Have you ever dreamed about being a powerful labour leader? Ever desired to be the champion of the working class against the bourgeois capitalists? Ever wanted to be a union President, but know nothing about it? Well in 1974, for the low, low price of $90,000, you too could’ve had your own union. Now while those days are (hopefully) long gone, the story of the Allied Union of Security Guards and Special Police (Allied) is a fascinating one that I wish to explore more today.
In the 1950s and 60s, the organized labour movement was at its peak in America. It was also the new Wild West. Everything was for the take, and everyone had a price tag. Besides controlling legitimate unions belonging to the ALF-CIO, entrepreneurial racketeers created independent labour unions and even paper unions that existed for the sole purpose of coercing businessmen for payoffs. No qualification was required, no oversight was needed. It got so bad that even street brutes like Joey Gallo and his gang got their own union called Local 266 of the Juke Box Union. Its sole intention was to create a mob-controlled jukebox cartel on Long Island, New York. It was in these wild times that Allied was born.
Ben Ross, also known as “Benny the Bug” was a Jewish labour racketeer who instilled terror into the hearts of businessmen all around New York. Flying high, mostly under the Lucchese umbrella, he was such a menace that Robert Kennedy made him a top target when the latter was going after union corruption. He mostly worked with Lucchese members John Dioguardi and Angelo Tuminaro and with their muscle, he owned and controlled a slew of unions. He formed the District 5 and Affiliated Unions, Local 348, International Brotherhood of Trade Unions, the International Jewelers Union, and the Allied Crafts Union. With these Ross and his Lucchese goons marched around New York pulling every known labour scam in the book. From informational picketing to trying to unionize maintenance workers at the Shea Stadium against their will, Benny made boatloads of money for himself and his mob partners. Benny’s next move was to create the Allied Guards Union, but this time he would do it with the help of another crime family.
Enter Genovese Family soldier, Joseph “Joe Curly” Agone. Agnone had an extensive labour racketeering background himself, being involved with Local 11 of the Hotel and Restaurant Employees and Bartenders International Union. Joe Curly teamed up with Benny Ross to create the Allied Crafts Security Union of North America in the 1960s. The union grew fairly slowly and was clearly not a priority for either man. Ben Ross’s shenanigans caught up to him and he was convicted for loansharking and tax evasion in 1972. Agone then appointed Pat Sottile to run the union. The Genovese soldier, however, had his own trouble with the law, stemming from his involvement in the aforementioned Local 11, but with Pat, at the helm, the fledgling union stayed within the Genovese’s orbit of control.
Bored with his career in real estate, Daniel Cunningham sought to spice up his life a bit by joining the chaotic world of organized labour. Promises of untold riches and power enticed Daniel to seek out his well-connected friend for advice for how to enter the business. Luckily for him, his friend was Genovese powerhouse and Street Boss “Funzi” Tieri. Allied was but one of the myriad unions under the influence of the Genovese Crime Family and Funzi put Daniel in touch with Pat Sottile, the President of Allied. If Cunningham paid Sottile $90,000 the latter would vacate his position as President and allow the buyer to serve out the rest of his term. Since the union didn’t have any formal elections, in an essence Daniel was buying control of the union by becoming its next leader. In late 1974, Daniel did just that and became Allied’s next President. At that time Cunningham was also associated with Funzi’s godson “Fat” Larry Paladino and so the union was still squarely in the orbit of the Genovese.
Daniel Cunningham’s leadership over Allied can be described with one word: pirate. The next half a dozen years proved to be extremely lucrative as the President milked the 650-member strong union dry. The first order of business was to rapidly expand the membership base. More dues-paying members meant more money. More money meant you can throw your weight around. After all, who is going to respect you as a labour leader if your union is so small? Well, he did just that, alongside Allied’s sister union, the Federation of Special Police and Law Enforcement Officers (Federation) he grew the union to over 6,000 members by 1980, a 10x increase. Do you know what else grew? His salary. When he came into the office of President, the annual salary was a meager $36,000 per year. By the time Daniel exited the union, his salary ballooned to $104,000.
Despite his lack of experience in organized labour, Daniel Cunningham was no slouch and used the rules to his full advantage. The National Labor Relations Board (NLRB) mandated that security guards be organized as a group separate from a union’s general bargaining unit. Taking advantage of this, Allied would approach other unions representing security guards and offer employees better benefits. Allied would sign up those employees and go to the NLRB and obtain an order allowing Daniel to bargain on their behalf. This organizing trick worked because most other unions simply did not follow NLRB’s rule. As such, they were powerless to do anything about Allied and the union grew exponentially in the late 1970s. In addition to pursuing traditional security guards, Daniel got creative and went after nuclear power plants. He organized several of those including the Indian Point and Shoreham plants. After organizing the guards he pressured the utilities by threatening strikes that would shut the power plants down. It was no idle threats either, as he successfully waged a strike that temporarily shut down five plants from Maine to Pennsylvania. As the 1970s drew to a close, Daniel Cunningham had his eyes set on an even bigger target. It was the biggest prize of them all. In 1976, the legalization of casinos was approved by the citizens of New Jersey and Allied was set on getting a piece of the Atlantic City action.
New Jersey law mandated that no casino could operate without security guards posted at specific locations. Thus, a strike of casino security guards would shut down these gambling halls and cause potential losses in the millions of dollars. Payoffs for labour peace, that was organized crime’s mantra and control of the security guards could prove very lucrative. Daniel Cunningham got to work on organizing Atlantic City’s casino guards by creating the Casino Police and Security Officers Union. His initial efforts were done under the guidance of the Genovese Crime Family, who continued to control him. In 1977, Daniel met with the Boss of the Philadelphia Crime Family, Angelo Bruno to discuss the unionization drive in Atlantic City. He sought the Gentle Don’s support in steering casino guards towards Allied while offering to hire some of Bruno’s underlings into powerful union positions. Things were on the up and up for Allied as they were poised to infiltrate the bustling casino industry of Atlantic City.
Around the early 1980s, Daniel Cunningham fell under the orbit of another powerful Mafia leader, John “Sonny” Franzese. In his usual form, he directed the union leader to go and talk to his business savvy son and Colombo Crime Family soldier Michael “the Yuppie Don” Franzese. Joseph Agone was getting up there in age and so Allied Union become a joint venture between the two crime families. The early 1980s saw a violent power struggle in the once stable Philly Family and Daniel needed Michael’s help arranging a sit down with the new Boss, Nicky Scarfo. By Michael’s account, Nicky was a gentleman who gave his blessing towards Daniel’s unionization drive. Coincidentally during late 1980, the head of a rival union seeking to organize casino security guards was murdered, paving the way for Allied to have sole monopoly in Atlantic City. That man was John McCullough, business manager of Roofers Union Local 30. Funny how these things happen.
In 1981, just as all the pieces were finally being put together, the party was finally over for Daniel the labour leader. He was indicted on 52 counts of union racketeering, fraud, and bribery. During the trial, the President’s abuse of power was on full display. A report aptly described the extent of the fraud, “Cunningham built up fraudulent business and travel expenses, hired “no-shows”, forged union and employee benefit plan checks, embezzled checks disbursed to fictitious employees, received kickbacks from employers and consultants, and participated in a variety of frauds against insurance benefit providers.” Some monetary highlights include $4,000 worth of kickbacks received between August through December of 1978 from IBI Security Services (a company organized by Allied). Daniel also embezzled $8,000 in union funds written out to fictitious employees. You must call him a family man as his wife, ex-wife, and girlfriend received a total of $37,500 worth of improper salary disbursements. Subsequent investigations by the Department of Labor (DOL) indicated that in five years he stole a total of $160,937 from the Allied Health and Benefit Fund. Subsequent disclosures from Cunningham himself also show he entered into “desk drawer contracts” with certain employers in exchange for payoffs. This protected the employer as they were now safe from a real union trying to organize their employees.
But it didn’t just stop there, besides internal pilfering, Daniel found other creative ways to earn some extra money. Between June 1st, 1981, and November 30th, 1982, Daniel got a $101,500 kickback for giving Schneider and Taubman a $20,000 a month service contract to handle Allied’s legal affairs. A similar scheme was done with the health and dental insurance plan. Michael Franzese, in his book, claimed that Cunningham pocketed $14,000 a month by charging the Union $20,000 for services that just cost $6,000. At $10 per member per month in union dues, by 1980, Allied should have been earning more than $700,000 a year in dues income alone. In fact, it reportedly earned only $370,000. That’s a pretty big discrepancy. Knowing of his upcoming prosecution, Daniel came up with the brilliant plan of trying to bribe DOL agents to perjure witnesses and delay the investigation. He also tried to blow up his father-in-law who ended up testifying against him. On July 26th, 1982, after a seven-week trial, Daniel Cunningham was convicted of racketeering, bribery, embezzlement, and obstruction of justice. He was sentenced to five years in prison, five years of probation after the competition of his sentence, and a fine of $80,000. Daniel’s story was at an end. But if you thought Daniel was cool for buying his union position, then his successor is even cooler since he got it for free.
Right before Cunningham’s trial, mobster Joseph Agone ended up dying on January 16th , 1982. This meant that the Colombo Family and Michael Franzese inherited the union to do with it as they pleased. And what pleased Michael most was making money. After going to prison, Daniel attempted to sell control of the union to his mob backer Franzese. In a chilling reply, the Yuppie Don asked a simple question, “Why should I buy something I already own?” This was the end for Daniel. But this was the beginning for Anthony Tomasso and Louis Fenza and their adventures with Allied. The two labour leaders and their backers were not interested in further ambitious organization efforts. Membership only grew to 10,000 by 1985. What they were interested in was to engage in even more financial schemes to take full advantage of Allied Union’s fund.
Leo Bloom, a crooked financier, approached Allied and made them an offer they couldn’t refuse. Between 1982 and 1984, Bloom made kickbacks to Michael Franzese, Tomasso, Fenza, and Allied’s lawyer Goldblatt in return for Allied’s purchase of $590,000 worthless certificates issued by Dome Insurance Company. Instead of giving out the kickback in straight cash, Dome financed Michael’s $120,000 Delray Beach, Florida home for a mortgage that was not only free of interest payments but also free of principal payments! I wish my bank would give me such a deal. Tomasso also received $184,700 worth of kickbacks similar to Franzese’s arraignment. Allied’s final President, Fenza also received $22,000 for allowing the worthless certificates to roll over. Leo Bloom, being such a nice guy, flew out the families of all the key Allied officials (barring the Yuppie Don) on an all-expense-paid vacation in the Virgin Islands. In case you were wondering how bad the financial mismanagement was, the Dome investments represented ~89% of Allied’s available assets. ASI, another company controlled by Leo Bloom, was Allied’s third-party administrator processing billings and other related paperwork. For that contract, Bloom provided $2,000 a month kickback to the union’s leaders. His shenanigans caught up to him and Leo Bloom would get convicted in 1984 on a conspiracy charge relating to his activities as principal of Dome Insurance. Dome’s financial reports were of course completely falsified as some of the assets and deposits they claimed never existed. He was sentenced to five years in prison.
When a union becomes a wholly-owned subsidiary of the Mafia, the financial havoc it wreaks is immense. When the DOL analyzed Allied Union’s financial statements retroactively, it found union corruption on another level. According to proper union management, a fund should spend no more than 10% of revenues on administrative expenses. Using this benchmark, Allied Union spent $1,779,836 more than it should have during the period of 1980 to 1985. Similarly, the union spent another unnecessary $98,337.50 on benefit claims. Justice was finally served on December 20th, 1985, when the Eastern District of New York indicted Michael Franzese and his union cronies in a massive 28-count 99-page indictment that detailed the union fraud among the numerous financial crimes committed by the Michael Franzese Group. Allied Union was finally purged from its Mafia ties, to be run legitimately and in the interest of their members, not labour racketeers.
Sources include: President’s Commission on Organized Crime, Mob Boss by Jerry Capeci and Tom Robbins, The Colombo Family by Andy Petepiece, LCNBios, Quitting the Mob by Michael Franzese and Dary Matera, and various articles from the Daily News (New York), The New York Times, and other newspapers.