The Anatomy of Corruption in Trade Unions

J O H N H U T C H I N S O N *

The Anatomy of Corruption in Trade Unions

IN THE SPRING of 1957 the Senate of the United States authorized an investigation of improper practices in American industrial relations. Conducted under the chairmanship of Senator John L. McClellan of Arkansas as essentially an examination of trade union behavior, the inquiry lasted three years and produced the most damaging indictment of American unions ever compiled.

But if the evidence was damning, it was also incomplete. In overwhelming degree it was directed at the imperfections of unions and union leaders alone, at the fact of misbehavior but not the cause. Trade union corruption is a complex matter. It is a product of trade union philosophy and government; but it owes little more to wayward union officials than to predatory employers, to industrial characteristics and practices, to corruption in politics and law enforcement, to organized crime and an imperfect criminal law, to ethnic discrimination and isolation, to the social conditions of the cities, and to a public philosophy which, in electing for the competitive society, has accorded either praise or tolerance to the victor in a battle lightly burdened with rules. It is neither simple in origin nor always easy to repair. If the aim is understanding rather than accusation and remedy rather than retribution, there is a duty to examine, not only the institution of trade unionism, but also the forces which influence its ways.

The Course of Corruption Corruption is a matter of standards. There are many aspects of trade

union behavior which, depending on the tastes of the observer, can be regarded as admirable or base, realistic or dishonest, statesmanlike or dishonest, fitting or ostentatious; the field for debate is immense. But hopefully one principle is beyond dispute -namely that trade unionism should not be regarded as an instrument of commercial profit. I have therefore chosen to regard corruption as the use of union power for private, unsanctioned enrichment by anyone.

The problem is an old one, dating back to the 19th century. It began as an observable phenomenon in the building trades a decade or so after the Civil War. Full-time union officials were given the authority - necessary in a geographically scattered industry characterized by relatively brief construction projects - to call immediate strikes or protest meetings to protect working conditions, The power was abused from time to time, being used to collect “strike insurance” from em-

* Associate Professor of Industrial Relations, Graduate School of Business Administration, and Associate Research Political Scientist, Institute of Industrial Relations, University of Cali- fornia, Los Angela.

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ployers or to fine them for imaginary infractions of union rules. The employers, in turn, were often prone to bribery or violence as a means of curbing union demands. In time there developed city-wide systems of collusion between union representatives, employers, and public officials - notably in New York City and Chicago - which disciplined the industry and increased the private incomes of the parties at the expense of the public. The major local redoubts of corruption in the building trades came to an end in the twenties after a series of investigations; but extortion and bribery have proved to be durable practices, continuing-if on a much re- duced and declining scale - until present times.

There was, it should be noted, a special quality about the extortionists in the building trades. They were amateurs, men who originated in the industry and could at least claim to be trade unionists, and who could often point away from their failings to genuine services rendered to their members. Side by side with the lineage of amateur thieves in the building trades and some other industries, however, there came to prominence a much more sinister breed with no claims to legitimacy and few to service. Particularly with the advent of Prohibition, the American labor movement came to suffer the attentions of an intruder far more malicious and dangerous than the fallen building tradesman: the professional racketeer.

The Rise of the Gangs Gangsters became involved in American industrial relations towards

the end of the 19th century, graduating from the streets to machine politics to independent brokerage, providing violent services to employers and unions alike. In the New York garment trades, for example, they became active in the nineties, reached a peak of influence in the twenties, and despite sustained union resistance since then remain a problem in some sections of the industry today. But prior to the twenties the gangsters were minor figures, quite obscure and not very ambi- tious. Then the mechanics of bootlegging propelled them to influence in the major service industries involved - road transportation, restaurants, and hotels. Juris- diction grew with consolidation, and in time the Capone and other organizations penetrated industries and unions ancillary to the consumption of alcohol - laundry, light foods, condiments, soft drinks, and others. Eventually there were few limits to ambition. The true extent of underworld influence in trade unionism and industrial relations during Prohibition is no doubt undocumentable, but it was important in major cities in the East and Midwest, including New York, Detroit, Cleveland, and, of course, Chicago. In 1929, the Illinois Association for Criminal Justice estimated that 90 industries in Chicago were dominated by gangsters; the Chicago Crime Commission declared that two-thirds of all local unions in Chi- cago were under criminal influence; and even the American Federation of Labor - not prone to confessions of guilt in this field - conceded that 27 AFL local unions in Chicago were controlled by the underworld.

Repeal brought a change for the worse. The activities of gangsters in the labor movement during Prohibition were essentially local or regional in character. The legalization of liquor, however, brought about a severe drop in underworld rev- enues and a need for new business. Trade unionism and industrial relations now came to be regarded increasingly as a proper source of income in themselves.

Trade Union Corruption / 137 Given the methodology and resources of the underworld, there was no necessary limit to aspirations. The Capone organization now took aim at a new level of influence : the international union.

It made three attempts to gain control of an entire union. In 1938 it financed a lavish campaign to elect its nominee as president of the Hotel and Restaurant Em- ployees, failing only after a determined resistance at the union’s convention in San Francisco by the incumbent officers, the local police, and the San Francisco Labor Council. It succeeded elsewhere. In 1934 it elected George Browne to the presidency of the International Association of Theatrical and Stage Employees; the new president, in collaboration with Capone representative Willie Bioff, thereafter extorted some two million dollars from the entertainment industry. In 1934, also, it arranged for the appointment of professional strike breaker George Scalise to a senior post in the Building Service Employees, subsequently elevating him to the presidency of the union. Browne, Bioff, and Scalise all went to jail in 1940-41 for stealing union funds.

They represented the peak of underworld influence in the American labor movement. The adverse publicity and the growing sensitivity of both the labor movement and the public to racketeering, as well as a general decline in the more bizarre operations of the underworld, militated against any future attempt by gangsters to seize power at the international union level. But the problem of corruption remained. Congressional investigations in the thirties and forties revealed extortionary practices in the building trades, the poultry industry, the musical pro- fession, trucking, produce markets, and the jukebox industry. In the fifties, Con- gress uncovered a new field of malpractices in the rapid growth of negotiated welfare funds - primarily involving collusive activities among union officials, welfare fund administrators, lawyers, and brokers who jointly plundered the funds through kickbacks, excessive charges, and theft; Congress responded by passing the Wel- fare and Pension Plans Disclosure Act of 1959 to supervise the administration of funds. Also in the fifties, the New York State Crime Commission showed that - in perhaps the classic case of the infiltration of a union by the underworld - the In- ternational Longshoremen’s Association in New York and New Jersey was corrupt; here the two state legislatures responded by creating a bi-state commission to supervise the affairs of the union.

Then, in 1957, came the McClellan investigation, the most exhaustive of its kind. It uncovered financial malpractices or conflict of interest activities in the Meat Cutters, Bakers, Laundry Workers, Distillery Workers, Sheet Metal Workers, Carpenters, United Textile Workers, Hotel and Restaurant Employees, Teamsters, and a few other unions. I t charged that underworld elements were influential in the Teamsters and Hotel and Restaurant Employees in Chicago, and in local affiliates of other unions in various cities. It paid special attention to Teamster President James R. Hoffa, accusing him not only of financial malpractice and conflict of interest activities but also of collusion with the underworld to gain and keep control of the union. The evidence in general was not always conclusive, nor was the conduct of the Committee a model of investigative behavior, but there was no doubt of an incidence of wrong-doing quite intolerable in its character and proportions. It moved the AFL-CIO to disciplinary action against a number of its affiliates and Congress to a major legislative enactment - the Landrum-Griffin


Act -which provided for detailed supervision by the federal government of union finances, elections, and deliberative and disciplinary procedures.

It was an unhappy record. For over two generations enough union officials had engaged in or tolerated corrupt practices to bring enduring damage to the reputation of American trade unionism. No other labor movement had such a record. Why did it all take place?

Trade Union Philosophy Business unionism is a common target, a favorite devil of the critics.

The charge is that it is a narrow creed, a child of the acquisitive society and tolerant of its manifestations, a handmaiden of corruption. The charge is suspect, not least since the term itself is often misunderstood.

Business unionism is the pursuit of improvements in wages, hours, and working conditions primarily through collective bargaining. At its best it is a perfectly honorable if modest pursuit, and indeed dominates the conduct of many union leaders formally dedicated to a more expansive view of their calling; the first priority of most union officials, whatever the content of the major policy statements, is the servicing of their members at the workplace. It is not a venal idea at all; it gives no sanction to peculation, and most unions noted for their commitment to business unionism - among them the United Mine Workers, the International Typographical Union, and the operating railroad brotherhoods - have remained effectively free of fiscal scandal. It is not a lazy view of trade unionism; most business unionists have contributed as much in time, risk, and fidelity to their unions as have their more cosmic-minded counterparts. The average business unionist has served his constituents honestly and well.

Yet a doubt remains. It may be, as Philip Taft has suggested, that the only re- quirement is “the simple ideal d honesty”; but honesty in behavior is nowhere an absolute; the ideal is perhaps less reliable alone than when supported by other persuasions. Business unionism is not a mercenary creed, but neither is it much of a discipline; it is short on imperatives. For some it is indeed a dedication, exclusive of other gainful activities. For some it is a worthy way of life, a form of service, but not prohibitive of other sources of income. For others it is truly a business - perhaps with a special rhetoric and appeal, but still a business. Even so defined it is not a license for theft. But the commodity conception of trade unionism is an imperfect guide to ethics; the narrowness of its vision leaves too much to the im- agination of the acquisitive and the weak.

It does seem from the record that something of a contrast can be drawn between the behavior of the business unionists and those now called social unionists-those of the larger view, committed to the notion of trade unionism as a moral cause broad in social jurisdiction, demanding in time and standards. The evidence leaves little doubt that resistance to corruption in the needle trades, the culinary trades, the building services, and elsewhere came largely from men who couId qualify as social unionists. As a matter of federation tradition, the Congress of Industrial Organizations was always more sensitive to charges of misbehavior than the American Federation of Labor before the presidency of George Meany. There were special reasons why this was so.; there was less corruption in the industries organized by the CIO, and the more compact distribution of most indus-

Trade Union Corruption / 139 trial union members made them less vulnerable to intimidation than the more geographically scattered craft unionists. But there was also an element of ideology involved. The litany of trade unionism in the CIO always had a more prescriptive quality than that of the AFL. The older organization, before 1952, seemed too prone to tolerate, too seldom ready to cure. It is hard to avoid the impression that the strongest resistance to corruption came from those for whom the labor movement was more than a service agency.

But there is no precision here, There was no necessary causative relationship between business unionism and corruption, only a negative connection at worse. Perhaps it should be argued that in the presence of temptation or error the so- called business unionists could have used a stronger creed. On the other hand, behavior was unpredictable. Most craft unions led by business unionists remained free of corruption, while some industrial unions-such as the Bakers and the United Textile Workers - went astray. In any event, there were always minimum standards, applicable to all regardless of philosophical commitment. Theft from the members was always one of the basest of trade union crimes, as well as a felony. “I am kind of old-fashioned,” Meany said of the comment by the AFL-CIO Committee on Ethical Practices that the worst offense of President James G. Cross of the Bakers was to engage in business activities with bakery industry employers, “I think the stealing of the members’ money was the worst thing.”

Furthermore, the distinction between philosophical types is hazy and mislead- ing. Business unionism was always an inexact term, embracing a variety of atti- tudes and styles, and is seldom used today. Social unionism is a relatively recent label, vague and elastic in content, virtually without circulation except among intellectuals. The conventional posture of the labor movement, indeed, has long rejected the notion of a parochial trade unionism committed to selfish ends; the broad and the narrow, the noble and the selfish, the honest and the corrupt- almost all have long paid tribute to the idea of a labor movement deeply involved in human affairs, high in purpose, complex in method, and global in jurisdiction. There are corollary standards of behavior, prohibitive of cheating and disloyalty, long a part of trade union folklore and now formalized in the AFL-CIO Codes of Ethical Practices. Ignorance of the rules, for a generation at least, has been a poor excuse for delinquency. At the same time, a fine philosophy has never been a guarantee of good behavior. It might properly be said that the American labor movement, like all human institutions, has attracted its quota of the greedy, the hypocritical, and the frail. Some needed no special temptation to steal. Others did. The circumstances deserve consideration.

Union Democracy Union government is an issue. Until recent years, the internal con-

duct of American unions was little affected by the law, and there have been great variations in behavior. American unions have sometimes been charged with a high frequency of autocracy; the common assumption is that autocracy is a cause or agent of corruption, and that the imposition of democracy by the law will eliminate the corrupt. It hardly seems necessary to state that democratic unions are less likely to be corrupt than undemocratic ones, but that is not always the case. Ex- pectations shodd be realistic.


A trade union is by proper origin a responsive institution, a collective resistance to indignity and arbitrary authority. If it is faithful to its credentials, it should negate by example the evils it was founded to resist. At its best it is a democracy of intelligent grievances, servant to its members and careful of rights.

But perfection is an imperfect counsel. No institution shows at birth or ma- turity all the virtues it might claim. The Athenian democracy is a poor model for most working organizations, and there have been special strains on the ability of American unions to emulate the Greeks. Violence has been the midwife of many organizations and a companion of their lives. Few labor movements have had to deal over so long a period with such opposition - both physical and political - to the elementary right to exist. Survival or effective performance have therefore sometimes seemed to require special disciplines, not always gently imposed. Loyalty is a natural principle of trade union organization, always necessary in some measure, but sometimes demanded at the expense of the right to dissent. Orthodoxy is the great temptation, particularly in dangerous times; even among the most sedulously democratic of unions there are departures under pressure from high constitutional principles. Then age and habit beget oligarchy - lightly resisted when the essential functions are performed - resentful of challenge or discomf ort.

But strong rule is not a necessary cause of corruption. John L. Lewis dominated the United Mine Workers for 40 years without a murmur of financial scandal about him. In fact, in some cases the authority of union leaders has been stretched to eliminate rather than entrench the corrupt. For a generation the president of the International Ladies Garment Workers Union has had the power to require of every elected or appointed official a signed, undated letter of resignation, requiring only a majority vote of the union’s executive board and the president’s date-stamp to make it effective; the practice dates back to the twenties when the internal struggle against both racketeers and Communists threatened to destroy the union. However undesirable in principle, it seemed justified at the time to men committed to democratic trade unionism, and has been retained in part to fight the lingering corrupt. The extraordinary powers given to former President James C. Petrillo of the Musicians - enabling him to interpret the union’s constitution virtually at will - might not have been unrelated to the attempts of the Capone organization to annex the union’s affiliates in Chicago. The nature of the opposition in the AFL’s battle against the ILA in the fifties, as well as the traditional ebullience of the waterfront, did not encourage the observance of Queensberry rules.

What might without facetiousness be termed the responsible abuse of power - the imaginative interpretation of union constitutions, the insistence on orthodoxy in times of trouble, the individual approach to parliamentary procedure, the selec- tive processing of grievances, the response in kind to the methods of the enemy - has seemed to some from time to time to be a necessary resort. Sometimes the odds do not permit of both survival and the courtesies. Anyone familiar with the folklore of the principal trade union victories over the underworld has leave to doubt whether it would always have been better to observe all the rules.

American unions are imperfectly governed, but what of it? Autocracy is observable in other private institutions - in churches as in business, and not least in other labor movements -without the conspicuous accompaniment of theft. Pos- sibly American unions are more autocratic than their foreign counterparts; but it

Trade Union Corruption / 141 can also be argued, on ample evidence, that the great majority of American unions conduct their affairs to the general satisfaction of their members. Indeed, a strong case can be made for the proposition that the indifference of satisfied union members is a stronger inducement to corruption than the heavy-handedness of union leaders. One of the more disturbing lessons of American trade unionism is that morally dubious activities on the part of economically effective leaders is so seldom a cause of membership revolt. “I’ve got mine,” a Teamster said in Detroit. “Why shouldn’t Hoffa get his?”

This is not to elevate autocracy, nor to deny its role in corruption. It was almost always a precursor or a companion of corruption; most of the delinquents of record were destroyers of democracy. Congress was right to intervene.

But union democracy is by no means the only issue. The New York City news- vendors’ local investigated by the McClellan Committee was something of a show- piece of democracy, but not one of fiscal propriety. The generally democratic traditions of the Bakers, Meat Cutters, Hotel and Restaurant Employees, Building Service Employees, Teamsters, and other organizations did not prevent the emerg- ence of local or national redoubts of corruption. Democracy was not a cure-all. Sometimes more powerful factors were at work.

The Industrial Environment The market was a factor, perhaps the most powerful of all. Trade

union corruption has been most flagrant and enduring in industries of shared characteristics. I t has been most obvious in the construction, garment, longshoring, culinary, and road transportation industries. All these have been notable in some degree for small business units, high proportional labor costs, intensive competition, small profit margins, relative ease of entry, and a considerable rate of business failures. At least in the past the battle for survival was often fierce, with ethics an early casualty. Wages were a natural point of attack by employers who sought cheapness and stability by bribery, coercion, or collaboration. Union officials used their economic power to private advantage against employers highly vulnerable to the strike, the slowdown, or other reprisals. The frequently chaotic condition of the industries involved made them a natural field for the hired marauder, the professional stabilizer, available to both sides and reluctant to leave when once established. Corruption in law and politics took their toll. Union members and the public paid the price.

In the building trades the extensive practice of subcontracting maximized the number of small and highly competitive h s vulnerable to the extortionary strike. The common presence of a penalty clause in a building contract, providing for penalty payments to the customer by the contractor if the job was not finished on time, made the strike the most feared of events. The relative immunity of building trades union ofticials from national union discipline in an essentially locaI industry, and the absence of effective extra-local commercial competition, encouraged in time the development of labor-management collusion at the expense of the consumer. The availability of corrupt public officials in some cities led to the cre- ation of triumvirates of grafters who looted the public purse, lowered construction and safety standards, and inflated building costs to their personal advantage.

The subcontracting or “jobbing” system and the uncertainties of fashion in the needle trades brought a special competitiveness to the industry, particularly in the


manufacture of women’s clothing, while the high proportion of immigrants and females in the work force made it highly vulnerable to intimidation. On the New York waterfront the congestive inadequacies of ancient facilities permitted extortion at many points of operation; this, together with the dishonesty or indifference of employers interested mainly in a docile and underpaid labor force, the collusion of the police, and the permissiveness of Tammany Hall, made easier the in- vasion of the longshoremen’s union by the underworld. The hotel, restaurant, and trucking industries - already highly competitive and susceptible to extortion - were natural extensions of underworld jurisdiction with the advent of Prohibition. Both longshore and trucking, because of their relatively low skill requirements and high opportunities for stealing, were favorite job markets for ex-convicts and the criminally inclined. In the restaurant, theatrical, laundry, and garment industries the stink-bomb and the fire were the simplest and most crippling of weapons for the extortionist.

There were reasons, too, why other unions remained free of corrupt influences. The job printing industry is highly competitive among generally small firms; but typographers are a highly sophisticated group, strong in self-discipline and sense of craft, an occupational community governed by long traditions of propriety and democracy. The railroads and public utilities are only mildly competitive if at all, subject to a high degree of public regulation, poor ground for illicit activities. The white-collar and professional unions - such as the Teachers and the Air Line Pilots - could probably claim the sophistication of their members and the public visibility of their occupations, in addition to the simple absence of opportunities for theft or extortion, as reasons for their respectability. The circumstances of mass production have always been a hindrance to extortion; the companies are large, centralized, typically stable, not savagely competitive, very much in the public eye, too big for important corruption. The mass production unions -the Auto- workers, Steelworkers, Rubber Workers, and Machinists - are usually organized into local unions of substantial size; their members are grouped together at work in large numbers, well placed to watch over local union affairs and to resist intimidation. They are in any case subject to strong national union discipline growing out of both ethical tradition and nationwide bargaining patterns. Unions in the mass production industries have thus generally been more inclined and better equipped to resist corruption than their counterparts in more competitive industries and fragmented unions. The industrial environment has had much to do with both the propensity and the opportunity to steal.

The Amateurs and the Professionals Given the inducement to corruption, the transgressors were two in

kind: the amateurs and the professionals. The amateurs were the majority, up from the shops, trade unionists with a flaw, often brutal but seldom lethal, usually en- titled to some credit for service, and not too hard to frighten into virtue once the odds were changed.

But while the conditions which produced the amateurs had much to do with the success of the professionals, there was a special quality about the latter. They came with terrible reputation and power. They were the proconsuls of the Amer- ican underworld, of a criminal system which, at least from the twenties, worked largeIy in disdain of the law and whose justice could be swift, terminal, and unre-

Trade Union Corruption / 143 quited. Neither the labor movement nor the law was prepared for effective response.

Terror was the note. Resistance to the amateurs could be physically uncomfortable and economically disastrous, but it rarely involved mortal consequences. The rebel against the racketeers, however, faced not only the resentment of his more pliable brethren but also the private remedies of the underworld. Some union representatives - not to speak of employers and public officials with a vested interest in criminal ways - stood aside because of greed or indifference; but they all had cause enough for fear. The open threats and anonymous tele- phone calls, the revolver on the negotiating table, the warning treatment in the alleys, the ineffectiveness of the law, the natural care for life and especially for dependents - the deterrents to resistance were ample, The alternative to surren- der, it seemed to many trade unionists of good disposition, was a high chance of death. It was a hard choice for all but the rarest of men.

Corruption and the Society They were victims of a social condition. Violent crime is an expected

feature of any new society, but it has shown a special strength and endurance in the United States. The heritage of frontier justice, an individualistic culture, an entrenched philosophy of acquisition, an admiration for the sharp transaction, a tolerance of the fix, and a legacy of politics viewed as a source of income have brought to American criminal behavior a boldness, and to law enforcement a ca- priciousness, foreign to most other democracies.

Crime grew on fertile soil. The city gangs received early recognition from the political machines, to whom they rendered useful services in voting, vote counting, and the molestation of political opponents. In time they became autonomous and graduated to strikebreaking and extortionary activities in labor-management relations. Immigration and ethnic isolation added to the strength of the gangs. The Irish, Jewish, and Italian communities lived in enclaves, resented by and resenting the dominant Anglo-Saxons; the discrimination which created the ghettoes thwarted the natural ambitions of the native-born generations, and some individ- uals took the criminal road to status and money. The ethnic gangs came into being - the Irish in the building trades and longshoring, the Jews in the garment industry, the Italians in longshoring and the service trades - protected from the law by the clan. The gangs became a permanent part of urban society, and then were thrust to unparalleled eminence by the scofflaws of Prohibition. Repeal brought an urbanity of style and consolidation of power, not only in the traditional vices but in legitimate enterprises as shop-front activities. The gangs remain a major social force. Organized crime, according to the 1967 report of the President’s Commission on Law Enforcement and Administration of Justice, is “the most sinister kind of crime in America . . . a national problem of the highest priority.”

The business community made a contribution to lawlessness. It held a priv- ileged place in the law, enjoying immunities from criminal prosecution denied to private citizens, particularly the poor. Business crime was a major institution, de- fiant of traditional law enforcement. “The financial loss of white-collar crime,” E. H. Sutherland wrote in 1940, “is probably several times as great as the loss of all crimes which are customarily regarded as the ‘crime problem.”’ It was lightly punished. “The one thing on which all authorities seem to agree,” Sutherland


wrote in 1949, “is that white-collar crime has a low vulnerability to official action.” Business standards were a model for the envious, affecting the morals of politics and the law, a contributory cause to the peculiar scale of American crime.

The standards of businessmen conditioned their response to corruption in unions and labor-management relations. Extortion was commonly acceptable if it meant a softening of union demands or led to a cooperative control over the market. The mistreatment of employees by gangsters or corrupt union officials seldom evoked any protest, particularly when industrial docility was the result. The condition of business was the test. Not in the building trades, nor in the garment industry, nor on the waterfront, nor in the service trades, nor in the entertainment industry, nor in road transportation, nor in any other industry seriously affected by amateur or professional corruption, is there a public record of substantial employer opposition to the works of the corrupt. There was usually formal support for public investigations and private crime commissions, but seldom loud protest or effective action against the predators. In most cases there was only collaboration or silence. The way of the reformers, in or out of the labor movement, was always harder than it might have been.

The law was largely ineffective. The criminal law was a child of Anglo-Saxon traditions, but the anxiety of bygone American legislatures to protect the innocent against hasty or prejudiced justice brought to the American criminal law a proce- dural complexity unknown to its parents, multiplying the obstacles to acceptable evidence and effective decision, a boon to the innocent and guilty alike. Complex law and corrupt politics were often allies, producing discretionary arrests by local police, the convenient loss of records, the purchase of safer pleas, and the arranged neglect to prosecute. Political influence, private income, and advocative ingenuity built civic sanctuaries for the underworld. It became literally true that a powerful criminal figure with enough money and connections could get away with murder. “There is,” criminologist Walter C. Reckless wrote in 1955, “no direct legal attack on racketeering . . , local ordinances are powerless to get at the operations of racketeers. So are the ordinary state laws. So are the federal laws. . . , Professional and organized criminals have always had the advantage of the American police through fixing and political pressure. Under the American system of law enforcement and prosecution, racketeers are practically immune.”

The culture was tainted, the law was unreliable, the public was tolerant, and the racketeers were safe. Few institutions escaped the consequences. The labor movement was one of the victims.

The Response of the Labor Movement ~

The great majority of unions, of course, have been untroubled by serious corruption. One of the misfortunes of the front-page publicity usually given to trade union malpractice - in contrast to the more subdued treatment of business errors -is the widespread notion that the problem is endemic. Corruption has certainly occurred often enough, but serious wrongdoing has been concen- trated both industrially and geographically and except in the most infected unions has involved only a handful of men. In other cases corruption has been only a local and brief phenomenon, dealt with summarily and usually effectively.

But where the problem was serious, the response was often less than salutary. Corruption in the New York and Chicago building trades from the turn of the

Trade Union Corruption 145 century to the twenties was generally of the amateur kind; yet internal resistance to it at any level was only occasional, and often quite lethargic even then. Virtually at no time was there strong disciplinary action by either national or local building trades organizations until embarrassment was high or the membership took charge. Nor was lethargy in resistance or criticism restricted to the building trades. There is ample evidence that, until recent times, the revelation of corruption in AFL unions stirred something less than a tidal wave of indignation and retribution among sister organizations.

Perhaps the relative harmlessness of the amateur grafters helps to explain the relative inaction against them. They were neither strangers nor simple marauders; they stole and extorted, but not too often from their members; they were crooks, but their criminality was usually combined with genuine service to their unions. There was an even more important factor. The amateurs were usually in positions of authority in their unions, often close to the top, They controlled or influenced the disciplinary procedures which might have been used to judge them; they controlled or influenced the jobs of those who might have moved to punish them; and the law had not yet intervened effectively to protect dissent from the rank and file.

Resistance to the professionals, of course, was a much more dangerous matter. One of the irritating elements in the criticism of trade union corruption is the fail- ure of the critics to recognize the odds sometimes faced by the honest. There is a bad grace in the florid denunciations, not least by members of the Congress, of “cowardice” on the part of those whose dangers they do not share. Underworld reprisals ranging from the lost job to death in a lime-pit, are romantic morbidities to some critics, but morbid realities to the recipients, The fact is that in very many cases the victim had nowhere to turn for help. If - as in the case of the New York waterfront - the union was corrupt, virtually in the hands of racketeers, in collusion with the employers, and protected by venal judges, politicians, and policemen, it was not hard for the average longshoreman to conclude that silence was prefer- able to valor. He was not alone in his predicament.

Thus genuine resistance to the racketeers was all the more impressive when it came about. I t is hard to withhold high respect from those men in the needle trades who fought a long and complex war against the underworld; from those in the cuIinary trades, the building services, and theatrical trades who resisted the Capone organization; from unions such as the Seafarers which gave protection - not only to their own, but to longshoremen and workers in other industries- against the terrors of the gangs; and from the legion of individual union officers and members who took their lives and livelihoods in their hands for the sake of their unions. They all confronted the deadliest of opponents, with all too rare assistance from the public authorities. It is a pity, if hardly a surprise, that the history of the wars is not more fully recorded.

The Role of the Federations The national labor bodies had a role to play, with special problems

of their own. Individual unions are, in a trade union sense, sovereign bodies, with great power to discipline offenders. It is a Werent matter with federations, at least in the United States.

The autonomy of individual unions is one of the strongest traditions in Ameri-


can trade unionism. The AFL was a higbly permissive organization, in fact a con- federation, reluctant and almost powerless to impose its will on any but the weak- est of its afFiliates.Neither Gompers nor Green was inclined to interfere in the internal &airs of affiliated unions; neither president, as a matter of political reality, could be much more than a conciliator. Not until the succession of George Meany to the presidency of the AFL in 1952 did the combination of an obdurate person- ality and bad publicity lead to major disciplinary action against an affiliate - the expulsion of the ILA in 1953 for corrupt practices.

The CIO was a more strongly governed body than the AFL before 1953. The enormous ability and prestige of John L. Lewis, his own instinct for authority, and the dependence of many young CIO unions on the financial assistance and personal guidance of the mineworkers’ president, gave him a great influence in the affairs of individual affiliates; but corruption was never a problem during his reign. His two successors, Philip Murray and Walter Reuther, also led firmly but with a lighter hand. CIO discipline was always stronger than that of the AFL, but corruption was never a serious problem. The CIO promulgated clear standards and demanded decisive action from affiliates which were troubled in any way with dubious practices, but there was never any great test of its disciplinary powers until the expulsion of the Communist-led unions in 1949, This, of course, was a major act of self-discipline; but it was plainly made easier, if not imperative, by the state of public opinion.

Much the same, no doubt, could be said of the AFL-CIOs actions against the corrupt. The findings of the McClellan Committee were sensational and the federation’s leaders probably felt that to leave the malefactors alone would incur a danger of punitive legislation. The AFL-CIO was also better placed than either the AFL or the CIO after Lewis to impose strong disciplinary action. It was a new aggregation of power. The affairs of the AFL and CIO tended to be dominated by a few large unions, the Teamsters and Carpenters in the AFL, the UAW and the Steelworkers in the CIO. The merger of the AFL and CIO in 1955, however, diluted the strength of the giants by increasing their number; no single union or pair of unions now had a veto. Furthermore, the merger brought together a large number of unions which, though long separate in affiliation, now thought similarly enough to be ready for united action on a matter of major consequence to the future of trade unionism in the United States.

Nevertheless, the particular actions taken by the AFL-CIO were not totally dictated by circumstances; alternative steps were always available, and there was something less than unanimity on the need for hard measures. The actions taken by the AFL-CIO against the corrupt were remarkable, in some cases at least, for their severity. There was also a very firm hand in charge. The public record and the AFL-CIO archives leave no doubt that the architect of policy in the matter of conuption, and by far the chief influence in its administration, was President George Meany.

The federation espoused, in fact, a quite revolutionary doctrine of intervention in the affairs of affiliated unions. “The constitution of the AFL-CIO makes it clear,” the AFL-CIO Committee on Ethical Practices said, “that no affiliate has the autonomous right to permit corrupt or unethical practices which endanger the good name of the trade union movement.” The 1957 AFL-CIO convention ex-

Trade Union Corruption / 147 pelled three unions investigated by the McClellan Committee - the Laundry Workers, Bakers, and Teamsters - losing over 10 per cent of its membership and revenue in the process. In a step without any real precedent, it established de facto trusteeship over three unions - the Distillery Workers, Allied Industrial Workers, and United Textile Workers-appointing a monitor over each to im- plement the reforms ordered by the federation. In addition, the federation main- tained a watch over the Operating Engineers until it was satisfied that appropriate remedial action had been taken.

The AFL-CIO chartered new unions to compete with the Bakers and Laundry Workers, but none to fight the Teamsters, for good reason. In the two former cases there were large groups of rebel officers and members eager and waiting to accept new charters from the federation. None came forward from the Teamsters. They were a special case - fiercely independent, regarding themselves as a movement on their own, extremely powerful, and most ably led, The price of war would have been very high, with the prospect of any gains of importance poor indeed.

What more could the AFL-CIO have done? The ILA was accepted into the AFL-CIO in 1961, much improved but hardly pure. The federation might have kept the ILA out or imposed stricter conditions of affiliation, but the union was already under the most exacting public supervision (by the Waterfront Commis- sion of New York Harbor) of any union in American history, and there was a danger of the Teamster embrace. Various senior officials of the Carpenters were criti- cized by the McClellan Committee for financial malpractices, but no public action was taken by the federation. Perhaps it was unpersuaded of intolerable guilt; perhaps there was internal adjustment; perhaps the cost of disciplinary action against one of the AFL-CIO's most powerful affiliates loomed too large after the expulsion of the Teamsters - the record does not show. In other cases, the Hotel and Restaurant Employees placed several of its Chicago locals under supervision; there were several resignations from the Meat Cutters; and almost all the remain- ing charges of corruption were confined to local incidences, perhaps too remote or minor for the federation's attention.

Retribution was no doubt imperfect, but it was extensive and generally impressive. There was little else the federation could have done. It had probably reached the limit of politically feasible discipline, and might have caused more harm than good by attempting to do more.

Retrospect and Prospect What should be the verdict? Like Israel, as John L. Lewis once said,

labor has many sorrows. The general ailments of the American labor movement are universal to trade unionism; but corruption has been a special sorrow here. The charges, and various versions of the facts, have become a currency of international conversation and have left a mark at home.

The need is perspective. Corruption there was, prominent and irrefutable, but it was never as widespread as the public was told to believe, and in terms of guilty men it was very small in scale. Tolerance there was, for over half a century; but the labor movement was not an agency of the law - itself most imperfect - and demonstrated in time a remarkable capacity for self-expurgation. Culpable it was, but so was the nation; such corruption as existed sprang as much from the ills of


American society as from the imperfections of the labor movement, and one won- ders what inquisitions elsewhere would reveal. It is not enough to point to the faults of other institutions by way of excuse, but no organization lives by itself. The American labor movement bears the marks of errors other than its own.

What are the prospects? Corruption has not been officially discussed by the AFL-CIO for some years, and the Committee on Ethical Practices has not met for nearly a decade. The unions reformed by fiat of the federation invoke no public comment. The new bakers’ and laundry workers’ unions are still in competition with their expelled predecessors, but the wars are mild and interspersed with talk of reconciliation. The Teamsters, now possibly the most carefully governed union in the United States, are still in exile; but except for a chill at top levels they co- operate extensively with AFL-CIO unions in organizing, bargaining, and political activities. Hoffa is almost the exclusive obstacle to reunification. He is now in jail. The longer he is away, the closer the relationship will become.

This is not to say that behavior is perfect. There have been recent charges of corruption in the New York and California locals of the Painters, revolving in the latter state around the murder of two local union officials. The New York waterfront is a continuing if subdued source of criminal behavior, while convictions for embezzlement and extortion continue at a light but steady pace elsewhere. Senator McClellan talks darkly of misdeeds in the welfare fund field and has threatened further investigations. There are occasional charges of misdeeds from other sources.

But the adverse evidence is unimpressive in either substance or volume, particularly when compared with the past. Furthermore, the conditions which caused so many former troubles have changed. The ferocious competition once common in the construction, garment, and service trades has become somewhat more re- strained. Municipal corruption is not at all what it used to be. Public supervision of trade union affairs is as detailed as anywhere in the Western world. There is no important pressure for new laws; rather there seems to be a sense of saturation, a doubt that any further governmental intervention in internal union affairs would be compatible with the notion of free trade unionism. The labor movement itself has adopted, in its Codes of Ethical Practices, a standard of trade union behavior which is surely as demanding as any; hopefully the warnings of experience and the enforcement of the law will ensure its continued observance.

It seems reasonable to expect that, whatever the relaxing effects of time and habit, the amateur offender is in permanent retreat as a serious problem for the American labor movement. He was in the great majority of miscreants, but also the easiest to eliminate. The law, and the enlightenment of the labor movement, should keep him at bay with ease,

The professional might be a different matter. There has been an acceleration in recent years in public activity against the underworld. There are new laws against racketeering and new funds for their administration. Since 1960, there has been at least a four-fold expansion in federal personnel dealing with organized crime and a manifold increase in both indictments and convictions. But optimism is limited. “We have made s igdcant progress,” Attorney General Robert F. Kennedy reported to his brother in 1963, ‘‘, . . but no one believes the tide of battle has turned.” In 1967, the President’s Commission on Law Enforcement and Administration of Justice declared that the Cosa Nostra, the alleged high council of organized crime,

Trade Union Corruption / 149 was now powerful enough to manipulate the stock market and the price of bread; that it operated in major cities across the nation, controlling nationwide manufac- turing and service industries of outward respectability; and that the money for its “respectable” enterprises came from its illegal or marginal activities, including labor racketeering.

The professional is still at hand, lingering at the edges of the labor movement, unwelcome but resourceful, greedy for opportunity, afraid of the law but vicious to private opponents. He is an outlaw with political and legal protection, capable in more casual days of terrible damage. Not all the good intentions and courage of the labor movement can entirely eliminate the threat he represents.

Only time and social change can heal. The leveling of crime to tolerable proportions in the United States will depend upon many developments - among them the reform of the criminal law, the raising of business and political ethics, the re- cession of race, the decline of want, and the sharpening of the public sensitivities. They will not come soon in proper measure; but until they do, the labor movement will continue to suffer the attentions of the enemy outside.

BIBLIOGRAPHICAL NOTE There is not much theoretical literature on the subject of trade union corruption. For rob

ably the earliest attempt at categorization, see Robert F. Hoxie, Trade Unionism in the d i t e d States (New York: Appleton, 1922), es , pp. 50-51. The best general comment is Philip Taft, Corruption and Racketeering in the L&or Movement (Ithaca: New York State School of Indus- trial and Labor Relations, 1958). See also, David J. Saposs, “Labor Racketeering: Evolution and Solutions,” Social Research (Autumn, 1958). The best causative analysis of a single case of corruption is Daniel Bell, “The Racket-Ridden Longshoremen,” in his The End of Ideology (Glen- coe: Free Press, 1960). There is no scholarly history of trade union corm tion. For journalistic treatments, see Harold Seidman, Labor Czars-A Histoy of Labor Racfaeering (New York: Liveright, 1938), and Malcolm Johnson, C 1 . i ~ on the Labor Front (New York: McGraw-Hill, 1950). For a brief historical acoount, see my “Corruption in American Trade Unions,” London PolitbaZ Quarterly (July, 1957).

For two attempts at an economic analysis of trade union corruption, see Simon Rottenberg, “A Theory of Corruption in Trade Unions,‘ National Institute of Social and Behavioral Sciences, Studies in Social and Economic Sciences, Symposia Studies Series No. 3 (Washin ton: 1960), and Paul A. Weinstein, “Racketeerin and Labor: an Economic Analysis,” Industrd and Labor Relations Review (April, 1966). The b t concludes inter alia that corruption is most likely to be found in industries where there is no eas substitute for the labor class involved or for the product (not true of the trucking, C U ~ {on shoring, and building service industries), or where the demand for labor is relatively ine Y E astic ecause the labor cost factor is small (the labor cost factor in the needle trades is high), or where the supply of labor is relatively inelastic because of the higher skills involved (not true of truckdrivin some of the culinary labor categories, the building services, and most longshore ernploymen$ The second article argues that “the larger the number of firms or the more d&cult the control of entry (into an industry) the less likely is racket organization because of its expense.” This cannot be reconciled with the experience in the garment, trucking, culinary, entertainment, longshoring, construction, and building service idustries.

On corruption in the building trades, see William Haber, lndwtrid Relutions in the Build- ing Trades (Cambridge: Harvard University Press, 1930); also Royal E. Montgomery, Industrial Relations in the Chicago Building Trades (Chicago: University of Chicago Press, 1927), and “Graft in the Buildin Trades,” Journal of Business (October, 1926). On events in the garment industry, see Joel SeiLan, The Needle Trades (New York: Farrar and Rinehart, 1942). On the activities of the Capone organization in the Hotel and Restaurant Employees, see Matthew Josephson, Union House-Union Bur (New York: Random House, 1956), Chaps. 10 and 11. On its support of Browne and Bioff in the IATSE, see Malcolm Johnson, Crime on the Labor Front (New York: McGraw-Hill, 19501, Cha 2; Virgil Peterson, Barbarians in Our Midst (Boston: Little, Brown, 1952), pp. 230-235; E g e r T. Irey, The Tax Dodgem (New York: Greenber 1948), Chap. 14; and Investigation into the Manner in Which the United States Board of Parog is Operating and as to Whether There is a Necessity for a Change in Either the Procedure OT


the Basic Law, House Committee on Expenditures in the Executive Departments, Hearings and Report No. 2441, 80th Cong., 2d sess. (Washington: 1948), passim. For its role in the promo- tion of George Scalise to high office in the BSEIU, see ohnsan, op. cit., Cha , 3 also Theodore

Francisco, 1940. For a comment on business unionism, see Philip Taft, “The Origins of Business Unionism,”

Z n d ~ ’ a Z and Labor Relations Reuiew (October, 1963). The point on “simple honesty” is made in his Corru tion and Racketeering in the Labor Mouement, p. 26.

There k v e been many Congressional and other ublic investigations of corrupt practices in industrial relations, far too numerous to list here. Tfe two most important Congressional in- quiries were those conducted by the Senate Committee on Labor and Public Welfare during the earl fifties on welfare fund abuses, and b the Senate Select Committee on Improper Practices in J e Labor or Management Field (McCle&in Committee) in the late fifties.

Meany’s statement on Cross is in Proceedings, AFL-CIO Convention (1957), Vol. I, p. 233. The Detroit Teamster’s comment was made in a private conversation with the author, but it is hardly original; there are many versions of it about.

On business and white-collar crime, see E. H. Sutherland, “White Collar Criminality,” American Sociological Reuiew (February, 1940), and his White Collar Crime (New York: Dry- den, 1949), p. 223. Hany Elmer Barnes told the Senate Committee an Commerce in 1934 that “Both crime and racketeering today have derived their ideals and methods from the business and financial practices of the last generation . . . the younger generation looked with envy, not at the bowed backs and wrinkled brows of their parents, but rather at the financial achieve- ments of the American financial buccaneers who had made away with their millions, with little or no service to society” (“Crime and Crime Control: Digest of Hearings before a Subcommittee of the Senate Committee on Commerce” [Washington: 19341). The statement by Reckless is in his T h Crime Problem (New York: Appleton-Century-Crofts, 1955), p. 189.

The relationship between immigration and crime is discussed in Report on Crime and the Foreign Born, National Committee on Law Observance and Enforcement (Washington: 1931). The Committee reported that the foreign born “commit considerably fewer crimes than the native born” (p, 195). Discontent leadin to crime comes with succeeding generations.

business. See Mabel E. Elliott, Crime 4n Modem Society (New York: Harper, 1952). For the point that American business would be uncomfortable operating according to the standards popularly ex cted of American unions, see Frederic Meyers, “Dual Standard for Corruption,” Nation, M a r g l , 1958.

The comment by the Committee an Ethical Practices is in Proceedings, AFL-CIO Conven- tion (1957), Vol. 11, p. 75.

Robert F. Kennedy’s statement is in Report to the President from the Attorney General on the Fight Against Organized Crime, January 10, 1963 (mimeo). See also Wall Street Journal, January 29, 1964, on the same subject. The report of the President’s Commission on Law En- forcement and Administration of Justice is discussed in New York Times, February 19, 1967. For a recent comment on alleged Cosa Nostra influence in unions, see Sandy Smith, “Mobsters in the Market Place,” Life, September 8,1967.

Canavaro u. Theatre and Amusement Janitors Local d 9, Superior Court Fig N6. 292428, San

There is a large and fast-growing f ‘terature on corrupt or unethical practices in American

Documents

The Anatomy of Corruption in Trade Unions