UNION FOR SALE
DC 37, the city's powerful consortium of municipal unions,
is rocked by corruption investigations—and challenges
from rank-and-file reformers
BY ROBERT FITCH
September 2-8, 1998
This weekend, when District Council 37's long-serving Executive Director Stanley Hill checked out of his $935-a night Executive Suite at Honolulu's Sheraton Waikiki, he undoubtedly left behind some happy hoteliers. That's because for a full week he picked up the tab for more than 800 other DC 37 delegates, staffers, and alternates.
Hill's entourage, swollen by nearly 600 guests, made up almost a third of the 4500 rooms reserved by the American Federation of State, County, and Municipal Employees for its 33rd conference. The AFSCME party occupied the entire Sheraton Honolulu chain: the Waikiki, the Princess Kaiulani, and the Moana Surfrider. "It was the largest single booking in Honolulu's history," say hotel officials.
The AFL-CIO, which used to have its conventions in Bal Harbor, Florida, has shifted them to Pittsburgh. But AFSCME still prefers surf and sun. Indeed, Hill tried to justify the Hawaii jaunt as a work trip for the city's largest, richest, and politically most generous union. "You have to understand we have to fulfill our constitutional responsibilities,"explained Hill, who supervises an $88 million yearly budget."We're going out there to fight privatization, to deal with workfare and welfare reform. We're going to be tightening up fiscal integrity nationwide. It's going to be a momentous convention."
Still, flying 1400 people 6000 miles across the Pacific in August for a week of sun, surf, and lu'au at members' expense may not seem like the appropriate strategy for an organization that by July had seen documents and officials from 12 of its locals subpoenaed to appear before a Manhattan grand jury. Even at group rates, travel experts estimate the cost of feeding, flying, and sheltering the Hill party at the Sheraton to be at least $2 million.
Actually, this flaunting of official perquisites comes at a time when the District Council, which brings together more than 105,000 city workers organized by 56 locals, is being probed by four sets of investigators and being rocked by an unprecedented number of challenges to its leadership by rank-and-file reformers. Eight of the 12 locals being investigated by the Manhattan D.A. are headed by vice presidents who sit on DC 37's 20-member executive board. "It's simply the biggest corruption scandal I've ever heard of," says a very senior city labor official who insisted on anonymity.
DC 37's parent, the 1.3 million–member AFSCME International, is looking into the disappearance of at least $10 million from the 22,000-member Board of Education Local 372, which was run for 30 years by Hill's ally Charles Hughes until last February. In 1997, Hughes received a payment of more than $1 million from DC 37 for "overtime," in addition to his $241,000 salary. As many as nine residents of Georgia and South Carolina appeared on the 372 payroll. Hill himself has acknowledged that Hughes, who was expelled from the union by the International, is also under federal investigation.
Then there's city comptroller Alan Hevesi, who's auditing DC 37's benefit funds. A spokesperson for Hevesi said, "We didn't single out DC 37." And Hill insisted that the audit is "perfectly normal." But when asked if this isn't the first time DC 37 has been audited in its 57-year history, Hill replied, "I'll have to check on that." (He never got back to the Voice.)
Perhaps most seriously for the future of DC 37, there is Manhattan D.A. Robert Morgenthau's investigation. It began in November with an inquiry into a bizarre turkey-buying operation run by the presidents of three locals. The inquiry has widened and deepened since then. In June, Morgenthau convened a special grand jury which is still in session. More subpoenas came down this month. Mark Shaplo, the $106,000-a-year assistant to DC 37's associate director, had his papers subpoenaed by the D.A. So did Adam Klein, an attorney for Local 983, who received a $450,000 fee approved by Hill.
Aside from the unprecedented number of locals and officials, the D.A. is also investigating a variety of allegations: stealing from the members; treasuries that mysteriously fade to empty; election rigging; kickbacks; payroll padding; Christmas parties with missing receipts; officials who simply write out checks to themselves. Altogether, a DC 37 insider speculates that as much as $25 million may be missing.
The D.A.'s office is also reportedly investigating allegations of death threats, intimidation, shakedowns, phony elections, and Italians and blacks fighting each other with chairs at union meetings. There are reports of a building takeover by 93 members of Local 983--motor vehicle workers--armed with baseball bats.
Things have gotten so bad, says one high-ranking labor official, that "Washington is going to have to come in. I've talked to a guy who goes back 30 years, and no one can think of anything that compares with it." To which Stanley Hill responds, "How far back does this guy really go? It's not that bad. People like to exaggerate."
In Local 384, the CUNY clerical workers' union, no one disagrees that hundreds of thousands of dollars are missing. The debate is over who is responsible: President Fran Autovino accuses Treasurer Connie Lango of having swiped $192,000, but Lango insists she is being set up by Autovino. The Manhattan D.A.'s office and the AFSCME International are both investigating.
In the summer of 1996, Lango counter-attacked by making the financial records of the local available to the members. Lango passed over to City College shop steward Sandy Tucker huge stacks of canceled checks and American Express bills, of which the Voice has obtained copies. Clearly, Autovino wrote lots of checks to herself on the local's account. In '91, she wrote a check for $6147, ostensibly as reimbursement for copies of the local's constitution. A couple of months later she got $5000 for "handbooks." Copies of various contracts cost $2000. Autovino did not return phone calls from the Voice.
Charges for cut flowers, limos, trips to the Catskills and the Bahamas loomed large on Autovino's company American Express card. But Vegas was a big expense. In one month, Autovino hit the Mirage, the Desert Inn, Caesar's Palace, and Bally's.
Tucker organized a petition, got it signed by 100 members, and sent it to Stanley Hill. "We are appalled at the scandal that is ripping apart our Local," she wrote. Tucker demanded a meeting with Hill. While Hill claims he sent a lawyer to meet with the members, Tucker says she never got a response.
When details of how Charlie Hughes managed to spend $10 million from the local were presented at a hearing held by an AFSCME judicial panel in March, Hughes supporters in the crowd cheered each item--such as the $1.4 million in expenses Hughes piled up for a week's retreat at Friar Tuck's in the Catskills. Hughes's members are part-time Board of Education cafeteria workers who average $10,000 to $11,000 a year plus benefits.
While the members rarely get paid for more than 20 hours a week, Hughes has become famous for the hours he's billed. In 1997, the same year in which he earned $241,000, Hughes requested overtime for all the work he'd done since he'd been president in 1971. Hughes promptly got a check from DC 37 for $1.1 million.
Sarah Gotbaum was Victor Gotbaum's first wife and political partner going back to their days in the Young People's Socialist League at Columbia in the early '50s. Victor Gotbaum ran DC 37 for the 22 years preceding Hill's 11. There are hours of tapes and interviews with Sarah Gotbaum carried out by Jewel and Bernard Bellush, who coauthored Union Power and New York. On one tape, Sarah, who is now divorced from Victor, is quoted as saying, "Vic knew that Vinnie Parisi's network was linked to the Mafia. He looked the other way."
Vinnie Parisi, who used to be the president of DC 37's Local 376--the laborers local--is dead. But his name and network resurfaced last July in an exposé, written by Richard Steier for The Chief, of an otherwise risible DC 37 turkey brokering scam. Steier revealed that presidents of several DC 37 locals had made a practice of giving their members Thanksgiving turkeys, bought for roughly $17 to $22 each from a Queens poultry firm--then charging the unions around $45 for each bird. The officials pocketed the difference as "brokerage fees." There were lots of turkeys involved.
Mixed up in this business was Robert Crilly, president of the computer workers Local 2627, who told Steier he had originally bought turkeys from Vinnie Parisi, and then from Parisi's successor at Local 376, Joe DeCanio. According to Crilly, DeCanio got the turkeys from Vinnie Parisi's grandson, Joseph A. Alfano, described by Steier as a turkey "conduit."
Alfano served as a $52,000-a-year grievance representative, and an aide to Hughes. The cost of the birds purchased by Crilly from Alfano averaged $36,000 a year. Alfano recently resigned. Both Alfano and Crilly requested that their phone numbers not be given out by DC 37.
"You're talking hearsay," Stanley Hill insisted when asked about the gobblers. "You're making allegations about where these turkeys came from. You don't know where they came from. I don't have any information or evidence. We don't really know the way the turkey situation has been handled."
Perhaps the most striking feature in Local 983's office under President Robert Taylor was the lack of any equipment: no fax, no xerox, no computers--just a phone and a fridge. It turns out there were no real elections and no financial accountability either. Investigators are trying to find out what happened to at least $700,000 in funds the union cannot account for.
Taylor "was not a player," according to attorney Arthur Z. Schwartz, who has been retained by the local's new president, Mark Rosenthal. "He was just a guy who signed checks." Taylor was installed in office following the death of President Frank Morelli in May 1994.
But the '94 election was suspect. "When Taylor was elected by the 983 executive board, they didn't have enough votes. The leadership couldn't produce a quorum for Taylor. He had only six votes," asserts Rosenthal. "The other names were either of people who were retired or dead. Taylor was elected by the zombie vote."
Taylor's vice president, James Dickens, confirms Rosenthal's charges. "What happened in '94 after Morelli died," says Dickens, who now works at the 34th Street and 12th Avenue car pound, "was that we had an executive board of five or six. Joe Timpa was the vice president. But he couldn't take over the top job. He'd put in for retirement. So Joe Timpa said to a small group of us, 'I'm going to make Robert Taylor president.' There were supposed to be 19 executive board members, but under Morelli, the number had fallen to six." Dickens was one of the valid names sent along to AFSCME to certify the election.
Dickens was also an eyewitness to a May 1995 vote being investigated by the Manhattan D.A.'s office. In that race for the 983 executive board, supervised by election officer David Catala, ballots were counted in the DC 37 mailroom. Robert Taylor's entire slate won, except for a guy named Ed Wiley. Claims Dickens, "Robert Taylor announces that Wiley had lost. Then he tells everyone to step out of the room. When we come back, Taylor says that Wiley won." Catala was subsequently given a job with DC 37 as a grievance rep.
Of Taylor's May '95 sweep, Rosenthal asks, "What are the statistical chances of all 26 of Taylor's candidates winning by a landslide in an open race with 60 candidates where only one, Taylor, was known by the membership? On April 14th, I had a campaign fundraiser in the Bronx and 130 members paid $35 apiece to support my campaign. After the count in the DC 37 mailroom, I wound up with 66 votes." Taylor, who managed to get only 33 votes in a carefully supervised election this June, left word with DC 37's personnel department that he didn't want to be contacted by the press.
After Taylor was forced from office this summer, he left a packet of bills from the Gee Whiz restaurant in the top drawer of the desk where incoming president Rosenthal found it. The Gee Whiz is located at 295 Greenwich Street in Tribeca, just down the street from Robert De Niro's Tribeca Grill. But the prices are a lot easier to swallow: You can get a huge, tasty Greek salad at the Gee Whiz for $6.95.
Those prices make the bills Local 983 ran up for catering services at the Gee Whiz all the more strange. Those bills reached as much as $91,888 for a Christmas party for only about 100 members. Odder still, says Schwartz, who has examined bills from the Gee Whiz, that restaurant may not have gotten any of the money for the catering. (The proprietor of Gee Whiz was unavailable for comment.) "The checks don't run through Gee Whiz's account," he observed. "Gee Whiz doesn't appear as an endorser on the back of the check. Sometimes you get as endorser 'Plymouth Beef' and other meat industry names--weird endorsements." (Drohan Poultry in Woodside, Queens--one of the endorsers—refused comment. A spokesperson for 14th Street's Plymouth Beef, another endorser, said, "I don't know what you're talking about.")
By the time Rosenthal got into office, a union that had $500,000 in dues coming in every year had only $6000 left in its coffers. Rosenthal charges that as much as $700,000 is missing from Local 983's treasury.
And investigators from the D.A.'s office are trying to determine the provenance of a $450,000 retainer to Rector Street attorney Adam Klein. The new leadership at 983 charges that Klein did very little--maybe only 100 hours work--for the $450,000. "Most labor lawyers don't get $150 an hour," observes Schwartz, who did a wage survey of Klein's work. "The highest-paid labor lawyer I've ever heard of gets paid $350. Klein's getting nearly $1300 an hour.
”Klein acknowledges that he has been subpoenaed by the grand jury and is also under investigation by the Office of Labor Relations. He insists, however, that he's done nothing wrong. On the contrary, he says, "What I did was worth three or four times what I got paid." He adds, "I've spoken to Stanley Hill, and he said, 'Keep doing what you're doing.'"
Hill does support Klein. His name is on the contract that authorizes the $450,000 retainer. "Adam is doing the best he could under the circumstances," Hill told the Voice. "He's been doing a very creditable job. He was approved by the membership because of his background and reputation."
But Rosenthal asserts that Klein's hiring was illegal. "It violated the 983 constitution that says all contracts over $1000 have to be approved first by the executive board and then by the whole membership. Klein's contract was approved only by a chapter meeting of the high-pressure plant tenders." Says Rosenthal, "I challenge any DC 37 officer to show me where the executive board approved Klein's contract."
DC 37 rarely hires outside lawyers. How did Klein come into the DC 37 picture? Actually, under very dramatic circumstances. Klein's entry was prepared by over 100 men armed with baseball bats who appeared one day at DC 37's headquarters at 125 Barclay Street.
"It was late in '95," recalls a Local 983 executive board member, who is also a member of the high-pressure plant operators union--formerly Local 1795--which is now being investigated by the D.A.'s office for mob control and job selling. "We hadn't got a raise in eight years. There was no movement on our contract. There'd be meetings set up and Stanley Hill wouldn't show. We'd go up to the headquarters and there'd be no one there. They'd leave us sitting. People were in dire straits. Cars were being repossessed. Christmas was coming."
"It wasn't a decision that was made prior," insists the power-plant operator. "We just got disgusted. We had ball bats in the trunks of our cars. People decided to go over to Barclay Street. 'Where's Stanley? Where's Taylor?' we're asking. We busted in the door, overturned chairs. 'We're looking for Stanley,' we told everyone. He was probably in there somewhere hiding in his office. We were told, though, that he wouldn't meet with us. So we shut down the elevators in the building. Security ran away. Then the cops showed up. They said, 'We don't want no problems. Make sure you're out of here in five minutes.' We hung around for a while. But we didn't turn the elevators back on. Finally we left."
DC 37 spokesperson Janet Dewart-Bell denies the incident ever happened. And she notes that one of the elevator banks on the main floor gets turned off automatically after 6 p.m. It's probably this routine operation that explains the story, she says.
Shortly after the alleged Barclay Street incident took place, however, both Taylor and Hill appeared at a Local 983 meeting with a plan to accelerate progress in wage negotiations. "They tell us about the idea to hire Klein," recalled the member. "They thought this guy was going to ride in on a white horse. He was the man to get." Members still haven't gotten a raise after nine years.
Whenever election fraud or corruption charges soil a DC 37 local, Stanley Hill invokes the doctrine of "local autonomy," meaning, "We're not responsible."
The pattern of Hill's indifference shows that "local autonomy" means independence only from the local's members, who seem increasingly unwilling to forgive the actions of their leadership. After all, forgiveness comes a lot easier from the perspective of the six-figure socialists at play on Waikiki beach than from the members who work in their boiler rooms in August, without a raise for nearly a decade, and who must pay their leaders' salaries.