How the corporate right lies about union corruption

Ah, the corporate right has launched a new anti-labor front group called UnionFacts.org, dealing in dark tales of union corruption. Of course, you can judge the likely accuracy of the site by the fact that its been set up by the professional lobbyist who helped found the Beverage Institute, the nice folks who tell the public soda pop has no role in childhood obesity and that Mothers Against Drunk Driving are radical ideologues.

But looking over the web site offers a good chance to walk folks through how corporations lie 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, if you check out the UnionFacts.org page on “Union Leader Fraud and Corruption,” they list $400 million in “labor racketeering” fines and civil restitution in the last five years.

Sounds bad for the union leaders, doesn’t it?

But since the information comes from the Labor Department’s Office of Inspector General, it’s worth going to the source. And if you go to the DOL’s labor racketeering site, they have a “Statistics” page with the same numbers on “labor racketeering” as on the anti-union site.

But let’s look in more detail at what counts as “labor racketeering” by reading the most recent Semi-Annual Report to the Congress by the office. Some of the problems in the union movement 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. Instead, they are businesses that defrauded the unions — i.e., 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 United Public Workers Union Local 646.

On Aug. 22, 2005, Robert Boyd, a former Evergreen Securities Ltd. official, was sentenced to 37 months imprisonment and three years probation. On Oct. 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 U.S., and bank fraud. Restitution will be paid to the victims of the embezzlement schemes that 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.

And remember, this is data from the Bush administration and with all their resources gunning to indict union leaders, most of the fish they catch are still corporate criminals.

Corporate flacks can keep putting out their propaganda, but it’s ultimately hard to take K Street lobbyists seriously as they beat their chests about supposed union ethical failings. Obviously, any union illegal conduct should be rooted out, but in a world of multibillion corporate corruption, from Enron to defense contractor rip-offs of the public, unions are models of integrity, especially in comparison to many of the criminals running corporate America.

Nathan Newman is a union and community activist and policy director of Progressive Legislative Action Network. This article is reprinted from The Progressive Populist by permission of the author.