Corruption Exposed in Big L.A. Local

May 19, 2011: The Independent Review Board (IRB) has completed an extensive investigation into corruption in Los Angeles Local 630 and recommended a trusteeship and charges against three officials. Hoffa has long known of the embezzlement but has taken no action.

“We knew this stuff was going on,” said Phil Richards, a warehouse worker at Unified Grocers. “But no corrective action was ever taken by the International Union. Meanwhile the companies are killing us with production standards and the union’s doing nothing about it.”

The report charges Paul Kenny, Local 630 secretary treasurer, with embezzlement and failing to operate the local union according to its bylaws. Business agents Abraham Moreno and Gary Guillory were also charged with embezzlement also.

The IRB trusteeship report was issued on May 12. Hoffa will now have to decide what action to take. He has been aware of the corruption since at least February 2009, but swept it under the rug.  You can also download the IRB report on charges against Kenny, Moreno and Guillory.

The IRB investigation reveals that:

  • Paul Kenny, the Local 630 principal officer, improperly spent $154,929 of union funds for 598 meals and liquor in less than four years. Nearly $1,000 a week embezzled to spend at local restaurants, one of them “known for its wine list.” There was “no union purpose” for any of the spending.
  • Kenny went to these fancy watering holes on 63 percent of all business days, many times even hitting two restaurants on the same day, the report documents. For example on one date, Kenny and three business agents consumed seven bottles of wine, costing $476, before 4:30 p.m. At one lunch, which lasted from 12:30 pm to 2:46 pm, Kenny and two BA’s consumed 19 drinks and cost the union $712.
  • While making $175,000 in salary, adding on expenses, allowances and all the fine dining, Kenny had the local borrow $400,000 improperly, without membership approval as required by the bylaws. Kenny raised his car allowance without membership approval, in violation of the local bylaws.
  • Kenny stated under oath that the previous secretary treasurer, Jerry Vercruse “signed the local over to me for secretary treasurer. The agreement was drafted by my lawyer and Jerry.” And he certainly acts like he owns it!
  • Kenny had the union pay an unlicensed contractor $335,690 to do work at the union hall. The same contractor did work at Kenny’s home, and the home of Local 630 president Sylvia Garza. He claims he paid the contractor for the personal work in cash, with no receipts.

In short, the local is not being run for the 6,400 members, but for the benefit of Kenny and his fellow officials. And Hoffa has known all of it for years.

The International Auditor in February 2009 reported the improper expenditures on meals and liquor, failure to get membership approval for all expenditures over $10,000 and other violations of the union bylaws. IBT Secretary Treasurer Tom Keegel followed up with a letter to the local union.

Yet no action was taken by the Hoffa administration. No charges, no trusteeship, no corrective action, and nothing changed. Because Kenny was a loyal Hoffa supporter. A member of the club.

His only crime according to the Hoffa code of ethics is getting caught.

That sums up what needs to change inside our great Teamsters Union.