PROLOGUE

Even though I have taken every step to maintain accuracy, some errors and omissions may be found. The applicable law that appears throughout this document is in many cases simplified and expressed as I perceive it. (Editorial comment: Published as an aid to the FBI prior to threatened RICO suit and amendments to LIUNA's constitution that empowered the offices of the LIUNA GEB Attorney, LIUNA Inspector General, LIUNA Independent Hearing Officer, LIUNA Appellate Officer)

Interpretations and opinions appearing in this instrument are mine alone and may not reflect the depiction's and decisions of Federal regulatory agencies and courts of law. Before implementing remedies contained herein please consult with the General council for explanations about their use and other available laws.

GENERALLY

In order to fully understand the Cosa Nostra's direct and indirect control of Labor Organizations and regional offices, district councils and locals of the Laborers International Union, one must appreciate the laborers place in the building trades and its history.

BUILDING TRADES AND THE CONSTRUCTION INDUSTRY

The Building Trades are traditionally those labor organizations involved in the construction industry which is to say: Road and Bridge building and repair, construction, repairing and demolishing of any structure, including tunnel's, subways, electrical and transmission lines, etc..

In the 1970's, the building trades were subject to sister union's such as the UAW, United Mine Workers Atomic, Oil and Gas Workers, United Steel Workers, etc., invading its domain and performing the construction, repair and demolition at the facilities it represented as the bargaining agent.

The building trades attempted to stem the loss of its work by having the American Federation of Labor, Congress of Industrial Organizations (AFL-CIO) mediates and enforces the no raid clauses that were in existence. Some successes were made but a new enemy arose and the building trades were forced to refocus its energies.

The rise of non-union companies and union companies operating under the guise of setting up a new company to circumvent the Collective Bargaining Agreement (alter-ego's) started taking advantage of the building trades weaknesses.

This included show-up time, hiring restrictions, paid holidays, inflexibility of workers (carpenters must do carpenters work, only engineers can operating rolling machinery, etc.) hiring of unneeded workers, higher wages on non federal and state required projects.

With even innovative concepts such as financing its projects, easement of work and hiring rules, lower wages on housing and non posted projects, individual unions could not bring about the change needed to ebb the ever increasing non-union worker.

Visionary labor leaders realized that the problem of an individual union was tied to all the other trades that performed work on the same project. To this day, the building trades as a whole have not been capable of coming up with a design and the necessary bylaws for its membership.

In the 1980's because of the clamor and concern with the environment, some trades including the Laborers noticed that skilled workers would be needed to perform the services necessary for cleaning up our years of negligence.

Taking a lesson from other trades, (Operating Engineers, with the crane and the electricians and plumbers) the lobbying of the Federal and State government for licensing of asbestos and other waste cleanup, workers did not pose a problem. Of course, if the trade was capable of having its own training and licensing ability, it could control to a large measure who was trained and narrow down the ability for the non-union worker and his employer.

LABORERS INTERNATIONAL UNION, HISTORICALLY

The Laborer's Union (through years of amalgamations and absorbing work that when work was plentiful other trades did not want it or felt it was below the dignity of a plumber to lay and plumb a pipe outside of a building subject to the elements or a carpenter to carry away his debris.) has become one of the largest trade unions in the building trades and is quite capable of addressing the manpower needs and ever changing technology of the future.

Even though the laborer was at the bottom rung of the ladder of skill in the building trades, some of its more talented officials expanded craft jurisdiction by organizing landscaping, utilization of the laser in surveying, blasting, racetrack workers, golf course employees and the above mentioned hazardous waste cleanup. Of all the unions affiliated with the building trades, the laborers are diverse and adaptable and very seldom will you find a union construction project that does not start with a laborer nor finish without one.

Some of the job functions of the laborer's is to provide the carpenters with lumber drywall, scaffolding and all necessary supplies. The operating engineer's equipment is directed on how deep to dig or where to place its crane load. Brick, block, mortar and masonry supplies are delivered to the bricklayer. Concrete is poured, then leveled and prepared for the cement finisher's trowel.

Outside the building the laborers are even more present. On road construction, you will find laborers utilizing jackhammers to bust and remove concrete, directing heavy equipment and trucks, guiding and maintaining traffic control, grubbing, cutting and discarding of trees and underbrush, distributing traffic cones, barrels and lights, guardrail, and curbs.

On utility line installation the laborers handle, install and align all sewer, sanitary, transmission and water lines up to the building. On hazardous waste projects they are (just about dominant) the only trade involved in waste removal loading and unloading toxins including spent and radioactive fuel and it's by products.

On tunnel work, the only other trade that is normally found working in the tunnel area would be the operating engineer who runs the boring machine and the surface equipment.

The same holds true on most demolition projects where the structure is to be discarded. The laborer's cut, torch, lance and size all the ferrous and non ferrous materials, all hazardous waste is bagged, barreled, and packed as well as located when it is submerged in creek beds or rivers by scuba clad laborers.

In many areas the laborers have organized municipal employees, convention and trade show centers, and together with the teamsters provide transportation for celebrities, traffic control, and props for the motion picture industry.

COSA NOSTRA, ITALIAN-AMERICAN ORGANIZED CRIME (See Genesis of Organized Crime in Chicago)

Even though the first recognized Italian-American organized criminal activity was the Black Hand Society of New Orleans, organized in the late 1800's, it was New York City that hosted the fledging arcane movement. Ellis Island and other U.S. ports of entry were considered the portals to freedom, an escape from oppression for many of our ancestors.

Italian immigrants were no different. One major problem arose that was perplexing, the ability to communicate with other nationalities. Anglo-Saxon immigrants spoke fluent English and were better equipped to find and procure employment.

Also, the Italian-Americans, fearing the Irish-American police were forced to rely on each other for safety. They eventually developed the Cosa Nostra to combat and protect their community from Anglo-American interference.

The Cosa Nostra, modeled after the Italian Mafia became a force to be reckoned with. Its beginnings were due in part to the resistance of many Italians against the French who were in control of many of the peninsulas Italian City States. Limited success for the Italian-American movement turned altruism into apathy.

The very people it was supposed to protect became the victim. The shoemaker or the corner grocer were forced to pay homage and the hard earned wages were turned over to the shadowy figure that would pop in the place of business from time to time.

By the 20's, with prohibition a reality and the realization that organization and discipline would be necessary to prevent the numerous gangsters from making forays onto already claimed territory and killing each other off.

As we know it, the modern day Cosa Nostra was born and with it what has become probably the most powerful and ever present secret society to menace the world.

Based largely on the structure of Roman Legions, the at first Sicilian-American sons, organized New York City, then spread north to Boston, south to Philadelphia and west to Chicago. Hijacking trucks, peddling home brew or smuggled alcohol from Canada and Britain spreading fear and terror in its wake. These were the talons of corruption of the Cosa Nostra.

Ironically, at the same time, the Cosa Nostra was spreading its wings, so was another group, Organized Labor. This group armed with the teachings of Mother Jones, Samuel Gompers and Eugene Debbs preached and rallied, the wanting toilers and workers of United States. Better wages and work conditions was the cry heard in the sweatshops and employment lines of America.

The Cosa Nostra made its services available to the business leaders that beckoned the mobsters to become strike breakers and head busters. Acting on their behalf, the mob dished out punishment and fear throughout the rank and file of the wanting strikers.

Many legitimate business' were required to maintain a life long association and contribute company assets to the Cosa Nostra as the price for strike-breaking. By 1935, with the creation of the National Labor Relations Act (Wagner Act), labor finally had the vehicle that was needed to make a significant impact on America.

Little by little the Cosa Nostra started realizing the importance of the labor movement and by the end of World War II, it realized that its future lay with the now peaking contrivance of American workers .

The rise of union problems also increased with the blossoming memberships. To assist in stopping other unions from raiding territory and potential insurrectionist from making waves and winning support with the rank and file.

The Union Leader turned to his past enemy the Cosa Nostra for help. Little did the union official know, the price for help would be a life long control of the local union. The eventual replacement of his position and direct control to a Cosa Nostra associate or relative would be the next step in the takeover process.

By the late 1940's, it became so paramount to the mob that advisers such as John Dio Guardi of the New York city Luchesee family, would visit other Cosa Nostra bastions around the country and explain how a takeover can be accomplished. Realizing that by controlling the Teamsters, Longshoreman and the Laborers, (who were then known as the International Hod Carriers and Common Laborers) many other unions would automatically come indirectly under Cosa Nostra influence.

Cosa Nostra leaders were also subject to insurrection and the control of union activity would prove to be most helpful in maintaining authority over Cosa Nostra members.

Unions and the employers provided the Don and his Capo's with plush jobs for the family soldiers. Millions of dollars of membership dues and benefit fund contributions were siphoned off for personal gain, and the ability to manipulate Collective Bargaining Agreements so that favored employers were not bound by the same regulations as the other signatory companies.

Political influence, the ability to elect the vote and financial asset wanting politician to office became commonplace. Influencing legislation at all levels of government and in many areas, even deciding who will be placed in Federal judgeships, and United States Attorneys was quite the norm.

This unseen government within a government was and is so powerful; the American public still remains skeptical on how much of their life is controlled and the financial burden that it carries because of its existence.

Even armed with the revelations of Joe Valachi and other surfaced Cosa Nostra members and RICO statues, the extraction of mob influence remains quite difficult. Evolution and change has also changed the Cosa Nostra.

Knowing that direct exposure on influence peddling and criminal activity will lead to a life of incarceration and place its membership in a position of capture and possible cooperation with investigative authorities, the Cosa Nostra membership has burrowed itself into communicating and exercising control through well paid attorneys and legal business representatives, fully cognizant of the difficulty in implementing investigations and prying into everyday businessmen and legal council.

LABORER'S INTERNATIONAL UNION OF NORTH AMERICA

The Laborers International Union is controlled by an Executive Board that consists of a President, General Secretary Treasurer, and Vice President.

General President

The General President is the Chief Executive Officer and spokesman of the Laborers International Union. According to the constitution, he is responsible for almost all general activity. He recommends to the General Executive Board the filling of vacancies, the appointment of international representatives and organizers, supervises the activities of regional office's and its officers.

This hiring and utilization of this position was the exclusive domain of the Chicago Cosa Nostra (Outfit) and any requests of the General President and all of his activity had to go through the Chicago Family.

The control of this position did not give the Chicago family exclusive authority over LIUNA activity. The General President could not implement more than general policy over other family dominated regions, such as New York state and New Jersey or Cleveland, Ohio. In order for a national agreement to be utilized in another controlled area, the union official or regional manager would send word to the local Cosa Nostra and then convey the approval or denial.

This, of course, caused factions within the international and national policies such as the National Political Action Committee operated by Jack Curran, until recently off limits in New England, New York and New Jersey. The same held true with the national pipeline agreements.

General Secretary Treasurer

The General Secretary Treasurer is the Chief Financial Officer. He is responsible for the finances. His position is not supposed to be subject to Cosa Nostra approval, but it is important for the Secretary Treasurer to not cause problems with the Cosa Nostra, such as the one caused by Terrence O'Sullivan at the wake of Peter Fosco in Chicago, when he echoed his wanting to be the next General President. This action led to his ousting and Vernie Reed becoming his successor.

Vice Presidents

Up until the middle 1980's, there were eight Vice Presidents regionally located through out the United States and Canada. The major function of the Vice President is that they together with the General President and Secretary Treasurer comprise the General Executive Board which is the ruling body of the Laborer's International Union.

Normally, a rubber stamp for LCN policy and somewhat titular in nature, this position can become quite powerful when the Vice President is also a regional manager. Case in point would be Michael Lorello and his successor, Sam Coivano and the ever present behind the scene power of the New York City LCN families.

Others, like the now deceased Ugo Rossini had extremely limited say so any were installed for purely political reasons.

The 1980's brought a split in the hierarchy of the Laborers International Union into two camps. One supporting the then General President, Angelo Fosco and the other supporting the late Arthur Coia Sr.

Even though the Chicago Cosa Nostra supported Fosco, their were many in the family that thought he was weak and didn't like him. They also felt Coia was more capable than Fosco. Coia, on the other hand was a more proficient earner and a close associate of his late mentor Raymond Patricaccia, Tampa, Florida boss Santo Traffacante, the New York City families and Anthony Accardo of the Chicago family.

When Coia made a decision he kept in mind all the families and even on the smallest policy making decisions informed the various LCN families prior.

In an effort to quell a potential uprising by the black minority membership over the discharge of Robert Powell, who was the 1st Vice President, it was decided to increase the membership of the Vice Presidents to ten.

In an effort to keep harmony, the ruling body of the Cosa Nostra, the Commission decided to allow Fosco to select one Vice President and Coia the other.

Fosco chose Louis Bravo, a California based Latin American. Coia opted for Verrie O Haynes, a Caribbean born black American.

Coia would berate Fosco for not addressing the Powell replacement problem by stating that Fosco was supposed to choose a black person not a Hispanic.

Fosco would counter by stating that American blacks do not like and respect Caribbean born and English accented blacks.

Coia joined by Mike Lorello would publicly voice their disapproval of Fosco and his associates. The bitterness became so public that the LCN commission decided to put an end to the bickering. Arthur Coia and Mike Lorello were told to cease and desist their remarks about Fosco and that only the Chicago family can decide who is the General President.

Even though favoring Coia over Fosco, Chicago was worried about the future and letting an outsider succeed to the position, plus John Serpico was being groomed to become the next president. Within months of the commission decision, Arthur Coia had a massive stroke that left him incapable of resuming his duties. He requested that his son be placed in his position.

The early 1990's brought the Federal Investigation of LIUNA and its control by the Cosa Nostra. With the Chicago Cosa Nostra in disarray over Federal convictions and investigations and New York City still reeling from the commission case, better heads in the Cosa Nostra decided to change policy and place less suspicious and more qualified associates in leadership roles.

With the death of Angelo Fosco, Arthur Coia Jr. became the General President and James Norwood, the brother in law of St. Louis LCN crime boss, and an LCN associate became the General Secretary Treasurer. Circling the wagons and preparing for the Federal onslaught was the order of the day.

The LCN was not about to give up control, but it was attempting to insulate itself and maybe this change in policy could save the day. Learning from the Teamsters and its leaderships ouster would be necessary in order to prevent the International Union falling into unwanted hands and the vehicle where by regional offices, district councils and local unions would be attacked by a hell bent on cleaning up its image International Union.

REGIONAL OFFICES AND OFFICERS

Regional offices and officers are the people who handle problems in their geographic areas and usually have international representatives making sure that the district councils and local unions in their area are adhering to International Union policy and conforming with inter-trade agreements.

In some areas, the regional manager is also a Vice President.

The Chicago regional manager has the largest geographic area and that region may still encompass vast tracks of Canada, as well as stretching over most of the mid-west. Besides encapsulating all of New England, the regional manager authority takes in the Maritime states of Canada and the province of Quebec.

This, of course, caused problems for the Canadian membership of the International who wanted a regional office of their own. Until recently, Ugo Rossini was the Vice President representing the Canadian provinces, but without a regional managers position.

At a loss on how to address this problem to the Canadian membership, eventually he was given the title of dupe and fell out of favor with his American sponsors.

Sub-Regional Offices

Some regions may establish satellite officials to expedite and handle problems more readily.

LOCAL UNIONS

The local union elected officials and members of its Executive Board consist of the President, Vice President, Recording Secretary, Business Manager, Secretary Treasurer, and two additional Board Members.

President

The President together with the Secretary Treasurer signs all checks and presides over all membership meetings. Because the position is titular, the President is in many cases appointed by the Business Manager with Executive Board approval as a field representative (business agent).

Vice President

The Vice President signs checks and presides over meetings in the absence of the President.

Recording Secretary

The Recording Secretary drafts and maintains a record of the union meetings and Executive Board sessions.

Business Manager

The Business Manager is the most important position in the local union structure. He is the spokes man and Chief Operating Official. The Business Manager is responsible for recommending and overseeing field representatives who are selected by him and are then approved by the Executive Board.

All shop stewards are selected by the Business Manager. He is responsible for all negotiations and enforces all Collective Bargaining Agreements.

Secretary Treasurer

The Secretary Treasurer is also a very important position. He handles the finances and together with the President signs all checks.

Two additional Executive Board Members

Two additional Board Members are elected to meet the seven member board requirement. They meet with the other members to approve or disapprove pending matters that are to be presented to the membership for approval.

In some locals, they may also be appointed as field representatives or as shop stewards.

ELECTED OFFICIALS WHO ARE NOT MEMBERS OF THE EXECUTIVE BOARD

Sergeant of Arms

The person elected as Sergeant of Arms is responsible for making sure that only union members enter the union meeting (unless the non member has been invited) and in keeping order. This position is not part of the Executive Board.

Auditors

The Auditors are elected by the rank and file. They are only utilized in the smallest of locals to audit the financial books and records of the local union.

NON ELECTED REPRESENTATIVES

Field Representatives (Business Agents)

Even though Field Representatives are not elected, next to the Business Manager and Secretary Treasurer, they are the most sought after position.

They are directed by the Business Manager to visit job sites and report back on jurisdictional problems (craft jurisdiction) noncompliance by the employer with the Collective Bargaining Agreement and sometimes unsafe working conditions.

Shop Stewards

Shop Stewards are the on the job union representative, handling craft jurisdiction, safety, hours of work, noncompliance with the Collective Bargaining Agreement and reporting to the union the hours of work of the laborers working for the general contractor and the sub-contractors.

DISTRICT COUNCILS

A district council is a consortium of more than one local union uniting and acting in concert to take advantage of the combination in negotiations and to increase the benefit funds paid to the membership.

It can prove to be quite beneficial when operated properly. Unfortunately many district councils are formed purely as a ploy to wrest control from locals not controlled by the LCN.

It is comprised of delegates from local unions who become executive members of its board. They elect a President, Vice President, Secretary Treasurer, Recording Secretary, Business Manager and additional members of the Executive Board.

Similar in responsibility to the local union, the Business Manager becomes the Chief Representing Official of the council, appointing field representatives and overseeing all business in the realm of the council.

COLLECTIVE BARGAINING AGREEMENTS

International Agreements

An International Agreement is an agreement reached between an International Union and an employer group or an individual employer. The advantages to the employer are that normally the contractor has the ability to bring key employees to work in local union jurisdiction and grievances are handled at the international level.

The advantage to the local union is that the employer is already signatory to the Laborers and bound by the local wage and benefits distributions protected by language in the agreement. The agreements also generate stability for the International and its affiliates.

Association Agreements

Association Agreements are considered the cornerstone for the local union, binding a large number of employers to a Collective Bargaining Agreement.They become the vehicle for the posting of wage rates and benefit contributions and many outline the work jurisdiction of the signatory trade.

On Federal and most State and Municipal funded projects, contractors are required to pay its workers what is known as the prevailing scale.

The Labor Organization-Contractor Association pays a major role in making sure that the posted rate and the increments for job classifications are the rate that the governments utilize when funding projects. This is known as the Davis Bacon Act and its continuance is paramount to union survival.

One problem that the associations and unions are encountering is that when the Davis Bacon Rates are utilized on a project. The rates apply for the duration of the project.

The Union Signatory Contractor is bound by wage and benefit fund increases that may occur during the life of the Collective Bargaining Agreement.

The non-union employer is not and takes full advantage of this loop hole. Recently, some creative unions have introduced what is known as a carry over clause, which means the Union Employer has the right to complete the project not having to pay any wage and benefit fund increases that may occur during the life of that project.

Independent Employer Agreements

An Independent Employer Agreement is reached between the union and a single employer. This opens the door for a lot of abuse by the employer and the union. Some legitimate reasons for this type of agreement are that the employer may not want to employ some of the union trades that may be required if he became signatory to the association agreement.

The contractor may not like a controlling segment of the contractor association because he feels there representation is more favorable to a given segment. He doesn't want to be locked in to the time restraints and other possible sections of the association agreement.

The union may enjoy additional benefits, such as spelled out craft jurisdiction, flexibility in hiring and of course more ability to get its way. The mischievous union and employer can use this agreement to create better conditions, less restrictions and flexibility under its guise.

One-liners

A One-liner type of agreement is normally reach for a given project and is limited to wages and benefits for union members. When a union official and an employer cannot agree on work rules and other contract conditions this approach is enacted. For the local union or district council this approach is quite disastrous and self defeating.

The union has lost the ability to organize and as a last ditch effort to collect union dues and benefit funds agrees to the one-liner. Other union contractors who have been bound by the more stringent contract, approach this procedure with a "what a about me" feeling and enter the next contract negotiation session armed with the union's acquiescence to this concept.

These type of agreements are self defeating for the union and their existence is quite telling on a local unions future. Of course, they are also utilized by the wayward to allow a pet employer normally through an alter ego to take advantage of this agreements flexibility.

Legally A union cannot accept dues withheld from an employee by an employer without contractual language. This holds true with benefit fund withholdings.

The union must have the employee sign a dues withhold form acknowledging that the employee has given permission for the union to accept a percentage of his wages or a fixed amount as union dues and the same with the benefit funds. The employer must also receive a copy.

THE COLLECTIVE BARGAINING AGREEMENT STRUCTURE

The agreement is the result of collective bargaining and the local or district council subject to the constitution of the International, its agreements, enactment's and inter-trade pacts. It is also subject to governmental laws and regulations.

Normally, an agreement commences with stating its affiliation with the Laborers International Union and the geographic area covered by the agreement.

Definitions are usually incorporated in the opening section outline the definition of an employer. the union and the employees covered by the agreement. This section or later on you will find the definition of the sub-contractor and contractual language binding any contractor operating as a sub-contractor and performing work and craft jurisdiction.

The sub-contractor will be bound by the terms and conditions of the signatory contractor. This is known in the industry as a down clause.

In many Collective Bargaining Agreements you will find language that bins the employer to not accept a contract and work form an employer who is acting as a General Contractor unless that employer is also signatory to the Collective bargaining agreement. This is commonly referred to an up-clause.

Foreman's Clauses,

Foreman's clauses when needed, how many and the pay differential are also included.

Stewards Clauses,

Steward clauses when needed, how appointed by the Business Manager and that they normally are first craft employee hired and the last to be laid off.

Many agreements will state that the steward will be given time from his employer to check the project for safety violations, to see that other trades or non-union employees are performing work that is the work of the union he or she is representing. Call the business agent if contractual violations are taking place etc.

This position is subject to abuse by both the union and the employer. The contractor does not want the shop steward making waves and usually awards him with a plush work assignment and in some cases allows him to leave the project and even become a no show.

The specious union official will use this position to place friends, relatives and schemers in this position as a reward or in a no-work position with an un-objecting employer who is utilizing cost saving remedies on the project.

Union Dues and Benefit Fund Withholding Language

Each agreement contains some language defining the dues and withhold process including how much is to be withheld and that those payments are made by the employer in a timely manner.

Contractual Contract Violation Remedies.

Most Collective Bargaining Agreements usually establish five part remedies for violations.

Step 1. Between the Employer Representative (project superintendent) and the Shop Steward.

Step 2. The Union Field Representative and the Employer Representative or the owner of the company.

Step 3. The Union Business Manager and the employer or his representative.

Step 4. A grievance meeting between the Employer Association and the Union officials.

Step 5. Normally, arbitration. In some agreements where arbitration is not listed as a remedy, Federal Court or other governmental remedies are included or available.

In many agreements, unions are allowed to strike or pull its employees off of a project for violations of the employer by not paying benefit fund contributions in a timely manner or emergency safety violations without wildcating.

(A wildcat strike is when a Union is signatory to a collective bargaining with an employer and pulls its employees off of a project.)

If a union or an employer does not adhere to the remedies available, when it comes to contract violations and either attempts to bring the matter to a governmental agency or other remedies available under law, the matter is usually rejected because the charging party has not exhausted all remedies.

(This is known in the business as Collerization, or the Collier Wire Products Case.) The same holds true for union members, even when the charge is filed against the union or one of its officials or representatives. (This language will be found in the Uniform Local Union Constitution.)

Craft Wage Classifications.

Craft Wage Classification tells the employer how much he has to pay for a tradesman when that individual is performing that type of work, (such as burning may be an additional fifty cents and hour, or asbestos removal workers may be paid an additional 50 cents an hours).

Special conditions and wages may apply to hazardous work and many specialized areas of construction, such as sandhogs working in compressed air requiring recovery time necessary to recover and adjust to the respiratory problems of compression.

Favored Nations Clause

Favored Nations clause, commonly referred to as "the me too" clause, which means that if the union grants or concludes an agreement with another employer or group of employers performing the same type of work that contains more favorable or beneficial conditions. The contractor can enact and enjoy those more favorable conditions.

Savings Clauses

Savings clauses protect the integrity of the contract if any portion of the agreement is found to conflict with governmental laws and regulations then only that section of the agreement shall be null and void.

HIRING OF EMPLOYEES

Many unions and employers utilize different procedures when concluding language and processes for procuring employees. Some procedures commonly used are Seniority, Geographic Seniority, Union Seniority, and Past Seniority.

By law when an employer who has not been signatory to a Collective Bargaining Agreement wants his current employees to remain and not discharge them, then the union must accept them as members.

As a condition of there union membership and a condition of employment, they must accept reasonable rules established by the union, and refrain from conduct detrimental to the union.

There have been numerous cases involving unions and reluctant dues and benefit fund paying employees over that being a condition of employment.

In the construction industry, most states allow for what is commonly referred to as "closed shop operations", However, 13 states do operate under what is commonly referred to as "right to work" laws banning dues, benefit paying and union membership as a condition of employment.

Seniorityy

You will find at least some seniority language in most Collective Bargaining Agreements. Total seniority is when the employer must recall those workers who have been previously employed by his company as the first employees called when starting a project and the last to be laid off.

In many of the Building Trades, this is not feasible because many workers float from employer to employer.

Geographic Seniority

The employer must give preference to those employees living in a geographic area. This is called Geographic Seniority.

Union Seniority

The employer must employ employees of the local union in which the project is located, unless the union has reached full employment and has exhausted all hiring remedies.

Past Employee Seniority (Recall List)

The employer must recall and place to work those employees (if capable of performing the work available) that previously worked for the company before the employer asks the union to submit new employees.

This is commonly referred to as the recall list and many union officials and employers violate this section of an agreement when it is included in a Collective Bargaining Agreement.

A case in point is when a contractor has a plush project and the opportunity for better conditions and overtime may be available. The union official may refer favored employees to the project instead of past employees.

Hiring Hall Arrangements

Many local unions utilize what is referred to as a hiring hall for the selection and placement of employees for the filling of jobs. Normally they include classes of workers who are categorized in groups such as:

Group 1

Union members who have worked for the employer in the past and are not working for another employer and have registered with the union that they are unemployed and available for work.

Group 2

All union members who are currently unemployed and available for work

Group 3

All applicants who have filled out an application for employment with the union who are seeking employment through the union.

When an employer, who is already signatory to the union Collective Bargaining Agreement, needs employees and calls the union hall for employees. the union representative looks into the employers recall list book.

This book is maintained by the local and contains the names of employees who previously worked for that employer. He or she then cross references the name or names with the out-of-work list in Group 1 and then reaches out for that worker.

If the employee refuses to accept the job, the union can remove that person from the out-of-work list unless the employee is incapable of performing the work for some valid reason. This procedure continues until Group 1 is exhausted, then Group 2 and onto Group 3.

When an employer, who is signatory to the Collective Bargaining Agreement and has never worked in the geographic area needs employees, the union must refer those members who have registered for unemployment and have been unemployed the longest.

Starting with Group 1, the union official starts with the longest unemployed member and exhaust that list before turning to the Group 2 list and so on.

Many Collective Bargaining Agreements contain language covering the selection and submitting of shop stewards and foreman's.

This language usually states that the union may refer stewards and foreman's to any given job without having to utilize the out-of-work list and their standing in the out-of-work list.

Some hiring hall procedures include language that spell out ability for employees to hire workers without regard to their standing in the out-of-work list.

This language usually is referred to specialized skill needs and the employer may, in writing, request a certain employee because the employee has special skills, such as burning, blasting, welding, etc.

Hiring halls procedures are routinely violated by LCN controlled unions.Favored employees and relatives are given slips out the back door instead of through the established hiring procedures.

The term back door originated with the Seafarers International Union and the Seafarers Union Pacific who for practical purposes maintain and operated hiring halls. When a ship needed a deck hand or another ship working member, the union who maintained a large chalk board listing the ship, its destination, cargo and its needs those seaman who were unemployed the longest and capable of filling the request would have the first opportunity to fill the job.

When a plush job request came into the mischievous union official, he would not post it on the board and give the slip for a financial reward or as a favor to a friend or to the highest bidder outside the view of the wanting workers.

One Job Only Employees

Many union officials are reluctant to allow to many people into the union because of flooding the union with members at times of good employment and subjecting themselves to potential members who may become uncontrollable and potential opponents.

The non-union workers are allowed to work on the union project by stipulating and signing dues and benefit fund withholding authorization forms. This is referred to an adobe fee. Most International Unions shun this practice and list it as a violation of the International Constitution, but many local unions continue to practice it.

Apprentice employees.

Some Union-Employer Contracts allow for the hiring of apprentices at lower wages and limited where they do not overwhelm the project work force.

Because Federal and State rules may come into play, especially if a Taft Hartley jointly administered training fund, allows for apprenticeship programs and its minority placement requirements. Many locals and district council training funds are established as retraining programs greatly narrowing governmental scrutiny and exposing the union to an influx of unwanted potential members and troublemakers.

Superseding Clauses

An employer may become a party to another association, or have more than one contract or a special arrangement with a local union. A Superseding clause is implemented and states that this agreement supersedes any and all other agreements that have been reached.

Duration and Contract Re-opener Language

Duration and Contract language states the duration of the contract and what procedures come into play as far as future bargaining and Taft Hartley requirements for future contracts.

You may find additional sections and sub-sections to fit the needs of the employers and the union.

COSA NOSTRA-LABOR UNION ACTIVITY

The first and foremost rule of the Cosa Nostra is the perpetuation of the family and the labor union is the perfect vehicle for achieving this.

The controlled union official makes sure that LCN members, relatives and associates are rewarded with plush jobs either in the union hall itself by creating field representative positions, clerical and secretarial appointments and even janitorial situations for the recipients.

The best stewardships, foreman positions and plus little or no-work positions are the reward on the job site.

Benefits are subjected to administrators, training directors and instructors, collectors of delinquent accounts, legal, investment advisors and health insurance providers who have an agenda that does not benefit the membership.

Contractors who kick-back wages, and allow no show employees are given preferential treatment.

Demolition and hazardous waste removal employers are allowed to illegally remove and dump toxins and debris and contaminate our eco system. Some of this activity is unrecognizable to an investigator or examiner because of not knowing what to look for.

In attempting to list common practices and violations that you can find in most LCN controlled unions, keep in mind that the investigator is limited to what he or she can discover on his own because of the lack of cooperation that will be given by the membership.

It is important that you understand that the traditional LCN controlled union local and district council have been subjected to years of Cosa Nostra dominance and the years of failure on the part of justice to correct the problem have galvanized the good non-LCN connected member against cooperating.

The membership of a union have had to go along with hiring practices. Knowledge of his or her benefits may be lacking and having to watch LCN favored employees receive the best jobs and stewards who are more interested in collecting last nights bookmaking receipts then staying on the job and looking after the workers needs and safety.

To speak or take any action against these practices would leave the outspoken worker without a job and incapable of finding one or at the bottom of a river.

Many investigators will find the lack of cooperation and ability to generate violations quite difficult and lacking success. Federal Investigators who have been indoctrinated into the utilization of Title 18 violations, will be limited and success may be placed out of reach. Title 29 (Federal Labor law) and State Labor laws are necessary, as well as Title 42 and its environmental laws and rules to achieve in the cleansing.

It is also essential that the investigator have a working knowledge of the local Collective Bargaining Agreement and utilize its violations as an instrument of achieving success.

Many violations are taking place in front of the investigators' eyes. It's in knowing what to look for. How can you remedy a problem if you do not know what the problems are.

Hiring Violations

Cooperating witnesses or informants, that are known to the investigator, are a good source and can assist in locating employers and some workers willing to talk off the record. Visit the job site and ask the steward for the workers on the job list, or just ask the workers their name.

Then compare the list with their standing in the out-of-work list located in the union hall or its seniority list. You will also find relatives of LCN members and union officials on some of the projects who were brought into the union and placed to work over long time workers who are unemployed.

Union employers operating as alter egos or allowed to engage the services of non-union employees.

This is quite common especially in the demolition industry. The union company is allowed to utilize non-union workers to aid in keeping the cost of the project down. Very often they work on a different shift and illegally remove asbestos and other toxins when no one is looking and discard the waste in dumpsters. This practice is prevalent in New York City.

These workers are referred to as the sneaker brigade.

Wage and Hour Violations

Wage and hour violations are quite commonplace, even when Federal and State inspectors are present on prevailing work rate projects. An employer full knowing that the hourly work rate is subject to scrutiny and the reporting requirements, lists the proper hourly wage scale, just less hours for the employee then what was really worked. An example of this is a worker puts in 52 hours and his paycheck reflects that he worked 30 hours.

Benefit Fund Remittance Violations

Benefit fund remittance violations amongst LCN favored employers and is an ever present tactic by favored employers in the construction industry. The employer tells an employee or a group of favored employees that the hours of work needed to cover his or their insurance needs have already been fulfilled and that the necessary hours and hourly contributions needed to achieve the full credit for his or their pension fund have peaked and any more contributions well not aid or improve the coverage, so, how about working under the table with a portion of your time.

This means the employee may work 40 hours and the remittance forms and necessary payments may be for only 24 hours. The employer than pays in cash or other remuneration half or a portion of the saved moneys to the employee.

Phantom Employees or Ghosts.

A phantom employee is normally a non-working employee that never or very seldom visit the job. This is practiced in LCN controlled areas where a LCN member or associate needs hours of work to aid in achieving a pension or needed other benefits. The contractor is normally rewarded by the union allowing non-union employees and or less compliance with the Collective Bargaining Agreement.

INSURANCE FRAUD

Union Officials and Fiduciaries

As a matter of law, Union officials are required to maintain an insurance bond that is necessary in case the official is charged and found guilty of illegal practices and fiduciary responsibility violations.

In many LCN dominated union locals and district councils, the insurance agent is a relative or an associate and is allowed to inflate the bond costs.

The money either remains with the agent as a favor, or is kicked-back to the LCN or favored LCN associate. Normally, the insurance is awarded to the agent without allowing the insurance to be bid competitively.

In many locals, this expenditure is not brought before the Executive Board for approval and the membership of the local for ratification. (When this mistake is exposed by the Dept. of Labor, the normal defense is that the matter was approved and that in the financial report is read before the local membership for approval, it mentions the payment to XYZ Insurance.)

Employers

In the Construction Industry, the person, group or entity looking to have worked competitively bid by a contractor, require that the employer that is bidding the work is a stable and competent business.

To make sure of this, the developer or letter of work in the bidding process notifies all interest contractors that a bid bond equal to a portion of the bidding contractors bid or equal to the whole amount is required.

When a contractor is successful in the bidding process, the bid bond is turned over to what is known as a performance bond, whereby the insurance company guarantees that the contractor will finish the job at the bid rate.

(There are some variations of this process, such as cash bonds for contractors not capable of securing insurance, but because they can tie up large amounts of cash are very seldom implemented except on small projects.)

The ability to find an insurance company to bond an employer is quite restrictive. Only those employers with a long history of successful business or vast cash and asset resources are eligible for the insurance and the better rates that follow success and asset gain.

With these restrictions, if someone wants to start a construction company they normally start out as a sub-contractor and work on only a portion of the project. Their work is guaranteed by the general contractor's insurance bond.

The LCN and its captive local know how to circumvent this problem and reach out for a scheming insurance agent and company. This by the way, includes some of Americas largest companies.

In concert with the direct or indirect controlled trustees of the benefit fund, they offer to either loan the insurance company through what is known as bullet contracts, bonds or stock purchases at needed times or, of course, higher commission rates.

In return, they may only require that the insurance company take care of the insurance bonding requirements for a favored company or a start up fledging LCN company equal to or even lower then major companies.

In many cases, the insurance company does not have to kick-back any moneys, just take care of the wanting LCN employer. The LCN will then reap its reward out of the requesting company or just use it as a job creator.

Another scheme that the LCN is using to alleviate the bonding requirements is through the establishment of offshore insurance companies or utilizing foreign companies.

This procedure may not work on federally funded projects and most state funded projects, but it is used for industrial in plant work and corporate let projects.

The LCN and its cohorts will travel to the Cayman Islands or another less restrictive country to establish their own insurance company. Utilizing assets from drug operations for laundered moneys and even fraudulent bonds, they set up a business. The company establishes an American subsidiary, hires a good printer and a blossoming business or bust out operation is a reality.

Corporate Blackmail

Corporate blackmail comes in all shapes and forms. Everything from a corporate cheating, physical threats, having OSHA fire, and other regulatory agency inspectors breathing down the back of unwilling employers to exposure of sexual compromise.

Salting and Windy Day Operations

Salting is the method where carbon and graphite dust is placed into the hydraulic system and the engines of a non-union contractors equipment by a evening foray by local union loyalists.

Windy day operations are when a building is in the erection stage and the support bolts of the steel beans are removed or loosened and lumber support braces are removed. If properly done, a strong breeze will bring down the structure.

Purchasing and supplies

Automobiles

The automobiles are purchased from a favored dealer at higher costs or when traded in at a lower than value price. Sometimes, the cars after being traded are made available to family members or associates at less than value costs.

Normally, they are purchased without competitive bidding, or if put up for bid less stringent bidding requirements are implemented to make sure that the favored dealer is successful.

Supplies

Everything from computers to toilet paper are purchased from LCN favored suppliers at inflated rates.

Service Providers

The soda and the cigarette machine located in some union halls, are in many LCN captive locals, are the property of a favored vendor and the cleaning service that enters after hours are also recipients of this relationship.

Building and Repair Construction

When the local union decides to move to new facilities, build a new officer or make repairs when necessary, the contractors hired are in many LCN dominated locals hand picked.

Normally, if the project is a major project a phony bidding process will be implemented. Plans and specifications will be sent to a number of employers and the favored employer will not have to adhere to the requirements that are listed.

Such as the specs may call for certain products to be installed and the LCN or its representative tells the favored employer "don't worry about it, you can use cheaper products or just paint the existing walls or you don't have to remove the existing one and install a new one. When painting is required, just use one coat not two or skip the upstairs painting needs." In some cases, no-work may be required at all.

Front Companies

Front companies are established to take advantage of Federal and State laws. Requirements that state a certain percentage of a given project that has Federal or State funding must sub-contract a certain portion of that project to a minority owned company or supplier.

The LCN has the local union promote the use of this company to general contractors who have a Collective Bargaining Agreement with the local.

By law, in order to qualify the minority business must have 51% of the company and its corporate assets beneficially owned and controlled by a minority or a group of minorities.

Minorities do not have to be of Afro-American, American Indian or Latino decent.

This can also include women and many LCN dominated union officials have been involved in this practice

Worker Transfers

In some small locals and when faced with opposition, local union leaders have turned to the Cosa Nostra or controlled union officials for help. A larger local may tell a number of loyalist to transfer their union book to another local to assist the local union official who has asked for help.

They convince many potential negative voters and turn them into supporters or just keep them away from the polling area. In many cases these votes carry the day and another local falls victim to the LCN and its relentless pursuit of controll.

Political Action Committees

Political Action Committees are necessary and a legal vehicle for the LCN and its dominated locals and district councils. The PAC funds are used to support favored candidates and even where spending caps are regulated, creative circumvention is introduced.

If it becomes vital that a certain political candidate be elected, the LCN and or the local union will reach out for sister locals in other states or regions to get money for the candidate. They will also send PAC money to another controlled PAC and have that PAC send money to the candidate.

Stock Purchasing

Even though stock purchasing is legal, many union officials purchase stock in a company that is listed in some exchange and is signatory to the Collective Bargaining Agreement or whose performed services are the same as covered under the craft jurisdiction of the union, in many instances this is illegal.

This automatically gives them an advantage over other investors and the controllers of the gain or loss of the giving value of the stock. If the company is uncontrolled they may play the down side option game. That is to say that they are wagering their money that the stock goes down.

The company and its affiliates are subjected to all kinds of mischief and the losses result in the stock value plummeting. They could also have inside knowledge on future profits or losses of the company and other insider corporate information. Of course, the companies stock value can benefit tremendously from the union granting favored working and turning its head when it comes to the Collective Bargaining Agreement.

Another stock scheme you may not see, but happens quite often, is when a stock is normally purchased it is purchased by the trading firm. A brokerage company that enjoys and benefits from its representation of benefit funds and wants to keep the relationship may illegally get involved.

Many purchasers of stocks and bonds have a couple of weeks in which to pay for their purchase and if the value of the stock or bond goes down over that period one of the benefit funds is the purchaser. However, if the stock goes up in value, the cousin or best friend of the union official is the owner of the stock.

Another scheme, that is quite difficult to discover and can happen with any unknowing company, is the union official and his LCN backers finds a stock not that costly and in need of funds.

The LCN and or the union official arrange for a cousin or best friend to purchase a number of shares in that company. After a couple of weeks or months go by LCN controlled unions through the benefit funds purchases stock in the given company.

After the benefit fund purchases have been completed the cousin or friend sells his stock at a profit.

Legal Defense Funds

Legal Defense Funds have been around for a number of years now and remain a pet of the LCN and controlled union. At first they were established as a means of keeping the LCN members legal costs down, Today, they still do that, but also take care of relatives and associates of the LCN. Normally, they provide the union member with house closings, wills, and general representation. With regard to the high cost criminal defenses that may be required or potential unrewarding civil suits they may only provide for, a small portion of the costs. In too many cases, accident and good civil suits still require that a percentage of the claim receipts be turned over to the attorney and his or her firm. Besides creating substantial funds for the attorneys and LCN sponsors, it also acts as a steering vehicle for the union membership and members relatives.

Hazardous Waste

Today, hazardous waste has become one of the largest money makers for the LCN. The local union is relied upon to make sure that the favored waste remover and transporter is capable of completing its projects and avoiding detection.

Toxic waste removal is taking place in every corner of America and the paper trail and the availability of potential witnesses needed in the pursuit of LCN-labor complicity is there.

I believe that each and every investigator should include this area in any investigation. The results will not only prove rewarding but a service to mankind.

In-Plant Demolition

In-plant demolition is a type of work very seldom publicly advertised. Steel plants, refineries, chemical plants etc., know of the toxins present inside the property line of their facilities and they are aware of the burdensome cost of pubic scrutiny.

Normally, contractors with proven records are allowed to bid on the project. When bidding the project, some unwanted bidder usually slips into the bidding process but almost always unsuccessful. The ferrous and non-ferrous steel and other metal and its value are included in the bid.

You may see a contractor actually pay the plant owner for the project. The structures being demolished are normally quite old and when erected did not come under environment laws and regulations.

In order to protect process lines from heat, they were covered with asbestos. Today's methods of heating the oils in electrical transformers were not and place so PCB's were added. Solvents, Benzene's and waste was regularly discarded on plant property and so on.

The successful LCN employer starts by having a reliable foreman or superintendent tear a placard off the transformers so that no one can read its contents.

The workers come in to remove the transformers and send them to a preparation area where steel is cut into sizes and ready for shipping to a steel processing plant by ship, truck or rail.

The steel contains PCB's, Redlead (a toxic paint used to prevent corrosion) or asbestos laden steel is either shipped to China, Korean, an American or a Canadian company willing to over look its contamination.

Ironically, because many of these jobs are labor intensive, almost every employer reaches out to ex-plant workers or anyone that is willing to take a crack at lighting a torch and cutting steel.

The wages are normally not above the minimum scale for many of the workers and when asked why they did the work when they know it was dangerous to their health. Almost everyone will answer with the need for employment or that this is the only type of work they know. The turnover rate for many of these employers is usually quite large.

The next step is to remove the asbestos from the steel. By law the employer is supposed to be licensed to remove asbestos and the employees involved in the removal and bagging operations are also required to be licensed,

One way of avoiding scrutiny is to hire a licensed company for a small portion of the asbestos removal and that contractor may or may not file the required notification to State and Federal authorities.

The contractor does attempt to remove the small portion of the project by encapsulating the removal work area, then set up a containment measures including negative air to prevent the asbestos fibers entry to non-capsulated areas.

The asbestos is removed and the work area is vacuumed and scrubbed to make sure all asbestos is removed. Air monitors check to see if any air transmitted fibers are present and the asbestos is securely bagged and shipped to a certified landfill.

The remainder of the ubiquitous asbestos is illegally stripped off of the steel and illegally discarded into rivers, or buried some where near the removal area. The steel is then cut and moved over to the preparation where it is also sized and prepared for shipping.

Copper, brass, stainless steel and other valuable metals are closely watched and are sold to what is commonly known as the Jewish Mafia. These operators are willing to pay cash for the valuable product and the cash is used to pay off the operation letting union officials and their LCN sponsors. The funds received from the steel that is shipped overseas usually ends up in an offshore bank account that can be tapped if additional funds are needed as kick-backs.

As an investigator looking into these illegal practices, they are not hard to find. You can start with any plant in any town. Ask a cooperating witness or worker about the plant and recent demolition work that may have taken place there.

Find a friendly demolition company or legitimate asbestos removal company about the project. Soon, you will find a disgruntled company or worker that may be aware of what companies may have bid on a demolition project or a discharged employee willing to tell all.

Each company that bids on a project that contains hazardous waste is required to maintain and preserve the companies bid for each and every project, even if the bid was unsuccessful. Check the amount of hazardous waste that was present and designated for removal, then cross check those records with the State and Federal records for how much asbestos and other waste was actually removed and manifested.

You will probably find major discrepancies in the recorded amounts. Armed with this information, check with the unemployment office to find out workers who were discharged by the employer or laid off. Many of those workers will be willing to talk about the illegal practices and union complicity.

Check to see if the company has a signed Collective Bargaining Agreement with the union, or are working under an alter-ego. On many of these projects, you will find union employees or even there relatives working and business agents stopping by to collect their kick-backs. Most favored companies do have agreements with the union to take advantage of the all union employee required projects.

It has always proved successful and the contractor or employees almost always implicate some union official and LCN member when the FBI followed this method of investigation. The case of Chester Liberatore of Cleveland Ohio, Cuyahoga Wrecking and Republic Steel is a good example.

Even though the investigator is not armed with the legal remedies available to the FBI and the Subpoena power, it will still prove quite successful. Many employers would rather talk than losing there livelihood and ability to make a living. The same holds true for employees because many of them have worked for cash and do not want to become a victim of the IRS.

Building Demolition

Many of the same practices taking place in plants also takes place in buildings though some asbestos discarding procedures may differ. One common removal scheme is that after successfully bidding on a building scheduled for demolition or gutting and before the job is awarded. The low bidder well send in a sneaker brigade to illegally remove as much asbestos as possible and either discard it in dumpsters or wash it into the sewer system.

Then once the project is awarded the contractor does not have as much asbestos to remove legally. The second way is after receiving the award for the demolition, the contractor legally starts removing asbestos on one floor and having the sneaker brigade come in at night then illegally remove and discard asbestos on another.

Investigating this area is easier than in plant work because of the availability of public records. Find a building that was demolished and is owned by a credible owner and check with him or his representative about the job.

The engineering department or construction department will have documentation listing the contractors who bid on the project and may even have their own estimates of how much asbestos was present. Cross check with the State and you will find the discrepancies.

The same holds true for the employees and you will find many willing to talk. The job of extracting the LCN controlled union official will be a lot easier, even if the fiduciary violations of allowing union employers to employ non-union workers were added to existing or stand alone charges. With all the clamor over the environment, the State regulatory agencies will probably start their own investigations.

Purchase of Union Books

In many LCN controlled unions, the purchasing of union books still continues and wanting workers are will willing to pay the union official for the right to become a member. This, of course, is quite difficult to prove unless the person is willing to comfort and cooperate.

Excess Travel Expenses and Reimbursements

Legally, this is quite difficult to prove but from a fiduciary violation standpoint it can be added to charges for misuse of union funds. Many LCN dominated officials will pick up the tab of LCN members dinners and expenses.

This is quite difficult to prove and the only witnesses available are those LCN members and Union officials who because of being caught in some criminal activity have become informants.

One area worthy of exploration is the use of first class travel to and from destinations and excess hotel expense. By itself, this would nor be enough to remove someone from office, but coupled with numerous other fiduciary violations a total disregard for the unions coffers can be proved.

Membership Approval for Expenses, Disbursements, Travel and Cost Related Activity

By law, union officials are required to pre-approve, except in cases where it is absolutely necessary to attend a meeting or other membership beneficial requirement, any and all expenses.

The matter is first presented before the Executive Board which meets once a month and then the membership meeting which also meets one a month for approval of the expense.

Some expenses may not require prior approval, such as the purchase of tires, or travel to meet with the International Union or another union for business matters. It is required, however, that those expenses be presented or at least approved at the next regular meeting. This is normally done under the financial report when it is read and then approved.

In the examination of the unions disbursements, the investigator may find exorbitant expenses for dinners, golf outings and so on.

Even though they may be legal and proper expenses, a thorough examination may also reveal abuse. I have seen union officials charge gambling losses to union credit cards and home expenses and purchases billed to the union.

Personal Use of Union Employees

Personal use of union employees is quite common. Many union officials have used union workers to work around his home or property for littler or no money. Concrete trucks destined for a project may find itself changing course and becoming a union officials new driveway.

Bookmaking

In many LCN controlled locals, the union official is required to find employment for bookmakers, so that they can take advantage of the number of workers present on a given job. Normally, they are coffee men or placed in jobs that allow them to canvas the job site.

Generally

Benefit funds are comprised of programs established to meet the retirement and health and welfare needs of the union employee. They may also include unemployment, vacation and training programs. The creation of these funds are a result of collective bargaining and by law must be jointly administered by the union and employer. Each fund stands alone. is separate and distinct. The funds can never be commingled and transferred from one fund to another.

Trustees are appointed or elected by the union and the employer to establish written trust agreements procedures for the employer's contributions, finances and guidelines that are necessary to fund a program and disburse benefits to the participating member are included.

By law, a trustee who is receiving a pay check from their respective union or employer cannot be financially reimbursed or paid by the fund(s.)

A trustee can be reimbursed or compensated by the fund(s) for travel, meals, entertainment and other fund related activity, provided that the activity was performed for the betterment of the funds.

Benefit fund programs may have separate trustees or group of trustees may represent all the funds in the program. In LCN captivated locals and district councils, the union and employer trustees, invest and disburse the funds in a manner that generates finances for the LCN and its membership.

Many employers who are not controlled by the LCN or the union may not know that the misuse is taking place. Some acquiesce to the illegal practices and avoid union retaliation, others take advantage of better conditions that they may be the recipient of.

Pension Fund

The very nature of the construction industry plays a major role in how a union member becomes eligible for a pension fund. The change of seasons, the nature of the work and the constant moving from company to company by many workers creates a different process from that of a factory worker who spends his whole career for the same employer.

Even though there may be some flexibility, most unions follow similar guidelines and the worker receives a quarter of a credit for 250-500 hours of contributed work in a year, a half a credit for 500-750 hours of contributed work, three quarters of a credit for 750-1000 of contributed work and a full credit for 1000 or more hours of credited work.

In some unions, those members that work 1500 hours or 2000 hours of work may also receive additional credit. In most, however, they don't and the excess moneys are used at the desecration of the fund and the trustees.

The ERISA amendments only establish minimum standard guidelines and substantial fraud takes place in the excess funding of a pension plan.

There are a couple of procedures that ERISA allows in credited years and the percentages of the members contributions that qualify him or her for a partial or full pension. This process is called vesting.

Some plans are allowed to establish 5 year vesting plans, but most have established 10 year fully vested plans.

What this means is, if a given worker stays with the union or a sister union where a reciprocity agreement exists and works for 10 years and contributions were made on his or her behalf for the ten years, then this worker becomes fully vested.

That is to say that in case of death or taking work outside the scope of the Collective Bargaining Agreement, that worker or the beneficiary will be entitled to the contributions made on his or her behalf to the pension fund.

Most collective bargaining pension funds are based on twenty years of service and 62 years of age for a normal retirement plan. Some allow for a reduced pension payment if the worker has twenty years of service and not 62 years of age. Some even have what is known as 25 and out plans.

That is the member has worker for twenty five years and the age requirement has been lifted and the pension payment remains whole.

Break in Service Rule

A loop hole in the ERISA requirements allows a pension plan from considering past pension payments. If an employee has found employment elsewhere and left the bargaining agreement area, that employee returns to the union, his previous pension contributions are not included in the vesting requirement of ERISA, and the employee has to start all over.

The previous contributions will be included and considered when the employee reaches his or her 62nd birthday and the previous and future contributions are equal to twenty or more contributed partial or total credits.

Investments

ERISA requires that the pension fund investments be diverse. When this is achieved, then the fund has what is known as a balanced portfolio.

A balanced portfolio is normally an equal distribution of income investments (bonds, blue chip stocks leaning toward security, mortgages, long term money instruments, etc.), growth investments (more volatile stocks and that may return a larger gain), or any legal investment that has more risk, but can be more rewarding), and liquidity for immediate needs.

These investments may be in the form of short term CD's, savings and checking accounts. The ratios for these investments are quite flexible and ERISA does not address how much should be where.

ERISA does require that no more then 10% of the pension portfolio be invested in any one individual stock or bond, for example, a real estate loan.

This does not hold true to a mutual fund company where that transaction is, in most cases, encompassing many diverse investments. The law is quite flexible on how a fund invests its resources. Even where flagrancy is quite recognizable and millions of dollars have been lost, prosecution is next to impossible.

Under the guise of "well at that time we thought it was a solid investment and in the best interest of the fund response," trustees have been able to avoid being charge with a criminal and misuse charge or when charge, acquitted.

As you can see, even with ERISA laws present there is substantial room for manipulation and many creative plan administrators and other responsible parties who when held captive can utilize to generate financial fallout.

Many illegal practices can take place with the pension funds and some of the more prevalent practices besides those already mentioned include churning, commission rates, and real estate investment fraud.

Churning

Churning is quite common and it refers to a stock broker or investor who constantly buys and sells stocks and bonds to increase the purchasing and selling commissions that are included in those transactions.

Commission Rates

The fund has to pay a higher commission rate than what is available.

Real Estate Investment Fraud

Some real estate investment fraud schemes usually include front-end and long-term financing kick-backs. When A real estate developer requests a loan from a pension or another benefit fund it is normally structured into two phases:

1. the construction loan and the financing for the actual construction. As a condition of loaning the money to the developer, the trustees mandate that the project must be constructed by union labor only.

Percentages of the loan normally around 3 % is paid to the benefit fund attorney and a benefit fund appointed real estate agent who makes sure the project is being constructed according to the specifications. In LCN controlled unions The lawyer or agent or both share their commission with the LCN;

2. once construction is completed, the construction loan is rolled over to what is known as the loan term financing. 3-5% is again paid to the lawyer and the agent who in turn kick-back the additional financial fall out to the LCN.

Another scheme that may be used in concert with the above scheme is:

By law trustee's are required to maximize the fund assets and that also includes real estate investments. In order to loan a favored developer trust fund moneys and avoid governmental scrutiny the trust loans the developer the funds at lets say 5% and the going best rate available is 7%.

The developer believes that the construction and operation after completion cost of that project is going to cost him 3 million dollars a year. He has projected that the projected business is going to bring in 5 million dollars a year. Before taxes a gain of 2 million dollars.

The developer puts together a projection by doing ten million dollars a year business and telling the trustees that he will give the trust 50% of all proceeds of business over 7 million dollars. This is known in the lending business as a kicker.

The developer and the LCN controlled trustees know that the 7 million dollar level of business is never going to become a reality, but it places a blanket of protection over the trust for making the loan at a lower than bank interest rate. Of course, the trustees could argue that the union and benefit fund contributions made by the workers on the project would not have been there if the job was not financed by the fund and would have been done by non-union workers.

Positions

Unneeded secretarial and support help are quite common in fund offices and you will find these positions held by relatives and cronies of the LCN and the union official. Many funds have established positions for collectors of delinquent accounts.

The responsibility and the remedies for collecting delinquent accounts are with the union and the Collective Bargaining Agreement. Many funds utilize the ERISA laws and its requirements to operate its own collection procedure and create unneeded positions.

5500 Reports

Each fund must file an annual report which is commonly known as a 5500 Report. This report contains information reflecting the assets, liabilities, employees, expenses, funding periods, gains and losses of a fund. The report does not contain each and every purchase and sale transaction of the fund.

Creative and even unknowing accountants,who compile the information, paint a picture of a fund well run and void of misuse. Besides revealing general information, this report is quite useless when a fund is subject to scrutiny.

Most investigators will find this perusal a waste of time and futile. To really find out if any churning and misuse of a fund is taking place, it is important that reports made to trustees by brokerage firms and investors be made available.

Each union and employer trustee will have in their possession periodic reports. These reports will list the purchasing, selling and commissions of the investors transactions.

Actuarial Reporting

Pension funds have what is know as actuaries working on behalf of the fund. The actuary will examine the investments, assets and liabilities. The actuary then interpolate the results and a report will follow explaining.

If the fund is over-funded with increases in benefits available, or under-funded and in need of additional contributions, by law a pension fund is required to achieve fully funding within a given period of time.

The problem for the union trustees in achieving fully funded status is that it narrows down future negotiated fund demands and control over employers who by law are responsible to achieve fully funding status. Many games are played by the actuary and his control is necessary to the LCN and its captive.

Legal Council

The Legal Councils in the pension plan is also vital to the LCN. He or she makes sure that the trustees are protected and have a defense when subjected to membership and regulatory agencies ask questions.

Many of these legal representatives have been placed in LCN controlled benefit funds as either a reward for low or no cost representation of an LCN member or associate. Or, he makes sure that the illegal use of the funds and the manipulators are protected.

Fund Administrator

The Fund Administrator is appointed by the trustees and essential to the LCN captive. It is vital that this position be filled by a lackey or collaborator who is willing to aid and abet any and all sponsored and money making activity. The glossing of shady investments or other schemes are, in most captives, the work of the administrator and her or her cohorts.

Individual Funding Fraud

Many past and favored members are not eligible for becoming the recipient of a pension. The administrator fraudulently creates past hours for work, even though not worked in a given period, showing the recipient working at a time prior to the introduction of the pension fund and where credits are awarded for union membership, commonly called past service.

Or, the recipient's name is listed with the employees of a contributing employee for hours of work and contributions made on his or her behalf even though the employee was not working for that employer.

Some administrator's will utilize a company that has ceased to exist or one that has filed for bankruptcy to create hours of work for a favored member.

The favored members name is added to the remittance forms that were submitted by the defunct employer. Many Taft Hartley established funds will honor uncollected funds and allow those members working for that company to receive pension credit anyway. In many cases, the administrator may just add the name of the favored member to a remittance form that was created by him and listing a made-up name with created hours of work.

Health and Welfare Fund

Health and Welfare funds are also jointly administered and subject to ERISA and other applicable laws, but the ability to siphon off funds is even greater. Besides utilizing the same investment and crediting employee requirements, health and welfare programs have some distinct and additional methods available to the LCN and its lackeys.

Controlled Dental, Optical and Medical Provider Plans

A physician, dentist or optician establishes a program where the union membership, through the health and welfare plan, are required to utilize the physician, dentist, or optician or its established group when care is needed.

Normally, the service is made available at a reduced rate, presented to the trustee's and union membership as a cost saving vehicle. The union membership doesn't approve these plans, nor do they have any authority to do so.

ERISA only requires that the members be supplied a copy of what benefits are available and the hours of work needed to qualify. The only due process available to the membership is to vote out of office those union officials.

As a rule, most unions are informed of the necessity of such a plan and the savings that the membership are enjoying. In reality, the service provider, as a reward for the increase in business, is kicking-back cash or other valued commodities to the LCN or wayward fund trustee(s) or union official.

Following the restrictive HMO or health provider concept paves the way for substantial abuse in the medical field and even ancillary services such as X-ray facilities, pharmaceutical supplies and pre-surgical procedures may be included in the schemes.

Provider Kick-backs

Many insurance providers, including some major carriers have been willing to pay LCN members and captive union officials an annual fee for allowing their company to provide the health coverage needs. This is normally done through inflated commissions, which are shared, laundered and disbursed.

Bid Rigging

A vehicle for making sure an LCN favored insurance provider is selected. Costly conditions and requirements are found in the unwanted carriers bid request and the favored company is given a substantial advantage.

Inflated Costs

A physician or provider may submit a fraudulent bill for insurance reimbursement or may inflate the actual cost of service.

Membership Fraud

A member in concert with a medical provider may inflate the actual services and spilt the profits or the fund.

Fund Administrator Fraud

Besides all the others mentioned, the administrator may provide the contributions and qualifications made on behalf of a union member and make them available to a LCN favored person. The recipient utilizes the name and social security number of the member for his or her medical needs.

Training Fund

Training funds are also a vehicle for misuse and in LCN controlled unions are method for taking care of relatives and favored members. Many training fund administrators and teachers are the recipients of this relationship and are not qualified to instruct and pass on the information to the membership.

Training Fund Fraud

Some of the more prevalent illegal practices that they are involved in include:

Supply Fraud

The purchase of steel and welding classes is either recycled or purchased in the amounts or quality listed. plastic encapsulation sheeting, filters, hepa vacuums, respirators, tivac clothing used for teaching asbestos cleanup are purchased from LCN favored suppliers at inflated cost and not in the quantities reflected in the purchase order. The list of supply fraud goes on and on.

Fraudulent Work at Training Sites

The training fund instruction includes concrete pouring, mason tending, blacktop laying and all related craft jurisdiction. Much of the actual construction of a training facility is being performed by the trainees and involving limited labor cost. A scheming training fund administrator may create a fraudulent bill stating the work was performed by the John Doe construction company.

Vacation and Annuity Funds

Vacation and annuity funds face the same problems as the other funds.

Supplemental Unemployment Benefit Funds

The Supplemental Unemployment Benefit (SUB) funds are designed to create additional funds for unemployed members. In order to become a recipient a worker must be eligible for state unemployment insurance. The schemes are similar as the other funds and in LCN controlled unions become advantageous for favored employees.

The list of violations and misuse of union funds goes on and on. No report or book could cover all the ingenious mistreatment schemes available and being exercised in LCN enslaved unions. Even though, I have not covered them all, I have attempted to incorporate some of the more common ones that will be found.

It is quite important that the investigator develop a game plan when delving into the irregularities of the LCN controlled local union and its officials.

Asking members to discuss these areas without being pre-armed with necessary information will be an effort in futility. One must always remember that the membership fears the LCN more than you, and any conversing or complaining will lead to his or her being blackballed.

APPLICABLE LAW

Besides Title 18 and its sub sections known to most of those involved in labor racketeering perusals. Labor and Environmental Laws should also be utilized when investigating a LCN captive union local and district council.

The representations made are guidelines only and any application and interpretation should be made by a qualified legal council.

Labor Management Relations Act of 1947 (Taft Hartly)

As a result of the passage and enactment of the Labor Relations Act of 1935. Many employers and citizens not wanting to be forced into labor organizations were. The Labor Management Act was passed after survived a Truman veto.

It pared down much of the labor organization's ability to impose its way and advanced Federal authority over unions that affected interstate commerce.

As a result the National Labor Relations Board was established to oversee this act, but the exhaust all remedies doctrine has narrowed down the NLRB's input until all contractual and union bylaw procedures have been implemented and used up.

In a LCN captive union many violations of this Act can be found and this section and its sub sections may prove to be helpful. However for the sake of brevity, I have omitted most of the language contained in this law, so my interpretation and opinions will have to suffice. It is quite important however that you review the many sections and subsections as a follow up to what is written and contained in this document.

Article 29 USCS § 141. Short title; Congressional declaration of purpose and policy

(a) This Act may be cited as the "Labor Management Relations Act, of 1947" Industrial strife which interferes with the normal flow of commerce and with the full production of articles and commodities for commerce, can be violated or substantially minimized if employers, employees, and labor organizations each recognize under law one another's legitimate rights in their relations with each other, and above all recognize under law that neither party has any right in its relations with any other to engage in acts or practices which jeopardize the public health, safety, or interest.

It is the purpose and policy of this Act, in order to promote the full flow of commerce, to prescribe the legitimate rights of both employees and employers in their relations affecting commerce, to provide orderly and peaceful procedures for preventing the interference by either with the legitimate rights of the other, to protect the rights of individual employees in their relations with labor organizations whose activities affect commerce, and are inimical to the general welfare, and to protect the rights of the public in connection with labor disputes affecting commerce. Some of the areas of illegal practices covered by this Act include:

Violence, threats, interference with workers rights, negligence, mass picketing, Federal funded projects, construction sites, secondary activity, picketing, boycotts, activity for union security, union breach of fair representation, wrongful expulsion or exclusion, wrongful union discipline, etc.

Labor, Management Reporting and Disclosure Act of 1959 (Landrum-Griffin Act)

When the Labor Management Act of 1947 was passed it did not address many internal union problems regarding the rights of members to oppose current officials, receive union documents and be informed of union practices.

Prior to 1959, many union officials even owned their own construction companies and would benefit from the lack of restrictions. What I feel was the most important area addressed by this amendment was the area of fiduciary responsibilities.

I have included some area of Landrum Griffin for use as a guide only. I have included some personal comments which are mine alone and may not reflect the opinions and decisions of the courts and governmental regulatory authorities.

Article 29 USCS § 431 Reporting of Labor Organizations, Officers and Employees of Labor Organizations, and Employers

Report of Labor Organizations

(a) Adoption and filing of constitution and bylaws: contents of report.

Every labor organization shall adopt a constitution and bylaws and shall file a copy thereof with the Secretary, (of Labor) together with a report, signed by its president and secretary or corresponding principal officers, containing the following information-

(1) the name of the labor organization, its mailing address, and any other address at which it maintains its principal office or at which it keeps the records referred to in this title (29 USCS §§ 431 et seq,);

(2) the name and title of each of its officers;

(3) the initiation fee or fees require from a new or transferred member and fees for work permits required by the reporting labor organization;

(4) the regular dues or fees or other periodic payments required to remain a member of the reporting labor organization; and

(5) detailed statements, or references to specific provisions of documents filed under this subsection which contain such statements, showing the provision made and procedures followed with respect to each of the following

(a) qualifications for or restrictions on membership,

(b) levying of assessments,

(C) participation in insurance or other labor benefit plans,

(D) authorization for disbursement of funds of the labor organization,

(E) audit of financial transactions of the labor organization,

(F) the calling of regular and special meetings,

(G) the selection of officers and stewards and any

representatives to other bodies composed of labor organizations, representatives, with a specific statement of the manner in which each was elected, appointed, or otherwise selected, (H) discipline or removal of officers, or agents for breach of trust,

(I) imposition of fines, suspensions, and expulsions of members, including the grounds for such action and any provision made for notice, hearing, judgment on the evidence, and appeal procedures,

(J) authorization for bargaining demands,

(K) issuance of contract terms,

(L) authorization for strikes and

(M) issuance of work permit. Any change in the information required by this subsection shall be reported to the Secretary (of Labor) at the time the reporting labor organization files with the secretary the annual report required by subsection (B).

(B) Annual financial report; filing; contents. Every labor

organization shall file annually with the Secretary (of Labor) a financial report signed by the president and treasurer or corresponding principal officers containing the following information in such detail as may be necessary accurately to disclose its financial condition and operations for its preceding fiscal year-

(1) assets and liabilities at the beginning and end of the fiscal year;

(2) receipts of any kind and the sources thereof;

(3) salary, allowances, and other direct or indirect disbursements (including reimbursed expenses) to each officer and to each employee who during such fiscal year, received more than $10,000 in the aggregate from such labor organization and any other labor organization affiliated with it or with which it is affiliated, or which is affiliated with the same national or international labor organization;

(4) direct and indirect loans made to any officer, employee, or member which aggregated more than $250 during the fiscal year, together with a statement of the purpose, security, if any, and arrangements for repayment;

(5) direct and indirect loans to any business enterprise, together with a statement of the purpose, security, if any, and arrangements for repayment; and

(6) other disbursements made by it including the purposes thereof;

all in such categories as the Secretary (of Labor) may prescribe.

(C) Availability of information to members; examination of books, records and accounts. Every labor organization required to submit a report under this Title (29 USCS §§ 431 et seq.) shall make available the information required to be contained in such report to all of its members, and every such labor organization and its officers shall be under a duty enforceable at the suit of any member of such labor organization in any State court of competent jurisdiction or in the district court of the United States for the district in which such labor organization maintains its principal office,to permitsuch member for just cause to examine any books, records, and accounts necessary to verify such report.

The court in such action may, in its discretion, in addition to any judgment awarded to the plaintiff or plaintiffs allow a reasonable attorney's fee be paid by the defendant, and costs of the action.

Opinionn

Many labor organizations do not comply with each and every notification requirement, such as letting the Department of Labor know many of the work rule changes that have resulted from the collective bargaining process and or procedures for appointing shop stewards.

When the DOL is made aware of this, they normally notify the union and tell them to comply with the law from now on. As far as utilization of § 431 violations they should be coupled with other violations when applied against a LCN controlled union.

Article 29 USCS § 432. Reports of Officers and Employees of Labor Organizations

(a) Filing; contents of report. Every officer of a labor organization and every employee of a labor organization (other that an employee performing exclusively clerical or custodial services) shall file with the Secretary a signed report listing and describing for his preceding fiscal year-

(1) Any stock, bond, security, or other interest, legal or equitable, which he or his spouse or minor child directly or indirectly held in, and any income or any other benefit with monetary value (including reimbursed (expenses) which he or his spouse or minor child derived directly or indirectly from, an employer whose employees such labor organization represents or is actively seeking to represent, except payments and other benefits received as a bona fide employee of such employer;

(2) any transaction in which he or his spouse or minor child engaged directly or indirectly, involving any stock, bond, security, or loan to and from, or other legal or equitable interest in the business of an employer whose employees such labor organization represents or is actively seeking to represent;

(3) any stock, bond, security, or other interest, legal or equitable, which he or his spouse or minor child directly or indirectly held in, and any income or any other benefit with monetary value (including reimbursed expenses) which he or his spouse or minor child directly or indirectly derived from, any business a substantial part of which consists of buying from, or selling or leasing directly or indirectly to, or otherwise dealing with such labor organization.

(4) any stock, bond, security, or other interest, legal or equitable, which he or his spouse or minor child directly or indirectly held in, and any income or any other benefit with monetary value (including reimbursed expenses) which he or his spouse or minor child directly or indirectly derived from, a business any part of which consists of buying from, or selling or leasing directly or indirectly to, otherwise dealing with such labor organization;

(5) any direct or indirect business transaction or arrangement between him or his spouse or minor child and any employer whose employees his organization represents or is actively seeking to represent, except work performed and payments and benefits received as a bona fide employee of such employer and except purchases and sales of goods in the regular course of business at prices generally available to any employee of such employer; and

(6) any payment of money or other thing of value (including reimbursed expenses) which he or his spouse or minor child received directly or indirectly from any employer or any other person who acts as a labor relations consultant to a employer, except payments of the kinds referred in section 302 (c) of the Labor Management Relations Act, 1947, (Taft Hartly) as amended (29 USCS § 186 (c).

(b) Report of certain bona fide investments. The provisions of paragraphs (1), (2), (3), (4), and (5) of subsection (a) shall not be construed to require any such officer or employee to report his bona fide investments in securities traded on a securities exchange registered as a national securities investment company registered under the Investment Company Act of the Public Utility Holding Company Act of 1935, or to report income derived therefrom.

(c) Exemption from filing requirement. Nothing contained in this section shall be construed to require any officer or employee of a labor organization to file a report under subsection (a) unless he or his spouse or minor child holds or has held an interest, has received income or any other thing with monetary value or a loan, or has engaged the services of an employer as defined therein.

Title 29 USCS § 436. Retention of Records

Every person required to file any report under this title (29 USCS §§ 431 et seq.) shall maintain records on the matters required to be reported which will provide in sufficient detail the necessary basic information and data from which the documents filed with the secretary may be verified, explained or clarified, and checked for accuracy and completeness and shall vouchers, worksheets, receipts, and applicable resolutions, and shall keep such records available for examination for a period of not less then five years after the filing of the documents based on the information which they contain.

Title 29 USCS § 501. Fiduciary responsibility of officers of labor organizations

(a) Duties of officers; exculpatory provisions and resolutions void.

The officers, agents, shop stewards, and other representatives of a labor organization occupy positions of trust in relation to such organization and its members as a group.

It is, therefore, the duty of each such person, taking into account the special problems and functions of a labor organization, to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder, to refrain from dealing with such organization as an adverse party or in behalf of an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interest of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization.

A general exculpatory provision in the constitution and bylaws of such labor organization or a general exculpatory resolution of a governing body purporting to relieve any such person of liability for breach of the duties declared by this section shall be void as against public policy.

(b) Violations of duties; action by memb