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The spending scandal has caused the Manhattan-based Mason Tenders District Council, which represents 14,000 laborers who do building construction and demolition, to be placed under the supervision of its national parent, the Laborers International Union of North America. So far, five top union officers have resigned. Two are facing criminal charges, including the council's respected former top official, business manager Anthony Silveri. Last week, Silveri was arrested by the office of the Manhattan district attorney and charged with embezzling $21,000 from the union to pay for home kitchen appliances.
Until its new problems, the Mason Tenders had been considered one of labor's success stories. Following federal criminal and civil charges lodged in the early 1990s against the union and virtually all of its top officers, the union managed, while under federal supervision, to transform itself from a mob-riddled organization to one that emphasized aggressive organizing and rank-and-file needs. More than a score of officials were ousted, including several who were alleged soldiers in the powerful Genovese crime family. Mobsters had drained its coffers and trust funds of more than $25 million through corrupt deals, and used its clout to shake down vendors and contractors for millions more. As a result of the gangsters' swindles, the union was even forced to sell its headquarters on West 18th Street.
But while the wiseguys engaged in wholesale looting of the union, the council's former secretary-treasurer, Daniel Kearney, allegedly went retail, spending more than $150,000 of union funds in a three-year spree from 2000 to 2002. According to records of an internal union investigation, the money went for everything from paying for airfare and luxury hotels in Las Vegas during Kearney's wedding to his personal dry-cleaning bills.
A list of Kearney's union credit card expenditures shows he splurged on $1,940 in clothes at Today's Man, a $3,500 dinner at Tavern on the Green in Central Park, $9,000 in flowers, $1,000 for a tuxedo, and more than $3,000 for purchases at a CVS drugstore near his home. More than $1,100 went for tickets to the Christmas Spectacular show at Radio City Music Hall. And over a two-day period in 2001, records show, Kearney bought $5,000 worth of video games and video players. Most of them were given away as presents, he told union investigators.
In addition to his union activities, Kearney served as a Democratic member of the city council in Long Beach in Nassau County, a post he resigned, citing personal reasons, when the spending was uncovered in March 2003. Before that, records show, he had the union pick up the tab for more than $10,000 in meals at local restaurants, including Café Fratelli, near Long Beach's boardwalk, where he wined and dined friends and political allies. Kearney also had the union make an unauthorized $5,000 contribution to the Long Beach Democratic Chairman's Club, investigators reported.
At work, Kearney regularly showered gifts on union officials as well as employees. The investigation by the national union's inspector general found that he bought televisions, video players, computers, car stereos, and gas grills for union officials. He spurned offers of payment, investigators reported, saying it was "on him."
Kearney told union investigators that he "just got stupid" in purchasing items with the union's credit cards, according to a summary of his interview. "It was partly ego . . . being a big shot, giving out gifts to different individuals," the report stated. "Kearney also liked people outside the union to believe he was an influential person within a major organization."
Kearney, 57, did not return calls. His attorney, Peter Tomao of Garden City, also did not respond to repeated messages. Kearney has pleaded guilty to federal charges of stealing from his union, records show. He has yet to be sentenced.
In addition to his post with the District Council, Kearney also served as secretary-treasurer of Laborers Local 79, a 9,000-member organization and the largest in the council. As such, he was, in effect, his own boss, with little oversight from others in the union. The lucky employees and officers who received his presents "were under the impression that the gifts were from him personally," investigators wrote.
But some later admitted they knew better.
This summer, three top officers of Local 79Frank Noviello, Andrew Cefalo, and Keith Loscalzoall submitted voluntary resignations from their posts and agreed never to hold office or employment in the union after investigators confronted them with evidence that Kearney had helped them get free car repairs or buy union-leased vehicles at below cost.
Silveri also resigned after being questioned about a series of transactions, including a $21,100 bill for kitchen appliances for his home which Kearney had the union pay. According to the union's investigation, Kearney arranged the purchase through a salesman-friend at a P.C. Richard's appliance store in Queens where Kearney bought computers and other equipment for the union. When Silveri was slow to pay the bill, Kearney told investigators, he arranged for the salesman to submit a bogus invoice for the fixtures, and then had the union pay it.
Silveri repaid the money last year after union auditors questioned him about the matter. As leader of the Mason Tenders, Silveri was credited with pushing the union to actively organize nonunion construction contractors, and also pressed it to fight for on-the-job safety improvements and to aid immigrants, who make up a large proportion of the union's membership.
Silveri's attorney, Jason Solotaroff, declined comment on his client's arrest. A complaint filed last week by the Manhattan district attorney charged Silveri with grand larceny.
Many of the details of the spending scandal were made public for the first time in September, at hearings held by the national union on placing both the District Council and Local 79 under supervisionwhich is considered one step below trusteeship.
At the hearings, union investigators presented evidence concerning Kearney's embezzlements, as well as what they said were inflated bills for construction and fixtures at the union's offices, currently on Eighth Avenue.
Patrick Slevin, an attorney representing the union's court-appointed monitor, said that Kearney, who oversaw purchases for the council and Local 79, had failed to get bids for the work. Slevin cited a $12,000 bill from a construction firm for less than a dozen wall shelves. In addition, almost $500,000 in office equipment was bought through a company called Tribeca Office Supply, which Slevin referred to as a "mom and pop supply store." Among the items purchased through the company, according to invoices presented at the hearing, were "7 brass desk accessories, 10 brass wastebaskets, 7 brass business card holders"at a cost of $9,300.
Another invoice showed that the union bought 40 leather chairs at a cost of $1,600 apiece, and 13 "officer's chairs" at $1,700 each. Slevin said that investigators learned that the owners of Tribeca were friends of a union employee. When investigators asked union officials about the expenditures, they were told that they "didn't really know what the cost of this furniture was going to be until the bills came in. We assumed that Dan Kearney was looking at cost."
The union probers also said that, following the expenditures, Tribeca gave gifts to several union officials and employees. Cefalo received a leather Coach bag valued at $450, and Loscalzo received a Waterford desk clock worth $150. An office secretary got five $100 American Express gift checks. Slevin said the owners of Tribeca refused to respond to questions from the union's investigators.
A handful of members addressed the hearing after the presentation of evidence. One of them was Pete DiNuzzo, a member of the union since 1986 who ran unsuccessfully for union office last year.
"It is a mess and a shame," said DiNuzzo. "I am a union guy and unions are good for people. But we shoot ourselves in the foot all the time."