May 18, 2010: CHICAGO—The General Executive Board of the International Brotherhood of Teamsters upheld charges of official misconduct by the two top officers of Local 743 in Chicago and imposed penalties removing the pair from office, sources told BNA May 17.

In a decision dated May 6, the GEB sustained a single charge of misconduct against former Local 743 president Richard Berg and former secretary-treasurer Eugenia Alvarez. Berg was removed from office and suspended from union membership for two years. Alvarez was also removed from office, but her suspension from union membership will last only one year.

Berg was charged with entering into a $21,000 severance agreement with a former business agent named Antonio Caldera without gaining the approval of the local's executive board. Alvarez was faulted for authorizing the payment to Caldera and failing to question Berg's authority to enter into such a transaction without executive board approval. The GEB dismissed a separate charge alleging that the pair prevented a group of business agents from paying their dues to the union.

The GEB decision found that Berg and Alvarez exercised poor judgment and misinterpreted their authorities under the IBT bylaws. The GEB noted, however, that Berg's conduct is mitigated by the fact that he did not personally profit from the improper $21,000 expenditure.

“None of the contentions raised in his (Berg's) defense has merit,’’ the GEB wrote. “The record does not reflect any great emergency that might have justified issuing a check to Caldera before bringing the matter before the Executive Board for approval.’’

Setback for Reformers

The GEB decision represents a setback for Berg, a reformer affiliated with Teamsters for a Democratic Union who waged a lengthy battle with corrupt elements within Local 743.

Local 743, which represents approximately 11,000 warehouse, office, maintenance, and medical services workers in Chicago, has had a colorful and controversial history. In 2004, Berg and his “New Leadership’’ slate of candidates ran for election at the local and lost. At Berg's request, the Labor Department investigated various election irregularities and then filed suit against the local under the Labor-Management Reporting and Disclosure Act.

DOL's litigation was resolved in July 2007, when a federal judge approved a settlement and order authorizing the department to supervise a rerun election (Chao v. Local 743, N.D. Ill., No. 05 C 4642, 7/17/07). Berg and his New Leadership slate won that election later that year (206 DLR A-14, 10/25/07).

The Labor Department's investigation formed the basis for criminal indictments against six Local 743 officials. In 2007, the Justice Department accused the union officials of rigging the 2004 election in order to benefit incumbent officers. Last year, the defendants were sentenced to prison terms on a range of fraud, embezzlement, and theft of union property charges. On Sept. 3, 2009, former Local 743 president Robert Walston was sentenced to 57 months in prison and was ordered to pay $900,000 in restitution for his role in the fraud, and on charges that he attempted to distribute five kilograms of cocaine (United States v. Lopez, N.D. Ill., No. 1:07 CR 580, 9/3/09).

Berg could not be reached for comment. But members of his New Leadership coalition have vehemently argued that “old guard’’ elements within the local manufactured charges against Berg and Alvarez to oust them from office.

Brian Rainville, executive director of Joint Council 25, dismissed such assertions as “preposterous.’’ Rainville said Berg has never taken responsibility for acting outside of his official authorities.

“Richard is a political animal,’’ Rainville told BNA in an interview May 17. “The fact is he spent the money. He tried to get approval from a board he had run with approximately a year before and he couldn't get it. You're not allowed to do that. He simply isn't taking responsibility for the action he took.’’

Rainville, who also serves as Teamsters President James Hoffa's personal representative for Local 743, said the executive board of the local elected new officers on May 14. Larry Davis was elected president and Donnie Von Moore was elected secretary-treasurer of the local. He said a new general election of officers will be held in November.

By Michael Bologna