Labor Racketeering

James B. Jacobs

Labor racketeering (not a legal or scientific term) is a popular way of referring to organized crime exploitation of unions and union pension and welfare funds. Unions, like most organizations, have their share of corrupt officers and employees. However, unions are unique on account of the extensiveness of corruption perpetrated by the Cosa Nostra (sometimes called “mafia”) organized crime families and union officials with whom they are allied. Indeed, no other country (not even Italy or Japan, with hugely powerful organized crime groups) has experienced the degree of organized-crime-sponsored labor racketeering that has plagued the U.S. labor movement. Setting the pattern for organized crime labor racketeering early in the 20th century were Jewish, Irish, and other ethnic gangsters like Arnold Rothstein (1882–1928), Jacob Orgen (1894–1927), Louis Buchwalter (1897–1944), and Arthur Flegenheimer, aka “Dutch Schultz” (1903–35). Sometimes hired to help a union defend itself from employers' thugs, these gangsters got a ...

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