By STEVEN GREENHOUSE

January 3, 1999

A wave of union corruption, including a widening scandal at New York City's largest municipal union, has thrown the labor movement off stride at a time when it is straining to improve its image and persuade millions more Americans to join unions.

Labor leaders assert that the current wave of corruption pales in comparison with labor's past, noting that mob influence has largely been rooted out and that hundreds of corrupt officials have been punished or expelled through union and government efforts to clean house.

But the scandals, which have involved the laborers, hotel workers, Teamsters and other unions, have caused some labor experts to question the widely held perception that union corruption has fallen markedly since the 1950s era of "On the Waterfront," when organized crime dominated many unions.

There is widespread agreement among union leaders that the current surge of accusations -- including embezzlement, vote rigging and associating with mobsters -- is an embarrassing setback because it focuses attention on labor's seamy side when its leaders are pushing the message that a revived labor movement is going to bat for working Americans.

"I think it's terrible," said Sandra Feldman, president of the United Federation of Teachers. "It clearly gives a very negative image, and we have to overcome it. But the fact of the matter is the overwhelming majority of unions are good unions."

The current wave of corruption involves some of the nation's most prominent unions.

Arthur Coia, the president of the Laborers International Union of North America, may face expulsion over internal charges that he associated with organized crime figures and acquiesced in their running parts of the union. An internal union judge is to rule this month on whether to uphold the charges.

In New York City, a scandal has rocked a union representing 120,000 municipal workers, District Council 37 of the American Federation of State, County and Municipal Employees. The president of one of the union locals in the district council was ousted after an internal union panel found that he embezzled more than $1.7 million, while several top officials have admitted to engaging in vote fraud to insure ratification of a deeply unpopular contract.

And the Manhattan District Attorney's office is investigating whether the same district council's officials received kickbacks from caterers, lawyers and travel agencies.

Last summer, a federal monitor forced the longtime president of the Hotel Employees and Restaurant Employees Union to step down because of extravagant spending and other wrongdoing. The union president,

Edward Hanley, had the union pay for his office and secretary in Palm Springs; bought a union-leased Cadillac sports car at a bargain rate, and set up a phantom local in a Wisconsin resort town to help union officials charge their vacation costs as union expenses.

Two weeks ago a Minnesota-based official with the operating engineers union pleaded guilty to embezzling more than $200,000 for gambling, drinking and other activities.

And many labor leaders voice fears that the recent election of Jimmy Hoffa's son, James P. Hoffa, to head the International Brotherhood of Teamsters could open the door to more corruption in the union, although Hoffa insists that he will fight corruption. Already a court-appointed review board has charged three officials, elected as vice presidents on the Hoffa slate, with wrongdoing that could lead to their expulsion from the union.

Hoffa's predecessor, Ron Carey -- who was originally elected as a corruption fighter -- was ousted from the union's presidency because three of his aides siphoned more than $700,000 in Teamster funds into his campaign treasury.

"What with the Hoffa victory and this District Council 37 scandal, my impression is the gloss is off the refurbished labor movement," said Herman Benson, the founder of the Association for Union Democracy, a New York-based group that has long fought union corruption.

Congressional Republicans and other critics of the labor movement have seized on the scandals to argue that unions have little moral leadership and are hardly better than in the '50s and '60s, when Jimmy Hoffa led the Teamsters. Back then, organized crime figures embezzled tens of millions of dollars from the Teamsters' pension funds, while many Teamster locals were run by and for mob leaders, who occasionally had their union opponents killed.

"Union corruption hasn't changed that much since the '50s," said Ken Boehm, chairman of the National Legal and Policy Center, a conservative research group that publishes a biweekly newsletter, the Union Corruption Report. "The cast of characters may have changed. Some of the corruption is more sophisticated, but it continues to be a very serious problem. If there's any distinction, it's that there's less organized crime than there was."

But labor's supporters maintain that there is far less corruption now, largely because of government efforts to eliminate mob influence in what were long considered the four most corrupt unions: the Teamsters, laborers, hotel and restaurant employees and the International Longshoremen's Association. In addition, several unions have worked side by side with the government to clean house. Over the past decade, the Teamsters' union and a court-appointed review board have punished or removed from office more than 400 Teamster officials.

"The labor movement is much better off than 40 years ago," Benson said. "Even though we're always criticizing and complaining, that's a real fact. This stuff was festering all the time in unions. What's new is they're getting rid of it."

Gerald McEntee, president of the AFSCME, agreed that unions are far cleaner. "When you go back to the '50s and '60s and Bobby Kennedy chasing after Hoffa and all those kinds of things -- the longshoremen, the laborers= -- you had corruption that went to the very core of so many of those unions," McEntee said. "I think all that has changed."

McEntee has gotten serious about corruption by taking direct control of District Council 37 in New York and by naming a trustee to run the union and to clean house.

Some labor leaders play down today's seeming surge in corruption, insisting that it is merely the exposure of wrongdoing that has gone on for years and has been brought to light by union reformers or government officials on cleaning up unions.

"Reform sometimes works like a washing machine -- it agitates the dirt to the top," John J. Sweeney, the AFL-CIO's president, said in a recent telephone interview.

Sweeney took pains to assert that the current wave of corruption did not suddenly happen during his three years at labor's helm, noting that much of the corruption was uncovered recently, after lengthy investigations.

"I really think there is much less corruption in unions than in past years," Sweeney said. "I firmly believe there's no more wrongdoing in unions than there is in business. But the bottom line is there is no room in the labor movement for corruption or wrongdoing of any kind."

There are plenty of suggestions about how to clean up unions. Boehm called for legislation requiring unions to have independent annual audits and to disclose more financial information to members.

Richard Gilberg, a former general counsel to the Teamsters, said not enough unions had adopted serious anticorruption measures. Noting that many defense contractors hired compliance officers after several companies were found guilty of bribery, he said few unions had established similar programs to combat corruption

"You've got organizations with tens of millions, hundreds of millions in assets, and there ought to be procedures in place to make sure it is handled properly," Gilberg said.

"If labor figures out a strategy to hire competent people to take a look at where the money is going, and do things like develop new bylaws or set up an in-house ethical practices committee, that would be a big help," he said. "There are a lot of things unions can do if they think more than a week or a month ahead."