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Bureau of National Affairs labor report
1/05/2004
Laborers Union Seeks Trusteeship of
Chicago Local Suspected of Organized Crime
Affiliations
CHICAGO--A battle is shaping up between
the Laborers International Union of North
America and Local 1001, long reputed to be
a hotbed of organized crime activity, as
the international union attempts to impose
a trusteeship on the Chicago-based local.
Representatives of the local told BNA Dec.
22 they will vigorously fight LIUNA 's
trusteeship
complaint, asserting that the
international union has pieced together a
case based on uncorroborated allegations
and flimsy evidence. The local represents
approximately 2,700 laborers. Most of the
local's members are employees of the city
of Chicago's sanitation, aviation, and
transportation departments.
But LIUNA 's Office of the General
Executive Board Attorney, which is
responsible for investigating and
prosecuting cases of misconduct within the
union, insists that Local 1001 has been
controlled by La Cosa Nostra (LCN) or the
"Outfit," as it is known in Chicago, for
more than three decades. During this
period, the union alleges, leaders of the
local ignored democratic practices and
made nearly $1 million in improper
payments to pension and health and welfare
funds on behalf of nonemployees and known
organized crime figures.
"Local 1001 has a long history of LCN
influence over its affairs," the Office of
the GEB Attorney said in its complaint.
"LCN associates have served as officers,
executive board members, auditors, and
business agents of Local 1001 from the
1970s to the present. The local has not
had a single contested election since at
least 1972, and all changes in officers
have taken place in midterm appointments."
Luskin Filed Complaint Sept. 24
Robert Luskin, LIUNA 's GEB attorney,
filed a complaint for trusteeship against
Local 1001 on Sept. 24. The local's
decision to oppose the complaint launched
an adjudicatory process through which
Luskin must justify a trusteeship. Peter
Vaira, LIUNA's independent hearing
officer, is overseeing that process.
The international union's complaint was
filed after talks failed to reach terms
with the local on a voluntary supervision
agreement. Leaders of the local in January
said that they were willing to yield
control to former Illinois Attorney
General Roland Burris. But Luskin rejected
the choice of Burris for the post of
supervisor, arguing that he did not have
enough labor union experience. (See
Tribune article)
Chicago attorney Matthias Lydon, who is
representing the local in the proceedings,
said hearings have been held before Vaira
and that both sides are developing final
briefs, which are due by Jan. 21. Lydon,
of the firm Winston & Strawn LLP, said the
local expects Vaira to issue a decision on
the trusteeship sometime in February.
Luskin's complaint contends that at least
10 current or former officers of the local
are, or were, associates of the "Outfit."
Currently, according to the complaint,
four of the six executive board members of
Local 1001 are associates of organized
crime, including business manager Nicholas
Gironda, the local's primary executive.
The complaint portrays Gironda as a "bag
man"--someone who collects cash payments
on behalf of organized crime--for Chicago
mob figures and as a known associate of
the "Outfit."
The complaint also says that Local 1001
was the home base of Bruno Caruso, its
business manager and president until 2001.
Caruso challenged Arthur Coia for the
LIUNA presidency in 1996. On Jan. 10,
2001,
Vaira issued an
order that
characterized Caruso as a "trusted
associate" of the Chicago Outfit and then
barred him from the union for life (10 DLR
A-6, 1/16/01).
Complaint Says Mob Controlled Local for 30
Years
The complaint contends that organized
crime maintained its control over the
local for 30 years by choosing and
installing officers and board members
through midterm appointments. As a result,
the complaint states there has been no
contested election for any post at Local
1001 since 1972.
In addition, the complaint says
racketeering activity occurred when
pension and health and welfare fund
contributions were made on behalf of
individuals who were not employees of the
local. In total, 33 individuals benefited
from this practice. In one case, the local
contributed funds for 18 years on behalf a
known associate of organized crime who was
never employed by the local.
The local made improper pension
contributions totaling nearly $400,000 to
the 33 individuals. Another $434,000 in
improper health and welfare contributions
were made on behalf of the same 33
individuals. Within this group, the
complaint says that 13 are known
associates of organized crime.
The complaint charges that these
contributions constitute violations of
LIUNA 's ethical code as well as the
federal Racketeer Influenced and Corrupt
Organization Act, the Employee Retirement
Income Security Act, and the Labor
Management Reporting and Disclosure Act.
Local Says Evidence Not Credible
Lydon characterized the GEB attorney's
allegations as "outrageous" and said the
evidence presented during the hearings
thus far has not been credible.
"We are unimpressed with the evidence
presented by the GEB Attorney," Lydon
said. "The testimony about associations
with organized crime came from a former
FBI agent who said his sources were
confidential and couldn't be revealed. A
lot of the information was nonspecific and
in many cases there was no corroboration."
Jim McGough, the leader of a Chicago-based
union reform effort known as Laborers for
Justice, said Local 1001's legacy of
corruption and associations with organized
crime is well known in law enforcement
circles.
"A trusteeship is definitely warranted--no
ands, ifs, or buts about it," McGough
said. "Of course we need to have a
trusteeship that is done properly and
professionally."
By Michael Bologna
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