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 (his official title is secretary-treasurer) 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. Court records state that SCI “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 that September 24 – five weeks before his admission to the state bar – has done extremely 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. And it’s roughly twice the average annual amount paid to the union’s previous firm, Klein, Daday, Aretos and O’Donoghue. Shocker alert: John Coli Jr. and William Coli, respectively, son and brother of John Coli Sr., reportedly made the decision to retain Joseph Coli. Also, an official of the Legal Aid Fund at the time of Joseph Coli’s hiring, Jonathan Magna, was co-owner of a condo with the younger Coli in Chicago’s Lincoln Park neighborhood. Magna since has left the union and now works as a senior associate for Illinois Advocates.
It’s not as if the Coli extended family needs all this money. In fact, they are among the best-compensated union chieftains in the nation. During fiscal year 2014, John Coli Sr. collected more than $347,000 in combined salary from Teamsters Local 727, Teamsters Joint Council 25 and the Teamsters international, the latter of which he serves as Central Region vice president. That’s not even including roughly $40,000 as a board member of the union-backed Amalgamated Bank. His son, John Coli Jr., pulled in nearly $257,000, who is a year older than his lawyer brother. And William Coli, John Sr.’s brother, made more than $255,000 managing local benefit funds; it was William Coli, in fact, who swung the $7.4 million purchase of the Local 727 headquarters in 2010. Another brother of John Sr., James Coli, was secretary-treasurer of Local 727 until the feds permanently barred him from the Teamsters in July 1992 for failure to investigate a local business agent, Joseph Talerico, who allegedly had close ties to the Mafia. Another brother, Michael Coli, also a former officer with Local 727, was appointed by current Republican Governor Bruce Rauner to the Illinois Labor Relations Board.
The Coli fiefdom somehow has managed to weather its legal storms. One reason may be its ability to win friends in high places, such as Teamster International boss James Hoffa. Like his late father, Jimmy Hoffa, the younger Hoffa’s primary base of support is the Midwest. In November 2011, Coli, on the same ballot as Hoffa and General Secretary-Treasurer Ken Hall, was re-elected by an overwhelming margin as IBT Central Region Vice President. The 20 local affiliates of Joint Council 25 gave the Hoffa-Hall slate an even greater percentage of their vote than did the other locals. Hoffa always watches the backsides of loyalists. That’s why he dissolved Local 726 and created in its place Local 700, thus paving the way for his appointment of Coli as a trustee of the latter.
The Coli family also has cultivated strong relationships with Illinois political leaders, especially Chicago Mayor Rahm Emanuel. In the fall of 2010, John Coli Sr. formally endorsed Emanuel for mayor at a time when other area labor leaders were reluctant to do so. It was a smart move. Emanuel, first elected in February 2011 and re-elected this year, for the most part has spared Teamster-member City employees from work rule changes required of other unionized City employees. And according to court records, during the SCI case, John Coli left a message related to his June 2011 deposition indicating that “the mayor of Chicago, Rahm Emanuel, needed him on an emergency basis.” The mayor that day had a 45-minute meeting with Coli. The partnership at least has had an upside: In October 2011, local Teamsters and Carpenters bosses, coaxed by Mayor Emanuel, agreed to abandon certain absurd work rules that had been discouraging trade show exhibitors from holding events in Chicago.
Teamsters Local 727 also supported former Democratic Governor Pat Quinn, who had taken over from the doomed Rod Blagojevich early in 2009. Quinn proved a trustworthy ally, signing nearly 700 union-driven Project Labor Agreements by the summer of 2013. Teamsters Joint Council 25 endorsed Quinn for re-election. And though Republican challenger Bruce Rauner won, the union allied itself with the new governor. Flexibility paid off. Rauner appointed John Coli Sr. to an unpaid position on the Illinois Labor Advisory Board, which works with the state Department of Labor on a variety of employment policies, laws and regulations. In addition, as mentioned earlier, Rauner appointed Michael Coli to another term on the Illinois Labor Relations Board.
President Barack Obama, of course, comes from this neck of the woods. A number of observers have speculated that his administration’s decision this January to phase out direct federal oversight mandated by the 1989 RICO consent decree was a political IUO. Back in May 2008, during primary season, the Wall Street Journal reported that then-Sen. Obama, D-Ill., met with John Coli Sr. over the possibility of an endorsement. The article cited a comment by Teamster spokesman Bret Caldwell that Obama in March 2007 had told IBT leaders that the union “deserved to find a way to end the consent decree.” Caldwell said that the future president and Coli had met “on a pretty regular basis,” with Coli spending some time “educating Obama” about the Teamsters. Bill Burton, chief spokesman for the 2008 Obama campaign, denounced as “completely ludicrous” any assertion of a quid pro quo arrangement. That said, Obama was and remains a shrewd politician. Whether out of conviction or self-interest, he understood the value of staying on the good side of organized labor, including its corrupt elements.
The Coli family saga harkens back to an era when many unions were “family businesses.” They’ve been a major force in Chicago politics for decades. And they’ve made their share of enemies, including people in their union. Ken Paff, an activist with the Detroit-based reform group, Teamsters for a Democratic Union, recently criticized John Coli’s real estate dealings as “clearly for his own benefit and not for the members.” Hopefully, the latest revelations about family abuses of power will spark renewed interest on the issue among federal and state investigators.
Related:
Feds Release Teamsters from Oversight, But Is Corruption Really Gone?
