Union dissidents accuse their leaders of corruption

Lawsuits filed by members of the International Union of Operating Engineers allege that complaints they brought to the Department of Labor -- including those during Hilda Solis' tenure -- were not properly investigated.
(Joshua Roberts / Getty Images)

The 380,000-member International Union of Operating Engineers likes to tout a history stretching back to the 1890s of bringing skilled labor to construction projects and the operations of large buildings across the nation.

But a group of dissident members from the southern reaches of California and Nevada say that proud record has been tainted by union bosses they allege have engaged in embezzlement, kickbacks and intimidation.

The insurgents are members of two of the union’s biggest units, Locals 12 and 501, which represent a total of nearly 30,000 workers. They have mounted a withering online campaign against current managers, forced a potentially pivotal August election in Los Angeles and filed a pair of federal class action lawsuits.


The former leaders, including the 90-year-old founding member of one of the locals, assert current officials have violated the Racketeer Influenced and Corrupt Organizations — RICO — Act. They are seeking the return of union funds and the appointment of a receiver to manage the operations of the two locals.

Among the insurgents’ allegations: The union’s former national leader made death threats against restive members; officials took kickbacks from employers who shortchanged pension and training funds; one former local official siphoned off union money for entertainment and his girlfriend’s breast enhancement; and another flew to auto races and family get-togethers on an $8.6-million jet ostensibly purchased for union business.

“This is my baby,” said Robert Fox, the nonagenarian who once led Local 501 and now is among those suing current management. “I can’t stand to see what they are doing today.”

Lawyers for the parent union say the allegations are baseless. “It’s all very dressed up and flamboyant,” Jack Leary, co-general counsel of the IUOE, said in an interview. “But that part of it is pure fantasy land.”

A spokesman for the national union, Jay Lederer, called the lawsuit allegations “a complete work of fiction” and part of a “campaign to smear the union” by losers in an earlier election who are hoping to reverse the outcome. He predicted that all of the allegations ultimately will be dismissed by the courts. Current officials at the union locals targeted in the suits did not return calls seeking comment.

If the stakes weren’t already high enough, they have become entangled with a bitter political fight in Washington.

Congressional Republicans are determined to short-circuit the tenure of National Labor Relations Board member Richard F. Griffin Jr., previously chief counsel with the operating engineers’ union. Griffin, a defendant in one of the lawsuits, was placed on the labor board by President Obama in a controversial “recess” appointment that sidestepped Senate confirmation.

GOP lawmakers, citing allegations in the internal union battle, are preparing for a delayed confirmation fight and a probe of Griffin’s role with the operating engineers. Griffin’s attorney, Fred Woocher, said his client is being “unfairly tarred.”

“Mr. Griffin has been added to this case for political value,” Woocher said.

Griffin and other defendants have asked U.S. District Judge Dean Pregerson to throw out one of the lawsuits, filed by dissident Local 501 members. A hearing is scheduled for Monday.

The insurgent union members contend they are trying to protect not just their middle-class jobs, but also trust funds that pay for their training, healthcare and pensions. Local 12 represents heavy-equipment operators who work in construction; Local 501 includes “stationary” engineers who tend to air conditioning, plumbing and electrical systems in buildings. Members can earn more than $40 an hour.

“I could just retire, but I have gotten a lot from the union, and I want to give something back,” said Patrick Adams, 61, a high-rise engineer and plaintiff in the lawsuit against Local 501. “These jobs can and should go on forever, but they won’t if the union is corrupt.”

Adams is part of a slate of candidates calling themselves “The Resistance” that is campaigning to replace officials at their Los Angeles-based local. The slate says it is part of a larger nationwide movement that trades information via Facebook and an anonymous email correspondent who identifies himself only as “The Man in Black.”

The rupture in Local 501 began in 2007, when longtime leader Jim McLaughlin found what he contends was more than $2,300 in improper expenditures by the group’s apprenticeship coordinator, Dennis Lundy.

McLaughlin and two deputies demanded a refund from Lundy and launched a deeper investigation. They eventually concluded, according to allegations in the lawsuit, that Lundy misspent union funds on drinks, meals and breast-enhancement surgery for his girlfriend. Lundy denied the allegations.

In March 2010, the lawsuit against Local 501 says, Fox tried to defend the dissidents in a phone call with the union’s top national leader, Vince Giblin. But Giblin threatened to have the men killed, the lawsuit contends. The alleged death threat is among the plaintiffs’ “fantasy” accusations, said union attorney Leary.

Most damaging to the union, the suit contends, have been instances of officials allowing two of the nation’s largest building management companies — ABM Engineering Services and Able Engineering Services — to shortchange payments they were contractually obligated to make to funds for apprentice training and health and welfare benefits. The companies also allegedly operated more than 100 buildings with nonunion employees, in violation of their union contract, the lawsuits says. The companies have denied the allegations.

More explosive allegations involve Pasadena-based Local 12, which has been overseen by William C. Waggoner, 85, for 37 years. According to a labor department filing, he earns $322,000 a year.

The lawsuit against that local alleges that “massive graft and misuse of assets” drained funds from both the union and a fund for employee pensions. It also says Waggoner funneled union business to companies where his wife and son worked, twisted arms to increase donations for politicians and pressured union members to make cash contributions to his reelection campaigns at the local.

Waggoner also used the local’s Cessna Citation jet, the suit alleges, to go to the rodeo, NASCAR races and to visit his brother in Kansas. Members who complained risked dropping to the bottom of hiring lists or were threatened, the lawsuit says. When member Rodney Karr raised objections last year about Waggoner’s use of the union jet, the lawsuit alleges, Waggoner allegedly answered: “If you don’t stop this … you’re going to get hurt.” Waggoner did not respond to a request for comment.

Politicians also allegedly were allowed to use Local 12’s jet, in a bid to increase the organization’s clout. Former U.S. Labor Secretary Hilda Solis flew on the aircraft when she was a member of Congress and for her swearing-in as a Cabinet member, the lawsuit contends. Solis, who is considering a run for the Los Angeles County Board of Supervisors next year, and her representatives could not be reached for comment.

Members of both Local 12 and Local 501 allege in their lawsuits that complaints they brought to the Department of Labor, including those during Solis’ tenure, weren’t properly investigated. The lawsuit offers no direct evidence that Solis interceded on behalf of the union or its officers. And the federal labor agency sided with the dissidents at one point, ruling that a 2010 election at Local 501 had to be repeated.

Leary, the union’s lawyer in Washington, noted that the lawsuits don’t name the Department of Labor as a defendant and suggested that’s because dissidents can’t prove their allegations. “This idea that the fix was in is just completely ludicrous,” he said. The new Local 501 election results will be known later this summer, offering a measure of rank-and-file support for the insurgents.