January 21, 2000
Details Corruption Within Government Union
Praised; U.S. Oversight Is Eased
Union Against Theft
By STEVEN GREENHOUSE
In internal union report lays out a picture of extensive corruption in
the nation's largest union of government employees, the American
State, County and Municipal Employees.
The report, which
was made available by a union official eager to have
take a tougher stance on corruption, provides an unusual
look at a major
union's internal problems and describes corruption far
beyond the well-known
scandal at the union's giant New York City
In all, the report
describes corrupt activities by 35 union officials, ranging
from the $2.2
million known to have been misappropriated by an official
Council 37, to $96,000 stolen by the treasurer of Local 366 in
$51,000 taken by a senior official at District Council 20 in
In dry language,
the report describes how union officials forged checks,
withdrawals from union accounts, siphoned union
dues into their
personal accounts and used union credit cards for
The report is
a comprehensive list detailing the $4.6 million in claims that
the union made
to its insurance company, seeking reimbursement under a
covers fraud by union officials. The report involved claims
Since many unions
do not release information about internal corruption, it
how the amount stolen compares with what has
other unions, particularly those better known for struggling
But the report offers an unusually detailed portrait of
at a union that is on the rise in influence and power.
is the nation's second-largest union, a 1.4-million-member
that recently surpassed the Teamsters in size, while
the National Education Association. The union's
McEntee, is chairman of the A.F.L.-C.I.O.'s political
is one of labor's most prominent backers of Vice
Gore and has overseen more than $4 million in contributions
causes over the past three years.
the accuracy of the information contained in the
with the American Federation of State, County and
known as Afscme, insisted that corruption was no
worse in their
union than in many others. These officials said that the
to the success of the union's stepped-up up efforts to
and uncover financial wrongdoing.
More than half
the claims arise out of New York's District Council 37,
with 56 union
locals, in which two dozen officials have been indicted.
claims involved locals in Indiana, Massachusetts,
New Jersey, Ohio and Pennsylvania.
has happened to this union in the past five years," said
executive director of the Association for Union Democracy, a
"Things have fallen apart in many, many regions. It
like this. Clearly, whatever McEntee's strengths are, he has
a blind eye to a lot of this."
the union's general counsel, said that considering
how many locals
are in the parent union, it is not extraordinary that there
were some corruption
problems in a dozen or two locals.
"I think Afscme
is cleaner than most unions," Mr. Weinberg said. "When
you add up all
this union's locals and chapters, we have between 7,000
and 8,000 subordinate
bodies, and what you're looking at is a pretty
out of that universe."
In many cases,
union-sponsored audits uncovered the thefts detailed in
In addition, officials accused of theft have usually been
their jobs, and some have been indicted. Several of the
37 officials involved in the claims have pleaded guilty to
the union said that in 1998 the union, concerned about
in New York City and elsewhere, adopted tighter
requiring, for instance, annual audits of any union
local or district
council with more than 2,000 members.
"We have an aggressive
auditing program," Mr. Weinberg said. "We
have a zero-tolerance
policy for wrongdoing. We believe we're more
cleaning up than any other union. There may be a price to
pay for that.
This type of information comes out. But we're doing all the
Some labor experts
said that the corruption in the union, while
did not approach levels seen decades ago in three unions that
or influenced by organized crime: the Teamsters, the
Longshoremen's Association and the Laborers' International
Union of North
the state, county and municipal employees' union,
Edward A. McDonald,
former director of the Organized Crime Strike
Force for Eastern
New York, said: "Any time you have multiple acts of
an international labor organization, it doesn't look good, but
if there are
3,000, 4,000 locals and you're talking about three dozen
certainly not a crime wave. But the corruption that's reported
pales in comparison
to the racketeering activities that characterized
unions throughout the 70's and 80's."
said one explanation for the corruption was that the union
is highly decentralized,
so that its locals have more financial autonomy
than most other
One episode of
reported corruption described in the report involves
who was ousted from his job as treasurer of the
representing 220 sewer workers after a bookkeeper
some money was missing. A union audit reported that
Mr. Gordon had
apparently embezzled $96,000 by writing 208 checks
to himself that
were not approved and were not used for union purposes.
Mr. Gordon has
not been indicted. His lawyer, Gerald Boyle, said his
client was talking
to law-enforcement officials and working with union
will take care of making sure that whatever needs to be put
back into the
union's coffers is put back," Mr. Boyle said.
a top official with the union, said: "We hold ourselves
to very high
standards, not only in Afscme, but in Wisconsin.
is things like that don't happen here."
The report said
that Steven K. Grubb, the treasurer of a municipal
in Elkhart, Ind., wrote $13,500 in union checks for his
Linda Ard, executive
director of the council representing all of the union's
in Indiana, said Mr. Grubb had been removed from office
when the local's
other officers uncovered the theft.
"This is not
anybody's personal money," she said. "This money belongs to
of the union." She said that Mr. Grubb had admitted to
that he siphoned off the money. Mr. Grubb has not been
involved the president of a Long Island chapter of the
union, who the
union said stole $14,870.
Pasquale Ferraro, was removed by a union judicial panel,
has repeatedly denied any wrongdoing.
an agent for the union's insurance company, St. Paul
"I don't know if they have more claims than other
unions. I don't
find them to be extraordinary or unextraordinary."
Like most other
unions, the federation of state, county and municipal
what is known as a fidelity bond insurance policy that
reimbursing the union if an official commits dishonest acts
that cause the
union to lose money.
Mr. Twigg said
his company examines all such claims to make sure they
The report did
not mention several prominent episodes of corruption not
covered by the
claims report. In 1998, for example, the
of the union's district council in Washington, Thomas
W. Waters, pleaded
guilty to embezzling $761,000, while the council's finance
T. Wood, confessed to stealing $73,500.
In the claims
that St. Paul Companies processed from last Oct. 1 to Nov.
22, the report
said, the company paid $605,000 of $2.6 million in claims.
The main reason
the company paid less than the amount sought was that
the union claimed
$2.2 million for money it said was stolen by Charles
former president of a local in District Council 37,
New York City's school crossing guards and cafeteria
aides. The policy
covering Mr. Hughes provided a maximum of
reimbursement to the union.
Mr. Hughes has
been charged with embezzlement. Sarita Kedia, Mr.
said yesterday that her client was not guilty of any