March 2006

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 LaborManagement 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 criminal 

investigations of violations such as embezzlement, election fraud, and deprivation of union 

members’ rights. OLMS also conducts audits, maintains a comprehensive compliance 

assistance program, and provides information and outreach to union officers and members to 

support further the goals of union democracy and fiscal responsibility. 

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. 

OLMS also conducts audits of local and international unions to further ensure their compliance 

with the LMRDA. 

OLMS Enforcement Statistics – Financial Integrity FY 2005 

Criminal Cases Processed 325 

Indictments 114 

Convictions 97 

Court-Ordered Restitution $23,244,979 

Compliance Audits Conducted – Local Unions (CAP) 612 

Compliance Audits Conducted – International Unions (I-CAP) 7 

Financial Reporting and Recordkeeping 

OLMS offers extensive compliance assistance sessions for union members and officials on the 

financial reporting and recordkeeping obligations under the LMRDA. This year, OLMS 

conducted a special enforcement initiative to encourage labor union officers and employees to 

file Form LM-30, the Labor Organization Officer and Employee Report. This initiative featured 

2005 Annual Report 

Office of Labor-Management Standards

Employment Standards Administration 

U.S. Department of Labor 

Don Todd, Deputy Assistant Secretary
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a grace period during which new filers who voluntarily submitted an initial report without 

being directed to file by OLMS would not be asked to file reports covering the same 

transactions for earlier years, absent extraordinary circumstances. OLMS also continued to 

provide extensive compliance assistance in training unions in the use of electronic filing 

software and the reporting requirements of the revised electronic Form LM-2, the annual 

financial report for the nation’s largest unions. 

OLMS Enforcement Statistics – Reporting and Disclosure FY 2005 

Delinquent Reports Cases Processed 2,048 

Deficient Reports Cases Processed 706 

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 

has 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, if warranted. 

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 can only be conducted upon receipt of a complaint from a member or 

subordinate body. 

OLMS Enforcement Statistics – Union Democracy FY 2005 

Election Investigations Conducted 127 

Lawsuits Filed 11 

Voluntary Compliance Agreements Obtained 19 

Supervised Elections 35 

Trusteeship Investigations 9 

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 2005. 

Investigation of Longshoremen’s Local 

Yields Multiple Indictments 

An investigation of Local 1740 of the 

International Longshoremen’s Association 

and its Health Benefit Plan in San Juan, 

Puerto Rico, resulted in the indictment of 

ten individuals and three corporations on 

July 19, 2005. Among the officials and 

members indicted were Local 1740 

president Jorge Aponte-Figueroa, two union 

members, Plan Director Ada Perez-Alfonso, 

Plan Sub-Director Enrique Sosa, and Plan 

Finance Supervisor Milagros Pagan. In 

addition, businessmen Angel Ramallo, 

Francisco Consuegra, Guillermo Rivera, and 

Rafael Garcia-Perez were also indicted. All 

individuals were arrested on July 20, 2005. 
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Safeguarding Union Assets (cont.) 

The indictment accuses Aponte and Sosa of 

embezzling more than $1.95 million from 

Local 1740 and accuses Aponte of underreporting nearly $1.5 million in dues. The 

indictment also alleges that Aponte, PerezAlfonso, Pagan, Garcia-Perez, and 

Ramallo conspired to embezzle health plan 

funds in excess of $8 million for their 

personal use. 

Long Trial Nets Two More Convictions in 

Washington Teachers’ Union Case 

On August 31, 2005, in the U.S. District 

Court for the District of Columbia, James 

Baxter, former treasurer of the Washington 

Teachers’ Union (WTU), and Gwendolyn 

Hemphill, former Assistant to previously 

convicted president Barbara Bullock, were 

found guilty on all counts after a jury trial 

lasting nearly three months. Baxter and 

Hemphill were convicted of conspiracy, 

embezzlement, mail fraud, wire fraud, 

money laundering, false statements on LM 

reports, and false union records. They are

the last of eight individuals charged and 

convicted of embezzling approximately $4.6 

million from the WTU. The case was the 

result of a joint investigation by the OLMS 

Washington District Office, the FBI, and the 

U.S. Attorney’s Office for the District of 

Columbia. 

Union Officer Pleads Guilty to Receiving 

Kickbacks

On September 19, 2005, Lenny V. Perez, 

former president of the National 

Association of Letter Carriers (NALC), 

Branch 599 in Tampa, Florida, 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. This offense is punishable by a 

maximum term of up to five years in prison, 

a fine of up to $250,000, or both; up to three 

years probation; and a special assessment. 

The indictment and plea resulted from a 

joint investigation that involved OLMS, FBI, 

U. S. Postal Inspection Service, DOL-OIG, 

Florida Department of Law Enforcement, 

and the Manatee County Sheriff’s Office. 

Secretary-Treasurer Raids Union Treasury 

Martha Bautista, the former secretarytreasurer of Machinists Lodge 1528 in 

Modesto, California, pled guilty to 

embezzling more than $9,500 in union 

funds and acknowledged taking more than 

$165,000 from the union. Bautista was the 

only full-time employee of Lodge 1528, 

which has approximately 1,300 members 

engaged in the manufacturing of cans, boxes, 

and plastic containers. Bautista wrote 89 

computer-generated checks to herself, made 

out in her name or to an alias, and altered 

information on the checks to conceal her 

embezzlement. In August 2005, Bautista 

was sentenced to 36 months probation, 

including 180 days of home detention. She 

was ordered to make restitution of $115,259. 

Bookkeeper Forges Officers’ Signatures 

to Steal Union Money 

Following an OLMS investigation, Amanda 

Kemmer, former bookkeeper and office 

secretary of Bricklayers Local 3 in Des 

Moines, Iowa, was sentenced to 24 months 

in prison plus three years of supervised 

release after pleading guilty to embezzling 

$209,000 in union funds. Kemmer used her 

position as the local’s bookkeeper to forge 

officers’ names on checks that were payable 

to herself, gave herself unauthorized salary 

increases, and took members’ dues that she 

should have deposited in the local’s accounts. 

Kemmer must also make full restitution to 

the union. 
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Safeguarding Union Assets (cont.)

Former Treasurer Indicted for 

Embezzling Union Funds 

On July 28, 2005, Donald Dixon, former 

treasurer and bookkeeper for Stage and 

Picture Operators (IATSE) Local 623 in West 

Palm Beach, Florida, was indicted for 

embezzling $106,151 in union funds. As a 

union officer, Dixon was authorized to pay 

legitimate and authorized union expenses. 

Without authorization or other officers’ 

knowledge, however, he also paid his 

personal expenses that were not related to 

union business. A plea hearing and 

sentencing date are pending. 

 

Postal Worker Paid Personal Bills with 

Union Money 

Terry Gloe, former secretary-treasurer of 

American Postal Workers Union Local 11 in 

Omaha, Nebraska, was sentenced in July 2005 

after pleading guilty to embezzling $113,377 

from the local’s treasury. While serving as the 

secretary-treasurer for the labor organization, 

Gloe wrote numerous unauthorized checks to 

himself and his creditors. The court sentenced 

Gloe to six months in prison and three years 

of supervised release that includes six months 

of home confinement. The court also ordered 

Gloe to make full restitution to the union. 

Former Liquor and Allied Workers Union 

Officials Convicted 

An investigation that began with the Liquor 

and Allied Workers Union Local 3, led to 

the convictions of former Local 3 vice 

president James M. Duff and former Local 3 

business agent William Stratton. Both Duff 

and Stratton were employed and associated 

with the Duff Family Business Enterprise, 

which involved five inter-related entities. 

The Duff Family Business Enterprise was 

involved in more than $100 million in 

government and private contracts it 

obtained through sham women- and 

minority-owned businesses and over $3 

million in unpaid workers’ compensation 

insurance premiums. Duff was sentenced to 

118 months in prison and 36 months of 

supervised release. At sentencing, Duff was 

ordered to make restitution of $10,933,016 

to the City of Chicago and $1.09 million to 

the National Council on Compensation 

Insurance’s Assigned Risk Pool in Illinois. 

He was also ordered to forfeit $10 million 

and assessed $58,805.62 in costs. Stratton 

was sentenced to 70 months in prison and 

36 months of supervised release. 

Stratton was ordered to be jointly and 

severally liable with Duff for restitution in 

the amount of $7,370,739 to the City of 

Chicago and ordered to forfeit $525,932 in 

salary he fraudulently received as the sham 

minority figurehead in one of the entities 

owned by the Duff Family Business 

Enterprise. 

This OLMS investigation was conducted 

jointly with the Chicago offices of the FBI, 

IRS and DOL-OIG. 
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Financial Reporting and Recordkeeping

New Division of International Union 

Audits Exposes Violations 

The Division of International Union Audits 

(DIUA) completed its first year as an OLMS 

organization during FY 2005. The seven 

audits that the division conducted included 

three of the largest international unions 

with no prior LMRDA audit history, and 

three unions that had not been audited in 

more than ten years. A summary of audit 

findings is provided to the unions in closing 

letters that will be 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 a follow-up review. 

During the audits and follow-up reviews, 

DIUA staff identified a total of 92 violations 

of the LMRDA: 

• 44 involved reporting deficiencies. 

• 16 concerned inadequate recordkeeping 

violations. 

• 25 related to the lack of internal controls 

safeguarding financial operations. 

• 7 included fiduciary responsibility, 

bonding, and loans to officers and 

employees. 

In FY 2006, DIUA plans to complete six 

audits, including one of a large 

international union with no prior audit 

history. 

Form LM-30 Grace Period Successful 

The Form LM-30 filing grace period 

established by OLMS ended on August 15, 

2005 and resulted in more than 13,000 

reports being filed during FY 2005 

compared to 244 reports during the 

previous 4 years. This temporary policy did 

not grant amnesty for criminal activity. The 

reporting requirements are designed to 

disclose possible conflicts between personal 

interests of the official or the official’s 

spouse or minor child and the offical’s duty 

to the union and its members. 

Electronic Form LM-2 

OLMS maintained its program of 

substantial compliance assistance in 

training unions on how to use electronic 

filing software and understand the 

reporting requirements of the revised 

electronic Form LM-2. This continuing 

effort included the creation and updating of 

informational Web-based tools, the posting 

of e-tools, and the updating of Web pages 

related to the revised electronic LM-2. 

Compliance Assistance 

OLMS continued to provide comprehensive 

compliance assistance to labor 

organizations. During FY 2005, OLMS 

achieved the following goals: 

• Created and updated informational Webbased tools regarding E.O. 13201, court 

actions, compliance assistance events, new 

regulatory initiatives, and user feedback. 

• Launched a new and improved Internet 

Public Disclosure Room. 

• Responded to roughly 150 public e-mails 

per month. 

• Conducted approximately 100 CA 

workshops and seminars nationwide. 

• Posted a new Web page to help small 

unions comply with the LMRDA. 

• Posted e-tools for LM-30 reporting. 

• Translated more publications into Spanish. 

• Posted Web-based user guides for the 

fillable pdf versions of the LM-3 and LM-4. 
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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. Following are highlights of 

some of the most significant OLMS election cases during FY 2005. 

Department Sues to Supervise New 

Election in Chicago Teamsters Local 

An extensive investigation of the December 

4, 2004 election of officers in the 

International Brotherhood of Teamsters 

Local 743 revealed numerous violations of 

the LMRDA. The most serious violations 

occurred when the union denied members 

in good standing the right to vote by 

mailing members’ ballots to incorrect 

addresses. These ballots were marked by 

individuals other than the designated 

recipients and were subsequently returned 

and counted in the election tally. The 

complaint, filed in Federal district court, 

seeks a court order directing that OLMS 

supervise a new election to correct these 

serious violations. 

OLMS Suit Seeks New Election 

in Michigan’s Largest Local 

OLMS is seeking to void certain results of 

the September 2004 election of officers of 

United Food and Commercial Workers 

Local 951. On September 19, 2005, the U.S. 

Attorney’s Office in Grand Rapids, 

Michigan, filed suit in Federal district court 

on behalf of the U.S. Department of Labor 

seeking a court order directing Local 951 to 

hold a new election for the offices of 

president and three regional vice-presidents 

under the supervision of OLMS. The 

complaint alleges numerous violations of 

the LMRDA, including union officials 

distributing and collecting ballots at 

worksites; use of union and employer 

resources to promote the incumbent slate; 

members voting in the presence of union 

officials and other members; and 

discrimination against certain candidates 

with respect to the use of a union 

membership list. In addition, the union 

failed to provide adequate safeguards for 

the distribution of replacement ballots, 

denied eligible members the right to vote, 

failed to account for all unused ballots, and 

failed to preserve all election records for the 

period required by the LMRDA. UFCW 

Local 951 is the largest local union in 

Michigan with over 33,000 members. 

OLMS Supervises Election 

of International Union 

In September 2005, OLMS completed a 

supervised election for the Brotherhood of 

Maintenance of Way Division, International 

Brotherhood of Teamsters. The Department 

and the BMWE, which at the time had not 

yet merged into the Teamsters, reached a 

settlement agreement on September 1, 2004 

to overturn the union’s election of president 

and secretary-treasurer, held in 2002. The 

supervised election involved the 

certification of approximately 600 delegates 

of which nearly 100 were elected under 

direct OLMS supervision. The 600 delegates 

voted by mail on behalf of the 30,000 

members of the union.
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Union Democracy (cont.)

Statewide AFSCME Council Election 

Rerun

OLMS filed suit against the 12,000 member 

American Federation of State, County, and 

Municipal Employees (AFSCME) Council 

61 after an investigation of its July 26, 2003 

election revealed that many of the Council’s 

106 locals had failed to provide proper 

nomination and election notices to 

members. The suit was settled in November 

2004 with the signing of a consent decree, 

under which the union agreed to OLMS 

supervision of the Council’s next officer 

election. Between February and July 2005, 

OLMS investigators supervised the mailing 

of nomination and election notices and 

went on site throughout the State of Iowa to 

supervise the nomination meetings in 112 

locals and the election of delegates in 20 

AFSCME locals. Finally, OLMS supervised 

the nomination and election of the Council’s 

25 officer positions at its July 2005 

convention. 

OLMS Supervises New Election for 

Nationwide Machinists District Lodge 

A new election for Machinists District 

Lodge 143, a nationwide union 

headquartered in St. Paul, Minnesota, was 

supervised by OLMS after investigation of a 

complaint found LMRDA violations. The 

violations included the failure to conduct 

the election by secret ballot, failure to 

protect the secrecy of all ballots cast, and 

the failure to provide proper notice of 

election. This was the second consecutive 

Machinists District Lodge 143 election in 

which the notice of election was inadequate 

and in which several constituent local 

lodges failed to conduct an election. A 

voluntary settlement between OLMS and 

the District Lodge provided for OLMS to 

supervise a new election to correct the 

violations found. District Lodge 143 has 

members in more than 50 local lodges 

throughout the United States. 

Florida District Council Election 

Supervised 

The nomination and election of delegates in 

81 local union affiliates of AFSCME, Florida 

Council 79, was supervised by OLMS in 

February and March 2005. Council 79 

represents about 18,000 members 

throughout the state of Florida. On April 9, 

2005, OLMS supervised the nomination and 

election of the three primary Council 

officers at its convention in Altamonte 

Springs, Florida. Eighty delegates 

representing 55 affiliates cast 15,169 votes in 

the election. The agreement to have OLMS 

supervise the nomination and election was 

reached after an OLMS investigation of 

AFSCME’s October 19, 2004 election 

determined delegates from a number of 

affiliates had not been elected by the 

membership, by secret ballot, or after 

proper notification of the membership. 
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Regulatory Activities

Form LM-30 Notice of Proposed 

Rulemaking Issued 

On August 29, 2005, OLMS published a 

Notice of Proposed Rulemaking seeking 

public comment on its plan to revise the 

Form LM-30 and its instructions. The broad 

purpose of Form LM-30 is to disclose 

possible conflicts between the personal 

financial interests of a union officer or 

employee and his or her duty to the union 

and its members. Form LM-30 has 

remained essentially unchanged in the more 

than 40 years since 1963, when the 

Department of Labor first approved it. Over 

the past several years, the Department has 

engaged in a process to improve the 

administration of the LMRDA, including 

the design and usefulness of the financial 

reports required by the Act. In the course of 

this process, a number of problems were 

identified with Form LM-30. The proposed 

rule addresses those problems. Comments 

must be received on or before January 26, 2006. 

Fiduciary Request for Information 

Published 

OLMS also published a Request for 

Information on August 29, 2005 to assist the 

Department in determining whether to 

issue guidelines concerning the fiduciary 

obligations of union officers, agents, shop 

stewards and other representatives under 

section 501(a) of the LMRDA. 

The Department also seeks comments on 

the nature and scope of such fiduciary 

obligations. Section 501 states in general 

terms that officers, agents, shop stewards, 

and other representatives of a labor 

organization occupy “positions of trust” 

within their labor organizations and must 

act in the best interests of their union. 

Comments must be received on or before 

January 26, 2006. 

OLMS Gets Public Input on Union Rights 

Proposal 

OLMS received 765 comments on its Notice 

of Proposed Rulemaking seeking public 

reaction to its plan that would require 

federal sector unions to inform their 

members about their democratic rights as 

union members. The comments are 

currently being reviewed and a Final Rule 

prepared. 

OLMS Reviewing Comments 

on Categorizing Labor Organizations

On November 3, 2004, OLMS published a 

Request for Information to help evaluate the 

agency’s methods for determining when a 

labor organization constitutes a local, 

intermediate, or national or international 

labor organization. Title IV of the LMRDA 

calls for different election intervals and 

methods, depending on the type of labor 

union holding the election. OLMS is 

currently reviewing the 24 comments 

received.