Feinstein and Genoese.

 

In late 1991, Carey’s father—despite Carey the reformer’s highly-publicized working-class background—died and mysteriously bequeathed his children at the end of 1991 over $2 million in UPS stock. Moreover, Time and Business Week reported that Carey had purchased a treasure trove of real estate in the Florida Keys with a woman not his wife. Even though the Kennedy airport local was not financially viable and the national union already was virtually bankrupt under Carey’s leadership, the Justice Department let Carey conduct his own internal reform of the local and settled the case with a weak court order.

 

Ickes became White House deputy chief of staff on January 4, 1994. His appointment had been delayed by his background investigation, which disclosed his representation of organized crime-controlled unions. By the time Ickes was able to start at the White House, his client HERE Local 100 had been sued under RICO, Amodeo and his sons were ousted and the union was under court supervision. Ickes was also being paid by LIUNA, HERE International Union, the New York Carpenters, and Teamsters Locals 239, 560 and 851. Each had a long pedigree of proven organized crime domination and were targets for civil RICO suits.

 

The Administration’s LIUNA Agreement

 

LIUNA is an acronym for the Laborers’ International Union of North America, which largely represents men and women in the construction industry. In 1986, the President’s Commission on Organized Crime (PCOC) named LIUNA, the Teamsters, the International Longshore-men’s Association (ILA) and the Hotel Employees and Restaurant Employees (HERE) union as the four most corrupt unions in America. A top FBI official testified that the presidents of those unions were "hand-picked by La Cosa Nostra (LCN)." The PCOC focused on prosecutions of LIUNA officials in New York. Several Laborers locals were affiliated with the Cement and Concrete Workers District Council, whose President was Ralph Scopo. Scopo—convicted twice of labor racketeering—was a member of the Colombo crime family, which exacted a tribute for the New York LCN Commission of 1 percent on every concrete job in New York under $2 million and 2 percent on jobs over $2 million. His co-defendants included the bosses of each of New York’s crime families. Organized crime figures who ran another LIUNA affiliated union, the Mason Tenders District Council, were also convicted.

 

Angelo Fosco was then LIUNA’s international president and Arthur E. Coia, an associate of the New England LCN Patriarca family in Providence, Rhode Island, was secretary-treasurer. The PCOC report documented routine law enforcement surveillance that demonstrated Fosco’s ties to Paul DeLucia and Dominic Blasi, Chicago LCN members. Fosco, not known as a dynamic or influential labor leader, held the power to authorize expenditures of union funds and award certain union patronage jobs, such as "special international representatives." Thomas W. Needham, LIUNA comptroller, testified before the commission in 1985 that Fosco had named convicted Chicago LCN territorial boss Al Pilotto and indicted Laborer’s official and St. Louis LCN boss Matthew Trupiano as special international representatives.

 

John Serpico was one of the LIUNA international’s vice presidents and president of LIUNA Local 8 in Chicago. Serpico testified before the PCOC that he was a friend or personal acquaintance of virtually every major organized crime figure in Chicago, including Tony Accardo, the "boss of bosses" of the Chicago LCN. As Fosco lay on his deathbed in February 1993, LIUNA’s executive board met in Miami. The "Outfit"—as the Chicago LCN referred to itself—strongly suggested that Fosco make sure Serpico was chosen as his successor. Fosco reportedly flew to Miami on a private jet and was wheeled on a hospital gurney into the meeting at the Bal Harbour Sheraton—where he promptly expired. Arthur Armand Coia, son of Fosco’s former international secretary-treasurer, rounded up enough votes to beat Serpico and became LIUNA’s new general president.

 

The PCOC called LIUNA in its 1986 report "A Case Waiting To Be Made," and a comprehensive Justice Department investigation was started by the Chicago U. S. Attorney’s Office. Once Coia Jr. was general president, the newspapers in Providence ran a series on his connections to the Patriarca family that garnered national attention. Coia, while representing lowly paid manual laborers, collected Ferrari automobiles and had prize competition rottweilers. Raymond Patriarca, Jr., son of the Providence mob boss, gave Coia his rottweiler to sire a litter. In September 1981, Coia pere and fils were indicted with Raymond Patriarca Sr. on bribery and racketeering charges. The indictment charged that the defendants had set up an insurance scam in which they charged LIUNA rank and file for the most expensive form of insurance and looted the premiums by using them for "kickbacks, payoffs, unearned salaries and fees and improper personal expenses." Unfortunately, the case against the Coias was thrown out by a judge who declared that the statute of limitations had run out.

 

When Coia became president of LIUNA in February 1993, it was no secret that the Justice Department was investigating a RICO complaint against the union based on the PCOC findings. Coia wasted little time befriending the new president. Even before taking office, he donated $100,000 to the Clinton inaugural committee. That was only the beginning. According to Federal Election Commission records examined by The American Spectator, the Laborers Political League, the union’s political action committee donated $1,415,867 to Democratic candidates and party committees in the 1993-94 election cycle. By June 1993, Coia had received his first invitation to the White House for a private dinner with the president and first lady. Soon, letters and gifts were regularly exchanged, and LIUNA money continued to flow into Democratic coffers. Coia was invited to attend the signing of the Israeli-Palestinian peace agreement. In February 1994, the Laborers invited Mrs. Clinton to address their convention in Miami. When Paul Coffey, head of the Organized Crime and Racketeering section of the Justice Department, was notified about the invitation, he wrote an internal Justice Department memo which stated that the White House should be aware that Justice was preparing a RICO suit against LIUNA and that it planned to portray Coia as a "mob puppet." Mrs. Clinton turned down the invitation.

 

Coia backed John Sweeney—along with Ron Carey—in the 1994 "palace coup" that installed Sweeney as AFL-CIO president. And he kept the money spigot open. He also backed Clinton on two key initiatives: he was the only head of a major union to support the NAFTA agreement, and he strongly supported the first lady’s health care overhaul. In September 1994, Clinton wanted to reward Coia with a spot on the President’s Council on Competitiveness. After a routine FBI background check, the White House was informed that the Justice Department would deliver the RICO complaint against Coia and the union within a few weeks. In mid-October, Coia sent a handmade golf shirt to the president. Nine days later, Clinton gave Coia a golf club. Coia responded with a handmade driver engraved with the presidential seal. Two days later, Coia received the proposed RICO charges at union headquarters. The Justice Department wanted Coia and several others removed and wide-ranging reform undertaken.

 

But Coia was prepared to fight. He hired Robert Luskin, a Washington criminal attorney formerly with Justice’s Organized Crime division, to negotiate with the government, and he kept in touch with the president throughout the negotiations between Luskin and the government. In February 1995, only three months after sending LIUNA the RICO charges, the Justice Department backed down. After installing a federal monitor and forcing a union-wide election in the 1989 consent decree with the Teamsters, the Justice Department decided to let Coia remain president and instituted an internal LIUNA reform effort. The government reserved the right to file the charges at a later date. However, as The American Spectator noted, the Justice Department needed only three months to drop a case it had taken three years to compile. Republicans were outraged, but Justice and the White House denied any special favors. Congressional investigators couldn’t prove that Clinton applied any pressure in the case and were left to theorize that prosecutors felt constrained by the president’s friendship with Coia. Coia again asked Mrs. Clinton to speak at the Laborers’ convention. This time she accepted, addressing the convention on February 6, 1995 in Miami. On February 13, LIUNA and the Justice Department cut its deal. Coia would use the negotiated internal reforms to oust rivals like John Serpico.

 

Four years later in March 1999, LIUNA’s internal prosecutors—hired as part of the negotiated settlement—ruled that witnesses against Coia were "truth-challenged" and that he had not associated with organized crime members. They filed only a tax evasion violation against him. Justice Department officials in Washington and Chicago were disappointed by the decision, claiming it contained "serious factual and legal errors." Coia was the first major LIUNA official to escape conviction in their internal anti-corruption investigation. Critics of the investigation note that Luskin, the former federal prosecutor who filed the charges against Coia, was previously a lawyer for the union.

 

Last January, Coia agreed to plead guilty to fraud for evading Rhode Island state income taxes on the purchase of a $1 million Ferrari. He stepped down in December as union president, but still collects a $250,000 annual salary and pension as general president emeritus. After Coia’s departure, the Justice Department agreed to lift its threat of a government takeover of the union—a takeover like the one the Bush Administration forced on the Teamsters—if it continued internal reforms. And when Harold Ickes left the White House in 1996, he returned to his old law firm. It was still representing LIUNA.

 

The Case Against HERE

 

Edward T. Hanley was almost as lucky as Coia. Hanley was the long-time president of the Chicago-based Hotel Employees and Restaurant Employees International Union (HERE). After the PCOC’s 1986 report identified HERE as one of the country’s four most corrupt unions, the Justice Department began building its case.

 

Hanley, who started as a bartender on Chicago’s West Side and rose to local leader and then president of the international union in 1973, was always suspected of ties to organized crime. When he testified before a Senate subcommittee investigating mob influence in the union in 1984, Hanley took the Fifth Amendment 35 times. One government report stated: "The reign of Hanley has been surrounded by allegations of organized crime’s influence in the choice of international union organizers, operation of benefit funds and conduct of union affairs." In 1991, Hanley denied associating with members of organized crime, but he agreed to let a federal court supervise an Atlantic City local that prosecutors charged was mob-controlled. They charged that Hanley had met with East Coast mobsters to discuss Atlantic City unions.

 

But Hanley was also politically well-connected. HERE doled out hundreds of thousands of dollars to former Chicago mayors Richard Daley, Jane Byrne and Michael Bilandic, former U.S. Rep. Dan Rostenkowski and Richard Daley, the current mayor. In the 1990 Illinois gubernatorial race, HERE contributed almost $100,000 to the campaigns of both Republican Jim Edgar and Democrat Neil Hartigan. Edgar appointed Hanley’s son Thomas to the Illinois State Toll Highway Authority. Hanley also was credited with getting Daley to consider a gambling casino in Chicago.

 

Despite the PCOC evidence against Hanley and HERE, the Justice Department’s case against the union languished even longer than its case against LIUNA. However, HERE wasn’t able to secure the internal reform agreement that LIUNA had won from the government. In August 1995, HERE accepted a consent decree that allowed a federal monitor to oversee the union’s activities and make recommendations to rid them of organized crime influence. The consent decree, signed by the union and the government, was the second time—following the consent decree signed with the Teamsters—that the federal government had taken control of a major union. But unlike the Teamsters agreement, whose anti-corruption oversight is still in place, the HERE decree allowed Kurt Muellenberg, a former head of the Justice Department’s Organized Crime and Racketeering Section, only eighteen months to bring charges before he would be replaced by a three person review board. While the Teamsters decree had provided for direct election of the Teamsters president, Hanley et al. were allowed to keep their positions—and collect their salaries—while Muellenberg conducted his investigation.

 

U.S. Attorney Faith S. Hochberg, upon announcement of the consent decree, called the agreement a "sweeping change that will place power into the hands of rank-and-file members and out of the grasp of organized crime." She charged that the union’s leadership had intimidated members through force and threat, embezzled union funds and extorted kickbacks from employers. But, despite 25 years of organized crime allegations, the Clinton Justice Department settled racketeering charges with the consent decree. A consent decree substitutes a civil racketeering complaint for criminal prosecution. (Coia and LIUNA weren’t even required to submit to a consent decree and federal monitor. They simply agreed to launch an internal reform effort led by outside attorneys.)

 

The weak consent decree certainly satisfied the union. Hanley assured all HERE locals that it wasn’t a "takeover," and the attorney for the union noted that neither the decree nor the complaint accused anyone of criminal activity. Hanley and other officials remained at their posts and the union admitted no wrongdoing. Most importantly, the government’s negotiated settlement with HERE protected the union from further prosecution, although prosecutors could still pursue individual union officers. The Federal Elections Commission showed $300,000 in soft money donations, almost entirely to Democratic candidates and committees, in the 1993-94 election cycle; $263,000 in 1995-96, when the consent decree was filed; and then a jump to $445,000 in the 1997-98 election cycle. Figures are not available yet for the current cycle.

 

The court order dealing with HERE wasn’t just weak; it was anemic. Muellenberg had little investigative authority and was generally limited to reporting any findings to the court. His monitoring authority expired at midnight on March 5, 1998, at which point the three member panel, comprised of Muellenberg, former Illinois Gov. James Thompson—who as governor had accepted over $50,000 in campaign funds from Hanley—and Archbishop James P. Keleher of Kansas City, Kansas, took over. At the end of March 1998, Muellenberg reached an agreement with the president and vice president of Cleveland HERE Local 10. They agreed to accept a lifetime ban from the union after Muellenberg informed them that charges would be filed against them for obstructing the monitor’s investigation and associating with members of an organized crime group. The agreements with the two men did not constitute an admission of wrongdoing and the men were allowed to keep their pensions and health benefits. The attorney for the two men issued a statement saying they had retired to pursue other opportunities.

 

At the close of his investigation, Muellenberg claimed that he found no compelling evidence to link the union’s top leaders to organized crime. Muellenberg noted, however, the lack of democracy in the union and its propensity for keeping in the dark its predominantly low-wage members, many of whom don’t speak English. Hanley himself retired in May 1998 as part of a deal with Muellenberg that barred him from any future leadership role, but he continued to receive his $267,000 a year pension for life. Despite extensive financial irregularities that were uncovered—including "ghost" jobs for which he and friends received salaries and the purchase of a private luxury jet—Hanley faced no criminal charges. The Chicago Sun-Times reported that the Justice Department gave federal prosecutors only two weeks to determine whether criminal charges should be filed against Hanley. Hanley’s successor at HERE is John Wilhelm, who already seems to understand the game well. Earlier this year, it was revealed that HERE had donated $5,000 to the private Jewish day school that Senator Joseph Lieberman’s daughter attends. Lieberman, now the Democrats’ candidate for vice president, is the ranking member on the Senate committee that oversees the Justice Department.

 

Kheel and McAuliffe Raise Some Money

 

News reports that labor lawyer Theodore Kheel gave $20,000 in illegal cash to Carey’s 1996 campaign were easy to overlook for those not familiar with who he is or his long role in labor relations. Cornell University has a new facility at its famous Industrial and Labor Relations School and it is named after the generous Kheel. Probably the finest labor relations training institution in the country, the Cornell school was founded by Irving Ives, a respected labor expert and patrician Republican who served on the Senate Labor Rackets Committee with Arkansas Democrat John McClellan. Ives, with then-Senator John F. Kennedy, sponsored the labor reform legislation that became the great investigation’s legacy.

 

In 1995, Kheel played a major role arranging the sale of the AFL-CIO’s "affinity credit card" from the Bank of New York to Household Finance. The sale brought over $35 million to the AFL-CIO, which gave it the liquidity to pump over $30 million into the Democratic Party’s 1996 congressional campaigns. Kheel brokered the deal with Democratic fundraiser Terry McAuliffe. In 1992, Kheel had convinced the newly elected Carey to endorse the credit card program. Carey delivered 1.5 million Teamsters who previously had not participated in the program. Kheel profited handsomely, from the new Teamsters in the credit card program, and he subsequently contributed the $20,000 to Carey’s 1996 Teamsters reelection bid.

 

McAuliffe, chairman of a record-breaking Democratic fundraiser in May and chairman of recent Democratic convention in Los Angeles, has long been associated with organized labor. In addition to his work on the Union Privileges "affinity" credit card, McAuliffe has had a major role handling investments for the AFL-CIO Union Labor Life Insurance Company (ULLICO). But while he may be welcome at AFL-CIO headquarters, he is reportedly persona non grata at the International Brotherhood of Electrical Workers (IBEW). McAuliffe-related businesses borrowed millions of dollars in loans over the years from the Electrical Workers Pension Plan for a series of business ventures, many of which he defaulted on. The loans themselves were highly favorable to McAuliffe, and there is evidence that the former Electrical Workers secretary-treasurer who made these loans was himself in business dealings with McAuliffe. Labor rackets investigators have been looking into the underlying transactions, and the trustees of the plan have been sued for their negligence in making these imprudent loans. The transactions scream ‘kickbacks’ to any experienced labor rackets investigator, but the probe remains stalled.

 

Criminal Prosecution is the Only Answer

 

The 1986 report of the President’s Organized Crime Commission tried to address the problems that are raised when corrupt union officials associated with organized crime seek legitimacy by pursuing political power. The PCOC observed that "gaining political power is one of the goals of organized crime labor-management racketeering activities." In his testimony to the FBI, Alphonse D’Arco also identified Service Employees Local 32 B/J in New York as dominated by the Genovese crime family. Gus Bevona, the highest paid local union official in the country, was handpicked by John Sweeney to be his successor as Local 32 B/J president when Sweeney became Service Employees International president. Sweeney remained on the payroll—earning a second salary—as a sort of president emeritus and member of its Executive Board until he went on to become AFL -CIO president. Bevona’s father was identified by D’Arco and confirmed by the FBI to be a member of the Genovese crime family.

 

Unfortunately, the mainstream media is content to celebrate labor’s big "comeback" under Sweeney. But these investigations are serious. Just last month, Manhattan District Attorney Robert Morganthau charged 38 union officials, contractors and reputed mobsters with bribery, bid-rigging and other racketeering schemes that in the last two years siphoned millions of dollars from construction projects. Named in the 57-count indictment were the acting boss of the Lucchese family, Steven L. Crea, two men identified as Luchesse capos, and 11 union officials, including Michael Forde, head of the District Council of Carpenters in New York City and Carpenters’ Local 608. Both those union organizations have long been considered under mob influence.

 

Criminal prosecutions, not weak consent decrees, are the only way to fight union corruption. It’s been done before. In the 1930’s, Tom Dewey won convictions against local and international union officers associated with organized crime who preyed on the pensions and health benefit funds of union rank and file. The pious platitudes of today’s labor movement—and its hefty political contributions—should not shield its leaders from aggressive prosecution.

 

 

Michael Moroney has spent 20 years fighting organized crime and labor racketeering. From 1992 through 1994, he was a court-appointed deputy trustee of the Teamsters airfreight local at New York’s Kennedy and Newark airports. Moroney is credited with helping to expose Ron Carey’s organized crime connections and corrupt background.


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