« How to Encourage Employers to Hire Undocumented Workers | Main | A Nasty Immigration Bill in Georgia »

February 14, 2006

How Corporate Right Lies About Union Corruption

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 union leaders 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 compared to the criminals running corporate America.

Posted by Nathan at February 14, 2006 08:24 AM