Union offices across nation are plagued by embezzlement, Detroit Free Press report says

Union offices across nation are plagued by embezzlement, Detroit Free Press report says
An embezzlement "epidemic" was found in union locations across the nation. The Detroit Free Press uncovered the trend through documents from the U.S. Department of Labor. (Jim Watson/Getty Images)

Embezzlement is a “plague” found in union offices across the nation, according to a new investigative report by the Detroit Free Press.

The Free Press uncovered the trend through documents from the U.S. Department of Labor. Documents revealed that over the past decade, millions of dollars were embezzled from hundreds of union offices nationwide. The money comes from employee dues collected to pay for the salaries of union staffers and other expenses.

In the last two years alone, more than 300 union locations experienced theft that led to criminal charges — sometimes involving more than one person. The story includes a long list detailing dozens of the crimes.

Individual cases compiled by the Office of Labor-Management Standards involve theft and fraud ranging from $1,051 to $6.5 million, the report said.

In one case, charges were filed on Jan. 9, 2017, against a former UAW president in New Jersey who allegedly worked with a health insurance broker to “steal $1 million from the union’s self-insured health plan and defraud Horizon Blue Cross Blue Shield of approximately $5.5 million,” the Free Press reported.

What type of employees were impacted?

Unions allegedly involved in theft, according to the documents, represent employees across many different fields.

The list:

“nurses, aerospace engineers, firefighters, teachers, film and TV artists, air traffic controllers, musicians, bus inspectors, bakery workers, roofers, postal workers, machinists, ironworkers, steelworkers, dairy workers, plasterers, train operators, plumbers, stagehands, engineers, electricians, heat insulators, missile range workers and bricklayers.”

And thefts are happening in cities both large and small. Often, a union’s local bookkeeper, president or treasurer dips into funds, according to the report. Sometimes gambling is the culprit, other times the money is used to buy luxury items.

In the story, union leaders say they put safeguards into place to avoid embezzlement, but doing so is “nearly impossible.” When crimes happen, the credibility of unions is damaged, said Harley Shaiken, a professor at the University of California-Berkeley who specializes in labor and the global economy.

“Corruption undermines the very soul of unions,” he told the Free Press. “And it’s used effectively to damage unions politically.”

Why does this happen?

Theft happens when people have access to the money and they feel entitled to it, Peter Henning, a former federal prosecutor who teaches law at Wayne State University, told the Free Press.

“Unions are not unique,” Henning said. “Another group hit hard by embezzlement are churches. You can’t train people to be ethical. It’s just access to money.”

“These people view themselves as overworked and underpaid,” Henning told the Free Press. “Well, I’ve just identified 80 percent of the country.”