By STEVEN GREENHOUSE
May 21, 1998
The federal government unsealed an agreement
on Wednesday in which Edward Hanley, the longtime president of
the nation's largest union of hotel workers, agreed to retire
after being pressured to do so by a court-appointed monitor.
In a news release on Monday, Hanley announced
his retirement from the Hotel Employees and Restaurant Employees
International Union, but the statement failed to point out that
he was stepping down under federal pressure.
Faith Hochberg, the U. S. attorney in Newark, N.J., said the agreement was just the latest development in sweeping federal
investigations that began with a successful
1991 racketeering suit against the union's Atlantic City, N.J.,
Under the agreement, Hanley, who has been
president since 1972, must repay $13,944 relating to the purchase
of a union-leased Cadillac Allante, a $60,000-plus sports coupe,
as well as several other cars. The agreement also relieves the
union of having to pay premiums on a $500,000 whole life insurance
policy for Hanley.
In addition, the agreement bars Hanley from
influencing union affairs and from accepting any future union
compensation except for vested benefits. The agreement also states
that Hanley's resignation and other actions do not constitute
an admission that any expenditure by Hanley was improper.
In 1995, the federal government filed a civil
racketeering lawsuit against the union, accusing officials of
misappropriating money from benefit funds and hiring ghost employees
associated with organized crime figures.
After the lawsuit was filed, the government
appointed Kurt Muellenberg, former chief of the Justice Department's
organized crime section, to monitor the union. Muellenberg and
Hanley signed the agreement in February, but it was not unsealed
While federal prosecutors have linked Hanley
to organized crime -- links he has repeatedly denied -- union
officials say he has revived the 255,000-member union by having
it aggressively recruit new members.
John Wilhelm, the union's secretary-treasurer,
has been chosen to succeed Hanley, effective Aug. 1. Wilhelm,
a Yale University graduate, is highly regarded for spearheading
a drive that organized more than 20,000 hotel and casino workers
in Las Vegas, Nev.
"The court-appointed monitor has obtained
an agreement that will substantially change the landscape of this
union," Ms. Hochberg said. "We are committed to insuring
that local and national labor unions serve their members without
corruption or undue influence from inside or outside."
Muellenberg, who ended his monitorship in
March, declined to comment on the agreement, but said he would
issue a report in a few months on his efforts to clean up the
union. Hanley's lawyer, John Joseph Cassidy, also refused to comment.
Muellenberg has brought civil charges against
Hanley's son, Thomas Hanley, the union's organizing director and
head of its Chicago local, charging him with embezzling union
funds. He has also filed charges against John O'Gara, who announced
his retirement last Monday as the union's general vice president.
In a news release issued on Monday, Hanley
said he would remain as chairman of the union's pension and welfare
funds "for at least another year," but the unsealed
agreement states he is to step down from those posts by July 31,
Copyright 1998 The New York Times