Cleveland-Area Steelworkers President Pleads Guilty to Obstruction, False Statements, Tax Fraud

For David Sager, it was a reasonable tradeoff. Put another way, he could have done worse. On June 30, Sager, formerly president of United Steelworkers Local 5000, pleaded guilty in Cleveland federal court to one charge each of obstruction of justice, making false statements to law enforcement, and filing a false tax return. In return, prosecutors agreed to drop 29 other charges, mostly related to his embezzling over $180,000 in funds from the Middleburg, Ohio union and extracting over $200,000 in payments from unionized Great Lakes shipping companies in exchange for his assurance that he would go easy on them come contract renewal time. Sager had been indicted last September and this April. The actions follow a probe by the IRS and the U.S. Labor Department’s Office of Labor-Management Standards.

Union Corruption Update has analyzed this case twice before (here and here). David Sager, now 59, a resident of Gibsonburg (near Sandusky), Ohio, served as president of United Steelworkers Local 5000 during 1999-April 2016. Unfortunately, during much of the latter part of his tenure, he helped himself more than he helped his union. According to federal prosecutors, Sager during 2010-12 had vendors issue checks totaling $182,659.68 from a strike fund that had been created in 2009 in anticipation of a (realized) strike. He used much of the money to make mortgage payments, property tax payments and home repairs. He also made false statements to federal investigators who had been looking into the missing funds and failed to report these sums to the IRS as taxable income. In a separate set of events, Sager received approximately $230,000 in payments from a joint employment trust set up through at least five union shipping firms in return for his promise to skirt certain issues when pressing contract demands. This pay-for-play practice is illegal under the Taft-Hartley Act.

Sager was forced out of his union once the details of the probe became known. As part of the plea agreement, lawyers for both sides will request a prison sentence of between 12 to 18 months. Under sentencing guidelines, the judge may split that sentence between prison and either a halfway house or home detention. In addition, Sager and his wife must relinquish nearly $33,000 in proceeds from the sale of their home.