08.27.2014 2

Like day follows night, union corruption continues

right to work slays big labor in Michigan

By Nathan Mehrens

This Labor Day weekend as you see labor union leaders extolling the supposed virtues of their organizations, remember that like day follows night, union corruption continues. At the federal level, in fiscal year 2013, the latest year for which complete data is available, the U.S. Department of Labor’s Office of Labor-Management Standards (OLMS) obtained 97 indictments and 116 convictions of union officials for crimes against their members. The number of convictions is down slightly from fiscal year 2012 (121) and the same as in fiscal year 2011 (116).

The trend continues. Here are a few examples.

In Michigan, a dues clerk for a local union of the International Brotherhood of Electrical Workers (IBEW), Ann Marie Shaffer, pled guilty to embezzling $101,059. The plea agreement details that she stole this money from her members by means of a receipts side embezzlement scheme. For approximately two years Shaffer, who was the union officer responsible for receiving money, engaged “in a check substitution scheme whereby she received dues remittance checks from employers and set them aside without properly recording them.” Then, after ”an equal amount of cash was received [she] embezzled the cash by replacing it with the unrecorded checks. As the income from the checks was not properly recorded, the deposit appeared to balance.” Shaffer will be sentenced later this year.

These receipts side embezzlement schemes are exactly the type of scenario that prompted the U.S. Department of Labor under President George W. Bush to update the reporting regulations as they apply to union receipts. At the urging of its union allies, the Obama Administration rescinded these particular reporting requirements. As a result, the thefts were much easier for Schaffer to conceal. While Shaffer’s thefts were eventually discovered, almost five years elapsed between when they began and when charges were filed against Shaffer. If the Bush era regulation had remained unchanged, these thefts would likely have been discovered much earlier because they would have been harder to conceal. Ironically, at the time this regulation was under consideration, the IBEW strenuously objected to it in general and specifically this provision because of their belief that, “of all the changes, this is the most burdensome.”

To rectify situations such as this, Sen. John Thune (R-S.D.) has introduced the Union Transparency and Accountability Act. The Act once enacted would reinstate the previous transparency requirements for labor unions, helping members better police them.

From another IBEW local in Ohio, Ronald Karr, the secretary-treasurer, was sentenced after he pled guilty to embezzling $158,100. James Jones, the business manager for yet another IBEW local in Texas pled guilty to stealing $11,164 from the union and its apprenticeship and training committee.

Out west in California, Adam Raimer, a secretary-treasurer for a local union of the Amalgamated Transit Union, was sentenced for embezzling $41,429. Continuing the western theme, Britta T. Duncan, a union treasurer, was sentenced and ordered to pay restitution of $41,183 for her embezzlements against a local union of the International Longshore and Warehouse Union. She also falsified records in an attempt to cover up her thefts.

Down south in Alabama, Harold Ray, secretary for a local union of the National Association of Letter Carriers pled guilty after being indicted for embezzlement of $38,565.

In Illinois, a state home to much corruption in general, Natasha J. Bever, the secretary-treasurer for a local union of the Communications Workers of America was sentenced after pleading guilty to embezzling $149,404. Bever, who had access to the local union’s payroll account decided to pay herself more than authorized, a practice she continued for approximately five years. In another Illinois case, James E. Charleston, the president of a local union of the American Federation of Government Employees pled guilty to a count of mail fraud in connection with a scheme to embezzle funds. He was ordered to pay restitution of $102,784.

All of these crimes were committed against union members, the very people that unions ostensibly exist to help. Some help that is.

Sen. Thune’s bill is needed to bring better accountability and transparency for union members. This will help union members better exercise their democratic rights within their unions and clean house. That’s something we should all be behind.

Nathan Mehrens is president of Americans for Limited Government and previously served in the U.S. Department of Labor’s Office of Labor-Management Standards.

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