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George Knapp: Are two local unions in hot water?

<p>George Knapp</p>

George Knapp

Anyone with more than a passing interest in Las Vegas history is familiar with the key role that labor unions have played in the development and success of our fabulous city. Union members and union dollars were critical in the creation and expansion of nearly every resort in the valley — and still are.

But along the way, there have been dozens of union-related scandals, flagrant corruption, and, most notably, indisputable links between local labor leaders and Mafia kingpins, men who’ve relied on beefy kneecap specialists and professional assassins to steal untold millions from hard-working rank-and-file union members. Piles of cash from the tainted Teamsters Pension Fund financed the construction of nearly every Las Vegas casino built in the ’50s and ’60s. But it came with strings attached, strings that led to massive mob skimming operations that poured untold riches into the mattresses of Mafia bosses all over the country. There was a time when the Culinary Union was secretly controlled by organized crime. Ditto for the Bartenders. Mobsters were involved in various attempts to unionize casino dealers in the late 20th century.

The few old-time journalists and lawmen who were around back then and are still above ground speak fondly of the bad-old days, not because mob control of unions was a good thing, but because it was such a fascinating time in our history, a time when there was never a slow news day, a time when blood spilled, bombs exploded and bullets flew.

Thankfully, we’re never going to see mob influence like that again. But it appears that at least two unions with strong local memberships are in line for intense scrutiny by law enforcement. For the first time in many years, I’ve been hearing conversations in which the most feared acronym in the government’s arsenal is once again being mentioned: RICO.

There’s been a steady but growing rumbling within the ranks of local operating engineers about serious problems at the top of the International Union of Operating Engineers Local 501, which has about 10,000 members, including 1,000 in Las Vegas. Union members often complain about union leadership, so maybe that’s why problems within Local 501 have received little or no media attention here, but elsewhere the rumbling is growing louder by the day.

Late last year, a class-action lawsuit was filed in federal court in central California that accuses IUOE’s highest-ranking bosses of committing a blistering array of crimes, in particular, numerous violations of the Racketeer Influenced and Corrupt Organizations Act. The allegations read like something written by Mario Puzo, including kickbacks, bribery, threats of violence, rigged elections and the “embezzlement of millions upon millions of dollars” from union members by bosses who, according to the suit, seem intent on returning the union to the “days of unrepentant racketeering by organized crime.”

The trouble started in 2007, when an independent auditor found what appeared to be evidence of ongoing embezzlement by a union official, who was then ordered to repay the union for part of what he had spent on lavish meals and trips with floozies. Instead of repaying the funds, the official sought the help of the international president of the union, who allegedly ordered the audit to be buried and — some say — the auditor buried as well. One of the union officials later named in the RICO suit is Richard Griffin, who was recently appointed by President Obama to serve on the National Labor Relations Board. Griffin’s lawyer describes the lawsuit by union dissidents as “frivolous.”

The plaintiffs say IUOE honchos have become way too cozy with the employers with whom they negotiate contracts for their members. In Las Vegas, Local 501 members are employed in about a third of the hotel-casinos in town. Union sources say they have no solid evidence of kickbacks from hotels to union officials, but they are hoping the RICO lawsuit will motivate union members to vote in a new administration this fall. (The results of the previous election were tossed out by the Department of Labor because of numerous irregularities.) I’ve been told that at least some of these union dissidents have been whispering into the ears of federal investigators, G-men whose interest in the integrity of local labor leaders has been moved to the front burner downtown.

The other local that is under the microscope of law enforcement is Teamsters Local 631. There is no question that FBI agents have been asking pointed questions about Local 631 for a couple of years now, but within the past few weeks, agents have been told some things that likely got their pulses pumping. Teamster dissidents say their Health and Welfare Fund has been used like an ATM machine, that millions of dollars have simply vanished, and that dues-paying members have had their health benefits gutted as result.

One particular allegation that’s been made — both to me and to lawmen — concerns the findings of an independent audit. Auditors uncovered the names of nearly 2,000 people who were receiving benefits from the fund but who were not legally eligible. Once the problem was made public, some 1,800 names were purged from the benefits list, but try as they might, union dissidents have been unable to get a list of those names. They don’t know if the 1,800 unknowns were simple errors, were workers or dependents who were never purged from the list once their eligibility changed, or whether some of them were ghost employees who didn’t exist at all.

Problems with the Health and Welfare fund have been felt by every union member, including those who set up convention shows, as well as the hard-working folks who collect garbage for Republic Services. Their deductibles have soared. Dental and vision benefits have been eliminated. Eligibility standards have been heightened. Workers were already hurting because of the economic slowdown, so these changes have really hurt hundreds or thousands of local families.

As far as we know, there is no solid evidence that any criminal acts were committed by officials within Local 631, but there is absolutely no doubt that lawmen have the union in their crosshairs at this moment. Grumbling union members have told them they have serious questions about the legitimacy of previous union elections, and have shared their theories about why their complaints about the local to the International union were ignored by the Teamsters top guy — James Hoffa — a name that certainly resonates in Las Vegas.

I’m guessing that some day in the near future, that list of 1,800 mystery names is going to find its way into an FBI file cabinet. Whether that will be enough to move this whole matter out of the investigatory stage is, as yet, unknown.

GEORGE KNAPP is a Peabody Award-winning investigative reporter for KLAS Channel 8. Reach him at