20 in steel local got inflated pay, union audit says Overbilling alleged at Sparrows Point

October 22, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

Twenty officials of the largest local union at Bethlehem Steel's Sparrows Point mill improperly received $217,000 from 1989 through 1991 by double-billing the union and receiving inflated wages, according to a union audit.

The release of the audit results yesterday came four months after the international offices of the United Steelworkers of America took over Steelworkers Local 2610 and removed President Walter Scott and Treasurer Walter Stankiwicz.

"They ripped us off," Stanley Satchell, a 23-year veteran of the mill, said last night during a meeting to discuss the audit. "They should be prosecuted."

His sentiments were echoed by several other workers who attended the 2 1/2 -hour union meeting. "It's a disgrace to the international, and it's a disgrace to our local," said Larry D. Cox, who has worked at the steel mill for 30 years.

About 400 members have signed a petition calling for the international to expand its probe and audit the local's financial records back to 1986.

The matter has also attracted the attention of the U.S. Labor Department, which is investigating the local, according to people involved in the probe.

Robert McKee, special agent-in-charge at the Philadelphia Office of Labor Racketeering, which is part of the Labor Department, said his office would neither confirm nor deny the existence of an investigation.

Mr. Scott, the ousted local president, called the charges "trumped up" and said they were politically motivated. "No one did anything to misuse the money," he said.

The audit found that Mr. Scott allegedly received $15,971.66 more than he was entitled to while serving as local president during the years covered by the audit. The pay of local union officers is directly related to the wage they would receive if they were working in the plant.

Mr. Scott denied he had received too much. He said that, according to pay records from the company, the person doing the same job he was doing when he became president in 1988 was getting paid $3,000 to $4,000 more a year.

The international has asked that all affected union officers repay the money they allegedly received incorrectly.

The local union has already collected $27,000 from the officials, which is being held in escrow until all appeals are exhausted, according to Harry Spedden, the Steelworkers union official who was appointed administrator of Local 2610.

However, the union has not brought any internal charges against the union officials. Charges can be brought by individual members by submitting them in writing to the union, Mr. Spedden said.

He said the international did not have plans to pursue criminal charges and would leave that up to the Labor Department. "They can step in and do it," Mr. Spedden said after the meeting.

The improper amounts allegedly paid to the local officials ranged from $16.38 to $48,079. They involved payments to part-time and full-time union officials who were supposed to be compensated for time they take off from steel mill jobs to conduct union business.

Local 2610, which has 2,300 workers, represents employees who make raw steel at the steel mill in southeast Baltimore County. The other major local at the Sparrows Point plant, No. 2609, which represents about 2,000 workers in the finishing mills, was not involved in the takeover by the international.

The audit, conducted by Maurice J. Goyette, an auditor from the union's international headquarters in Pittsburgh, found that officials were also paid by Bethlehem at the same time they were paid by the union.

It also said many of the officials were paid a higher amount than they would have received working in the plant.

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