We can’t resist noticing when union officers are caught sticking their hands in the cookie jar. There’s seldom a shortage of such news, but this month, there’s a doozy of a corruption case to discuss involving the top of the Boilermakers’ food chain. It’s the kind of head-shaking case that perfectly illustrates why more transparent union financials are necessary, and members should demand to know where their dues money is going.
Granted, this story is not as amusing as this year’s Valentine’s Day Teamsters announcement, which involved two officers allegedly handing themselves sweetheart deals for luxury goods. That led to President Sean O’Brien asking those officers to resign because he does not want any Hoffa-esque vibes ruining his reputation as a legislative mover and shaker.
Speaking of Hoffa-level corruption, this story about the Boilermakers (IBB) is a modern-day example of what happens when officers go unchecked. The crimes for which they were convicted are breathtaking in scope.
Corruption by the numbers
A federal jury convicted four defendants, including three top IBB officers, of fraud, embezzlement, racketeering, and other white-collar crimes. These defendants funded their scheme by funneling dues money and siphoning members’ retirement funds. Ex-President Newton Jones and his wife, Kateryna; ex-Secretary Treasurer William Creeden; and ex-VP Lawrence McManamon each face up to 20 years’ prison time for the following:
- $5 million on lavish trips, for leisure not business, to international cities such as Paris and Rome
- A no-show job for Kateryna Jones, who received $1.8 million
- An illegal $7 million loan to the IBB-affiliated Bank of Labor, which paid Newton Jones and William Creeden $500,000 annually for barely existent “employment” when they also received full-time union officer salaries.
- $100,000+ in tuition costs for Newton Jones’ family members
- $100,000+ in restaurant meals for Newton and Kateryna Jones
- Hundreds of thousands of dollars in unearned salary, fraudulently claimed vacation time, and fraudulent healthcare costs
- Unauthorized surveillance of union staffers who questioned the above expenditures
- Wire fraud involving the above financial transactions that were thus elevated to RICO crimes
A “reckoning” to come
Here’s a quote from U.S. Attorney Ryan A. Kriegshauser, who expressed disgust over this intricate scheme that ran for at least 15 years:
“The absolute hubris and entitlement with which these defendants stole from American workers is disgraceful. While union members were faithfully clocking-in and out of their jobs, these defendants thought they were unaccountable and were callously gallivanting on extravagant trips that spared no expense. With these convictions comes a reckoning.”
Sentencing will take place on Sept. 1. These IBB officers could end up doing more time than Jimmy Hoffa, who only served four years after being convicted for fraud, conspiracy, and jury tampering. Yet no matter how these sentencings go, this IBB mess is another reminder that despite how much lip service that unions give to reformation, the high cost of corruption keeps rearing its head. Again, they simply can’t resist!
