Razzle Dazzle

The Horse in Labor's House

By RICHARD STEIER

In entering a guilty plea Sept. 14 before U.S. Magistrate Judge Ronald L. Ellis, Matthew "Matty the Horse" Ianniello admitted to having "participated in the conduct of the affairs of a racketeering enterprise ... I assisted persons connected to Local 1181 of the Amalgamated Transit Union to receive illegal payments from the owners of certain school bus companies whose employees Local 1181 either represented, sought to represent or would admit to membership ..."

It is possible that when Local 1181 President Sal Battaglia goes on trial in his own racketeering case Oct. 16 that he or his attorney will argue his innocence by denouncing Mr. Ianniello as a lying rat or questioning his mental competence. Possible, but not very likely, since Federal prosecutors have identified Mr. Ianniello as one of the acting bosses of the Genovese Crime Family.

Even if Mr. Battaglia is prepared to rebut the testimony in a related trial by Michael Campi, the Coordinator of the organized-crime branch of the FBI's New York Division, that he himself is "a soldier in the Genovese family," it would be imprudent for him to assail Mr. Ianniello in such a fashion. And so the latter gentleman's guilty plea, while not stripping Mr. Battaglia of the presumption of innocence, complicates his legal position and does not do much to shore up his image as a labor leader.

ATU Asleep At the Wheel

It does not, however, necessarily threaten his job as head of the union representing Department of Education school bus drivers and matrons, based on the inertia that has gripped the leadership of the International ATU since Mr. Battaglia and Local 1181's other top two officials were indicted 15 months ago.

It was only because Federal prosecutors insisted on it as a condition for granting bail after a second indictment on an extortion charge that Julius "Spike" Bernstein, the local's longtime secretary-treasurer and alleged close associate of Mr. Ianniello, took a leave of absence from that position this summer. And Ann Chiarovano, Local 1181's recording secretary and the director of its pension and welfare funds, apparently still holds those positions more than six weeks after she pleaded guilty to attempting to conceal that the union had been taken over by organized crime.

NOT THE BEST EXAMPLES: One reason organized labor's image has suffered besides problems with mob-infested unions is that national labor leaders like John Sweeney (left) and Gerald McEntee have been slow to take action against subordinates whose excesses eventually became major embarrassments.

Mr. Battaglia's lawyer, David Lewis, said Sept. 22, "Ianniello's plea has got nothing to do with us," noting that his client was not charged with taking illegal payments. International ATU President Warren George failed to respond to an inquiry about whether Mr. Ianniello's admission would finally force him to act to clean up the ATU's largest (nearly 15,000 members) local.

To this point, Mr. George's only response to the allegations that Local 1181 was a mob enterprise was to deputize International Vice President Joseph Welch to monitor the union's operations in the wake of Mr. Bernstein's forced leave of absence.

During the mid-July vote on Local 1181's new wage contract, Mr. Welch proved to be a decidedly passive monitor. He said nothing when Mr. Battaglia weaseled his way past a contract clause that presents the prospect of future health-benefit givebacks by telling members, "As of this day, there will be no raise in your deductibles." Nor did he indicate any sign of disapproval when Mr. Battaglia, after assuring dissident union members that they would have a chance to ask questions about the contract, swiftly pushed through a ratification vote without any comments from those in attendance. Mr. Ianniello's guilty plea, however, has made the International's state of denial a more uncomfortable place to live. Indications are that other prominent labor leaders from outside the ATU consider it such an embarrassment that they are prodding Mr. George to finally remove Local 1181's leaders.

Link to Sweeney's Past

Mr. Ianniello's guilty plea, and the ongoing trial of his close associate, Genovese family captain Ciro Perrone - in the Federal courtroom next door to the one holding the Junior Gotti racketeering case - have received relatively little media coverage. But the admission by the 86-year-old crime family boss that he exerted control over Local 1181 has echoes of charges made against other prominent private-sector New York City unions during the 1990s, one of which has uncomfortable associations for AFL-CIO President John Sweeney.

That union, since cleaned up, was Local 32B-32J of the Service Employees' International Union, representing building service workers. Mr. Sweeney headed the local before becoming president of the SEIU. For more than a decade he tolerated the spending excesses of Local 32B-32J President Gus Bevona, whose total compensation eventually exceeded $500,000 a year. When finally forced from office in 1999, Mr. Bevona received a severance package of $1.5 million. Alphonse D'Arco, a former boss of the Lucchese Crime Family who turned FBI informant, identified Mr. Bevona as being connected to the Genovese family.

Sweeney Stayed on Payroll

Veteran labor journalist Harry Kelber, in an article that appeared just before Labor Day, revisited the Sweeney/Bevona relationship, noting that for 13 years after he left 32-BJ to run the SEIU in 1981, Mr. Sweeney remained on the local's payroll in an advisory capacity and received at least $449,000 in payments. His decision not to remove Mr. Bevona after widespread publicity about his huge salary, and his attempts to intimidate a janitor named Carlos Guzman who questioned it, Mr. Kelber wrote, "accounts for the growing cynicism within unions and labor's loss of public esteem."

The article set off a fierce e-mail debate between two editors of municipal union newspapers, with one arguing that the piece showed how corrupt Mr. Sweeney was and the other countering that Mr. Kelber was dredging up ancient history because of his antipathy toward the old guard of the AFL-CIO.

Mr. Sweeney's continued compensation from Local 32B-32J was hardly a revelation; the payments from the local to him, which eventually exceeded $70,000 a year, were listed on a disclosure form filed with the Federal Government that I received a copy of while writing about Mr. Bevona for the New York Post in 1991. The payment itself raised eyebrows but did not automatically signal wrongdoing; a far more telling sign of Mr. Sweeney's complicity in Mr. Bevona's gorging himself at his union's expense was the reaction of the then- SEIU president's spokesman after I wrote that Mr. Bevona had led a strike by building service workers without getting the required authorization from his rank and file.

The Sweeney spokesman, Ray Abernathy, called me to say that I was in error and that a strike vote had in fact been taken. When I responded that I had spoken to a dozen doormen in two different neighborhoods, Greenwich Village and Murray Hill, all of whom said they were never notified of a strike vote, Mr. Abernathy stood firm on his claim. It was a variation on the old cheater's defense: "Who you gonna believe - me, or your own lyin' eyes?"

Sweeney Got a Pass

But if Mr. Kelber's article, as his critic alleged, amounted to old news, why didn't it have any impact 11 years ago when Mr. Sweeney was elected president of the AFL-CIO - at a time when Mr. Bevona was still the overpaid, underperforming president of his old local? The Bevona association should have been at least two strikes against Mr. Sweeney's candidacy. But he prevailed over retiring AFL-CIO President Lane Kirkland's choice for the job, Tom Donahue, by promising greater activism, both politically and in organizing workers.

Mr. Sweeney's organizing efforts have fallen well short of expectations. And the greater political role he pledged took an interesting turn a year into his tenure with the re-election bid of Ron Carey, the then-president of the International Brotherhood of Teamsters.

Mr. Carey was running against Jimmy Hoffa, whose father during his tenure as Teamster president had personified the intersection of organized labor and organized crime. In trying to retain office, Mr. Carey, who had come to power as a reformer, engaged in the kind of fundraising chicanery that might have been expected from the elder Hoffa, and was forced to step down when Federal investigators uncovered the evidence that eventually led to his indictment.

McEntee Part of Scheme Among the prominent labor leaders who were implicated in the scheme were Mr. Sweeney's successor at the SEIU, Andy Stern; AFL-CIO Secretary-Treasurer Rich Trumka; and Gerry McEntee, the president of the American Federation of State, County and Municipal Employees. They were accused of having made large donations to groups closely affiliated with the Democratic Party; those groups then made donations that were used to cover some of Mr. Carey's campaign expenses.

Mr. Trumka took the Fifth Amendment when investigators asked about his role. Under the AFL-CIO's code of conduct, this was a violation that normally would have required him to resign his post, but Mr. Sweeney granted him a waiver that allowed Mr. Trumka to continue in office.

In essence, prominent union officials were engaging in political moneylaundering. In their eyes, the cause may have been worthy, but there were signs that the loose ethics behind their illegal actions were applied in situations where by no stretch of the imagination could it be justified.

Ignored Vote-Fix Cry

During the same year as the Teamster election, a suspiciously high vote in favor of a wage contract by one District Council 37 local prompted the leader of another local to write Mr. McEntee - whose union is DC 37's parent - seeking an investigation. Mr. McEntee ignored the request; a couple of years later, it was revealed to the Manhattan District Attorney's Office that the suspicious contract vote in DC 37's Local 1549 had in fact been rigged to ensure passage of the deal, which began with a two-year wage freeze.

The public reason given by some of the fixers was that they believed rejection of the deal would have hurt the standing of DC 37 Executive Director Stanley Hill with the Giuliani administration. At least as plausible an explanation is that they were afraid that if the contract - which offered short-term savings that became a vital element in dramatically improving the city's fiscal condition - were rejected, an angry Mr. Giuliani might have turned a spotlight on the union that would have uncovered some of the rampant corruption that later surfaced.

Mr. McEntee's willingness to be a party to the Carey scheme, and to turn a blind eye to the rigged contract vote, make it easy to understand why he has not intervened as the head of DC 37's largest local, Local 372, has held her last two elections in just a single polling location over a four-hour period. On a moral scale, what's an appalling lack of democracy amount to when weighed alongside outright corruption? Which may also explain also why Mr. Welch, the International ATU vice president, was unmoved by the way that Mr. Battaglia conducted his contract ratification vote.

Thin Line Easy to Cross

The problem for all of labor, as Mr. Ianniello's guilty plea should drive home, is that it is often difficult to separate autocratic behavior from outright thievery. Just as cops who are corrupt are more inclined to be brutal as well, labor leaders who operate as if they own their positions are prone to extend that sense of entitlement to enrich themselves.

If organized crime gets its foot in the door, the problem becomes immeasurably worse. For one thing, any pangs of conscience a corrupt labor leader might have in terms of serving his or her members are likely to be trampled by the more-urgent demands of men who have never been infected by trade-union principles. For another, violence is much more likely to enter the equation: it's possible that one reason Mr. George of the ATU has been so loathe to act to protect the image of his largest local is that he's afraid of the consequences of disturbing a mob operation.

So what suffers as he dithers - besides the Local 1181 members who have been represented by people who don't view them as their real bosses and are now too preoccupied with their legal problems to do much on their behalf - is the image of the labor movement.

Even a Whiff Hurts

Dealing with a White House that has often seemed hostile to unions and an increasingly conservative media that is quick to brand as "labor bosses" even those union leaders whose only offense is to represent their members vigorously, any hint of corruption can be harmful.

Cognizant of the need to present a clean face to the larger world, the AFL-CIO New York City Central Labor Council has vastly reduced the duties of its president, Brian McLaughlin, and virtually exiled him from the Labor Day Parade, because he is a target of a Federal probe into possible collusion in the bidding for city street-light maintenance contracts - although he has yet to be criminally charged.

At Local 1181, the public face of the union belongs to Matty the Horse, and that won't change until the actual leadership of the union does. That's bad news for the honest ATU locals that represent city bus drivers in Queens and Staten Island; bad news for other locals throughout the nation, and bad news for labor in general.

Someone in labor's upper echelons has to get that message across to Mr. George, before the U.S. Department of Labor steps in and places Local 1181 under government control. And those at the top also have to realize that the laissez-faire attitude they've displayed toward ethical violations in their ranks helps feed suspicions that the difference between mob-linked unions and those that are merely a bit shady is no more than a few convictions.