Labor Racketeering Enforcement Actions
|Cases referred for prosecution||88||105||80||74||81||105||73||132|
|Fines, restitutions, forfeitures, and civil monetary actions ($ in millions)||$187.9||$69.2||$27.1||$24.2||$76.2||$72.9||$75.4||$109.2|
Source: Selected Five-Year Statistics of the OIG
The Office of Labor-Management Standards (OLMS) is not alone in fighting union leader corruption and financial mismanagement. While the OLMS specifically enforces the LMRDA, in 1978 the Department of Labor tasked its Office of the Inspector General (OIG) with a wider mandate to “conduct criminal investigations to combat the influence of labor racketeering and organized crime in the nation’s labor unions.” Now the OIG’s Office of Labor Racketeering investigates internal union affairs, benefit plan fraud, much of which involves union-administered plans, and labor-management corruption, such as collusion between management and labor representatives to defraud an employer.
Based on its investigations, the OIG reports that organized crime’s role in labor racketeering has evolved. Gone are the days of Jimmy Hoffa — although it should be noted that half of the last eight Teamster presidents have been indicted. Now, the OIG reports:
The field of organized crime groups has expanded to include new nontraditional, transnational groups from Asia and Eastern Europe among others, in addition to traditional groups like La Cosa Nostra (LCN), known also as the “Mafia.” What remains unchanged is labor racketeering’s impact on American workers, employers, and the public through reduced wages and benefits, diminished competitive business opportunities, and increased costs for goods and services.
In a recent report to Congress, the OIG wrote that its “investigations continue to identify complex financial and investment schemes used to defraud benefit fund assets, resulting in millions of dollars in losses to plan participants. The schemes include embezzlement or other sophisticated methods, such as fraudulent loans or excessive fees paid to corrupt union and benefit plan service providers.”
In addition to the many cases of union leader racketeering, the OIG’s investigations also reveal that union leaders are complicit in protecting their members’ financial interests. With respect to pension and healthcare plans, the OIG has investigated numerous instances where union leaders have failed to properly insure the security of their members assets against embezzlement from outside sources such as corrupt benefits plan administrators or employers. Testifying before Congress, Deputy Inspector General Stephen J. Cossu said: “Our investigations have shown that the vast sums of money in these plans remain vulnerable to corrupt union officials and organized crime influence.”
More troubling are instances where the OIG discovers unions leaders that collude with others to embezzle from plans. In many cases, the OIG sees unions as the center of most racketeering.
The OIG has secured nearly half-a-billion dollars in fines and restitution to employees, benefit plans, and others defrauded by labor racketeers since 2005.
Many of the OIG’s investigations focus on the nexis between union leaders, business representatives, and organized crime figures. Whether union leaders are directly involved in corruption or merely complacent in their responsibility to guard their member’s financial interests, an analysis of the OIG’s semi-annual reports to Congress suggests that union leaders are central to the problem of labor racketeering.