The High Cost of Corruption
The American President's commission on organized crime has announced that four unions are believed to be largely controlled by the Mafia: the Teamsters, the International Longshoreman's Association (ILA), the Labourers International, and the Hotel and Restaurant Employees.
The Teamsters' record is especially appalling : three of its last four presidents were convicted of serious crimes, and its current president, Jackie Presser, is under federal investigation for a charge of defrauding a Cleveland union local of $250,000. Mr. Presser's predecessor, Roy Williams, faces a 55-year sentence for attempting to bribe former Senator Howard Cannon. The huge central states pension fund of the Teamsters has been under government supervision for years.
Officials of the Labourers, Hotel and Restaurant Employees, and the ILA also have a history of convictions for racketeering and extortion. Over the last few years the four above-mentioned unions accounted for 75 per cent of federal indictments of labour racketeering charges.
An example of a case of extortion involving yet another union, the International Union of Operating Engineers, came to light last month. A New York State commission discovered that a supervisor at the $1.5 billion Manhattan sky-scraper project of Toronto-based Olympia and York Developments collected, while he vacationed in Europe and elsewhere, $323,000 in salary and overtime payments and $86,000 in union benefits just in 1984.
Testifying before the commission, the developers' director of construction said that he was unaware that the supervisor was being paid both by the union and by the company. He explained that paying for such services was required by the union collective agreement and was simply part of the cost of building in New York. The contractors, he said, believed it to be cheaper for them to give in to union demands than to fight.
Commission chairman David Trager pointed out that the excessive construction costs arising from such practices "are borne not only by the residential and commercial tenants who eventually inhabit the completed buildings, but by every individual who uses the services provided by those tenants."
While corrupt union practices have not assumed the same proportions as in the United States, they nevertheless occur in Canada too. For example, John Deverell of the Toronto Star reported on June 20 that Consumers Distributing pleaded guilty to paying $250,000 in kick backs to a Toronto official of the Teamsters. A statement of facts, approved by Consumers Distributing, explained that the payments were made "with a view to ensuring a beneficial relationship for the company with the Teamsters union who represented the company's truck drivers and warehouse workers."