NJ Local Bosses Accused of Gross Nepotism

Some of the highest-paying jobs at Local 734 of the Laborers Intl. Union of N. America — which represents thousands of workers in New Jersey and Pennsylvania — had little to do with digging ditches.  There was the wife of one former union official, who was hired after her husband was convicted on federal labor law violations for attempting to create a no-show job.  She received $111,799 to come in twice a week to listen to voice mail messages from members with benefits questions.


Then there was the accountant who paid his mother-in-law $650 a week for part-time work as a bookkeeper while charging the local’s pension and welfare funds $182,000 a year for her services.  And the business partner of another former official who was hired as the office manager of a satellite office at the Jersey Shore and paid $123,500 to supervise two people.


The Laborers’ union now is seeking a federal investigation into the New Jersey local, claiming that members were defrauded of more than $2 million in a scheme that saw the hiring of relatives and business cronies to perform “non-essential, part-time and ruse jobs at grossly excessive salaries,” reports Ted Sherman of the Newark Star-Ledger.


In a lawsuit filed last week in U.S. District Court in Newark, LIUNA trustees said Local 734 was riddled with no-show jobs and ill-defined, overpaid positions — many of them connected to former executive board member August “Auggie” Vergalito, who left the local after he pleaded guilty in 1997 to unlawfully concealing payments he made from the welfare and educational fund.  Among those who benefited included his wife, a daughter, three sons-in-law, a former son-in-law and two business associates, the lawsuit claimed.


In New Jersey, an independent hearing officer for the union, Peter F. Vaira, the former U.S. attorney for the Eastern District of Pennsylvania, concluded that most of the jobs held by Vergalito’s family and friends were of little value to the union’s operation.  For example, he noted that Jamie Dolan — a daughter of Vergalito who was married to Edward Dolan, a Local 734 official — was hired as a confidential officer for the local after her husband was convicted in 1995 on federal embezzlement charges.


Dolan’s job required her to be on call from Friday through Monday, and listen to voice mail messages from members trying to resolve benefits questions.  “In reality, she came into the office and took the messages off the voice mail two days a week,” Vaira found. In 2003, she responded to 109 calls — earning a salary of $111,799.


“This averages to approximately two calls per week, at approximately $1,000 a call,” Vaira said in his findings, which were filed with the federal lawsuit.


The hearing officer also raised questions about the local’s connections to organized crime. According to Vaira, Vergalito was observed by an FBI surveillance team entering the Soho Grand Hotel in New York about the same time as Dominick Cirillo, identified then as the acting boss of the Genovese crime family.  He said Vergalito was seen at the hotel on at least 13 separate occasions in 1999 — often on Wednesdays — and was seen in the company of Cirillo at the hotel bar at least once. [Newark Star-Ledger, 1/13/05]