Union Corruption In Your Face-Its Deeper and Darker Than You Ever Thought
Yahoo news reports that a partner of an accounting firm specializing in organized labor plead guilty Thursday August 22, 2002 in federal court to charges of helping leaders of the iron workers international union hide $1.5 million in entertainment and dining expenses on annual disclosure reports to the Labor Department.
Frank J. Massey, 50, a certified public accountant and partner in the Washington offices of accounting firm Thomas Havey LLP, agreed to cooperate with the government in its criminal investigation of embezzlement and fraud at the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers. The union has about 140,000 members.
Investigators say Massey's cooperation could widen the investigation to include other unions. Thomas Havey is the auditor for more than 700 union-bargained benefit plans and Massey worked with a number of international unions based in Washington.
Thomas Havey issued a statement Thursday August 22, 2002 stating:
"Our firm deeply regrets any harm resulting from the actions taken by our former partner Mr.. Massey that led to his guilty plea today. His conduct is clearly unacceptable and completely deviates from the values and code of conduct at Thomas Havey LLP."
Unions in the United States are required to file annual financial disclosure reports with the US Labor Department, and the criminal investigation into the iron workers union comes as agency officials are considering changing the forms to require more detailed information. The investigation also coincides with the recent string of corporate accounting scandals that many unions have criticized as we reported in this thread.
"In the age of Enron, this is evidence that loose accounting practices extend beyond corporate America," Labor Department spokeswoman Sue Hensley said.
In this thread we reported of another Thomas Havey accountant, Alfred S. Garappolo, pleaded guilty in June to helping an iron workers union bookkeeper conceal her embezzlement of payroll checks from a training fund. Other corruption updates for iron workers can be found here.
Massey pleaded guilty in U.S. District Court for the District of Columbia to one felony count of aiding a conspiracy to defraud the government and union members and making false statements, and could face a maximum prison sentence of five years and a fine of up to $250,000. He agreed to pay a $30,000 fine and $5,000 to the Labor Department within 30 days.
Federal prosecutors said Massey helped leaders of the iron workers union hide and underreport their expenses for golf, food, alcohol and other entertainment at restaurants and country clubs by claiming them as educational and publicity costs or office and administrative expenses.
Union officers and others spent nearly a half million dollars at the Prime Rib Restaurant in Washington from 1992 through 1998. That's on top of another $1 million paid directly to union officials or establishments for their dining, drinking and entertainment, prosecutors said.
Besides the two accountants, five former union officials and employees have pleaded guilty to various embezzlement and conspiracy charges. Former union president Jake West and former union secretary LeRoy Worley are awaiting trial.
Jake West, was an executive member of the AFL-CIO, and the former president of the ironworkers' union who had held the post for twelve years.West was arrested on August 28, 2001 while having dinner in a prominent upscale Washington, D.C., restaurant and charged in federal court with embezzling more than $50,000 in union money to pay for vacations and other personal expenses.
The 49-count indictment in federal court in Washington alleges that West used union funds for such things as dinner parties, vacations and golf outings. The indictment stems from a federal investigation of the union's finances that began in 1998. West has repeatedly denied any wrongdoing and has since retired.
Take a moment to reflect before you re-affirm that there is not even a remote possibility that your union-local may have corruption within it ranks. If a union with only 140,000 members can have this much corruption despite government laws to discourage and prosecute illegal acts against members and the government, what shape are Canadian unions in?
There are no laws federally or provincially in Canada that have the same regulatory power that the United States has. Although not all unions or locals in Canada need to put under a close financial scrutiny you have to at least wonder what "evil grows in the dark" in your union when no stops and checks even exist. Will your union be next to be investigated or will you or your felow members on your own initiative, investigate how and where your dues money is really being spent? It just may be deeper and darker than You ever thought or wanted to think.