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Corrupt Coli Family, Chicago Teamsters under Fresh Scrutiny

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The good old days of union nepotism never really went away – not in Chicago anyway. According to published sources, International Brotherhood of Teamsters Local 727, long a virtual candy store for boss John Coli Sr. (in photo) and extended family, has been providing lavish compensation for a law firm whose managing partner is one of Coli’s sons.  The firm has been busy as of late.  In July, a Cook County judge ruled that the elder Coli and Teamsters Local 700, of which he is a trustee, were jointly liable for $2.3 million for breaking a building lease.  That’s not even taking into account a now-dismissed RICO suit charging the Colis and Local 727 with stiffing a funeral employee pension plan out of contributions.  If the family needs allies, it knows where to look, especially Teamsters General President James P. Hoffa and Chicago Mayor Rahm Emanuel.

The Park Ridge, Ill.-based Teamsters Local 727, which claims about 9,000 members in such occupations as bus drivers, funeral directors, trade show workers and parking garage attendants, for decades has been a dominant force in Chicago organized labor.  Current boss John Coli Sr., now 55, inherited the mantle from his father, Secretary-Treasurer James Eco Coli.  With John Coli at the helm for some 30 years, the union has elevated self-dealing into a high art.  Back in January 2005, Union Corruption Update reported that the FBI had launched a criminal probe into allegations that Coli family members from 1993 to 2000 fleeced a dental plan that represented union employees of Chicago-area undertaker firms.  A team of investigators working for IBT internal ethics overseer Edwin Stier at the time had just released a 303-page report addressing a wide range of allegations directed at the Teamsters and affiliates.  Stier and his entire staff already had resigned in April 2004, convinced that IBT General President James P. Hoffa was interfering with corruption investigations in Chicago and Houston.   The report was an outgrowth of a 1989 settlement of a Justice Department civil RICO suit concluding that the Teamsters international union for decades had been controlled by organized criminals. 

With respect to Teamsters Local 727, the Stier report concluded that 30 percent of employer reimbursements to the union had gone for “grossly excessive” administrative expenses.  A local benefits contractor, the Florida-based Dental Consultants and Management, had received more than $4 million in payments.  Were that not enough, the report cited payments from the plan to “persons and entities…having had ties to organized crime figures, been implicated in racketeering schemes or both.”  These shakedowns, argued investigators, very likely had the effect of reducing hourly wages.  The cost of being buried in Chicago, never all that cheap in the first place, apparently had gone up.

The probe indirectly led to a civil RICO suit filed on November 1, 2011 against John Coli Sr., other family members, and Local 727.  The plaintiff, SCI Illinois Services Inc., a unionized Chicago-area provider of funeral services, alleged that local officials had been ripping off the company’s health, pension and education plans.  It was no coincidence, noted the complaint, that three of the four appointed trustees of these plans were Coli family members.  The plaintiffs alleged that the union created “a scheme to defraud and extort” money from SCI by wildly inflating the value of scheduled payments to the benefit funds.  During April 2004-April 2008, the plaintiff settled seven separate lawsuits with the defendants for amounts far exceeding the sums owed.  The lawsuit read

Defendants have conspired to and have falsely and intentionally inflated audits relating to how much was owed to the Local 727 Funds, continually abusing the legitimate audit process year after year to extort as much money as possible from Plaintiff for the Funds. 

Finally, after years of Plaintiff submitting to extortion and incurring enormous legal expenses, Plaintiff decided to fight instead.  In litigation brought by the Funds at the control and direction of the Defendants, Plaintiff sought the deposition of key individuals, including Defendant John Coli Sr.  Coli Sr. resisted his deposition vigorously.  When the court finally ordered him to attend, he did appear, but was belligerent and uncooperative, stating, “For the record, go f**k yourself.”

Predictably, the Local 727 crew filed a motion to dismiss the case.  U.S. District Judge James Zagel, however, denied the motion, stating, “The Complaint contains enough facts to infer the existence of an agreement between Defendants to violate [the federal ERISA law].  The conspiracy claims stands.  Causation and injury have been sufficiently pled…”  Judge Zagel the following year, in September 2013, slapped a preliminary injunction against local Teamsters who had been engaging in extremely abusive behavior at funeral sites and services.  SCI, court records show, “asked for preliminary and permanent injunctions due to repeated incidents of gross insensitivity and harassment directed at grieving families by Teamsters’ picketers outside of funeral homes affected by the union’s labor dispute with the company.”  Yet several months later, the union got its wish:  The court, presided over by U.S. District Judge Sara Ellis, dismissed the case in January 2014.

The Coli family’s egregious behavior has been manifest in other ways.  And recent investigative reports by the Chicago Sun-Times’ Dan Mihalopoulos have revealed that it hasn’t been limited to Local 727.  Even the courts have grown impatient.  This July 14, Cook County Judge Raymond W. Mitchell ruled on behalf of a property owner in Des Plaines, Ill. who had filed suit against John Coli and Teamsters Local 700, which represents more than 12,000 public employees for the City of Chicago and various suburban and other communities in Illinois.  As head of the Teamsters Joint District Council 25 as well as Local 727, Coli controlled a lot of turf.  It helped that he also was a trustee of Local 700, a Council 25 affiliate. 

The case centered upon the union’s abrupt breaking of the building lease.  In 2010, barely a year into a 15-year rent-to-own lease agreement on the Des Plaines building located at 1550 Mount Prospect Road, Local 700 leaders broke the lease and moved the union into its current abode in Park Ridge, which happens to be owned by Local 727.  The Des Plaines lease, effective for five years and renting for more than $16,000 a month with an option to buy for $2.15 million, had been signed by officials of Teamsters Local 726, which represented certain Chicago city workers.  But Teamsters headquarters in Washington, D.C. in 2009 had placed the corruption-ridden Local 726 under trusteeship at the recommendation of the three-person federal oversight entity, the Independent Review Board; at least six of its members already had been disciplined by the IRB.  Headquarters proceeded to dissolve Local 726 and move members to a new entity, Teamsters Local 700.  Leaders of the new union, insisting they weren’t bound by the lease, stopped making rental payments.  This triggered a lawsuit by the plaintiff, 1550 MP Road LLC. 

Judge Mitchell was not impressed by the claim by the new union that circumstances forced it to break the lease.  Local 700, he wrote, was seeking to “escape liability.”  He pointed a finger at John Coli, whom he said was behind the dissolution of Local 726.  Local 700 “unilaterally chose to accept all of the assets of Local 726 while representing its most significant liability, the [Des Plaines] lease…Coli’s actions are unjustified and not protected…precisely because he orchestrated an unlawful act:  a scheme to defraud a creditor.”  Coli, he concluded, “alone decided to abandon” the Des Plaines offices and move Local 700 to the Park Ridge building,” the latter structure, interestingly enough, managed by John Coli’s sister, Susan Fosco.  The decision to move was “plainly against the interests of the members of Local 700 and wholly unjustified.”  Toward that end, Judge Mitchell ordered the local to pay the plaintiff about $2.3 million.  Nearly $2 million of that covered damages and more than $300,000 covered legal fees and court costs.  Lawyers for Local 700 still believe the case has legs.  They have asked Judge Mitchell to reconsider his ruling, claiming that leaders of Local 726 lacked the authority to sign the lease on the Des Plaines building. 

Meanwhile, the Coli patronage machine is priming its next generation, most of all, one of John Sr.’s sons, Joseph.  Joseph Coli, now 28, is a lawyer – and a lucky one.  Just weeks after receiving his license to practice, his firm, Illinois Advocates, effective December 1, 2012, was retained by Local 727 as the union’s “exclusive provider of legal services.”  Illinois Advocates, founded by the younger Coli just weeks earlier on September 24 – five weeks before his admission to the state bar – has done very well.  According to the U.S. Labor Department, the Local 727 Legal Aid Fund paid Illinois Advocates $171,000 during the first three months of the contract period.  Then, during the 12-month period of March 1, 2013-February 28, 2014, it disbursed a whopping $1.86 million.  That’s a hefty sum directed to any union law firm, to say nothing of one whose only partner (out of more than 10 staff lawyers) was a complete neophyte. 

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