October 24, 2000 
  Investigative Report 
  Cloud of Corruption Around Democrats’ Union Patron
  AFSCME and Its President, Gerald McEntee, Have Given Party More Than $3.6 million 
 By Charles Lewis and the Center for Public Integrity
 (Washington, August 9) By 1996, there had been much mutual back-scratching
  between the Teamsters, the White House, and the Democratic Party. And so a
  deal was struck, a complicated scheme that happens to have been illegal:
  The Teamsters would continue to pour unprecedented sums into the
  Clinton-Gore campaign and Democratic Party committees, and in exchange, the
  Democrats would help to finance Teamster President Ron Carey’s own
  re-election campaign. They couldn’t do that directly, of course, so the
  money was laundered through a liberal public-interest organization, Citizen
  Action, and through other groups, including the National Council of Senior
  Citizens and Project Vote.
  Federal law prohibits employers from contributing to any union election.
  More than $4 million in Democratic National Committee money moved to Citizen
  Action and other groups, and at least $885,000 in union funds was illegally
  diverted into Carey’s re-election campaign.
  Today, the carnage from this scandal casts a pall over the entire labor   movement.
  Three individuals pleaded guilty to embezzlement, mail fraud, and conspiracy
  and cooperated with the federal prosecutors. (One of them, Michael Ansara,
  continued to do major consulting business with the DNC via his company, the
  Share Group .) A fourth, William Hamilton, a former political director of
  the Teamsters union, was found guilty in November 1999 and sentenced to
  three years in prison. The AFL-CIO’s No. 2 official, Richard Trumka, whoas
  secretary-treasurer signed some of the checks, has asserted his Fifth
  Amendment right against self-incrimination – to federal prosecutors, to a
  court-appointed labor investigator, to a congressional committee, and even
  to AFL-CIO president John Sweeney.
  It’s difficult for many labor insiders to accept that Trumka hatched such a
  plan. No one seems to know for sure how the high-level labor conversations
  exactly went with respect to the illegal scheme involving the Democratic
  Party and the Teamsters, but Gerald McEntee, the president of AFSCME and the
  chairman of the AFL-CIO’s political committee (a position he assumed in
  1995), certainly was involved.
  He has had a close personal friendship with Carey. McEntee retained an
  attorney, paid for by AFSCME, to represent him in the Teamsters matter and
  admitted to federal prosecutors that he sought a campaign donation of
  $20,000 to the Carey campaign from the owners of a company that does major
  business with AFSCME. Kelly Press, Inc., is barred by federal law from
  contributing to a union campaign, and McEntee apparently broke
  government-imposed rules for union elections by soliciting an AFSCME
  supplier. Paul Booth, an aide to McEntee who’s married to Heather Booth, a
  former DNC official and a founder of Citizen Action, also has said that he
  raised tens of thousands of dollars for Carey.
  “What we did, according to our attorneys, was nothing illegal,” McEntee told
  the Center for Public Integrity. “We cooperated fully and completely with
  the people who were investigating this case, and that’s about the size of
  But there is, as they say, much more to the story.
  McEntee has been the president of the nation’s largest union of public
  employees since 1981, after the death of Jerry Wurf. Wurf, who boosted the
  union’s membership from 200,000 to roughly one million – organizing police
  officers, firefighters, sanitation and hospital workers and other government
  employees from coast to coast – was enormously respected for his honesty and
  his independence. A case in point: He opposed the U.S. involvement in the
  Vietnam war, to the consternation of George Meany, then the president of the
  Under Wurf, AFSCME became known as a pioneer in aggressively recruiting
  women and blacks. It is a forgotten footnote of history that it was the
  mostly black, striking garbage workers who in April 1968 drew the Rev.
  Martin Luther King Jr. to Memphis, where he was assassinated, were AFSCME
  In McEntee’s two decades of stewardship, AFSCME’s membership has grown only
  modestly, and no one seems to know the exact number. The union’s annual
  reports to the Labor Department have suspiciously listed the same membership
  figure for the past five years: 1.3 million. As in many unions today,
  secrecy reigns. It is not well known that the progressive union respected
  for its commitment to civil rights and diversity -- it once brought Nelson
  Mandela to speak to its national convention -- was sued by 10 employees for
  race discrimination. AFSCME settled all the cases out of court.
  “McEntee was made aware of the situation and he did not take steps to deal
  with it,” a union insider told the Center. “If you set a permissive
  environment, if people get a sense that discrimination doesn’t matter, then
  it will reverberate throughout the organization.”
  Long considered one of the “clean” unions, a cloud of corruption has now
  begun to surround AFSCME. Besides the Teamsters scandal that’s swirling
  around McEntee and his aide Paul Booth, in recent years no fewer than six
  AFSCME international vice-presidents have been forced to resign. Consider
  the following:
  In New York City, Stanley Hill, the executive director of AFSCME District
  Council 37, retired after spending several months on unpaid leave pending
  investigation. Two of his top aides resigned following their admissions that
  they had helped to rig the vote on the local’s 1996 contract ratification.
  Also in New York City, Albert Diop was removed in 1999 as the president of
  an AFSCME clerical workers local. Diop and three others charged more than $1
  million in personal expenses on their union credit cards and spent nearly
  $1.2 million on undocumented “hospitality” payments when traveling. Diop
  spent more than $600,000 to rent a penthouse apartment and ran up $162,431
  in hotel charges in New York City for 446 nights, including 128 on weekends,
  even though he has a residence in the city. He also spent nearly $135,000
  over three years to lease a Lincoln Town Car even though he already had a
  $665-a-month automobile allowance.
  In Connecticut, Dominic Badolato was expelled from AFSCME for using illegal
  strong-arm tactics against his political opponents. In Boston, Joseph
  Bonavita had to leave his union after an audit revealed he had been paid
  $82,416 in unauthorized bonuses and undocumented reimbursements. In Iowa,
  Don McKee was convicted of helping himself to $43,000 in union money. And in
  Pennsylvania, Earl Stout was convicted of racketeering, embezzlement, and
  mail fraud.
  “Wherever we have found this [corruption], we have rooted it out, and we
  have either suspended or dismissed the union leaders that were involved,”
  McEntee told the Center. “We are a good union, we are a clean union.”
  Perks have increased
  When Wurf died, he was making about $108,000 a year in salary and allowances
  and had refused a raise. By 1998, McEntee was making $375,000 a year, and he
  also got his friendly board to adopt a deferred compensation plan so that
  when he retires he will receive nearly 100 percent of his salary. “I think
  you ought to get decent pay, a decent pension, decent benefits,” McEntee
  told the Center.
  AFSCME also provides McEntee with a car and a chauffeur as well as an
  $1,800-a-month automobile expense allowance. Sources told the Center that
  McEntee spends more than $100,000 a year in AFSCME funds to travel around
  the United States on charter jets and stay in the finest hotel suites, and
  he is a fixture at such “power lunch” expense-account restaurants in
  Washington as The Palm, where his caricature is on the wall. None of this
  information, of course, is in AFSCME’s annual reports to the Labor
  Department .
  Referring to McEntee and, in general, the unseemly extravagances of today’s
  union leaders, a veteran AFSCME member who asked that his name not be used
  told the Center, “They think they’re becoming the captains of industry, for
  chrissakes! . . . I guess they forgot what they’re supposed to be doing.”
  Benefited from vendors
  The Center has learned that McEntee personally benefited from the
generosity of certain AFSCME vendors, a violation of union rules.
  Consider the case of Kelly Press, which contributed $20,000 to the Teamster
  election at McEntee’s urging. Over the years, the company has gotten
  millions of dollars in printing business from AFSCME . McEntee and Paul
  Kelly, a co-owner of the company, frequently play tennis at Congressional
  Country Club in Bethesda, Md., where Kelly is a member, and sources told the
  Center that McEntee has been an occasional guest on the Kellys’ fishing
  boat. The relationship goes back at least a decade: When McEntee was
  remarried, Kelly arranged for the wedding reception to be at
  “The only way that you can have a wedding there is that a member has to
  sponsor you,” McEntee told the Center. “So the Kellys sponsored us.”
  Close to President Clinton
  No union president is closer to Bill Clinton today than McEntee; the two men
  have assiduously courted each other for nearly a decade now. AFSCME was the
  first national union to back Clinton, even before the 1992 New Hampshire
  primary, when he was still a dark horse. Clinton had spoken to the AFSCME
  board, and he brought along a letter of support from 840 AFSCME members in
  Arkansas. He even showed them his own AFSCME membership card. Days later,
  McEntee assigned three staff members to work for Clinton in New Hampshire.
  And so it began.
  Since 1993, McEntee has reveled in his personal access to the president.
  From the private St. Patrick’s Day party at the White House and various Rose
  Garden events, to trips on Air Force One and Friday night bull sessions at
  the White House mess, McEntee, to quote a veteran union insider, “got lost
  in space over that stuff.” (“I’ve only been on Air Force One maybe six  times
  – that’s six times in eight years – so it’s not like I take a trip every
  three weeks,” McEntee told the Center.)
  At McEntee’s 60th birthday celebration a few years ago at Washington’s
  Capital Hilton hotel, Clinton spoke warmly about how McEntee had always been
  there for him. McEntee and AFSCME have certainly been there financially for
  Clinton and his party, more than anyone else in America, to the tune of more
  than $3.6 million.
  The union has an elaborate get-out-the-vote operation, a voter registration
  effort and an extensive phone bank system, in addition to the contributions
  to politicians that it has made at all levels of government. McEntee led the
  AFL-CIO’s highly publicized $35 million ad campaign in 1996. And McEntee,
  the Center has learned, called a meeting to personally urge higher-ups at
  AFSCME to make contributions to the president’s legal-expense fund.
  Unfortunately, such access comes at a steep price. On policy issues of
  greatest concern to AFSCME’s members, in public McEntee has been largely
  silent. McEntee doesn’t criticize Clinton by name, and if he feels obligated
  politically to criticize the administration, which is rare, he has sometimes
  called the White House in advance to explain it and quietly warn Clinton and
  his staff.
  Ralph Nader vs. McEntee
  Take, for example, the subject of national health care insurance. For years,
  AFSCME had advocated the liberal “single payer” plan with the greatest
  government role – not surprising for a union whose largest contingent is
  325,000 health and hospital workers. But under the Clinton-McEntee spell,
  the union muted its public advocacy for this policy and fell in line behind
  the White House. As the Center described in its 1994 study, “Well-Healed:
  Inside Lobbying for Health Care Reform,” just weeks before Clinton’s
  inauguration in January 1993, there was a high-level, unusual confrontation
  at AFSCME headquarters between Ralph Nader and McEntee.
  Nader invoked the example of Franklin Roosevelt, after he had been elected
  president, telling his supporters, “You elected me, now go out there and
  make me do it.” Nader argued that advocates of a single-payer approach could
  not squander the opportunity and had a moral obligation to speak out
  forcefully. By contrast, McEntee stressed the extraordinary access they all
  now had after 12 years of being completely shut out. The basic response was,
  “We’re going to handle this our way, behind the scenes.”
  AFSCME chose not to wage a postcard campaign, or to support a very public
  bus caravan to Little Rock, Ark., to promote the single-payer option. And in
  early 1993, at a meeting of the AFL-CIO health care committee, McEntee and
  AFSCME voted in favor of managed competition, abandoning its long-held
  single-payer position. AFSCME also poured money into television “issue ads”
  in support of the Clinton health care plan – ads that were intended to
  counter the highly effective “Harry and Louise” commercials paid for by the
  insurance companies. In addition, the Center has learned that when the
  president and the first lady embarked on a bus tour “to the heartland” to
  garner public support for the administration’s ill-fated plan, McEntee’s
  union agreed to help pay for it.
  The bottom line, however, is that during the 1993-94 struggle over health
  care reform, organized labor, including AFSCME, was politically ineffective
  and ultimately unsuccessful.
  McEntee remains unbowed
  McEntee remains unbowed about his inside approach, however. In the spring of
  1996, he met with Clinton, urging that the White House address the public
  concern over managed health care, and months later the president named
  McEntee to a commission on health care quality.
  The “reinventing government” mantra of the Clinton-Gore administration has
  presented McEntee with an interesting problem, as AFSCME faces initiatives
  nationwide to privatize many traditional state and local government
  functions – which, on its face, is a direct affront to the union’s
  membership. McEntee’s public position is to support the idea of making
  government more efficient and responsive by eliminating red tape and
  redundant management, and to decry privatization when it cheats citizens by
  failing to provide adequate services by trained employees. AFSCME forged an
  innovative privatization agreement with the Republican mayor of
  Indianapolis, Stephen Goldsmith, in which the local union avoided mass
  layoffs. McEntee has testified before Congress that AFSCME regularly wins
  back 80 percent of privatized contracts, by bidding successfully or working
  with management to redesign the system in lieu of privatization.
  Back-door concessions 
  McEntee was not directly critical of the president when he proposed welfare
  reform, which union leaders have estimated could cost more than 200,000
  jobs, and got it enacted. But he and other union leaders successfully
  lobbied the administration – over Republican opposition on Capitol Hill – to
  rule that people who must work for their welfare benefits are protected by
  federal labor law and entitled to the minimum wage.
  McEntee and others were able to gain another back-door concession. In a
  March 28, 1997, meeting with the president, McEntee, Sweeney, and two other
  union presidents urged Clinton to reject a request by Texas Gov. George W.
  Bush, a Republican, for federal permission to allow private companies to
  manage several Texas welfare programs, which could have meant the loss of
  5,000 public jobs. Weeks later, Clinton sided with McEntee and labor, which
  Bush complained would cost the state $10 million a month.
  Anya Richards of the Center for Public Integrity contributed to this report,
  excerpted from The Buying of the President 2000 (Avon Books), by Charles
  Lewis and the Center for Public Integrity.

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