Union Fund Embezzlements 'Epidemic,' Analyst Says

July 7, 2008 - 8:32 PM

(CNSNews.com) - Eleven union officials were indicted and eight were convicted in August on charges of embezzling union pension funds, following probes launched by federal auditors and investigators at the U.S. Department of Labor.

According to a report released Monday by the department's Office of Labor-Management Standards (OLMS), 84 indictments for corruption have been issued thus far in 2007, leading to the conviction of 108 union officials.

All told, nearly 800 convictions have been obtained since 2001, with court-ordered restitution exceeding $101 million, said Deputy Assistant Labor Secretary Don Todd, who announced the report's release.

In the largest enforcement effort, Jorge Aponte-Figueroa, the former president of the International Longshoreman's Association Local 1740 in San Juan, Puerto Rico, was sentenced to five years in prison and three years of supervised release for embezzling $1.9 million in union funds. He also was found guilty of falsifying records and money laundering.

Union officials were quick to dismiss the report. Teamsters Union spokeswoman Leslie Miller called the government statistics meaningless.

"Unless you look at the entire universe of (pension) funds, what does 11 indictments mean? It really doesn't mean anything," Miller told Cybercast News Service.

But Ken Boehm, chairman of the National Legal and Policy Center, said union embezzlements and financial misdeeds have become epidemic -- a fact the OLMS report documents and which the media largely ignores.

"There is rampant corruption -- it's persistent," Boehm said. "It's largely embezzlement, but it is no longer limited to what they call the 'historically corrupt' unions -- Teamsters, Laborers, and so forth. One of the biggest corruption cases involved the teachers union in Washington, D.C., with close to $5 million embezzled."

Indeed, misuse of union pension funds is being conducted on an increasingly grand scale. Boehm pointed out that in one West Coast case, union officials embezzled $200 million from a pension fund.

"The biggest tragedy of all is that Congress recently cut back the amount of funds being used to investigate corruption, presumably for political reasons," he added.

In August, congressional Democrats on the House Appropriations Committee succeeded in cutting $47.7 million in funding for the OLMS out of the Labor-HHS-Education appropriations bill for fiscal year 2008 (H.R. 3043).

The Washington Times reported that during debate on an ill-fated amendment to reinstate the funding to last year's level, Rep. Patrick Kennedy (D-R.I.) accused the Labor Department's union watchdog unit of going after "people who are trying to earn a living."

The House, on a 276-140 vote, subsequently passed H.R. 3043 without the OLMS funding. The measure is currently awaiting a Senate vote.

Boehm is incredulous. "It makes no sense," he said. "This was done by members of Congress who are funded by the unions. But I would argue that if you are pro-union and a member of Congress, you should want to have union corruption probed.

"One of the main reasons why, year after year, union membership figures drop, is that individual workers are fed up with corruption. People are voting with their feet and are leaving unions," Boehm added.

Unions, however, don't see the enforcement effort as protecting the rank-and-file, said the Teamsters' Miller. They see it as government harassment, pure and simple.

"George Bush's Labor Department protects worker's rights the way George Orwell's Ministry of Truth portrayed propaganda," she said. "This is an administration that attacks working people, and it attacks them through the unions and this what the Labor Department is doing."

Nevertheless, the Labor Department pledges to continue to investigate corruption, according to Deputy Assistant Labor Secretary Todd.

"OLMS is as committed as ever to protecting union members from criminal activity by those entrusted to represent them, and we will maintain efforts to uncover wrongdoing against the rank-and-file," he said.

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