BY HERBERT HILL
Herbert Hill is professor of industriol
relations and Afro-American studies at the University of Wisconsin.
He is the former Notional Labor Director of the N.A.A.C.P. and
author of Black Labor and the American Legal System (The Bureau
of National Affairs Inc.).
More than twenty years after its enactment,
the Labor-Management Reporting and Disclosure Act of 1959, better
known as the Landrum-Griffin Law, has failed in its purpose of
eliminating corruption in organized labor. Indeed, there is reason
to believe that corruption in its various forms is even more prevalent
today than when the law was passed. Furthermore, the evidence
indicates that criminal forces have in fact extended their control
of labor unions and that their influence reaches into the highest
echelons of leadership within organized labor.
Mob infiltration of the International Brotherhood
of Teamsters is notorious; the union's newly elected president,
Roy Williams, was called an "organized crime mole" in
a report by the Senate Permanent Subcommittee on Investigations.
And where mob control is absent, some labor leaders use their
positions to profit from improper business dealings. Even Lane
Kirkland, the statesmanlike president of the A.F.L.-C.I.O., has
been implicated in such practices. The purge of radicals from
the unions in the late 1940s brought in a new generation of conservative
union leaders who are not averse to parlaying mob ties and a cozy
relationship with business into profitable sidelines.
Prodded by union dissidents, Congressional
committees and the media, law-enforcement agencies have been slowly
turning their attention to crookedness within organized labor.
In late 1978, six high-ranking officials of the United Paperworkers
International Union, including its president, Joseph Tonelli,
who was a member of the A.F.L.-C.I.O. executive council, pleaded
guilty to embezzlement of union funds and obstruction of justice.
Tonelli, who was described by one law-enforcement official as
"Carlo Gambino's emissary to the A.F.L.-C.I.0 executive council,"
was convicted and served a prison term.
Since 1976, many other union leaders have
been convicted of crimes, including Federal charges of racketeering,
conspiracy, extortion, illegal labor payments, tax evasion and
perjury. Among these were high-ranking officials of the Amalgamated
Meat Cutters and Butcher Workmen, Laborers' International Union
of North America, Hotel and Restaurant Employees Union, International
Longshoremen's Association and, above all, the Teamsters' Union.
A Justice Department memorandum concludes, "Although there
have been numerous prosecutions of high-ranking Teamster officials
(e.g., William Presser, Allen Dorfman and Jimmy Hoffa), the domination
of the Union by organized crime has gone unchecked."
The extent of labor corruption and the widespread
control of unions by organized crime was summarized in a report
of the Justice Department:
A majority of the locals in most major
cities of the United States in the International Brotherhood of
Teamsters (IBT), Hotel and Restaurant Employees (HRE), Laborers'
International Union of North America (Laborers), and International
Longshoremen's Association (ILA) unions are completely dominated
by organized crime. The officials of these unions are firmly entrenched;
there is little hope of removing them by a free election process.
Convictions for misconduct have been sparse and when one corrupt
official is removed another soon takes his place.... There are
many other unions which are hoodlum infiltrated, such as the Laundry
Workers and the Operating Engineers.
The report ticks off the situation in major cities. "Organized crime has a substantial foothold into the labor unions in the New York City area.... Over one hundred unions [have] members of organized crime or their associates in positions of power." In Cleveland, the underworld not only controls many local unions but also the A.F.L.-C.l.O.'s Cleveland Federation of Labor. In Chicago, "syndicate influence is not only heavily concentrated but disciplined.
The control comes directly from the top of
the Chicago organization. The rosters of these locals are littered
with the names of men whose job it is to serve the syndicate as
enforcers and muscle men. The collective bargaining agreements,
health and life insurance contracts and investment of union funds
are negotiated by men who have as their primary aim the protecting
of syndicate business interests and lining their own pockets."
This pattern is repeated in other cities across the country.
The most important source of illegal gain
is union pension and welfare funds. Court records and investigative
reports by law-enforcement agencies reveal systematic looting
of union funds, which by 1990 will have an estimated worth of
approximately $3 trillion. The plundering of union pension and
welfare funds is undoubtedly one of the most sordid chapters in
the history of American labor unions. Many unions that represent
seasonal or transitory workers accumulate vast sums in a variety
of welfare funds which will never be collected. In other industries,
thousands of union members will never receive their pensions because
of complex technical rules and regulations that are not explained
to the members. Labor union welfare and pension funds have become
the underworld's bank, and the failure of government agencies
to enforce the law has resulted in the widespread corruption of
major sections of organized labor.
Because of repeated scandals and criminal
convictions involving the leadership of the Teamsters' Union,
especially the looting of the multibillion-dollar pension funds
by the underworld, the Senate Permanent Subcommittee on Investigations
began oversight hearings last August on the Department of Labor's
investigation of the Teamsters' Central States Pension Fund. The
Secretary of Labor has the statutory obligation to enforce the
reporting, financial disclosure and fiduciary responsibility provisions
of the Landrum-Griffin Act which protect unions from corrupt elements,
as well as those that require internal union democracy. How well
the department has lived up to this obligation was revealed most
recently in a report made last year by the General Accounting
Office and the Senate Investigations Subcommittee on Secretary
of Labor Ray Marshall's performance in office under the Carter
Comptroller General Elmer Stasts testified
before the subcommittee that although the Department of Labor
had spent $5.4 million over a five-year period to investigate
the Central States Pension Fund, its work was characterized by
"significant shortcomings and left numerous problems unresolved."
The Attorney General informed the subcommittee that he first learned
of the Labor Department's civil lawsuit against the trustees of
the fund only hours before it was filed. The Justice Department
was "concerned that the Labor Department had not vigorously
pursued critical avenues of potential responsibilities over the
Fund's management." A Department of Justice memo notes that
the Secretary of Labor failed "to refer information to us
which indicates potential civil as well as criminal misconduct....
Marshall, who has had an extraordinarily
close personal and professional relationship with the leaders
of organized labor, chose to ignore certain criminal statutes
which could have been used against the predators who had been
raiding the Teamster pension funds over a period of many years.
He could have initiated proceedings under the Organized Crime
Control Act of 1970, for example, asking the courts to protect
the pension funds through injunctions and criminal forfeiture,
which could also have resulted in triple damages and other deterrent
penalties. He could have sought criminal convictions and sent
the guilty parties to Federal prison.
Instead, Marshall negotiated a dubious settlement
which ignored criminal intent. The Department of Labor did not
issue the subpoenas necessary for an adequate investigation, kept
the entire matter away from its own skilled criminal investigators
and terminated the investigation before it was completed. In sum,
Marshall failed to protect the interests of rank-and-file union
members, as he pledged he would during his confirmation hearings.
Organized crime remains in control of the Teamsters' Central States
While Marshall's record was dismal, in all
fairness to him it should be noted that every Secretary of Labor
since 1959-both Republican and Democrat-has acted on the assumption
that the department functions on behalf of its primary constituency,
the various union bureaucracies, and not in the interest of rank-and-file
workers-even though the Secretary of Labor is the public officer
charged by law with enforcing the Labor-Management Reporting and
Disclosure Act of 1959.
The experience of Michael Moroney and Stephen
Smith is illustrative of the way that labor union officials are
able to prevent the D.O.L. from rooting out corrupt practices.
Moroney and Smith were both highly skilled investigators on the
staff of the Labor Department. In 1976 they were assigned to the
Organized Crime Strike Force in New York City, consisting of Federal
and local agencies under the coordination of the Department of
Justice. They had an extraordinarily successful record; seventeen
convictions of corrupt union officials-one of the best records
in the department.
Early in 1979, Moroney and Smith became increasingly
alarmed about the course of events within the Labor Department.
Marshall had appointed Francis X. Burkhardt, a former research
director for the Painters Union, an organization with a long history
of corruption, as Assistant Secretary of Labor with responsibility
for eliminating racketeering in organized labor. (Burkhardt and
his four immediate predecessors as Assistant Secretary were all
taken from the ranks of labor union bureaucrats.) But instead
of conducting a vigorous investigation, Burkhardt blunted the
department's effectiveness by frequently transferring investigators,
reassigning them to routine procedures and failing to fill vacant
positions on the investigative staff. Burkhardt also informed
the Senate Appropriations Subcommittee that the Labor Department
intended to limit its future participation in the Organized Crime
Strike Force program.
After filing several protests with his superiors,
Moroney wrote to President Carter explaining the rapidly deteriorating
situation. Moroney's letter was turned over to Marshall's office
for investigation and soon thereafter Moroney was removed from
the Organized Crime Strike Force and reassigned to routine duties.
Stephen Smith met the same fate. Thomas Puccio, the Justice Department
Attorney in charge of the strike force, protested their removal
and argued that he needed their expertise and dedication. Moroney
and Smith, however, were forbidden to work with any strike force.
Both resigned from the Department of Labor not long after the
Moroney and Smith's experience was not unique.
In 1975 Joseph Kissane, an accountant in the New York Regional
Office of the Labor-Management Services Administration, was suspended
because he conducted "unauthorized investigations" into
suspected violations of the law by the International Ladies' Garment
Workers' Union. Over a period of years, Kissane had become interested
in this union because he had found irregularities in the reporting
and disclosure statements made by the l.L.G.W.U. These included
the granting of illegal loans to union officers, failure to report
a corporate subsidiary and repeated errors and omissions in the
financial reports filed by the union as required by law.
Kissane submitted several communications
to his superiors suggesting audit reviews of the union's financial
records and finally recommended prosecution because the I.L.G.W.U
had abrogated an agreement it had entered into with the Solicitor
of Labor to comply with the law. On several occassions Kissane
received direct orders to stop probing the I.L.G.W.U., but persisted.
Eventually, Kissane was suspended, and after several appeals,
resigned. He is now employed by the Suffolk County, New York,
District Attorney's Office, investigating sewage construction
The inglorious career of Kissane's superior,
Benjamin Naumoff, New York Regional Administrator of the Labor
Management Services Administration, deserves mention. In 1976,
the Organized Crime Strike Force was conducting an investigation
into the activities of Local 805 of the Teamsters' Union in New
York City, headed by Abe Gordon. An audit revealed that Gordon,
well known to law enforcement agencies because of his longtime
involvement with the underworld, was "buying good will from
Through an investigation of Abraham Weiss
Associates, a public relations company that represented many corrupt
unions with close Mafia ties, the trail led to Ben Naumoff. Investigators
found that Naumoff had accepted gifts from several labor unions
and expense-paid trips to union conventions in California and
other distant places. After his vouchers were subpoenaed, the
government found that Naumoff had engaged in "substantial"
double billing-charging the Department of Labor for travel and
other expenses that had already been paid for by labor unions
On at least two occasions, grand juries considered
indicting Naumoff. The first time was after an investigation revealed
the close connection between him and labor leaders suspected of
corrupt practices. The second rose out of his fraudulent expense
accounts. But the U.S. Attorney dropped the case and, after suffering
a heart attack in the office of Teamster official Gordon, Naumoff
was permitted to retire.
The domination of the department by the labor
bureaucracy is the prime cause of its poor record in fighting
corruption. In an appearance before the Senate Permanent investigations
Subcommittee, Peter Vaira, formerly U.S. attorney in charge of
the Organized Crime Strike Force in Chicago and now U.S. Attorney
in Philadelphia, testified:
There are some investigators who have
attempted to do a good job, but they have been severely restricted
and unrewarded by their agency.... The D.O.L. has no method of
keeping track of the current corruption in the labor unions of
Chicago.... Moreover, the compliance officers have been given
such restrictive operating instructions that it is impossible
for them to conduct a thorough investigation.
Vaira concluded his remarks with a story
that put the Labor Department's enforcement operations in a more
In a recent investigation, an employer
complained to the D.O.L. that he was being forced to employ extra,
unneeded manpower under threat of violence. The D.O.L. closed
the investigation by informing the union in writing about the
employer's allegation. The letter to the union named the particular
employer. Several weeks later, the employer's place of business
With Marshall's departure in 1980, his subordinates quickly flew off to various nesting places
within the labor establishment. Francis Burkhardt returned to
the Painters Union; another Assistant Secretary, Donald
Elisburg,joined the law firm of Connerton and Bernstein,
which represents the Laborers' International and other unions;
Frank Greer, Marshall's executive assistant, is working for the
Kamber Group, a Washington public relations firm serving labor
leaders (Victor Kamber was formerly assistant to the director
of the A.F.L.-C.I.O. Building Trades Department), and Ray Marshall,
through both the Kamber Group and the Labor Policy Institute,
which was created by the federation's Industrial Union Department,
is a paid consultant to several groups of A.F.L.-C.I.O. affiliates.
There is no reason to anticipate that the
Department of Labor will perform any differently under the Reagan
Administration. The notorious Jackie Presser of the Teamsters'
Union, which endorsed Reagan, was prominent on the Administration's
labor transition team, and the new Secretary of Labor is Raymond
Donovan, a construction industry executive. According to A.H.
Raskin, the former New York Times labor correspondent, "Donovan
comes out of that whole swamp of the New Jersey construction industry.
It has been an absolute morass of collusion, payoffs and under-the-table
deals. So to think that Donovan is going to come in and say, 'Let's
get real enforcement of the Landrum-Griffin Act.' . . . Well,
I don't think so." [See Samuel Dillon, "Something Rotten
in New Jersey," The Nation, February 28.]
Enforcement is crucial, however, for labor
has shown little inclination to put its own house in order. After
the merger between the A.F.L. and the C.l.O. in 1955, the united
labor organization adopted an Ethical Practices Code and established
an Ethical Practices Committee. It was not, however, until the
McClellan Committee's dramatic and highly publicized revelations
of union corruption in 1957 that the federation was forced to
move beyond pious declarations.
With the expulsion of the Teamsters from
the A.F.L.-C.I.O. at the latter's convention in December 1957,
and the expulsion of the International Longshoremen's Association
and the Bakery and Confectionary Workers' Union, the federation
proclaimed that it would not tolerate dishonest unions, and its
president, George Meany, thundered away against those who were
debasing "the House of Labor." But this commitment had
a very short life. After a single burst of energy, the Ethical
Practices Committee fell into a comatose state and quickly expired.
Its last meeting of record was in December 1959.
As for the Teamsters, their redemption was
eventually arranged. Soon after Lane Kirkland succeeded Meany
as president of the A.F.L.-C.I.O. in 1980, he invited the Teamsters'
Union to rejoin the federation. There was no demand that it purge
itself of underworld control, nor was the question of whether
the Teamsters were in technical compliance with the federation's
code ever raised. For more than twenty years, the A.F.L.-C.I.O.
had taken no action, even of a symbolic nature, against the racketeering
elements in its own ranks; now it was inviting into affiliation
the union that had been repeatedly exposed as the most corrupt
labor organization in the country and had previously been expelled
from the federation because it was gangster-ridden. So much for
the A.F.L.-C.l.O.'s anticorruption policy.
Corruption within labor unions is not limited
to the depredations of organized-crime syndicates. In 1975, not
long after Sol (Chick) Chaikin succeeded David Dubinsky as president
of the International Ladies' Garment Workers' Union, garment manufacturers,
many of whom had contracts with the I.L.G.W.U., found that it
would be good business to purchase their dress linings from Robert
Evan Inc. and its subsidiary, D.C. Linings, which, it happened,
were owned by two sons of president Chaikin. I.L.G.W.U. found
it desirable to use the legal services of president Chaikin's
other son and his wife, both lawyers, and employers end affiliated
local unions found it convenient to buy their,greeting cards in
bulk quantities from Mrs. Chaikin, wife of the president, who
was in that business.
Labor leaders' predilection for treating
"their" unions like a family business extends to the
A.F.L.-C.I.O. itself. Documents from the Securities and Exchange
Commission and the U.S. District Court in Rochester reveal that
Lane Kirkland was not averse to using his high position in organized
labor to make a quick and easy buck when he was secretary-treasurer
of the A.F.L.-C.I.O. during the 1970s. In October 1974, a Federal
grand jury in Rochester began an investigation into the Stirling
Homex Corporation scandal which involved seven of officials of
the United Brotherhood of Carpenters (A.F.L.-C.I.O.) and Lane
The Stirling Homex Corporation planned to
manufacture and install modular housing units across the nation.
The main obstacle to the large profits the proprietors of this
enterprise were anticipating was the Carpenters Union, the union
with primary jurisdiction, which had a longstanding and firm policy,
as did other A.F.L.-C.I.O. construction unions, of refusing to
install prefabricated units. With almost miraculous suddenness,
the Carpenters Union reversed its well-known and well-enforced
position-not long after seven officials of the union received
company stock with a total value of $200,000.
An investigative memorandum of the Securities
and Exchange Commission describes the transaction in fuller detail:
In early March 1970, at about the time
of the initial Stirling Homex public offering, David Stirling,
Jr. and Yanowitch arranged for certain officials of the Carpenters
Union and a senior officer of the A.F.L.-C.I.O. who had introduced
Stirling Homex and [Theodore] Kheel to the Carpenters Union, to
purchase 6,500 shares of the securities of Stirling Homex....
In order to pay for these purchases in March 1970, David Stirling
Jr. requested that Charles Marshall, then Senior Vice President
of Central Trust Bank ("Central Trust") in Rochester,
New York, lend over $200,000 to these seven Carpenters Union officials
and Kirkland in order to help them purchase the stock. Even though
these individuals were strangers to Central Bank the loans were
made based on the credit worthiness of David Stirling. The loans
to these individuals varied in amounts from $13,000 to $60,000.......
It appears likely that several indictments will be forthcoming
as a result of this investigation.
Federal law prohibits employers from making
payments or giving loans to union officials and also forbids acceptance
of such payments or loans by union officials. In his sworn testimony
before a Federal grand jury and the S.E.C. staff, Kirkland acknowledged
that he gave advice and introduced Theodore Kheel, a director
and special counsel on labor relations of the Stirling Homex Corporation,
to officials of the Carpenters Union. Kirkland also admitted before
a Federal judge and jury that he signed a promissory note in Kheel's
office in the amount of $58,000, arranged for and secured by the
According to the S.E.C., the leaders of the
Carpenters Union used the company loans to buy Homex stock at
below market price. After the Carpenters Union signed the collective
bargaining agreement with the company, it used its influence in
persuading the other A.F.L.-C.I.O. building trades unions to install
Homex units and to perform other necessary work on construction
sites. Eventually, William and David Stirling went to jail for
stock fraud and the company went bankrupt. The Carpenters Union
officials invoked the Fifth Amendment against self-incrimination,
and the government never prosecuted Kirkland.
The huge upsurge in labor corruption since
the merger of the A.F.L. and the C.I.O. may well have had its
origins in the purge of assorted radicals from unions that began
in the late 1940s. These purges left a vacuum that was filled
by conservative leaders who regarded themselves as being in the
"union business." These careerists, many with underworld
connections, were more interested in expanding their influence
and bank accounts than in leading mass movement for social change.
Furthermore, employers preferred such "responsible"
labor leaders who had no hesitation in disciplining rank-and-file
workers and knew how to enforce labor peace.
And so a labor union attitude developed that
was suspicious of dissent, that identified all criticism of American
society and all deviation from conventional values as "Communist
inspired." The labor bureaucracy, with th assistance of the
government, crushed all expressions of dissatisfaction and reform
within organized labor.
Since the end of World War Il, the U.S. government
has assisted and protected union leadership groups that either
acquiesced or engaged in corrupt activities, because of the services
of such groups at home and abroad in the areas of foreign policy
and national security. The government repeatedly gave vital support
to the union leaders who endorsed and actively helped implement
U.S. foreign policy.
In this atmosphere, many officials of labor
unions advanced their personal and organizational interests with
the help of the government and the underworld. And within this
context, the underworld was able to advance its own power and
influence so that the spread of labor corruption now extends to
the highest levels of the A.F.L.-C.I.O., as well as to independent
unions like the Teamsters.
Labor reform movements well up sporadically
but fail to break the alliance of the union bureaucracy with the
underworld and the government. As a consequence, the house labor
continues to stagnate while it is rifled by thieves.