Labor leader arrested for racketeering

[Ron Burgundy]

AP - The president of the nation's largest municipal labor council was arrested on federal racketeering charges Tuesday, accused of stealing more than $2 million from the state, labor unions and even a Little League fund.

Brian M. McLaughlin, a seven-term Democratic state assemblyman and president of the New York City Central Labor Council, has been under investigation for several years.

He surrendered Tuesday morning and was released on $250,000 bail after a brief appearance before U.S. Magistrate Judge James C. Francis. McLaughlin and his lawyer, Jonathan Bach, declined to comment as they left U.S. District Court in Manhattan.

"Everyone should keep in mind that Brian McLaughlin has not been convicted of a crime and will be afforded the opportunity to respond to and defend himself against these allegations," said the labor council's executive board chairman, Denis M. Hughes.

The labor council is an umbrella group of unions that has supported Mayor Michael Bloomberg.

In a 186-page indictment unsealed Tuesday, McLaughlin and others are accused of engaging in racketeering from 1995 through 2006 by using money collected for union activities to instead pay personal expenses, including credit card bills, rent and home improvements.

The indictment alleges McLaughlin committed mail fraud, embezzlement, money laundering and labor bribery by diverting money from various funds he controlled.

Among the funds identified were McLaughlin's political campaign committee, union accounts meant to provide benefits for union members and even contributions meant to support a Little League baseball program.

The indictment also alleges McLaughlin and others misappropriated funds from the state by creating fictitious jobs on his legislative staff and submitting false expense forms.

Among the expenses named in the indictment were more than $4,100 to maintain a boat in Tuckerton, N.J., and $4,200 for Long Island country club membership dues.

The indictment accuses McLaughlin of combining with others, not named in the indictment, to obtain hundreds of thousands of dollars in unlawful payments and things of value from street lighting contractors and other companies in the street lighting and traffic signal industry.

It also focuses at one point on a housing development created in 1950 by union leaders and electrical industry management that resulted in more than 30 large apartment buildings. As part of the development, residents created the Electchester Athletic Association Inc. to run a youth sports programs.

The indictment alleges McLaughlin used his position as state assemblyman to direct state money to that athletic association, then defrauded the association of more than $95,000.

Meanwhile, the indictment noted, McLaughlin continued soliciting donations to the athletic fund with sponsorship forms thanking the contributor and concluding with the message: "A CHILD IN SPORTS STAYS OUT OF THE COURTS!"

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Associated Press Writers Larry Neumeister in New York and Michael Gormley in Albany contributed to this report.