Head of Nation's Largest Municipal Labor Council Arrested in NYC

NEW YORK (AP) - A seven-term Democratic state assemblyman who also is 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, 54, was accused in an indictment of stealing money from several organizations in which he held official positions. He and his associates allegedly stole money from labor unions, the state of New York and not-for-profit groups.

Mr. McLaughlin has been under investigation for several years.

He is president of the labor council, an umbrella group of unions that has supported Mayor Bloomberg.

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

There was no immediate comment from Speaker Sheldon Silver or from Mr. McLaughlin's office at the New York City Central Labor Council.

The indictment accused Mr. McLaughlin of combining with others to obtain hundreds of thousands of dollars in unlawful payments and other things of value from street lighting contractors and other companies in the street lighting and traffic signal industry. Mr. McLaughlin is the only one named in the indictment.

A street lighting fraud included an instance in which Mr. McLaughlin and others secretly maintained an interest and received hundreds of thousands of dollars from a company that did business with their unions, according to the indictment in U.S. District Court.

The indictment in Manhattan accused Mr. McLaughlin of committing mail fraud, embezzlement, money laundering and labor bribery by diverting money from various funds he controlled or had access to for his own use.

Among the funds identified by the indictment were Mr. 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 said Mr. McLaughlin and others misappropriated funds from the state of New York by creating fictitious positions on his legislative staff, by providing McLaughlin with a share of salary for one purported employee and by submitting false expense forms.

The indictment said Mr. McLaughlin helped friends as well, including providing 16 checks from a Street Lighting Association union fund meant to benefit union employees between May 1997 and October 2003 to a female friend with whom he had a personal relationship.

The woman spent the approximately $21,900 in checks on personal expenses, the indictment said.

In September 2000, he gave a $1,000 check to another woman with whom he had a personal relationship, the indictment said.

The indictment alleged Mr. McLaughlin diverted the union funds for his own use too, spending more than $4,100 in June 1995 and July 1996 to maintain a boat in Tuckerton, N.J., $2,400 in November 1998 for a car payment and $4,200 in March 2003 for Long Island country club membership dues.

The indictment focused at one point on a housing development created in 1950 by union leaders and electrical industry management. It resulted in more than 30 large apartment buildings in the Pomonok section of Queens.

As part of the development, residents created the Electchester Athletic Association Inc. to finance and operate youth sports programs for children who lived in the Pomonok area.

The indictment alleged Mr. McLaughlin used his position as state assemblyman to direct the allocation of state funds to the athletic association so that children and their families could benefit.

Since 1997, Mr. McLaughlin, assisted by others, defrauded the athletic association of more than $95,000, including $6,000 McLaughlin demanded be extracted so he could pay rent for his apartment in Albany for the rest of the year, the indictment said.

Meanwhile, the indictment noted, Mr. 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!"