Coia’s Attorneys Meet with DOJ, Discuss Future

Representatives of the Laborers’ Int’l Union of North Am. and the Justice Dep’t met Oct. 6 to assess the union’s future after Jan. 31, 1999 when DOJ’s oversight of LIUNA is supposed to end. Michael S. Bearse, LIUNA’s general counsel and New England labor lawyer, said this was the first in a series of meetings “to decide what happens next and understand each other.” The next meeting is Oct. 21.  Bearse said, the union would like to see “more arm’s length supervision” from DOJ.  However, others outside LIUNA’s inner circle have called for DOJ to take over LIUNA and oust the current leadership before DOJ’s authority do due so lapses. Among the many reasons for a government takeover is the fact that Gen. President Arthur A. Coia, who DOJ said in its 1994 draft RICO complaint had “associated with, and been controlled and influenced by, organized crime figures,” is still running the union. [BNA 10/14/98]

LAX Bosses Charged with $100K Embezzlement
Two bosses of the Los Angeles Airport Police Officers Ass’n were charged with grand theft Oct. 2 for allegedly embezzling about $100,000 in union funds.  Gail Marie Brown-Rall was the former secretary, and Dax Clarence Hermais was the former treasurer. Both were arrested and bail was set at $110,000. If convicted, they face 4 years in prison. In Nov. 1996, the union asked the sheriff’s department to investigate the alleged theft of money and equipment from the union. Officials also questioned $48,000 in expenditures in 1993 and $62,000 in 1994. The probe reportedly found checks made to Brown-Rall or to cash, and then cashed by Hermais. [City News Service 10/2/98]

Connecticut Boss Expelled from Union
Dominic J. Badolato, Connecticut’s once-powerful AFSCME Council 4 boss who was ousted as executive director in 1997, was expelled from the union on Oct. 8.  AFSCME said the move was very rare but necessary. The expulsion means he will no longer be eligible to serve as a member of the executive board of the Conn. AFL-CIO. He also loses his spot as an AFSCME Int’l vice president.  In mid-1997, when faced with the strong possibility he would be defeated in his bid for reelection, Badolato fired his challenger, Michael Ferrucci, Jr., and other political foes who held positions at state AFSCME headquarters in New Britain. The move was a desperate effort by the 78-year-old Badolato to cling to power. An internal union review of those events reached the conclusion: “It is apparent that the action of Brother Badolato was based upon and intended to suppress their exercise of their rights of free speech…He showed a complete disregard for the fact that those terminations disabled the union from carrying out its purpose and deprived… members of the representation [for] which they pay dues..and to which they are entitled.”  Badolato’s reign ran 29 years. [Hartford Courant 10/9/98]

Probe of Dist. Council 37 Expanded, Union Endorses Schumer
The Manhattan Dist. Attorney broadened the investigation of into corruption in the N.Y. City’s public employees unions Oct. 9 by demanding financial documents from 40 locals of Am. Fed. of State, County & Municipal Employees Dist. Council 37. Dist. Attorney Robert M. Morgenthau subpoenaed records from all 56 locals of the Dist. Council as part of a probe into allegations of embezzlement and election fraud. The new subpoenas concerned possible kickbacks and demanded documents about the union’s dealings with a caterer, a bakery, several travel agencies and other businesses. A source at AFSCME HQ in Washington said the union had been told to expect indictments of bosses at several locals in the next few months.

The new subpoenas were issued just days after the scandal-ridden Dist. Council 37 endorsed Rep. Charles E. Schumer (D) for U.S. Senate. Both Schumer and Sen. Alfonse D’Amato sought the corrupt union’s endorsement. Schumer is now slated to receive thousands in donations and will benefit from the union’s 40 computerized phone banks which will make 4,000 calls a day on Schumer’s behalf. [N.Y. Times 10/3 & 10/10/98]

Donation to Massachusetts Attorney General Questioned
Five years ago, Democratic nominee for Mass. governor and current Attorney Gen. Scott Harshbarger called union boss Paul Donohue the mastermind of an “elaborate larcenous scheme” and indicted the state workers’ union president on charges he illegally collected $70,000 in holiday, vacation, and sick pay while on unpaid leave of absence. Now, the nominee has received a $500 donation from Donohue and the endorsement of his union, the Mass. Org. of State Engineers & Scientists. The criminal case against Donohue has languished, and Harshbarger has not pursued it despite a court ruling that Donohue’s scheme at the Highway Dep’t violated state law. Former Highway Commissioner James Kerasiotes, who developed the case for Harshbarger’s office, said the attorney general dropped the ball. “They just blew us off,” said Kerasiotes, who is now chairman of the Turnpike Authority. He said officials had repeatedly asked Harshbarger to pursue the case. “The fact is they just lost their nerve and the taxpayers are out $70,000 and the Harshbarger campaign has an endorsement.” [Boston Globe 10/8/98]

Agent Stole $775K from Union
According to the U.S. Attorney for N.J., Charles J. McFadden pled guilty Oct. 13 to embezzling about $775,000 from the United Auto Workers Local 2315’s health benefits plan in Millville. He was an insurance consultant and owner of retail pet food stores. In 1992, McFadden was awarded a contract to administer the health benefit plan for Local 2315. He diverted about $100,000 of the plan’s funds to himself and his family, and he diverted approximately $675,000 of these funds to his pet supply business, according to the plea. He is free on $10,000 unsecured bond. He will be sentenced Jan. 6, 1999 and faces 5 years in prison, a $250,000 fine or twice his profits, and a restitution order.

Boss/Teacher Allegedly Took $6.5K
A Northbridge, Mass., union boss and elementary school teacher allegedly stole $6,500 from the Northbridge Teachers Ass’n. The female boss/teacher, whose name was not disclosed, was placed on paid administrative leave, with pay, a week before school began. As an officer in the teachers’ union, she allegedly misallocated union dues from teachers for more than a year. The police investigation was announced Oct. 1, and the police chief would not say if more than one person is under investigation.  Also at issue is why the school and the union failed to report the alleged theft when it was discovered. The police chief said under state law, anyone who conceals or compounds a felony is guilty of committing a misdemeanor. [Telegram & Gazette 10/2/98]

“We are all agitators. We are all illegals. No matter how many years we’ve been here, in the eyes of the bankers of Wall Street we’re all immigrants from Europe or Central America or Mexico, on our knees, digging in the dirt.”

– AFL-CIO Secretary Treasurer Richard L. Trumka speaking Oct. 12 to the Asian-Pacific Am. Labor Alliance in San Fran. [Inter Press Service 10/13/98] Trumka has invoked the 5th Amendment to avoid investigators’ questions about his role in the Teamsters money-laundering scandal. Allegedly he routed $200,000 to Ron Carey’s  campaign.