January 2007 

Introduction 

Assuring financial integrity and accountability and safeguarding union democracy for America’s union 

members is the mission of the Department of Labor’s Office of Labor-Management Standards (OLMS). 

In 1959, Congress enacted the Labor-Management Reporting and Disclosure Act (LMRDA) to combat 

union-related corruption, and OLMS continues today to pursue this important goal through criminal and 

civil enforcement of the LMRDA. 

The LMRDA establishes a bill of rights for union members; reporting requirements for unions, union 

officers, union employees, employers, and others; rules for establishing and maintaining trusteeships; 

standards for the election of union officers; and safeguards for protecting union funds and assets. OLMS 

also administers Executive Order 13201, which requires Federal contractors to notify employees of their 

rights concerning payment of union dues or fees. 

OLMS is the front line agency responsible for enforcing the LMRDA through its investigations of 

violations such as embezzlement, election irregularities, and deprivation of union members’ rights. 

OLMS also conducts audits, provides comprehensive compliance assistance, and offers information and 

technical support to union officers and members to further the goals of financial integrity, union 

democracy and transparency. 

Summary Statistics 

Safeguarding Union Assets 

As part of its effort to protect and safeguard union funds and assets, OLMS investigates possible 

embezzlement from unions and violations of other criminal provisions of the LMRDA. Since 2001 the 

courts have ordered restitution of $70,523,926 in OLMS criminal cases. OLMS also conducts audits of 

local, intermediate, and international unions to further ensure their compliance with the LMRDA. 

OLMS Enforcement Statistics – Financial Integrity FY 2006 Change from 

FY 2001 

Criminal Cases Processed 339 -8% 

Indictments 118 +20% 

Convictions 129 +26% 

Compliance Audits Conducted – Local + Intermediate Unions 

(CAP) 

736 +209% 

Compliance Audits Conducted – International Unions (I-CAP) 5 +400% 

International Compliance Audits – Follow-up audits 7 +600% 

Financial Reporting and Recordkeeping 

OLMS offers comprehensive compliance assistance for union members and officials on financial 

reporting and recordkeeping obligations under the LMRDA. During FY 2006, the nation’s largest unions, 

which file Form LM-2, Labor Organization Annual Report, completed their first fiscal year under revised 

recordkeeping and reporting requirements. Form LM-2 must be filed electronically and OLMS provided 

these unions extensive compliance assistance in the filing process. This year, OLMS also conducted a 

special enforcement initiative to encourage employers to file Form LM-10, Employer Report. This 

initiative featured a grace period during which new filers who voluntarily submitted a report without 

FY 2006 Annual Report

Office of Labor-Management Standards

Employment Standards Administration 

U.S. Department of Labor 

Don Todd, Deputy Assistant Secretary
2 

being directed to file by OLMS would not be asked to submit reports for prior years, absent extraordinary 

circumstances. 

OLMS Enforcement Statistics – Reporting and Disclosure FY 2006 

Delinquent Reports Cases Processed 1,946 

Deficient Reports Cases Processed 671 

Union Democracy 

When a union member files a timely complaint protesting a regularly scheduled election of union officers, 

OLMS initiates an investigation. If the investigation determines that the union violated the requirements 

of the LMRDA, the union may agree to allow OLMS to supervise a new election. If the union refuses to 

agree to remedy the violation, OLMS may take legal action seeking a new election supervised by OLMS. 

The agency also conducts investigations to determine the validity of the imposition or continuation of 

trusteeships imposed by national unions on subordinate bodies. Trusteeship investigations are generally 

conducted upon receipt of a complaint from a member or subordinate body. 

OLMS Enforcement Statistics – Union Democracy FY 2006 

Election Investigations Conducted 133 

Lawsuits Filed 8 

Voluntary Compliance Agreements Obtained 24 

Supervised Elections Conducted 33 

Trusteeship Investigations Conducted 13 

Program Activities 

Safeguarding Union Assets

Union officers have a duty to manage the funds and property of the union solely for the benefit of the 

union in accordance with its constitution and bylaws. A union officer or employee who embezzles or 

misappropriates union funds or assets commits a Federal crime punishable by a fine and/or imprisonment, 

and OLMS vigorously pursues investigations of these crimes. Following are some of the most significant 

cases brought by OLMS during FY 2006.

Elevator Constructors Case Produces 14 More 

Convictions 

The multi-year investigation of a no-show jobs 

scheme in New York involving officials of 

Elevator Constructors Local 1, Operating 

Engineers Local 14, and Laborers Local 79, which 

has already resulted in 35 convictions, approached 

completion in fiscal 2006, with 14 more 

convictions. The individuals convicted in FY 2006 

were sentenced to make restitution totaling more 

than $1.6 million and to forfeit assets totaling 

more than $1.0 million. The investigative team 

included OLMS, the FBI and the DOL Employee 

Benefits Security Administration. Based on a 

settlement agreement between the U.S. Attorney’s 

Office and Local 1, OLMS has regular contact 

with the local’s monitor, appointed under the 

terms of the settlement, and investigates matters 

the local is involved with that may be criminal or 

civil violations or refers them to other agencies. 

Three Indictments in Market Recovery 

Fund Case 

An OLMS investigation of IBEW Local 212 in 

Ohio resulted in three indictments in March 2006. 

Based on a tip from a union member, OLMS 

examined payments made by the local to union 

contractors from its Market Recovery Fund 

(MRF), which was established by the union to 

make payments to union contractors so they could 

compete against non-union contractors bidding for 

jobs. The OLMS investigation established that 

Electrical Mechanics, Inc. owner Michael Griffie, 

a union contractor, filed fraudulent payroll forms 

with the local, inflating the number of hours on the 

forms to obtain MRF money. Griffie received 

approximately $220,166 in unauthorized payments
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Safeguarding Union Assets (cont.) 

from the union’s MRF. He was indicted and 

charged with aggravated theft of property or 

services, and tampering with and forging market 

recovery funds forms for the purpose of 

defrauding the union. 

In a similar scheme, union contractors Charlene 

Monroe and Rachetta Johnson, owners of 

Electrical Innovations, also filed fraudulent payroll 

forms with the local and received approximately 

$30,000 in unauthorized monies from the MRF. 

They were convicted of theft by deception and 

were sentenced on September 22, 2006 to 5 years 

of probation, 500 hours community service, and 

were ordered to pay restitution to the union. 

Prison Terms Handed Down in the Washington 

Teachers’ Union Case 

On May 22, 2006, and June 5, 2006, in the U.S. 

District Court for the District of Columbia, James 

Baxter, former treasurer of the Washington 

Teachers’ Union (WTU), and Gwedolyn Hemphill, 

former assistant to previously-convicted president 

Barbara Bullock, were sentenced following their 

jury trial conviction for conspiracy, embezzlement, 

mail fraud, wire fraud, money laundering, false 

statements on LM reports, and falsification of union 

records. Baxter was sentenced to 10 years in prison 

and was ordered to pay restitution in the amount of 

$4.2 million and perform 900 hours of community 

service. Hemphill was sentenced to 11 years in 

prison and ordered to pay $4.2 million in restitution. 

These cases were the result of a joint investigation 

by OLMS and the FBI. 

NALC Branch 599 President Sentenced 

in Kickback Scheme 

On May 19, 2006, Lenny V. Perez, former 

president of the National Association of Letter 

Carriers (NALC), Branch 599 in Florida was 

sentenced to 21 months in prison, 31 months 

supervised probation, and a special assessment. 

On September 19, 2005, Perez pled guilty to 

receiving cash kickbacks of $384,000 in union 

funds in return for referring postal employees to 

certain medical specialists under the Workers’ 

Compensation Program. The indictment and plea 

resulted from a joint investigation involving 

OLMS, the FBI, Postal Inspection Service, DOLOIG, the Florida Department of Law Enforcement, 

and the Manatee County Sheriff’s Office. 

Six Enter Guilty Pleas in Multi-Million Dollar 

Scheme

Thirteen indictments have been obtained in the 

OLMS investigation of International 

Longshoremen’s Association (ILA) Local 1740, 

and its health benefit plan in Puerto Rico. To date, 

five individuals and one corporation involved in 

the $10 million embezzlement scheme have 

entered guilty pleas, and a second corporation is 

expected to enter a guilty plea soon. Six additional 

individuals and one corporation are expected to go 

to trial in January 2007. 

On March 23, 2006, businessmen Fernando 

Sanchez-Bencon and Francisco Consuegra-Lastayo 

entered guilty pleas to one count of embezzlement. 

Consuegra-Lastayo entered a similar plea on behalf 

of his company, Consuegra, Inc. Consuegra-Lastayo 

pled guilty to laundering more than $500,000 in 

union dues checks through his jewelry business, 

Consuegra, Inc., which Sanchez-Bencon funneled to 

him in exchange for a 2 percent commission on the 

total amount of the checks. Under the terms of the 

plea agreement, Consuegra is expected to serve four 

months under house arrest, two years probation, and 

pay a $10,000 fine, while his company is expected to 

pay a $25,000 fine. 

Sanchez-Bencon pled guilty to cashing union dues 

checks totaling $900,000. Under his plea 

agreement, Sanchez-Bencon will cooperate with 

Federal authorities in other cases and is expected 

to serve 30 to 37 months in prison, as well as make 

restitution of $90,000. 

On April 21, 2006, Rafael Garcia-Perez, 

businessman and former Comptroller for Ramallo 

Bros, Inc., pled guilty to six counts of 

embezzlement and laundering funds in excess of $8 

million from the local’s health benefit plan. GarciaPerez initially laundered the money through 

Ramallo Bros., Inc., for Angel Ramallo, President 

and CEO of Ramallo Bros., Inc. Garcia-Perez later 

set up three shell companies (Caribbean Services, 

Metropolitan Group, & SS Community) that were 

used to launder additional money. Under the terms 

of his plea agreement, Garcia-Perez will cooperate 

with Federal authorities in other cases. Garcia-Perez 

faces a sentence of 14 to 17 1⁄2 years in prison and 

the forfeiture of $1.5 million. These cases are the 

result of joint investigations by OLMS and the FBI. 
4 

Safeguarding Union Assets (cont.) 

LA County Federation of Labor Official 

Convicted of Conspiracy 

On March 28, 2006, Martin Ludlow, former 

executive secretary-treasurer of the Los Angeles 

County Federation of Labor and former member 

of the Los Angeles City Council, pled guilty to 

conspiracy with embezzlement of union funds as 

the underlying crime pursuant to a plea agreement 

covering federal, state, and local charges for his 

role in the use of funds embezzled from Service 

Employees International Union (SEIU) Local 99 

by its former president, Janett Humphries. Ludlow 

admitted using the embezzled union funds in his 

2003 campaign for Los Angeles City Council. Six 

people were put on the union payroll but actually 

worked on Ludlow’s campaign. Ludlow also used 

union funds to pay for a cell phone used in his 

campaign. On June 5, 2006, he was sentenced to 5 

years probation, 2,000 hours of community service 

and was ordered to make restitution of $36,400 to 

Local 99. 

Ludlow’s co-conspirator, former SEIU Local 99 

President Janett Humphries, was indicted on one 

count of conspiracy and twelve counts of 

embezzling union funds. Humphries was charged 

with providing misappropriated funds and union 

"ghost employees" as workers for Martin Ludlow's 

campaign for City Council. Humphries was also 

charged with five counts of embezzling union 

funds for other unauthorized expenses not related 

to the Ludlow campaign. Her jury trial in state 

court ended with a conviction on two counts of 

conspiracy and two counts of perjury on October 

27, 2006. Sentencing is pending. Humphries still 

faces federal charges. These investigations were 

conducted jointly by OLMS, the Department of 

Labor’s Office of the Inspector General (DOLOIG), and local law enforcement. 

Local President’s Wife Steals from Union 

A joint investigation by OLMS and the DOL-OIG 

established that Leslie Bell, former bookkeeper for 

Laborers Local 1184 and ex-wife of its former 

president, embezzled $178,452 over a three-year 

period by stealing members’ cash dues and 

initiation fees and forging union checks to pay 

personal expenses. After pleading guilty, Bell was 

sentenced to 18 months of incarceration, 3 years of 

supervised probation, and was ordered to pay 

restitution to the union’s bonding company. 

Guilty Plea in $100,000 Embezzlement 

from UFCW Local 

Donald Hutchinson, the former financial-secretary 

of United Food and Commercial Workers Local 

763-C in Joliet, IL, pled guilty to embezzling more 

than $103,000 in union funds after serving 10 

years as financial secretary for the local. 

Hutchinson wrote over 250 unauthorized union 

checks to himself under the guise of lost time, 

mileage, and hotel expenses. He attempted to 

conceal his embezzlement by falsifying monthly 

financial reports and the local’s annual financial 

reports submitted to OLMS. In March 2006, 

Hutchinson was sentenced to three years of 

probation including eight months in community 

confinement and four months in home detention. 

He also was ordered to pay restitution of 

$103,248. 

Two Former Presidents Charged 

in 33-Count Indictment

In March 2006, Debra Timko and Danny Iverson, 

former presidents of Service Employees Local 150 in 

Milwaukee, Wisconsin, were charged in a 33-count 

indictment involving mail and wire fraud and failure 

to maintain union records as part of a scheme to 

defraud the union of over $90,000. The indictment 

details a scheme wherein Iverson and Timko 

eliminated any audit or review of the expense 

vouchers they submitted for reimbursement and used 

their positions to authorize fraudulent payments to 

themselves for unused vacation time and personal or 

other expenses that were not reimbursable. The 

indictment also alleges that upon Iverson's 

resignation as president, Timko became president, 

and in exchange she authorized payments to Iverson 

totaling $50,000. Trials are pending. 

Former Director of Police Association 

Sentenced 

On March 31, 2006, in the United States District 

Court for the Western District of Wisconsin, 

Stanley James Kluss, former executive director of 

the Wisconsin Professional Police Association 

(WPPA), was sentenced after pleading guilty to 

one count of embezzlement. The 32-count 

indictment, returned in October 2005, charged 
5 

Safeguarding Union Assets (cont.) 

Kluss with 14 counts of embezzling union funds 

and 18 counts of mail fraud. The indictment 

charged that Kluss caused the WPPA to pay for 

unauthorized personal expenses. When Kluss 

submitted expense vouchers to the WPPA, he 

altered the receipts deleting the detail portion of 

the receipts that identified the items purchased, or 

deleting the date or place of purchase. At 

sentencing the embezzlement amount was 

established as $95,048. The court sentenced Kluss 

to 15 months in prison with no eligibility for early 

release or community confinement. Kluss was also 

ordered to make full restitution. 

Former AFSCME Officers Sentenced 

Gary Gourley, former president, and Jackie 

Sikorski, former secretary-treasurer, of AFSCME 

Local 1522 in Bridgeport, CT, were sentenced on 

December 16, 2005, and March 3, 2006, for 

embezzling union funds. These cases were 

discovered during a compliance audit conducted 

by OLMS. Gourley pled guilty to embezzling 

$63,084 from the local by writing unauthorized 

checks to himself. He was sentenced to five 

months in jail and five months of home 

confinement as well as being required to make full 

restitution. Sikorski pled guilty to embezzling 

$26,256 by writing unauthorized checks to herself 

and was sentenced to six months home 

confinement and ordered to make full restitution. 

Officer Stole from Local and State Conferences 

On July 26, 2006, Mark Jones, former president 

and secretary-treasurer of Musicians Local 92 in 

Buffalo, NY, pled guilty to one count of 

embezzlement. Jones admitted to stealing $40,738 

between 2002 and 2005 from the local. He also 

admitted to stealing $34,672 during the same 

period from the New York State Conference of 

Musicians where he served as secretary-treasurer. 

The criminal investigation resulted from a 

compliance audit conducted by OLMS, which 

showed that Jones wrote unauthorized checks to 

himself from both unions, charged unauthorized 

expenses on the local’s credit card, and failed to 

deposit all union money he collected. Jones is 

scheduled to be sentenced in November 2006. 

Jones also served as president of the Buffalo AFLCIO labor council and was a member of the 

international union’s executive board. 

Unity House Corruption Investigation Ends 

with Convictions of Founder’s Son and 

Grandson 

A lengthy investigation into corruption at Unity 

House, a non-profit Hawaiian labor organization 

founded by labor pioneer Arthur Rutledge to 

provide benefits and services to more than 20,000 

members and retirees of Hotel and Restaurant 

Employees (HERE) Local 5 and Teamsters Local 

996, ended in the convictions of his son and grandson. 

In February 2006, Anthony Rutledge, the former 

financial secretary-treasurer of HERE Local 5 and 

former president of Unity House, pled guilty to 

one count of knowingly falsifying a tax return. 

Under terms of the plea agreement, Rutledge must 

permanently disassociate himself from Unity 

House, which his father founded in 1951. He was 

sentenced to 3 years of probation. Anthony 

Rutledge’s son, Aaron, pled guilty to one count of 

witness harassment and was sentenced to 1 year of 

probation. Under terms of his plea agreement, 

Aaron Rutledge was required to resign 

immediately as executive vice president of Unity 

House and disassociate himself from the 

organization and its assets while on probation. 

The investigation was conducted jointly by a task 

force that included OLMS, the IRS, the FBI, the 

DOL-OIG, and the Employee Benefits Security 

Administration.
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Financial Reporting and Recordkeeping

Division of International Union Audits 

The Division of International Union Audits 

(DIUA), established by OLMS in 2004, has 

completed its second full year conducting the 

International Compliance Audit Program (I-CAP). 

During FY 2006, unions completed their first 

fiscal year under the Department’s revised 

recordkeeping and reporting requirements and for 

the first time submitted their Form LM-2s using 

electronic filing software. Of the five audits and 

seven follow-up audits DIUA conducted in FY 

2006, three were of unions that had submitted their 

Form LM-2 electronically. DIUA also began work 

on four additional audits that will be completed in 

FY 2007. All initial audits conducted by DIUA in 

FY 2007 will be of the revised electronic Form 

LM-2. 

Audits scheduled for FY 2007 include four 

medium-sized unions and one large union, as well 

as five follow-up audits. DIUA continues to focus 

on international unions with no prior audit 

history. 

A summary of audit findings is provided to the 

unions in closing letters, which are posted on the 

OLMS Web site. For serious deficiencies and 

violations that have not been corrected by the 

union at the time of the exit interview, DIUA 

conducts follow-up audits to review LMRDA 

compliance, discuss the corrective actions the 

union has taken to resolve deficiencies, and 

continue cooperative efforts to assist the union in 

coming into compliance. 

During the audits and follow-up reviews, DIUA 

identified a total of 81 violations of the LMRDA: 

• 40 involved reporting deficiencies. 

• 13 concerned inadequate recordkeeping. 

• 25 related to inadequate internal controls.

• 3 involved fiduciary responsibility and officeholding prohibitions.

Form LM-10 Grace Period Successful 

The Form LM-10 filing grace period established 

by OLMS ended on May 15, 2006, and resulted in 

more than 1,800 reports being filed by employers. 

The reporting requirements for employers are 

designed to disclose certain payments to unions 

and union officials, among other things. In 

addition to the Form LM-10 reports, during FY 

2006 OLMS received 4,382 Form LM-30 reports 

from union officers and employees. 

Change to Win Files Initial Labor Organization 

Information Report 

On August 14, 2006, Change to Win filed with 

OLMS its initial labor organization information 

report, Form LM-1, and a copy of its constitution, 

as required by the LMRDA. Change to Win is the 

newly-formed federation of labor unions that 

withdrew from the AFL-CIO. Change to Win 

initially concluded that it was not a labor 

organization within the meaning of the LMRDA 

but after discussions with OLMS personnel, filed 

Form LM-1. As Change to Win’s fiscal year ends 

September 30, 2006, its first Form LM-2 annual 

financial report will be due by the end of 

December 2006. 

Compliance Assistance 

Compliance assistance is an essential component 

of the Agency’s broad enforcement strategy of 

advising labor organization officials and members 

concerning their rights and responsibilities under 

the LMRDA and promoting compliance. OLMS 

continued to provide comprehensive compliance 

assistance to labor organizations and received a 

“green” rating on the DOL Compliance Assistance 

Scorecard. 

Following are highlights of the goals achieved by 

OLMS during FY 2006: 

• Provided an opportunity for the officers of every 

labor organization covered by the LMRDA or 

CSRA to attend a compliance assistance 

seminar. 

• Promoted use of the “list serve” system to send 

e-mail messages to unions, accountants, union 

members and other interested individuals. 
7 

Financial Reporting and Recordkeeping (cont.)

• Provided web-based tools regarding CSRA, 

enforcement actions, compliance assistance 

events, and new regulatory initiatives. 

• Provided a phone line dedicated to helping union 

officers file their LM reports electronically. 

• Responded to phone and e-mail inquiries 

requesting assistance with preparing and 

completing the electronic reporting forms and 

navigation of the OLMS Public Disclosure 

Room. 

• Conducted a public demonstration of the Public 

Disclosure Web Site. 

• Posted closing letters in OLMS audits of labor 

organizations under the International 

Compliance Audit Program (I-CAP). 

• Enhanced web-based resources to help officers 

and members of small labor organizations 

understand and comply with LMRDA 

requirements. 

• Updated e-tools for LM-10 and LM-30 

reporting. 

Union Democracy 

The LMRDA establishes democratic standards for conducting union officer elections, such as the 

frequency and method of election, the right of members in good standing to be candidates, rights of 

candidates, and voting rights of members. An investigation will be conducted if OLMS receives a timely 

filed complaint from a union member alleging that the LMRDA has been violated. If the investigation 

determines that the election provisions have been violated, OLMS may negotiate a voluntary agreement 

to have the union rerun the election under OLMS supervision or OLMS may take legal action seeking a 

new election. Criminal violations associated with election cases including ballot fraud, false statements 

and deprivation of rights under the act by violence also may be investigated by OLMS and prosecuted. 

The following are highlights of some of the most significant OLMS election cases during FY 2006. 

OLMS Supervises Election 

of Amalgamated Industrial Workers Union

On July 28, 2005, the Department filed a lawsuit 

that resulted in a court-approved voluntary 

settlement agreement to supervise a new election 

for the offices of president, vice-president, 

secretary-treasurer, sergeant-at-arms, three 

trustees, and three executive board members-atlarge of the Amalgamated Industrial Workers 

Union. The union failed to mail notices of election 

to its members, allowed delegates not elected by 

secret ballot to vote in its 2004 election, and 

allowed persons who were not elected delegates to 

the convention to be nominated for office. OLMS 

determined that the AIWU was actually a local 

union, and the AIWU rewrote its constitution and 

bylaws accordingly. The remedial election was 

conducted by direct balloting of the membership 

and concluded with the newly elected officers 

taking the oath of office on June 22, 2006. 

Department Sues to Supervise New Election 

in the Washington Teachers’ Union 

On February 15, 2006, in the United States District 

Court for the District of Columbia, the Department 

filed a complaint against the Washington Teachers' 

Union (WTU). The complaint seeks to set aside the 

December 28, 2004 original election and the 

January 26, 2005 run-off election, and to conduct a 

new election for the positions of President, General 

Vice-President, Recording Secretary, Treasurer, 

Vice-President Senior High, Vice-President Junior 

High, Vice-President Elementary, Vice-President 

Special Education, Vice-President Special Services, 

Vice-President Career Development, Member-AtLarge Senior High (2), Member-At-Large Junior 

High (2), Member-At-Large Elementary (4) and 

Member-At-Large Special Services (3). The 

complaint alleges that WTU failed to mail an 

election notice to every member at the member’s 

last known home address; that WTU failed to mail 

a ballot to each member in good standing, thus 

depriving those members of the right to vote; and 

that WTU permitted ineligible voters to vote. 
8 

Union Democracy (cont.) 

OLMS Supervises Election of Statewide 

Nurses Local 

OLMS supervised a new election of officers for 

the Hawaii Nurses Association (HNA) in 

May 2006 under a voluntary compliance 

agreement reached in October 2005. The 

agreement included new nominations and a new 

election for the offices of president, vice-president, 

secretary, treasurer, 29 bargaining unit directors, 

and 14 district directors. HNA represents about 

4,000 registered nurses and other healthcare 

professionals throughout the state of Hawaii. 

The supervised election remedied violations 

disclosed during an extensive investigation of the 

HNA’s March 28, 2005, election of officers. The 

most serious violations included the union’s 

failure to provide adequate safeguards to ensure a 

fair election by using a poorly-designed ballot and 

failing to provide members with proper 

instructions for casting their ballots for district 

director. The union failed to mail a combined 

election notice/ballot package to each member, 

denying members in good standing the right to 

vote and permitting a member who was not in 

good standing to run as a candidate for office.

Criminal Indictment in Ballot Fraud Case 

An investigation of Teamsters Local 988 in 

Houston, Texas, resulted in the June 8, 2006, 

indictment of former president, Charles “Chuck” 

Crawley. The indictment accuses Crawley of 

devising a scheme to defraud the local union 

members of their right to honest services by using 

the mail during the local’s October 2002 election 

of officers. Crawley is alleged to have placed 362 

phony ballots marked in his favor for union 

president into false return envelopes representing 

members of Local 988 that Crawley believed 

would not be voting. He is also accused in two 

counts of the indictment of embezzling union 

assets through the use of the union’s computer 

system to generate the fraudulent ballots and by 

arranging and accepting a $20,000 kickback from 

the installer of a telephone system in the union’s 

hall. Additionally, Crawley has been charged with 

causing false entries in official union records 

regarding the telephone installation. This case was 

jointly investigated by OLMS, the FBI, and the 

DOL-OIG. 

Regulatory Activities

Notification of Union Member Rights 

On June 2, 2006, OLMS issued a final rule that 

requires Federal sector labor organizations to 

inform their members of their democratic rights as 

union members. These labor organizations were 

required to inform members of their rights by 

October 2, 2006, and every three years thereafter. 

New members must be informed of their rights 

within 90 days of joining the labor organization. 

Written notice may be given by hand delivery, 

U.S. mail, e-mail, or any combination as long as 

the method is reasonably calculated to reach all 

members. If a labor organization has a website, the 

website must also contain a notice. 

Form T-1, Trust Annual Report, Issued 

On September 29, 2006, OLMS issued a final rule 

implementing Form T-1, Trust Annual Report. 

Form T-1 originally had been issued in a 2003 

rule, but a 2005 court decision vacated the portion 

of the rule relating to Form T-1. In order to 

conform to the court decision, the new rule revises 

the types of trusts that are subject to the reporting 

requirement. Form T-1 is effective on January 1, 

2007, and will apply only to trust fiscal years 

beginning on or after that date. 

Form LM-30 Notice of Proposed Rulemaking 

On January 26, 2006, the public comment period 

ended for a Notice of Proposed Rulemaking to 

revise Form LM-30, Labor Organization Officer 

and Employee Report. OLMS received 1,002 

comments. OLMS and the Office of the Solicitor 

have reviewed those comments. Final action is 

expected in early 2007.