Union official
seeks probe of N.J. local
By Maurice Possley
See Lm2s for Local 734 See salaries for all New Jersey Local union
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Tribune staff reporter See
Order for voluntary supervision of local 734 of October 28, 2002
which did not clean up corruption-why not is the question-what
corruption did Pocino overlook? why? Was Michael Pagano an auditor?)
January 9, 2005
A hearing officer for Laborers' International Union of North America,
which represents about 800,000 (550,000 is
approximately correct per Jim McGough) workers nationwide,
including 20,000 in Chicagoland, has urged
a criminal inquiry into alleged fraud, waste and organized crime
influence at a New Jersey local.
Following allegations of corruption and waste in Local 734 and its
benefit funds, the local in Rochelle Park, N.J., near Newark, was placed
into emergency trusteeship last October by Terence O'Sullivan, general
president of the international.
In a
ruling dated Dec. 30, union hearing officer Peter Vaira declared
that beginning about 1996, August "Auggie" Vergalito, a former executive
board member and assistant business manager, and his family members and
friends "devised a scheme to defraud" the union and its welfare plans. (Decision not available on LIUNA's web site for members as of
1/09/2005 because of typical LIUNA incompetence and because GEB Attorney
Luskin will not force LIUNA to publish charges and decisions much less
secret settlement agreements on its web site-per Laborers for JUSTICE
Jim McGough)
On Friday, attorneys for two current trustees of the pension and benefit
funds filed a lawsuit in U.S. District Court in Newark seeking damages
from current and former employees and officials of the union and funds
as a result of the conduct outlined in Vaira's ruling.
Ex-officer linked to mob
Vergalito is an associate of the Genovese organized crime family in New
York, Vaira said in the ruling.
Vergalito pleaded guilty in 1997 to hiding payments made from the
Laborers' International's benefit funds and was placed on probation. Two
years earlier, in 1995, Vergalito's son-in-law Edward Dolan, then the
benefit funds administrator, had been convicted in federal court in
Newark of a labor violation in a ghost-payrolling scheme.
Since then, according to the Vaira ruling, several of Vergalito's family
members have been put on the payrolls of the local and the funds at
"grossly excessive" salaries for doing little or no work.
The decision listed as questionable the salaries of Vergalito's wife as
well as daughters and their husbands and other relatives and associates
totaling more than $3.8 million.
For instance, one of Vergalito's daughters, Jamie Dolan, who is Edward
Dolan's wife, was hired to listen to voice mail messages from members
who phoned with questions about benefits or other matters.
"In reality, she came into the office and took the messages off the
voice mail two days a week," according to Vaira's decision.
In 2003, when she responded to 109 telephone calls, she was paid
$111,799--a little more than $1,000 per call, according to the decision.
At the same time, Vergalito's wife was hired to handle the same
job--responding to telephone messages left during the evenings--for
$1,000 a week, the decision states, although she earned more than
$80,000 in 1999.
`Grossly excessive' salaries
Vaira noted that the local's welfare and education fund spent up to 20
percent of its contributions and the pension up to 40 percent of its
contributions for these "grossly excessive" salaries.
"Normal administrative costs are between 7 and 10 percent," the ruling
said.
Four years ago, Vaira, a former federal prosecutor in Chicago who is now
an attorney in Philadelphia, ordered the ouster of three men from two
Chicago locals of the Laborers' International Union, citing their ties
to organized crime. At the time, Vaira concluded that brothers Frank and
Bruno
Caruso and their cousin, Leo Caruso, were under the control of
organized crime bosses who used them to manipulate affairs at Locals
1006 and 1001.
Another questionable payment uncovered by union investigators was the
hiring of a bookkeeping firm that was paid $182,000 a year, but whose
expenses consisted of hiring a bookkeeper for $650 a week.
Hotel socializing
According to evidence presented by lawyers representing the union,
Vergalito and Peter Rizzo, an assistant administrator for the benefit
funds until last September, were seen at the SoHo Grand Hotel in
Manhattan on several occasions in the company of members of the Genovese
crime family, including Dominick Cirillo, the acting boss.
"One does not meet on a regular basis with high-ranking members of a
major crime family by accident or for purely social purposes," Vaira
said in his decision.
Calling the fraud "continuous and so notorious" and a "disgrace to the
labor movement," Vaira directed that his findings and evidence presented
at hearings before him in November and December be forwarded to the FBI
and the New Jersey attorney general's office.
Copyright © 2005,
Chicago Tribune
Laborers for
JUSTICE© 1997-2004 All Rights reserved. Not for republication on the
internet without permission.
Jim McGough, Director
2615 West Peterson Avenue
Chicago, Il 60659
773-878-1002 (tel)
773-409-1503 (eFax number)
laborers@comcast.net
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