Union official seeks probe of N.J. local

By Maurice Possley See Lm2s for Local 734 See salaries for all New Jersey Local union officers for 2003, 2002, 2001, 2000 See salaries for LIUNA New jersey Local Union Employees for 2003, 2002, 2001, 2000 Search for officer or employee salary of your union
Tribune staff reporter See Order for voluntary supervision of local 734 of October 28, 2002 which did not clean up corruption-why not is the question-what corruption did Pocino overlook? why? Was Michael Pagano an auditor?)

January 9, 2005

A hearing officer for Laborers' International Union of North America, which represents about 800,000 (550,000 is approximately correct per Jim McGough) workers nationwide, including 20,000 in Chicagoland, has urged a criminal inquiry into alleged fraud, waste and organized crime influence at a New Jersey local.

Following allegations of corruption and waste in Local 734 and its benefit funds, the local in Rochelle Park, N.J., near Newark, was placed into emergency trusteeship last October by Terence O'Sullivan, general president of the international.

In a ruling dated Dec. 30, union hearing officer Peter Vaira declared that beginning about 1996, August "Auggie" Vergalito, a former executive board member and assistant business manager, and his family members and friends "devised a scheme to defraud" the union and its welfare plans. (Decision not available on LIUNA's web site for members as of 1/09/2005 because of typical LIUNA incompetence and because GEB Attorney Luskin will not force LIUNA to publish charges and decisions much less secret settlement agreements on its web site-per Laborers for JUSTICE Jim McGough)

On Friday, attorneys for two current trustees of the pension and benefit funds filed a lawsuit in U.S. District Court in Newark seeking damages from current and former employees and officials of the union and funds as a result of the conduct outlined in Vaira's ruling.

Ex-officer linked to mob

Vergalito is an associate of the Genovese organized crime family in New York, Vaira said in the ruling.

Vergalito pleaded guilty in 1997 to hiding payments made from the Laborers' International's benefit funds and was placed on probation. Two years earlier, in 1995, Vergalito's son-in-law Edward Dolan, then the benefit funds administrator, had been convicted in federal court in Newark of a labor violation in a ghost-payrolling scheme.

Since then, according to the Vaira ruling, several of Vergalito's family members have been put on the payrolls of the local and the funds at "grossly excessive" salaries for doing little or no work.

The decision listed as questionable the salaries of Vergalito's wife as well as daughters and their husbands and other relatives and associates totaling more than $3.8 million.

For instance, one of Vergalito's daughters, Jamie Dolan, who is Edward Dolan's wife, was hired to listen to voice mail messages from members who phoned with questions about benefits or other matters.

"In reality, she came into the office and took the messages off the voice mail two days a week," according to Vaira's decision.

In 2003, when she responded to 109 telephone calls, she was paid $111,799--a little more than $1,000 per call, according to the decision.

At the same time, Vergalito's wife was hired to handle the same job--responding to telephone messages left during the evenings--for $1,000 a week, the decision states, although she earned more than $80,000 in 1999.

`Grossly excessive' salaries

Vaira noted that the local's welfare and education fund spent up to 20 percent of its contributions and the pension up to 40 percent of its contributions for these "grossly excessive" salaries.

"Normal administrative costs are between 7 and 10 percent," the ruling said.

Four years ago, Vaira, a former federal prosecutor in Chicago who is now an attorney in Philadelphia, ordered the ouster of three men from two Chicago locals of the Laborers' International Union, citing their ties to organized crime. At the time, Vaira concluded that brothers Frank and Bruno Caruso and their cousin, Leo Caruso, were under the control of organized crime bosses who used them to manipulate affairs at Locals 1006 and 1001.

Another questionable payment uncovered by union investigators was the hiring of a bookkeeping firm that was paid $182,000 a year, but whose expenses consisted of hiring a bookkeeper for $650 a week.

Hotel socializing

According to evidence presented by lawyers representing the union, Vergalito and Peter Rizzo, an assistant administrator for the benefit funds until last September, were seen at the SoHo Grand Hotel in Manhattan on several occasions in the company of members of the Genovese crime family, including Dominick Cirillo, the acting boss.

"One does not meet on a regular basis with high-ranking members of a major crime family by accident or for purely social purposes," Vaira said in his decision.

Calling the fraud "continuous and so notorious" and a "disgrace to the labor movement," Vaira directed that his findings and evidence presented at hearings before him in November and December be forwarded to the FBI and the New Jersey attorney general's office.

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