Outside of Laborers Local 91, no union in the country as of late has epitomized the domino theory of guilty pleas as much as Local 1 of the International Union of Elevator Constructors. In the latter half of July not less than nine members of the New York City local pleaded guilty in federal court to their role in running a construction ghost-worker scheme at the New York City Metropolitan Transit Authority Building at 2 Broadway in Lower Manhattan. This is on top of the convictions earlier in the month of members Timothy Grimm and Thomas Harrington. In all cases, the principals received three years probation, and in most cases they were ordered to make restitution and/or forfeiture payments. The guilty pleas follow a joint investigation by the Labor Department’s Office of Labor-Management Standards and Employee Benefits Security Administration, plus the FBI and the IRS.
The ball started rolling on July 19. Robert Bull, Edward Connolly, John Quinn and John Mills, all local members, were sentenced to three years probation and ordered to pay a $200 special assessment. Mills and Connolly additionally were barred from holding union office or affiliated positions for a period of up to 13 years. Six days later, on July 25, Robert Dunbar received three years probation for making false statements in the course of the investigation. But the biggest catches were yet to come.
On July 27, two sets of defendants entered guilty pleas. In the first instance, members Edward Lynch and Richard Brady were ordered to make payments on top of their probation sentences. Lynch was ordered to pay nearly $200,000 in restitution to defrauded contractors and more than $65,000 in forfeiture payments to defrauded union benefit plans; Brady had to pay $67,165 in restitution to contractors and another $19,000 to the benefit plans. Each also was barred from holding a position within the union for up to 13 years, as specified under the Landrum-Griffin Act. In the second instance, Anthony DeGennaro and his wife, Susan DeGennaro, in addition to getting three years probation, were ordered to make restitution and forfeiture payments. Mr. DeGennaro, the key witness in the trial of convicted Local 1 Executive Vice President Charles Novak, was ordered to pay nearly $925,000 in restitution to the defrauded contractors and $398,000 in forfeiture payments to affiliated benefit plans. Mrs. DeGennaro’s required restitution and benefit-plan forfeiture payments, respectively, were $44,694 and $189,000.
The sentences are the latest in a series resulting from a federal probe into alleged corruption plaguing IUEC Local 1 for more than a decade. Last October, officials from the Justice Department and the Labor Department announced that the union had agreed to be placed under the supervision of an independent federal monitor; its leaders would avoid prosecution provided its leaders implemented key internal reforms over the next three years. By that time, the investigation already had produced more than three dozen convictions of persons belonging to or affiliated with Local 1, any number of whom had associated with known mobsters. Nobody ever said reform was easy.