Top bosses of the Am. Fed’n of State, County & Mun. Employees’ Dist. Council 37 spent $1.5 million on car services from 1995-98. Although they were only supposed to use car services when leaving work after 8:00PM, an audit by KPMG, found that over a 12-month period, bosses took 6,582 trips at a cost of $306,000. These bosses also spent more than $2,062,878 (5,568 food purchases) over four years from two caterers, including Gee Whiz, which has been indicted for paying kickbacks to bosses.
The audit, made public May 15, that shows millions of dollars in worker dues supported a lavish lifestyle to which DC37 members (average annual salary about $27,500) are unaccustomed. It was commissioned by the scandal-scarred union in 1998 after the first corruption allegations surfaced. Over half of DC37’s 28-person board in 1998 have been convicted of crimes. It describes an out-of-control situation under Stanley Hill, DC37’s ex-executive director, who auditors said allowed the local bosses to spend freely to secure their loyalty. During the four-year period on which the audit focused, DC37’s assets plummeted from $20 million in 1995 to $3.5 million at the end of 1998.
Many DC37 bosses have claimed that they were unaware of the fraud, but the audit lays out in stark detail what anyone following DC37 spending would have known. It cites hundreds of examples, including $12,462 for an Alaska cruise as a retirement present for an ex-treasurer, and $135,654 over four years that Local 1549 paid to lease a car for its president, Albert Diop.
DC37 bosses reportedly went on a lot of trips, sometimes with spouses. Hill and his wife stayed in a $1,081 per-night suite for eight nights during a Aug. 1998 trip to AFSCME’s Aloha Conference in Hawaii. DC37 spent at least $141,897, including $11,855 for alcohol and other goodies, at the event; thus, Hill’s room was complimentary.
Another event, at the Sheraton Chicago Hotel & Towers, cost DC37 $345,549. The June 1996 tab included $11,250 for cajun chicken wings and $29,250 for 9,000 chilled jumbo Gulf shrimp. There were also 2,500 smoked salmon canapes, 9 roast steamships of beef and 9 honey-glazed hams. Drinks cost $74,590, including $6,351 name-brand mixed drinks and $1,938 “top-shelf liquors.” The hotel waived the charge for the ice carvings.
The audit also revealed, for the first time, that Mark Gotbaum, son of ex-DC37 executive director Victor Gotbaum, got $8,670 in the early 1990s for drawing cartoons for DC37’s newspaper. Although working as a freelancer, he also got union-covered health benefits. Reportedly, Victor Gotbaum agreed with Hill, his successor, to get health benefits for Mark Gotbaum.
The audit also described 1,219 transactions for $270,786 as gifts. The recipients of the gifts were identified for $107,150 of transactions but were not identified for $163,635. The audit recommended that DC37 increase accountability, improve compliance with union rules, and adopt an ethics code. [Newsday 5/15/01; N.Y. Times 5/16/01] The Nat’l Legal & Pol’y Ctr., a union corruption watchdog, has also recommended expanding the coverage of the federal anti-corruption law, the Landrum-Griffin Act, to include public unions, such as DC37.