Copyright 1999 The New York Times Company  
The New York Times
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February 15, 1999, Monday, Late Edition - Final
SECTION: Section B; Page 1; Column 4; Metropolitan Desk 

LENGTH: 1645 words

HEADLINE: Scandals Affirm New York As Union Corruption Capital

BYLINE:  By STEVEN GREENHOUSE 

BODY:
The scandal that swept the president of New York City's janitors' local from his union penthouse earlier this month was the latest in a series of stinging labor setbacks, stemming from an unusual combination of forces, that have made the city the national capital of union excess and corruption.

Other cities are well known for union corruption, of course, among them Chicago, Boston, Providence, R.I., and several New Jersey locales. But labor investigators and experts say no other city today comes close to New York in the number of officials under investigation or the dozens of union locals under trusteeship.

"I don't think there's any question that New York, because of some historical reasons and some unfortunate traditions, has the unfortunate rank as the No. 1 labor racketeering city in the nation," said Michael Cherkasky, a former prosecutor who is chief operating officer of Kroll Associates, the investigative firm.

Labor corruption is so widespread in New York that union locals representing 300,000 workers -- nearly one-fourth of the city's unionized work force -- have been in trusteeship at some point over the last two years.

New York's union scandals stem from many factors, among them more aggressive policing by parent unions, a continuation of prosecutors' longstanding cleanup efforts, and a push by union dissidents to expose their leaders' misdeeds.

The leader of the janitors' union, Gus Bevona, for example, was pushed out because his parent union, the Service Employees International Union, was angry about his $450,000 salary and extravagant penthouse. Stanley Hill, the longtime executive director of District Council 37, which represents 120,000 city workers, was forced out in December by his parent union, the American Federation of State, County and Municipal Employees, because dissidents had discovered evidence of what they said was extensive corruption and the Manhattan District Attorney's office was expanding its investigation into suspected kickbacks, embezzlement and vote fraud.

In the last two years, the former president of the carpenters' union in New York City was convicted of stealing more than $50,000, while numerous teamsters officials have been expelled for ties to organized crime. The former president of the transit police union was convicted in June of taking kickbacks, and two members of the Lucchese crime family have pleaded guilty to the 1990 murder of a mob rival who ran a painters' union local. And two weeks ago, Federal prosecutors obtained a three-year extension of their four-year-old trusteeship of the 13,000-member Mason Tenders District Council, which represents construction workers. Union officials, prosecutors said, wasted or stole more than $50 million from the union's benefit fund.

Government officials say such examples explain why the United States Department of Labor and the Federal Bureau of Investigation have placed more racketeering investigators in New York than in any other city. Although other cities may have extensive corruption in two or three unions -- in Chicago, it is the teamsters, hotel workers and laborers -- in New York, there have been deep-seated problems in many unions, including those involving the carpenters, government employees, ironworkers, longshoremen, mason tenders, painters, plumbers, service employees and teamsters.

A confluence of factors -- historic, demographic, economic and political -- has made New York the mother lode of union corruption. Those factors include the city's entrenched Mafia presence, its huge construction industry, many immigrant workers and the juxtaposition of muscular unions and small, vulnerable businesses.

For New Yorkers, the price of union corruption has been high. For example, it has raised costs to erect a building, to exhibit at the Jacob K. Javits Convention Center and to hire private garbage haulers.

For labor leaders, there is concern that all the corruption is souring the public on unions and eclipsing the positive developments that point to a rebirth of labor. Those developments include last year's 100,000 increase in union membership nationwide, labor's successes in electing union-friendly candidates to Congress last November and the continuing campaigns to unionize hotel maids, home health aides and doctors around the country.

"The high-profile episodes of corruption and skulduggery in New York and elsewhere are unquestionably hurting efforts to revive the labor movement," said Nelson Lichtenstein, a University of Virginia labor historian.

One symbol of labor's decay in New York is that Plumbers Local 2, famed for giving a start to George Meany, the A.F.L.-C.I.O. president from 1955 to 1979, was disgraced in 1996, when its leaders pleaded guilty to extorting nearly $1 million in bribes to arrange sweetheart contracts.

New York's labor leaders say there is far less corruption, especially the heavy-duty variety like extortion and beatings, than in the days of the film "On the Waterfront," during the 1950's, largely because of persistent efforts by district attorneys and Federal prosecutors. City labor leaders say that New York has some of the nation's most honest and respected unions, like the United Federation of Teachers and 1199, the National Health and Human Service Employees Union.

But Andrew Stern, president of the Service Employees International Union -- the man who put Mr. Bevona's Local 32B-32J into trusteeship this month -- complained that the excesses and crimes of New York unions often made the public overlook the good things about labor.

Mr. Stern boasted, for instance, that last year, 1199, a Service Employees International affiliate, negotiated the best contract for hospital workers in the nation's history. "But compared to what happened with Local 32B-32J, that kind of success gets overwhelmed," he said.

Although Mr. Bevona has not been accused of any crimes, the union movement has been acutely embarrassed by his unusual salary, his luxurious penthouse and the $1.5 million he received in severance pay and unused vacation.

Despite the long roster of wrongdoing, many union officials say that as a result of all the trusteeships and oversight, New York labor may be at a turning point and may end up more honest and vigorous.

"I'm very optimistic about the city's labor movement right now," said Henry Tamarin, president of a once-corrupt New York local of restaurant workers, which has been cleaned up and transformed into a model of aggressive union organizing. "There's a lot of new leadership, and there's really an opportunity to turn things around, to do more organizing, to get more involved in politics in a way we haven't seen for years."

Any analyst of New York's unions points, of course, to the Mafia as a major factor behind labor corruption, especially in the many teamster locals that have been involved in kickbacks, shakedowns and embezzlement. For example, before Teamsters Local 282 was placed into trusteeship in 1995, prosecutors showed that it was controlled by John J. Gotti's crime family. The 4,000-member local, whose members deliver building materials, often threatened slowdowns to extort money from building contractors, for whom delays could cost millions of dollars, prosecutors said.

Other factors have also fueled New York's labor corruption. Unlike Detroit and Pittsburgh, which were long dominated by large companies in a single industry, New York's economy is characterized by tens of thousands of small businesses, desperate to outlast the competition. This industrial structure has enabled some unions to extort money from these businesses or to offer sweetheart deals in exchange for payoffs.

Lois Gray, a Cornell labor relations professor, said: "Small companies in highly competitive industries are much more tempted to buy their way through a labor problem. It would be hard for G.M. to do that. They're too much in the public eye."

The city's work force is also made up in large part of immigrants, who often do not know their rights and are too insecure to challenge dishonest union leaders. And because many New York unions are composed primarily of one ethnic group, members often feel they would betray their group if they ratted on venal leaders.

Some labor experts say another factor feeding corruption is that unions contribute millions of dollars to city and state politicians, helping make government officials less aggressive in investigating unions and passing strict laws to regulate them.

"Public employee unions are cash cows at election time," said Mark Rosenthal, president of a motor vehicle operators' local, who had a major role in unearthing corruption at District Council 37. "They feel they can keep Democratic and Republican politicians off their backs. They felt untouchable because of that."

In many national unions, the New York locals are the biggest units by far. As a result, leaders of the parent unions are often loath to pressure wayward New York locals to stop cutting corners for fear that the those locals will fight against their re-election.

Many members of District Council 37 fault the parent union for waiting until December to put the council into trusteeship even though the Manhattan District Attorney had long been investigating allegations of kickbacks, embezzlement and vote fraud. The president of the local in the council that represents 25,000 cafeteria workers and crossing guards has already been ousted because a union panel found he misappropriated more than $1.5 million, while other officials have acknowledged rigging the council's 1996 contract ratification vote.

"Parent unions have often been very slow to act," said Carl Biers, executive director of the Association for Union Democracy, a Brooklyn-based group. "In many unions, there is great reluctance to recognize that corruption is a problem."
 

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GRAPHIC: Photos: Stanley Hill. Gus Bevona (pg. B1)
 
Chart: "A CLOSER LOOK: Scandals for New York's Labor Unions
 
FEBRUARY 1999 -- The parent union, the Service Employees International Union, forces Gus Bevona, president of the 55,000-member Local 32B-32J, into retirement, because it is unhappy with his salary, perks and undemocratic rule.
 
FEBRUARY 1999 -- Federal prosecutors get a three-year extension of the four-year-old trusteeship of the 13,000-member Mason Tenders District Council, which represents construction workers. Prosecutors say its officials wasted or stole more than $50 million from its benefit fund.
 
DECEMBER 1998 -- The parent union, the American Federation of State, County and Municipal Employees, imposes direct control of District Council 37, which represents 123,000 city workers and faces the Manhattan District Attorney's investigation into allegations of kickbacks, embezzlement and vote fraud.
 
NOVEMBER 1998 -- Joseph DeCanio, president of a local representing 1,000 city highway laborers, pleads guilty to helping fix union elections and receiving more than $50,000 in kickbacks from providing Thanksgiving turkeys to other locals.
 
JUNE 1998 -- The former president of the transit police union and three union lawyers and advisers are sentenced to prison in a kickback and bribery scheme.
 
JUNE 1998 -- A union judicial panel expels Charles Hughes, president of a District Council local for school crossing guards and cafeteria workers, finding that he misappropriated more than $1.7 million.
 
MARCH 1998 -- A Federal jury convicts Frederick W. Devine, former president of New York's 25,000-member District Council of Carpenters, of stealing more than $50,000 that had been earmarked to create jobs for unemployed carpenters.
 
AUGUST 1997 -- The parent union imposes trusteeship on Service Employees Local 144, representing 30,000 health care workers, finding that the president ran up more than $100,000 in questionable hotel and restaurant charges. (pg. B6)