LIUNA Puts Corrupt Southern Illinois Local Under Trusteeship

Laborers International Union of North America Local 773 has had quite a few problems, especially in the area of anger management. That’s why the old guard is no longer in charge. On September 1, LIUNA General President Terry O’Sullivan (in photo) announced in a letter that he was placing the Southern Illinois-based local under an emergency trusteeship in the wake of reports that several of its leaders had engaged in acts of corruption or intimidation. He justified the takeover as a necessary step to counteract “the breakdown in governance, leadership and democratic procedures brought upon by recent events.” That might be putting it mildly. John Penn, an international union vice president and regional manager, will run the local in the interim.

Laborers Local 773 represents more than 4,500 private-sector and government employees in 41 states. Headquartered in Marion, Ill., it carries enough civic clout to get a street named after a former local leader, Edward Smith. Recent leaders, which include Smith’s son, seem to believe that high community status provides a shield of immunity from bad behavior. In his notice, President O’Sullivan listed five alleged incidents or recurring problems: 1) the carrying of firearms by the local business manager in a threatening manner and his causing of others to carry firearms; 2) the business manager’s resignation from the board of trustees for a number of union trust funds; 3) acts of intimidation against local office employees; 4) improper financial practices, including records concealment, by more than one local executive board member; and 5) a breakdown in cooperation between board members.

The longtime business manager of Local 773, Kevin Starr, was a key figure in this gallery of rogues. Starr, who also served as treasurer of the union’s political arm, the Southern and Central Illinois Laborers Political League, reportedly used a gun in a threatening manner at union hall meetings. Moreover, he induced other union members to do likewise at other official functions. He also resigned as a trustee of local benefit funds, though O’Sullivan’s letter was not specific as to what precipitated his departure.

Another departed local official is Treasurer John Price. Until January 2015, Price had been a board member of the Alexander County, Ill. (Cairo) Housing Authority and the union representative in collective bargaining talks. The U.S. Department of Housing and Urban Development (HUD) is seeking his debarment, claiming that his dual role constituted a conflict of interest. If HUD does debar Price, he will be ineligible for three years to participate in any program involving federal funds. HUD also is seeking the indefinite debarment of two former housing authority executive directors, James Wilson and Martha Franklin. And it recently dismissed all union workers there, arguing that the authority could not afford to pay the contracted wages and benefits. HUD re-advertised these mostly part-time positions as nonunion ones, a move that resulted in Local 773 filing an unfair labor practice suit currently pending before the Illinois Labor Relations Board.

Two other Local 773 officials managed to get into trouble for things unrelated to their union duties. Paul Prendergast, local in-house counsel, left the union following his guilty plea earlier this year to two counts of felony drunk driving. He had been arrested and charged in June 2016 to those offenses, plus simple possession of marijuana and drug paraphernalia. Much more seriously, local President Matthew Smith, son of former President Edward Smith, is facing a second-degree domestic battery charge related to an incident in Cape Girardeau, Missouri. Police records show that on August 10, 2016, Smith threw a rock at the head of his then-fiancee, and then took her cell phone and threw it into a bush to keep her from calling police while he drove away. During her statement to the cops, the woman recalled an incident about a year earlier in which Smith had kicked her in the head and broke her neck. There was more. According to Union County (Ill.) police, on July 18, 2014, Smith broke into the home of an earlier girlfriend, pulled her out of bed and tossed her against a wall. He was charged with felony trespassing, felony vandalism, and misdemeanor domestic battery. Smith and his lawyer eventually worked out a deal in which he would plead guilty only to a new misdemeanor vandalism charge, undergo counseling and compensate the victim’s medical expenses. Running a powerful union local apparently has its advantages.

For nearly two decades, Terry O’Sullivan has been running Laborers International Union of North America, now with around 550,000 members in the U.S. and another 80,000 in Canada. He’s seen his share of corruption. During late 1994 and the early weeks of 1995, during the tenure of his predecessor, Arthur A. Coia, the union was on the verge of being slapped by the Department of Justice with a massive civil racketeering suit. Thanks in no small measure to Coia’s close friendship with President Clinton, the DOJ backed away from the suit and settled for a union self-reform program to be supervised by former federal prosecutor Robert Luskin. The arrangement lasted until 2006. As for Arthur Coia, he pleaded guilty in January 2000 to tax fraud in a federal case in Rhode Island. The last thing O’Sullivan needs is a reputation for turning his eyes from wrongdoing within his union. A trusteeship for Local 773 makes sense for all concerned.