CHAPTER ONE — UNION CORRUPTION:  A LICENSE TO STEAL

CHAPTER TWO –- CORRUPTION:  HOW IT’S DONE AND WHO DOES IT
  Overview
  Tactics
     Extortion
     Embezzlement
     Bid-Rigging/Collusion
     Benefit Plan Theft
     Extortion and Bribery to Secure Jobs
     No-Show Workers
     Fishy Business Fronts
   The Big Four

CHAPTER THREE --  THE PECULIAR CASE OF  THE TEAMSTERS
   Overview
   The Roots of Corruption
   Married to the Mob:  The Golden Age
   The Carey "Reform" Years
   Hoffa II:  The Sequel

CHAPTER FOUR – STRATEGIES FOR FIGHTING CORRUPTION
   Overview
   What Can Be Done
       Improve Anti-Corruption Investigation and Law Enforcement
       Continue Industry Deregulation
       Enforce the Beck Decision 
       Promote State Paycheck Protection Laws
       Promote Union Democracy
       Enact a National Right-to-Work Law
       Repeal the Exclusive Representation Clause
       Limit Union Non-Dues Revenue
       Restore the Original Intent of the Hobbs Act
   Conclusion

BIOGRAPHY

NOTES

INTRODUCTION

Call it the mystery of the missing $8 million.

In New York City in 1995 federal investigators discovered that around $8 million had vanished from the pension fund of Teamsters Local 875. ¹  The truck drivers, garage mechanics, assembly-line workers and other employees who make up the union had counted on the money for retirement.  Yet behind their backs, union officials for several years had not been making their promised pension contributions.  The culprits eventually were arrested and convicted, and ordered to pay restitution. ²  But aside from the bad guys getting their comeuppance, there’s another way to look at the theft. 

Local 875 had a long history of corruption; in the previous 25 years five of its officers and financial advisers were convicted of embezzlement or accepting payoffs to keep labor peace.  Suppose workers during that time had an opportunity to join what they believed was a less corrupt union—or not join a union at all.  It’s a fair bet the white-collar crooks wouldn’t have been quite so attracted to the pension fund in the first place. 

The problem is that federal law for decades has given unions the privilege of requiring new employees to join.  In that sense, the law has been an unwitting accomplice to corruption in labor unions, whether the pile of money lay in operating revenues or member benefit plans. 

While there are many reasons for corruption, public policy has been a major contributing factor explaining why the term "union corruption" in the public mind seems a redundancy.  Labor unions, ostensibly established to promote the interests of their members, too often embody the abuse of trust in the service of greed and power. 

Some unions are cleaner than others, but too much evidence suggests even "good" unions remain that way out of expediency rather than principle.  The seemingly clean hands owe mainly to the lack of opportunities at hand for embezzlement, bribery or extortion—and threats or acts of violence to protect the guilty.  But to the vast opportunities for crime that exist, there is an irony:  Unions have as an unwitting accomplice the very federal government that investigates, arrests, prosecutes, and convicts corruption.

Federal law enforcement agencies rightly point with pride to their efforts to rid unions of their looters.  The Department of Labor’s Office of Inspector General, for example, reported last spring that over the previous five years it helped secure 21 indictments and 20 convictions of persons who looted union employee benefit plans. ³  In certain instances, most notably the Teamsters, federal officials have taken the drastic step of taking control of corruption-ridden unions or their locals.  Yet on the other hand, it has promoted this criminality through laws and court decisions that effectively grant unions a license to steal and intimidate anyone who complains about it. 

Put simply, unions are susceptible to ripoffs in large part because there is so much money to be ripped off in the first place.  And longstanding federal policy has helped to swell the pot of money.  The National Labor Relations Act of 1935 and the National Railway Act of 1951 each contain clauses sanctioning unions to condition a person’s employment upon joining the union and paying requisite dues.  As exclusive bargaining agent for workers, a union can prevent a worker from showing up on the job if he or she fails to pay tribute. 

Right-to-work laws in 21 states effectively veto this federally-granted authority; it is little coincidence that corruption in these states, though real, is not widespread, and involves relatively small sums of money.  In the other 29 states, however, where the heart of the nation’s industrial activity is located, unions inflate their coffers with a unique base of captive income.  With the stakes greater, the temptation to steal is greater.  Yes, unions enjoy lucrative and growing sources of income beyond dues, especially real estate and affinity credit cards.  Yet even here, the forced nature of dues collection helped make even these investments possible. 

Strictly speaking, unions may not bar from employment any worker who does not wish to join.  In 1963 the U.S. Supreme Court ruled in NLRB v. General Motors Corp. ⁴ that an employee has the right not to become a member.  Yet in invalidating the union shop, the court did not address the fact that unwilling workers must still pay dues if the union requires it.  And because fees in lieu of membership, known as "agency fees," are usually nearly as steep as regular dues (if not as steep), even reluctant workers outside right-to-work states have the incentive to join. 

Another contributing reason for corruption is that unions have what amounts to a license to hire muscle, often courtesy of the Mafia and other crime syndicates, to extort and terrorize.  And who, however unwittingly, granted this license?  The U.S. Supreme Court did, in its 1973 Enmons ruling.  The court ruled a union could be exempt from federal extortion statutes if seemingly illegal acts were related to "legitimate" union objectives like wage and benefit increases. ⁵  Admittedly, organized labor was an old hand at extortion long before 1973. Yet the decision has had the effect of blunting anti-corruption efforts by federal prosecutors, armed with the Racketeer Influenced and Corrupt Organizations Act (RICO) that Congress had passed just three years earlier.  Given that intimidating, even killing, "scab" workers may qualify, under certain circumstances, as a legitimate activity, unions have proceeded boldly in the last 25 years. ⁶

Ending the federal sanction of forced dues through a national right-to-work law and undoing Enmons, are two needed actions.  Unfortunately, Big Labor ally Bill Clinton stands in their way.  In the meantime, it is a necessary task to understand how corruption happens, and what obstacles stand in the way of combating it more effectively.

Corruption, loosely speaking, refers to any activity that involves the enrichment of members of an organization through illegal means.  In a union, as in other contexts, that can assume different forms.  Corruption can consist of a one-time event or a repeated pattern of behavior over years, even decades.   It can be a small renegade operation conducted without the knowledge of ranking union officials or it can be an elaborate racket involving the national leadership, local presidents, and a network of shady criminal underworld figures. 

The worst unions, such as the Laborers International Union of North America and the International Brotherhood of Teamsters, have been branches of crime syndicates all but in name.  Some mob enforcers have admitted as much.   For example, a segment of the September 20, 1998 edition of CBS’s "60 Minutes" profiled Anthony Casso, a top member of the Lucchese crime family in New York, now doing multiple life sentences for some three dozen murders.  Casso came clean about the Mob’s domination of Manhattan’s garment district through control of labor unions: 

You can’t move a garment…unless we tell you what trucker to use, who to deal with and what you have to pay, because we control the unions….(T)he organized crime’s putting their people in there to be the union representatives. ⁷

That there are many known corrupt present and former union officials in this country is indisputable.  Yet equally plausible is that there are many who aren’t known, or if they are, they have yet to receive their just deserts.  A mob-connected union official’s acquittal isn’t necessarily so much a sign of innocence as it is a mark of the ability of his lawyers to convince a judge or jury that evidence, however compelling, fails to meet the "beyond a reasonable doubt" required for a criminal conviction.  For example, in Southern California a jury in 1986 acquitted three men, one a former Teamsters official and the other a two with mob connections, of plotting to sell more than $2.8 million in stolen stocks.  Despite extensive evidence, there was not enough certainty for a guilty verdict. ⁸

Cases like these are the precisely reason why federal prosecutors prefer to use civil rather than criminal RICO statutes to snare union criminals. Another reason for union corruption going unpunished is that many witnesses whose testimony could put crooks away are intimidated, and on due occasion, killed.  This monograph has made every effort to follow through on newspaper accounts of union corruption that provided only preliminary facts in relation to a probe and/or indictments.

The main, though not exclusive, focus is on unions serving private-sector industry.  Public employees’ unions have not been immune to corruption, New York City’s District Council 37 of the American Federation of State, County and Municipal Employees (AFSCME) being an extreme example. ⁹  Yet such unions by definition are beholden to government.  Of primary interest here is how government policy may be encouraging corruption in the private sector, where presumably the spirit of unionism as voluntary cooperation ought to prevail.  For it is there where unions have benefited most from an implicit federal license to steal, and hence where the need for reform is greatest.

The need to nail crooks cannot be underestimated.  Yet the reader should not lose sight of the larger tragedy of corruption.  When union officials steal from operating expenses or pension funds, they undermine the trust workers place in unions and indeed their very liberty.  It is, after all, workers who have entrusted their unions to handle their money honestly, and for legally authorized purposes.  Each dollar embezzled or extorted from a union’s coffers, in a sense, is a dollar taken from some the mortgage down payment, health care or retirement of some worker and his family.  Law enforcement officials, prosecutors and courts should remain vigilant in protecting their interests.  The money that union officials and their bagmen illegally obtain belongs to the workers, and it is to the workers that this monograph is dedicated.
 

Chapter One:  UNION CORRUPTION:  A LICENSE TO STEAL

Corruption in American labor unions is hardly a new phenomenon.  As early as the 1920s, for example, government reports documented a widespread pattern of corruption and racketeering among construction trade unions in New York City. ¹  Corrupt labor practices in construction have been far more than New York’s problem.  In 1938 historian Harold Seidman observed, "For almost fifty years corruption has been the most striking feature of the American building industry. (T)he first labor czars were born of the building trades, and not a year has passed since their day in which this industry has failed to produce its full quotas of racketeers." ²

It was a little over 40 years ago when corruption among unions as a whole became an issue of the first rank.  The American Federation of Labor and the Congress of Industrial Organizations had merged in 1955 to form the AFL-CIO.  Top federation officials sought to convey the impression that they, like business, were good partners in the American economy.

For good measure the AFL-CIO in 1957 expelled the Teamsters for corrupt practices, in the light of widely-publicized hearings in the Senate Government Operations Committee, headed by John McClellan, Arkansas Democrat.  The hearings produced over 50 volumes of testimony, and a host of supplementary reports.  Robert F. Kennedy served as chief counsel to the McClellan Committee.  Not long after, he wrote a book, The Enemy Within, ³  detailing many of the findings.  The book, like his pungent questions during hearings, made him a special nemesis of Teamster boss Jimmy Hoffa.

The McClellan hearings were remarkable for their abundance of detail, a performance Congress regrettably since has not duplicated.  But full-scale investigations have come from other sources.  In 1986, for example, a White House Task force, the President’s Commission on Organized Crime, detailed how organized crime and labor unions collude to control seemingly legitimate businesses. ⁴  And various state commissions over the years have released reports on union corruption. ⁵

There is always the danger that treading lightly on unions will reinforce a longstanding and misleading view that corruption is merely a small blot on an otherwise honest labor movement.   "Probably only a tiny fraction of all union officials in America would stoop to serious abuse, " wrote Derek Bok and John T. Dunlop in 1970, the latter who would serve as President Ford’s Secretary of Labor. ⁶  Likewise, Clark Kerr argued, "Corruption exists, and it is bad; but right and wrong are quite evident and hardly open to debate.  Few unions are involved, and other institutions in society have known and do know it too." ⁷  Even Bobby Kennedy, in The Enemy Within, was moved to conclude, "(W)ith few exceptions, the men who run our great labor unions in this country are honest, dedicated men." ⁸  In 1980, the Labor Department, after an extensive review of federal prosecutions, concluded, "(I)n the overwhelming number of cases prosecuted there is no evidence available to this study of systematic corruption within unions or of their domination by organized crime." ⁹

Yet corruption may be more deeply imbedded than such statements would indicate.  In the view of this monograph, corruption, far from an aberration, is endemic to an enormous portion of American trade unionism, and worse, is accompanied by a culture of intimidation. For as Texas A & M economist Morgan Reynolds wrote some 15 years ago:

It is difficult to tell racketeer-controlled unions from other unions, because both types depend on violence and the threat of violence…The plain truth is that our labor laws have arranged incentives so that honest, noncoercive union officials find it difficult to survive in competition with the muscleman types." ¹⁰

To understand why organized labor is so intertwined with crime, it is necessary to grasp that the fundamental purpose of labor unions is to restrict the supply of labor.  However much one hears of  "labor-management tensions," what a union fears most is competition from workers who, for whatever reasons, choose not to join that union, or worse, any union at all.  A union foremost opposes non-member workers, not an employer or an industry.  British economist and lawyer Arthur Shenfield elaborates: ¹²

(Unionism) presents itself as the protector of the worker in conflict with the employer.  In fact it is, always has been, and must be, the agent of oppression by some workers of other workers.  The conflict is only in a minor degree worker versus employer or capitalist.  It is mainly and above all worker against worker.

Unions compete with those who sell substitutes for their members’ services, which means other forms of labor—members of rival unions, foreign workers, strikebreakers, nonunion workers—as well as machinery and other nonlabor commodities that can substitute for direct labor, or in effect, the labor of those who produce and service machinery that can substitute for the services of organized workers. ¹³

But even the best-organized union cannot completely control the supply of labor, locally let alone nationally.  That means they have an incentive to discourage employers from hiring workers who might accept less than what the union wins at the bargaining table.  Toward this end, unions have an ally in the National Labor Relations Act of 1935 and the National Railway Act of 1951.  These laws contain language that grants a union the right of exclusive representation or "monopoly bargaining."  If a group of workers votes for a union to represent them, that union reserves the right to represent all workers covered by a contract, regardless of how they voted.

What’s more, federal law authorizes unions (except in right-to-work states) to bar from employment those workers who withhold dues (or equivalent "agency fees") to a union covered by a contract.  Surveys over time have shown that about 80 percent of all private-sector union contracts contain some requirement that employees pay union dues to keep their jobs. ¹⁴  A 1977 Supreme Court decision, Abood v. Detroit Board of Education, ¹⁵ placed workers in public-employees unions under the same constraint.

Union officials therefore enjoy what amounts to a monopoly, though they obviously wouldn’t use that term.  And like business monopolies, union monopolies, shielded from competition, have a tendency to be lax in accountability toward the people they serve.  Unlike business monopolies, however, there is an element of intimidation.

While workers can choose between one monopoly firm versus another, they can’t switch unions so easily.  And in non-right-to-work states, faced with the choice between leaving a union or becoming nearly unemployable in their chosen trade, employees would prefer not to acquire a reputation as a dissenter.

They may see it as more attractive to remain silent or even get a piece of the action.  After all, if stemming corruption is futile, and paying dues is mandatory, why not at least get one’s share, especially at the top of  the union hierarchy?  Corruption begets more corruption, and if rank and file are crooked, it is certain that their hostility toward whistle-blowers will burn especially hot.

A culture of intimidation pervades much of America’s unions. And that culture explains much of why so much corruption is hard to detect and fight.  Corruption, by definition, involves illegal activity for personal gain.  And in a large organization such as a labor union, no participant, acting alone or in concert with others, will admit to misdeeds.  Instead, when under suspicion, they will issue a defiant, "Prove it! "   In absence of vigilant prosecution and witness protection, the lone dissenting worker is not likely to risk his job, let alone his physical safety, to play the hero.

Fear and silence enlarge the pie for corruption.  Not only are workers "encouraged" to pay dues or equivalent agency fees, but they have little ability, left to their own devices, to track where their money has gone.  Federal reporting requirements, enacted as the Landrum-Griffin Act of 1959 in the wake of the McClellan Committee hearings, have helped fitfully.  But even here, unions can hide or falsify the money they take from members, and intimidate those who complain.  And it takes a lot of patience and a good lawyer for the workers to track their money down.

In Syracuse, for example, dissident members of Local 214 of the Laborers International Union of North America (LIUNA) in 1987 charged local officials hid union money to frustrate them from winning any money in a suit they had filed in federal court four years earlier. ¹⁶  The case was brought on by 32 LIUNA members who claimed they were blocked out of work in the construction of the cost overrun-plagued Nine Mile Point 2 nuclear power plant.  What’s more, they were spied on, beaten up, and blackmailed by bosses of the Oswego, N.Y.-based local.  At the beginning of 1986 the local had a cash balance of about $1.6 million.  Sometime during that year about $1.4 million had been withdrawn and invested in "marketable securities" through a "B & K Employees Fund."  The workers in November 1988 won $1.3 million in an out-of-court settlement, but not without incurring substantial legal bills and further intimidation along the way.

The point is that an individual worker, or a group of workers, may be risking their jobs or safety by demanding accountability from their union.  Most workers as a result see it in their interest either to play along or get in on the gravy train.  Yet without recourse to leave the union (unless, of course, they don’t mind losing their job), they will subsidize, reluctantly or not, union corruption.  To remove many of the incentives for corruption, Congress and the courts must remove the unions’ monopoly status over workers.  This they have been reluctant to do.

Unions and their allies in Congress are a formidable political force, and relentlessly fight to maximize their authority to raise and spend money.  The Federal Election Commission recently reported that "soft" donations by labor unions to national political parties during the 1997-98 election cycle totaled some $8 million, nearly all of it to the Democratic Party; AFSCME and the Communications Workers of America, respectively, ranked number two and three among all donors. ¹⁷  This is actually a small fraction of the true total, when taking into account "in-kind" expenditures such as get-out-the-vote drives and issue-advocacy "voter education" projects.

But absent the political will to challenge them, union monopoly privileges are not going to disappear anytime soon.  And neither is corruption on the scale seen for the past several decades.  Still, corruption is illegal and can result in a prison sentence.  In response, union leaders have become increasingly adept in keeping corruption out of view.  Intimidation and bribery, while effective, are not enough. The next two chapters chronicle how union officials have enriched their coffers, often with deadly force. Chapter Two breaks down union corruption into several methods, giving illustrations for each, while Chapter Three applies this to the Teamsters, a union whose corruption has more widespread and inescapable, than that practiced by any other union.

Let it be said here, as in subsequent chapters, that union corruption occurs most frequently, and involves greater sums of money, in states without a right-to-work law.  It is safe to say that if New York or New Jersey each had a right-to-work law, neither would offer such a rich lode of case material.  In encountering these synopses of cases, which ranges from disturbing to horrifying (much of it unintentionally hilarious, one might add), the reader should not lose sight of the reality that federally-granted labor monopoly privileges made many of these sagas possible.
 

Chapter Two:  CORRUPTION:  HOW IT’S DONE AND WHO DOES IT

Overview

When it comes to rooting out union corruption, it seems no matter how much progress is made, nothing really changes.  At least that’s the way it has seemed with the International Longshoreman’s Association.

Two generations ago author Budd Schulberg investigated working conditions on the Brooklyn shipping docks. ¹  Appalled by the Longshoreman union’s rampant exploitation and intimidation, he was moved to write the novel, On the Waterfront, which became the basis for the 1954 Oscar-winning film of the same name.

Less known was that in 1963 Schulberg revisited the waterfront for an article for the Saturday Evening Post, and found conditions had barely changed, if at all.  Nearly a decade later, in 1971, a commission, the Bi-State Waterfront Commission of New York Harbor, concluded that the Brooklyn docks were heavily infiltrated by the Gambino crime family, the New Jersey docks by the Genovese crime family, and the Manhattan docks by a Florida-based crime syndicate.  Extortion, it found, hadn’t disappeared, but had grown more sophisticated, with the help of lawyers and accountants.  In 1979 Anthony Scotto, a Gambino captain, was convicted of extorting $225,000 in bribes from waterfront businessmen.  A Labor Department official at the time said the ILA was "virtually synonymous for corruption in the labor movement." ²

Corruption continued to flourish in the 80s, so much so that the Justice Department in February 1990 filed a civil RICO suit, asking the immediate appointment of a temporary court officer to oversee the day-to-day activities of six locals, and the appointment of trustees to run new union elections.  The suit named some pretty big names:  ILA President, John Bowers, who also served as president of three of the locals; Gambino crime family boss John Gotti; and jailed Genovese family boss Anthony "Fat Tony" Salerno.  The FBI’s top official in New York remarked, "When we began this case three years ago, we were shocked at the extent to which the ILA was controlled by organized crime." ³  A mobster-turned-government witness, Francis "Mickey" Featherstone, testified mob hits were business as usual on the West Side piers of Manhattan. ⁴  Within four years, five ILA officers were forced to quit, and the government won the right to oversee two of the 17 ports in Port of New York and New Jersey.

Yet a declaration of victory would be premature.  Of the 117 ILA officers and workers were jailed or fined as a result of a 70s-era RICO suit, at least 34 by the close of 1993 had returned to work for firms that did business with the port. ⁵  Organized crime has managed to make unions and employers part of the same project.  So long as the Longshoremen rule by intimidation, from within or without, corruption can be expected.

Violence—and the constant fear of it—is the thread that ties together virtually all corruption, among the Longshoremen and any other union.  This is true not only of extortion, which by definition involves a threat of violence, but many well-concealed scams as well.   Nobody wants to be caught.  The ability to conceal goes hand in hand with the ability to intimidate those who might blow the whistle.  It’s a fair bet that unions learned many of the tricks of their trade from organized crime enforcers.  In the end, it is the honest who suffer most.  As Randolph Boehm argues, "It matters little to the bashed and beaten whether they have been victimized directly by organized crime acting through a union or whether their homegrown assailants have merely learned their tactics of attack (from organized crime)." ⁶

Yet intimidation is not enough.  Unions and their underworld benefactors know that crimes, including the issuing of retaliatory threats, might result in prison sentences and plenty of bad publicity.  Federal and state investigators have stepped up probes of union corruption in the Nineties.  Newspapers and magazines regularly cover labor corruption, and expose many officials to the glare of public opinion.  Corruption, to thrive in a contemporary context, has had to grow in sophistication to avoid detection.  From the cases where union criminals have been caught, the evidence reveals a far-reaching inventory of corruption methods.  Often, in a single instance of corruption, a union practices more than one type.  Indeed, the degree of overlap is so enormous, especially in the context of a racket, that distinctions between types of crimes are almost meaningless.  Yet its is essential to know just what corrupt labor leaders do to reinforce their power over members.  This chapter should give the reader a thorough summary of their diverse bag of tricks.
 
 

TACTICS OF CORRUPTION

Extortion

To extort something, whether in the form of money, services or other items of value, is to obtain it through the threat of violent retaliation, directly or indirectly.  By instilling in the unwilling donor a fear of retaliation, unions can keep employers and employees alike silent.  The mere reputation of a union for heavy-handedness can induce payments to assure things "run smoothly."  Thus, what often seems to be bribery, is in reality, in a climate of intimidation, extortion by any other name.  "Keeping labor peace" could be a phrase out of Orwell’s 1984; it is a peace unions achieve by instilling fear of predatory violence in rival workers and the employers who hire them.

Here’s an example of how labor "peace" has been bought in a non-right-to-work state.  A few years ago in Paterson, New Jersey two brothers, Joseph and Raymond LaBarck, headed a 1,200-member local of the Amalgamated Clothing and Textile Workers.  They were arrested and charged with operating a seven-year racketeering scheme based on threats and violence, and accepting more than $400,000 in illegal payments from employers to ensure labor peace.  They’d also embezzled from the general operating account and a separate welfare fund.   They began serving 44-month sentences for racketeering convictions in 1995. ⁷

In Philadelphia several years ago Joseph Fiorelli, founder and former boss of Local 1955 of the Drywall Finishers Union was sentenced to more than 10 years in prison on extortion payoffs from contractors, theft of union funds, and racketeering charges.  Fiorelli had extorted payments from 25 contractors from 1967 to 1991.  Contractors testified that in exchange for their payments, Fiorelli gave them labor peace and allowed them to sometimes use nonunion workers, and to delay or avoid payments to the union's health and welfare fund. ⁸

Other unions have promoted this kind of brotherly love in Philadelphia.  In 1984 a federal grand jury indicted the president and secretary-treasurer of the United Independent Union Local No. 1, Francis "Chip" Chiappardi and Dominick Michael Cosentino, on charges they extorted money for nearly 20 years from local furniture, toymaking, aluminum-fabricating and meat-distributing businesses. ⁹  The payments, ranging from $200 to $10,000 apiece, were demanded "in exchange for labor peace and collective bargaining agreements favorable to the employers," the indictment read.  If employers were late, or worse, uncooperative, Cosentino threatened them with bodily harm and economic disaster.  All told, the racket netted at least $207,000.  Cosentino pleaded guilty, but Chiappardi was acquitted. ¹⁰

Construction trade unions are notorious for extortion from contractors by threatening labor problems such as work slowdowns, disruption, sabotage or assault.   In New York unions long have elevated the practice to an art form.  In the 1980s a civil suit against Local 6A of the Cement and Concrete Workers of the Laborers International Union of North America (LIUNA) alleged that the local, its district council, their officers and certain organized crime figures extorted one percent of the contract price from ready mix contractors by threatening "labor problems." ¹¹  For a while, that bought labor peace.  FBI investigation of building trades practices in Long Island led to the indictment of the president of the District Council of Carpenters and five other union officials connected to organized crime families for extorting more than $100,000 from a drywall contractor. ¹²

Two concrete contractors testified in 1985, for instance, that they had been forced to pay thousands of dollars to Ralph Scopo, who for seven years had been president of the Cement and Concrete Workers District Council.  The contractors already had pleaded guilty to making illegal payments to a union official, had appeared in court for the trial of Colombo crime boss Carmine Persico (later convicted) and nine other Colombo family members.  The contractors said they had to kick back one percent of the contract cost to Scopo, especailly on publicly-financed projects such as library in the Parkchester section of the Bronx and a swimming pool in the Red Hook section of Brooklyn. ¹³  Eventually, in 1987 the District Council of Cement and Concrete Workers (Locals 18A, 20 and 1175) and Local 6A agreed, under a government civil RICO suit, to replace many of their leaders and undergo supervision by a court-appointed trustee. ¹⁴

The Jacob K. Javits Convention Center, on midtown Manhattan’s West Side, and opened in 1986, stands as a monument, literally and figuratively, to how organized labor and organized crime work in tandem to extort from contractors.  Less directly, it has been a supreme ripoff of taxpayers.

For one thing, the center was built with mob-run cement contractors.  Then-U.S. Attorney Rudolph Giuliani in 1987 charged Genovese family ¹⁵ boss Tony Salerno and nine associates with rigging the award of a $30.4 million contract for cement work to a Bronx company, S&A Concrete Co., that Salerno secretly controlled. ¹⁶  Salerno wasn’t in a chipper mood, having been sentenced a couple days before to 100 years in prison on racketeering charges.   Testimony showed four of the city’s five Cosa Nostra families ran a "club" of captive concrete contractors who were allotted every contract in Manhattan in excess of $2 million.  But only one of the "club" firms, S&A, could receive contracts in excess of $15 million.  Edward Halloran, who held a lock on the supply of concrete, and Ralph Scopo also were convicted with Salerno.  They threatened concrete firms with financial ruin if they strayed from the club’s orders.

The local carpenters’ union also got into the act.  Before his ouster by a federal judge in 1996, Frederick Devine, head of the New York City District Council of Carpenters, gave hiring preference to persons connected with the Genovese crime family at the expense of rank and file.  He’d also appointed as District Council Representative Anthony Fiorino, brother-in-law of Liborio "Barney" Bellomo, a ranking Genovese family member.  Testimony also linked Devine to the Colombo crime family. ¹⁷ He eventually was convicted and sentenced up to four years in prison on separate charges of ripping off the union’s health and benefit fund.

Once the center opened, it was a haven for shakedown artists.  In 1990 federal prosecutors described the convention center as "a hiring hall" for mobsters and former convicts, who often made more than $60 an hour for services of dubious value.  The government filed a civil racketeering suit against the Carpenters and Joiners Union and its District Council, hoping it would limit the power of union officials to assign members to jobs.

But not much changed after that.  In 1992 federal, state and city law enforcement officials arrested about two dozen people following complaints by convention center exhibitors of shakedowns and thefts by union employees. ¹⁸  Among the defendants were members and officers of the Teamsters, the International Alliance of Theatrical Stage Employees, the United Brotherhood of Carpenters and Joiners, and Exposition Workers Local 829.  Frank Primavera, a representative of the stage hands union, for instance, took about $27,000 in payments in 1989 and 1990 from an event promoter for a nonexistent contract with the union.  Other charges against the defendants included assaults against a security guard with a pipe.  The shakedown racket, noted New York District Attorney Robert Morgenthau, was costing the city millions in revenue, as exhibitors went elsewhere to display their goods.

In the fall of 1994 a federal court-appointed investigator, former U.S. District Judge Kenneth Conboy, charged that about hundred carpenters who put up and took down displays were employed by union officials with mob connections. ¹⁹  Day-to-day hiring decisions were made by two union stewards.  One, Anthony Fiorino, was the brother-in-law of Barney Bellomo, widely believed to be acting boss of the Genovese crime family.  The other was Leonard Simon, brother-in-law of Ralph Coppola, a convicted arsonist with mob ties.  Simon, originally an unemployed taxi driver, had joined the union at Coppola’s urging.  "An alarming number" of the carpenters themselves, the Conboy report added, also had Genovese connections.  About a third of them had been arrested or convicted of crimes ranging from arson to drug trafficking to murder.

Some action was taken at the behest of the federal government.  The following March the Teamsters’ national hierarchy seized control over Local 807, which represents drivers, forklift operators, warehousemen and other helpers at the center.  Their jobs sometimes paid double what similar jobs paid elsewhere, and often were reserved to union members with ties to organized crime. ²⁰  The local has connections in high places; its lawyer at one point was Harold Ickes, Jr. who late in President Clinton’s first term became White House Deputy Chief of Staff.  By various counts he would have been Chief of Staff from the very start were it not for suspicions raised over his representation of Local 807. 

The convention-center shakedown racket hasn’t been limited to New York.  In 1981 Emeric Martin, former director of the Cervantes Convention Center in St. Louis, revealed he feared for his life after he’d received several death threats from local union employees affiliated with the center over the previous two years. ²¹  That same year an Indiana businessman overseeing the setup of an exhibition revealed he’d beaten by workers at the St. Louis center, just days after he refused to pay on-site "gratuities" demanded by workers.  Chicago-based promoters had chosen an Iron Workers local to set up and take down exhibits.  The president of the victim’s employer, the Fort Wayne-based States Engineering Corp., said a man identified himself as a "union supervisor" before administering the beating. ²²

Missouri, like all other industrialized states of the Midwest, does not have a right-to-work law.
 

Embezzlement

Embezzlement is a crime of bookkeeping, not coercion, and for this reason has the reputation as being the province of accountants and secretaries.  Yet pulling off this type of crime can be complicated.  Thus, what seems to be a case of a single union employee padding his or her lifestyle can be a group effort, with top officials providing the needed cover.  Sometimes union heads embezzle; on other occasions secretaries or other auxiliary employees, act on their own.  It can be a lucrative racket either way, but sometimes the culprits get caught.

Bernard Rubin, president of South Florida’s Laborer’s District Council, was convicted in 1975 on 103 counts of embezzlement, racketeering and tax evasion.  The charges involved duplicate billing of unions he represented for travel, entertainment and other expenses.  In all, he misappropriated more than $350,000 in union funds. ²³  Rubin was no small-fry crook; in fact, he had extensive ties to the mobsters who fleeced the Laborers’ benefit plans in the Chicago and South Florida areas (see discussion below). ²⁴

In April 1998 a federal court convicted Eileen Cibellis, former longtime office manager and fund administrator for the Bloomfield, New Jersey-based District Council 10 of the International Brotherhood of Painters and Allied Trades, for embezzling more than $400,000 from union funds, then trying to burn the records to cover her tracks.  She carried out the embezzlement scheme by diverting funds from a variety of accounts into a little-used Employer Bond Account, originally used to hold employer deposits of various benefits while operating on union jobs. ²⁵

Other examples:  Carol Sue Fisher, a former bookkeeper for the local Painters’ union in Evansville, Indiana, in 1992 pleaded guilty to embezzling some $135,000 from the union.  She admitted she embezzled the money by pocketing health and life insurance premiums that were being paid by retired and unemployed union members. ²⁶  And in the Denver area a decade ago John Ducey, the former financial secretary and business manager of the Carpet, Linoleum and Resilient Tile Layers Union received a prison sentence for embezzling more than $51,000.  The Department of Labor had conducted an audit and discovered he’d written checks to himself, and made fabricated bank statements. ²⁷

Neither Indiana nor Colorado is a right-to-work state.

Embezzlement may be accompanied by coercion.  In Nevada George Osley Jr., secretary-treasurer of Laborers Local 872 in Las Vegas was found guilty by a federal jury of embezzling union funds to build his house and cover the expenses of his 1981 union re-election campaign.  Osley told the judge that an early morning caller threatened to kill his daughter and stepdaughter if he refused to testify.  He said the threats were made in the hopes that he would convict himself on the stand, ensuring his ouster as overseer of a $35 million pension fund; that way, it would be vulnerable to a takeover by mobsters. ²⁸

Robert Hickerson, former business manager of Local 919 in Quincy, Illinois, in 1982 was sentenced to three years in prison for embezzling union funds, and hiring vandals to smash more than $250,000 worth of equipment owned by non-union contractors. ²⁹  In Lancaster, N.H., Paul Wilson, former treasurer of United Paperworkers Local 61, in 1993 was sentenced for theft of more than $67,000 in union funds.  He forged signatures to more than 200 checks over a three-year period. ³⁰  This year Robert Kellas, a former official of an amalgamated Transit Union local in Bellingham, Washington, pleaded guilty to embezzlement of up to $120,000 from the union over a four-year period.  He had access to investment and bank accounts of two ATU organizations. ³¹  And former Troy, N.Y. Laborers Union business manager Frank Archina in 1995 was sentenced to 40 months in prison for embezzling more than $500,000 from, and effectively bankrupting, Local 452.  Several associates of Archina already had pleaded guilty to helping him steal the funds. ³²

Each of these cases occurred in non-right-to-work states.

The National Maritime Union, which represents some 2,000 unlicensed seafarers working on U.S.-flag commercial ships, deserves special mention.  Over the years it has served as a private bank for its leaders.  In January 1997 NMU President Louis Parise, Sr. had to resign and sever all connections to the union following his conviction in federal court on racketeering and embezzlement to the tune of more than $700,000.  His son was convicted on similar charges.  "The evidence showed that this man (Parise, Sr.) used the union treasury as his family piggy bank," said Assistant U.S. Attorney Timothy Rice. ³³  Nearly two decades before a federal judge had ruled that founder and then-President Joseph Curran, and nine other present or former officers of the union had to pay as much as $1 million in funds they embezzled.  They had taken the money through unauthorized perquisites on income taxes, excessive pension and severance payments and unearned pay in lieu of vacation. ³⁴

Another maritime union, the Marine Engineers Beneficial Association, also has a history of embezzlement.  Former President E. Eugene DeFries and two other ex-union officials in 1996 were convicted of racketeering charges that included embezzlement of $2 million from the union under the guise of severance payments. ³⁵

On occasion, the conviction of a union embezzler involves a sum of money far less than that indicated in the original indictment; the crook can get off lucky.  In the late 70s, for example, former United Paperworkers International Union boss Joseph Tonelli, and four other union officials, pleaded guilty in federal court to a scheme to embezzle $33,000.  But the original suit was for $360,000.  Prosecutors had dropped 34 other counts involving another $327,000. ³⁶

The Longshoremen may be notorious for mob-style executions, but they’ve had their hands in the benefit cookie jar, too.  In Jacksonville, Florida, Ronnie Bell and James E. Cushion, two former pension fund administrators, pleaded guilty in 1992 to seven counts of a 36-count indictment concerning the embezzlement of about $586,000 in ILA benefit funds. ³⁷

More recently, Joseph C. Talarico, former secretary-treasurer of the United Food and Commercial Workers Union, was convicted on embezzlement.  He’d received a salary of more than $1 million a year.  Apparently, his lifestyle required more, so he stole more than $925,000 in union funds.  Last July he was sentenced to 30 months in federal prison. ³⁸
 

Bid Rigging/Collusion

In theory, the awarding of contracts for construction is competitive, with the contract going to the lowest responsible bidder.  Unfortunately, in practice, that can cause even more problems than a negotiated contract.  Public construction especially tends to be vulnerable to bid-rigging because state and local governments are required to award contracts through competitive bidding with no opportunity for negotiation. ³⁹  The "competing" contractors easily can collude to predetermine who the successful bidder will be.  And they play hardball with potential competitors who use non-approved (i.e., non-union) labor.

As discussed above, the mob-controlled contractors’ "club" rigged bids and allocated territory throughout New York City. ⁴⁰  If a contractor didn’t belong to the club, and decided anyway to submit bids of more than $2 million, the local concrete workers union promised "labor problems," supply difficulties and even physical harm.

The club was policed by Colombo member Scopo and three other organized crime families.  The four families equally divided about two percent of every contract.  After Scopo stepped down in the wake of labor racketeering charges, his successor, Louis Gaeta, soon was indicted for extortion.  Gaeta, a first cousin of former Staten Island Borough President Anthony Gaeta, allegedly got a cash kickback from a company renovating the Sunset Park pool in Brooklyn. ⁴¹

The Genovese crime family was involved in concrete contracting.  Genovese chieftain Tony Salerno, captains Vincent "Fish" Cafaro and John "Peanuts" Tronolone, and a dozen other associates in 1986 were charged in a 29-count indictment that included labor racketeering and bid-rigging in Manhattan’s construction industry (other offenses included conspiracy to commit two murders).  The mobsters controlled delivery of ready-mix concrete "to nearly all construction projects in Manhattan."  The District Council of Cement and Concrete Workers and Teamsters Local 282 threatened the developers with work stoppages if demands were not met.  Sixteen projects were listed in the indictment, including Trump Plaza and Memorial Sloan-Kettering Residence.

According to the indictment:  "Only a certain select few concrete construction companies would be permitted to bid for concrete superstructure construction subcontracts valued at more than $2 million….Other companies were directed to submit inflated bids or to refrain from bidding entirely." ⁴²  Salerno, two other Mafia bosses, Carmine Persico (Colombo) and Anthony "Ducks" Corallo (Lucchese), and five associates were convicted in 1986 on extortion, conspiracy and labor payoffs in this and other cases. ⁴³

In 1988 the Justice Department indicted four New York union leaders in construction payoffs.  One indictment accused Robert Waller Jr., president of Local 531 of the United Brotherhood of Carpenters and Joiners and Edward Annino, a foreman for Teamsters Local 282 of extorting, under threat of economic harm, money from a nonunion contractor. Three others, affiliated with the International Union of Bricklayers and Allied Craftsmen, were charged with a pattern of racketeering. ⁴⁴

The city’s painting contractors also have practiced this tactic. ⁴⁵  At one point contractors agreed on a bid-rigging conspiracy in which they agreed on who would submit the lowest bid on New York City Housing Authority contracts.  They paid an official of the local painters union to harass any member of the cartel who violated member rules and any non-members.  If a non-member did obtain a contract, union shop stewards assured low worker productivity.  The union official got two percent of each contract.

Actually, the union’s take was higher on most other types of projects.  In June 1990 a grand jury indicted 12 men, including eight top painters’ union leaders, for participating in a Mafia-led conspiracy that rigged bids for almost every major public and private painting contract in New York City for a dozen years.  Through threats and control of the union, the Lucchese family mob ordered contractors to kick back 10 percent of their gross payments on contracts for subway painting, bridges, schools and highways.  Law enforcement official long had maintained contractors feared for their own safety.  It was no wonder.  Among the dozen people indicted was Anthony Casso, the author or co-author of three dozen murders (see Introduction). ⁴⁶  The following March New York City Painters Union boss Paul Kamen, among four men, pleaded guilty in the bid-rigging conspiracy. ⁴⁷

Also in New York, law enforcement officials said two politically active developers who are major builders and renovators of low- and middle-income housing in Queens and Long Island were involved in bid rigging and cash payoffs of hundreds of thousands of dollars to Basil "Bobby" Cervone, leader of Local 13 of the Mason Tenders Union (part of LIUNA) and a reputed associate of the Genovese and Gambino families.  Louis Giardina, an official of another city local, already had been convicted for racketeering, obstruction of justice and receiving payoffs for labor peace in connection with the 1981-83 renovation of a deepwater pipeline system.  He’d been identified by the government as a Gambino "soldier." ⁴⁸  Besides Local 13, officials of four other construction workers’ unions were targets of the Justice department probe into the low-rise construction industry.  Giardina later was convicted of racketeering, obstruction of justice and receiving payoffs to keep labor peace.  Two other defendants pleaded guilty, too. ⁴⁹  The federal government, having seen enough examples like these, in 1994 ordered trustees to replace the leadership of the Mason Tenders District Council of Greater New York.

Cervone had a shady history.  In 1965 he and his wife were indicted on tax evasion charges.  Both were acquitted the following year—and three months after Cervone’s brother George, a union rival, was shot to death in his sleep.  FBI-bugged conversations caught Bobby Cervone demanding cash payments to keep labor peace from the Benjamin Contracting Corp.  The union, sources said, also gave bribes concealed as salaries to fictitious persons, paid salaries to no-show employees, and sham payments to the pension and welfare fund. ⁵⁰

By 1994 the federal government, having seen enough cases like these, put the Mason Tenders District Council of Greater New York under trusteeship.  During that period, the union recovered $12 million of the $15 million stolen or lost by former officers.

Racketeering also has plagued the awarding of window replacement contracts at the New York City Housing Authority.  In May 1990 the Justice Department indicted 15 men in four crime families on charges they skimmed "tens of millions" of dollars.  For more than 12 years four of the families selected contractors for the manufacture and installation more than one million windows.  Contractors made sure they hired workers from Local 580 of the Architectural and Ornamental Ironworkers Union. ⁵¹

What tipped investigators off was the discovery of two persons murdered and buried in a window-manufacturing plant in Brooklyn owned by Peter Savino, a Genovese family associate.  After Savino was picked up, for 18 months he worked undercover for the FBI.  He was lucky to live.  John Morrissey, an official of Local 580 and a reputed Lucchese mob associate wasn’t so lucky; he turned up dead in rural Morris County, N.J., shot dead several times. ⁵²  Peter Chiodo, a captain in the Lucchese family, was shot 12 times in an assassination attempt, but somehow did live to testify about how he’d participated in four murders.  He also said he carried cash payments from Local 580 to top Lucchese bosses. ⁵³
 

Benefit Plan Theft

If Willie Sutton, the bank robber, were around today, he surely would say of union pension, health and welfare funds, "That’s where the money is."  And if the robust stock market performance of recent years continues, that pot of money should climb higher, even as union membership stagnates.  Unions typically require members to donate, in addition to standard dues, small amounts for pension and other benefit plans.  It adds up to opportunity for unscrupulous labor chieftains, and certainly attracts the attention of mobsters.

As an example, a Miami jury in 1987 convicted four Chicago men on a racketeering conspiracy to skim more than $2 million from the Laborers International Union of North America (LIUNA) dental and eye care plans in Chicago and South Florida.  Paul DiFranco, Paul Fosco, James Norton and James Pinckard, each associates of the late Miami mobster Santo Trafficante, Jr., funneled the money to the mob.  In a trial five years earlier eight defendants were convicted and three-—including Laborers' General President Angelo Fosco, the father of Paul Fosco—were acquitted. ⁵⁴  The total take among all concerned was around $12 million.

The Fosco connection was not likely a coincidence.  Paul Fosco was a vice president of Consultants and Administrators (C&A), the firm administering the union’s various benefit plans (even after the convictions).  Soon after the Miami convictions, the Labor Department filed a civil suit against C&A, key officers of the company, and 19 current or former trustees of LIUNA’s health and welfare plan.  Among the trustees were Alfred Pilotto, a former top Laborers official and onetime south suburban rackets boss, and the already-convicted Pinckard, who was Pilotto’s son-in-law and head of a company that worked with C&A.  Pilotto, one five "street bosses" under Chicago mob kingpin Joey Aiuppa, was among the eight persons convicted in 1982.  The elder Fosco had been acquitted, along with former union official Terrence O’Sullivan, and Anthony "Big Tuna" Accardo, reputed boss of the Chicago underworld. ⁵⁵

Were the acquittals for want of evidence or something else?  Two persons with close ties to LIUNA told the FBI that a male juror had been paid $200,000 to vote for acquittal of the three. ⁵⁶

Jury bribery or not, there was all the reason to suspect their guilt, given the Laborers’ connections to a series of murders in Broward County, Florida a few years before.  In April 1984 Daniel Forgione, Jr., business manager of LIUNA Local 938, was found dead in his car outside a Margate lounge.  Police said the killer had pumped six shots into Forgione’s head and chest at close range.  Forgione had been the target of a federal probe into a Florida-Georgia narcotics and racketeering network.  He also was implicated to the pension looting.  "Forgione was involved but we never had enough evidence to charge him," said an agent who worked on that case.  "Naturally, his union activities have been closely watched ever since." ⁵⁷

There had been much to watch before, too.  In 1976 Forgione, then a rank-and-file Laborers member, and Salvatore Mazzaglia, secretary-treasurer of the local, were acquitted on charges of embezzlement, conspiracy and extortion under the Taft-Hartley Act, which forbids unions from accepting or requesting gifts from people with whom they do business.  Two years later Forgione was a suspect in a shootout with police in which reputed organized crime figure Tony Anthony was shot to death by police at a shopping mall.  Anthony had tried to run over police with his car during an extortion plot.  Police reported shots fired at them from a second car, registered in Forgione’s name, that fled the mall. ⁵⁸

Agents also were watching bodies pile up.  Another target of the federal drug probe, Joey Cam, was found murdered in May 1983, as were three persons identified as involved in the drug-smuggling operation, Lincoln Linton, Joseph Olivetti and Joseph Kilrain.

This wasn’t the only instance that LIUNA benefits proved ripe for looting.  In 1986 Wendell Cage, a former Detroit Labor official, was convicted of embezzling union benefit funds and income tax evasion, though he had disappeared shortly before the verdict—he’d told his attorney he had to go the bathroom and would be back in 20 minutes.   It was a nature call of a guilty man.  The government presented six witnesses who testified that Cage, an assistant administrator of the Laborers’ Metropolitan Detroit Health and Welfare Fund, had issued fraudulent checks totaling more than $500,000 to them between 1979 and 1981.  They told the jury they had cashed the checks and kicked back up to 80 percent of the money to Cage. ⁵⁹

The Laborers aren’t the only union to have robbed from the benefit cookie jar.  In 1995 a federal grand jury handed down a 22-count indictment against Paul Glover, a former vice president of an independent truckers union, the Chicago Truck Drivers, Helpers and Warehouse Workers Union.  Glover allegedly committed a range of fraudulent acts, including receiving more than $330,000 in kickbacks related to pension and health and welfare fund investments.  Later that year he was convicted; a U.S. District Court also sentenced ousted union President John Johnson for splitting the proceeds with Glover. ⁶⁰

In Oklahoma City a decade ago Floyd Donwerth pleaded guilty in federal court to embezzling more than $150,000 from two accounts of the Plumbers and Pipefitters Local 344 over an 18-month period.  A U.A. Attorney said the real take, over four to five years, was as much as $500,000.  Donwerth had made illegal withdrawals from the union’s vacation and health-welfare funds.  Apparently, Donwerth didn’t get to enjoy his money for too long, having gambled it away in Las Vegas. ⁶¹

Oklahoma, unlike neighboring Texas, is not a right-to-work state; the opportunities Donwerth saw might not have existed had his state did have such legislation.

Sometimes outsiders, rather than union officials themselves, pilfer benefits.  In 1995 Barbara Nolan, a former investment adviser to Roofers Local 12 in New Haven, Connecticut, admitted her role in the theft of more than $1.5 million in funds from the union’s pension fund. The embezzlement drained the fund of more than half its assets, said an assistant U.S. Attorney.  She and an associate August Mezzetta worked through various companies, paid themselves bogus fees for investment advisory services, and used the pension money to finance the purchase of a Manhattan brownstone. ⁶²

In Boston Arthur Grodd, owner of a local roofing company, in 1997 was charged with embezzling more than $1 million from the pension funds of two Roofers locals.  He defrauded workers by failing to make scheduled contributions, underreporting work hours, and filing false statements. ⁶³  Grodd pleaded guilty in federal court that September, though he got a relatively mild one-year prison sentence plus two years of community service.

In New York City Frank Russo, ousted president of the 30,000 member Local 144 of the Hotel, Hospitals, Nursing Home and Allied Services, managed to nearly bankrupt his local, an independent audit by the Services Employees International Union revealed in 1997.  His mismanagement, which included failing for two years to pay any money into the union staff’s 401(k) retirement account, resulted in about $2 million in unpaid debts.  Meanwhile, Russo helped himself to a slice of the good life, spending $257,530 on shop-delegates dinner-dance; $91,219 on another union dance, and $58,790 on a kiddie circus party.  Among his money-losing rental properties was a $2,500 monthly lease to the Rev. Al Sharpton for his mayoral campaign office. ⁶⁴  Since it was an SEIU audit that turned up these revelations, if anything, the extent of the pilferage was even deeper.

Extortion and Bribery to Secure Jobs

Unions, as discussed in the previous chapter, protect their members from competition by non-union members.  But suppose a contractor or employer decides they want to hire non-union labor.  Unscrupulous unions have one of two options:  1) make life uncomfortable for contractors until they hire union labor; or 2)  allow the contractor to hire nonunion labor--if the price is right.  On due occasion, organized labor has employed both methods.

In 1981 Louis Sanzo, president of Local 29 of the Blasters, Drill Runners and Mines Union in Queens, N.Y., affiliated with LIUNA, his wife, several mob figures and a lawyer were indicted on racketeering charges.  Sanzo and the others took a combined $400,000 in payoffs from construction firms to buy labor peace. ⁶⁵  The owner of a Florida-based construction firm said he tried to get out of the deal, but Sanzo’s men threatened to kill him, his wife and three children.  The hustle, according to one source, worked like this: ⁶⁶

The contractor would say in his bid that he needed 30 men and he would be paid for 30 men by the people who hired him to do the job.  But then Local 29 would send over only 15 men.  They could keep the rest of the money.

Likewise, a New York City strike force called "Operation Flush" resulted in the indictment of 10 present and former Plumbers Union officials, some with Lucchese and Genovese family organized crime links, plus four contractors on racketeering and bribery charges.  A Manhattan grand jury in 1993 accused officials of Local 2, the nation’s largest plumbing union local, of using the union for a decade to extort bribes and kickbacks from building contractors to the tune of about $1 million in exchange for sweetheart contracts to buy labor peace, use nonunion employees, and ignore wasteful work rules. ⁶⁷  They also had engaged in bid-rigging.  In 1996 four union officials pleaded guilty to extorting payoffs. ⁶⁸

It wasn’t the first time the Plumbers have used this kind of shakedown.  In 1990 a local contractor sued the Northern California Plumbers Union, claiming the union was guilty of racketeering.  PetroChem Insulation Inc. demanded $2 million in damages in federal court in San Francisco, arguing that the union extorted money from developers and contractors on energy projects by threatening to delay the permit process unless builders used union labor. ⁶⁹  California is not a right-to-work state.

In West Virginia, also resistant to enacting a right-to-work law, a retired labor official was convicted in 1980 for extorting approximately $300,000 from workers applying for membership in a Huntington union.  Another union member had pleaded guilty to conspiracy.  A Department of Labor probe revealed that the victims of the extortion racket were more than 100 laborers who wanted membership.  In exchange for the money, the defendants gave the applicants applications and affidavits of experience that often contained false information. ⁷⁰

In fact, the Plumbers can get downright ornery about this issue.  In April 1990 a Queens Plumbers Union official, Don Scalfani, business agent for Local No. 1, was accused in a federal complaint of inciting 300 demonstrators to march on the grounds of Dayton Manor, a Navy apartment complex undergoing reconstruction in Brooklyn.  An unidentified witness said Scalfani ordered all nonunion workers at the project be fired and replaced by union workers.  Rioters, using sticks, bricks and hammers, did an estimated $40,000 in damage. ⁷¹

The Roofers have practiced their own brand of intimidation to ensure hiring of union members.  They certainly made their presence known in Local 30 –30B in Philadelphia.

In 1992 Stephen Traitz Jr., Local 30-30B’s former business manager, sons Stephen J. Traitz III and Joseph Traitz, and several other union officials, pleaded guilty to state charges of conspiracy, theft by extortion and making terroristic threats in the course of organizing non-union workers and contractors in southeastern Pennsylvania and southern New Jersey.  The senior Traitz also pleaded guilty to intimidating witnesses.  Since 1968, prosecutors had charged, Roofers local officials used threats to coerce contractors to use union labor only.  Roofers officials also forced residential roofing contractors to report to the union at least 100 hours of work a month, whether or not they did that much business.  The contractors were legally obligated to pay 60 cents into the union health and welfare fund every month for each hour worked. ⁷²
 

No-Show Workers

Using union funds to pay nonexistent "employees" is a common way of rewarding friends at the expense of dues-paying rank and file.  Joseph DiMaio, business manager of District 10 of the Painters Union District 10 in New Jersey, and Edward Dolan, a former official of the merged welfare funds for Districts 10 and 19, learned that sometimes this crime doesn’t pay.  A federal jury in Newark in 1995 convicted the two for conspiring to create a no-show job of "benefits coordinator" for Dolan, and embezzling more than $40,000 paid to Dolan in that capacity.  Dolan signed checks to himself, even though there was not a single other document with Dolan’s name on it at the welfare fund. ⁷³

If ticket prices for rock n’ roll concerts in Philadelphia seemed inflated for a while, chances are a local of the International Alliance of Theatrical and Stage Employees had something to do with it.  In 1991 Francis O’Shea, president of the union’s Local 8, pleaded guilty to bilking rock groups out of thousands of dollars by hiring family members and other union members on payroll sheets for concerts they did not work, and then cashing the checks himself.   The promoter, Electric Factory Concerts, may also have participated in the scam.  The affadavit cited a 1989 Grateful Dead concert in which EFC allegedly charged the band $84,000 beyond actual expenses. ⁷⁴

Longshoremen officials also practice the art of ghost employment.  In California several years ago Levin-Richmond Terminals filed suit against the ILA for racketeering to induce the company to make regular payments to the union for work its members never performed.  The union had mobilized 600 members from around the San Francisco Bay Area to picket the terminal, shutting down its operations.  The pickets, which ignored a prior restraining order, forced Levin to sign an agreement to pay a regular salary to four Longshoremen ghost workers.   The company had paid more than $1.2 million to the union.  It added that it had been losing about $1 million a year in profits from contracts lost because of the need to factor in the ghost workers salaries into bids. ⁷⁵
 

Fishy Business Fronts

Often, labor rackets operate under cover of a legitimate business.   For example, the mobsters who control New York City’s building trade unions typically own, work for, or have a direct interest in numerous construction contractors and suppliers. ⁷⁶ Sometimes they hide through nominal businessmen who "front" for them on public records; in other instances, they have the temerity to be openly owners.  The late Genovese crime boss Tony Salerno controlled S&A Concrete, a contractor, and Certified Concrete, a producer.  Vincent DiNapoli, a captain in the family, controlled Cambridge Drywall Company and Inner City Drywall.  Gambino underboss-turned-informant Sammy "the Bull" Gravano, was president of JJS Construction Company.  And Gravano’s boss, John Gotti, served as salesman with ARC Plumbing Company.

New York City’s five major wholesale food markets might well take first prize for how union leaders, officials, and mobsters work seemingly legitimate businesses.

These markets—the Hunts Point Produce Market, the Brooklyn Terminal Market, Brooklyn Wholesale Meat Market, the Gansevoort Meat Market, and the Fulton Fish Market—are important cogs in the city’s economy.  They handle most of the fresh fish and unpackaged fruit, vegetables and meat shipped into the New York region and sold to retail stores and restaurants.  More than 200 businesses, mainly wholesale dealers, each year generate more than $3 billion in sales, employing some 8,000 people.

They’ve also been controlled by a Mafia alliance with local from the Teamsters and the United Food and Commercial Workers. ⁷⁷  The Mafia handpicks union officials, extorts money from merchants in return for labor peace, demands no-show jobs for mobsters and their relatives, and wins sweetheart contracts for mob-run companies.  Not only that, it has used the markets for gambling loan sharking, money-laundering and narcotics trafficking.

In October 1996 Mayor Rudolph Giuliani requested that the City Council give him the authority to investigate and ban officials of unions who represent market employees and are suspected of having ties to the mob.  Though the measure would be modeled after laws in New Jersey and Nevada that regulated casinos to exclude union officials for Mafia links or misconduct, Anthony Cirillo, president of the United Food and Commercial Workers Local 359, which serves Fulton Fish Market, vowed to challenge the law all the way to the Supreme Court.

Cirillo has an interest in this, having beaten the rap by a hair’s breadth in 1989.  A federal prosecution established, if not to a court’s satisfaction, then to a lot of suspicious minds, that Local 359 was a tool of the Genovese crime family.   The Fulton Fish Market scam was a full-scale operation honed to a science, and enforced by mob muscle.  Yet a federal court in Manhattan had ruled prosecutors had not sufficiently proved that the two top leaders of Local 359, Cirillo and Secretary-Treasurer Dennis Faicco, were controlled by the Genovese mob.  But the ruling left in place orders signed by Judge Thomas Griesa that appointed an administrator to monitor the market.  The civil action filed in October 1987, Judge Griesa admitted then, "gave promise of a full-fledged case against the union defendants, including evidence of threatened labor disturbances.  Regular payoffs from businesses in the market and the channeling of extortion proceeds into the hands of the Genovese family." ⁷⁸

But the investigation had gotten some results.  The federal probe had begun in June 1979, and after three years had resulted in the convictions of 11 fish market firms and 11 individuals.   Local 359 unloading operations enforcers Carmine and Peter Romano were convicted on charges of racketeering and manipulation of union pension funds.  The two men were big fish indeed.  "All the fish coming into Fulton Fish market is unloaded by a half-dozen unloading companies that have been granted monopolies by the mob," said one Assistant U.S. Attorney, adding millions of dollars worth of fish were being stolen each year during unloading. ⁷⁹  By 1989 Rudolph Giuliani, then U.S. Attorney, proclaimed, "The government has already achieved most of its objectives with regard to the Fulton Fish Market." ⁸⁰  As mayor, Giuliani succeeded in persuading the City Council to pass his measure to more tightly regulate the food markets.  Still, so long as New York remains a non-right-to-work state, a large pool of union funds will serve as a lure to gangsters.
 
 

The Big Four

The examples thus far uncovered, by definition, represents a portion of known cases; that is, which involved a conviction or, failing that, at least offered enough evidence to reasonably warrant one.  Many scams likely have never been uncovered.   Moreover, over time a union may become less or more corrupt depending on the ruthlessness of its leaders, and the degree of government surveillance.  To gauge the extent of corruption is to examine how much progress, if any, the most egregious unions have made.

The 1986 report of the President’s Commission on Organized Crime concluded that the Longshoremen, the Hotel Employees and Restaurant Employees, the Laborers and the Teamsters by far were the four unions most saturated with racketeering.  It recommended a government takeover, barring an absence of a cleanup. The Longshoremen’s sordid history was briefly outlined at the explained at the beginning of this chapter.  But the Hotel Employees and Restaurant Employees (HERE) also has been notorious.

The 350,000-member union long has provided the labor force for mob-controlled hotels and casinos.  In 1984 the Senate Permanent Subcommittee on Investigations issued a 144-page report concluding the union was under "substantial influence" of organized criminals.  "Numerous officers and employees have documented ties to organized crime figures," and there is little doubt that Local 54 (Atlantic City) is now controlled, and Locals 226 (Las Vegas) and 30 (San Diego) have been influenced in the past, by organized crime interests," the report noted.  Union officials had made shady loans, defrauded employee benefit plans, hired enormous numbers of workers with criminal records, and terrorized anyone who complained about it.  A Senate senior staff member noted that Chicago-based mobsters in particular were behind the operation.  Almost three dozen witnesses, including HERE President Edward Hanley, refused to cooperate and took the Fifth Amendment. ⁸¹

The Justice Department did take action against some of the most corrupt locals.   In December 1990, the department filed a racketeering suit against Atlantic City’s Local 54, alleging that the union was in the hands of mobster Nicky Scarfo.  "Never worry about the unions. We own the unions," Scarfo said to a former associate, Joseph Salerno. ⁸²  Scarfo, boss of the Angelo Bruno crime family in Philadelphia, in 1981 had taken over the reins from Philip Testa, who’d been killed by a bomb blast.  Testa had taken control of the syndicate from Bruno himself, who in 1980 was killed by a shotgun blast in front of his home.

The Justice Department seized the local in 1991, and later filed a civil RICO suit against the union’s national leadership.  The department coaxed officials into accepting a consent decree in September 1995.  A court appointee would oversee the group, and for at least 18 months have the power to remove corrupt local heads.  Federal receivership has borne some positive results.  By early 1997 Justice officials already were recommending that Local 54, having been cleaned up, was ready to be lifted from federal supervision.

LIUNA has proven a tougher nut to crack.  With an estimated 750,000 members, the Laborers have a huge pot of dues and fees from which to collect—and abuse.  The Laborers, more than other unions, consist of unskilled workers; that is, workers whose trades do not require prior special training or education.  Also, the unions does a lot of its recruiting in the hiring hall.  This gives hand-picked union "enforcers" the power to personally intimidate job applicants—and at the same time protect the corruption of higher-ups in the local.  Dissenters face some unusual risks.

Nearly two decades ago, a member of LIUNA Local 435 in Rochester, John Polito, gave a speech at his union hall, and announced:  "There is talk going through the membership that the mob is infiltrating our local.  If so, it’s time for us, the members, to rise up and get them the hell out of here, and anyone else who wants to go with them." ⁸³  Less than a month after that speech, reputed mobsters Loren Piccarreto and Joseph Trieste were indicted on federal grand jury assault charges; they had threatened and choked Polito.

That sort of intimidation explains why mob infiltration in the Laborers lives on.  Union officials, of course, deny mob ties. ⁸⁴  Yet any number of examples of incriminating evidence belies such claims.  An underworld war in St. Louis during 1979-82, for example, left four people dead and three more injured.   The problems centered around Raymond Flynn, business manager of Laborers Local 42 from 1979 until October 1981, convicted in 1987 on charges of racketeering, conspiracy and interstate transportation of dynamite.   He’d been implicated in the bombing death of Local 42 Business Manager John Paul Spica (who got his job on orders from the late St. Louis crime kingpin Anthony Giordano), a murder conspiracy run local mobster Paul Leisure, and the bombing death of George "Sonny" Faheen (Flynn provided the dynamite). ⁸⁵

In Chicago the areawide District Council of the Laborers Union has been, as Chicago magazine put it in 1990, "a carnival of graft and violence." ⁸⁶  Witnesses in government hearings repeatedly called Angelo Fosco, LIUNA’s general president, a puppet of Chicago mob boss Tony Accardo.  It was he and Accardo, along with other Laborers officials, who were charged with (but acquitted of) looting union benefit funds.  In 1988 David C. Williams, director of the special investigations unit of the General Accounting Office, remarked,  "The Chicago….(mob) family controls two of the four international unions that are dominated by the La Cosa Nostra.  They control the Laborers International Union, and the Hotel Employees and Restaurant Workers Union." ⁸⁷

In 1994 officials at the Justice Department saw the Laborers’ corruption, and the violence backing it up, as worthy of a civil RICO suit similar to a successful prior action against the Teamsters in 1989.  In a draft complaint, here is what the Justice Department had to say: ⁸⁸

LIUNA has been infiltrated at all levels by corrupt individuals and organized crime figures who have exploited their control and influence over the union for personal gain and to the detriment of the union.  LIUNA officers and employees at all levels, including the general presidency (i.e., Arthur Coia, Jr.), have been chosen, subject to the approval of, and have been controlled by, various members and associates of organized crime.

It looked like curtains for Coia, who had assumed his duties as president in March 1993.  But he had an ace up his sleeve in none other than President Bill Clinton. ⁹⁰  The two had gotten close through White House aide Harold Ickes, who as a labor lawyer, had represented LIUNA.  Coia needed the help.  His father Arthur E. Coia, had risen to the number-two position in the national union, and with his son, were chummy with New England’s Patriarca mob.  In 1981, in fact, father and son, along with boss Raymond Patriarca, were indicted on racketeering and bribery charges in relation to a phony insurance scheme.  This tied in (see Chapter Two) to the $2 million looting of the Laborers’ benefit fund that nailed then-union President Angelo Fosco, Chicago mobster Tony Accardo and Miami mobster Santo Trafficante.

So if it paid to know Ickes, it surely paid to know his party, the Democrats, and their leader, President Bill Clinton.  Coia gave generously.  According to the Federal Election Commission, Coia’s political action committee, the Laborers Political League, gave $1,415,867 to the Democratic Party and its candidates in the 1993-94 election cycle (a figure not even including sums given by the union’s state PACs); he was even more generous in the 1995-96 cycle, donating $2,260,700.  In 1994 he served as co-chair of a Democratic National Committee fundraiser that raised $3.5 million.  He also supported—as few labor leaders were willing to do—a pair of key Clinton initiatives:  the NAFTA trade agreement and the proposed health-care overhaul.

As a certified "Friend of Bill," it was time for the White House to reciprocate, especially with Clinton’s 1996 re-election bid looming.  And by every appearance, the White House did just that.  Without apparent warning, the Justice Department on February 13, 1995 called off its RICO suit.  The union had agreed to root out and punish corruption under a four-person independent board.  The top four Justice officials on the case each denied in House Judiciary Committee testimony that the White House had not pressured them.  Yet Ickes, at the time the White House’s deputy chief of staff, got First Lady Hillary Rodham Clinton to address the union’s February 1995 convention in Miami.  The Justice Department-LIUNA agreement occurred only a week later.  As Byron York, writing in The American Spectator, ruefully put it, "It had taken the government three years to compile the case—and three months to drop it." ⁹¹

The cleanup campaign has yielded significant results—at least on the surface.  LIUNA booted out some 20 members of Buffalo’s Local 210 who had ties to organized crime.  A federally-appointed overseer, Robert Luskin, filed charges against Coia based on his activities during 1986-93.  But Buffalo’s local was so corrupt that even the national leadership realized that doing nothing would be a liability.

The appointment of Luskin, meanwhile, underscores the close ties of Coia and Clinton officials.  Prior to his appointment by the Justice Department, he was the union’s own lawyer.   Aside from making frequent print and airwaves appearances as a Clinton advocate, he’s got at least one major skeleton in his own closet.  Last May he forfeited $245,000 to the Justice Department in attorney’s fees paid to him from illegally laundered funds.  The forfeiture grew out of defense work Luskin did for Stephen Saccoccia, now doing a 660-year prison sentence for laundering money for the Medellin and Cali drug cartels. ⁹²

Meanwhile, the appellate officer in the LIUNA cleanup is S. Neil Eggleston, who previously had worked in the Clinton White House Counsel’s office.  Coia’s cooperation under such "supervision" is not likely to continue if his own position is placed in harm’s way; under the agreement, LIUNA has the right to sue if the government attempts a takeover.  And Coia has vowed to fight any criminal charges filed against him. ⁹³

Champions in Congress of forced unionism are putting a favorable spin on LIUNA’s self-policing.  "Today there is an effort underway at the Laborers’ Union that represents one of the most innovative, cost-effective programs ever undertaken to rid a union of mob influence," said Rep. William Clay, D-Mo.  "(T)he progress that has been made is truly impressive." ⁹⁴  Coia couldn’t have said it better if he’d written the script himself.

Yet hard as it is to believe, the Laborers’ exploits fall well short of those of a union whose corruption has been so pervasive, and for so long, that only a separate chapter can do justice to it.  Chapter Three explores the practices of the International Brotherhood of Teamsters at all levels, and explains why a campaign to rid American organized labor of criminal practices must succeed here if the public is to claim victory against corruption generally.
 

Chapter Three:  THE PECULIAR CASE OF THE TEAMSTERS

Overview

The International Brotherhood of Teamsters, in a real sense, is the mother of American labor union corruption.  Headquartered at its "marble palace" near the U.S. Capitol in Washington, D.C., the Teamsters’ 1.4 million members make up the nation’s largest union outside of the National Education Association.  With an estimated current annual budget of around $100 million, ¹ the Teamsters have a long tradition of corruption on a grand scale of making life unpleasant -- and often short-lived -- for whistle-blowers.

Some 30 years ago the business agent and his secretary of Teamsters Local 107 in Philadelphia were found murdered in the union’s offices; authorities believed they were killed to prevent exposure of corruption in the union. ²  Around then Gerardo Carena, a New Jersey Mafia boss, used the Teamsters to force New York and New Jersey supermarkets to buy a soap detergent product in which he had invested.  When the A&P grocery chain refused, five of its stores were burned out, and two store managers were found murdered.  Federal authorities subsequently traced these incidents to certain persons associated with the detergent, but because the names of informants were withheld, no convictions could be secured. ³

It hadn’t gotten safer for New Jersey supermarket managers to cross the Teamsters two decades later either.  Robert E. Wunderle, vice president of the Supermarkets General Corp., parent company of Pathmark, was found shot to death in a ditch in 1989.  He had been helping reporters with stories about the way his stores and their employees were being victimized by Teamsters extortionists. ⁴

With that kind of persuasion, it is little surprise that the job of Teamsters president has come with a less than lifetime guarantee.  Before his tenure as Teamsters president (1983-88) Jackie Presser revealed the tightrope he had to walk to keep his job—and life: ⁵

You know, that chair (Frank) Fitzsimmons sits on isn’t a throne, it’s an electric chair.  They [government prosecutors] got the last two men who sat there and sent them to jail, and it wouldn’t surprise me if they got Fitz on something soon.  They sure are trying.  On the other hand, if you’re totally honest and you try to clean up the union like you say I should, and you try to do it fast enough and without making accommodations so the government won’t get you, the other guys—the hoods—will get you.  Just like they got Hoffa when he threatened them.  So that’s a death chair either way.

Exits rarely are graceful for top Teamsters.  If the corruption and violence have seemed to tail off in the past several years, it’s because the union has had no other choice but to reform, though usually in fits and starts.  The U.S. Justice Department in 1988 filed a 113-page civil RICO lawsuit against the union, revealing an unmistakable pattern of racketeering—backed up by beatings, bombings and murders. ⁷

Rather than fight a futile battle, the union agreed to a federal consent decree in March 1989.  The decree states that the union indefinitely would be under the jurisdiction of a new three-member panel, the Independent Review Board.  The board’s government representative is former Federal Judge Frederick Lacey, who’d thrown out the Seneses, to name two mob-connected Teamsters.  The IRB has the authority to probe into the workings of every Teamster local.  The government permitted New England regional chieftain William McCarthy to remain as president, but stripped him of key powers.  That which union leadership couldn’t or wouldn’t do, the federal government did quickly; in its first three years the IRB’s investigation had resulted in the debarment or forced resignations of 87 union officers. ⁸

The board also set up a 1991 election that for the first time would allow rank-and-file Teamsters to vote for general president.  Ron Carey, an avowed reformer, was elected.  The AFL-CIO, which had given the Teamsters the boot in 1957 for corruption, readmitted the union in 1987 as part of a quid pro quo.  The Teamsters saw in the AFL-CIO a measure of protection against a federal crackdown.  And AFL-CIO President Lane Kirkland, whose politics lay somewhat closer to the center of the federation’s affiliates, saw a readmitted Teamsters as insurance against a far-left takeover. ⁹

It didn’t work out well for either side.  The federal RICO suit came soon enough.  And that suit led to the election of Ron Carey, the Teamsters’ most left-leaning president ever, which in turn led to the 1995 election of leftist Service Employees International Union President John Sweeney to head the AFL-CIO.

The Teamsters, meanwhile, experienced its own share of corruption under Carey.  This past summer federal officials expelled Carey and Teamsters Political Director William W. Hamilton, Jr., from the union for their role in laundering money into Carey’s 1996 re-election campaign; earlier it had removed Carey from his presidential post.

In 1997 the government nullified the election, which the government had overseen at a cost of $20 million, and banned him from seeking further re-election. ¹⁰  That set the stage for the election late in 1998 of James P. "Jim" Hoffa, son of the inimitable Jimmy Hoffa, as president.  Hoffa had been Carey’s challenger in that 1996 election.  The final bills of the Carey era are not fully known, but with Hoffa at the helm there will be every effort to reveal them.  Last October the Teamsters agreed to make available to House investigators documents relating to internal corruption probes, including those relating to organized crime penetration of union locals. ¹¹

To understand why the Teamsters have led the pack in corruption, consider the nature of their industry.  Teamsters are mainly truckers and ancillary transportation employees, such as warehouse workers, construction workers and clerks.

Outside of right-to-work states, the union has the power to determine whether or not materials and finished goods are hauled to construction sites, warehouses, retail businesses and public facilities.  "Why should the Teamsters be the union most controlled by organized crime?  Why not other big unions like the autoworkers or the steelworkers?" asked an article in Reason magazine a decade ago.  "One answer is economic power.  The Teamsters have long controlled the labor market in local trucking in major metropolitan areas of the country.  As a consequence, local Teamsters unions have enormous leverage over thousands of businesses that depend on union deliveries." ¹²  From the start the union’s officials have used this leverage.  In 1902, when being Teamster meant driving a horse and buggy, not a truck, a union leader bragged, "There is no industry today that can carry on its business if the Teamsters lay down their reins." ¹³

Despite a declining membership since 1980, when Congress deregulated trucking, a Teamsters strike still can bring shudders to an employer, large and small.  For example, some 200,000 members—one out of seven--are employed by United Parcel Service. ¹⁴  When the union in the summer of 1997 went on a 15-day strike against UPS, packages stacked up in warehouses throughout the U.S., causing millions of dollars in losses to large companies and forcing some smaller ones into bankruptcy. ¹⁵

The Teamsters have a well-earned reputation of using organized criminals to ensure employers, contractors and businesses don’t make the mistake of using non-Teamster labor.  And organized criminals, in turn, have made extensive use of Teamsters to carry out their own objectives.  It often is hard to tell where one ends and the other begins, and that’s precisely the point. ¹⁶ Yet this unholy alliance was decades in the making.
 

The Roots of Corruption

The International Brotherhood of Teamsters was founded in Detroit in 1899 as part of the American Federation of Labor. ¹⁷  Known at the time as the Team Drivers International Union, it grew from 1,200 to 30,000 members after only three years.  Among the dozens of strikes in the year 1902 was one in Chicago that lasted 13 days; in almost continuous rioting, police clubbed picketers, while Teamsters blocked meat and bakery wagons from being removed.  Strikes and violence occurred with regularity in the 1920s and 30s, as by then trucks fast were replacing the horse and buggy.  One strike, at Christmas time in 1933 in Philadelphia, threw the city into a panic, as food shortages developed; crowds of Teamsters beat strike-replacement drivers, while police and hired goons in turn pummeled strikers.

During these early violent decades Teamsters locals and joint councils made their initial alliances with local gangsters.  It was a case of tit for tat; many mobsters also were employed by management as strikebreakers.  Teamsters in Detroit, Chicago and Cleveland, respectively, joined forces with the Purple Gang, Al Capone, and the Milano family.  In the 1930s and 40s police investigated Teamsters rackets in several cities.  Prominent convictions included Joseph "Socks" Lanza for his role in a Teamsters extortion racket at New York City’s Fulton Fish Market.

It was in 1934 that the Teamsters discovered how much leverage they could have with employers in an era when trucking was coming into its own.  Minneapolis Teamsters chieftain Farrell Dobbs, a fiery Trotskyite Communist, led a strike calling for union recognition, raises and seniority rights for drivers and warehousemen.  A riot broke out ten days later, with Teamsters beating to death two special deputies.  The next day police sent in an armed convoy to escort a strikebreaking truck.  Unarmed strikers blocked them.  In the standoff police fired on strikers, killing two and wounding 67.  Several months later, after the Minnesota governor had declared martial law, employers began to give in.

The victorious Dobbs then hit on an idea.  Sensing long-distance hauling between cities was the future, he would require all drivers coming into his Minneapolis terminals, and the workers at the terminals, to be union members under a uniform contract.  Otherwise, nothing would move there.  It worked all too well.  Dobbs then organized warehousemen and drivers in other cities in the same manner.  With the origin as well as the destination of a terminal covered by a union contract, the Teamsters realized they could have a lock on long-distance transporting.

The key was force; local labor cartels would ensure long-distance hauling would exclude non-Teamster labor.  The brand-new National Labor Relations Act of 1935 gave the benediction to this arrangement.  Workers would have to recognize the Teamsters as their sole bargaining agent, and pay dues to the union.  Companies that used non-Teamster workers, as well as such workers themselves, would be targeted for coercion.

Teamster President Dan Tobin, whose reign lasted nearly a half-century, from 1907 to 1952, shied away from militant locals and the relationships they were cultivating with the underworld.  He preferred instead to focus on AFL affairs.  He opposed Dobbs’ interstate plan, offering him the job of international vice president to keep the peace.  But Dobbs was not to be denied, and by leapfrogging from city to city in the Midwest, and selectively conducting strikes, he brought employers to agree to uniform contracts.  From 1933 to 1939 Teamster rank and file grew from 75,000 to 420,000.  At the peak of his power, Dobbs in 1940 left the Teamsters to lead the Socialist Workers Party, the Trotskyites’ political arm.   But there was no shortage of people ready, willing and able to get in the trenches, and organize Teamsters at intercity terminals and force employers into areawide contracts.  One was a young Detroit organizer named Jimmy Hoffa.
 

Married to the Mob: The Golden Age

By the early 50s, Hoffa’s arrival at the top was still several years away.  The president’s job belonged to Dave Beck.  Beck, like Tobin, tried to avoid the impression he was in cahoots with mobsters.  But the façade cracked on March 26, 1957, when he took the Fifth Amendment 90 times in testimony before the McClellan Committee.  And he did exhibit more than a streak of nepotism.  The committee discovered that Beck had established a company for his son, Dave Jr., which produced toy trucks; the older Beck ordered Teamsters locals to buy hundreds to give away as presents.  Beck also pressured a Seattle beer distributor, whose employees were under a Teamsters contract, to let Dave Jr. buy into the firm and eventually become its president.  After he’d left as president, he was convicted filing a false tax return, and served half of a five-year prison term.

Jimmy Hoffa succeeded Beck as president in 1957, with the McClellan hearings in full swing.  Though anything but glamorous, the gruff, take-no-prisoners Hoffa was right for the media age.  No one person has more personified the Teamster identity than Hoffa, whose style Jack Nicholson depicted with uncanny accuracy in the 1992 movie, "Hoffa."  Hoffa, the real-life character, inspired a fierce loyalty among his subordinates that energized an organizing campaign that increased the Teamsters’ membership to a peak of well over two million.

Hoffa’s opinion of truckers who didn’t want to join his union was made clear in 1958 when he warned employers in California not to support a proposed Right to Work referendum because, he claimed, in states where Right to Work laws had passed, "our organization has become more militant and aroused." Such pugnaciousness toward recalcitrant workers, along with help from organized crime and, more tacitly, the federal government, made much of that growth possible. ¹⁸

Hoffa never made a secret of being on the wrong side of the law when it suited his interests.  He often bragged of having an arrest record "as long as your arm."  As early as 1937 he was convicted of assault and battery on a picket line.  In 1941, when a rival union threatened his turf in Detroit, Hoffa called in reputed mobsters Santo Perrone, "Scarface Joe" Bommarito and Frank Coppola to make sure his territory was secure.  It was the beginning of a long friendship with the underworld.  In 1949, for example, Hoffa cut a deal with Chicago mobster, Paul "Red" Dorfman, who years before had been an ally of Al Capone.  Local hoodlums would provide the muscle to help with organizing drives, while Hoffa would give Dorfman’s stepson, Allen, control over the union’s Central States Health and Welfare Fund.

Mob protection was crucial to Hoffa staying out of prison.  In 1946 he was charged with extortion for forcing small grocers to buy permits from the Teamsters to use their trucks.  He pleaded guilty to a lesser charge, paid a $500 fine and returned $7,600 he had collected for the permits.  In 1957 he tried to bribe the McClellan Committee into handing him confidential documents.  Despite being photographed by the FBI in the act of the exchange, a jury later acquitted him of bribery and conspiracy.  The committee concluded in its 1959 report that Hoffa had "shamelessly abused his union members," and had used union funds "to pay off a longstanding debt to the Chicago underworld."  But no arrest resulted.  In 1962 he was indicted in a $1 million kickback scheme, but the case ended in a mistrial.  Even when it came to physical violence, Hoffa managed to get off the hook.  That year he punched and knocked down Teamsters field director Sam Baron, suspecting he had been talking to the feds.  Baron pressed charges, yet the government decided not to prosecute Hoffa.

Hoffa’s luck finally ran out in 1964, when a federal court convicted him on two counts of jury tampering; courts later added convictions for mail and wire fraud, and misuse of the Teamsters’ Central States Pension Fund.  After exhausting his appeals, in March 1967 he went to federal prison in Lewisburg, Pa. to serve a 13-year sentence.  Yet he did only about third of his time.  In December 1971, under pressure to shore up ties with organized labor for his own pending re-election campaign, President Nixon commuted his sentence.

Hoffa’s release was conditioned on his agreement to stay out of Teamster activities until 1980.  But he was not one to wait.  While pursuing legal and political maneuvers to regain control of his union, he also campaigned among Teamsters around the country.  Ironically, he made corruption—that of his successor and former ally, Frank Fitzsimmons—as his theme.  In 1975 Hoffa published a book, Hoffa: The Real Story.  His indictment was blunt: ¹⁹

I charge Fitzsimmons with selling out to the mobsters and letting known racketeers into The Teamsters….I charge him with awarding a $1.3 million Teamsters’ public relations program in 1973 to two men with criminal records; I charge him with permitting the underworld establishment of a union insurance scheme which in one year was a ripoff to the tune of $1,185,000 in the New York area alone and in which his own son participated on a nation level.  I charge him with making vast loans from the billion-dollar Teamster pension fund to known mobsters.

The FBI file is still open on the Jimmy Hoffa case, but had justice prevailed, it would have been closed long ago.  A bureau investigation concluded Hoffa was lured to the meeting, where a New Jersey Mafia hit man, a Provenzano crony named Salvatore Briguglio, strangled him.  Hoffa’s body was then taken to a Detroit fender factory and dismembered.  But the bureau couldn’t make its case stick.  Provenzano died of a heart attack in federal prison in 1988; Briguglio had been murdered a decade earlier. ²¹

The Fitzsimmons-Provenzano pact kept union "peace," but further solidified mob  domination.  Provenzano was a capo in the Genovese crime family, and boss of Teamsters Local 560 in New Jersey.  His prison sentence was the result of a conviction in 1978 for the 1961 murder of a union opponent, Anthony Castellito. ²²  Provenzano had two brothers, Salvatore and Nunzio, also officials of Local 560 and part of the Genovese organization.  Local 560, in fact, had been placed under federal trusteeship in 1986 to settle a civil RICO suit, three years before the federal takeover of the union as a whole.  A U.S. district court found the local’s members lived in constant fear of physical violence and economic retaliation.  Tony Pro’s lawyer, Russell Bufalino, may hold the key to Hoffa’s disappearance.  Anthony Provenzano was Bufalino’s main entrée into the Teamsters’ extortion, pension fraud and bank fraud rackets in the New York-New Jersey area.  "Everywhere we find Bufalino we find Tony Pro," said one federal Organized Crime Strike Force lawyer. ²³

Fitzsimmons was indicted only once, in 1953, long before becoming president, for extortion from Michigan construction companies.  But his stamp was most pronounced on the union’s pension funds.  The largest and most notorious was the Central States Pension Fund, a creation of Hoffa’s in 1955.

Officially, it was the employer-contributed retirement nest egg for Teamsters in more than two dozen states; unofficially, it was the Chicago underworld’s private bank.  Just before Hoffa went to prison, he put Allen Dorfman in charge of the operation.  Dorfman enjoyed the good life, raking in some $3 million in commissions, some of which allegedly were siphoned off into Hoffa’s accounts.  Among its activities, the CSPF loaned more than $60 million to Allen Glick, a San Diego-based real estate investor, to buy the Stardust and the Fremont casinos in Las Vegas. ²⁴  The Chicago mob fleeced the revenues, courtesy of heavy-duty enforcement by Tony Spilotro, who’d moved from Chicago to Las Vegas in 1971.  Dorfman was able to beat the rap until 1972, when he was convicted of conspiring to take a $55,000 cash kickback in New York to arrange a $1.5 million loan to wheeler-dealer investor George Horvath, who’d borrowed more than $15 million in five separate—and defaulted--loans from the fund since 1963. ²⁵

After Glick took over the Stardust and the Fremont in 1974, he hired Frank "Lefty" Rosenthal, a former baccarat dealer at the Stardust, to handle all his gambling operations on a ten-year, $250,000-a-year contract.  "Glick is the financial end, but policy comes from me," Rosenthal said in an interview with Business Week. ²⁶  But Rosenthal also took orders from above.  A close friend of Spilotro, Rosenthal winked and gave cover to the mob’s skimming operation.  A 1975 memo from a California police agency explained the plan was for Rosenthal and associates to drive the Fremont and the Stardust into bankruptcy, thus inducing foreclosure by the Central States Pension Fund, leaving the Teamsters the outright owners of Glick’s operations. ²⁷

This kind of bank robbery left quite a tab.  By the late 70s the Central States Pension Fund, made possible by forced dues payments, racked up losses of nearly $400 million in bad loans and undercharges. ²⁸

In 1978 the Labor Department’s enforcement of the Employee Retirement and Income Security Act (ERISA) forced the resignations of the CSPF’s trustees, and replaced them with new ones less prone to gangster manipulation.  Finally, in early in 1986 under a consent decree with the Department of Labor, the fund for five years under the helm of Executive Director George Lehr, a former Kansas City banker and friend of Teamster President Roy Williams (1981-83), agreed not to make future investments in resort or casino properties.  By then, the fund had accumulated some $6.5 billion in assets. ²⁹  Martin Scorsese’s brilliant 1995 film, "Casino," based on a book by Nicholas Pileggi, changed the names of the main characters in the Las Vegas saga (Robert DeNiro’s role of "Ace Rothstein" was based on Lefty Rosenthal).  But the details were accurate.

Challenging the Central States Pension Fund’s mismanagement proved more risky than even the loans the fund approved.  On September 27, 1974 Daniel Seifert, who’d been in the fiberglass business with Chicago mobster Joe "the Clown" Lombardo, was shot to death by two masked assassins in a Chicago suburb.  He was set to be a key government witness against Lombardo, Dorfman, Spilotro, and two fund trustees for defrauding the fund of $1.4 million.  On November 9, 1975, Tamara Rand, the wife of a prominent San Diego gynecologist, was shot to death in her kitchen.  San Diego police were unable to close the case, but concluded they had a mob hit on their hands.  Rand had invested heavily in one of Glick’s ventures, became disillusioned, and sued to acquire some of his Las Vegas properties.  Mobsters feared she knew too much about too many things; an associate of Tony Spilotro, in fact, had overheard him talking about Rand just before her death.

The clock struck midnight for Dorfman in January 1983.  No longer a useful stage prop, top mobsters feared he was about to become a government witness, and dispatched a hit man to shoot him dead on a suburban Chicago hotel parking lot.  Allen Glick was luckier; his testimony, in the face of death threats, helped convict key mob principals in the thefts from Las Vegas’s Stardust, Fremont, Marina and Hacienda casinos.

Fitzsimmons, who died in office of lung cancer in 1981, was less than cooperative with details.  He took the Fifth Amendment two dozen times during a Senate investigation of the Central States Pension Fund.  But Kansas City-based Teamster boss Roy Williams, who took over the reins as president, would reveal more than anyone could reasonably expect.

Williams, by all accounts, was in the pockets of local mobster Nicholas Civella.  A 1971 Labor Department memo noted, "Roy Williams is under the complete domination of Civella.  Williams will not act contrary to the wishes of Civella, apparently because of both self-interest and fear." ³⁰  Williams learned about the fear part well before that.  According to FBI testimony, when Williams in the 1950s had resisted buying an overpriced medical care program for members of his Local 41, two members of Civella’s gang visited him, and warned, "Buy the medical plan or we’ll kill your children and your wife.  You go last." ³¹  At Hoffa’s urging, Williams bought the plan, and raised dues to cover the cost.

Williams’ first serious scrape with the law was in 1962, when the Justice Department charged him, former Local 41 predecessor Floyd Hayes and several associates with embezzling more than $200,000 in union funds.  Although Hayes and the others were convicted, Williams was acquitted when witnesses suddenly became vague about details.  Hayes turned government witness, telling the FBI about the Teamsters-Mafia connection; in June 1964 mobsters murdered him in a parking lot, and wounded his wife for good measure.  FBI agents finally nailed Civella in 1977 for conspiracy to violate interstate gambling laws.   Paroled the next year, a wave of gangland murders in Kansas City persuaded local judges to record Civella and his brother Carl plotting to use the Mafia to promote Williams as Fitzsimmons’ successor.

Civella’s courier was arrested at Kansas City International Airport in 1979 with a pair of $40,000 packages of stolen casino cash.  The FBI then raided the homes of Civella and six other mobsters, plus some casino offices, recovering coded records of casino payoffs to Teamster and Mafia figures. Williams in 1982, along with Lombardo, was convicted of attempting to bribe U.S. Senator Howard Cannon, Nevada Democrat; a few years before he had offered the Senator Teamster-owned Las Vegas real estate in return for delaying trucking-deregulation legislation. ³²  In 1985 Williams, by then out of office, openly acknowledged in testimony before the President’s Commission on Organized Crime just how deeply his union and organized crime were intertwined: ³³

Q:   So that any Teamsters president, sitting where you sat for several years, has to take into account that portions of this union are under the control of organized crime and not under his control?
A:  Yes.
Q:  Do you think it’s possible that someone sitting in that chair could significantly change and disrupt the activities of organized crime?
A:  Not without having a bigger organization than they got.  They (sic) was here a long time before any of us ever got here, and they have (sic) got pretty powerful.  And you fellows haven’t been able to do nothing with them either.
Q:  And they remain extremely powerful today?
A:  Yes, they do.

Meanwhile, Williams proved a key witness in the January 1986 convictions of Chicago mob boss Joseph Aiuppa, underboss John Cerone, and three other men, including Lombardo, for skimming more than $2 million in untaxed winnings from Las Vegas casinos bought and remodeled with loans from the Central States Pension Fund. ³⁴

Cleveland boss Jackie Presser took over as president in 1983 from the convicted Williams, who died of emphysema several years later.  He’d advanced up the union hierarchy under the tutelage of his father, William "Big Bill" Presser, for years a close Hoffa associate. ³⁵  The older Presser had built up a local jukebox servicing empire with local mobster John Nardi, Sr., and also brother-in-law of the city’s crime boss.  Presser brought his own union into the Teamsters in 1951, and with Hoffa’s help, hired mob-connected felons to run Cleveland operations.  In was risky venture for Nardi, though just how risky he would not know until May 1977, when he was killed by a bomb placed in a car next to his own.

Presser took the Fifth Amendment at the McClellan Committee hearings rather than admit he’d destroyed evidence, and in 1960 was sent to jail for obstruction of justice.  His other conviction, in 1971, was a guilty plea on eight counts of shaking down employers by making them buy ads in his Teamsters’ joint council newspaper in return for labor peace. (He was fined, but not sent to prison).  For a while, he’d also managed the Central States Pension Fund. ³⁶  A Labor Department memo that year called Presser’s joint council a "Who’s Who of organized crime in Ohio." ³⁷

Jackie Presser, like his father, enjoyed power, and didn’t hesitate to use raw criminal muscle to make sure he kept it.  He became secretary-treasurer of Local 507 in Cleveland in 1972, and international vice president in 1976.  It was the younger Presser who in 1981 dispatched a Teamster goon squad called the Brotherhood of Loyal Americans and Strong Teamsters, or BLAST, to Las Vegas to intimidate and assault members of a dissident Teamsters faction, Teamsters for a Democratic Union. ³⁸  A federal judge enjoined BLAST from further activity after the group broke up a later TDU meeting in Detroit.  Presser owed his presidency to New York summit meetings between convicted Cleveland mobsters Angelo Lonardo and Milton Rockman, with Genovese crime boss Tony Salerno presiding. ³⁹  Lonardo and several mobsters-turned-federal informants (including notorious hit man James "Jimmy the Weasel" Fratianno) all told the FBI that the Cleveland mob controlled Presser.   In 1988 Lonardo admitted to a Senate subcommittee that the Mafia has handpicked all the union’s presidents in recent years. ⁴⁰

What the mobsters didn’t know at the time was that Presser as early as 1974 had worked as an FBI informant. ⁴¹  Known by his code name, "All Pro," he gave an insider’s view of how the mob controlled the union.  Presser openly acknowledged his role.  His attorney, John Climaco, told the Justice Department Presser had been "authorized" as an FBI informant to set up a ghost-worker scheme to embezzle more than $700,000 from Teamsters Local 507 and Bakery and Tobacco Workers Union Local 19.  After a five-year investigation, the two union "officers," Presser’s uncle, Allen Friedman, and John Nardi, Jr., were both convicted. ⁴²  Also convicted was Local 507 boss Harold Friedman, no relation to Allen Friedman, for his role in the payroll-padding scheme.  For a while, the Justice Department declined to prosecute Presser. ⁴³  He’d been more than helpful, providing the FBI with information about 69 people in 11 cities, and about how the Mafia used Teamsters pension funds for Las Vegas investments. ⁴⁴

Presser died of cancer in July 1988 while under indictment for racketeering and embezzlement, less than a year before the federal takeover.  Weldon Mathis, Atlanta’s Teamster boss and a Presser ally, moved up from secretary-treasurer to acting president after his death.  His tenure lasted only weeks; earlier he’d compiled a criminal record that included a conviction for possession of explosives. ⁴⁵  He apparently could not bring  himself to admit the Teamsters were crooked.  The civil RICO suit, he said, was a "scurrilous attack" on the union, which "is not now and never was controlled by organized-crime influences." ⁴⁶

William McCarthy, definitely not a Presser ally, had been a Teamster vice-president since 1969.  He also had been friendly to mobsters, always a plus in obtaining the presidency.  Government wiretaps of mobster phone conversations in 1984 showed that organized criminals, including Salerno, thought well of him. ⁴⁷  But it wasn’t enough for a prosecution.

Becoming president in the summer of 1988, McCarthy consolidated power in a way that would have done his predecessors proud.  New York Teamster Joint Council 16 head Joseph Trerotola, by his own admission, maneuvered McCarthy’s surprise election victory. ⁴⁸  The President’s Organized Crime Commission Report described Trerotola, who died in 1991, as "blind…to the influence of organized crime" in the Teamsters.  McCarthy took away jobs or fringe benefits from four vice presidents who had supported Mathis, and gave them to his own supporters.   He also fired Climaco as Teamster general counsel.  Not coincidentally, Climaco and Mathis had been trying to settle the government’s massive civil RICO suit, promising sweeping reforms to undermine mob influence.  In 1994, a half-decade after the federal takeover, that a mobster-turned informant, Thomas Hillary, testified that New England’s Patriarca crime family had influence with McCarthy. ⁴⁹

The RICO consent decree of March 1989 allowed McCarthy (who died of natural causes in November 1998) and most of his top lieutenants to remain in office, but from that point on to be a Teamsters president would mean working for the federal government all but in name.  Yet the Teamsters-organized crime alliance wasn’t about to take a permanent vacation.  A big reason was that in addition to national leadership, local Teamster leaders, in concert with mobsters, long have had their own gravy train.   The hovering presence of the Independent Review Board might slow that train down, but would far from knock it off track.
 
 

Grassroots Bundles

The courting of organized crime for decades by the Teamsters national leadership has given a green light for corruption of varying kinds at the local and state levels.  Teamster local unions have run the gamut in crime.   What follows are significant examples of grassroots Teamsters corruption.  Some have involved mob influence; some don’t.  Some occurred (or at least began) prior to the 1989 federal takeover; others happened after that.  Some have involved national leadership, while others have been purely local.  Yet all point to the resourcefulness of Teamster local and council officials in raking in dollars at the expense of rank and file.  And all implicitly reveal why federal authorization of union monopoly power has been a license to steal.

If ever there was a model case of how a Teamsters racket, left unchecked, can control a local, indeed a state economy, it took place in the 70s in Alaska, which has never been a right-to-work state.  For all intents and purposes, the Teamsters dictated the ground rules for construction of the Alaskan oil pipeline, and the provision of services to workers and surrounding communities.   Being geographically isolated from the rest of the country had its advantages, especially since the then-oil crisis had made the pipeline’s construction a national priority.

By 1977 nearly 15 percent of the state’s work force were Teamsters. ⁵⁰  That included not just truckers and oil pipeline workers, but a wide range of private- and public-sector service employees.  The Teamsters negotiated wages and benefits for their workers that were the envy of any unionized labor force in the U.S.  All family health care was completely free.  The union built office buildings around the state.  Here, reform-minded union leaders assured, was the Teamsters as it should be, a mobster-free force for worker prosperity and positive social change.  "Go to Alaska and see what Jesse Carr’s done, because that’s my real legacy.  I gave Jesse all his ideas for social programs," said St. Louis Teamster leader Harold Gibbons in the Seventies. ⁵¹

That kind of claim needed a cross-check, and it came from the Los Angeles Times.  The paper in the mid-70s published the results of a two-month investigation, "Alaska Today—Runaway Crime and Union Violence." ⁵²  The driving force in the new Alaska was state Teamster boss Jesse Carr, a man whose personal motto was, "When you have them by the balls, their hearts and minds usually will follow."   Say this for him:  He practiced what he preached.  Carr, a former California truck driver, was indicted six times during the 1960s on charges ranging from embezzlement to extortion to making false statements to obtain a government loan.  He was acquitted on four of the charges when the chief witness against him became unable to testify due to "extensive medical treatment."

Carr built an empire in Alaska by using the Teamsters to control a wide array of goods and services, much in the same way in a rural area an employer can create its own "company town."   Like all Teamster officials, he was aware of his union’s leverage to make people dependent.  He declared he had the power to shut down the entire pipeline project, and had done exactly that several times, despite the no-strike agreement in the Teamster contract.  One shutdown occurred when Carr’s organization forced a non-Teamster trucking company out of business.

Carr controlled state Teamster pension, health, welfare and other funds.  Because of rapid salary increases, employers by the mid-70s were contributing to these funds a combined $500,000 a day.  Pension funds typically invested in mortgages in the state, so it was good business sense for Carr to serve on the board of directors at the state’s largest bank, the National Bank of Alaska.

One thing was certain about Carr’s power:  Challenging it could get someone hurt.    Even then-Governor Jay Hammond was scared, admitting "nobody is going to challenge" Carr.  State and local law enforcement officials, he added, had a policy of "Teamsters first and police second."  In worker camps police were unable or unwilling to protect innocent men, women and children from assault, rape and property destruction.  Drugs, numbers, kickbacks and theft were rampant.  Tool theft from each of the 20 labor camps averaged roughly $10,000 a month.  The central supply warehouse in Fairbanks was under a tight criminal racket.  Some of the most notorious criminals in Alaska had warehouse jobs; a huge portion of shipments never reached their destination.  At one point, the Alaskan Pipeline Service Company attempted to increase warehouse security, but Teamsters complained about the prospect of non-union labor, and subsequently steered the jobs to union members.

It was little wonder that Alaska would attract mobsters, more specifically associates of the Bonanno crime family who’d bought jewelry, tavern and restaurant businesses.  A state trooper several times had been offered $1,500 by the Mafia.  One reporter, disguised as a workman, was menacing informed, "This here is a syndicate town.  Don’t you forget it.  Keep your mouth shut."  Officials in Anchorage, Fairbanks and Valdez feared they would be "butchered" if they attempted to confront illegal prostitution and gambling establishments.  Jesse Carr died some 15 years ago of a heart attack, but not before leaving quite a legacy.

Teamsters affiliates haven’t quite managed to bring an entire state to heel like Carr in his heyday.  But they’ve kept law enforcement officials and the IRB busy just the same.  In the New York City metropolitan area, all of it covered by non-right-to-work states, union officials long have practiced corruption, especially embezzlement, on a grand scale.

In 1992, for example, an IRB investigator charged New York Teamster leader Barry Feinstein with pilfering some $540,000 in union funds from 1984 to 1991. ⁵³  Most of the money was embezzled, though he also improperly took interest-free loans of $20,000 to $30,000 a year.  Feinstein, president of Local 237 and head of Joint Council 16 (covering New York City and Long Island), found his $189,000 income and his chauffeur-driven Lincoln Town Car were unable to give him the lifestyle he apparently required.  Among his expenses were $166,131 for a penthouse apartment on Manhattan’s East Side, $59,757 for furnishings, and $56,157 for a cleaning person.  Feinstein eventually agreed to give up his union posts for life, and make a $104,000 payment to the local. ⁵⁴

IRB investigator Charles Carberry in 1992 filed charges against two officers of Local 810, also in New York, of a scheme dating back two decades earlier.  Local 810 President Dennis Silverman and Vice President Max Sanchez conspired to take $1 a month out of union member dues instead of the authorized 35 cents.  Silverman and Sanchez had ripped off $710,000 and $561,000 respectively, by the time the fund was dissolved in 1987, even though they didn’t retire. ⁵⁵

Illustrating how a fine line can separate embezzlement from extortion, the president of a Teamsters local in nearby Morris County, New Jersey was convicted in federal district court of receiving kickbacks from the owners of a Parsippany-Troy Hills, N.J. firm hired to handle the union’s welfare fund. ⁵⁶  Salvatore Zingone, president of Local 723, had accepted kickbacks totaling $36,000 from the owners of the now-defunct Omega Network Systems, Inc., an insurance administrator, over a 28-month period.  According to testimony, Zingone demanded Omega’s principals pay him kickbacks, warning them "accidents could happen" if he wasn’t paid and that he was connected to the mob.  The dots connected; this case led to the indictment of Mayor Frank Priore on federal fraud and embezzlement charges to bilk the benefit plan to pay for dental care for friends and family.  Omega had contributed at least $3,800 to Priore’s campaign fund.

Sometimes embezzlement is built into paychecks.  In 1992 the IRB, in a civil lawsuit, settled with Providence, R.I. Teamster leadership who misused $688,000 of Local 64 funds. ⁵⁷  Local Secretary-Treasurer Paul C. Hanoian had been accused of improperly receiving a 10 percent raise each year for the previous 14 years without authorization from the local’s executive board and members.  The local president, George Gibney, and two trustees were cited for approving of the paychecks.

Josephine Russo, former assistant administrator for the New York State Teamsters Council Health and Hospital Fund in Utica, was convicted with her son and daughter during January 1987 to March 1992 to embezzle more than $138,000 from the fund.  She admitted she submitted ineligible, fraudulent or duplicate claims. ⁵⁸

In the Boston area Steven Watchmaker, top accountant for the New England Teamsters Pension Fund, was indicted in 1992 in a federal suit alleging misuse of funds. Watchmaker steered $60 million in union benefit fund investments during 1980-90 into four banks in return for favorable treatment of real estate ventures with his partner, Neil Zais. ⁵⁹  In 1994 Watchmaker pled guilty to bank fraud and illegal use of union funds.  Earlier, in 1991, he and another associate, Thomas Prendergast, had been investigated by a grand jury that they had received loans at below-market-interest rates in return for influencing the distribution of funds in the New England Teamsters Pension Fund.  There was more than a passing connection to national leadership. Prendergast was a son-in-law of then-Teamsters President William McCarthy.  The IRB only weeks before had accused McCarthy of steering a $3.8 million printing contract to another Boston-area son-in-law, Thomas Treacy. ⁶⁰

The New England Teamsters leadership also have a knack for getting on the wrong side of the law.  In 1992 federal prosecutors charged former Local 25 President James Moar, along with three persons, including the son of New England mob chieftain Francis "Cadillac Frank" Salemme, with racketeering and conspiracy.  The charges stemmed from a 1990 FBI sting, during which an agent posed as a Hollywood producer paid $65,000 in bribes to have movies made in Massachusetts without paying union members.  Francis Salemme Jr. and reputed Mafia soldier Dennis "Champagne" LePore collected extortion money and ripped off drug dealers, federal prosecutors said. ⁶¹  LePore pleaded guilty to bribery in 1994; at the time he already was in prison for extorting $500,000 from a 92-year-old dentist bookmaker.  These figures were associates of Patriarca crime family soldier-turned informant Thomas Hillary, who fingered McCarthy as being in the pockets of the New England syndicate.

In New Jersey in 1986 a U.S. District Court convicted three men, two of them former Teamsters pension fund trustees, for a scheme to divert $20 million from the pension fund of Teamsters Local 701 of North Brunswick, N.J. in exchange for kickbacks.  The money was used by a pair of former New Jersey state legislators in a mortgage company they controlled in Ft. Lauderdale. ⁶²

Around that time on a similarly grand scale, two men were charged with bilking more than $16 million from pension plans from Teamsters Local 810 in New York City and Sheetmetal Workers Local 38 in Peekskill, N.Y.  Mario Schwimmer and Mario Renda, respectively, owner of and consultant to First United Fund Ltd. of Garden City, N.Y., had taken money from the union funds, placed the funds in long term CDs in cash-starved banks and savings & loans, and pocketed undeserved or excessively high commissions.  They also paid kickbacks to Local 810 officials. ⁶³  Renda eventually pled guilty, and his testimony helped convict Schwimmer on 83 counts of racketeering and receiving kickbacks.

Meanwhile, in Syracuse three defendants pleaded guilty in federal court to various charges in connection with skimming anywhere from $500,000 to $700,000 from the Teamsters Pension and Welfare Fund during 1980 to 1987.  The defendants bought securities in promising companies, and then transferred the securities to a holding account.  If the stock made money, it was transferred to the account of a friend, relative or associate, who collected an immediate profit.   If the stock lost money, it was sold back to the Teamsters fund. ⁶⁴

Sometimes embezzlement complements another type of offense.  George F. Burke Jr. and Richard E. Robidoux, former head of Teamsters Local 671 in East Hartford, Connecticut in 1989 surrendered to federal authorities on charges of paying and receiving a $30,000 kickback in connection with the construction of a new union headquarters.   In the course of the deal, read the indictment, the two men embezzled a substantial portion from the union’s health services and insurance fund, of which Burke gave $30,000 to Robidoux. ⁶⁵

Similarly, Charles V. Giordano, former president of Local 125 in Little Falls, N.J., pleaded guilty to accepting more than $460,000 in kickbacks from various developers and businessmen in connection with pension and welfare fund transactions, embezzling more than $16,000 in union funds, and evading taxes. ⁶⁶

Teamsters’ lawyers have not been averse to getting in on the action.  Cleveland lawyer Joseph Kalk in 1989 was sentenced to three years probation and fined $20,000 to cover up an embezzlement scheme of the Teamsters’ Health and Welfare Fund.  Kalk had obstructed a grand jury investigation and making false statements about $260,000 in legal fees allegedly improperly advanced to a union official.  He was trying to prevent the arrest of former Local 436 President of Salvatore Busacca and his associate, Louis Marrali, the latter two eventually convicted of embezzling $27,000 from the fund. ⁶⁷  Busacca got a 10-year prison term after his 1987 conviction on racketeering and embezzlement charges.

Cleveland’s Local 507 continued to have problems even well after the death of Jackie Presser.  In August 1993 a U.S. District Court ordered the Teamsters local, along with Bakers Local 19, to repay $2 million in misspent pension funds.  The court found that the pension fund trustees and the unions improperly paid salaries to plan employees who were working on other union business. ⁶⁸

In Detroit a federal jury in 1994 convicted Gerald Wiedyk, executive director of the Michigan Conference of Teamsters Welfare Fund, of accepting $460,000 in illegal kickbacks from a medical laboratory and forging documents to justify the payments.  A joint FBI-Department of Labor probe turned up payments to Wiedyk by the Southfield, Mich.-based Metric Medical Laboratory.  Wiedyk funneled the kickbacks through a medical billing company owned by his wife. ⁶⁹

In Chicago 1995 the Teamsters filed a federal civil suit accusing several persons, including former Local 705 President Daniel Ligurotis—ousted from the union in 1992—of channeling some $4 million to cronies.  Ligurotis, the suit charged, also solicited a $25,000 bribe from the Lucchese family. ⁷⁰  The IRB imposed a lifetime ban on Ligurotis after evidence clearly showed he improperly had received over $200,000 in loans from his local, embezzled and unlawfully converted the local’s funds, and engaged in conduct that allowed corruption to thrive at the local.

In Milwaukee the former head of Teamsters Local 344, Charles Pieper, was convicted in federal court of conspiring to create a kickback scheme with Gary Landru, a former bank vice president.   Pieper and Landru allegedly charged a 3 percent unrecorded cash fee during the early 80s on low-interest commercial real estate loans from the union’s pension fund.  The two men had split an estimated $300,000 and also accepted home improvements in lieu of the 3 percent fee. ⁷¹  Wisconsin, like other states in the Great Lakes region, is not right-to-work territory.

On the West Coast, too, Teamsters embezzlement has exacted a price.  In 1986 a federal grand jury convicted a couple, Nicholas and Dana Nicholson, of embezzlement, mail fraud, tax evasion charges stemming from the $1.5 million looting of the Long Beach Teamsters health plan fund they managed. ⁷²  The defendants had misrepresented the size of the fund, which as a result, had been forced into receivership.

In a classic case of how a sweetheart contract buys "peace" through appeasing violent characters, Francis Walsh, owner of a New Jersey trucking company, in 1990 pled guilty to conspiring to pay off officials of Union City, N.J.-based Teamsters Local 560, the one controlled by Genovese family boss Tony Provenzano. ⁷³  The case revolved around a series of monthly payments to Genovese boss Tony Salerno and capo Matthew "Matty the Horse" Ianiello over more than a half-dozen years ranging from $1,200 to $3,000.  In exchange, Walsh’s company implemented a collective bargaining agreement that shortchanged Local 560 warehouse workers. ⁷⁴

The threat of violence has enabled local Teamsters rackets to flourish.  The New York metropolitan area functions as a focal point.  In April 1989, for example, a month after the federal RICO suit was settled, Anthony Gilberti, a former vice president of Local 814, testified before a Senate panel this way:  "I had two choices, to be a dead man or talk to the feds." ⁷⁵  Gilberti came close to being a dead man; he was shot outside his home in July 1982.

Trash collection long has been one of the Teamsters’ most lucrative rackets.  In 1993 a federal grand jury indicted James Failla, longtime head of the Association of Trade Waste Removers of Greater New York, on racketeering charges. ⁷⁶  The government contended Failla, a captain in the Gambino crime family, controlled by John Gotti, used force and threats of violence to divide up collection routes in a way that has given New York City the highest trash-hauling rates in the nation.  The indictment charged five other men conspired to kill Thomas Spinelli in 1989, after he had begun to testify at a grand jury inquiry into the Gambino family.  The indictment of Failla came on the heels of Salvatore Avellino, Jr., in Long Island’s garbage collection business and a captain in the Lucchese crime family.

Under federal heat, in 1994 Local 813, representing over 2,000 sanitation workers, agreed to have a court-appointed officer monitor its activities to ensure mobsters would be kept away.  "Organized crime has had a very valuable tool in Local 813 for decades, and it is not something they’re going to easily relinquish," said Joseph McCann, a federal prosecutor. ⁷⁷

New York Teamsters connected to the same two mobs have been notoriously connected to air-freight operations at John F. Kennedy International Airport.  A federal racketeering suit in 1990 estimated that two Teamsters locals and 14 individuals, connected with the Gambino and Lucchese families, engaged in a variety of extortion schemes to gain and keep control.  Roughly 10 freight-handling firms had suffered damages totaling more than $10 million in the previous dozen years. ⁷⁸  It was a long time coming.  In 1984 a Justice Department attorney, Edward McDonald, concluded organized crime had a "stranglehold" on a large part of the cargo business at Kennedy Airport. ⁷⁹  "They have obtained ownership or secret ownership of many companies and by being in cahoots with some unions, have been able to get millions in payoffs for labor peace," he said.   Another Justice department lawyer said the investigation was difficult because "witnesses feared if they cooperated with us, not only would their business be endangered, but also their lives."

The investigation did catch some big fish.  A Teamster official, Harry Davidoff, vice president of Local 851, was convicted in 1986 of four counts of extortion.  Described by a Senate subcommittee as a "ruthless New York thug," he had a criminal record dating back to 1933. ⁸⁰  A criminal-turned government witness in that trial, Henry Hill, testified that the son of a captain in the Lucchese crime family had said, "The airport is ours." ⁸¹  The capo in question, Paul Vario, got a six-year sentence for extorting nearly $1 million from air freight truckers in return for "labor peace."  Federal prosecutors had called him "one of the most violent and dangerous career criminals in the City of New York." ⁸²  Frank Calise, former president of Teamsters Local 295, was sentenced in 1986 to nine years in prison for his role in extorting at least $1.2 million in exchange for labor peace—"allowing" freight companies to hire nonunion employees.  He had been indicted on charges that included racketeering, conspiracy, extortion and securities fraud in a scheme that involved officials from Davidoff’s Local 851 and reputed Lucchese family members. ⁸³  And Gambino family mobster Salvatore Reale in 1987 pled guilty to extortion from an air-freight company; he’d met several times with Calise to plan how to muscle $50,000 in payoffs from an official at Airride Inc. ⁸⁴

In 1992 a federal court appointed a former prosecutor in the probe as a trustee to administer Local 295.  Yet Lucchese-family mobsters managed to circumvent the cleanup plan by getting freight companies to pay hundreds of thousands of dollars in bribes to Lucchese leaders and Local 851 officials.  Dozens of Local 295 members were persuaded to switch to Local 851.  Prosecutors said in a court memorandum that Adam Heinz and Anthony Farino, president and vice-president of 851, had ties to organized crime. ⁸⁵  Meanwhile, Patrick Dello Russo and Anthony Razza were arrested in 1993 on charges they extorted $500,000 in payoffs from Amerford International Corp. that had terminated more than 20 employees in 1990.  The two allegedly terrorized employees if they resisted being fired; Dello Russo also was charged with with conspiracy to murder, Vladimer Jadick, a Lucchese associate who turned informant. ⁸⁶

Air freight isn’t the only transportation racket that New York Teamsters and organized criminals have found lucrative.  School busing has been attractive, too.  Federal and local investigators in New York City in 1990 uncovered an alliance between organized crime and two unions, the Teamsters and the Amalgamated Transit Union. ⁸⁷  During that decade the New York City Board of Education paid some $1.6 billion to bus companies through a system of periodically renewed contracts.  The board in the 1989-90 school year spent about $1,700 per student, the highest of any large school district in the nation.  Union-connected mobsters created that padded figure.

Frank Dapolito, a personnel manager for five bus companies that operate out of one garage, was one key person in the scam. A captain in the Gambino family, he also had been vice president of Teamsters Local 854.  Anthony Zappi, the head of Local 854, had been cited by an IRB investigator as a Gambino family head.  Edward Lino, another reputed Gambino member, controlled a company that received $8.2 million in fees before he was murdered in November 1990.  Nicholas Grancio, identified by the FBI as a member of the Colombo crime family, was a consultant for a company with $17.5 million in contracts in 1990 alone.  He ran Teamsters Local 707 for the mob. ⁸⁸  The worst character of all may have been Robert Bering, who for at least operated a bus company in Brooklyn in his wife’s name.  He testified in court that he participated in three Mafia murders and an attempted murder.

Julius "Spike" Bernstein, a top official with the Transit Workers Local 1181, acknowledged he had meetings with leaders of the Gambino and Genovese families.  He claimed the meetings were unrelated to union or school bus issues.  Yet he was a longtime friend of Genovese captain Matty Ianiello, serving a 24-year federal prison sentence for racketeering and other crimes.   Bernstein claimed the allegations against him were the fiction of a convicted murderer, Robert Bering, who was trying to cut a deal with the government.  But, in fact, Bering, who led a double life as a school bus company owner and alleged mob hit man, was a reliable source for much of the government’s case.  Prosecutors maintained in court records they had corroborated much of Bering’s story through informants and police surveillance.  "The evidence gathered so far," prosecutors wrote in 1989, "establishes that "Spike" Bernstein…receives payoffs from school bus company owners who wish to avoid signing collective bargaining agreements with Local 1181." ⁸⁹

The city’s moving and storage industry also has been vulnerable to Mafia-Teamsters teamwork.  In 1987 Philip Rastelli, reputed boss of the Bonanno crime family, received a 12-year prison sentence for running a 20-year racketeering operation that collected more than $500,000 in shakedowns, rigged bids and bombings. ⁹⁰  Three officials of Teamsters Local 814, including James Vincent Bracco, also were convicted and sentenced.  Rastelli’s brother, Carmine, a former Local 814 representative, got a six-year sentence.

In the construction industry, the Gambino crime family used Teamsters Local 282 like a candy store from the late 1970s until 1991.  Robert Sasso, president of the local, in 1992 resigned only hours before he was to face charges he was a Gambino pawn, and had helped John Gotti extract payoffs from contractors; ⁹¹  in 1994 he pled guilty to racketeering conspiracy.  The prosecution’s star witness was former Gotti hit man, Sammy "the Bull" Gravano.  Ten years earlier Sasso’s predecessor, John Cody, was convicted of federal racketeering charges and served five years in prison.  In 1993 federal prosecutors announced construction industry racketeering and extortion charges against five current and former Local 282 officials.  Gotti personally received $1.2 million annually in the arrangement.  The mob only had to call one of the Teamsters bigwigs, said FBI Special Agent William Doran, and the result was "an $80,000 no-show job and a fancy car."

Upstate New York also is a hotbed of Teamsters corruption.  Anthony Guarnieri, aging boss of the Bufalino crime family, was convicted in 1990 of attempted murder, bribery of union officials, extortion of businesses and defrauding truckers working highway construction projects in the Binghamton area.   Anthony Mosco, Sr., a 400-lb. Bufalino foot soldier and ex-assistant business manager of a Binghamton Teamsters local, was convicted of embezzling union funds, extorting money from businesses and truck drivers, tax evasion and defrauding drivers of wages.

The Independent Review Board in 1991 kicked out Angelo Misuraca from his job as vice president of Teamsters Local 398 in Rochester. ⁹²  The local was a longtime problem.  A Justice Department official in Rochester had testified in 1978 that former mob underboss "Sammy G" Gingello, co-owner of the Sam-Jon Trucking Co., used the union to squeeze rival trucking firms out of business.  Gingello didn’t get to enjoy the fruits of his labor too long; he was killed later that year by a remote-controlled car bomb.  Three years later John Fiorino, vice president of Local 398 and Gingello’s former business partner, was gunned down in front of a local restaurant after he decided to cooperate in a federal investigation of mob activity.  The IRB’s investigation charged Misuraca knowingly had associated with Angelo Amico, Rochester crime boss during much of the 80s.

In Atlantic City Nancy Scarfo Leonetti, sister of convicted Philadelphia mobster Nicky Scarfo and mother of Scarfo associate Philip "Crazy Phil" Leonetti, held two no-show jobs as administrator for employee funds of Local 158, which represents employees in Pennsylvania and New Jersey.  It was nice work that got her more than $220,000 over several years.  But with her connections, it wasn’t hard.  She obtained them "by means of violent threats made by an organized crime figure," noted U.S. Attorney Samuel Alito. ⁹³  In 1988 she pled guilty to embezzlement, and was sentenced to five years probation.

As if to square the circle, this section closes with the conviction of former Teamsters official Dick Fitzsimmons.  The son of the late Teamster president, Frank Fitzsimmons, in 1986 a federal district court convicted him and three other men to prison for their role in a scheme to rig kickbacks worth $1 million a month through the awarding of health care contracts for Detroit-area Teamsters.  Part of the evidence consisted of taped conversations of the late Allen Dorfman. ⁹⁴  Passing the torch from one generation to the next is a Teamsters tradition.
 
 

The Carey "Reform" Years

It is this sordid Teamsters-mob alliance, pervasive at the local as well as national level, that served as the backdrop for the election of Ron Carey as the union’s general president in December 1991.  Carey was not only incorruptible himself, supporters said, he also was vigilant in rooting out corruption.  Since his election in 1967 as president of Local 804 in Queens, New York, Carey had gathered a reputation as an honest, ambitious reformer. ⁹⁵  Newspaper editorials, and even the Justice Department, welcomed Carey’s victory. ⁹⁶  Now, as president, he would lay the groundwork for a new era for the Teamsters.  He set an example by cutting back his presidential salary from $225,000 to $175,000, and selling the union’s limousine and two executive jets.  He pledged full cooperation with the IRB and other federal officials, and repeatedly issued statements that his union would have clean hands.  He freely admitted to his union’s checkered past, such as its role as a bank for Mafia-controlled casinos. ⁹⁷  And he backed up his words.  In 1993, for example, he won a court order to force leaders of Chicago’s Local 705 to cooperate with a federal cleanup. ⁹⁸  He threw out the leadership of dozens of corrupt locals.

Yet in the end the "new" Teamsters proved not that different from the old.  Carey, like his predecessors, knew that staying in power depended on rewarding loyalty, especially when it came to selecting lieutenants.  A good case in point was Teamster Vice-President Dennis Skelton.  A native of St. Louis, Skelton, nicknamed "J.B."--as in Jaw Breaker -- began as a bodyguard and driver for Bill Giordano, son of the late St. Louis mob boss Tony Giordano. ⁹⁹  By the end of the 80s Skelton had amassed a string of arrests for violent assaults. ¹⁰⁰  Yet though his criminal background was common knowledge, Carey selected him as a running mate in 1991 (there are now typically more than a dozen Teamsters vice presidents at any given time).

Once in office, Skelton demonstrated an ability to make life unpleasant for Carey’s critics.  In front of numerous witnesses, Skelton made violent threats against two members of the Teamsters General Executive Board on May 17, 1994, after these members had indicated concerns over Carey’s financial practices. ¹⁰¹  Yet despite several requests from Teamsters Vice President Gene Giacumbo, Carey took no action to restrain Skelton.  In a letter to the IRB, Giacumbo wrote: ¹⁰²

 …I constantly asked General President (Ron) Carey to preserve order.  The tapes should reflect that Mr. Carey sat on his hands while Skelton and Vice President Johnny Morris and Vice President (Tom) Gilmartin continued to make threatening and/or disruptive remarks throughout the April 25-29 meeting to any Board member who dared to question Carey administration policies.  I ask that the tapes of all of this administration’s GEB (General Executive Board) meetings be reviewed and believe they will show a pattern of progressive arbitrary abuse.

As important as the intimidation practiced by pro-Carey forces was the corruption it covered up.  The Independent Review Board has been kept busy.  In its 35th report, dated June 19, 1997, for instance, it cited more than 20 charges, new and existing, of corruption within the Teamsters.  That the charges were made for activity occurring under Carey’s watch, of course, didn’t mean he condoned such activity.  Yet his incorruptible image proved more public-relations coup than fact.  Upon taking office, he launched a campaign to discredit the government’s reform plan and end Independent Review Board control, an effort that cost the union some $10.5 million. ¹⁰⁵  He also appointed his own campaign manager, Eddie Burke (a former United Mine Workers leader) , as the union’s IRB representative, and urged him to resist the appointment of a third, "neutral" member to the board.  Carey lost on both counts; a federal court rejected the appeal to end government supervision, and a U.S. District Judge appointed William Webster, the former FBI and CIA director, in 1992 as the third member. ¹⁰⁶

Carey had good reason to cover his tracks.  As early as 1993 federal authorities probed into allegations that Carey had ties to organized crime figures and knowingly appointed them to high union posts. ¹⁰⁷  For one thing, he had dealings with Alphonse "Little Al" D’Arco, former acting boss of the Lucchese family.  D’Arco, by this time a government informant, claimed he had a working relationship with Carey from his Local 804 days.  Carey’s dealings with Lucchese mobsters went further than that.  He’d testified in 1975 on behalf of Lucchese member John Conti during an extortion trial.  Though acquitted, authorities had identified him as a "soldier " in the family.  Carey, as president, also appointed as a Local 295 trustee William Genoese, director of the Teamsters’ airline division, whom Judge Lacey cited as being "unbelievably oblivious" to corruption.  A trustee was needed because of the conviction of Anthony Calagna, a Lucchese associate convicted in 1992 of coercing payments from private firms.  Under fire for that appointment, Carey ousted Genoese in January 1994.

The Lucchese family wasn’t only crime syndicate with whom Carey was on good terms.  Before becoming national president, he’d appointed William Cardinale, an associate of former Colombo crime family boss Carmine "the Snake" Persico, to the Local 804 executive board.

Was all of this a coincidence?  Law enforcement officials didn’t think so.  "It strains credulity to believe that Carey did not know the background of these guys," said one New York law enforcement official.  "Evidence is readily available showing beyond any reasonable doubt that Carey testified for known mobsters, that he was aware of their connections and that he didn’t care." ¹⁰⁸

If Carey did not practice arm-twisting tactics to the extent of his predecessors—he was hardly in a position to do otherwise--he also displayed a corruption of a different sort.  In the end, it would be his downfall.

Carey envisioned the new Teamsters not just as an honest union looking out for its own, but as a clearinghouse for progressive activists of various causes, ever attuned to sympathetic Washington power brokers. ¹⁰⁹  Organized labor could be the vanguard of a revived American Left.  His social activism made possible the election of leftist John Sweeney as AFL-CIO president in 1995.  "There is no way Sweeney could have won without Carey’s support.  The Teamsters swung that election," noted Michael Ledeen, resident scholar and corruption expert at the American Enterprise Institute. ¹¹⁰

If Carey sought influence at the highest levels, leading Democrats, in search of endorsements from organized labor, were all too willing to oblige him.  Under Carey the Teamsters would donate large sums to Democratic candidates or Democrat-backed causes. ¹¹¹  There was a logic to this about-face from Presser’s GOP endorsement the previous decade.  The Democrats, beholden to Teamsters fundraising and political support, once in the White House, could keep the Independent Review Board at bay.

Carey’s point man was Harold Ickes, Jr., who later would become the Clinton White House’s Deputy Chief of Staff.  At the time Ickes was a prominent labor leader who had represented a number of corrupt unions, such as the Hotel Employees and Restaurant Employees New York local, an inconvenient reality that delayed his White House appointment in the first place.  Ickes in 1992 had represented Teamsters Local 237, the one headed by the not-yet-deposed Barry Feinstein, and another local that the McClellan Committee had exposed as the province of Lucchese family boss Tony "Ducks" Corallo; the latter, along with several mobsters that included godfathers Tony Salerno (Genovese) and Carmine Persico (Colombo), was sentenced by a U.S. District judge in January 1987 to 100 years in prison.

Carey proved a less than efficient administrator, and within two years his union, which had $150 million on hand when he took office, was practically broke.  His attempt in 1994 to raise dues lost by three to one, and worse, the Republicans that November won control of both houses of Congress.  A politically weak Bill Clinton, behind on fundraising goals, would need serious help to win re-election in 1996.  Carey, also low on funds, would have to face re-election in ’96 from James Hoffa Jr.  As with LIUNA’s Arthur Coia, the time for back-scratching was at hand, especially with Ickes as Clinton’s right-hand man.  The Teamsters had a plan.  They, along with the left-lurching AFL-CIO, would pump money into Democrat coffers, and in return the Democratic National Committee would fund union projects—including Carey’s re-election—through various self-styled public-interest groups.

The scheme, estimated by James Hoffa at $1.5 million and federal overseer Kenneth Conboy at nearly $1 million, was money-laundering by any other name, and violated a Landrum-Griffin Act provision barring employers from contributing to any campaign for union office.  In the final days of the campaign alone the Teamsters gave out $735,000 to various public-interest organizations, and kicked back $227,500 to the Carey campaign.  Three people closely connected to the Carey campaign—Jere Nash, Martin Davis and Michael Ansara—pleaded guilty in September 1997 to conspiring to divert funds into Carey’s campaign fund, ironically called Teamsters for a Corruption Free Union.  Federal officials nullified Carey’s close re-election victory over Hoffa, and in 1998 forced him out of his post and then out of the union altogether.

The headaches for Carey are far from over.  In September Attorney General Janet Reno ordered a preliminary investigation into allegations that former Clinton White House Deputy Chief of Staff Harold Ickes had performed political favors to get Teamsters support in the 1996 election. Republicans have been suspicious the White House pressured a California cannery company, Diamond Walnut Growers, to settle a strike that has continued since 1990.  Rep. Peter Hoekstra, Michigan Republican, believes there is evidence the Teamsters used member dues to buy negotiating power from the White House. ¹¹²

The Carey era, as his supporters saw it, was an allegory of a tragic hero, not a villain.  His wrongdoing was minuscule in comparison to that of the Old Guard troglodytes who preceded him, and thus ought not to define him.  That’s the view of Arthur Sloane, University of Delaware professor of industrial relations and biographer of Jimmy Hoffa.  "It’s very sad that a guy [Carey] who was really a reformer, who made a lot of good moves, who kicked out a lot of the obscene salaries, which took a lot of guts, has been caught in something like this," he observed. ¹¹³  Indeed, Carey put more than 70 corrupt union locals into trusteeship; even during his presidency of his Queens, N.Y. local, he’d shunned sweetheart deals in favor of strikes.

But the case for Carey as a reformer has to be put into the context of the union as a ward of the federal government.  Any Teamsters president under such conditions would have reformed his union to some extent in order to keep his job.  His crackdowns, though real, also were a subterfuge for his own brand of corruption.  That’s why in the end the federal government would be his "executioner."

Carey could have shored up support among skeptics by respecting the freedom of Teamsters members who dissent from their union’s politics by not forcing them to pay for it.  But he chose not to.  Early in 1992, for example, Reed Larson, president of the National Right to Work Committee, after publicly congratulating Carey on his election, requested that he abide by the spirit of the U.S. Supreme Court’s Beck decision. ¹¹⁴  That ruling allows union members to withhold dues from political causes they find objectionable.  Yet Larson received no response.  Apparently, Carey did not find compelling the argument that when an organization forces people to join, and furnish funds to it, it sows the seeds of corruption.
 
 

Hoffa II: The Sequel

The ouster of Carey cleared the decks for the election of James Hoffa Jr., the current president.  The union announced the results in December; Hoffa got 55 percent of the vote, comfortably ahead of his nearest rival, Tom Leedham, a Carey supporter who at the time headed the union’s warehouse division.  Hoffa took office this May following a vote-count challenge from Leedham.

A University of Michigan-trained labor lawyer now in his late 50s, the younger Hoffa has successfully cultivated an image of an erudite populist, at heart a "regular guy" able to appeal to concerns of his union’s rank and file.  Though a Democrat, he long has despised the "McGovern wing" (and by extension, the Clinton wing) of the party, and the way Carey courted it. ¹¹⁵  The apparent lack of his father’s white-knuckles bluster shouldn’t be taken as a sign of weakness.  He’s made clear his intention to aggressively step up organizing efforts.  The younger Hoffa is quick to defend his father’s legacy, repeatedly stating his alleged wrongdoing was the result of entrapment by the government and enemies within the union.

Hoffa also has voiced his intention to fight corruption. ¹¹⁶  He and supporters worked feverishly to uncover Carey’s diversion of funds to left-leaning advocacy groups.  "We are the true reformers," he has declared. ¹¹⁷  One almost wants to believe him.  But on closer inspection, his stance seems to fit a classic Teamsters pattern:  Denounce only the corruption of rivals.  The younger Hoffa’s closet contains any number of live skeletons.  Three prominent ones are Larry Brennan, Richard Leebove and George Geller.  Like Hoffa, they are obsessed with getting the federal government off Teamsters’ backs, unwilling to admit to the possibility that there are good reasons why those backs are carrying a heavy load.

Brennan, longtime president of Michigan Teamsters Joint Council 43, was a protégé of Jimmy Hoffa, Sr.  A Teamsters health fund indirectly under his control has been rife with corruption, though federal investigators haven’t been able to nail him.  Brennan in the 80s brought in Leebove and Geller, both formerly with the Lyndon LaRouche-led front group, the National Caucus of Labor Committees, since the early-70s a menacing presence on the radical Right.  The eccentric LaRouche, who long has believed the world is in the grip of a conspiracy headed by prominent Zionists and the British royal family, was a presidential candidate in 1976 and 1980.  In the early years his group gained notoriety by its stormtrooper-style disruptions of demonstrations by leftist activists. ¹¹⁸  Leebove gave $167,675 worth of in-kind contributions to Hoffa’s run for the union presidency two years ago, a figure not including $43,868 in campaign donations Hoffa failed to report.  (Federal officials fined Hoffa’s campaign, but cleared him to run).  Geller’s rhetoric conjures up past memories of the Big Bad Teamsters.  "We represent the true working class," he remarked.  "We’re a little violent, a little threatening.  Everyone else wants us to be tethered to liberal notions.  We’re the ones who are going to kick over the bucket and create a ruckus."   There’s no argument there, save perhaps for the word "little."

Hoffa’s 1996 campaign also included some less than model reformers. William Hogan, Jr., head of Local 714 in Chicago, ran a fiefdom so shot with nepotism that he stepped down from the slate to prevent further embarrassment.  Dallas Teamster boss T.C. Stone also left the campaign after IRB investigators had revealed he and other cronies at Local 745 padded their salaries with more than $750,000 in vacation pay during 1985-96.  And Philadelphia chieftain Thomas Ryan, after being accused of embezzling union funds, was suspended from union activities for five years.  All have denied wrongdoing; Hoffa contends they have been set up by vindictive Carey forces.

If  "known by the company he keeps" is still a phrase with cache, old corrupt habits probably will die hard under the next Hoffa reign.  Flush with forced dues from new members, the Teamsters will fight to ensure the cash remains on hand to practice those habits.  Hoffa, in a 1997 interview, denounced the right-to-work concept.  "To me," he said, "right-to-work is a misnomer.  It’s a term only employers use, when they want to discourage union membership." ¹¹⁹  That statement alone ought to chasten Republican Party activists inclined to build bridges with the Teamsters to revive a "Reagan Democrat" populism." ¹²⁰  The next several years might prove interesting, especially to federal investigators.
 

Chapter Four:  STRATEGIES FOR FIGHTING CORRUPTION

Overview

The conclusion is unavoidable that in American trade unions a culture of corruption goes hand in hand with a culture of intimidation. 

Less obvious, but no less salient, is that organized labor’s rackets are derived from a license to coerce.  The irony is that the federal government has granted this license, even as it goes after union rogues.  For anti-corruption campaigns to bear maximum results, government policy must view unions as their original leaders in the late 19th century intended them--as voluntary worker associations.   And as, for example, the Elks Club or a local historical society cannot legally force someone to join or remain, so must this principle apply to unions.

"(I)n their internal organization and operation most labor unions more closely resemble one-party states than they do democratic organizations with legitimate and organized oppositions and turnover in office," wrote sociologist Seymour Martin Lipset in the 50s. ¹  This statement, valid today as then, almost gets it right.  Labor unions do resemble one-party states.  Yet the problem is not simply a lack of democracy, but an abundance of monopoly privileges.  As long as unions retain the rights of exclusive representation and coercion of payments from members, they will have incentives to plunder their coffers and squash internal opposition.

There are several plausible ways to limit a union’s cartel-forming power.  The advantages and limitations of each are worth evaluating here. 
 

WHAT CAN BE DONE

Improve Anti-Corruption Investigation and Law Enforcement 

Since the end of World War II Congress has created an arsenal of laws designed to combat criminal activity among labor unions and their mob enforcers, and safeguard the rights of workers and the population at large.  In 1946 lawmakers enacted the Hobbs Act, which prohibits the obstruction of interstate commerce by robbery or extortion.  While preserving a worker’s right to striket, it was intended to protect all interstate commerce from union extortion.  The Taft-Hartley Act, passed the next year, among other things prohibits employers from making payments to union officials.  The 1959 Landrum-Griffin Act, passed in the aftermath of the McClellan Committee hearings, asserted federal jurisdiction over the internal financial affairs of unions and their officers.  It made embezzlement a federal offense.  In 1970 Congress passed the Racketeer Influenced and Corrupt Organizations Act, or RICO, to widen the federal jurisdiction over organized crime involving a pattern of racketeering. And the 1974 Employee Retirement and Income Security Act, or ERISA, established comprehensive reporting and disclosure requirements for employee benefit plans, union plans included.  The law contains criminal statutes banning embezzlement, bribery and making false statements. 

On top of these laws, as amended, the executive branch has beefed up its enforcement.  The Justice Department some 30 years ago created the Attorney General’s Organized Crime Strike Force to investigate labor racketeering, among other felonies.  Two decades ago, in response to the new Inspector General Act, the Department of Labor created its Office of Labor Racketeering; the office has its own special agents to execute search warrants and make arrests.  DOL investigators often work closely with the FBI to track down witnesses and trace deposits.   The commitment and tools are there.  It can be said quite easily that the problem of corruption would be far worse without this effort. 

Yet why does corruption still persist on a widespread scale?  How can it be that the proportion of the overall labor force belonging to a union has been falling since the 50s, yet unions remain so synonymous with criminal wrongdoing?

For one thing, the sophistication of criminals has improved to the point where the added government authority and resources barely have kept pace.  The Labor Department’s anti-racketeering office argues that crooks are always finding new, ingenuous ways to stay one step ahead of the law: ²

Labor racketeering has evolved from amateurish schemes by hoodlums and bloody violence by organized crime.  Today it is characterized by sophisticated schemes applying expertise in areas such as accounting, law, finance and computer technology.  The new generation of racketeers include bankers, benefit plan administrators, and providers of services to benefit plans. 

In August 1997 Burton Horowitz (no relation to the author), a former lawyer for the pension fund of Teamsters Local 875 in Queens, N.Y., was charged with conspiracy to receive a kickback and commit wire fraud for his role in an international investment scheme that resulted in a more than $9 million loss to the union. ³  Four years before, the indictment charged, Horowitz and his partner, Sanford Pollack, persuaded the union’s pension fund to invest $9.3 million in "prime bank debentures," which were, in essence, fake bonds that promised a high rate of return.  The pension fund deposited the money the following June, despite a prior Securities and Exchange Commission warning about such schemes.  The pension fund never received the bonds and lost $9.1 million.  Federal law enforcement officials, speaking on the condition of anonymity, said $8.3 million had been located in German offshore bank accounts.  In February 1997 Pollack had pleaded guilty to conspiring to receive a kickback.

Schemes like these reveal just how far union corruption has come from the days of the loaded-gun shakedown.  Neither criminals nor the money they steal are easy to track down, and both may be outside the U.S.  In the case of Local 875, the charges resulted from a 14-month joint investigation by the Brooklyn U.S. Attorney’s Office, the FBI and the Department of Labor.  Resources are limited, and keeping up with the crooks requires constant updating of investigator skills and technology. 

Second, investigations of union corruption, however committed and scrupulous, may run into unexpected roadblocks.  A General Accounting Office audit of the Jackie Presser-Teamsters probe, for example, uncovered the following shortcomings:  limited access to Justice Department records and officials; restricted access to the Department of Labor’s records; lack of cooperation by the FBI; restrictions on access to, and use of, grand jury information; and lack of complete documentation on some cases. ⁴

Sometimes, people within the government act to stymie an investigation, as was the case during 1993-94 when Charles Ruff, a Washington lawyer retained by the White House, blocked a federal investigation of Ron Carey and of Teamsters Locals 295 and 851 in New York. The Independent Review Board received extensive criticism in 1995 when it issued a report exonerating Carey from charges he was linked to organized crime.  It didn’t help when Time magazine received an April 1994 private letter written by IRB Trustee Frederick Lacey that raised questions about his impartiality; evidence suggested Lacey glossed over Carey’s mob connections in an effort to save face. ⁵

Federal and state efforts to combat union corruption can and do bring about results.  Congress should consider budgeting more funds for personnel and hardware for investigations of labor officials.   But cracking down alone will not get the job done. 

Continue Industry Deregulation

One of the ways unions exert monopoly power is through a cozy relationship with heavily-regulated employers.  Contrary to common perception, large corporations for most of this century generally have welcomed regulation as a way of blocking competition by smaller firms. ⁶  And some companies have preferred to deal with a single union rather than a multitude of them; federal labor law for them simplifies things. ⁷  Deregulation of industry, advocates argue, leads to deregulation of labor markets, and by implication, a weakened ability of unions to coerce and form rackets. ⁸  With more of employers to choose from—many non-union—fewer workers will feel the pull of union demands for membership and dues.  The pot of potential corruption likewise would get smaller. 

Evidence suggests industry deregulation increases productivity, and thus encourages companies to be more flexible in dealing with its labor issues.  By the same token, without deregulation, union chiefs can hold a trump card over business that inhibits efficiency.  Economist Thomas Gale Moore, for example, studying the trucking industry prior to deregulation, estimated that the Teamsters had raised labor costs about 50 percent. ⁹  "From a productivity point of view," argues Reynolds, "greater regulatory freedom would allow more companies to discover superior forms of labor relations instead of concentrating on tactics least likely to play into the hands of (union) troublemakers." ¹⁰

But deregulation has its limits. Trucking, after all, was deregulated nearly two decades ago, despite the Teamsters’ efforts to block the legislation, and yet remained in the grip of that corrupt union.  It was a RICO suit that ultimately forced some changes in the union’s corrupt political culture.  And while deregulation has led to greater efficiency in such economic sectors as trucking, air transportation and phone service, it also has led to higher union member incomes.  Union officials as a result have been emboldened, though not without opposition from rank and file, to raise dues, fees, fines and assessments. ¹¹

Enforce the Beck Decision

In 1988 the U.S. Supreme Court issued a ruling that cheered opponents of organized labor’s excesses.  In Communications Workers of America v. Beck ¹²  the court rules that no compulsory union dues or agency fees can be used for purposes unrelated to collective bargaining, contract administration and grievance adjustment.  In effect, if a worker objected to his dues going to political action committee or a voter education project, or some other "soft" politically-geared activity, he could withhold that portion from his dues.  Since 79 percent of Harry Beck’s dues had gone for these things, he had the right to a refund of that amount.

The rationale made sense.  If a union claims to "represent" workers, it ought not to spend money on political wish-list items that run counter to the consciences of rank and file.  For all intents and purposes, union political activity is an adjunct of the Democratic Party.  The AFL-CIO set aside $35 million in 1996, for example, to defeat Republican candidates.   In effect, forcing workers to join a union makes them into involuntary contributors to political causes.  Including "in-kind" expenditures, such as phone banks and misleadingly-labeled "voter-education" projects, private-sector unions in the election year of 1992, according to one estimate, spent anywhere from $300 million to $500 million on political activities. ¹³

But Beck has proven difficult to enforce.  To the extent union locals even acknowledge a worker’s Beck rights at all, they do so grudgingly; to the extent they offer rebates, the refund is so small as to hardly warrant the effort, especially as a Beck-based request may brand a worker a "troublemaker."  Recent hearings before the House Subcommittee on Employer-Employee Relations featured testimony by employees who told of union officials’ hostility or indifference. 
 

Promote State "Paycheck Protection" Laws

A growing number of states are sponsoring efforts that ostensibly go beyond Beck.  The most dramatic recent example of this was a voter initiative last June in California known as Proposition 226, the Paycheck Protection Act.  The measure, rejected, though it one point had led in the polls by two to one, would have required the state’s labor unions to obtain written permission from each member before spending dues money on "soft" politically-oriented purposes within state campaigns.  The California campaign failed, but five states — Idaho, Michigan, Ohio, Washington and Wyoming — recently enacted equivalent laws.  Many other states are at least considering their own paycheck protection measure, whether through ballot initiative or legislation.  Many conservatives insist were it not for organized labor’s opposition, the idea would be far further along by now; in California, for instance, unions poured more than $20 million into opposing Prop. 226.  Key Republicans in Congress are insisting the idea should be part of any comprehensive campaign finance reform bill.  In 1997 Rep. Harris Fawell, Illinois Republican (who did not seek re-election in 1998), sponsored a freestanding bill of this type.

It has been argued that paycheck protection laws, like the Beck decision, would induce unions to be more responsive to the wishes of their members.  And such laws, indirectly, would strike a blow against forced union membership.  By depriving the Democratic Party and a host of left-of-center union-backed causes of revenues, there would be less money available for ginning up propaganda machines that advocate forced unionism.   With less money to spread around, there might be fewer organized criminals interested in labor as a cash source.

Yet there are major drawbacks to such an approach.  For one thing, a paycheck protection law, in any state, is a redundancy.  To be sure, unions too often have been laggard in informing members of their Beck rights.  But that’s a problem that should be rectified by stronger enforcement of the existing law, not enactment of a new one. ¹⁴  Enforcement of paycheck protection laws at any level of government is bound to be costly as well as redundant.  It would require a government bureaucracy to check if each and every worker is satisfied with the non-collective bargaining spending of their respective unions. 

Second, it is doubtful such laws, once in effect, would achieve their aims.  Indeed, unions have shown themselves to be resourceful at skirting the law entirely.   The State of Washington, for example, passed its own paycheck protection law, Initiative 134, in 1992.  Yet the combined political coffers of the state’s National Education Association affiliate expanded 55 percent. ¹⁵  The union had renamed its political action committee a "community outreach program," and funded it with a mandatory $1 per month payroll deduction for all 65,000 members. 

Conservative activists and dissenting teachers brought this matter to the attention of the state’s campaign-finance regulators.  The result of this money-laundering scheme was a $100,000 fine, and worse, a new set of guidelines allowing all the state’s unions even more leeway to spend funds on political purposes. 

In California, meanwhile, the California NEA affiliate, the California Teachers Association, had a contingency plan already drawn up in case Prop. 226 had passed.  The union would have diverted funds to "outreach" groups in a way that could have caused forced-dues payers to pay more to their union. ¹⁶  Surely, the unions could call that "paycheck protection" – their own. 

Finally, aside from their necessity and dubious workability, the paycheck protection idea rests on the assumption that promoting worker freedom is foremost a matter of rallying worker sentiment against "the Left."  Such a view is wrong. ¹⁷  Promoting worker freedom is foremost a matter defending the principle of freedom of choice. 

Advocates of paycheck protection look at worker freedom from the wrong end of the lens.  They are concerned with how dues or spent, but ignore the issue of how they are raised.  They assume, implicitly, that forcing a worker to join a union or pay a fee in lieu of joining isn’t wrong per se; it is only wrong to make them contribute to "objectionable" political causes.   But they are sadly mistaken.  The key focus on blocking union monopoly power must be on the forcible nature of how so many dues are raised.  Put another way, if no worker had to join a union, the issue of political spending would be moot.

Promote Union Democracy

Some of the impetus for fighting union corruption is coming from union rank and file members themselves.  They argue that by putting more power in the hands of the workers themselves, unions would produce far more honest and responsive officials at the local, district and national levels.  Cleaning up the unions requires nothing less than making them function like democratic governments in microcosm.  This "union-democracy" movement even has its own organization, the Brooklyn, N.Y.-based Association for Union Democracy.  It also, for a while, had its own proposed legislation. 

Rep. Fawell last October introduced a bill called the Democratic Rights for Union Members Act.  This measure, introduced only days before Congress adjourned, would have amended the 1959 Labor-Management Reporting and Disclosure Act (i.e., Landrum-Griffin Act).  Union members’ influence, argued Fawell and AUD founder Herman Benson, have been eroded over the past four decades by the formation and expanded powers of "intermediate" (above the local, but below the national levels) organizations, typically union district councils.  These councils, while not illegal, often function as dictatorships in blunting the rights of rank and file to choose their leaders and policies. ¹⁸  Fawell’s bill would have required the direct election of district officers by the membership when the district takes over from locals.  It would have barred unelected intermediate organizations from negotiating contracts, handling grievances and performing other functions previously carried out by locals.   Finally, the measure would have limited the power of national union officials to impose trusteeships on locals. 

Democratic unionism, like paycheck protection, has a surface appeal.  District councils are run like fiefdoms, and reducing their powers could well root out some corruption.  Yet the idea rests on the false premise that a union ought to operate like a government, albeit an open, democratic one.  In this view, the interests of the union, not the contractual rights of individual employees, are what need protection. ¹⁹  And if a majority of workers in a given local believe that an increase in dues and other contributions are necessary, then reluctant workers would have no choice but to pay. 

But wouldn’t more voting power in the hands of workers act as a check on misuse of funds by district councils?   That’s far from certain.  Plenty of corrupt council officials head their own locals; indeed, prior to assuming their current position, they almost invariably were popular local presidents.  The union democracy movement appears to reverse cause and effect in assuming that aloof, power-hungry district council heads sow the seeds of corruption into their unions.  More likely, already corrupt locals in a given union form a district council so as to consolidate their power.  The union democracy movement can combat corruption effectively, but a right-to-work law needs to accompany it.  Unfortunately, Rep. Fawell made clear to AUD officials that a union democracy law would supersede the need for a national right-to-work law. 

Enact a National Right-to-Work Law

Ideally, workers anywhere in this country ought to have the right to decide whether or not they want to join a union, and if so, which union.  Yet for more than 60 years they have had this right only fitfully, and then only because of our federalist system of government.  Sections 157 and 158 of the National Labor Relations Act granted union officials the right to require new workers to join as a condition of employment; Section 152 of the Railway Labor Act does the same thing for railroad workers. 

A dozen years later the Taft-Hartley Act of 1947 blunted some of the New Deal law’s impact.  Section 14(b) of the latter law authorized states to enact laws preventing unions exercising this monopoly power.  Yet even in these "right-to-work" states workers enjoy less than full freedom of choice.  Employees in the airline and railroad industries, construction workers who are forced to seek work through union-official hiring halls, and employees in "federal enclaves" can still be forced to be union dues. 

Over the next four decades 21 states, concentrated in the South, Great Plains and Rocky Mountain states, passed right-to-work laws.  Contrary to union fears that such laws would lead to rampant exploitation of workers and a drastic reduction in overall living standards, right-to-work states have prospered.  A nationwide study by George Mason University economist James Bennett, for example, found that a typical metropolitan-area family in a right-to-work state in 1993 had $2,852, or 8.5 percent, more in after-tax purchasing power than the same family in a non-right-to-work state. ²⁰  In a 1996 report to the Federal Reserve Bank of Minneapolis, University of Minnesota economist Thomas Holmes found manufacturing employment rose on average by a third when workers crossed over the border to a right-to-work state from a non-right-to-work state. ²¹  Perhaps most tellingly, U.S. Department of Labor data show that during 1988-96 right-to-work states experienced a 21.8 percent rise in high-technology industry employment, compared to a mere 2.6 percent in non-right-to-work states. ²²

Twenty-one states have right-to-work laws; the 29 others, plus Washington, D.C., don’t.  Most in the latter category happen to be in the nation’s most industrialized regions:  the Northeast, the Great Lakes and the Pacific Coast.  The most recent state to pass a right-to-work law was Idaho in 1986. 

The other possibility lies with a preemptive national right-to-work law. The proposal is good politics as well as policy.  A national poll conducted by the Pensacola, Fla.-based Marketing Research Institute revealed 77 percent of respondents supported the right-to-work principle.  In the last two Congresses Rep. Bob Goodlatte, Virginia Republican, introduced the National Right to Work Act to protect a worker’s right to refuse to pay dues.  But in each case House lawmakers stymied action.  In fact, last year House Speaker Newt Gingrich and Majority Leader Dick Armey (both hailing from right-to-work states, no less) went out of their way to stonewall the bill, even with more than 100 co-sponsors, from ever reaching the full floor.  Goodlatte has reintroduced his measure this year, H.R. 792, with Senator Paul Coverdell, R-Ga., sponsoring a Senate bill, S. 424.

Suppose a federal law were passed.  How much would that deprive unions of revenues?  A study last year by the National Institute for Labor Relations Research (NILRR) concluded that if a national right to work law were passed, unions would have to make do with anywhere from $834.1 million to $1.9 billion less in annual dues. ²³  Put another way, workers who leave unions, where they once were not free to do so, would have that much more to keep.  When workers have the right to say "no" as well as "yes" to a particular union, there is a decent likelihood, the union’s leadership will be more accountable to their wishes.

Repeal the Exclusive Representation Clause

Requiring workers to pay dues to a union is one aspect of organized labor’s monopoly privileges; forcing workers to acknowledge a union as their sole bargaining agent is the other.  For even though workers in right-to-work states may withhold dues, they can't form unions or similar types of organizations to negotiate with an employer. This "exclusive representation" clause, enshrined in Section 9(a) of the National Labor Relations Act and Section 2, Fourth of the Railway Labor Act, covers all 50 states.  A union that receives a majority of votes in a certification or representation election becomes the "exclusive bargaining agent" for all workers who were eligible to vote, regardless of how or even if they voted.  Individual employees are barred from representing themselves on wages and other issues that come under the scope of collective bargaining.  Unions enjoy this authority as much in right-to-work Georgia and Kansas as in non-right-to-work Michigan and New Jersey.  "That is governmentally imposed coercion, pure and simple," argues Charles W. Baird, economist at California State University at Hayward.  "The fact that workers can opt out of the unwanted representation services of a certified union by quitting their jobs does not mitigate the coercion." ²⁴

Exclusive representation may have contributed to corruption cases uncovered in this research in Alabama, Florida, Louisiana and Texas, all of them right-to-work states, ²⁵ as well as in coerced-dues states.  A worker dissatisfied with the honesty of a union is not in a position to mount a challenge, either as an individual or as a member of a rival union or employees’ association.  Congress should repeal the federal statutes granting unions the right of monopoly bargaining.  The result may be a lot less union corruption throughout the U.S.

Limit Union Non-Dues Revenue

Repealing union monopoly power would go a long way in reducing the pool of revenues that make unions so attractive to the underworld and corrupt union officials.  Yet it would be naïve to suggest it would disappear entirely.  Indeed, historians have traced labor racketeering to around 1880, long before federal privileges came about. ²⁶  Put another way, the money flowing into unions will continue.  Why should that be?

First, many workers will choose to belong to a union even if they are not coerced into doing so.   The NILRR study admitted, "Not all (forced-dues) employees would automatically leave the union if they could do so without being fired."  Even harsh critics of union monopoly power, such as Texas A & M’s Reynolds, know that unions have an inevitable built-in appeal, even without the privileges.  "Unions can give members a feeling of participation, of community with their fellow employees," he noted.  "Call it solidarity.  To some extent, this fraternal feeling is generated by working with others and by membership in associations like the Rotary Club, the Elks, the Veterans of Foreign Wars, and countless other social and professional organizations." ²⁷

Second, unions enjoy a large and growing base of revenues independent of membership dues.  They have substantial real estate holdings that generate income from sales and rents.  They have assets in securities markets that produce income from interest, dividends and capital gains.  Union affinity credit cards have become a new way to say "Charge it!"  Since 1986 the AFL-CIO had offered its members a bank affinity card, the aptly-named Union Privilege; in 1996 union officials projected they would take in $375 million over the following five years. ²⁸  Labor investigator Michael Moroney believes the affinity card, rather than a widely-publicized one-time special dues assessment, was the real source of the AFL-CIO’s $35 million political war chest in 1996. ²⁹  Unions, moreover, have proven themselves adroit grantsmen.  Economists James Bennett and Thomas DiLorenzo in the 1980s revealed labor unions and their spinoff activist groups have received tens of millions of dollars in federal grants and contracts. ³⁰  In the Nineties, the money train has continued.  The Service Employees International Union, for instance, received substantial federal support for its "Justice for Janitors" project, which included street demonstrations and invasions of company board meetings. ³¹  More ominously, LIUNA during the first two Clinton years (fiscal 1994 and 1995) received a whopping combined nearly $30 million in grants from various federal agencies—a generous payback for largesse to the Democratic Party. ³²

There is little that can be done about unions, even corrupt ones, from entering into legal business deals.  What no union should have a right to do is involve taxpayers as involuntary partners in their various tax-deductible political and educational campaigns.  In addition to removing monopoly privileges, Congress should refuse to set aside funds for union advocacy.  Legislators serious about curbing union excesses should pay especially close attention to grants and contracts that typically go under such benign-sounding names as "civic action alliance" and "community organizing project"; many are little more than union fronts. 

Restore the Original Intent of the Hobbs Act

A union’s authority to coerce dues payments adds to the allure of a union to the criminal element.  But even if Congress fails to pass right-to-work legislation, it can strike a blow for worker choice by restoring teeth to the Hobbs Act.  This law, passed in 1946, like the Taft-Hartley Act of the next year, was the product of a Republican-controlled Congress that understood the dangers of union coercion. ³³  The law restated previous legislation, the Anti-Racketeering Act of 1934, making it illegal to use or threaten use of force in the course of interstate commerce.  But to the unions’ chagrin, the Hobbs Act also repealed a clause exempting violence if it was related to wage issues.   The unions scored a long-awaited victory in 1973, when the Supreme Court, in U.S. v. Enmons, ³⁴  gutted the Hobbs Act. 

In that case, three members of the International Brotherhood of Electrical Workers were indicted for firing high-powered rifles at three utility company transformers, and blowing up a transformer substation during a strike. Yet the Supreme Court upheld a U.S. District Court in Baton Rouge, Louisiana, which dismissed the charges on the grounds that they reflected "legitimate" union objectives.  The court left intact the Hobbs Act’s ban on threats to obtain no-show and superfluous jobs. 

That case did not directly pertain to union corruption, but it doesn’t take a degree in labor law to understand the consequences of the ruling.  With violent crime in the "right" context now lawful, prosecuting union thugs would be harder.  Since large numbers of union employees also are mob-connected (e.g., the construction and operation of the Jacob Javits Center in New York), the 1973 ruling has unwittingly been an invitation to corruption. 

Restoring the Hobbs Act to reflect its original intent—that is, repealing the Enmons doctrine—will go a long way in keeping mobsters away from unions, and in turn, restraining union leaders who might be predisposed to call upon mobsters.  Yes, organized crime and organized labor had worked hand in hand, in the Teamsters and elsewhere, before the Hobbs Act was passed.  But unions as a whole almost certainly would be cleaner if the legal ambiguity of Enmons were cleared away for good.  Legislation introduced this year in the U.S. Senate by Strom Thurmond, R-S.C., the Freedom from Union Violence Act, would do just that. 

Conclusion

 "When given a chance," one observer wrote in the 70s, "workers frequently refuse to join a union for the reason that the union is controlled by the underworld.  In many parts of the United States to agree to join a union is in fact to decide to place one’s welfare in the hands of thugs and racketeers." ³⁵  It is hard to imagine any part of that statement needing revision today.  It ought to follow that the goal of a sound anti-corruption policy, now as then, ought to be to enable workers to exercise their right to refuse.  For without it, the con artists, racketeers and goons will keep reappearing, even if the names on the roster change.   They will run unions, no matter who is nominally in charge.

Just as corruption reinforces the power of unions to block out competition, the lack of competition, embedded in federal labor laws and court interpretations, reinforces corruption.  True, many workers, left to their own devices, would stay in a union, even one they know to be corrupt.  But many others would opt to join another union or not join any union at all.  They are infuriated over their lack of power to end corruption in their unions, and want the freedom of exit, not simply the power to elect new bosses to replace existing ones.  It is time to give them that freedom. The best strategy to fight union corruption is to fight government-granted monopoly privileges.  When unions have to compete with other sources of labor for members, the chances are better they will keep their organizations clean.  Once employees everywhere in this country can both leave a union and remain in their chosen career, unions will have little choice but to demonstrate more responsible, honest leadership.

INTRODUCTION

1.  See Selwyn Raab, "Loss Is Found in Pensions for Teamsters," New York Times, November 8, 1995.
2.  U.S. Department of Labor, Office of Inspector General, Semiannual Report to Congress, April 1, 1997-September 30, 1997, pp. 51-52.  A more full discussion of the outcome is contained in Chapter Four.
3.  U.S. Department of Labor, Office of Inspector General, Semiannual Report to Congress:   October 1, 1997-March 31, 1998, p. 46.
4. NLRB v. General Motors Corp., 373 U.S. 734 (1963).
5.  U.S. v. Enmons, 410 U.S. 396 (1973).
6.  See David Kendrick, Violence:  Organized Labor’s Unique Privilege, Springfield, Va.:  National Institute for Labor Relations Research, 1996.
7.  Quoted in the "The Most Feared Gangster," CBS News, 60 Minutes, September 20, 1998, Livingston, N.J.:  Burrelle’s Information Services, p. 17.
8.  Karen E. Klein, "3 Acquitted of Stock Fraud Charges," Los Angeles Daily News (Valley Edition), October 4, 1986.
9.  A recent probe by the Manhattan District Attorney’s Office has uncovered mob influence in the 120,000-member District Council 37.  Allegations include union members took kickbacks from a mob-connected upstate New York resort, padded their payrolls with no-show jobs, and made contributions to a charity suspected of having Mafia ties.   See, for example, Tom Robbins, Maureen Fan and Paul Schwartzman, "Probe Finds Ties to Mob," New York Daily News, December 6, 1998; Robbins, "Mob Seen in ’89 Beating of Union Big," New York Daily News, December 7, 1998.
 

CHAPTER ONE

1.  Corruption and Racketeering in the New York City Construction Industry, An Interim Report by the New York State Organized Crime Task Force, Ithaca, N.Y.:  Cornell University, New York State School of Industrial and Labor Relations, 1988, p. viii.
2.  Harold Seidman, Labor Czars:  A History of Labor Racketeering, New York:  Liveright, 1938, p. 147.
3.  Robert F. Kennedy, The Enemy Within, New York: Harper, 1960.
4.  President’s Commission on Organized Crime, Report to the President and the Attorney General, The Edge:  Organized Crime, Business, and Labor Unions, Washington, U.S. Government Printing Office, March 1986.
5.  Ibid., pp. 66-67.  Perhaps most significant was a series of reports issued in the 1980s by the New York State Commission of Investigation.  The SIC’s four-year investigation focused on waste, fraud, inefficiency, featherbedding and bidding irregularities in the state’s public construction projects.
6.  Derek C. Bok and John T. Dunlop, Labor and the American Community, New York: Simon & Schuster, 1970,  p. 69.
7.  Clark Kerr, "Unions and Union Leaders of Their Own Choosing," in Richard L. Rowan, ed., Readings in Labor Economics and Labor Relations, 3rd ed., Homewood, Ill.:  Irwin, 1976, p. 205.
8.  Kennedy, The Enemy Within,  p. 211.
9.  Quoted in David W. Elbaor and Laurence E. Gold, "Does Uncle Sam Look or Aim for the Union Label?," District Lawyer, Vol. 9, No. 6, July/August 1985, p. 38.
10.  Morgan O. Reynolds, Power and Privilege: Labor Unions in America, New York:  Universe Books, 1984, p. 229.
11.  Interview with Michael Moroney, January 6, 1999.
12.  Arthur Shenfield, Myth and Reality in Economic Systems, Heritage Lecture No. 4, Washington, D.C.:  Heritage Foundation, 1981, p. 35.
13.  Reynolds, Power and Privilege, p. 65.
14.  David Kendrick, Big Labor’s Two Billion Dollar Free Ride on the Backs of Workers, Issue Brief, Springfield, Va.:  National Institute for Labor Relations Research,  May 12, 1998.  In 1996 this represented some 7.5 million working men and women in this country.
15.  Abood v. Detroit Board of Education, 431 U.S. 209, 1977.
16.  Steve Carlic, "Union Accused of Hiding Money," Syracuse Herald-Journal, July 31, 1987.
17.  Ben White, "’Soft Money’ Donations Soared Despite Ongoing Investigations," Washington Post, January 11, 1999.  The term "soft money" refers to political contributions to purposes other than individual candidates.   They include political action committees, get-out-the-vote efforts and issue-advocacy campaigns.  While legal, these contributions are unregulated, and hence invite a lot of rule-bending.
 

CHAPTER TWO

1.  See Boehm, Organized Crime and Organized Labor, pp. 31-34.

2.  "Union Corruption:  Worse Than Ever," U.S. News & World Report,  Special Report, September 8, 1980, p. 35.
3.  Frank Swoboda, "U.S. Targets New York Dock Union," New York Times, February 15, 1990.
4.  Steven Kalcanides, "Hits on Piers Called Commonplace," Jersey Journal, September 25, 1991.  Featherstone belonged to an Irish ethnic mob called the "Westies," which controlled Local 1909.  The Westies expanded their power in the 1970s, when they joined forces with the Gambino crime family.
5.  Al Frank, "Lawmen Update Their Tactics to Fight Sophisticated Waterfront Racketeers," Newark Star-Ledger, January 2, 1994.  These employees exploited a loophole:  Their jobs were outside 1,000 yards of an active pier, and thus outside the Bi-State Waterfront Commission’s jurisdiction.
6.  Ibid., pp. 37-38.
7.  Kevin R. Richardson, "Paterson Leaders Charged with Extortion," Newark Star-Ledger, June 29, 1993; Nina Wasserman, "Double Jeopardy Cited in Bomb Blot," North Jersey Herald & News, September 4, 1997.
8.  "Ex-Union Boss Gets 10 Years," Philadelphia Daily News, December 7, 1994.
9.  Tim Weiner, "Two Union Officials Indicted," Philadelphia Inquirer, November 28, 1984.
10.  Chiappardi’s acquittal might have been due to the influence of friends in high places.  In addition to being president of his Philadelphia local, he was president of the National Federation of Independent Unions.  A friend of and trade policy advisor to then-Labor Secretary Ray Donovan, himself had been under indictment by a Bronx, N.Y. grand jury on larceny and fraud charges, it’s entirely likely he solicited Donovan’s help.  But Chiappardi denied he called Donovan or any other Reagan official as a character witness.  "Union Leader Acquitted of Extortion Conspiracy," Daily Labor Report, April 22, 1985.
11.  Corruption and Racketeering in the New York City Construction Industry, p. 19.
12.  Ibid.
13.  M.A. Parker, "Concrete Contractors Tell of Payoffs to a Union Leader for Labor Peace," New York Times, December 18, 1985.
14.  Arnold H. Lubasch, "2 Unions in New York Concrete Industry Agree to Court Trustee," New York Times, March 19, 1987.
15.  Throughout Chapters Two and Three there are references to crime "families."  Here is a brief primer. The New York City Sicilian underworld operates under five groups run by the family names of their respective founders:  Bonanno, Colombo, Gambino, Genovese and Lucchese.  In 1931 New York gangster Lucky Luciano organized a commission that has acted as a "board of directors" which carries on to this day.  Periodically, the commission meets to settle territorial disputes, divide money, accept new members, and on occasion, authorize high-level executions, such as that of reputed Bonanno boss Carmine Galante in 1979.  Court testimony that led to the conviction of eight top mobsters in 1986 proved, without a reasonable doubt, that the five families and its commission are fact, not fiction.  See John M. Doyle, "Eight Crime Bosses Convicted," Washington Post, November 20, 1986.  Moroney argues that Luciano’s role in setting up labor rackets has been vastly overrated.  The real brains behind the operations, he suggested, was the far less known Louis "Lepke" Buchalter, a Brooklyn Jewish mobster.  Telephone conversation with Michael Moroney, January 6, 1999.  Whoever can lay claim to the original godfather to labor rackets, the implication either way is that the mob, far from simply being "invited" in by union officials, hand-picked those officials.
16.  Gerald McKelvey, "Javits Convention Center Built with Mob Cement:  Indictment," Newsday, January 16, 1987.
17.  See David S. Chartock, "Carpenters Clean House," New York Construction News, July 8, 1996; Selwyn Raab, "Head of Carpenters’ Union Is Dismissed in an Office Raid, New York Times, June 27, 1996.
18.  "Union Members Arrested by Local Authorities for Alleged Shakedowns at New York Exhibit Hall," Daily Labor Report, February 7, 1992.
19.  James Barron, "Javits Center Inquiry Says Workers Have Mob Ties," New York Times, October 6, 1994.
20.  Lawrence Van Gelder, "Union Is Seized in Graft Inquiry at Javits Center," New York Times, March 9, 1995.
21.  Bill Smith and Les Pearson, "Convention Official Feared for His Life," St. Louis Globe-Democrat, February 5, 1981.
22.  Bill Smith, "Convention Exhibitor Tells of Beating in ‘Shakedown’," St. Louis Globe-Democrat, January 28, 1981.
23.  "Unionist Found Guilty," Columbus Dispatch, October 23, 1975.
24.  Ed Barnes and Bob Windrem, "Six Ways to Take Over a Union," Mother Jones, August 1980, pp. 34-47.
25.  Robert Rudolph, "Manager Guilty of Embezzling," Newark Star-Ledger, April 17, 1998.
26.  "Embezzler to Repay Union," Evansville Courier, November 5, 1992.
27.  "Former Union Official Receives Prison Term," Daily Journal, (Denver), August 11, 1988.
28.  Vaughn Roche, "Union Executive Found Guilty," Las Vegas Review-Journal, January 18, 1985.
29.  "Ex-Labor Official Sentenced to Three Years for Embezzlement," Quincy Herald-Whig, n.d., 1982.
30.  Barbara Tetreault, "Ex-Treasurer Sentenced in Theft from Union," Manchester Union Leader, April 9, 1993.
31.  "ATU Official Pleads Guilty to Embezzling Funds," Daily Labor Report, April 27, 1998.
32.  Laura Suchowolec, "Man Admits Stealing from Troy Union," Schenectady Daily Gazette, December 16, 1994; Richard Crist, "Union Boss gets 40 Months," Troy Record, July 21, 1995.  Archina was no stranger to the law. He’d previously served four years in a Canadian jail on conspiracy and weapons charges in connection with a plot to shoot a Toronto businessman.  The union’s international leaders disbanded Local 452, which was absorbed by another union.
33.  Quoted in Tim Shorrock, "Parise Steps Down After Conviction," Journal of Commerce, January 30, 1997.
34.  "Maritime Union’s Founder and Others Must Repay Funds Obtained Improperly," Wall Street Journal, July 30, 1979.
35.  "Former Maritime Union President DeFries, Four Others, Convicted of Racketeering," Daily Labor Report, July 10, 1995; "Former Union Official Sentenced," Los Angeles Daily Journal, January 30, 1996.  One of the men, Alexander Cullison, was convicted of extortion.  He had threatened union members with the delay of pension applications and the denial of basic union services if they did not help obtain election ballots or contribute to the union’s political action committee.
36.  "Ex-Union Chief Denied Parole," Newsday, August 22, 1979; "Paperworkers’ Chief Enters a Guilty Plea to Embezzling Charge," Wall Street Journal, October 23, 1978.
37.  "Ex-Union Administrators Plead Guilty to Embezzling," Florida Times-Union, November 26, 1992.
38.  Cited in Ken Boehm, "Teamsters’ Corruption:  One Case Among Many," Investor’s Business Daily, September 22, 1998.
39.  Corruption and Racketeering, pp. 37-38.
40.  Ibid., p. 39.
41.  Larry Nathanson, "Union Boss Charged with Extortion," New York Post, July 12, 1985.
42.  Margot Hornblower, "Mafia Allegedly Picked Ex-Teamsters Chief," Washington Post, March 22, 1986.
43.  Doyle, "Eight Crime Bosses Convicted."
44.  Leonard Buder, "4 Union Leaders Indicted in Construction Payoffs," New York Times, August 10, 1988.
45.  Corruption and Racketeering, p. 38.
46.  Selwyn Raab, "12 Indicted As Mob Rulers of Painting," New York Times, June 22, 1990.
47.  Selwyn Raab, "Painters Union Officials Admit Links to Mob," New York Times, March 10, 1991.
48.  Philip Russo, "Upcoming Gallo Trials Have Many Island Links," Staten Island Advance, June 15, 1987.  Joseph Gallo was the reputed Gambino family consigliere, or counselor.
49.  Philip Russo, "Upcoming Gallo Trials Have Many Island Links, Staten Island Advance, June 15, 1987.
50.  Jerry Capeci, "Low-Rise Low-Lifes?," New York Daily News, June 14, 1987.  The Benjamin Contracting Corp. made cash payoffs to union officials, sources also said.
51.  "Suspected New York Mob Leaders Are Indicted in Contract Rigging," New York Times, May 31, 1990.
52.  "FBI Finds Mob Victim," Philadelphia News, August 13, 1991.
53.  Arnold H. Lubasch, "Mafia Captain Is Prosecution Witness," New York Times, September 12, 1991.
54.  Reinaldo Ramos, "Trafficante Associates Guilty of Racketeering," Miami Herald, April 30, 1987.
55.  Ibid.; James Warren and John O’Brien, "U.S. Seeking Millions in Union Funds," Chicago Tribune, May 7, 1987.
56.  Andy Rosenblatt and Alice Klement, "Alleged Bribing of Juror Probed," Miami Herald, July 12, 1982.
57.  Quoted in M. Anthony Lednovich, "Murdered Union Chief Was Being Probed," Sun Sentinel, April 27, 1984.
58.  Ibid.
59.  "’Missing’ Union Official Guilty," Detroit News, May 29, 1986.
60.  "Former Union Vice President Charged in Indictment with Fraudulent Acts," Daily Labor Report, January 23, 1995; "Ex-Union Official Guilty of Fraud, Chicago Sun-Times, June 23, 1995; Chicago Trucking Union Leader Sentenced," Daily Labor Report, January 29, 1996.
61.  Wayne Singleterry, "Union Chief Guilty of Embezzlement," Daily Oklahoman, July 13, 1988.
62.  Andrew Julien, "Women Admits Role in Theft of $1.5 Million from Union," Hartford Courant, August 17, 1995.
63.  Tony Munroe, "6 in Bay State Charged with Pension Fraud," Boston Herald, May 16, 1997.
64.  Juan Gonzalez, "Union Lies in Ruins, All Eyes Focus," Daily News, September 30, 1997.
65.  Daniel Hays and Ned Steele, "Indict Union Leader, Alleged Mob Figures in 400G Plot," Daily News, March 17, 1981; Hays, "Union Boss Guilty in Tax Case," Daily News, June 24, 1981; Michael Oreskes, "2 Face Charges on Building Payoffs," Daily News, April 20, 1979.
66.  Oreskes, ibid.
67.  Selwyn Raab, "Investigators Raid Homes of 7 in Union," New York Times, January 7, 1993; "Plumbing Unionists, Contractors Indicted," Rockland Journal-News, October 15, 1993.
68.  Selwyn Raab, "Four Plumbers’ Union Officials Plead Guilty to Extorting Payoffs," New York Times, April 23, 1996.
69.  Caris Davis, "PetroChem Sues Union:  Extortion Charged," Vallejo Times Herald, January 1, 1991.
70.  "Labor Agent Admits Extortion," Charleston Gazette, October 24, 1980.
71.  Pete Bowles, "Plumbers Union Official Charged with Inciting Riot," Newsday, April 12, 1990.
72.  "Former Roofers Union Official Pleads Guilty in Extortion," Daily Labor Report, May 4, 1992; Larry King, "Roofers Plead Guilty, Won’t Serve More Time," Philadelphia Inquirer, April 30, 1992.
73.  Donald Warshaw, "Union Chief, Ex-Official Guilty of Embezzlement," Newark Star-Ledger, June 16, 1995.
74.  Shannon P. Duffy, "Ex-Union Boss Guilty in Scam," Daily Times (Primos, Pa.), December 6, 1991; "Prison for DH Man," News of Delaware County (Haverford edition), April 29, 1992.
75.  Rick Radin, "Richmond Cargo Firm Sues Union, Says Its Boycott Was Racketeering," (no paper name), June 19, 1990.
76.  Corruption and Racketeering in the New York City Construction Industry, pp. 79-82.
77.  Selwyn Raab, "Giuliani Seeking to Expel Union Chiefs Tied to Mob," New York Times, October 27, 1998.
78.  William Glaberson, "Ruling Slows U.S. Effort At Fish Market," New York Times, January 25, 1989.
79.  Bruce Stutz, "Three More Indicted in Fulton Investigation," National Fisherman, June 1982.
80.  Quoted in Glaberson, "Ruling Slows U.S. Effort."
81  See Peter Perl, "Senate Probe Finds ‘Substantial’ Mob Ties to Hotel Union, Washington Post, August 28, 1984; Bill Keller, "Panel Links Mob and Hotel Union," New York Times, August 27, 1984.
82.  R. Brierly Thompson, "Witness:  Scarfo Bragged of His Clout," Philadelphia Inquirer, July 9, 1982.
Salerno had made this statement to the Atlantic City regulatory body, the Casino Control Commission.
83.  Jody McPhillips, "Polito Tells of Underworld ‘Puppeteers’ in Laborers Union," Democrat and Chronicle (Rochester), January 21, 1983.
84.  LIUNA leadership issued a denunciation of the expose in Mother Jones magazine (Barnes & Windrem, "Six Ways to take Over a Union"), which presented strong evidence the union was in the pockets of the Chicago mob.  See James Warren, "Labor Fights back:  Mob Ties Denied," Chicago Sun-Times, March 15, 1981.
85.  See Bill Bryan and John C. Shelton, "Local Mob in Unions, Politics, Sources Say," St. Louis Globe-Democrat, August 22, 1981; William C. Lhotka and Ronald J. Lawrence, "Union Called Easy Target for Mob Takeover," St. Louis Post-Dispatch, April 17, 1983; William C. Lhotka, "Flynn Convicted of Links to Mob Warfare," St. Louis Post Dispatch, March 26, 1987.
86.  David Jackson, "Bad Company," Chicago, February 1990, p. 92.
87.  Quoted in Michael Briggs, "Chicago Mob Activity Still Strong, Panel Told," Chicago Sun-Times, April 12, 1988.
88.  Quoted in Ken Boehm, National Legal and Policy Center, "Big Labor Represents Radical Elites, Not Workers," Letter to the Editor, Washington Times, April 13, 1998.
89.  The Local 210-Buffalo mob connection had been a long and ugly one.  See, for example, Margaret Hammersley, "Jury Eyeing Possible Linkup Here of Crimes with Past Probe Figures," Buffalo Evening News, March 16, 1981; Matt Gryta, "Sciolino Case to Be Used in Probe of Union," Buffalo Evening News, March 20, 1980.
90.  For excellent coverage of this scandal, see Byron York, "Mob Rules," The American Spectator, April 1997, pp. 29-35, 84; John E. Mulligan and Dean Starkman, "An F.O.B. and the Mob," Washington Monthly, May 1996.
91.  York, p. 30.
92.  See "Who Is Robert Luskin?," Editorial, Investor’s Business Daily, January 27, 1999.
93.  Glenn Burkins, "Laborers Union President Is Charged with Kickbacks, Criminal Connections," Wall Street Journal, November 7, 1997.
94.  Excerpted from remarks of Rep. William Clay, D-Mo., on the floor of the U.S. House of Representatives, "On the Achievements of the Laborers’ Reform Efforts," reprinted in LIUNA News, October 9, 1998.
 

CHAPTER THREE

1.  Conversation with Michael Ledeen, September 28, 1998.  Ledeen is a resident scholar with the American Enterprise Institute in Washington, D.C.
2.  Boehm, p. 29.
3.  Ibid.
4.  Jonathan Kwitny, "The Mafia:  Down But Not Out," Boston Globe, April 1, 1990.
5.  Quoted in Michael McMenamin, "Cleaning Up the Teamsters," Reason, May 1989, p. 28.
6.  John O’Brien, "The Seneses:  No Longer a Union Dynasty," Chicago Tribune, April 15, 1993.  Lucien Senese’s brother, Joseph, president of the National Production Workers Union, seems to be safe, thanks to some $483,000 he spent on security in 1991 out of union funds.  That kind of spending triggered action by a dissident faction in the union, seeking full financial accounting in federal court.
7.  Civil, as opposed to criminal, statutes were used because federal officials felt it would be easier to make charges stick.  A civil RICO action requires meeting only "a preponderance of the evidence" standard, not "beyond a reasonable doubt."   George Archibald and John McCaslin, "Mob Runs Teamsters, U.S. Suit Claims," Washington Times, June 29, 1988.
8.  "87 Officials Forced to Resign in Three-Year Investigation of Teamsters, Report Shows," Daily Labor Report, June 30, 1992.
9.  That is the view of Michael Ledeen and Mike Moroney, "The White House Joins the Teamsters," The American Spectator, November 1998, pp. 38-42, 86-88.  See especially p. 41.
10.  Bill Sammon, "Teamsters President Banished by Board," Washington Times, July 28, 1998.
11.  "Teamsters to Release Documents to Panel," Washington Times, October 2, 1998.
12.  McMenamin, "Cleaning Up the Teamsters," pp. 28-29.
13.  Steven Brill, The Teamsters, New York:  Simon & Schuster, 1978, p. 13.
14.  Chris Isidore and William Roberts, "Teamster’s Mail Delivers Discord," Journal of Commerce, December 30, 1996.
15.  Harry Jaffe, "Road Rage," Playboy, November 1998, p. 152.
16.  The discussion of the pre-1980 Teamsters history is drawn from Brill, The Teamsters; Boehm, Organized Crime and Organized Labor, pp. 22-30, 39-55.
17.  The discussion of the earliest years of the Teamsters draws mainly upon Brill, pp. 358-64.
18.  Material on Jimmy Hoffa is taken from Brill,  pp. 31-75;  Boehm, pp. 47-50; Arthur Sloane, Hoffa, Cambridge, Mass.:  MIT Press, 1991.
19.  James Hoffa (as told to Oscar Fraley), Hoffa: The Real Story, 1975, quoted in Boehm, pp. 95-96.
20.  See Brill, p. 69.
21.  Ernest Volkman, "The FBI’s Open Case File," George, October 1998, p. 78.
22.  In fact, Salvatore Briguglio, the prime suspect Hoffa’s slaying, was indicted in 1976 for Castellito’s murder.  See Boehm, p. 49.
23.  Brill, p. 62.
24.  Glick had applied for the loan nine only days prior to approval without ever offering a personal financial statement.  The Central States fund had a record of approving 92.5 percent of all its applications, a rate higher than that of the Social Security system.  See Brill, p. 249.
25.  Ibid., p. 23, 228.
26.  Ibid., p. 238.
27.  Ibid.
28.  Ibid., p. 256.
29.  James Warren, "Teamsters Fund Cuts Nevada Casino Ties," Chicago Tribune, January 31, 1986.
30.  Ibid., p. 348.  Williams himself could not have been more blunt in testimony before a federal racketeering trial in 1987. "Nick Civella—I was controlled by Nick," he said. See Arnold Lubasch, "Ex-Teamster Chief tells Jury Mafia Controls Union Leaders," New York Times, June 2, 1987.
31.  The discussion of Williams relies mainly on Eugene H. Methvin, "The Devil and Roy Williams," Reader’s Digest, June 1986, p. 156.
32.  Lombardo would have problems later on, too.  In 1985 he was convicted for conspiring to skim gambling proceeds from Las Vegas casinos bought with CSPF loans.  Four years later he agreed to pay the federal government $250,000 in a civil settlement for receiving proceeds from illegal activities that had involved the Teamsters.  See William Glaberson, "Reputed Organized-Crime Figure Agrees to Fine in Teamsters Case," New York Times, October 24, 1989.
33.  Reprinted in McMenamin, "Cleaning Up the Teamsters," p. 28.
34.  "Alleged Mafia Chiefs Convicted," New York Times, January 26, 1998.
35.  Fitzsimmons in the mid-70s had called the elder Presser "one of the greatest men I have ever known."
36.  To some extent, this was a father-son operation.  In 1962 Jackie Presser received a CSPF loan of $1.4 million to build an amusement park in Cleveland that later went bankrupt. The Bally Corporation later bought the property and gave the Pressers 3,750 shares of Bally stock.  Eighteen months later, the fund reciprocated, providing Bally with a $12 million unsecured loan.  See Joe Conason, "The Death Chair," Village Voice, June 10, 1986.
37.  Brill, p. 326.
38.  See Conason, "The Death Chair."
39.  Ibid.; Arnold H. Lubasch, "Mob Figure Is Said to Have Selected Teamsters’ Chief," New York Times, November 25, 1986.
40.  "Ex-Leader of Mafia Links Teamsters to Mob," Washington Post, April 16, 1988.
41.  "Presser was FBI Informant for 9 Years," Washington Times, August 4, 1988.
42.  Local 507 continued to have problems.  Local chieftain Harold Friedman was convicted in 1989 for racketeering and embezzlement.  In 1992 he also was charged with violating his suspension from union activities.  Jay Greene, "Ex-Official of Teamsters Faces Charges," The Plain Dealer, September 2, 1992.
43.  For a full account, see Conason; U.S. General Accounting Office, Criminal Investigations of Mr. Jackie Presser and Other Teamsters Officials, GAO/HRD-87-25BR, December 1986.   John Nardi, Jr. didn’t get off so easily.  He was more than a ghost employee.  In 1989 he was sentenced to four years in prison on charges of conspiracy to embezzle union funds, bribery, fraud and making false statements to obtain a passport.  "Ghost Teamsters Employee Sentenced," The Plain Dealer, June 22, 1989.
44.  "Since Expulsion, Controversy Has Dogged Teamsters’ Chiefs, The Plain Dealer, December 21, 1987.
45.  Brill, p. 27.
46.  Quoted in Frank Swoboda, "Racketeering Law Faces Toughest Test," Washington Post, July 4, 1988.
47.  Bruce D. Butterfield, "Teamsters President Mentioned in Wiretaps," Boston Globe, August 15, 1988.  The wiretaps, in and of themselves, pointed to no evidence of criminal activity on McCarthy’s part.  But they did suggest that the mob had the ultimate veto power as to who leads the union.  When McCarthy died late in 1998, he may have taken many secrets to his grave.
48.  Ibid.
49.  Ralph Ranalli, "Stoolie Ties Teamsters to Mob," Boston Herald, October 25, 1994.
50.  Brill, p. 394.
51.  Quoted in Brill, p. 393.
52.  The articles are summarized in Boehm, pp. 51-55.
53.  Kenneth C. Crowe, "Teamster King?," New York Newsday, September 17, 1992.
54.  Selwyn Raab, "New York Teamster Chief Agrees to Give Up Union Posts for Life," New York Times, April 13, 1993.
55.  Kenneth C. Crowe, "2 Teamsters Accused of Defrauding Pension," Long Island Newsday, October 22, 1992.
56. Stephen Steele, "Morris Teamster Exec Convicted in Kickbacks," Newark Star-Ledger, October 11, 1992; Deborah Priante, "Teamster Guilty in Kickbacks," Woodbridge (N.J.) News Tribune, October 11, 1992.  The two executives with Omega, an insurance administration firm, had a far bigger take.  They were convicted of embezzling $650,000 from the local government of Woodbridge Township, N.J.
57.  "Settlement in Teamsters Lawsuit," Rhode Island Lawyer’s Weekly, September 21, 1992.
58.  "Former Official of Teamsters’ Admits Crime," Evening Times (Little Falls, N.Y.), February 22, 1993.
59.  "New England Teamsters Accountant Indicted for Misusing $60 Million," Daily Labor Report, January 24, 1992.  In a separate case, Lisa Vitale was accused of stealing $34,000 from the fund by making about 50 separate payments to a fictitious employee.  Phil Primack, "Teamster Employee Accused of Stealing $34,000," Boston Herald, July 14, 1992.
60.  Jane Poss and Sean Murphy, "Jury Probing Kickbacks to Teamsters," Boston Globe, February 20, 1991.
61.  Raplh Ranalli, "Feds:  Mob Evidence Grows," Boston Herald, March 1, 1994.
62.  Joseph D. McCaffrey, "Ex-Jersey Lawman, 2 Associates Get 4 years for Looting Union Fund," Newark Star-Ledger, April 25, 1987.  One of the lawmakers, Joseph Higgins, a former Union County Assemblyman, already had pled guilty.  The other, former Hudson County State Senator David Friedland, "disappeared" in a scuba diving accident, but federal authorities say he faked his own death.  Their hunch proved right; months later he was captured on an island off the Indian Ocean.
63.  Leonard Buder, "2 Are Charged with Stealing Union Funds," New York Times, June 17, 1987; William Power, "Two Pension-Fund Investors Indicted; U.S. Alleges Kickbacks Paid Teamsters," Wall Street Journal, June 17, 1987.
64.  Dan Kane, "3 Say They Plotted to Defraud Teamsters," Syracuse Herald Journal, Mar 4, 1989.
65.  Anita M. Seline, "Former Union Organizer Surrenders on Charges," Hartford Courant, November 21, 1989.  Robidoux’s cousin, James, was issued an arrest warrant for the 1988 third-degree assault of another union member.  See Anita M. Seline, "Warrant Issued for Union Leader Accused of Hitting Tolland Man," Hartford Courant, May 26, 1988.
66.  "Crime and Punishment," New Jersey Lawyer, August 15, 1994.
67.  Andrea M. Muto, "Teamster Lawyer Fined, Put on Probation, The Plain Dealer, June 21, 1989.
68.  "2 Union Locals Will Repay Misspent Pension Funds," Orlando Sentinel, August 19, 1993.
69.  Ann Sweeney, "Union Official Found Guilty of Taking Payoffs," Detroit News, August 1994.
70.  "Brotherhood vs. Brother," Business Week, February 27, 1995.
71.  Ken Wysocky, "Ex-Teamster Must Forfeit $48,951," Milwaukee Sentinel, February 11, 1987.
72.  Jane Applegate, "2 Convicted of Embezzling Union Funds," Los Angeles Times, November 13, 1986; Jane Applegate, "Ex-Administrator Convicted of Stealing from Teamsters Union Health Plan Fund," Los Angeles Times, November 14, 1986.
73.  George Anastasia, "N.J. Trucking Firm Owner Admits to Role in Union Payoff," Philadelphia Inquirer, October 2, 1990.
74.  Local 560 also was the preserve for years of Genovese associate Michael Sciarra.  In 1992 a federal appeals court upheld a permanent injunction against Sciarra from any involvement in the local.
75.  "Wounded Teamster Talks to Congress," Washington Times, April 7, 1989.
76.  Joseph P. Fried, "Charges Link Trash Industry to the Mafia," New York Times, April 20, 1993.
77  Jonathan Rabinovitz, "Union Agrees to Monitor to Bar Ties with Mobsters," New York Times, January 12, 1994.
78.  U.S. Sues to Oust 2 Teamster Chiefs," Washington Post, March 22, 1990.
79.  Selwyn Raab, "U.S. Inquiry Finds Gangsters Hold Grip on Kennedy Cargo," New York Times, September 30, 1984.
80.  Patricia Hurtado, "Teamster Guilty in Airport Racket," Newsday, November 6, 1986.
81.  "Mafia Links to Union Cited," New York Times, October 28, 1986.  Hill’s criminal career was the subject of Nicholas Pileggi’s book, Wiseguy:  Life in a Mafia Family, which was the basis for Martin Scorsese’s 1990 movie, "Goodfellas."
82.  Patricia Hurtado, "6-Year Sentence in JFK Racket," Newsday, December 11, 1986.
83.   "Union Boss Gets 9 Years," Newsday, November 6, 1986.
84.  Jesus Rangel, "Associate of Gotti Pleads Guilty in Extortion at Kennedy Airport," New York Times, April 16, 1987.
85.  Selwyn Raab, "Obstacles to Cleanup," New York Times, June 29, 1993.
86.  "Teamsters Officials Charged in Payoffs," Newsday, September 15, 1993.
87.  Selwyn Raab, "School Bus Pacts Go to Companies with Ties to Mob," New York Times, December 26, 1990.
88.  Grancio had at least one other major skeleton in his closet: the murder of Bruno Bauer.  Bauer was a mechanic at a Queens trucking firm, and was found murdered there in the fall of 1986.  Several months before his death he had filed an unfair labor practice complaint with the National Labor Relations Board, alleging that the trucking firm was paying him less than the wage agreed upon in its contract with the union.  He also charged that the union had refused to process his grievance and that his shop steward had assaulted him when informed he was seeking aid from federal authorities.  See Robert Walters, "Labor Racketeering Just Part of the Cityscape," Newsday, January 31, 1987.  The crime did not result in any prosecutions.  One likely reason is that Grancio himself was murdered in 1992.
89.  Kevin Flynn and Joe Calderone, "Greased by Bus Union?," New York Newsday, May 11, 1995.  Several years later a probe by Edward Stancik, Special Commissioner of Investigations for the New York City School District, concluded former and current union officials and bus company owners had longstanding connections with mobsters.  See Selwyn Raab, "Officials Say School Bus System Has Enduring Mob Ties," New York Times, April 23, 1995.
90.  Pete Bowles, "Rastelli Sentenced to 12-Year Term for Racketeering," Newsday, January 17, 1987.
91.  Selwyn Raab, "Linked to Mafia, Union Chief Quits," New York Times, April 16, 1992; see also Mike Hurewitz, "5 Teamsters Leaders Indicted for Running Mob ‘Candy Store,’" New York Daily News, n.d.
92.  David Jones, "Mob-Teamster Connection:  Is It Being Cut,?" Rochester Democrat and Chronicle, April 21, 1991.
93.  Elliot Pinsley, "Scarfo’s Sister Charged in Two No-Show Jobs," News-Tribune (Woodbridge, N.J.), September 24, 1987.
94.  Barbara Stanton, "Fitzsimmons Sentenced to 5 Years for Conspiracy," Detroit Free Press, March 4, 1987; Douglas Ilka and John Nehman, "Court Upholds Conviction of Fitzsimmons," Detroit Free Press, February 28, 1991.
95.  Ibid., pp. 156-99.
96.  Jaffe, "Road Rage," p. 157.  The New York Times, for instance, had written, "Mr. Carey’s triumph is labor’s triumph."
97.  Ron Carey, "Reformed Teamsters Fighting Corruption," Boston Globe, December 5, 1995.
98.  Local 705, the largest in Chicago with 16,000 members, was controlled by Dan Ligurotis before the national union banished him for alleged embezzlement.  Patricia Moore, "National Teamsters Seize Chicago Local," Chicago Sun-Times, June 17, 1993.
99.  Correspondence from Charles M. Carberry, Assistant U.S. Attorney and chief investigator for the Independent Review Board, January 10, 1994.
100.  According to a handbill circulated by anti-Carey Teamsters, Skelton is considered a "Code 2" by police, which means any officer in a police vehicle pulling him over must call for backup before doing anything else.
101.  Letter from Gene Giacumbo, Teamsters Vice President to Robert Fischer, Independent Review Board, May 17, 1994.
102.  Letter from Giacumbo to Fischer, May 24, 1994.
103.  Letter from Robert Kronhert, Rutherford, New Jersey, to the International Brotherhood of Teamsters, Office of the Election Officer, January 25, 1996.
104.  It should be noted that Giacumbo wasn’t entirely clean either.  In 1995 the Teamsters suspended him for six months as vice president on minor election charges.  Donald Warshaw, "Jersey Teamster Suspended," Newark Star-Ledger, November 20, 1995.
105.  That figure came from U.S. District Judge David Edelstein, who has the power to review IRB actions.  See "Teamsters’ Leader Blasted by Judge in Pro-U.S. Ruling," Chicago Sun-Times, August 21, 1992.
106.  Ledeen and Moroney, "The White House Joins the Teamsters," p. 40.  Most of the material for this section relies on this article.
107.  Jerry Seper, "Teamsters President Probed," Washington Times, September 6, 1993; Seper, "Teamsters Aide Focus of Probe"; Seper, "Teamsters Unit Wants Union Leader Probed," Washington Times, September 16, 1993.
108.  Quoted in ibid., "Teamsters President Probed."
109.  Carey’s vision for the Teamsters is much more in line with public-sector than private-sector unions.  The alignment of a group such as the Teamsters with a host of left-of-center causes is abound to arouse hostility from many rank and file.  See Leo Troy, The New Unionism in the New Society:  Public Sector Unions in the Redistributive State, Fairfax, Va.:  George Mason University Press, 1994, pp. 99-130.
110.  Conversation with Michael Ledeen, September 28, 1998.
111.  Ken Boehm, "Mr. Carey’s Corruption," Washington Times, November 17, 1997.
112.  Frank Swoboda, "Kantor Testifies in Probe of Teamsters, Washington Post, October 7, 1998.  Former U.S. Trade Representative Mickey Cantor admitted to Congress that Ickes asked him to call the president of Diamond Walnut Growers after the union began pressuring the Clinton administration to help settle the dispute.  He added that the administration did not provide the help.
113.  Quoted in Steven Greenhouse, "Tarnished Knight of Revived Labor Movement," New York Times, November 19, 1997.
114.  See "Polishing the Image," Arizona Republic, Editorial, February 26, 1992; Timothy M. McConville, Letter to the Editor, "Teamsters Plant Corruption," Troy (Ala.) Messenger, February 11, 1992.
115.  The Old Democrat vs. New Democrat debate is key to understanding why Jim Hoffa was so eager to challenge Carey for the union leadership.  Hoffa is a classic Old Democrat; he once described himself as representing the "Scoop Jackson, Pat Moynihan wing of the party."  See Brill, The Teamsters, p. 33.
116.  For a more full discussion, see Jaffe, "Road Rage."
117.  Ibid., p. 154.
118.  Anyone doubting the radical-Right sensibilities of LaRouche and his subordinates, in word or deed, should consult Dennis King’s expose of the LaRouche cult, Nazis Without Swastikas, New York:  League for Industrial Democracy, 1982.  On page 1 King quotes LaRouche on July 7, 1978 as saying, "It is not necessary to call oneself a fascist to be a fascist.  It is simply necessary to be one!"  LaRouche’s began actively courting Teamster support in 1977.  The NCLC published a pamphlet, The Plot to Destroy the Teamsters, which among other things, claimed Jimmy Hoffa’s disappearance was a Zionist conspiracy.  According to LaRouche spokesperson, Nancy Spannaus, neither Leebove nor Geller had anything to do with the pamphlet.  The two were suddenly "disaffilated" from the movement in 1981, she added, declining to specify the reasons.
119.  "Labor Leader Jim Hoffa Jr. Hopes to Clean Up Teamsters," Insight, November 10, 1997.
120.  For an example of the unfortunate tendency among conservatives to see a Hoffa-led Teamsters as a fertile breeding ground for a new generation of  "Reagan Democrats"-turned-Republicans, see Scott Reed, "The GOP Meets Big Labor," Washington Times, July 22, 1998.  Reed managed Bob Dole’s 1996 presidential campaign.
 
 

CHAPTER FOUR

1.  The original article was reprinted in Seymour Martin Lipset, Political Man:  The Social Bases of Politics, Garden City, N.Y.:  Anchor Books, 1963, p. 388.
2.  U.S. Department of Labor, Office of Labor Racketeering, booklet from Office of Inspector General, October 1993, p. 5.
3.  Patricia Hurtado, "Charges in Fraud Scheme," Newsday, August 27, 1997.
4.  U.S. General Accounting Office, Labor Law:  Criminal Investigations of Mr. Jackie Presser and Other Teamsters Officials, GAO/HRD-87-25BR, December 1986, pp. 12-14.
5.  Richard Behar, "A Teamsters Tempest," Time, May 15, 1995.
6.  See Paul H. Weaver, The Suicidal Corporation:  How Big Business Fails America, New York:  Simon & Schuster, 1988, pp. 109-45.
7.  During the New Deal General Electric chief executive Gerard Swope welcomed the National Industrial Recovery Act for this reason. Weaver, p. 133.
8.  See Morgan O. Reynolds, Making America Poorer:  The Cost of Labor Law, Washington, D.C.:  Cato Institute, 1987, pp. 161-94.
9.  Thomas Gale Moore, "The Beneficiaries of Trucking Regulation," Journal of Law and Economics, October 1978, pp. 327-43.
10.  Ibid., p. 30.
11.  James T. Bennett, "Private Sector Unions:  The Myth of Decline," Journal of Labor Research, Vol. XII, No. 1, Winter 1991.
12.  Communications Workers of America v. Beck, 106 S. Ct., 2648 (1988).
13.  David Kendrick, Forced Dues—Fuel for Big Labor’s Political Machine, Springfield, Va.:  National Institute for Labor Relations Research, June 11, 1996, p. 3.
14.  Jonathan Cohn, "Grover Cornered," The New Republic, June 29, 1998, p. 6.  The title is an allusion to Grover Norquist, a conservative activist who is president of the Washington, D.C.-based Americans for Tax Reform, and prime mover behind the paycheck-protection movement.
15.  Michael W. Lynch, "Protection Racket," National Review, June 22, 1998,  pp. 40-42; David Kendrick, Washington State Union Bosses Richer After"Paycheck Protection," National Institute for Labor Relations Research, Issue Brief, May 18, 1998.
16.  Mike Antonucci, "Paycheck Protection or Paycheck Deflection?," Investor’s Business Daily, July 9, 1998.
17.  Norquist, in fact, may have done a disservice to the right-to-work cause by admitting his goal is to "crush labor unions as a political entity."  See Cohn.
18.  "Authorities on Union Democracy Enlisted to Write Reform Bill," Union Labor Report, December 17, 1998.
19.  See Howard Dickman, Industrial Democracy in America:  Ideological Origins of National Labor Relations Policy, LaSalle, Ill.;  Open Court, 1987.
20.  James T. Bennett, A Higher Standard of Living in Right-to-Work States, Springfield, Va.:  National Institute for Labor Relations Research, 1994.
21.  Thomas J. Holmes, "The Effect of State Policies on the Location of Industry," Minneapolis:  Federal Reserve Bank of Minneapolis, revised staff report, September 1996.
22.  Cited in "Freedom Key for U.S. Jobs of the Future," National Right to Work Newsletter, February 1999, p. 5.  In raw numbers, the growth in right-to-work states also was larger, 573,178 to 181,260.
23.  David Kendrick, Big Labor’s Two Billion Dollar Free Ride on the Backs of Workers, Issue Brief, Springfield, Va.:  National Institute for Labor Relations Research, May 12, 1998.
24.  Charles W. Baird, "The Permissible Uses of Forced Union Dues:  From Hanson to Beck," Policy Analysis No. 174, Washington, D.C.:  Cato Institute, July 24, 1992, p. 4.  Baird argues that this provision is blatantly unconstitutional, despite early Supreme Court rulings that affirmed it.
25.  Texas alone provided a number of cases of Teamsters corruption.  For example, in 1996 Richard Hammond, longtime president of Teamsters Local 988 in Houston, was indicted on charges of embezzling $188,000 to obtain a bank loan.  That same year the Teamsters national headquarters placed Local 745 in the Dallas-Ft. Worth area in trusteeship amid allegations of widespread corruption.  See John D. Schulz, "Houston Teamster Leader Indicted," Traffic World, September 16, 1996; Worth Wren Jr., "Union Local Trusteeship Sought," Fort Worth Star-Telegram, August 22, 1996.
26.  "Union Corruption:  Worse Than Ever," U.S. News & World Report, Special Report,  September 8, 1980, p. 36.
27.  Morgan O. Reynolds, Power and Privilege:  Labor Unions in America, New York:  Universe Books, 1984, p. 39.
28.  See Carl Horowitz, "Behind Big Labor’s New Façade," Investor’s Business Daily, March 27, 1996.
29.  Telephone conversation with Michael Moroney, January 6, 1999.
30.  James T. Bennett and Thomas DiLorenzo, Destroying Democracy:  How Government Funds Partisan Politics, Washington, D.C.:  Cato Institute, 1985; Bennett and DiLorenzo, "Tax Funded Unionism: The Unemployment Connection," Journal of Labor Research, Vol. 7, Fall 1986,  pp. 363-85; "Tax-Funded Unionism II:  The Façade of Culture and Democracy," Journal of Labor Research, Winter 1987,  pp. 31-46; "Tax-Funded Unionism III:  Front Organizations," Journal of Labor Research, Vol. 8, Spring 1987, pp. 179-89.
31.  The Heritage Foundation revealed in 1995 that SEIU, whose president, John Sweeney, was elected AFL-CIO chief that fall, had received $137,000 during the 12-month period  July 1993-June 1994.
32.  Kenneth R. Weinstein and August Stofferahn, "LIUNA, Organized Crime, and the Clinton Administration," Backgrounder Update No. 281, Washington, D.C.:  The Heritage Foundation, October 20, 1996, pp. 2-3.  The Heritage report revealed the use of government grant money is a scandal in itself.  A Department of Justice complaint in 1994 against LIUNA drafted by the Justice Department, but never filed in court, alleged that "in or about 1986 to on or about July 31, 1994," LIUNA officials, including Coia, sought to "defraud training and education funds of various upstate locals" in New York, employing "actual or threatened force" to "induce the locals to surrender control of these funds."
33.  There is no doubt that Congressional supporters of the Hobbs Act meant to close all loopholes for unions to commit acts of violence.   See Thomas R. Haggard, "Labor Violence:  The Inadequate Response of the Federal Anti-Extortion Statutes," Nebraska Law Review, Vol. 59, No. 4, 1980,  pp. 859-916.
34.  U.S. v. Enmons, 410 U.S. 396 (1973).
35.  Philip D. Bradley, Constitutional Limits to Union Power, Washington, D.C.:  Council on American Affairs, 1976, p. 44.
 
 




 

The author of this monograph, Carl F. Horowitz, was formerly Washington correspondent for Investor’s Business Daily.  Previous to that, he had been a policy analyst with The Heritage Foundation, and an Assistant Professor of Urban and Regional Planing at Virginia Tech in Blacksburg, Virginia.  He has a bachelor’s in economics from the University of Kansas, and a master’s and Ph.D. in urban planning and policy development from Rutgers University.