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Latest News - January 2014

January 13, 2014
Top Ten Union Corruption Stories of the Year
Source: NLPC
By: Carl Horowitz

Though union membership as a share of all American workers continued its decades-long decline, union officials in 2013 showed they're not the sort to stand on the sidelines. As much as any year, if not more, organized labor last year used the courts to pursue their interests. Their ultimate weapon, however, was its aggressive lobbying for immigration amnesty/surge legislation. Eight members of the Senate, four from each party, solicited advice exclusively from supporters of open borders in hopes of achieving "comprehensive reform." Since its introduction in April and passage in June, the measure deservedly has stalled in the House. Drafted in secret, with no hearings or debate, the bill represents a corruption of the political process. If it becomes law, the result would be a further undercutting of entry-level wages for American workers, union and nonunion alike. Whether naive or sinister, union leaders have much to answer for either way. 

The immigration proposal, which would radically transform the nature of this country, has the handprints of organized labor, specifically, the AFL-CIO, all over it. The "Gang of Eight" who supervised the process wouldn't have had it any other way. The Washington, D.C.-based AFL-CIO, working in tandem with business, ethnic and other interest groups, during the early months of 2013 developed the key contents. Staffers for Sens. Charles Schumer, D-N.Y., and John McCain, R-Ariz., ironed the differences out. Unions, as National Legal and Policy Center long has argued, have promoted explosive immigration growth for at least two decades, effectively negating a longstanding position.

The immigration bill was the most obvious means through which union leaders tried to import a new labor force last year. They also provided extensive backing for day laborer centers, which are enablers for illegal immigration, especially from Hispanic countries. These centers are a subset of certain nonprofit groups proliferating around the country known as worker centers. They operate as unions in picketing and organizing, yet are not subject to the National Labor Relations Act or any other federal labor law that governs union behavior. Unions, recognizing the possibilities for institution-building, now more than ever are working in tandem with these groups. It's a potential win-win. Worker centers potentially gain expertise and funds; unions potentially gain new members, especially from difficult-to-organize immigrant populations. 

Don't expect the Department of Labor to discourage this practice, at least not with Thomas Perez at the helm. The Obama administration's first-term DOL secretary, Hilda Solis, was herself a union and open borders partisan, but Perez, who had served in the first Obama term as civil rights enforcer for the Justice Department, goes a little beyond even his predecessor. For a while, prior to working for the Obama administration, he served as board president of a nonprofit day laborer worker center, Casa de Maryland, which has done everything possible to circumvent U.S. immigration laws, including blocking deportations. That doesn't bother Perez. His goal, as an ethnic radical, is the transformation of the American work force. As the new DOL secretary, Perez already has given the cold shoulder to Reps. John Kline, R-Minn., and Phil Roe, R-Tenn, who had written a letter of inquiry asking him to clarify the legal status of worker centers.

Unions long have used the federal courts to authorize intimidation, subtle or otherwise, to expand membership. In 2013, however, they experienced a certain amount of frustration. In separate cases, appeals courts upheld recent laws in Wisconsin and Michigan restricting the ability of public employee unions to negotiate excessive salary and (especially) benefit packages. Taxpayers in each state will be better off. The U.S. Supreme Court, meanwhile, heard Mulhall v. UNITE HERE Local 355, a case filed by a Miami-Dade County, Fla.-based union appealing a circuit court ruling invalidating a 2004 neutrality agreement. That deal committed the owner-operator of a Broward County dog racing track owner to allow complete onsite union organizing; in turn, the union contributed more than $100,000 to a ballot initiative that year to allow dog tracks Broward and Dade Counties to expand into casino gambling. The Supreme Court also agreed to hear an appeal by dissenting home care workers in Illinois (Harris v. Quinn) who were less than enthusiastic about having their employment status converted to "state employee," so as to enable the union to collect dues.

The National Labor Relations Board, the primary arbiter of the nation's law disputes, itself was embroiled in a court case - actually, the culmination (for now) of a running legislative and court battle. The board's revolving-door membership, exacerbated by President Obama's three suspect recess appointments in January 2012, had made the agency, normally with five members, into a source of embarrassment. A Washington, D.C. federal appeals court, in Noel Canning v. NLRB, struck down the appointments of Sharon Block, Richard Griffin and Terence Flynn in January, leaving only one person, Chairman Mark Pearce, as a sitting member. Obama in response named two Democrats, Nancy Schiffer and Kent Hirozawa, to replace Block and Griffin, plus two Republicans, Harry Johnson III and Philip Miscimarra (Flynn by then had departed as well). Senate Majority Leader Harry Reid in July strongarmed his colleagues into holding a same-day vote on the five appointees. All were approved either through a roll call or voice vote. The issue still remains live; the Supreme Court currently is reviewing the Noel Canning case.

There was, of course, plenty of corruption last year in the grand tradition of ripoffs. Among noteworthy cases, Tyrone Freeman, a once-rising star of the Service Employees International Union (SEIU) and a major player in Los Angeles-area Democratic politics, was convicted by a jury on more than a dozen criminal counts; he eventually received a 33-month prison sentence. Cora Carper, a political action committee office manager for the Insulators union, pleaded guilty to, and was sentenced for, embezzling more than $500,000. Angela Heninger, manager of an International Brotherhood of Boilermakers job training fund at union headquarters in Kansas City, Kan., pleaded guilty to fraud in the amount of about $50,000, though the true theft may have been ten times that. And Deborah DiFrancesco, a Las Vegas-based tax consultant, pleaded guilty to stealing $3.3 million from her clients. Of that sum, $673,000 belonged to the powerful UNITE HERE Local 226, which represents tens of thousands of hotel-casino employees in Las Vegas.

Teachers unions, and not for the first time, also saw a number of scandals. Denise Owens (Tull), treasurer of a National Education Assocation affiliate in coastal Maryland, was found guilty of embezzling more than $400,000 in union money to cover her casino gambling losses, apparently with her colleagues' tacit knowledge. Sally Jo Widmer, president of a teachers union in upstate New York, managed to steal around twice that, much of which went to cover her own casino losses. Sadly, once Widmer sensed authorities were onto her, she committed suicide. And down in Mexico, the teacher union boss known as "La Maestra" ("The Teacher"), Esther Gordillo, was arrested near Mexico City upon her arrival via private jet for pilfering union funds. She and her cronies had pilfered a staggering $150 million or more over the years. A powerful political as well as union figure, her reign of terror is no more. The jet, like her other luxury goods, was stolen.

Based on timeliness, magnitude and other criteria, here are the ten union corruption stories (or sets of stories) last year that mattered most, in reverse order:

Unions are creating high fiscal stress for state and local governments by negotiating costly salary and benefit packages. In response, certain states have attempted to curb public-sector union collective bargaining power. Nowhere has this battle more intense, or watched, than in Wisconsin, where for the last three years Republican Governor Scott Walker has been under fire for putting forth a collective bargaining and benefit curb proposal ("Act 10"). This plan eventually passed the legislature and was upheld by the State Supreme Court. In June 2012, Walker survived a recall election. And this past January, the law itself survived another union-led legal challenge, when a federal appeals court in Chicago, by 2-1, ruled that Act 10 did not violate union member free-speech rights. The ruling overturned a lower court ruling the previous March. 

It isn't every day that a foreign case makes the top ten list. But Esther Gordillo, the longtime autocratic head of Mexico's National Union of Education Workers, isn't an everyday union leader. For decades, she and her network of cronies, including family members, dominated the nation's educational system and fleeced the union, instilling fear in any teacher, administrator or politician who crossed her the wrong way. But the Mexican political landscape has changed in recent years - enough at any rate to erode her reputation. In February, Gordillo was arrested in near Mexico City upon arrival from the U.S. via private jet. Indirectly, all that corruption may have played a role in triggering immigration to the U.S. Hopefully, American teacher unions will draw a lesson from this.

Union officials long have used neutrality agreements during workplace organizing drives to ensure "labor peace." Yet such "peace" often is a muzzling of employers who might object to union representation. Nonunion workers don't necessarily like this arrangement. The most important among them right now is a group of employees at a Broward County, Fla. dog track and casino. Back in 2004, the owner-operators of the facility and a Miami-Dade County UNITE HERE local entered into a neutrality pact. The employees argued that the arrangement violated the Taft-Hartley Act's ban on unions and employers offering each other things of value. They won in federal circuit court in January 2012, whereupon the union then appealed to the U.S. Supreme Court and won standing. The Court heard arguments in the case, Mulhall v. UNITE HERE Local 355, in November. Update: On December 10, only a week after Union Corruption Update reported on this case, the Supreme Court, with little explanation, declared that for the time being it would not rule on the case. Certiorari, several justices argued, had been "improvidently granted." This move suggests that the Court doesn't see a problem with unions coercing employers into becoming business partners. The dissenting employees' victory remains binding upon the states comprising the 11th Circuit - Alabama, Florida and Georgia. It's an open book elsewhere.

State governments are becoming de facto partners with public-sector union organizers, and perhaps no more so than in Illinois. This October, the U.S. Supreme Court granted standing to a group of private-sector home care providers who had objected to a 2009 executive order by Gov. Pat Quinn reclassifying their status as state employees so as to bring them under a union contract and force them to pay agency fees to a union. In a subsequent mail ballot election, employees rejected attempts at representation by a Service Employees International Union (SEIU) local and an AFSCME district council. The case, Harris v. Quinn, will test the Supreme Court's willingness to build on its Knox v. SEIU ruling of 2012, which held that a California SEIU local could not force covered nonunion employees to pay fees in support of political activism. Given the details of the case, the Court may rule against the entire practice of public-sector unions charging nonmembers agency fees, regardless of purpose.

Tyrone Freeman, former head of the 180,000-member Service Employees International Union Local 6434 in Los Angeles, and a related organization, until 2008 had been a growing force in area labor and political activism. An expose that year by the Los Angeles Times revealed extensive self-dealing and fraud by Freeman, especially on behalf of family members. Months later, then-SEIU International President Andrew Stern, upon reviewing the evidence, banned him for life from union activity. A long hiatus followed, but in July 2012 a federal grand jury indicted Freeman on 15 counts. In January 2013 a trial jury convicted him on 14 charges. Freeman would receive a 33-month sentence this past October and was ordered to pay restitution in the amount of $150,000. Yet his actual take, according to the SEIU, had exceeded $1 million.

Hurricane Sandy back in the fall of 2012 left a trail of devastation in the Middle Atlantic region, especially along the New Jersey coastline, damaging or destroying tens of thousands of homes, businesses and other properties. The estimated reconstruction cost of roughly $30 billion might be running significantly higher were it not for New Jersey Governor Chris Christie's veto of a union-backed legislative proposal to expand the range of large-scale public works projects requiring a Project Labor Agreement (PLA). Such agreements commit contractors to hire union labor before work commences, effectively knocking nonunion contractors out of the competitive bidding process. Several months later, in September, a U.S. appeals court upheld a Michigan law enacted in 2012 to bar the use of government-mandated PLAs. Score two victories for the merit shop.

When Hilda Solis resigned at the beginning of 2013 as Secretary of Labor, it was hard to imagine President Obama finding a replacement more radical. The president proved skeptics wrong in his March nomination of Thomas Perez, chief civil rights enforcer at the Department of Justice. A zealot for multiculturalism and mass immigration (whether or not legal), Perez had amassed a highly disturbing track record at DOJ. Despite strong Republican opposition, the Senate approved him for the DOL post in July by 54-46. Perez thus far has appeared to ignore an inquiry from two House members about the legality of ‘worker centers,' which operate like unions but without having to worry about being subject to laws applicable to unions.

 The ongoing game of musical chairs at the National Labor Relations Board, fraught with legal disputes, is almost the stuff of comedy. For several months last year, the normally five-member board was down to one undisputed member, Chairman Mark Pearce. And his existing term was set to expire in August. In late July, the full Senate, in the face of parliamentary maneuvering by Majority Leader Harry Reid, approved five nominees, including Pearce, all at once. Much of this drama would not have been necessary had President Obama not made three temporary recess appointments in January 2012 when Congress formally wasn't in recess. The issue is still up in the air given that the Noel Canning v. NLRB case is now before the Supreme Court. If the High Court rules in favor of the plaintiff, the issue will be around for a good while longer.

They're called "worker centers." They're not exactly labor unions. But they behave like them when it comes to  picketing employers and organizing Third World labor forces. And in practice, they flout laws governing union behavior. Unions don't mind. Indeed, they have found an ideal stalking-horse in these nonprofit groups, now numbering more than 200 around the U.S. For example, the worker centers Fast Food Forward, Restaurant Opportunities Centers United, and OUR Walmart, are fronts, respectively, for the SEIU, UNITE HERE, and the United Food and Commercial Workers. Worker centers have become increasingly brazen in their tactics - and effective in their results. Their most visible activity as of late is a ramped-up campaign to raise the federal minimum wage to $15 an hour, especially in the fast food industry.

No legislation has the capacity to shape America's long-term future, for the worse, than the "Gang of Eight" Senate immigration bill (S. 744), introduced in April and passed by the Senate by a 68-32 margin in June. Under the guise of fixing a "broken" system, this amnesty/surge surge proposal would double and possibly triple existing levels of immigration, creating almost intolerable strains on law enforcement and public benefits - talk about a self-fulfilling prophecy! The AFL-CIO played a central role, along with business and ethnic interest groups, in developing the bill. So eager are labor bosses to secure passage that they have willfully ignored legitimate objections by unions whose members are on the front lines of border protection and customs enforcement.

Tax consultant Deborah DiFrancesco pleads guilty to embezzling $673,000 from UNITE HERE Las Vegas casino workers local, part of a $3.3 million overall take; Michigan public-sector unions appeal a decision that upheld a state civil service Right to Work law; Angela Heninger, manager of Boilermakers training fund, pleads guilty to fraud totaling $50,000, but her actual thefts may total $480,000; Ava Ramey, United Government Security Officers Association trustee, sentenced for embezzling over $375,000 in union funds; National Labor Relations Board signs letter of cooperative agreement with Mexico to promote the rights of Mexican workers in the U.S. regardless of legal status; ethnic day laborer center activists escalate campaign in U.S. cities to block deportations of Mexican workers here illegally; Joseph Lombardo, founder of Cleveland-area investment company, pleads guilty to forgery in order to retain a $3 million multiyear benefit contract with NBA Players Association; Teamsters oversight board charges Minnesota father-and-son local bosses Bradley Slawson Sr. and Bradley Slawson Jr. with stealing $450,000+ through various schemes; Denise Owens (Tull), treasurer of Maryland teachers local, found guilty and sentenced for embezzling $430,000; construction union goon squads in Philadelphia terrorize nonunion workers and contractors; deceased upstate New York teachers union president Sally Jo Widmer embezzled more than $800,000 from union; United Auto Workers steps up campaign at nonunion Volkswagen plant in Tennessee in order to gain union recognition despite worker opposition; Insulators union PAC office manager Cora Carper sentenced for embezzling more than $500,000; New York City Theatrical and Stage Employees local president John McNamee Jr. sentenced for embezzling $150,000, though originally he had been charged with stealing $250,000; Laborers office manager in Rockford, Ill., Grace Rathke, pleads guilty to embezzling about $200,000.

 

 


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