Olms interpretative Manual

CRIMESCOVEREDBYSECTION504

553.001LMRDA, SECTION504(a)

…robbery, bribery, extortion, embezzlement, grand larceny, burglary, arson, violation ornarcoticlaws, murder,rape, assaultwith intentto kill,,assaultwhichinflictsgrievousbodily

injury,oraviolation oftitleIIorIIIofthis Act,orconspiracyto commit anysuch crimes,…

553.305HOBBS ACT—EXTORTION

A union officer was found guilty of conspiracy to obstruct interstate commerce byextortion under the Hobbs Act in 1956. He was sentenced to be confined for four years. After hisrelease but prior to the end of the ban on holding union office imposed by section 504, the formeroffice made application for a Certificate of Exemption to the U.S. Board of Parole. After theapplication was denied, he attempted to run for local union office and was barred from so doingby the union, which relied upon an opinion of the Attorney General that he was barred fromholdingoffice by section 504 ofLMRDA until January 10, 1966.

The former officer then brought this action against the union seeking a declaratoryjudgment that he is not subject to the sanctions imposed by section 504 since he was not convictedof one of the crimes enumerated therein. Upon application, the Attorney General was allowed tointervene as a defendant. The Attorney General contended that the crime of which the formeroffice was convicted necessarily embraced extortion and is therefore included in the list of crimesenumeratedin section504 andmoved fora summaryjudgment todismiss the complaint.

In granting the defendant’s motion for summary judgment, the court construed section 504“asembracinganyoftheenumeratedcrimes,the commissionofwhichisanecessarypredicateforthe guilty verdict” (i.e., violation of the Hobbs Act). In finding the former officer guilty of theHobbsActviolation,thecourtstated,“itisinescapablethatthejury…musthavefoundthathewasguilty ofextortion because itwas an essentialelement of thecrime and therewasno other

meansor methodbywhichtheconspiracywasestablished.”


Postmav. International Brotherhood of Teamsters, Local 294, 337 F.2d 609, 57 LRRM 2298 (2dCir. 1964).
(Revised:Dec. 2016)

553.310CONSPIRACYTOEXTORT

A former convict served as an organizer for a local union. He was charged with violatingsection 504 and in defense contended that he was convicted of the crime of conspiracy (which isnotlisted asa crime under section 504) and not conspiracytoextort.

Inoverrulinghiscontention,thecourtstatedthatreferencetotheindictment“makesit

abundantly clear that defendant…was convicted of conspiracy to commit the crime of extortion.”Thecourt went on to say:

“…The interpretation that will result in a rational scheme and give dimension to the purgingaction of section 504, is one which includes convictions obtained under the conspiracy statues oftheseveralstates, uponproofthe conspiracywasentered intoto committhecrime ofextortionoranyof the other crimes referred to.”

UnitedStatesv. Priore,236 F.Supp.542,56 LRRM2580 (E.D.N.Y.1964).

(TechnicalRevisions:Dec. 2016)

553.400FALSE ENTRIESIN CREDITUNION RECORDS

Section 504(a) makes it a crime for a person who has been convicted of certain offensesenumeratedin thesection tohold officeinalabor union.Oneofthe priorconvictionssetforthisembezzlement.

X, a union officer, entered a plea of guilty to a violation of section 1006 of Title 18 of theUnitedStatesCode.Hereceivedasuspendedsentenceoftwoyears,wasfined$300andplacedonprobation fortwo years.

Section1006proscribesthe makingoffalseentries, statements,etc.,in recordsofcreditunions (methods used to cover up embezzlement) and while the offense is much likeembezzlement, it appears from legislative history of the section that Congress did not intend tocoverthe offense in 18U.S.C. 1006.

Therefore, since Xwas not convicted of embezzlement or any of the other crimesspecificallyenumerated insection 504(a),heisnot proscribedfromholdingoffice byvirtue ofhishavingbeenconvicted under 18 U.S.C. 1006.

(Revised:Dec. 2016)

553.505CONSPIRACY TOCHEATAND DEFRAUD

The plaintiff, a union member, brought an action for a declaratory judgment and sought aninjunction which would order the defendant, a local union, to place his name on the ballot as acandidate for the office of business agent in the forthcoming election. Defendant had declared theplaintiff ineligible to be a candidate by reason of his conviction in 1963, under Pennsylvania law,for conspiracy to cheat and defraud the local. The plaintiff, at the time of this action, was in prisoninPennsylvaniabuthad apetitionbeforethecourtallegingthathisconvictionunder Statelawwasin violation ofcertain Federal constitutional rights.

Plaintiff’s principal contention in this action was that since LMRDA does not specify “aconspiracyto cheat anddefraud,”his convictionwasnotcovered byany ofthe specifictermsofsection 504. He further argued that section 504 of LMRDA “must be regarded as so penal innature” that the doctrine of strict construction of penal statutes must be applied in this civilinjunctivecase.

Citing Seriov. Liss, Postmav. International Brotherhood of Teamsters, Local 294, andUnited Statesv. Priore(see Manual Entries 550.700, 552.100, 553.305, 553.310) the court rejectsthe argument that section 504 must be strictly construed in civil cases, holding that it should beinterpretedliberally as aremedial statute.

Theissuethus waswhether thePennsylvaniacrime ofconspiracytocheat anddefraudiswithinone ofthe prohibitions ofeither embezzlement orgrand larceny insection 504.

AfterlengthyanalysisofPennsylvaniaandFederallawthecourtconcludes:

“While aware of the technical differences under Pennsylvania law as to Larceny and a Conspiracyto Cheat and Defraud, I conclude that for the purposes of the Labor-Management Reporting Act,section 504, the state crime of conspiracy to cheat and defraud is the equivalent of grand larcenyas used in section 504. Such a construction seems particularly consistent with the Congressionalintent where the cheating and defrauding which resulted in the illegal dissipation of union fundswere among the acts which Congress intended to eliminate by the enactment of the Labor-ManagementReportingActof 1959.”

The court denied the request for an injunction and held that the plaintiff was not entitled to adeclaratoryjudgmentwhichwouldsanctionplacinghisnameontheballotintheforthcomingelection.

Bermanv. Local 107, International Brotherhood of Teamsters, 237 F.Supp. 767, 58 LRRM 2009,(E.D. Pa. 1964).

(TechnicalRevisions:Dec. 2016)