Feds Probe Free-Spending Boilermakers Local in Pittsburgh

Boilermaker at workWhen it comes to living large, no union is quite the match for the International Brotherhood of Boilermakers.  And the IBB appears to be setting an example for its local affiliates.  Late last month, KDKA, the CBS television affiliate for the Pittsburgh area, confirmed that the FBI has launched an investigation of the Pittsburgh-based Boilermakers Local 154.  The union, which represents more than 2,000 welders, pipefitters and other construction workers, may have diverted as much as $1 million in member dues for unauthorized expenditures during the three most recent fiscal years.  The probe is based on financial reports submitted to the U.S. Labor Department’s Office of Labor-Management Standards.

Union Corruption Update back in May 2012 discussed at length the extravagant salaries and benefits enjoyed by board members, officers and staff at the International Brotherhood of Boilermakers’ home base in Kansas City, Kansas.  The article, based on an expose by the Kansas City Star of union tax records and financial reports submitted to the Department of Labor, described a clear pattern of excessive pay for active and retired top brass.  Well over half of the nearly 125 employees at headquarters, in fact, received annual compensation of at least $100,000.  IBB President Newton Jones and extended family members made out especially well.  The union wasn’t bashful about spending what it took in, shelling out more than $500,000 alone on maintenance and fees of its two planes, often to travel to distant luxury hotel-spas.  Relatively little money, by contrast, went for core representation.  Remarkably, even with outsized pay, union officials have felt a compulsion to steal.  In 2013, IBB training fund manager Angela Heninger pleaded guilty in federal court to defrauding the union of about $50,000, despite her nearly $175,000 salary and benefit package.  And the $50,000 figure was a fraction of the missing $480,000.

Boilermakers Local 154 seems to be inspired by such behavior.  An investigation by KDKA reporter Andy Sheehan revealed that a large portion of local expenditures for fiscal years 2012, 2013 and 2014 were listed as “gifts.”  Though recipients could not be identified, such outlays included:  $27,000 at Best Buy; $48,000 at the Apple Store; $28,800 at Drum World; $19,000 at Tumi Luggage; and $6,000 at a sunglasses store in Miami, Florida.  The Pittsburgh local didn’t skimp on travel and entertainment either.  Records show spending figures of $11,400 for events at Staples Center in Los Angeles; over $20,000 for tickets for Pittsburgh Penguins hockey games; and $70,000 for catering and bar tabs at upscale Pittsburgh-area restaurants.  The biggest ticket of all was closest to the local office:  more than $1 million to build a banquet facility across the street.  The operation reportedly has failed to generate anticipated revenues.

Whatever connections such expenditures may have to union business, the local hasn’t made them explicit.  Sources told Sheehan that federal investigators are focusing on former business manager Ray Ventrone, who resigned in March.  When reached by phone, Ventrone had no comment.  Neither did the current business manager, John Hughes.  IBB central offices issued the following statement:

The International Brotherhood of Boilermakers (IBB) has been informed that there is an ongoing investigation of some individuals currently and/or previously associated with Local Lodge 154.  The authorities have asked IBB not to comment on that investigation, which it will not, other than to state that IBB is conducting its own investigation and is fully cooperating with the authorities.

It is gratifying that the international union is showing concern over excessive and possibly illegal spending by one of its locals.  It would be even more gratifying, however, if it were to apply the lessons of the investigation to its own practices.