LOS ANGELES (CN) - Top bosses of the International Union of Operating Engineers Local 501 embezzled "tens of millions of dollars" and ran the union "with the same disregard for others' rights as the mob," 10 members say in a federal RICO class action.
Lead plaintiff Finn Pette and other members of Local 501 sued the International Union of Operating Engineers and 27 of its officers, including president James Callahan, former president Vince Giblin, and 13 vice presidents. Able Engineering Services and ABM Engineering Services are also named as defendants.
"This action arises from years of illegal activity by the International Union of Operating Engineers and its controlling officers and co-conspirators," the complaint states. "Local 501, a local trade union, and its members, were victimized by those many years of illegal activity. The unlawful abuses suffered by Local 501 and its members takes three predominant forms. First, millions upon millions of dollars were withheld and/or embezzled from Local 501 and its membership. Second, Local 501 was prevented from expanding its membership; the employers violating their contracts with Local 501 were protected by defendants, who were receiving kickbacks for their protection. And third, the membership of Local 501 was denied the right to freely select its own officers, through fair and honest elections.
"The conduct of defendants harkens back to the days of unrepentant racketeering by organized crime, which makes some sense here. The International Union of Operating Engineers conducts its affairs with the same disregard for others' rights as the mob. Not surprisingly, the International Union of Operating Engineers has a long history of ties to organized crime families in New York and New Jersey, and they have apparently learned their techniques from the very best of those crime syndicates."
The 400,000-member union represents "heavy equipment operators, mechanics, and surveyors in the construction industry, and stationary engineers, who work in operations and maintenance in building and industrial complexes, and in the service industries. IUOE also represents nurses and other health industry workers, a significant number of public employees engaged in a wide variety of occupations, as well as a number of job classifications in the petrochemical industry," according to the complaint.
The union, founded in 1896, has 123 locals throughout the United States and Canada and is the 10th largest union in the AFL-CIO, members say.
Many of the plaintiffs were union officers, including James McLaughlin, who was the Local 501's business manager and a vice president for more than years, until he was "forced to resign in 2009," according to the complaint.
The plaintiffs claim former General President Vince Giblin, a defendant, told officers in Local 501 that "if they wanted to serve as an officer, they had no choice but to contribute to the President's Club, in amounts ranging from hundreds to thousands of dollars."
They claim that defendant Dennis Lundy, director of the Local 501 Apprenticeship Trust Account, embezzled money. The plaintiffs say Lundy forged McLaughlin's signature on checks and charged "many thousands of dollars in lunches to the fund, though the lunches were not for any Fund business purposes. Instead, Mr. Lundy was having an affair with [defendant] Cynthia Escanuelas, an employee of Local 501."
After Giblin promoted Lundy to Western Regional Director, McLaughlin reviewed the fund's financial statements and discovered "a number of improper, personal charges related to food, beverage, and travel purchases," the complaint states.