By DEBRA PRESSEY
July 02, 1998
URBANA – The Laborers' International Union of North America has ousted the officers of its Local 703 in Urbana and sent in a temporary trustee to take control.
The local, which represents about 750 laborers in the construction trades, is expected to remain under receivership for about 18 months.
The action followed a decision Friday by an independent hearing officer to allow the International to take over the troubled local.
The International's General Executive Board said it is seeking to restore a democratic process at Local 703 and curtail misuse of union money by some of the local's top officers.
The International says the term of the receivership is 18 months under federal law, but that could be extended or shortened depending on how long it takes to put the local back in order.
Meanwhile, all Local 703 officers are suspended, and disciplinary action could be initiated against them, the International said.
One of the charges brought by the International's General Executive Board is that Local 703 failed to comply with orders to hold a new election after a hearing officer threw out the results of the last election in May 1996. The International said officers of Local 703 thwarted a fair election by intimidating challengers and their supporters.
Several Local 703 officers were also accused by the International of misappropriating union money by claiming personal outings as union business and arranging a contract that kept two former business managers – father and son Gene and Jamie Johnson – on the payroll at the same time.
Specifically, the International charged, Gene Johnson resigned as longtime business manager of the local in August 1995 after lining up a consulting contract with the local's executive board.
The contract called for him to continue receiving his full salary and benefits while helping his son take over as business manager, but the International contends the true reason for the arrangement was to install the younger Johnson as incumbent business manager prior to the May 1996 election.
The elder Johnson didn't actually retire from the local until June 1, 1996. Upon his retirement, Gene Johnson was to be paid $25,000 a year, plus be reimbursed for income taxes on that money. During the nine months after his resignation, the local executive board approved payments to Gene Johnson of more than $100,000 while paying full salary and benefits to his son.
The Laborers' General Executive Board's move to take control of Local 703 is part of a far-reaching anti-corruption campaign initiated by the International under an agreement with the Justice Department.
Typically, in other cases in which a trustee has been sent in to set a local in order, union officials say a new election is held after the 18 months.