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Top Ten Union Corruption Stories of the Year

Thursday, January 22, 2015 12:25
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Top Ten logoIf the year 2014 had a main theme, it was, as in 2013, the unions' pursuit of legal advantage. The results were mixed. Unions scored victories at the National Labor Relations Board, but they tasted defeat in the courts, most notably in their effort to unionize private home care providers in Illinois and overturn a Wisconsin law reining in public-sector costs.

In another bitter pill, the United Auto Workers last February lost a representation election at the Volkswagen plant in Chattanooga. As for dipping their hands in union tills, national leaders generally behaved themselves, but the same could not be said for a good many local bosses, office employees and business agents. A suit by dissidents against a Los Angeles-area Operating Engineers local revealed first-term Obama Labor Secretary Hilda Solis, and their bosses, to have ethically-challenged pasts. Whether successful or not, then, unions provided much to write about.

The National Labor Relations Board, even more than the Department of Labor, were the unions' de facto ally within the federal government. After several years of operating short-handed, often with a revolving door of recess appointees, the board, once again with a full five-member roster, was ready to roll. During the course of 2014, its 3-2 Democrat (i.e., pro-union) majority, handed unions a victory in Purple Communications Inc., concluding that a Northern California company could not prevent its employees from using a company e-mail system for off-hours organizing on behalf of a Communications Workers affiliate. In another Northern California case, the NLRB agreed to review a complaint filed by a Teamsters local seeking to force collective bargaining upon a parent company if a franchise had a contract in force. A regional board office also granted standing to a group of current and former football players at Northwestern University seeking collective bargaining status. The university appealed; NLRB headquarters agreed to review. If the players win, the United Steelworkers, seeking to represent NCAA players, would be better off; the same could not be said about the culture of amateur sports or the mission of higher education.

Organized labor didn't fare as well in the courts. In a major defeat for public-sector unions, the Wisconsin Supreme Court ruled 5-2 in July that restrictions on state and local employee collective bargaining, enacted by the legislature in 2011 at the urging of Republican Governor Scott Walker, were constitutional and did not violate union freedom of speech. Three months earlier, a federal appeals court had concluded the same thing in response to a suit filed by the City of Madison and surrounding Dane County. In the courts' view, unions had the right to organize, but state and local governments are not obligated to negotiate with them. At the U.S. Supreme Court, the Service Employees and AFSCME failed in a bid to represent private-sector home care providers by getting the State of Illinois to change their employment status to public-sector and hence place them under collective bargaining coverage. Former Democratic Governors Rod Blagojevich and Patrick Quinn, each tight with public-sector unions, had signed executive orders declaring private providers compensated by state Medicaid coffers to be public employees. Pamela Harris, one such caregiver, sued. And after repeated frustration, she appealed her case to the Supreme Court, which ruled 5-4 on her behalf.

Unions long have used or justified violence to achieve goals, but here, too, they ran into a brick wall. Leaders and certain enthusiastic followers at Iron Workers Local 401 in Philadelphia had practiced the dark arts of property destruction and physical assault at nonunion construction sites in and around Philadelphia until they were placed under the spotlight by a well-publicized expose a few years ago. The result was a series of arrests and indictments last year. A holy terror of the Buffalo area, Operating Engineers Local 17, likewise had been running roughshod over nonunion rivals until a wave of indictments came down several years ago. After considerable delay, a federal jury last March convicted former local president Mark Kirsch on top of five union members who already had pleaded guilty. Four defendants who took their case to trial managed to walk, but it's unlikely they will play much of a role in union decision-making.

The biggest disappointment of all for labor officials may have been on the automobile industry organizing front. Since the Eighties, the United Auto Workers, still a formidable entity at roughly 400,000 members, has eyed foreign-owned assembly plants in fast-growing Right to Work Southern states as the next frontier. Victories here, the union believes, could decisively reverse the long-run decline in its own numbers and in the unionized share of the U.S. work force. In 2014, the main event took place at the Volkswagen assembly plant in Chattanooga, where more than 250,000 Passat sedans had rolled off its assembly lines since the grand opening in 2011. UAW organizers conducted a card check and secured the backing of VW headquarters, the latter of which was focused on creating a European-style works council at the plant. Yet despite forcing a neutrality agreement on VW, the union lost a worker representation vote in February by 712-626. Union chieftains shortly thereafter filed a complaint with the NLRB, charging devious forces in Tennessee politics had interfered with the campaign process. Several weeks later they withdrew their complaint. Meanwhile, near Tuscaloosa, Alabama, at the Mercedes-Benz plant, the UAW organizing campaign appeared terminally stalled – even pro-union workers are tiring of the union's presence. While the Auto Workers' Southern strategy remains active, it has yet to deliver results at foreign-owned worksites.

It wouldn't have been a year in union corruption without embezzlement and fraud. And there were plenty such stories, at least at the district and local levels. Among the most prominent: Los Angeles-area employers skipped $4 million or more worth of scheduled payments to benefit funds sponsored by a Cement Masons local; the Fusella brothers were sentenced for a $1 million+ Teamsters local benefits theft in New York; Westchester County, N.Y. educator Frank Gluberman pleaded guilty to stealing nearly $800,000 from an affiliate of the American Federation of Teachers; New York City-area school bus drivers boss Warren Annunziata, having been banned from union activity for 13 years following his extortion conviction in 2010, pleaded guilty to violating the ban and receiving around $800,000 in consulting fees during and after his prison time; Angela Heninger, an office manager at the Kansas City, Kan. headquarters of the International Brotherhood of Boilermakers, pleaded guilty to stealing $400,000 from the union training fund; and five persons pleaded guilty to ripping off $400,000 in benefits from an Orlando, Fla. Iron Workers local.

On the whole, unions lost key battles than they won, even with the National Labor Relations Board in their corner. This may be the first time this has been true since Union Corruption Update began publishing annual summaries. And it is reason to cheer. For the policies, programs and rulings sought by organized labor, in every case, would wind up diminishing liberty for workers and for society as a whole.

Ranking union stories in importance inevitably involves a certain degree of subjective judgment. Yet some stood out from the rest, if one applied criteria such as timeliness, impact and evidence of collusion with the criminal underworld. The following, in reverse order, were the 10 most significant union stories of 2014:

10) Philadelphia Iron Workers goons indicted. Unions, by their nature, see nonunion workers, who are willing to do the same work for less compensation, as rivals if not enemies. But they also are not averse to wreaking havoc upon employers who hire them. In the Philadelphia area, Iron Workers Local 401 for several years used vandalism, arson, assault and terror threats as tools of persuasion at area construction sites to ensure contractors hired union members only. Last February, the reign of terror experienced the beginning of the end. Ten local bosses and members were arrested and indicted on federal racketeering charges; five participants among these goon squads were slapped with additional charges in July. Nonunion contractors can sleep a little easier knowing that sledgehammers won't be taken to their projects.

9) Solis on hot seat in Southern California lawsuit. First-term Obama Secretary of Labor Hilda Solis might not be corrupt, but evidence suggests that she won her job through the assistance of a Southern California affiliate of the International Union Operating Engineers that was. Last January, several dissenting members of Operating Engineers Local 12 filed a civil racketeering suit against some two dozen officials, members and associates of the powerful Pasadena-based union charging that leadership for years had engaged in embezzlement, graft and other illegal activity. Part of the suit alleges that Solis accepted free travel on the union's private jet to and from her Senate confirmation hearings back in late 2008 when she was still a member of Congress. Local boss William Waggoner apparently wanted the best labor secretary money could buy. By laws governing congressional ethics, Solis had to report these and related gratuities, but apparently didn't. The revelations didn't hurt her political career;


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