The Sinner Within

How Brian McLaughlin betrayed the labor movement and conned us all

In the months after law enforcement agents raided his state assembly and union offices, Brian McLaughlin, wary of surveillance, started conducting his business at the Hollywood Coffee Shop, a soup and sandwich place at 16th Street and Sixth Avenue, around the corner from the New York City Central Labor Council. He would sit at a table against the windows, over-looking the subway entrance, facing the door where he could see who was coming and going.There, he told those who asked that he really had no clear idea why a battery of agents from the FBI, the federal labor-racketeering office, and city investigations department had burst into his offices on

March 2 and seized scores of boxes of records. He sat there in his dark labor statesman's suit, six foot three, built like a tree trunk, shaking his big handsome head of black hair laced with gray from side to side. "That's what my lawyer's trying to find out," he said.

People wanted to believe him. New York is considered a union town, and over the 10 years he headed the 1.5 million- member labor council, Brian McLaughlin, more than anyone else, was the face of labor. He rarely missed a rally or a picket line, and you couldn't fail to spot him as he stood literally head and shoulders above the crowd, always with a determined set to his jaw. He was there for the transit workers at their huge thundering demonstrations; for the firefighters, cops, and teachers when City Hall balked at new contracts; and for labor newcomers like the graduate school students trying to win union protections. He talked about immigrants and the rough deal they got, and how unions were reversing years of policy to now embrace them. He fought Wal-Mart over the way it treated its workers and helped block the giant chain from opening in the city. He had his troops organize the annual Labor Day parade (the weekend after Labor Day to avoid vacation conflicts), and every elected official in town, and those seeking to become one, had to be there, to be seen marching with big Brian McLaughlin, the face of labor.

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  • In the Wake
    McLaughlin scandal casts doubt on labor council's future
    by Tom Robbins
  • Which is why many were inclined to give him the benefit of their many doubts when federal agents appeared, seemingly out of nowhere, at his doorstep. New York's unions have been plagued for generations by thieves who used their official positions to wrongful advantage. But most had the decency to keep to the shadows, to grow fat and prosperous in the dark like plump mushrooms. Who ever heard of a thief who clamored for the limelight? What burglar made sure his face was in every photo, his name in every article, the more times the better?

    The minute he became president of the labor council in 1995, McLaughlin put a public relations adviser on the payroll. He went through half a dozen of them over the years, his instructions always the same: Get me coverage. He was an easy media sell: good-looking, charming, able to give a good speech. The resulting profiles were so flattering that he began discussing his political future with consultants. Why not mayor? he asked. He was a moderate blue-collar Democrat, a veteran assemblyman from Queens, a natural heir to those who had crossed party lines to vote for Rudy Giuliani, the Republican mayor McLaughlin had endorsed for re-election. He let the notion float in the press and began raising a campaign war chest.

    At St. Patrick's Cathedral in September 1999, he sat upright and earnest in a front pew as his dying friend, Cardinal John O'Connor, proud son of a union painter, praised him during a Sunday homily for bringing energy and integrity to labor. "There is a wonderful new breath in the movement," said O'Connor, eager to reaffirm the dignity he believed unions offered to his flock. McLaughlin nodded in solemn agreement.

    That fall, when scandal engulfed leaders of the huge municipal workers' union, District Council 37, McLaughlin rushed to repair the damage. He spent several Sundays touring neighborhood churches, where he climbed to the pulpits, offering an apology and a plea for forgiveness of the wayward unions. "Neither the church nor the unions are perfect institutions," he said. "Sinners belong in church, but workers belong in labor unions if they want a better future."

    That was Brian McLaughlin for you: ever sensitive to the PR demands of the moment, always aiming his pitch at the soft spot held in the hearts of most New Yorkers for labor, always standing tall for working men and women, so tall that you always knew he was there.

    And that's why the betrayal by Brian McLaughlin of the labor movement—a movement that has suffered a thousand such betrayals by lesser leaders—cuts so deep. Despite his claims of innocence, McLaughlin has few believers these days. He faces 50 years in prison if convicted, and a trial (for which no date has been set) would be likely to smear the city's unions even more. "I'm as angry as angry can be," seethed veteran union organizer Kevin Lynch last month, echoing the rage of scores of colleagues. "It's going to take us years to dig out from this one."


    If even a small portion of the massive 186-page indictment filed against him in October is to be believed, Brian McLaughlin already knew he belonged in the ranks of the sinners he deplored when he toured the churches that fall. Even then, according to the allegations, he was concocting larcenies large and small.

    A fund intended for picnics and holiday parties for the members of the streetlighting division of his own union, Local 3 of the electrical workers? He was already using it to pay the docking fees at a marina on the Jersey Shore where he kept his boat, and to make payments on his sports utility vehicle, according to the government. The campaign finance committee, the one he sought to boost with contributions from admirers who saw in him a potential mayor, a real labor mayor? He had already placed one of his union cronies on the committee's payroll as a consultant for $500 a week, payments he allegedly directed straight back to his own pocket. The Committee to Elect Brian M. McLaughlin paid a woman $450 monthly to clean his district assembly office in Flushing. But most of her time was spent washing floors and windows at the nearby house McLaughlin shared with his wife and children, the indictment asserts.

    Bigger schemes were also allegedly under way.

    In 1998, an electrical contractor who won a city bid to maintain streetlights on Staten Island asked to be cut a break on union work-crew requirements. McLaughlin, who served as the union's business agent for the streetlighting workers, agreed—for a price, the indictment states. The contractor doled out monthly checks of $2,400 described as expenses, along with numerous "bonus" checks of $5,000, to his top foreman, a member of McLaughlin's union, according to the government, money that is also alleged to have gone into the labor leader's wallet. Two years later, when the contractor won the right to maintain Manhattan's streetlights as well, McLaughlin said the labor-saving arrangement could continue—at double the price, according to the government. At the end of that contract, McLaughlin allegedly demanded a closeout payment of $15,000. He was amenable to terms: The money could be in cash or in checks to either his campaign committee or a union-sponsored athletics group that ran a Little League for members' kids. The contractor chose the combination plan, the government claims, writing several checks in May 2002, including one for $3,000 to the Electchester Athletics Association, a group McLaughlin also allegedly plundered, and another for the same amount to the campaign committee.

    Prosecutors carefully omitted from their indictment the names of McLaughlin's accomplices and the contractors alleged to have bribed him. But in campaign disclosure reports filed with the state elections board, McLaughlin listed just one $3,000 check that month. It was from Solomon Tannor, the late president of S.N. Tannor, an electrical contracting firm that won bids to maintain city streetlights in Staten Island and Manhattan in 1998 and 2000. Firm representatives did not return calls.

    As McLaughlin preached that fall, he had an even more lucrative scam under way, according to the charges. New York was preparing a massive overhaul of its traffic signals, replacing incandescent bulbs with cheaper, energy-saving light-emitting diodes. Electrical contractors purchasing the new LEDs were told by McLaughlin and his cohorts, the government claims, that they'd be well served to buy them from a particular supplier, even though his fixtures were more expensive than those of competitors. Otherwise, McLaughlin allegedly told the contractors, his members might have trouble installing the new lights. In exchange for that heavy-handed product endorsement, the lighting salesman allegedly put more than $400,000 in sales commissions in a McLaughlin account, according to the indictment.

    Again, authorities didn't disclose the name of McLaughlin's alleged partner, but records and sources confirm his identity, and it has a familiar ring for New Yorkers: Bernard "Buddy" Beame, owner of Argent Electric Corp. and son of Abe Beame, the late mayor who was famous for his municipal penny-pinching. Buddy Beame denied any wrongdoing. "I have no dealings with him," he said of McLaughlin when reached at his Westchester home.


    Such scams are a long way from the skills that Brian McLaughlin's co-workers so admired when he was first coming up in the electricians' union. "We used to call him 'The Natural,'" said an electrician who served with McLaughlin in the union's construction apprentice program in the 1970s. "He just had all these gifts of leadership—tall, impressive, a great speaker."

    It didn't hurt that McLaughlin was a third-generation union member (his father was the chief electrician for The New York Times), and when Local 3's longtime leader, Harry Van Arsdale Jr., needed help running the city labor council—where Van Arsdale had doubled as president since 1957—he tapped McLaughlin for the slot. When Van Arsdale decided to revive the Labor Day parade in 1981, a tradition that the city's increasingly moribund union movement had abandoned almost 20 years earlier, McLaughlin was told to pull it together.


    To do so, the young electrician recruited help from the union's "J division," some 300 members working for private contractors maintaining the city's streetlights. Contractors are required to keep a team of workers and trucks on call at all times for emergencies, and the union contract stipulates how many workers should be in a crew. And while many J-division men did union tasks on their own time, before or after their shifts, there has also long been a wink and a nod between contractors and the union allowing members to slip off the job for extracurricular activities.

    J-division men often provided the troops for labor rallies and political campaigns, tapping light posts to supply the juice for sound systems, and using the trucks with the long stretch buckets to festoon streets with banners and campaign posters. McLaughlin was appointed business agent for the division and he generously shared his members' expertise with other unions, a move that earned him friends among the rest of the city's trade union leadership. When they went looking for a new council president, the good-look ing guy from Local 3 seemed a perfect fit.

    Back then, McLaughlin's election as the city's top labor official was viewed in union circles as a major reform victory. For one thing, he was replacing Van Arsdale's son Tommy, who had frustrated other city union leaders with his cautious labor conservatism. For another, McLaughlin was just 43 at the time and he talked the talk of a labor activist, in stark contrast to many of the city's ossified unionists, particularly in the powerful building trades. In addition, he already knew the city's top politicians, having been elected in 1993 to the state assembly, representing what was then a mostly white working-class swath of Flushing, Queens.

    And there seemed to be no question he was a hard worker. He seemed to need little sleep and peppered his staff with constant questions. "I am on the beach in the summer, it is 10:30 at night, and he is e-mailing me about projects he wants to get done," said Ed Ott, a former health care workers organizer whose 1996 hiring by McLaughlin as the council's policy director was viewed as another positive sign that the city's new labor chief wanted to get things done.

    But even then there were hints that big Brian McLaughlin also carried a dangerously big ego. In his campaign for the job, McLaughlin told supporters he wanted to be the council's first full-time leader, focused strictly on union business. But after his election, he refused to yield either his $80,000-a-year assembly seat, which kept him commuting to Albany at least six months a year, or his position as head of the J division, a post that carried prestige within Local 3, one of the largest and most powerful of the city's unions.

    There was also an exasperating tendency to try and please everyone, to make promises he could never deliver. "He wasn't a hard guy to like," said a top city union leader. "He just wasn't someone you wanted to do business with."

    As one labor official put it: "He was split so many ways, it made it impossible to focus."

    Despite the many hats he wore, McLaughlin did find time to harness the council's organizational assets for his own benefit. Each of the council's 400 affiliate unions contributed to its political action committee, a fund intended to provide monetary heft to labor's political agenda, putting money behind pro-union candidates and causes. But records show council contributions went heavily to candidates in Queens, McLaughlin's political base, with McLaughlin's own assembly campaign committee and his political club receiving the largest donations. In 1999, the PAC shelled out $49,000, its largest single expenditure, for a series of radio ads that highlighted the labor council's push for a so-called living-wage bill. But the ads' main purpose, confirmed sources who helped craft them, was to get McLaughlin added name exposure.

    Technically, McLaughlin was accountable to an executive board, composed of more than 30 representatives of the city's largest unions. But according to several board members (many simply didn't bother to attend the monthly meetings), there was little discussion of the council's own operations. "I never went to a meeting where they approved an expenditure," said one member. "I don't remember ever seeing an audited financial statement."

    Often, McLaughlin brought guests to make presentations. A couple of years ago, a board member recalled, McLaughlin introduced the marketing director for a cell phone company that had agreed to union contracts. Using the company would be good for labor, McLaughlin told his board, adding that the director was making a contribution to the council's upcoming golf tournament. After the marketing director ended his pitch, someone walked in with a pile of boxes. "I have a gift for everyone," the cell phone rep said, and proceeded to hand out new phones to the board members. The phones, union officials noted, came loaded with several hundred free minutes. Some happily took them, but many left the boxes on the table, aware that the gift from a union employer represented a potential violation of federal law. "It was such a typical Brian meeting," said one member. "Just a dog and pony show. Instead of talking about real work, he's just trying to ingratiate himself with this guy."


    Members of the J division were constantly in the council's offices. Some came and went, carefully noting their volunteer hours. But a small clique of McLaughlin's closest associates were fixtures in the place. "Brian's Local 3 guys were always around," said one former council employee. "For a while I tried to figure out who was who, and why they were there. Then they would tell me, friendly-like, 'Just don't worry about it.' So I didn't. I figured I didn't need to know to do my job."

    McLaughlin's own council salary rose to $145,000 a year, but when another former council aide said he needed a raise, McLaughlin ordered him fired, and then refused to appear in person to explain why. The aide delayed cleaning out his desk, figuring McLaughlin would have to show up eventually. Instead, the aide received a visit from a pair of burly Local 3 members, both of them foremen in the streetlighting division. "We've been told we have to get you out of here, even if we have to throw you out, which we don't want to do," threatened one of the foremen, although the dispute was settled peaceably.

    One steady council hanger-on was Pete Manno, the roly-poly chairman of the local's streetlighting division who served as McLaughlin's right-hand man. Another was Charles Washington, a cigar-chomping African American who was listed as a foreman for streetlighting contractors but whose time was allegedly consumed attending to constant personal errands for McLaughlin, ranging from picking up prescriptions for McLaughlin's family to taking McLaughlin's Jeep Cherokee to the car wash, even delivering envelopes and gifts to McLaughlin's girlfriends. Washington, discreetly referred to as "Officer 2" in the indictment, is described as having served as the labor chief's "personal assistant and valet."

    Another J-division regular was McLaughlin's cousin, a man named Tommy Schuette (pronounced shoot-ay). In addition to working as a foreman for a streetlighting contractor—purportedly a full-time job in itself—Schuette was a practicing chiropractor with offices in Suffolk County and Manhattan. The two men were extremely close. "I think Brian is closer to Tommy than he is to his brother," said one person who knows the family. On occasion, Schuette would give back rubs to people meeting in the council's conference room, and he often signed up visitors as clients for his practice.

    He had other jobs as well. In late 2002, McLaughlin had the council hire Schuette as a $5,000-a-month consultant for chores like hauling and setting up sound equipment for rallies. This was work that had long been done for free by J-division volunteers, but McLaughlin allegedly insisted his cousin be paid for the tasks. That wasn't all. McLaughlin also had the labor council retain Schuette as a fundraising consultant, allowing him to collect a percentage of whatever contributions he collected for the new golf tournament that the labor leader had initiated.

    Finally, in August 2005, McLaughlin ordered Schuette placed on the council's payroll as the director of its immigration project, the Commission on the Dignity of Immigrants, a group that had been launched in tandem with the New York Catholic Archdiocese and McLaughlin's admiring friend, the late Cardinal O'Connor.

    Under its first director, José Peralta, the commission had played a helpful role, uniting immigrant groups around the city. But after Peralta was elected to an assembly seat, the organization faltered, with immigrant activists wondering what had happened. By the time McLaughlin appointed Schuette to head it, the group was essentially inactive. But that didn't affect his pay scale. Schuette's initial salary was $81,000, a level that made him the third-highest-paid employee at the council. A couple of months later, McLaughlin had it hiked to $94,000.

    For Ted Jacobson, a quiet former teachers' union official who has long served as the council's secretary, an elected position, this was too much. According to council sources, the usually mild-mannered Jacobson tried to tell McLaughlin that it would be a big mistake to hire his cousin for the immigration job. The confrontation took place over the telephone and witnesses heard McLaughlin's end of the conversation. "Fuck you, I am the president. Don't tell me what I can't do," McLaughlin yelled and then slammed down the phone.

    According to the federal charges, each one of the labor chieftain's dealings with his multitasking cousin was a scam, with most of the money passed back to McLaughlin. Nor was that all of it. State records show that the same month that McLaughlin had Schuette hired at the labor council, he also added him to his assembly payroll as a part-time "community liaison"—another scam, according to the feds.

    In one more elaborate scheme, McLaughlin allegedly helped Schuette launch a film- processing business in Manhattan, ordering a crew of Local 3 streetlighting workers to spend the summer of 2002 building the new film lab—while they were on the clock for a city contractor. As part of McLaughlin's end of the deal, he allegedly had Schuette's new company make payments on a brand-new $80,000 luxury car that he registered in his wife Eva's name. The vehicle was an interesting choice for one of the top labor leaders in the country, where the auto- and steelworkers unions have long pleaded with members to show support for their ever dwindling jobs by buying American-made cars. It was a gleaming black Mercedes-Benz.


    Outside of the little clique from Local 3 and a handful of other McLaughlin intimates, those escapades stayed mainly behind the closed doors of his council office. In public, Brian McLaughlin remained labor's face and leading voice, an affable man whom most people liked, even admired. That status was something he was determined to capitalize on.

    He had first talked about a mayoral candidacy in the late '90s, an idea that failed to gain traction. But the notion gained new life after new mayor Michael Bloomberg hiked property taxes, evoking anger among middle-class families. In early 2003, polls showed any Democrat could beat Bloomberg nearly 2-1.

    McLaughlin huddled with his political advisers, his former chief of staff, Evan Stavisky, and union lobbyist Bob Ungar, and asked top gurus like Hank Sheinkopf for advice. He hired a full-time fundraising consultant, a young woman named Jackie Rovine, parked her in an office upstairs from the labor council on West 15th Street, and began trying to raise as much campaign cash as he could.

    It wasn't that difficult. He had close contacts in the construction industry, and valuable friends. His most important fundraiser was his pal Santo Petrocelli Sr., the former chief executive of Petrocelli Electric, a Long Island City–based firm that has won some $400 million in city electrical contracts over the last 15 years. "Petrocelli may not have had the title, but he was Brian's campaign-fundraising chairman," said one of McLaughlin's former advisers.

    McLaughlin dined regularly with Petrocelli, who was known in the industry for brandishing a big cigar and bragging about wiseguy connections, ties that have often been alleged by mob informants. McLaughlin clearly respected the older man. His assembly financial disclosure reports show that in 2000 he invested in a successful telecommunications company called FiberNet Telecom that was started and partly owned by Petrocelli. The investment breached the spirit if not the letter of rules forbidding employer-union dealings, but then so did much of McLaughlin's relationship with the contractors.

    Campaign records show that the electrical firms, many with Local 3 bargaining agreements, loaded up the labor leader's campaign coffers. Petrocelli and his family anted up about $10,000 personally, and held fundraisers that brought in thousands more; Welsbach Electric, another big Queens-based contractor, gave $18,000. In a single week in May 2003, Richard Addeo, the late owner of Adco Electric on Staten Island, raised $61,000 from business aides and family members to fuel McLaughlin's mayoral bid.

    By July, McLaughlin had already hit the $1 million mark and he hired a new publicist to get that story out to the press. The Daily News described McLaughlin as "charging hard from the outside." The Times did a Public Lives profile on the big labor leader who would be mayor. "I don't particularly like politics, and I have no ego for it, quite frankly," he told the reporter, a remark that made many roll their eyes when they read it.

    But then suddenly, after the big push, he gave up. McLaughlin never explained his reasons, even to council aides. Early polls showed him running far behind other likely contenders, and there was also resistance within the labor movement. State AFL-CIO president Denis Hughes, a respected leader in McLaughlin's own Local 3, publicly opposed the campaign, and several union officials said they were pledged to other candidates. But the move still stunned his supporters.

    "It was like he just couldn't pull the trigger," said Rory Lancman, a Queens district leader in McLaughlin's own political club. "We never had a discussion about him quitting the race; he just announced it. That was the frustrating thing about dealing with Brian. He was this big, powerful guy, but no one ever knew what he was doing."

    Others wondered if the whole thing had been a sham. "A lot of people thought it was a cynical exercise," said one labor official who worked with McLaughlin. "As soon as he shut it down, a whole lot of eyebrows went up."

    But there was another reason as well. In early 2004, more than two years before the raids on his offices, and just before he dropped his mayoral bid, WNBC-TV reporter Jonathan Dienst called McLaughlin's offices, saying that he'd learned from sources that the labor official was the target of a criminal investigation. The message was relayed to McLaughlin. He "turned white," according to a source. "He just got panicky."

    A couple of weeks later, an item ran in the Daily News that McLaughlin had taken himself out of the mayoral race. "My focus has to be on working people," he told the paper.

    Dienst's story, however, never ran. He decided to hold off, he said, after law enforcement sources pleaded that it could jeopardize their case. When the piece didn't run, McLaughlin was relieved. But he was hardly scared straight. Instead, he responded more like a well-schooled crook, urging greater precautions. According to the indictment, during a meeting with one of his union minions about ripping off more funds from the Electchester Little League, he ordered him never to talk over the telephone. "Nothing on the fucking phone ever again," the labor chief is alleged to have instructed.


    He also began siphoning money out of his campaign committee. In the months after he ended his candidacy, he authorized some $146,000 to a consulting firm set up by his cousin Tommy Schuette. Another $56,000 went to a foreman in the J divi sion; $20,000 was given to McLaughlin's new daughter-in-law. He even billed his campaign committee $2,400 for the cost of flowers and dinner for his son's wedding rehearsal, according to the government.

    Still, his ambitions died hard. Even after the mayoral bid fizzled, he talked about becoming the next Democratic county leader in Queens. The buzz grew so loud that the late Democratic boss Tom Manton confronted him, according to a longtime Manton aide. "What's this about you wanting my job?" Manton asked him. "Not while you're in it," McLaughlin assured him, although top Democrats in the borough said that was exactly what McLaughlin had in mind. He saw other possibilities as well. As late as last year, according to his advisers, McLaughlin was talking about running for Public Advocate, or perhaps city comptroller. "He was talking about 2009," said one consultant. "He was going to raise another million dollars."


    It wasn't until after the indictment that McLaughlin's labor colleagues learned how well the city's top union official had done for himself. Out on the north shore of Long Island, in the hamlet of Nissequogue, just north of Smithtown, McLaughlin had been building a dream house, a sprawling 13-room colonial with two fireplaces, a wraparound porch, wine cellar, wet bar, and a two-horse stable in the back. The tabloids ran photos of the place, but the pictures didn't do it justice. The big house is nestled in the woods, set back from a rural road behind a post-and-rail fence, in a neighborhood of horse farms, a mile from the beaches. Much of the money McLaughlin is alleged to have taken from his various victims—the labor council, the J division's picnic fund, the Little League, his campaign committee—went into the house, according to the government.

    Other money went to girlfriends, at least three of whom were cited in the indictment. In New York's labor world, that was about the only thing that people could agree on when asked if they'd ever gotten a hint that McLaughlin had a secret life. "I knew he liked the broads," said one veteran unionist. "We'd be out after meetings and he'd be at the bar working it. He didn't have any trouble, either, a good-looking guy like that."

    Other than his not-guilty plea at his October arraignment, McLaughlin hasn't said a public word about his troubles. Even people who count him as a friend say they haven't heard from him. Two weeks ago, he and his wife put the new house in Nissequogue on the market at an asking price of $1,699,000. The government already has a lien on the property, so he'll have to fight it for the money. The first to spot the real estate listing were members of Local 3, who put the link to the offering, with its 360- degree color panorama photos of the interior, on a website where union gossip and gripes are posted. "Look at all those high-hats!!" commented one poster, referring to the expensive recessed lights in every room.

    Most unions keep mum after their leaders are accused of crimes, insisting that the accused is entitled to a presumption of innocence. Not so Local 3. In an almost unprecedented article in the November issue of the local's newspaper, its leadership issued a withering blast on the editorial page. "He has betrayed us," the editorial stated. "We are embarrassed. We are shocked."

    Last week, a visit to the Nissequogue house found an inflated Santa, a snowman, and other happy-looking Christmas decorations on the lawn, with the only sound that of chittering sparrows in the tall pines. Eva McLaughlin was just pulling out of the driveway, and she paused to see what the visitor wanted. Yes, this was 1 Hawks Nest Lane, she confirmed, a hopeful tone in her voice. When the visitor introduced himself as a reporter, however, she stomped on the gas and roared away in the shiny black Mercedes-Benz her husband had bought.

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