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How Corporate Right Lies About Union Corruption

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Well, the corporate right has launched a new anti-labor front group called UnionFacts.org, dealing in dark tales of union corruption promoted by the former head of the Beverage institute, the nice folks who tell the public soda pop has no role in childhood obesity.

But it's a good chance to walk folks through how corporations lies about things like union corruption. Not that among the 15 million union members and tens of thousands of union staff, there aren't a few bad folks, but what's amazing is how much the opposition has to lie and pump up the numbers to make it seem at all significant.

For example, check out the site's page on "Union Leader Fraud & Corruption". They list $400 million in "labor racketeering" fines and civil restitution in the last five years. Sounds bad for the union leaders, but since the information come from the Labor Departments Office of Inspector General, let's go to that department's labor racketeering site.

Check out their Statistics page on the righthand side and, yep, there are the same numbers as on the anti-union site.

But let's look in more detail at what counts as "labor racketeering" by readng the most recent "Semi-Annual Report to the Congress" by the Office. It's a PDF so scroll down to page 33 where the Labor Racketeering part starts. Some of the problems are very real, including fighting crime influence on the east coast longshoremen union, but when you get to the money fines, suddenly the defendants largely stop being union officials, but instead are businesses that defrauded the unions-- ie. the unions were the victims not the criminals.

Here are a few examples:

Peter Wong, who controlled Pacific Group Medical Association (PGMA), pled guilty on June 14, 2005, to charges of insurance fraud and money laundering. In 1997, PGMA failed with more than $18 million in unpaid medical claims, making it one of the largest health plan failures in Hawaii’s history. PGMA had provided health coverage for 26,000 people, including members of the United Public Workers Union Local 646.

On August 22, 2005, Robert Boyd, a former Evergreen Securities Ltd. official, was sentenced to 37 months imprisonment and three years probation. On October 3, 2005, Martin Boelens, Jr., another company official, was sentenced to 46 months imprisonment and three years of supervised release. Both were ordered to pay more than $25 million and $14 million respectively, in restitution for fraudulently obtaining monies from investors and pension funds to be used for their personal benefit and that of others.

In April 2005, Dennis Lambka and Ronald Bray, officers of Simplified Employment Services, were sentenced to 54 months and 60 months in prison respectively, and both received three years probation. They were also ordered to pay, jointly and severally, restitution of $55,136,267. Lambka and Bray previously pled guilty to charges of conspiracy to commit the following offenses: embezzlement from an employee benefit plan; defrauding the United States; and bank fraud. Restitution will be paid to the victims of the embezzlement schemes which resulted in unpaid medical bills.

In fact, almost all of the big money associated with the $400 million figure in labor racketeering was committed by private industry AGAINST unions, not by union officials.

But that's how you lie with statistics. Throw around a word like "labor racketeering" while only talking about union officials and leave the impression that the crime only involves acts by unions, not acts where unions and their members are the victims.

Any union illegal conduct should be rooted out, but in a world of multi-billion corporate corruption, unions are pure as snow, especially in comparison to the criminals running corporate America.


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Thanks! Part what your post shows is that the union haters,presumbly Republicans for the most part, are smart enough to know that even though a dog has been steadily kicked for years, it may not be dead.

A good example of the be-all-end-all politics of today's Repo party.  Juxtaposed with Bush's "Trust me" is the campaign to smear and slander any person, political entity, organization, publication the very existence of which  threatens to weaken its hold on the American people.  And that is the sum-total of their political philosophy and practice.

It's amazing how brazen this group is at assuming the facts from the "Semi-Annual Report" can be restated as "labor racketeering", implying that it's all a report on the racketeering occuring at the behest of organized labor.

Even a cursory glance a the report reveals that the Inspector General distinguishes between those people involved in racketeering as "internal" - those w/in the union, and "external" - people engaging in illegal activities where the victim is a union or its membership.  

 This group is disgusting and it's important that people quickly debunk this tripe.
 

This information is so insane.  This discussion is now going to make its way to my TA discussion on Labor and Work in the US....in fact I might just use the information on their website to specifically slam each issue they raise and I will most likely use your points, nathan at least I can educate some freshman and sophmores on how screwed up companies are in this country.

The Cranky Historian

Nathan! I was afraid you weren't contributing to this site anymore since the House of Labor was gone.

 

Keep up the good work!  

 

The Cranky Historian

OK, good example of misusing data for propaganda purposes.  Clearly the flacks who write for this site are not above misleading stats. 

 

But then you mar what would otherwise be an informative post with a bit of propaganda of your own.  Unions are "pure as snow compared to the criminals running corporate America?"

 

Excuse me?  On what basis would you make such a preposterous statement?  By saying that, you are simply the mirror image of the you criticize - just another hack throwing out wildly hyperbolic statements to fire up supporters and perhaps snare a few others who aren't well informed.  What a shame.

Or to put the issue somewhat differently, why does the Department of Labor's OIG list the fines and recoveries under the heading of Labor Rackteering Investigations?

 

If these frauds against union benefit plans did not involve corrupt union officials, then, it seems to me the Department of Labor is libeling union officials and Nathan's righteous anger should be directed at the Department and its OIG even before attacking the anti-union PR shop.

 

Why aren't you angry at the Department, Nathan? 

I was not saying that unions are "pure as snow", just pure as snow compared to corporate America, where fraud is far more pervasive and costly, as the report I cited makes clear since the large dollars of fraud involved is almost solely corporate fraud.

Sorry, but that's bullshit. The only thing you can say is that there were more examples of corporate fraud than union fraud in the DOL report.  To extrapolate from that and say that corporate America is "run by criminals" is completely dishonest.

 

There is also the simple fact that there are immensely more corporations than there are unions.  So to cite simply the number of fraud cases and conclude that corporations are more crooked than unions is also dishonest.  The only measure that would make sense would be a comparison of the rate of fraud - i.e. the number of fraud cases divided by the total number of entities, either corporations or unions.  Since the DOL report didn't say anything about that and you didn't cite any other data, I stand by my statement that you are just a hack looking to score cheap propaganda points - the mirror image of those you criticize.

I wasn't claiming that this report reflected the higher degree of corporate fraud, just noting that the propaganda of corporations against unions covered up that reality.

But I' will definitely do a post on corporate fraud in the future to illustrate this reality with more detail.

Still, Nathan, why aren't you angry with the Department of Labor?  See, my comment, above.

I noticed you gave my comment, below, a "1," pladooo5.  Why did you do that?

 

N.B.  "Readers trying to participate in discussions in good faith should never be given ratings of 1s or 0s."  Josh Marshall, Posting, 8/22/05 

Well, because being disdainful of the Bush Department of Labor is so obvious, I wasn't hitting that issue, but at least the DOL reports are very clear who is covered by their accusations.  Yes, it would be nice if "labor racketeering" by corporations was just listed as corporate fraud, but ripping off unions is a different category of fraud from other frauds, so it's worth tracking in its place.  

Yes, the term "labor racketeering" has been misused in public debate as a way to attack unionism and union leaders generally, so the real animus should be against those like UnionFacts.org

In general, Nathan, I'm not disagreeing with you excepting only that I don't view the Department's reports as "very clear."

 

Indeed, from my reading I conclude that the OIG is saying that in every reported case of financial/insurance fraud perpetrated against unions and their members, the fraudster was successful because the union officials with whom he dealt were corrupt.

 

Am I wrong?  Is that not what the OIG reports are saying? 

Its time for American workers to do something about the present neoliberal economic policies that have brought things like globalization, out-sourcing, capital liquidation and the corresponding "race to the bottom" of wages into everyones homes and apartments.  For the last 200 years but especially since the 1960's civil rights/political rights have been the focus.  Now...should I say it?  Gasp...what about economic rights?  There I said it.  When is the fleecing of Americans going to end?  Enron, Walmart, Delphi, GM, Ford, Saving and Loan debacle, golden parachutes, signing bonuses and other bonuses for corporate pirates is not ending. I see one bright lining in this increasingly dark political economy and that is the IWW.  Where "business unionism" talks of we can all get along the IWW argues that workers and corporates are diametrically oppossed.  Where business unions agree to no strike clauses in contracts the IWW argues that workers can strike at any time.  Where the AFLCIO has bloated, highly paid staff that are frequently appointed the IWW officers are elected by the workers and are not on an IWW payroll.  Where business unions have dues check-off lists done by the actual company the workers work for the IWW collects dues monthly by an IWW delegate.  Where locals often have much of their dues moved to the head union office most IWW dues stay in the branch.  Where business unions divide job skills and workers into different unions the IWW organizes everyone at the job site into one union thereby keeping solidarity.  Where business unions frequently cross picket lines the IWW wont cross other union's picketlines.  If you are tired of the same old union hypocrisy of todays "unions" look up the IWW for solidarity, education and agitation.

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