AFSCME Gangsters
         January 21, 2000

          Report Details Corruption Within Government Union 

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               In internal union report lays out a picture of extensive corruption in
               the nation's largest union of government employees, the American
          Federation of State, County and Municipal Employees. 

          The report, which was made available by a union official eager to have
          the federation 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
          affiliate, District Council 37. 

          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
          at District Council 37, to $96,000 stolen by the treasurer of Local 366 in
          Milwaukee to $51,000 taken by a senior official at District Council 20 in

          In dry language, the report describes how union officials forged checks,
          made unauthorized withdrawals from union accounts, siphoned union
          dues into their personal accounts and used union credit cards for
          personal expenses. 

          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
          policy that covers fraud by union officials. The report involved claims
          pending last November. 

          Since many unions do not release information about internal corruption, it
          remains unclear how the amount stolen compares with what has
          happened at other unions, particularly those better known for struggling
          with corruption. But the report offers an unusually detailed portrait of
          internal problems at a union that is on the rise in influence and power. 

          The federation is the nation's second-largest union, a 1.4-million-member
          organization that recently surpassed the Teamsters in size, while
          remaining behind the National Education Association. The union's
          president, Gerald McEntee, is chairman of the A.F.L.-C.I.O.'s political
          committee. He is one of labor's most prominent backers of Vice
          President Al Gore and has overseen more than $4 million in contributions
          to Democratic causes over the past three years. 

          While acknowledging the accuracy of the information contained in the
          report, officials with the American Federation of State, County and
          Municipal Employees, known as Afscme, insisted that corruption was no
          worse in their union than in many others. These officials said that the
          report attested to the success of the union's stepped-up up efforts to
          audit locals 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.
          Other corruption claims involved locals in Indiana, Massachusetts,
          Minnesota, Montana, New Jersey, Ohio and Pennsylvania. 

          "Clearly something has happened to this union in the past five years," said
          Carl Biers, executive director of the Association for Union Democracy, a
          watchdog group. "Things have fallen apart in many, many regions. It
          wasn't always like this. Clearly, whatever McEntee's strengths are, he has 
          been turning a blind eye to a lot of this." 

          Lawrence Weinberg, 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
          small number out of that universe." 

          In many cases, union-sponsored audits uncovered the thefts detailed in
          the report. In addition, officials accused of theft have usually been
          stripped of their jobs, and some have been indicted. Several of the
          District Council 37 officials involved in the claims have pleaded guilty to

          Officials with the union said that in 1998 the union, concerned about
          spiraling corruption in New York City and elsewhere, adopted tighter
          auditing procedures, 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
          aggressive in 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
          right things." 

          Some labor experts said that the corruption in the union, while
          lamentable, did not approach levels seen decades ago in three unions that
          were controlled or influenced by organized crime: the Teamsters, the
          International Longshoremen's Association and the Laborers' International
          Union of North America. 

          Speaking about 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
          corruption in 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
          people, it's certainly not a crime wave. But the corruption that's reported
          pales in comparison to the racketeering activities that characterized
          certain mob-dominated unions throughout the 70's and 80's." 

          Mr. Weinberg said one explanation for the corruption was that the union
          is highly decentralized, so that its locals have more financial autonomy
          than most other unions. 

          One episode of reported corruption described in the report involves
          Robert Gordon, who was ousted from his job as treasurer of the
          Milwaukee local representing 220 sewer workers after a bookkeeper
          discovered that 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
          officials. "We will take care of making sure that whatever needs to be put
          back into the union's coffers is put back," Mr. Boyle said. 

          Richard Abelson, a top official with the union, said: "We hold ourselves
          to very high standards, not only in Afscme, but in Wisconsin. 

          Our expectation is things like that don't happen here." 

          The report said that Steven K. Grubb, the treasurer of a municipal
          workers' local in Elkhart, Ind., wrote $13,500 in union checks for his
          personal benefit. 

          Linda Ard, executive director of the council representing all of the union's
          8,000 workers 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
          the members of the union." She said that Mr. Grubb had admitted to
          union officials that he siphoned off the money. Mr. Grubb has not been

          Another claim involved the president of a Long Island chapter of the
          union, who the union said stole $14,870. 

          The official, Pasquale Ferraro, was removed by a union judicial panel,
          although he has repeatedly denied any wrongdoing. 

          Glenn Twigg, an agent for the union's insurance company, St. Paul
          Companies, said, "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
          employees has what is known as a fidelity bond insurance policy that
          provides for 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
          are valid. 

          The report did not mention several prominent episodes of corruption not
          covered by the claims report. In 1998, for example, the
          secretary-treasurer of the union's district council in Washington, Thomas
          W. Waters, pleaded guilty to embezzling $761,000, while the council's finance
          director, Barbara 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
          Hughes, the former president of a local in District Council 37,
          representing New York City's school crossing guards and cafeteria
          aides. The policy covering Mr. Hughes provided a maximum of
          $500,000 in reimbursement to the union. 

          Mr. Hughes has been charged with embezzlement. Sarita Kedia, Mr.
          Hughes's lawyer, said yesterday that her client was not guilty of any

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