Archives for posts with tag: Nynex And At&T Can’t Hang Up On This Scandal

Most Valuable Pervert

Some industries are prone to wrongdoing, criminal and otherwise. The chemical, tobacco, pharmaceutical and auto industries come to mind. The telephone industry is not usually a regular in the criminogenic crowd. That’s why NYNEX, the regional telephone company serving New York and the New England states, stands out.

In May 1990, a federal grand jury in Washington, D.C. indicted NYNEX on one count of criminal contempt for violating the consent decree that broke up the giant Bell operating system. The U.S. Justice Department began its investigation after Scott Rafferty, a lawyer hired for NYNEX’s Telco subsidiary, questioned the legality of giving MCI Communications access to Telco computer facilities. Rafferty says he was fired for questioning the “regulatory exposure” of a number of NYNEX’s business operations.

In October 1990, the Federal Communications Commission (FCC) reached an agreement with the company settling FCC charges brought in February that the company overcharged its unregulated affiliates by $35.5 million. The company was fined $1.4 million. The settlement decree, approved by a vote of 5-0, did not cite findings of wrongdoing. But Commissioner Andrew C. Barrett said in a separate opinion that he would have preferred to have had such a finding. Barrett said there was “sufficient evidence of wrongdoing to find that NYNEX violated the FCC’s rules regarding transactions between telephone companies and their nonregulated affiliates.”

Rafferty calls the FCC settlement with NYNEX a sellout.

The New York Public Service Commission apparently didn’t think very highly of NYNEX’s veracity or competence either. It reduced the company’s $945 million rate request to $23 million.

Company executives were apparently paying more attention to the libidinous needs of fellow male executives than they were to the rights of the company’s phone customers. From 1984 to 1988, NYNEX allegedly held “pervert conventions” in Florida, where employees and suppliers partied together. Awards were given at the convention: one NYNEX employee won the “Procurement Award” for three consecutive years for “arranging for women” to appear at the conventions; others included the “Most Valuable Pervert Award” and the “Moon Over Miami Award.”

Rafferty charges that there were improper relationships with suppliers at the conventions that tainted business transactions. New York State officials allege that many suppliers who attended the conventions saw their business from NYNEX increase, but NYNEX denies this.

Instead of listening to Rafferty and other employees who sought an early exposure and resolution of incipient corruption within the company, NYNEX sought to silence the messengers. According to Rafferty, a number of other whistleblowers within the company faced this silencing treatment. Michael Burkhart was discharged by a NYNEX subsidiary after he questioned the use of illegal, one-of-a-kind contracts to give unlawful discounts to certain large corporate customers. Robert Zirkelbach was fired by a NYNEX subsidiary after he questioned markups as high as 1,004 percent that the NYNEX procurement subsidiary, MECO, was charging. Tobias Squitieri was fired after he complied with a New York state employment discrimination administration subpoena regarding the discharge of another employee.

Many of the fired employees have brought legal actions against NYNEX.

Businessweek Archives

Nynex And At&T Can’t Hang Up On This Scandal

Posted on April 16, 1995



Back in 1990, Nynex Corp. became the center of a lurid scandal involving bawdy parties at Florida hotels held annually by its suppliers. The explosive disclosures surfaced during a regulatory proceeding in a state rate case for Nynex’ New York Telephone unit. After investigations by the company and the state utility commission didn’t produce information that might have led to criminal charges, the issue of what dozens of party-goers dubbed the “perverts’ conventions” faded away.

Until now. BUSINESS WEEK has learned that the Securities & Exchange Commission is taking a look at the retreats as part of its ongoing investigation into a sprawling insider trading ring. On Feb. 9, the SEC charged that a group of 17 friends–many of whom had worked together at New York Telephone when it was part of AT&T–allegedly reaped $2.6 million trading on illegal tips on AT&T’s plans to take over several companies. On the same day, the Justice Dept. brought criminal securities fraud charges against six of the alleged insider trading ring members.

Now law-enforcement officials are trying to find out if the two scandals are linked. The weeklong retreats, from 1984 to as late as 1989, may have overlapped with some of the alleged insider trading, which took place from 1988 to 1991. On Apr. 5, the SEC issued at least two subpoenas requesting information about the retreats, including the closely guarded names of attendees, according to Scott J. Rafferty, a former Nynex employee who received one of the subpoenas.

One of the few names made public during the Nynex scandal was Lawrence Friedman, a former Nynex vice-president who arranged the parties. Friedman is also a member of the insider trading group charged by the SEC. And sources say at least two others named in the SEC’s complaint are on the secret list of those who attended the retreats: Thomas Alger, one of the two ringleaders, and Robert Flanagan, who was scheduled to be Alger’s roommate at the 1985 retreat at the Marina Bay Hotel in Fort Lauderdale. They were friends who had worked together at New York Telephone. Alger has pleaded guilty to criminal conspiracy, while Flanagan is fighting the charges. Alger declined to comment. Friedman through his lawyer declined comment. Flanagan could not be reached.

“SECRET SOCIETY.” William R. McLucas, the SEC’s enforcement chief, also declined to comment. AT&T and Nynex weren’t accused of any wrongdoing in the trading scheme. AT&T had no comment. Nynex still refuses to discuss the Florida meetings, citing its policy against disclosing personnel matters. In the New York rate case, the company contended that such disclosures could strain marriages and hurt company morale. Nynex also argued that the identities of those who attended and the companies they represented, as well as alleged prostitution and other convention activities, are “trade secrets” that needn’t be disclosed. Accepting that argument, an administrative court judge ordered that the names remain under seal. “Had Nynex publicly disclosed their names, the wrongdoers wouldn’t have been able to keep the secret society together to do their insider trading,” says Rafferty, who alerted the SEC to the Nynex tie.

The SEC’s new focus on the Nynex parties could reveal the full extent of what is already one of the largest insider trading rings. The scheme was orchestrated by Alger and Charles L. Brumfield, both AT&T labor relations executives, the government charges. The men passed confidential information to friends and relatives about the company’s plans to acquire four companies–Paradyne, NCR, Digital Microwave, and Teradata–the SEC complaint says. After the participants illegally traded on the information, they passed back $300,000 of the illicit profits to Alger and Brumfield, who is known as “Big Red” because of his red hair. Brumfield also pleaded guilty to criminal conspiracy.

BAD-DEBT SCAM. Another alleged participant was Joseph Penna, a union representative for 2,000 technicians and clerical personnel at AT&T’s computer unit, who negotiated contracts with Brumfield. Three days after AT&T had announced a $6 billion takeover mf NCR, Penna denounced the deal in an interview with the Newark (N.J.) Star Ledger. “I’m not going to stand by and allow that,” he said. But just days before the deal was announced, Penna allegedly made more than $36,000 in illegal profits from trades based on information about the imminent proposal, according to the SEC complaint. Penna had no comment.

One of the men under criminal indictment has been in trouble with the law before. Joseph A. Cusimano, a former executive vice-president of International Games Inc. in Joliet, Ill., pleaded guilty in 1992 for his part in a scheme to conceal $173,000 in political contributions. He was sentenced to three years’ probation and fined $99,000. Cusimano, a friend mf Brumfield, was the largest profiteer in the insider trading scheme, making more than $865,000, according to the SEC. The agency’s complaint also alleges that Cusimano falsified a promissory note to cover up payments he made to Brumfield in return for inside information. His attorney says Cusimano expects to be acquitted at his trial.

All six of the defendants in the criminal case have pleaded innocent. Their trial is scheduled for the fall. The SEC, meanwhile, is pursuing its case against the 17 individuals it has identified as part of the insider trading ring. With the renewed prosecutorial interest in the frolicking in Florida, that number could go higher.


MID-1988 Nynex investigates lewd gatherings of employees at Florida hotels from 1984 to 1988. Two convention organizers were dismissed, including Lawrence Friedman. In February, the SEC alleged that Friedman was involved in an illegal insider trading ring.

DEC. 1988 The SEC says the insider trading scheme started when Charles Brumfield, an AT&T executive, obtains nonpublic information about AT&T’s plan to buy Paradyne. He tips two former AT&T executives.

NOV. 1990 Brumfield learns of AT&T’s plans to acquire NCR and passes it on to Thomas Alger and others. During the next year, says the SEC, Brumfield passes tips about AT&T’s takeover of Digital Microwave and Teradata.

FEB. 1995 The SEC files charges against 17 people, including Brumfield and Alger, alleging they made illegal insider trading profits of $2.6 million.

APR. 1995 SEC starts exploring whether the Nynex gatherings and the AT&T insider trading ring are linked.

DATA: BUSINESS WEEKBy Michael Schroeder and Mark Lewyn in Washington

Probe Connects N.Y. Phone Firm to Bawdy Parties

July 12, 1990| Associated Press

NEW YORK — Investigators are looking into allegations that New York Telephone suppliers helped pay for bawdy parties and prostitutes at annual conventions of company employees, it was reported today.

State regulators are questioning whether the meetings at Florida resorts resulted in higher costs being paid by customers, The Wall Street Journal said.

Our Sister Firm, Fine, Olin & Anderman, Wins Discrimination Suit Against Verizon

Posted on November 16, 2010 by Finkelstein & Partners

When a worker suffers an injury on the job, they need to worry about getting better, not whether or not they’

ll have a job to return to after their recovery — and they certainly don’t need, or expect, to be disciplined after a workplace accident. That was the case argued, and won, recently by Finkelstein & Partner’s sister firm, Fine, Olin & Anderman (FOA) LLPon behalf of a number of affected Verizon employees.

FOA, which represents union members and their families, filed a discrimination lawsuit when they learned that many of their workers’ compensation clients employed by Verizon were disciplined for having a work place accident.

“We believed that

Verizon’s actions violated the law, and their employee’s rights, as their policy discriminated against people who had work place accidents,” said FOA attorney Vincent Rossillo.  “The cause of the accident didn’t matter.  People were disciplined, even if the accident wasn’t their fault.  As a result of this policy, workers have been suspended without pay, sent to ‘safety school,’ written up, or given warnings,” continued Rossillo. “The company is worried about their bottom line, not the well-being of their employees.”

As stated in the case,

Verizon employees have been reporting fewer work place accidents because of the discriminatory policy.Rather than subjecting themselves to discipline, employees are simply not reporting the accidents and are shifting the medical costs to their private health insurance.  By under-reporting accidents, Verizon’s workers’ compensation insurance  costs will decrease  while the cost of private health insurance premiums will rise.

“This is likely what

Verizon hoped would happen when they implemented their policy,” argued Rossillo.  “If the company’s workers’ compensation costs decrease while the costs of private health insurance increase, the company can use that to their advantage against the union when negotiating the next contract.”

The lawsuit noted that

Verizon’s new policy only affected those workers who had work place accidents.  If an employee was injured at home or off the job, no disciplinary action was taken. In addition, workers were disciplined regardless of fault. The simple fact that an accident occurred on the job was cause for disciplinary action.


FOA team argued that the Workers’ Compensation Law specifically prohibits an employer from discriminating against employees who have work place accidents. This section of the law was created to prevent employers from taking any action that would harm or intimidate an employee because they filed or intended to file a Workers Compensation claim.

As a result of their findings,

FOA filed discrimination complaints on behalf of numerous clients.  Two cases have gone to trial and in both cases, the Workers’ Compensation Law Judge determined that Verizon had violated the law. In one of the cases, the Law Judge noted that Verizon was clearly not disciplining employees for working in an unsafe manner, but rather was disciplining the employee for simply being involved in a workplace accident.  Back pay was awarded to the employee who had been suspended. In another case where the employee was sent to safety school with no loss of pay, Verizon was fined the maximum amount under the law.

“While these favorable decisions are subject to appeal, the initial decisions are encouraging for protecting the rights of workers,” remarked

Rossillo.  “If Verizon continues to lose these cases and has to pay fines, back pay, and lawyers’ fees, and starts to feel the affect on their bottom line, maybe they’ll  reconsider their policy. In the meantime, we’ll continue to fight for the rights of our clients,” added Rossillo.

If you or a co-worker have been unfairly disciplined for having a work place accident, contact Fine, Olin & Anderman (FOA) and your local union office. FOA will review your claim to determine if you meet the criteria.  You should be aware that there are very strict time limitations in which to file a workers compensation and discrimination claims.  If you do not file a claim timely, you may be forever barred from doing so.

Dear Law Maker:

I am a 46 year old former U.S. Marine, who was brought up by my father, due to my mother passing away when I was 8 years old.  I have five children, a grandchild and a wonderful wife of over 20 years.

I was born in 1965, in Fall River Massachusetts.  I lived on the 2nd floor from my Grandmother.  I come from a very large family Cape Verdean family.  In 1973 we moved from the city, into the suburban neighborhood, a place called Swansea.  It was that year when I lost my mother in an auto mobile accident.

In 1984 I went into the U.S. Marines which enforced respect for one self and our Nation. After getting out of the Marines, I furthered my education and received my first degree, which was in Electrical Technology.

In 1997 I was hired by Nynex (now called Verizon), as a lineman. In 2004 I was promoted to manager as I was in the process of working on my second degree in Business Management and advanced to upper management, rapidly.  I was a valued leader on the Verizon Diversity Committee, and spoke at several locations.  I was on the Diversity committee and was directly responsible for ensure the first ever Verizon’s Diversity Week went on without any hitches.  I was awarded for my success in New York by the Verizon New England President.  I was apart of other specialized organizations within Verizon to ensure my voice was heard as I stood up against Bullying, Harassment, Racism and Discrimination was not accepted with the Verizon walls.

But it was in 2004 when I was promoted, I began to see Verizon employees getting bullied by Verizon Management.  I did what I through was best, and tried to halt the bullying that was taking place at Verizon, then it shifted to me.  After standing up against the powers to be, trying to help others I was targeted, harassed, bullied, discriminated against, endured racial harassment and eventually wrongfully terminated.

I was brought up with the belief of how you treat people, is how you will be treated.  It was embedded into my mind that respect was how it will be in my family.  My father said, “Respect people, work hard and life will treat you kind.”  This was the belief of a man who was discriminated against for so many years, because of his color, but never changed his values.

I knew then, I cannot walk away like so many others that have had to endure such cruelty, and that this bullying issue is larger than me.

After seven and a half years my story is still is not over as I am still in federal court in Boston Massachusetts awaiting the second summary of judgment decision.  I will continue to fight for justice and my honor.

I now have committed my life to help others, and started a blog page which has acquired over 14,000 readings and over 2,000 comments in only a few months.  After hearing all these stories, I knew I had to do something and became an advocate for workplace bulling.  This is when I stumbled upon “New York Healthy Workplace Advocates.”

I have helped to organize many in the fight against Verizon and other companies in the war against bullying in corporate America.  I have helped to guide so many to resources to guide these victims in the fight against any form of harassment or discrimination in the workplace, as this is my mission.

I am in the working on publishing a book, which will be out later this year as it is about the immoral, unethical and illegal treatment of employees and myself while working at Verizon.

  • The U.S. Department of Labor produced a fact sheet on numerous events in the workplace.  July 2010 they concluded that over a 5 year span, from 2004 – 2008, there were an average of 564 work-related homicides that occurred each year in the United States of America.  About 4 out of 5 homicide victims in 2008 were male
  • The U.S. National Institute of Occupational Safety and Health states that Homicide is the second highest cause of death on the job after motor vehicle accidents.  That amounts to every 3 cases to 10,000 workers.  Over 2 million workers are assaulted each year and 2, 000 people are murdered.
  • A 2007 national survey by Zogby International and Workplace Institute found that:
  • 37% of workers have experienced workplace bullying.
  • 62% of employees who received complaints about workplace bullying either ignore the problem or made it worse.
  • 64% of bullying targets eventually are pushed out of their jobs.
  • 73% of workplace bullies are supervisors.

**In the spring of 2011, I was in a Federal Deposition with Verizon, and they admitted, under oath that they receive over 104,000 EEO Complaints a year.  That comes out to 8,666 a month, and 2,000 a week, 400 a day.  Why so many?

In the last four years of my career at Verizon as a manager (from February 2004 – November 2008), as a black manager I have been a victim of enormous and continued bullying.  Discrimination, harassment, intimidation tactics, racism, endured racial comments, racial jokes, belittlement being forced to endure demeaning behavior and language.  I was ignored when reporting unethical behavior and abusive treatment to upper management and corporate compliance departments like Verizon Ethics and Corporate Security.  I was threatened physically, targeted, falsely accused of a crime, my work sabotaged, un-voluntarily relocated (7 times in 2 ½ years and verbally attacked.  My pay was intentionally withheld several times, my annual bonus withheld, unequal treatment, diminished development and diminished opportunities.  I was moved regularly, yelled at, called names, harassed at my home while being out sick.  I was so belittled, treated with the utmost disrespect, given low ratings and my pay was being withheld.  I was then removed from duty call out list, advised to do my Caucasian peer managers work and were given lower raises and bonuses than them.  I was denied of justice, forced to do extended work and harassed till no end, been the butt end of a conspiracy and my technicians attacked in a retaliation method to reduce my team’s productivity and demoralize my team.  I was given unfavorable performance evaluations, treated like a criminal, been thrown out of meetings for no reason.  I’ve been embarrassed due to being treated horribly in front of peers, isolation and stripped of responsibilities which dramatically reduced my income to support my family.  My employment was threatened, sworn at, called a liar as well as my morals and values questioned.  I was called psychotic, called pathetic, harassed at home on my property while I was out ill, while on my property.   I endured repulsive behavior, forced to endure hostile treatment, forced to sit in the back of the room in meeting as a punishment, forced to be in a hostile environment and consistently retaliated against and in the end wrongfully terminated, because I choose not to accept this brutal behavior from Verizon.

This Healthy Workplace Bill

    • Today, there is an active bill in most states which, with the work of you, and others in office that have the power to make this a Law, bullying can save lives.  The bill is called: “Healthy Workplace Bill,”
    • Bullies are an internal terrorist, attacking the moral of our character, and society from the inside.  They are destroying good people, and their lives.  Just as we, as a country dominate in containing world wide terrorism, we need to strengthen our cause and focus on luring out the bullies in each and every workplace in this country, and hold them accountable.   This, “Healthy Workplace Bill,” will do such a thing, this bill if we can get it to become law – will save lives!

Bulling Advocates:

The people that are complaining of bullies are not sissy’s, they are not pansies’ they are not people that aren’t afraid to do anything that they have to, including being violent.

They are people that choose to take a non-violent activist way of doing what is right for themselves and their families and many others.  So they are individuals that have no problem standing up for themselves, if they have to protect themselves in a violent manner, but they choose not do.

They are individuals that follow the law, based on the law is what society asks, is to be non-violent when making a stand. These individuals whether children or adults, make a stand up against bullying, is making a stand are doing what’s right for the best interest of all.

I myself had the potential and ability to act out in a violent manner and harm the individuals that harassed, bullied, discriminated against and targeted me, if I had to but choose not to.  I choose to make a stand utilizing the proper chain of command, and within the law in the best interest of my family and myself.  I refused to have to sit behind bars of kill myself, because of acting out in a violent manner to resolve these immoral issues. I choose the right path; I choose what I had to for all the right reasons and has still been denied justice.

So I credit all the individuals that are standing as advocates all across this world against bullies, so we can change society so people can go to work each day and make a reasonable income to support their families.

Life is stressful enough, no one needs to be abused and tormented in the process.

Please help, and get this Healthy Workplace Bill recognized and into a law.  If you need me at anytime to speak, I will be glad to offer my word.  I am now an active Advocate in Massachusetts for Healthy Workplace Bill.

I am also starting a National campaign across this country called: “Enough is Enough – End Bullying in Corporate America.”

This is the year to end Corporate Bullying, it is up to you. The Healthy Workplace Bill needs to become Law.  If this bill becomes law, it will help to create healthier workplaces, and saves lives.

“The only thing necessary for evil to triumph is for good men to do nothing.”
-Edmund Burke

Neal W. Dias

Attached is my story:

  • My full story
  • U.S. Justice Department Letter
  • 2 Pictures taken at the Capital Press Conference in Albany New York on April 30, 2012

My Blog Page:
Blog Address (GOOGLE): “Bullied at  Verizon – Enough is Enough” or  “Bullied at Verizon – Enough is Enough”

My Speech / News Paper Article:

Healthy Workplace Bill Press Conference in New York April 30, 2012 (Video), I begin the speech about Verizon at the 27:00 minute:

Healthy Workplace Bill Press Conference in New York April 30, 2012 (Newspaper Article):

Healthy Workplace Bill:
Healthy Workplace National Bill page:

National Petition:
Here’s a National Petition against Workplace Bullying that generates individual emails notifying both President Obama & DOL Secretary Solis each time someone signs — please help us reach our goal and get the word out: