Last week, the New York Times reported that Manhattan Federal District Court Judge Charles S. Haight Jr. ordered a one-year continuation of governmental oversight of the New York City carpenters’ union, citing recent bribery convictions of several local bosses, extensive off-the-books work, and an incident where union militants beat up a worker outside a Catholic school until he was unconscious (because he had the gall to challenge the insiders in a union election).

The union has spent the last 14 years under government supervision after signing a consent decree in a civil racketeering case alleging organized crime figures were favored for high-pay but no-show jobs. Regardless, union officials felt it necessary to argue in court that they do not need supervision. Their thugs all but erased any chance of that when they assaulted a dissident candidate.

Judge Haight agreed with the United States attorney’s argument that supervision would end when the union’s corruption had been eradicated. However, as blogger Warner Todd Huston noted, “The judge did mention that the union had done better since it originally went into government oversight, but that it is way too early to claim that the Mob influence and corruption is excised from the union.”

Indeed, the only reliable way to end this union corruption would be to end compulsory unionism.

Yesterday, the Wall Street Journal had a great editorial up on the hypocrisy of SEIU leadership. Andy Stern and his cronies are more intent than ever on blackmailing unwilling companies into forcing SEIU "representation" on their employees through a series of vicious corporate campaigns:

SEIU President Andy Stern is the drama king of Big Labor, and Thursday's publicity blitz will feature all of his signature choreography: Rallies in 18 states and even overseas, in which thousands of union activists will march against companies and politicians they don't like. Themes include "Buyout Monsters On the Loose" and "The War on Greed." To listen to Mr. Stern, this is about getting Congress to close tax "loopholes" for private equity firms, while funding national health care and "middle class" tax cuts.

That's a sideshow. The real targets are private equity firms such as Kohlberg Kravis Roberts and Carlyle Group, which own companies that have resisted SEIU attempts to organize their workers. Mr. Stern wants to pound these firms with bad publicity and political retribution until they break.

What's worse, it turns out that the SEIU's activism is apparently being funded illegally. Just today, Foundation president Mark Mix requested a Department of Justice investigation into new SEIU directives allowing Andy Stern to impose financial penalties on any local affiliate that doesn't meet mandatory political fundraising targets. Not only that, but local unions may be forced to pay the SEIU's fines with money collected from nonmember employees' compulsory agency fees. We hope that the DoJ and the Department of Labor will move quickly to investigate this apparent criminal activity (the Foundation's press release is available here).

Given the SEIU's checkered past, these new developments aren't particularly surprising. But aggressive union activism does have a cost. Devoting untold sums of money to intimidating employers evidently comes at the expense of the union's so-called "representation":

Mr. Stern's "middle class" spin would be more believable if the SEIU did more for its own members, especially their pensions. Public records based on the SEIU's own filings show that the SEIU National Industry Pension plan – which covers some 101,000 workers – was only 75% funded in 2006. Put another way, the plan had only three-fourths of the money it needs to meet its retirement obligations. And the national chapter is only the start. Some 13 local SEIU pension plans in 2006 were less than 80% funded; several didn't reach 65%.

Some of this might be the result of poor investment performance, but the main problem is that the SEIU hasn't negotiated adequate employer contributions to the plans.

The SEIU's top brass, on the other hand, is guaranteed generous compensation funded by employees' mandatory dues-payments. Too bad the workers they're supposed to be representing don't receive similar benefits:

On the other hand, SEIU leaders are highly attentive to their own pension funding. A separate fund run by the national union, this one covering the benefits of SEIU officers, was 103% funded in 2006. The top SEIU guns are set for their golden years.

Read the whole sordid tale here.

In May, a devastating piece from the Far Left New Republic highlighted the Teamsters' officials attempts to get rid of the Independent Review Board (IRB), a federal oversight body intended to police the union's well-documented connections to organized crime. Here's a particularly choice example of Teamster union "representation" from the article:

But Hoffa's efforts [to get rid of the IRB] were derailed by a sensational IRB report that appeared late that year detailing the efforts of Chicago Teamsters, working with a Chicago labor broker, Richard Simon, whom Stier [a former federal prosecutor] would later describe as "having ties to organized crime," to undermine a Teamster local in Las Vegas by negotiating non-union, low-wage agreements to service the city's numerous business conventions.

Now a former Teamsters boss has written in to announce he's shocked - shocked - by the magazine's allegations of corruption. Having already been ejected from the union by the IRB for innappropriate conduct, his credibility on this issue is somewhat strained. Fortunately, the author ably defends his original contentions:

The IRB found that the two men [two Teamsters officials -- one of whom wrote in to object to the first article] tried to get the Teamsters local 631 in Las Vegas, which provided workers to convention shows, to allow Richard Simon, a Chicago labor broker, to provide non-union workers to conventions. The workers, which would be provided by Simon's United Temps, would not receive benefits or overtime. All in all, they would earn less than half of the Teamster workers; and under the labor agreement that the Teamsters had with the conventions, Simon's cut-rate contract could then become the standard for all convention employees. The Teamsters would be screwed, but Simon would come out ahead, and so would Hogan's brother Michael, who was the vice president of Simon's company, and also the head of a convention company that would be hiring Simon's workers.

Notably, the IRB's investigation was later validated by a federal court:

"Having carefully reviewed the hearing record," the Appeals Court wrote, "we concluded that the IRB's findings are supported by substantial evidence, are not arbitrary or capricious, and plainly demonstrate that Hogan and Passo were negotiating a contract that they knew would have harmed the union."

While more oversight may seem desirable, it's no substitute for real reform. Corruption will remain endemic to labor unions like the Teamsters as long as union officials have access to a bottomless source of mandatory dues payments. Furthermore, the entire structure of monopoly bargaining gives employees no meaningful recourse to combat union fraud and corruption, as union officials are essentially installed for life as workers' sole representatives [this National Institute for Labor Relations Research paper is good primer on the relationship between compulsory unionism and union corruption].

Good-faith efforts at union oversight are also vulnerable to changes in the political environment. According to this Wall Street Journal article, one presidential candidate has already announced his support for dismantling the IRB and giving the Teamsters free reign to police themselves. Unfortunately, we already know how that strategy will turn out (from the original TNR article):

To build an argument for getting rid of the IRB, Hoffa set up his own internal oversight group. It was called RISE (or Respect, Integrity, Strength, and Ethics) and was run by a former federal prosecutor and organized crime expert Ed Stier.

. . .

For Stier, however, those hopes were dashed the next year when he began investigating Chicago-area Teamster locals for corruption. As he later detailed in a report, Stier discovered "multiple issues related to organized crime [and] corruption" in Local 714, and similar issues in five other area locals. The report concluded, "Issues related to organized crime infiltration and associated corruption in the Chicago area are numerous and cut across jurisdictional lines." But in the fall of 2003, as Stier was still in the midst of his investigation, the Teamster leadership began objecting vociferously to it, and in February 2004, Hoffa shut it down.

A recent U.S Court of Appeals ruling found several National Association of Letter Carriers (NALC) union officials guilty of violating the Labor-Management Reporting and Disclosure Act. The decision resolved a 1994 suit brought by David Noble, a postal worker who alleged union officials -- including a former NALC president -- funneled workers' dues into unmonitored expense accounts.

Judge Williams' concurrence features some particularly choice tidbits on the NALC's corrupt practices:

"Placing union money in the officers’ hands, solely on those same officers’ bland assurances that it will be used for union business, completely subverts the [NALC constitution] clause’s obvious goal of preserving accountability."

He also chides his two colleagues on the panel for refusing to punish union officials for excessive "per diem" expenditures:

At every biennial convention after 1964, a small group of unnamed delegates received a “per diem” payment calculated on the basis of certain estimated expenses: lost wages, hotel rooms, and meals and incidentals. Noble argued in the district court that the presidentially appointed Committee on Mileage and Per Diem asked each post-1964 convention to approve these payments without informing the delegates of two facts: (1) that the union’s officers were among those receiving per diem payments, even though they continued to earn their salaries and thus had no “lost time” (unlike rank-and-file mail carriers); and (2) that the union had already paid (in full or part) for most officers’ hotel rooms, transferring the union’s hotel discount to the officers’ benefit. Thus, the members were unaware of these costs’ peculiarities — peculiarities that might well have been material to their decision.

[Emphasis added]

Full text of the decision can be found here (pdf). More Freedom@Work posts on union corruption available here, here, and here.

While the ruling is welcomed, the fact remains that regulatory oversight of unions -- rather than simply stripping union bosses of the government-granted special privileges that facilitate the corruption -- results in little more than make-work for federal bureaucrats.

For two weeks now, Freedom @ Work has covered the indictment of twelve union officials in Upstate New York for a laundry list of criminal activity that includes a stabbing and death threats. Nonunion employers and employees were targeted in an effort to push more workers into the union officials' forced dues-paying ranks.

A local paper even compared the acts depicted in the indictment to an episode of the HBO hit TV show The Sopranos.

The latest video added to the National Right to Work Foundation's YouTube video channel shows just how brutal these union officials' acts were by simply quoting word for word from the 62-page indictment.

Today, National Right to Work Legal Defense Foundation staff attorney Glenn Taubman filed official comments with the Department of Labor regarding a proposal to mandate public financial reporting for union trusts.

As yesterday's post on $25 million that was misused from five union pension funds makes clear, these trust funds can be used to funnel money to things ranging from the Democrat party to strip clubs and horse farms. Any increased disclosure would be a step (though perhaps only a small one) in the right direction.

One area that the Foundation's comments focus on is the loophole for so-called "sensitive information":

This "sensitive information" exception to full disclosure is simply a loophole allowing union and trust fund officials to unilaterally determine what disclosure must be made public, and then hide a vast array of questionable expenditures. Financial reports of trust fund operations and expenditures can never be considered "confidential" information, because this money is owned by the employees, not the union or trust fund officials. Fiduciary agents have no right to maintain secret record or engage in secret transactions that are purposefully hidden from principals - the employees who are the actual owners of the funds.

Expect Big Labor to fight tooth and nail any proposal that would give employees better access to information about the money they are being forced to hand over to union and trust fund officials.

The Chicago Sun Times reports that $25 million from five union pension funds have been misused by a Chicago firm that specializes in managing union pension funds. Such funds are funded from employees' paychecks and normally all employees under a union contract - even if they don't want to be - are forced to pay money in. Often the pension funds are then used as de facto slush funds for union officials.

According to reports, one million dollars were funneled into political organizations including "Citizens for a Greater Detroit" and the Michigan Democrats. Money was also used to buy a Detroit strip club, a Michigan horse farm, and millions were used for "travel and entertainment" for clients including private jets, Vegas nightclubs and Super Bowl tickets.

Since the firm specializes in managing union pension funds, the "clients" being entertained were likely union officials who were effectively ripping off the very employees they claim to represent. It is also unlikely that it is a coincidence that the political money went to the union's political allies.

The Department of Labor is suing the firm to try and recover the funds, but if unions didn't have the power to force employees to accept their "representation," employees would not have been compelled to fund these pension plans in the first place.

Here is a copy of the indictment of twelve Operating Engineers Local 17 union officials we first discussed last week.

The 62-page indictment details a brutal and sustained campaign by union officials to terrorize employees and employers, in an effort attack employers whose workers haven't chosen unionization, and to force employees into forced-union dues paying ranks. Included in the indictment is a 33 page list of 75 individual acts of thuggery that includes:

• A stabbing
• A broken windshield that cut an employee's face
• Hundreds of thousands of dollars in vandalized construction equipment
• Threats against nonunion workers
• Running the license plates of nonunion employees
• Slashed tires
• Threats against going to the police
• Locking employees in and out of their workplace
• Throwing coffee at employees and their vehicles
• Sabotaging construction equipment
• The use of "star nails" to flatten employees' tires
• Death threats

In Upstate New York non-union workers were targets of a campaign of violence and intimidation by Operating Engineers Union Local 17 thugs:

The indictment accuses Local 17 leaders and members of dozens of threats and instances of vandalism and harassment against non-union workers and contractors. At times, members of other unions were also targeted.

Much of the activity took place at major publicly funded construction projects, including the expansion of Roswell Park Cancer Institute and renovations at Ralph Wilson Stadium, Buffalo State College and the Buffalo Sewer Authority’s treatment plant on Bird Island, prosecutors said.

One of the disturbing aspects to the case, in Flynn’s view, is that members of the local repeatedly used the Web site of the state Department of Motor Vehicles to find out the addresses of people they intended to harass.

Union members went to construction sites and took photos of the license plates of vehicles used by construction company executives or non-union workers, Flynn said.

“Then, they would use that information to find out where these people lived, and where their families lived,” Flynn said. “They would then make threats against people, mentioning their home addresses.”

At times the union officials' actions seem to be out a script for a Hollywood mafia movie:

According to prosecutor Charles B. Wydysh, [union organizer] Larson had a conversation in 2003 with an official of a construction firm, STS. The conversation took place about two months after a union member had stabbed the owner of STS in the neck in an Orchard Park bar.

The STS representative is quoted in court papers asking Larson what his company would gain by hiring members of the union.

“What are the positives?” the company official asked Larson. “You guys slash my tires, stab me in the neck, try to beat me up in a bar. What are the positives in signing? There are only negatives.”

“The positives,” Larson answered, “are that the negatives you are complaining about would go away.”

News of a 170-page federal indictment handed down over the weekend could've come straight out of The Sopranos. According to The Jersey Journal:

The business manager of a Jersey City labor local is among
more than 80 people charged by federal and New York
officials this week in a massive sweep they say also netted
key leaders of the Gambino crime family.

The indictment details how the union official helped "Fat Joe" Agate get fraudulent union credentials and access to a union job site. The indictment was part of a mob crackdown that reached as far away as Italy.

What a slap in the face to workers in New Jersey forced to pay union dues that they have to pay the salaries of union officials charged with such crimes.