By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
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The scandal stems from the arrests last June of three plumbers' union officials who were charged with taking bribes from a contractor working at Staten Island University Hospital. The officials allegedly collected more than $60,000 in bribes in exchange for allowing the builder to save more than $1 million by not making payments to the union's benefit funds. The arrests came at the same time that investigators from the state attorney general's office were probing corruption allegations surrounding the purchase and construction of a multimillion-dollar training center built by the union in Long Island City.
Now, in an effort to forestall a possible government civil racketeering lawsuit, the union itself has taken the offensive and agreed to a new tough code of ethical standards for its members and officers, as well as the supervision of an outside investigator of its business operations and finances.
In December, the union signed an agreement with Attorney General Eliot Spitzer and the federal Office of Labor Racketeering to retain Kroll Inc., the giant security firm, to conduct independent investigations of the union's operations. Under the agreement, Kroll, led by James Bucknam, a former top FBI official, will have unfettered access to the union's financial records and business operations, as well as the right to scrutinize any links between members, officers, or vendors with organized crime.
Any charges of wrongdoing brought by investigators will be considered by an outside hearing officer, Edward A. McDonald, a former federal prosecutor. The supervision lasts just 18 months, but Kroll will also watchdog upcoming union elections in 2006 and 2009.
"Nobody's happy about having outsiders come in, but this is the best of the options before us," said George Reilly, 51, a 30-year veteran plumber and plumbing instructor who was elected business manager of Plumbers Union Local 1 after his predecessor abruptly retired just days after the arrests. The alternatives, Reilly said, had been a trusteeship by the national union, or the likelihood of facing a racketeering suit brought by Spitzer, whose Organized Crime Task Force led the investigation and the push for reforms. "We'll give them whatever [records] they want," said Reilly. "It's my intention to go the extra mile, to take some strong measures to show we can clean up this union."
Such shotgun marriages between unions and outside monitors have become almost commonplace in New York. Several of the city's largest unions, including the teamsters, carpenters, laborers, and even newspaper deliverers, have been placed under some form of supervision in recent years after findings of widespread corruption. The monitors have ranged from those with all-encompassing, court-authorized power to direct union operations like that which the national teamsters union and several of its large New York City locals have endured since 1988, to more simple outside supervision such as that agreed to by the plumbers. In the parlance of law enforcement, such monitors are known as Independent Private Sector Inspectors General, and they have been used widely by companies hit with corruption charges to show prosecutors and investors they can clean up their own act.
But even if the new monitor is on the lower end of potential outside interference, it is still a tough pill to swallow for union members, particularly for the fiercely independent plumbers, the home base of one of organized labor's icons, the late AFL-CIO chief George Meany. The cigar-chomping labor boss started out as a Bronx plumber in what was formerly Local 2. In 1993, that local was revealed as a hub of corruption when Manhattan District Attorney Robert Morgenthau won convictions of virtually all of the local's top officers for mob-orchestrated fraud.
The union's own reaction to the problems, however, was sluggish. It took three years for its national parentthe United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industryto respond to the problem. After seven union officers were convicted of the charges in 1996, it moved to place the local under trusteeship. It then merged the three locals covering the city into one combined unitLocal 1. The move did little to change the atmosphere, however, according to several members of the union.
"Nothing changed," said one plumber who has long pushed for reforms.
Donald Sclafani, an official who had previously represented plumbers in Brooklyn and Queens, was appointed head of the new combined local by national officials. When the trusteeship was lifted in 2000, elections were held and Sclafani won the top position of business manager. Although the newly merged citywide local had been briefly headquartered in mid Manhattan, Sclafani set up shop in the offices of the old local representing Brooklyn and Queens, located along a waterway on Cross Bay Boulevard in Howard Beach, near JFK airport. The headquarters were a short commute for Sclafani, who lives just a few blocks away on the other side of the canal that opens onto Jamaica Bay.
On the eve of new elections in June, after the union had received government subpoenas and as the arrests of the three union officials were announced, Sclafani abruptly quit his $130,000-a-year post and declined to seek re-election. Reilly refused to speculate on the reasons for Sclafani's departure. "He was pushing 65 and he was ready to retire," he said, adding, "There was a feeling that we needed to change things." Sclafani did not return messages left at his home.
Reilly, who had worked as the union's second-ranking officer prior to Sclafani's quitting, ran unopposed for the top slot. Union members were split on their reaction to the arrests of other officials. Domenick Goffredo, who earned $108,000 a year as the local's business agent at large and faced charges of grand larceny and bribe receiving, was defeated by an insurgent, John Feeney. Thomas Parrella, a $103,000-a-year business agent also charged with grand larceny and bribery, was re-elected to his post, and David Aginsky, another business agent who faced similar charges, won election to the post of financial secretary unopposed.
Since then, all three officials have pled guilty. Parrella stepped down from his post and pled guilty to felonies in December, as did Goffredo. Aginsky pled to a misdemeanor count and remains in office. "I am disappointed in them," said Reilly. "You think you know someone and then you learn something else. They shortchanged the members."
Kroll's Bucknam declined to say whether any action against Aginsky or other members was pending. "We are taking stock and assessing the lay of the land," he said. He urged members with knowledge of wrongdoing to use a new toll-free number set up by the agreement, 1-866-PLUMB-01. "The more specific the information, the better," said Bucknam.
Jim McNamara, research director of the Association for Union Democracy, an organization that assists rank-and-file unionists, said it remained to be seen whether the new investigators will be able to change the culture of the plumbers' union. "The real test of the new monitors will be how they deal with the immediate problem of Aginsky," said McNamara. He also said members have expressed a need for changes in the hiring-hall referral system. "Right now, contractors and business agents are the ones in control of who gets hired," said McNamara.
Reilly said he believed the changes would ultimately benefit his union. "I got into this because someone had to step up to the plate. Some members said, 'Come on, George, you gotta do it.' We went through five and a half months of negotiations with the [attorney general] to get a fair agreement. I think we got one."