Laborers General President Arthur A.Coia
was cleared by the Independent Hearing Officer (IHO) Peter F.
Vaira of multiple charges of associating with organized crime
figures and knowingly permitting such individuals to influence
the activities of the union and its members.
After hearing testimony over the course of
ten weeks and considering over 500 exhibits, Hearing Officer Vaira,
a former United States Attorney and Chair of the Presidents Commission
on Organized Crime, found that allegations of organized crime
influence over Mr. Coia "simply disintegrated."
A $100,000 fine was assessed against Mr.
Coia for "a definite conflict of interest and an appearance
of impropriety"arising out of a joint venture with a LIUNA
car leasing vendor prior to the time that he became General President.
Related to this charge, Mr. Vaira added that he found that "no
union funds were involved" in the dealings and "there
were no kickbacks or payments, nor any direct effect on the union."
Coia was charged with 16 charges, arising
out of five separate subject areas:
1) Coia's knowing association with a Member of La Cosa Nostra ("LCN") New England Crime Family2) Coia's role in the Trusteeship of Local 66
3) Coia's role in the International Union's Investigation of Ronald Fino's Allegations
4) Coia's appointment of John Serpico as chairman of the GEB Hearings Panel, and
Summary of the Decisions Relating to These
Charges
1) New England Crime Family
The charges alleged that Mr. Coia associated
with Raymond Patriarca, Jr., once the head of the New England
organized crime family. In support of this charge, the GEB Attorney
relied on the testimony of two federally protected witnesses.
IHO Vaira found that the allegations of these
witnesses "disintegrated once both witnesses appeared
on the witness stand." He also found their testimony to be
contradicted by testimony and evidence from FBI surveillance records,
the Rhode Island State Police, and former police officials in
Rhode Island who had conducted extensive surveillance of Mr. Patriarca.
Mr. Vaira concluded that no improper relationship existed between
Mr. Coia a and Mr. Patriarca.
2) Local Union 66, Long Island
These charges relate to Mr. Coia's actions
and failure to act in allowing officers of Local 66, who were
influenced and controlled by the LCN, to remain in power and thereby
allowed the LCN to continue its control and influence over Local
66. Coia served as Hearing Officer in an emergency trusteeship,
prior to becoming General President.
The charges were dismissed as not being proven.
The IHO ruled that Mr. Coia's authority was limited, that constitutional
authority was placed with the General President, that Mr. Coia
brought his concerns to the attention of the General President
and the Regional Manager, and that Mr. Coia fulfilled his fiduciary
and constitutional responsibilities.
3) Investigation of Ron Fino's allegations
These charges concern Arthur Coia's approval
of expenditures of funds to attack the credibility of Ron Fino
regarding claims he had made of mob influence in LIUNA.
The IHO found the charges not proved. Mr.
Coia was General Secretary-Treasurer at the time that two investigations
were made regarding Ron Fino, who was an International Representative
of the Union and Business Manager of Local 210, Buffalo, New York.
Fino had charged that the International Union was under the influence
of the LCN at the highest levels.
One investigation was directed at reviewing
the substance of Fino's allegations, undertaken by the office
of the LIUNA General Counsel through David Elbaor, attorney with
the firm of Connerton, Ray and Simon. The IHO found Elbaor well
qualified to conduct this investigation and found that the investigation
was conducted properly and in good faith.
The other investigation, aimed at uncovering
evidence to attack Fino's credibility, was conducted by outside
counsel, Anthony Traini, an experienced criminal defense attorney.
The IHO found that Traini's investigation was properly undertaken
in the event that the Union eventually might need to defend a
criminal or civil RICO case. In addition, the IHO found that Mr.
Coia "fully satisfied" his fiduciary duties, acting
in accordance with his powers and responsibilities under federal
law and the LIUNA Constitution.
4) Activity of Mr. Coia in appointing John
Serpico of the GEB Hearing Panel
The GEB Attorney charged that the Serpico
appointment was improper because Arthur Coia knew Serpico was
"an instrument of organized crime influence over LIUNA."
These charges were dismissed as not proved.
The IHO found that Coia's appointment of
Serpico to serve as Hearing Officer was made for the legitimate
purpose of bringing about John Serpico's resignation from the
Union, and that Mr. Coia's ability to achieve that result in other
ways was limited, if non-existent. He also noted that even after
implementation of the LIUNA Ethics and Disciplinary Procedure,
removing Serpico was "a difficult endeavor."
5) Viking Oldsmobile
Three charges were reviewed by the IHO as
a continuing, single transaction.
One involves a claim that Mr. Coia obstructed
an investigation by the GEB Attorney and the Inspector General
by giving false or misleading deposition testimony. That charge
was dismissed as not proved and the IHO specifically found that it has not been
established that Mr. Coia attempted to mislead the investigation.
In the second charge, the GEB Attorney alleged
that Coia, while General Secretary-Treasurer, had violated the
LIUNA Ethical Practices Code for purchasing a 1991 Ferrari F40
automobile with Viking Oldsmobile, a union vendor. The IHO found
that the arrangements provided Coia with "favorable terms
and ...the opportunity to make a large profit," although
he also found that there were "no kickbacks or payments,"
and no use of union funds. The IHO imposed a fine of $100,000,
payable over two years, as a "penalty commensurate with the
benefits improperly obtained."
The third claim, relating to federal luxury
tax on the Ferrari transaction, was dismissed as beyond the scope
of the IHO's jurisdiction.
IN THE MATTER OF: ) DOCKET NO.
ARTHUR A. COIA ) 97-52D
II. KNOWING ASSOCIATION WITH A MEMBER
OF THE NEW ENGLAND LCN ---7
III. THE TRUSTEESHIP OF LOCAL 66 ---38
IV. THE INVESTIGATION OF RONALD FINO'S
ALLEGATIONS ---50
V. THE APPOINTMENT OF JOHN SERPICO AS
CHAIRMAN OF THE GEB HEARINGS PANEL ---64
VI. COIA'S DEALINGS WITH VIKING OLDSMOBILE
---79
VII. DECISION ---106
VIII. PENALTY ---107
IN THE MATTER OF: ) DOCKET NO.
)
This Order and Memorandum addresses the disciplinary
charges of November 6, 1997, as amended on March 23 and April
8, 1998, filed by the Laborers' International Union of North America
("LIUNA" or "International Union") General
Executive Board Attorney ("GEB Attorney") against Arthur
A. Coia ("Coia" or "Respondent Coia"), the
International General President of LIUNA.
The Independent Hearing Officer ("IHO")
held a hearing which began on April 14, 1998 and ended on June
23, 1998. There were 22 hearing days. The transcripts from the
hearing total over 5500 pages, and over 500 exhibits were submitted
into evidence. Both the GEB Attorney and counsel for Coia submitted
post-hearing briefs on September 25, 1998 and post-hearing responsive
briefs on November 24, 1998.
Coia has been charged with sixteen charges
arising out of five separate subject categories which may be described
as follows: Coia's Knowing Association with a Member of La Cosa
Nostra's ("LCN") New England Crime Family; Coia's Role
in the Trusteeship of Local 66; Coia's Role in the International
Union's Investigation of Ronald Fino's Allegations; Coia's
Appointment of John Serpico as Chairman of
the GEB Hearings Panel; and Coia's Dealings with Viking Oldsmobile.
The incidents in question span the time period
from 1981 to the present and involve periods of Coia's career
from his early involvement in LIUNA to his ascent to the offices
of International General Secretary-Treasurer and International
General President.
In this matter, the GEB Attorney has presented
much evidence which is far outside the scope of the charges. The
IHO has dealt with these occasions as they arose and has made
no blanket prohibitions.
The following standards apply to the charges.
Barred Conduct
Pursuant to the LIUNA Ethics and Disciplinary
Procedures ("EDP") and the LIUNA Ethical Practices Code
("EPC"), union officers are prohibited from engaging
in "barred conduct," which is defined to include --
a) committing any act of racketeering, as defined in 18 U.S.C. ?1961(1);
b) knowingly associating with any member or associate of the organized crime syndicate known as La Cosa Nostra (LCN);
c) knowingly permitting any member or associate of the LCN to exercise control or influence in the conduct of the affairs of the Union; or
d) obstructing or interfering with the LIUNA Inspector General, the GEB Attorney, or the Independent Hearing Officer . . . .
EDP, Section 1, Ethical Practices Code; EPC,
Barred Conduct.
Knowing Association with the LCN and
Permitting LCN Influence on the Union
According to the EDP and the EPC, "knowing association" occurs when
--
a) an individual knows that the person with whom he or she is associating is a member or associate of the LCN;
b) the association relates directly or indirectly to the affairs of the Union; and
EDP, Section 1, Ethical Practices Code; EPC,
Barred Conduct. See also In the Matter of Rocco J. Napoli and
Thomas Fallacara, IHO Order and Memorandum, 96-65D at 5-6
?19 (September 25, 1997)(defining "knowing association").
Knowledge is established if an individual:
(b) reasonably should have known that the person
with whom he was associating was an LCN member; or
(c) deliberately
remained ignorant of facts that would demonstrate that the person
with whom he was associating was an LCN member. Fallacara, IHO
96-65D at 7.(a) had actual knowledge that the person with whom he was associating
was an LCN member;
The relationship to the affairs of the union
need not on its face affect the operation of the union; it need
only reflect that the "knowing association" permits
undesirable individuals to have easy access to the union officers
and members in the total atmosphere of the labor union operation.
See In the Matter of Trusteeship Proceeding Chicago Dist. Council,
IHO Order and Memorandum, 97-30T at 9 (February 7, 1998). See
also Fallacara, IHO 96-65D at 6 ?20.
The GEB Attorney must also demonstrate that
the charged party's association was "more than fleeting or
casual." See generally United States v. International
Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am.,
824 F. Supp. 410, 414 (S.D.N.Y. 1993); United States v. International
Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am.,
745 F. Supp. 908, 917-18 (S.D.N.Y. 1990), aff'd, 941 F.2d 1292
(2d Cir. 1991), cert. denied, 502 U.S. 1091 (1992)(contact that
was "knowing, purposeful and not fleeting" was enough
to constitute "knowing association").
The EDP and EPC incorporate certain exceptions
to the definition of "knowing association" which are
contained in a Consent Decree entered in the case of United
States v. District Council of New York City and Vicinity of The
United Bhd. of Carpenters and Joiners of Am., No. 90 Civ.
5722 (CSH), 1993 WL 364443 at *3-4 (S.D.N.Y. 1993) ("the
Carpenters' Consent Decree"). Those exceptions would permit
a LIUNA officer to --
1) Meet or communicate with a "barred person" who is an employer to discuss the negotiation, execution or management of a collective bargaining agreement, or a labor dispute, when the officer represents, seeks to represent, or would admit to membership the employees of that employer.
2) Meet or communicate with a "barred person" who is a representative of a labor organization to discuss union matters.
3) Meet or communicate with an officer, employee or member of LIUNA and its constituent locals.
The Carpenters' Consent Decree also permits
a "member" who holds no elected, appointed or salaried
position in the union, or any constituent local, to meet or communicate
with "barred persons regarding matters unrelated to the union
or any constituent local."(1) Id. at 4.
"A 'barred person' is (1) any member
or associate of any La Cosa Nostra crime family or any other criminal
group, or (2) any person prohibited from participating in Union
affairs." EDP, Appendix B.
Obstruction of the GEB Attorney and
Inspector General
The LIUNA Appellate Officer has determined
that in "obstruction" cases involving false testimony
during depositions, the GEB Attorney must show that the testimony
was material and would have impeded the Inspector General's ("IG")
investigation by being misleading and intentionally deceptive.
See In Re Martire, 1997 A.O. 81 (97-008D). In order for
a statement to be considered material, "the statement must
have a 'natural tendency to influence, or [be] capable of influencing,
the decision making body to which it was addressed'." United
States v. Gaudin, 515 U.S. 506, 509 (1995), citing, Kungys
v. United States, 485 U.S. 759, 770 (1988).
The GEB Attorney also cites the following
statutory provision in support of his claims:
The officers, agents, shop stewards, and
other representatives of a labor organization occupy positions
of trust in relation to such organization and its members as a
group. It is, therefore, the duty of each such person, taking
into account the special problems and functions of a labor organization,
to hold its money and property solely for the benefit of the organization
and its members and to manage, invest, and expend the same in
accordance with its constitution and bylaws and any resolutions
of the governing bodies adopted thereunder, to refrain from dealing
with such organization as an adverse party or in behalf of an
adverse party in any matter connected with his duties and from
holding or acquiring any pecuniary or personal interest which
conflicts with the interests of such organization, and to account
to the organization for any profit received by him in whatever
capacity in connection with transactions conducted by him or under
his direction on behalf of the organization. A general exculpatory
provision in the constitution and bylaws of such a labor organization
or a general exculpatory resolution of a governing body purporting
to relieve any such person of liability for breach of the duties
declared by this section shall be void as against public policy.
The IHO has determined that section 501(a)
was intended to prevent misuse of union funds and to forbid union
officials from receiving payments from third parties or making
a private profit from union contracts. Thus, the statute pertains
only to financial transactions. See In the Matter of Baker,
IHO Order and Memorandum, 97-55D at 13 (July 21, 1998). See
also, Guarnaccia v. Kenin, 234 F. Supp. 429, 442 (S.D.N.Y.
1964), aff'd sub nom. Gurton v. Arons, 339 F.2d 371 (2d
Cir. 1964) (ruling 29 U.S.C. ?501(a) not a catch-all for breaches
of fiduciary duty).
The Uniform Local Union Constitution
Article III, Section 3(d) of the LIUNA Uniform
Local Union Constitution requires that all members refrain
from "interfering with the proper conduct of all the business
of the Organization." Uniform Local Union Constitution, Article
III, Section 3(d).
In Baker, the IHO determined that, in order
to establish a violation of Article III, Section 3(d) of the Constitution,
the GEB Attorney must show that the charged member committed a
deliberate affirmative act which would constitute interference
with the proper conduct of union business. Baker, IHO 97-55D at 11.
Mere nonfeasance on the part of the member is insufficient.
II. KNOWING ASSOCIATION WITH A MEMBER
OF THE NEW ENGLAND LCN
Barred Conduct -- Knowing Association with
LCN Member: From in or about 1981 until in or about 1987, ARTHUR
A. COIA knowingly associated with a member of the Patriarca Family,
Raymond Patriarca, Jr., in violation of the barred conduct provisions
of the LIUNA EDP and EPC.
Charge II alleges:(2)
Barred Conduct -- Permitting LCN Influence:
In or about 1987, ARTHUR A. COIA knowingly permitted a member
of the Patriarca Family, namely Raymond Patriarca, Jr., to exercise
control or influence over the conduct of Union affairs, to wit:
at the behest of Raymond Patriarca, Jr., Coia assisted Nino Cucinotta
in joining Local 271 and in receiving job referrals, in violation
of the barred conduct provisions of the LIUNA EDP and EPC.
Charge III alleges:
Breaching Constitutional Duties of LIUNA
Members and Officers: In knowingly associating with an LCN member
and/or permitting him to influence Union affairs, as alleged more
specifically above in Charges I and II, ARTHUR A. COIA failed
to honor his obligation as a LIUNA member to refrain from interfering
with the proper conduct of LIUNA business, and breached his duty
as an Executive Board member of Local 271 to see to it that the
affairs and business of his Local Union were properly conducted,
in violation of Article III, Section 3(d) and Article IV, Section
4(H)(9) of the Uniform Local Union Constitution.
The following chronology(3) is relevant to
understanding the context of the above charges:
Charges I and III are based upon the following
three alleged incidents:
The GEB Attorney alleges that Coia knowingly
associated with Patriarca, Jr., a member of the LCN, from
1981 through 1987, in violation of the EPC, EDP and the LIUNA
International Union Constitution ("International Constitution").
In addition, the GEB Attorney alleges certain
other incidents which occurred outside of this 1981 to 1987 time
period. These incidents are:
In his opening statement on April 14, 1998,
the GEB Attorney asserted that the core of the evidence on Charges
I through III would come from the testimony of Cucinotta, but
that the context of the charges -- the "relationship"
between the Patriarca family and the Coia family -- would come
from Hillary. Transcript ("Tr.") 11. The GEB Attorney
further asserted that, "[A]t every point of tangency between
Tommy Hillary and Nino Cucinotta, Mr. Hillary [would] confirm
Mr. Cucinotta in every significant respect." Tr. 15.
As demonstrated below, Hillary failed to
corroborate Cucinotta on any material point.
In his post-hearing briefs, the GEB Attorney
informed the IHO that Cucinotta was not credible on some points.
GEB Attorney Response Brief ("GEB Resp. Br.") at 2.
He specifically abandoned his reliance on Cucinotta and conceded
that "Cucinotta's testimony should be credited only in certain
respects" but not all respects as originally intended.
See id. (emphasisadded). The GEB Attorney failed to identify
what those "certain respects" were other than
to say that Cucinotta's description of the inside of Coia &
Lepore was extremely detailed. Id. at 5. The GEB Attorney
also dropped Charge II, which was based on Cucinotta's testimony.
GEB Br. at 52 n.2. The evidentiary effect of these concessions
will be discussed, infra at ??63-4.
Findings of Fact
The Hillary Allegations
In the mid 1960s, Hillary was the best man
for Patriarca, Jr. at his wedding. Tr. 401.
When Patriarca, Jr. married, his father moved out of the family home and turned it over to Patriarca, Jr. and his new wife. Tr. 401-02.
Hillary and Patriarca, Sr. then moved into
a one bedroom apartment, where they lived together for about a
year. Tr. 402-03.
382-825. The GEB Attorney asserted in his
opening statement that Hillary was called as a witness for two
purposes: to establish the "context" of the Patriarca-Coia
connection and to corroborate Cucinotta's testimony. Tr. 11-15.
Coia's Association with Hillary During
Lepore, Jr.'s Campaign
The Kendall Estates Incident
Tr. 699-700; 708-09.
Coia's Meetings With Patriarca, Jr.
at the Offices of Coia & Lepore
Meetings During the Time Period From
1981 Through 1984
2716-17.
Meetings Between 1984 and 1987
FONT FACE="Courier">846-47. He knew the Patriarcas were mobsters, but began spending time at the Coin-o-matic in order to make money. Tr.
846-49. He sold sandwiches, coffee and sodas
at the Bradford Club, located above the Coin-o-matic, and
Patriarca, Jr. gave him a cut of the money that was collected
from card games played there. Tr. 848-49.
[D]uring the last 10 minutes of this testimony,
[Cucinotta] was standing and it is my impression that he was very
emotional, his voice broke a number of times. He did not sit and
was extraordinarily agitated, and I think the record ought to
reflect that the testimony was not in a peaceful manner. He stood
up and was extremely agitated, gestured a lot and hammered the
table and broke down several times.
Tr. 943-44.
These will be discussed seriatim.
The FBI Surveillance Files
. . . please be advised that the Rhode Island
State Police files specifically relating to Arthur A. Coia, Arthur
E. Coia, Raymond Patriarca, Jr. or the Laborers International
Union of North America covering the period 1984 to 1986 do not
contain any documents that would tend to indicate that Patriarca,
Jr. visited several times per week for many weeks with Arthur
A. Coia or at the Arthur E. Coia building at 226 South Main Street,
Providence, Rhode Island.
The Former Secretaries of Coia &
Lepore
Hermiz Full-time Secretary June, 1975-April,
1986
Aceto Full-time Secretary April, 1981-1983
Moretti Full-time Secretary 1977-1986
Menna Full-time Secretary 1981-June, 1986
Santos Receptionist then September, 1983-March,
1998
Tr. 4091, 4115-16, 4151, 4184, 4207.
Armand Sabitoni
The IHO's Site Visit to Coia & Lepore
Legal Work Performed by Coia &
Lepore for Patriarca, Jr.
Coia's Association with Patriarca,
Jr. and the Rottweiler Breeding
There is no indication that Coia had any
contact with Patriarca, Jr. during the course of the breeding.
Patriarca, Jr.'s FBI 302 Statement
. . . [although] Coia, Sr. and [Patriarca,
Jr.'s] father had a long term business relationship, he never
had such a relationship with Arthur A. Coia. Patriarca added that
'no one who reports to him [Patriarca, Jr.] has any such relationship
to Arthur A. Coia', and added that 'Arthur [A. Coia] does not
have the balls to be a gangster.
R. Ex. 49A.
Discussion
A complicating factor in determining Charges
I and III is the relationship between Coia, Sr. and Patriarca,
Sr. It is a factual element which confuses the analysis of the
charges. In this proceeding and others heard by the IHO, there
was testimony that Coia, Sr. had a relationship with Patriarca,
Sr. as well as other LCN members across the country.(8) Some allegations
are credible, others are patently incorrect. Coia, Sr. died in
March of 1993, and no issue regarding his activities has been
presented to the IHO for a determination. Nevertheless, allegations
of certain acts or relationships of Coia, Sr., correct or incorrect,
are necessarily present in the chronology of this and other cases.
The problem for the fact finder with the
background presence of Coia, Sr. is that events are often described
with him being the actor, with an inference that his son, who
was also in the union hierarchy at the time, shared responsibility
or knowledge of them. Indeed, the GEB Attorney often makes the
statement that Coia was "the son of a legendary Rhode Island
labor leader within LIUNA and himself an heir apparent for high
office within LIUNA." GEB Br. at 58-59. See GEB Resp. Br.
at 6. Another example of this appears in the testimony of Hillary
and Cucinotta, both of whom stated that persons were sent to Local
271 by the Patriarcas to obtain jobs and that, allegedly, Coia,
Sr. made the arrangements. No witness, however, implicated Respondent
Coia in obtaining jobs for them at Local 271 and, indeed, the
GEB Attorney abandoned this allegation. In reading the transcript,
however, the questioning by the GEB Attorney of certain witnesses
implied that Respondent Coia was deeply involved in arranging
jobs for Patriarca family members and associates merely by invoking
the name Coia, Sr.
The GEB Attorney's position on Patriarca,
Jr.'s visits to Coia & Lepore should be viewed in a historical
spectrum. At the outset, the GEB Attorney contended in his opening
statement that Coia met regularly with Patriarca, Jr. from 1984
through 1987 at Coia & Lepore. These meetings were to be proven
by Cucinotta and then corroborated by Hillary although Hillary
had no firsthand knowledge of these matters. The GEB Attorney
said that the core of the evidence would be from Cucinotta and
Hillary would confirm Cucinotta in every significant respect.
Tr. 11, 15.
Both parties agree there were visits to Coia
& Lepore by Patriarca, Jr. during the pendency of the Hauser
case. The problem arose that Cucinotta, perhaps out of simple
mistake, perhaps out of his desire to testify somewhere in order
to obtain a sentencing reduction, or perhaps a combination of
both, testified that the visits continued for far beyond the period
of time that any other witness recalled. As determined above,
this testimony runs contrary to the surveillance evidence, witness
testimony, and common sense.
Moreover, Cucinotta's bizarre performance
on the witness stand, and his impeachment during cross examination,
caused the GEB Attorney to distance himself from him. In fact,
the GEB Attorney stated in his post-hearing brief that the evidence
did not establish ." . . the frequency of meetings between
Coia and Raymond, Jr. after 1984 as recalled by Raymond, Jr.'s
driver, Anthonio [sic] Cucinotta." GEB Resp. Br. at 2 n.1.
In other words, although Cucinotta is the GEB Attorney's witness,
one cannot believe everything he said. As noted earlier, Hillary
made no contribution to the proof of this matter. Although asserted
to be probative by the GEB Attorney in his opening statement,
the Hillary/Cucinotta combination simply disintegrated once both
witnesses appeared on the witness stand, and there is no evidence
of Patriarca, Jr. and Coia meeting after 1984.
Nevertheless, the GEB Attorney argues in
his post-hearing briefs that, due to Coia's position in the 1980s
as an up and coming LIUNA labor leader and Patriarca, Jr.'s position
as a made member of the LCN and the son of the Boss of the New
England LCN family, "any contact between Coia and Raymond,
Jr. conveyed the unmistakable message that the LCN had significant
influence within LIUNA." GEB Br. at 59 (emphasis omitted).
See GEB Resp. Br. at 5-6. He further argues that the "unique
positions" of Coia and Patriarca, Jr. send a message to the
union membership that the LCN has "easy access to the Union
officers and members in the total atmosphere [of the] labor union
operation." GEB Br. at 60, citing, Fallacara, IHO 96-65D
at 6, ?210. This argument flies in the face of his concession
that the joint defense meetings between Coia and Patriarca, Jr.
were proper.
The GEB Attorney also relies extensively
on the Patriarca family influence at Local 271. Although, historically,
the Patriarcas may have had influence at that Local during Coia,
Sr.'s tenure, it is not relevant to the charges here against Respondent
Coia and will not be considered by the IHO in rendering his final
decision.
The GEB Attorney also implicitly argues that
there was an improper relationship between Local 271 and the law
firm of Coia & Lepore since it shared office space with the
Local and did extensive legal work for it. This argument does
not have any probative value relative to the charges in this matter.
The GEB Attorney, citing the Fallacara test
for "knowing association," also contends that the mere
appearance of mob access to the union is sufficient to discipline
a union official. See supra pp. 2-3. There is no indication in
the record, however, that Patriarca, Jr. had access to the union.
He visited Coia at Coia & Lepore on only a few occasions.
No credible evidence was put forth to show that he and Coia were
together at any other time.
Teamsters Case Law
The GEB Attorney offers a number of cases
decided by the Court appointed Independent Administrator of the
International Brotherhood of Teamsters ("IBT" or "Teamsters")
as well as certain federal court decisions to support his position,
but the language quoted therefrom is taken out of context. All
of those cases deal with Teamster union officials who either invited LCN figures
into their union, regularly socialized with them, or sought their
assistance in union affairs. An examination of the facts in those
cases reveals far different fact patterns than the one presented
here.
In all of the Teamsters' cases cited by the
GEB Attorney, the relationships between the charged persons
and the LCN members and associates continued for a number of years,
on regular social and business levels.
In United States v. International Bhd.
of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. ("DiGirlamo"),
824 F. Supp. 410 (S.D.N.Y. 1993), DiGirlamo was the bookkeeper
for IBT Local 41 in Kansas City, Missouri and the evidence therein
established that he associated with four men -- Charles Moretina,
James Moretina, Peter Simone ("Simone"), and Frank Tousa
("Tousa") -- whom he knew to be members of the Kansas
City LCN. Id. at 414-416 (discussing association with C. Moretina,
J. Moretina, P. Simone and F. Tousa).
DiGirlamo's car was observed by the FBI outside
of Charles Moretina's house during working hours. He also attended
Charles Moretina's criminal trial and visited him several times
in prison. Id. at 416. James Moretina and Simone hired DiGirlamo
as an accountant for their business -- Be Amused Vending Company--
and he would occasionally go to Simone's illegal gambling hall to pick
up the company's books. In fact, during his tenure as the company's
accountant, the FBI seized illegal gambling equipment which the
company owned, and James Moretina and Simone were eventually convicted
for money laundering and illegal gambling. Id.
DiGirlamo also visited James Moretina's home
and spoke with him daily on the telephone. Id.
DiGirlamo and Simone had known each other
since childhood. They had participated in community sporting and
charity events together, and had spent time at one another's homes.
Id.
DiGirlamo had also prepared Tousa and his
wife's personal tax returns and had spent time in the Tousas'
home while doing so. Id.
In United States v. International Bhd.
of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. (Adelstein),
998 F.2d 120 (2d Cir. 1993), Adelstein held the positions of Secretary-Treasurer
of IBT Local 813, President of IBT Local 1034, and Secretary-Treasurer
of the Executive Board of IBT Joint Council 16.
There was evidence that he had "decades-long
relationships with an entire cast of characters who were members
of organized crime'." Id. at 123-24 (quoting Independent
Administrator). Adelstein assisted Gambino family member James
Failla ("Failla") in the mob's control of both the garbage
industry and of IBT Local 813 in New York City. Id. at
122. He was an associate of the Gambino family and answered to
Failla. He and Failla often attended the same social affairs,
charity affairs, and funerals. Id. at 125.
In United States v. International Bhd.
of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. (Yager),
761 F. Supp. 315 (S.D.N.Y. 1991), the Independent Administrator
prevented the appointment of Yager to the IBT's General Executive
Board since there was evidence that he had been seen with members
of the LCN. Id. at 320. Moreover, the LCN had a history
of influence over the IBT Central States Pension Fund, of which
Yager was an officer, and had once engaged in a scheme to bribe
a former United States Senator using pension fund assets. Id.
The Independent Administrator concluded that Yager knew of this,
yet did nothing to stop it. Id.
The GEB Attorney also cites Judge Edelstein's
statement in United States v. International Bhd. of Teamsters,
Chauffeurs, Warehousemen and Helpers of Am. (Cozza), 764 F.
Supp. 797, 813 (S.D.N.Y. 1991), that "there is no such thing
as a purposeful, yet innocent or non-reproachful association of
an Union leader and an underworld figure." The facts of that
case, however, are far different from those herein. There, Cozza
admitted that he knowingly associated with five members of the
Pittsburgh LCN. This association included daily visits with John S. LaRocca, who was the
Boss of the Pittsburgh family from 1956 until his death in 1984.
Id. at 806.
In a case brought under the Carpenters' Consent
Decree, United States v. District Council of New York City
(Fiorino), 941 F.Supp. 349 (S.D.N.Y. 1996), Fiorino knowingly
associated with two members of the Genovese family, Liborio Bellomo
and Ralph Coppola. Id. at 357. Although Bellomo was married
to Fiorino's sister, the Court found that their relationship went
beyond the ordinary contacts of family members. Id. at
368. For example, there were 372 telephone calls made in a ten
month period from Bellomo's home to Fiorino's beeper. Id. at 369.
Fiorino also admitted that he had met with Coppola on the street,
visited him at home, and spoke with him on the telephone. Id.
The contact alleged by the GEB Attorney herein
is of a far different character than that found in the above cases.
In this matter, there was no credible evidence presented to show
any contact between Patriarca, Jr. and Coia at any time except
for the joint defense meetings at Coia & Lepore.
Conclusions
III. THE TRUSTEESHIP OF LOCAL 66
Charge IV alleges:
Barred Conduct -- Permitting LCN Influence:
From in or about April, 1990 through 1994, ARTHUR A. COIA knowingly
permitted members and/or associates of the LCN to exercise control
or influence over the affairs of the Union, to wit: by his actions
and failures to act, he allowed officers of Local 66 who were
influenced and controlled by the LCN to remain in power, thereby
allowing the LCN to continue its control and influence over Local
66.
Charge V alleges:
Violation of Duty of Loyalty: From in or
about 1990 until in or about 1994, ARTHUR A. COIA violated the
obligation of undivided loyalty incumbent upon all members, officers,
and employees of LIUNA, including but not limited to those duties
set forth in 29 U.S.C. ?501(a) and the LIUNA Ethical Practices
Code, to wit: through his actions and failures to act, he did
not take adequate steps to investigate and remedy organized crime
corruption at Local 66, and he participated in a course of conduct
that permitted and facilitated the continuation of that corruption
during and after the time that LIUNA placed Local 66 under trusteeship
in 1990 through 1992.
Charge VI alleges:
Constitutional Duties of LIUNA Members: In
permitting the LCN to exercise influence over Union affairs, as
alleged more specifically above in Charge IV, ARTHUR A. COIA failed
to honor his obligation as a LIUNA member to refrain from interfering
with the proper conduct of LIUNA business, in violation of Article
III, Section 3(d) of the Uniform Local Union Constitution.
Introduction
In Charges IV through VI, the GEB Attorney
asserts that Coia failed to take adequate measures to ensure that
LCN influence was eradicated from LIUNA Local Union 66 ("Local
66") after he was appointed as the Hearings Panel Officer
to rule upon an emergency trusteeship for the Local.
Michael LaBarbara, Jr. ("LaBarbara,
Jr.")
Business Manager/Secretary-Treasurer;
James Abbatiello, Sr. ("Abbatiello,
Sr.")
Assistant Business Manager and Recording
Secretary;
Peter Vario ("Vario")
Vice President of Local 66 and Administrator
of Local 66's Benefit Funds;
Benjamin DeLucia ("DeLucia")
President;
Santo Ippolito ("Ippolito")
Executive Board Member and Field Representative;
Frank Chimento ("Chimento")
Executive Board Member;
James Abbatiello, Jr. ("Abbatiello,
Jr.")
Executive Board member;
Michael LaBarbara, III ("LaBarbara,
III")
Field Representative;
Gerald Losquadro ("Losquadro")
Field Representative;
Bruno Leone, Jr. ("Leone")
Field Representative.
See R. Ex. 120.
2.At the January 26, 1989 Local 66 Board
meeting, the remaining members of the Board voted to pay for the
legal expenses incurred by Vario, LaBarbara, Jr., and Abbatiello,
Sr. in their defense against the indictment. GEB Ex. 9, Tab 23;
R. Ex. 110. In all, Local 66 would eventually pay approximately
$400,000 in legal expenses on their behalf. GEB Ex. 9, 11.
3.The Local's attorney, Jeffrey S. Dubin
("Dubin"), advised the Board that it was legal for the
Local to pay the attorneys' fees. Tr. 1100-01. This advice was
incorrect. Tr. 1237-38; GEB Ex. 41.
4.On December 14, 1989, LaBarbara, Jr. and
Abbatiello, Sr. resigned from the Board and, as severance
packages, the Local gave each a new Lincoln Town car. GEB Ex.
17-18 (resigning from posts), 21-23 (receiving automobiles from
Local). Vario was given a cash payment of $35,769.50 in lieu of
a car.(9) GEB Ex. 24, 25. Dubin had advised the Board that it
could make this cash award to Vario. GEB Ex. 9, Tab 28.
5.On September 26, 1989, LaBarbara, Jr. and
Abbatiello, Sr. pled guilty to various federal charges and, on
December 15, 1989, they were each sentenced to 14 months in prison,
two years probation, and fines of approximately $37,000. GEB Ex.
14, 19, 20. On March 29, 1990, Vario was convicted and sentenced
to 46 months in prison, three years probation, and a fine of $106,360.
GEB Ex. 30, 32.
6.On January 8, 1990, Samuel Caivano, the
Regional Manager in whose jurisdiction Local 66 was located,
wrote a letter to General President Angelo Fosco ("Fosco")
requesting that Local 66 be placed under trusteeship. GEB Ex.
26. Samuel Caivano said:
Because of circumstances surrounding the conviction and incarceration of several key local union officials, I strongly recommend that emergency trusteeship be placed over Local Union 66, Melville, New York.
This Regional Office has been monitoring the current situation at Local Union 66, and I believe that the only way to guarantee quality representation for the membership as well as restoring the integrity of the Local Union is through the immediate imposition of emergency trusteeship.
Your immediate attention to this problem would be appreciated.
2.In conformance with Article IX, Section
7, Fosco convened a Special Hearings Panel ("the Panel")
to determine if the emergency trusteeship over Local 66 was properly
imposed and if it should be continued. R. Ex. 60. Such a Panel
usually consisted of one or more International Vice Presidents
who acted as Hearing Officers. International Constitution, Article
VIII, Section 2(a-vii). They were assisted by one or more attorneys
from the LIUNA General Counsel's(10) office. Tr. 3584. Coia, who
was then the International General Secretary-Treasurer, was appointed to sit
as the sole member of the Local 66 Panel. Tr. 1175-76. Two attorneys
from the General Counsel's office, David Elbaor ("Elbaor")
and Ted Green ("Green"), accompanied him to the hearing
See id.
3.As the Hearing Officer assigned to the
Local 66 Panel, Coia's sole duty was to determine whether the
trusteeship was properly imposed and whether a good faith basis
existed to continue it. See International Constitution, Article
IX, Section 2(a-vii), Section 7. See id. Article X, Section 4.
4.The hearing was convened on April 10, 1990
and evidence was presented to the Panel regarding financial
malpractice and corruption at Local 66. See generally R. Ex. 63.
An audit report revealed that approximately $400,000 of the Local's
funds had been spent on legal fees for Vario, LaBarbara, Jr.,
and Abbatiello, Sr. See id. at 4, 6, 39.
5.As was the practice at that time, the Panel's
report was drafted by the attorneys who accompanied
Coia to the hearing. Tr. 1431, 3585, 4587, 4590. Coia approved
the report, signed it, and submitted it to the GEB for its approval.
GEB Ex. 34. The report made the following findings:
1. In December, 1989, the Business Manager/Secretary-Treasurer,
and the Recording Secretary/Assistant Business Manager of the
Local Union pled guilty to indictments alleging numerous violations
of RICO and Section 302 of the Taft-Hartley involving the taking
of money from contractors for personal benefit. The Business Manager
and Recording Secretary/Assistant Business Manager immediately
resigned from office. In March, 1990, the Vice President, who
was also an Organizer of the Local Union and the Administrator
of the Local Union Funds, was convicted for his part in the same
course of conduct.
2. The Local Union has paid the legal expenses
of all three officers.
3. The former Vice President and Fund Administrator
has interfered with the conduct of Local Union business following
the resignation of the Business Manager/Secretary-Treasurer and
the Recording Secretary/Assistant Business Manager in December,
1989 up to and beyond the point at which his own trial was conducted.
4. The trustee has taken various steps to
rectify the situation. A full audit of Local Union affairs is
being conducted and appropriate remedial action will be taken.
Through its trustees, the Local Union will see to it that the
funds not retain, as an employee or agent, any person disqualified
by ERISA. Other action is being taken to see that appropriate
collective bargaining procedures are restored.
5. Under the circumstances it is clear that
the Local Union was facing an emergency condition when the General
President imposed trusteeship on [March 15], 1990.
2.At the time, it was the accepted policy
and practice of the International Union to appoint the Regional
Manager as the trustee of a local placed in receivership, or to
defer to the Regional Manager's recommendation when selecting
an alternative trustee. Tr. 3667-68. Regional Managers, as a general
rule, were and still are, very protective of their regions and
the prerogatives and procedures that go along with their position.
Tr. 3519-23, 3819-23.
3.Daniel Caivano was appointed the interim
trustee upon the recommendation of his uncle, Samuel Caivano,
the Regional Manager. GEB Ex. 31; R. Ex. 57. As Local 66's trustee,
Daniel Caivano was "authorized to take full charge of the
affairs of the [Local] . . . and to take such other action as,
in [his] . . . judgement, [was] necessary for the preservation
of the [Local] and its interests." See International Constitution, Article IX, Section 7. Only General President Fosco was constitutionally authorized to remove him from his post.
Id.
4.Daniel Caivano exercised his authority
as trustee to appoint DeLucia and LaBarbara, III as deputy trustees
with power only to co-sign the checks Daniel Caivano wrote for
Local 66. R. Ex. 103 at 83. He also appointed DeLucia, LaBarbara,
III, Losquadro, and himself as trustees of the Local 66 Funds,
while Abbatiello, Jr. became the Administrator of the Funds.(11)
Id. at 72-73, 75-76.
5.Upon learning of these appointments, Coia
admonished Samuel Caivano and Fosco regarding the negative
perception which arose from retaining the sons of the convicted
felons as Local 66 officials. Tr. 4931-33, 5313. Coia testified
that he and Samuel Caivano had an argument on this subject but
that Samuel Caivano persisted by stating, "[T]he sins of
the fathers should not be put on to the kids." Tr. 4933.
6.Daniel Caivano said he appointed Abbatiello,
Jr. and LaBarbara, III to positions of authority at Local 66 because
they had never been accused of engaging in any wrongdoing. R.
Ex. 103 at 95.
7.In his opening statement, the GEB Attorney
stated that the handling of the Local 66 matter was a "museum
quality example of how local unions were corrupted and controlled
by organized crime and how the international union sustained that
corruption through the illusion of intervention." Tr. 22-23.
He argued that Coia, "had a legal and ethical duty to make
every effort to protect the members of Local 66 from continued
corruption, and he failed to do so." GEB Resp. Br. at 7.
8.The GEB Attorney contends that Coia violated
his fiduciary duty by not doing more to eradicate LCN influence
from Local 66 after he sat as the Hearing Officer at the emergency
trusteeship hearing. The GEB Attorney's argument fails to recognize
the institutional makeup of the International Union at that time,
prior to the adoption of the EDP.
Pre-Reform Trusteeship Procedure
2.Article IX, Section 7 of the International
Constitution conformed to 29 U.S.C. ?462 and a trusteeship could
be imposed on a local union to correct corruption or financial
malpractice, assure the performance of collective bargaining agreements
or other duties of a bargaining representative, restore democratic
procedures, carry out the legitimate objects of the local union
or protect the organization as an institution. International Constitution,
Article IX, Section 7.
3.A trusteeship is presumed valid for 18
months. 29 U.S.C. ?464(c).
4.Aside from its statutory and constitutional
authority to impose a trusteeship, the International Union had
no control over the local unions.
5.Historically, a parent labor organization
and its affiliates do not always share common interests. The parent
organization is limited by federal law and its constitution when
exercising its authority over a subordinate affiliate. See generally
Laborers' Int'l Union of N. Am. v. National Post Office Mail Handlers,
Watchmen, Messengers and Group Leaders Div. of the Laborers' Int'l
Union of N. Am., 880 F.2d 1388 (D.C. Cir. 1989). The relationship
between an international union and its local unions cannot be
compared to the business arena where the head organization controls
subordinate entities, but is more analogous the United States
Government's concept of our nation's federalism and separation
of powers. See Ann B. Whitley, Note, Collective Institutional
Guilt: The Emergence of International Unions' RICO Liability for
Local Union Crimes, 21 Am. J. Crim. L. 291 (1994).
6.The GEB Attorney has based Charges IV through
VI to a great extent on the fact that the sons of the convicted
officers remained in positions of power after the continuation
of the trusteeship, and Coia did nothing to remove them.
7.As the Hearing Officer, Coia had no authority
to participate in the operation of the trusteeship and had no
power to appoint or even recommend a trustee for Local 66. See
generally International Constitution, Article IX, Section 7 (discussing
process of appointing trustee). Unlike a judicial trusteeship,
where the judge has continuing oversight, the Hearing Officer
merely confirms or denies the need for the trusteeship. Id. The
General President then assumes the role of the judge and supervises
the trustee. The Hearing Officer is similar to a Special Hearing
Master whose job is to find facts with respect to very specifically
defined issues.
8.Coia's only constitutional role as the
Hearing Officer at Local 66 was to determine whether the emergency
trusteeship should be continued. He did all that he was legally
required to do in this position. He could not appoint or remove
the trustee and he had no legal authority over the actions of
the trustee; this power was reserved for the General President
who, at the relevant time herein, was Fosco.
9.Even today, the IHO, when sitting as the
Hearing Officer in a trusteeship proceeding pursuant to his powers
under the EDP, cannot choose, remove, or intercede in the activities
of a trustee once that person has been appointed. The IHO has
informally recommended that certain persons be appointed or removed
as trustees without success. It is unreasonable to think that
Coia, in the International Union structure as it existed prior
to the enactment of the EDP, could have constitutionally or legally
done more.
10.The GEB Attorney's argument regarding
the supervision of the trusteeship is more properly directed at
General President Fosco and his supervision of the trustee, Daniel
Caivano. Coia did not become LIUNA's General President until February
of 1993, long after the Local 66 trusteeship had ended. At that
time, a local union was autonomous and the International Officers
had very limited power over it once a trusteeship had ended.
11.The Regional Manager's ability to dictate
that the two sons remain as deputy trustees was a reflection of
the ineffective LIUNA organization that existed prior to the reform.
Today, such a decision would have been overridden by the IG or
the GEB Attorney, but Coia cannot now be held legally responsible
for Samuel Caivano's actions.
2.The GEB Attorney, in rebuttal, attacked
Coia's handling of the claim.
3.In February of 1993, Coia became the General
President and Norwood became the General Secretary-Treasurer
of LIUNA. The final settlement of the bonding claim was handled
by Norwood in his capacity as the General Secretary-Treasurer
in April of 1994, four years after Coia sat as Hearing Officer
at Local 66.
4.The evidence of the bonding claim, and
the rebuttal thereto, are irrelevant to the Local 66 charges and
will not be discussed further.
Conclusions
2.The evidence in the record does not prove
that Coia committed "barred conduct" in violation of
the EDP by allowing the LCN to continue its control and influence
over Local 66 after he recommended the continuation of the trusteeship
in April of 1990.
3.The GEB Attorney does not offer any suggestions
as to how Coia breached his fiduciary duty, except to assert that
he could have done more. The IHO finds that Coia did not breach
his fiduciary duty during or after the Local 66 trusteeship hearing.
4.The GEB Attorney has failed to prove that
Coia interfered with the proper conduct of Local 66's union business
after he recommended the continuation of the trusteeship
in April of 1990.
5.The IHO finds that the GEB Attorney has
not proven Charges IV through VI by a preponderance of the evidence.
IV. THE INVESTIGATION OF RONALD FINO'S
ALLEGATIONS
Barred Conduct -- Permitting LCN Influence:
From in or about April 1990 until in or about
1992, ARTHUR A. COIA knowingly permitted members and/or associates
of the LCN to exercise control or influence over the affairs of
the Union, to wit: through Coia's actions, LIUNA supported the
defense of LCN members and associates who had corrupted LIUNA
by authorizing and approving the expenditure of substantial Union
funds to attack the credibility of Ronald Fino, but not to determine
in good faith the truth or falsity of Fino's allegations, when
Coia knew or should have known that at least some of Fino's allegations
of LCN influence over LIUNA were credible and true.
Charge VIII alleges:
Violation of Duty of Loyalty:
From in or about 1990 until in or about 1992,
ARTHUR A. COIA violated the obligation of undivided loyalty incumbent
upon all members, officers, and employees of LIUNA, including
but not limited to those duties set forth in 29 U.S.C. ?501(a)
and the LIUNA Ethical Practices Code, to wit: he authorized and
approved the expenditure of substantial Union funds for legal
aid investigative work which benefited LCN members and associates,
to the detriment of LIUNA and its members, and failed to authorize
or approve the use of Union resources to determine in good faith
the truth or falsity of Fino's allegations of LCN control over
LIUNA.
Constitutional Duties of LIUNA Members:
In permitting the LCN to exercise influence over Union affairs
as alleged more specifically above in Charge VII, ARTHUR A. COIA
failed to honor his obligation as a LIUNA member to refrain from
interfering with the proper conduct of LIUNA business, in violation
of Article III, Section 3(d) of the Uniform Local Union Constitution.
Introduction
Initially, the GEB Attorney charged Coia
with permitting the LCN to influence LIUNA by authorizing the
expenditure of International Union funds to attack the credibility
of Ronald Fino ("Fino"), the former Business Manager
of LIUNA Local Union 210 ("Local 210"), after the media
reported that Fino had been exposed as an FBI informant and was
alleging LCN infiltration at the highest levels of LIUNA. The
GEB Attorney contended that the International Union's attorneys
were deployed by Coia to investigate Fino for the sole purpose
of discrediting him and allowing their information to be shared
with attorneys representing known LCN members. Tr. 43-45. Furthermore,
he charged Coia with failing to authorize the expenditure of Union
funds to determine the veracity of Fino's allegations which had
surfaced in media reports, in his testimony in a criminal proceeding
in New York, and in FBI 302 reports obtained by the International
Union. See Charges VII through IX, supra at 47-48.
In his case in chief, the GEB Attorney presented
evidence that only one investigation, conducted by attorney Anthony
Traini ("Traini"), took place after Fino surfaced as
an FBI informant and this investigation was designed solely to
impugn Fino. He asserted that the International Union should have
conducted an investigation into the substance, truth or falsity
of Fino's allegations. The defense then countered and presented
substantial evidence that an extensive investigation, or "legal
audit," had in fact been conducted by the LIUNA General Counsel's
Office into the substance of Fino's allegations. See R. Ex. 122,
125-26, 128, 130, 135-41, 143-63, 168-73
In his post-hearing briefs, the GEB Attorney
abandoned his original position and argued that Coia was more
concerned with following the investigation into Fino's credibility
than the investigation conducted by the General Counsel. GEB Br.
at 95, 100.
Findings of Fact
Fino's Allegations and LIUNA's Response
Thereto
2.In February of 1989, the Buffalo news media
reported that Fino had been an FBI informant during his entire
15 years as the Business Manager of Local 210 and had provided
the FBI with substantial information of LCN infiltration of LIUNA.
Tr. 1627-28. The media further reported that Fino provided information
to the FBI that the ." . . Mafia controlled the parent union's
operation across the country." R. Ex. 178 (Michael Beebe,
Fino Goes Into Hiding, Says He Had Been FBI Informer, The
Buffalo News, February 2, 1989, at A1.). See also R. Ex. 181 (Michael
Beebe, Fino's Double Life Recalls Father's Warning on Mob,
The Buffalo News, April 17, 1989 at A1)(reporting familial involvement of Fino
with mob), R. Ex. 182 (Dan Harback, Masked FBI Agent Acts
as Decoy as Threatened Fino Enters Court, The Buffalo News,
March 23, 1989 at A1)(reporting Fino's FBI contract and mob threats
against Fino).
3.LIUNA's General Counsel was aware that
the federal government was conducting an aggressive program to
rid labor unions of LCN corruption using the civil provisions
of the Racketeer Influence and Corrupt Organizations Act ("RICO").
Tr. 3407-08. During the late 1980s and early 1990s, for example,
the DOJ embarked upon a campaign of filing civil RICO suits against
numerous international and local labor unions, with the object
of placing them under government trusteeship. At the time the
Fino allegations came to light, this movement was well underway.
The DOJ had been successful in placing IBT Local 560 in New Jersey
under trusteeship. United States v. Local 560, Int'l Bhd. of
Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 581
F. Supp. 279 (D. N.J. 1984). The DOJ also filed a civil RICO complaint
against the International Brotherhood of Teamsters on June 28,
1988 and, after a year of intense litigation, entered into a voluntary
Consent Decree with the international union in March of 1989,
placing it under trusteeship. See United States v. International
Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am.,
831 F. Supp. 278 (S.D.N.Y. 1993). The trusteeship over Local 560
was lifted in February of 1999; the trusteeship over the Teamsters
remains in place. Similar suits were also filed against the Roofers
Union, United States v. Local 30, United Slate, Tile, and Composition
Roofers Damp and Waterproof Workers Ass'n, 686 F. Supp. 1139
(E.D. Pa. 1988); the Carpenters Union, United States v. District
Council of New York and Vicinity of the United Brotherhood of
Carpenters & Joiners of America, 778 F. Supp. 738 (S.D.N.Y.
1991); and the International Longshoremens' Association, United
States v. Local 1804-1 International Longshoremens' Ass'n,
812 F. Supp. 1303 (S.D.N.Y. 1993). Each of these suits resulted
in some form of trusteeship over the defendant union.
4.Also relevant at this time was LIUNA's
experience in 1981 in what is described as the Hauser case wherein
Coia, his father, Lepore, Jr. and Patriarca Sr. were indicted
for allegedly receiving kickbacks in return for awarding a union
contract to a Florida insurance company operated by Joseph Hauser.
United States v. Coia, 81-417-King (S.D. Fla. 1984.) See
also R. Ex. 124. Hauser surfaced in the early 1980s as an FBI
government witness and had testified in a number of federal prosecutions,
including United States v. Accardo, No. 81-23-CR-JWK, (S.D.
Fla. June 7, 1982), which involved the receipt of kickbacks from
a LIUNA welfare fund. R. Ex. 123 at 1 n.1. In the case involving
Coia, the court dismissed the charges. R. Ex. 124.
5.In response to Fino's allegations and in
anticipation of possible litigation filed by the DOJ, LIUNA
began two separate investigations in April of 1990. Elbaor, on
behalf of LIUNA's General Counsel, began an inquiry to determine
the substance, truth or falsity of Fino's allegations and Traini
commenced an investigation into Fino's background and credibility
for use as future impeachment material. These two investigations
ran simultaneously but on separate tracks, and will be discussed
seriatim.
2.On April 5, 1990, Elbaor held a telephone
conference with Harold Boreanaz ("Boreanaz"), an
attorney in Buffalo, New York. R. Ex. 122 at 1. Boreanaz represented
Joseph Rosato ("Rosato"), a steward at Local 210, who
was a defendant in a federal criminal case in Buffalo. Tr. 1631.
Fino was scheduled to be a witness against Rosato.(12)
Boreanaz told Elbaor that he would be willing to supply the International
Union with copies of eighteen FBI 302s on Fino, in exchange for
assistance from the International Union in investigating Fino.
R. Ex. 122 at 1.
3.As reflected in his memorandum to Connerton
on April 6, 1990, Elbaor emphasized to Boreanaz that the International
Union was his client and he would only participate in the proposed
sharing of information if it would serve the institutional interests
of the International Union. R. Ex. 122 at 2.
4.It should be noted that FBI 302s are not
public documents of the FBI or the DOJ. Pursuant to 18 U.S.C.
?3500, they are only given to defense counsel in criminal cases
where a witness, whose interview is the subject of the 302, testifies
at trial. Since Fino was under FBI protection and unavailable,
the only legitimate means of obtaining his allegations were from
the 302s which were provided to defense counsel in cases where
Fino was scheduled to testify. Moreover, the 302s released to
these defense counsel were generally limited to the subject matter
of that particular trial. Id.
5.Elbaor recommended to Connerton that they
meet with Boreanaz for two reasons: (1) "Fino may be a resurrected
and improved Joe Hauser," and (2) "his [Fino's] accusations
may be the springboard for a RICO civil action against LIUNA,
or its Regions, or its District Councils." R. Ex. 122 at
3.
6.On April 10, 1990, Connerton and Elbaor
met with Boreanaz in Buffalo and obtained all of the Fino 302s
that Boreanaz had in his possession. R. Ex. 125. Boreanaz told
Elbaor and Connerton that he had obtained the 302s from Paul Cambria
("Cambria"), another criminal defense attorney in Buffalo,
who had received them from a prosecutor during pre-trial discovery
in an unrelated case. Id.
7.On April 12, 1990, Elbaor sent a memorandum
to Coia and Fosco with copies of Fino's FBI 302s.(13) R. Ex. 126.
8.After Elbaor received the Fino 302s, he
recommended to Connerton that the General Counsel's office
conduct a "legal audit of the International [to] see what
we can learn." Tr. 3047. Elbaor's task was to ." . .
identify what [Fino's] allegations were, [and] see which ones
were capable of verification." Id.
9.A "legal audit," also known as
an internal investigation, is a recognized concept in which a
corporation, partnership, labor union or other business entity
utilizes a lawyer or law firm to investigate internal matters
under the protection of the attorney client privilege. See
e.g., Corporate internal investigations, Webb, Tarun, Molo,
Law Journal Seminar Press (1990); Stephen F. Black, Internal Corporate
Investigations, Business Law Monographs Vol. C5, Matthew Bender
Co., Inc. (1998). The attorney's task is to investigate the matter
in question and report to the entity's officers with findings
and legal advice. Id. A substantial body of case law has developed
involving the techniques and use of this procedure, which is widely
employed by corporations. Id.
10.A legal audit was an acceptable tool for
Elbaor to utilize when conducting his investigation into Fino's
allegations.
11.Elbaor was well qualified to conduct the
legal audit into Fino's allegations. From 1976 through October
of 1980, Elbaor worked at DOJ headquarters in Washington, D.C.
as a trial attorney in the General Crimes Section, and
he also served on temporary duty for a six month period as a Special
Assistant in the U.S. Attorney's office in the Eastern District
of Virginia. Tr. 2983. In addition, he was assigned to the Labor
Unit of the Criminal Division where he investigated and prosecuted
both labor union and ERISA cases. Tr. 2984. Later, he joined the
Organized Crime and Racketeering Section of the Criminal Division
in a special unit known as Strike Force 18, which specialized
in RICO investigations, including those involving labor racketeering.
Tr. 2985. He joined the Connerton firm in 1980 where he became
a partner and, in 1994, began his own practice. Tr. 2981-82. Currently,
he works on civil RICO litigation matters and bonding claims for
LIUNA. 2986-87.
12.Elbaor reviewed the FBI 302s and compiled
a catalogue of the allegations made by Fino therein. GEB Ex. 72,
121; R. Ex. 130.
13.Elbaor monitored Fino's testimony during
the trial of John M. Riggi, John J. Riggi, Vincent Riggi, Salvatore
Timpani and Girolamo Palermo. Tr. 3367; R. Ex. 134. John
M. Riggi was a LIUNA local union officer who had been charged
with various counts of labor racketeering. Id.;
GEB Ex. 114. Elbaor also read the transcript of Fino's March 7, 1990
testimony in U.S. v. Guarnieri
before Judge McAvoy in the Northern District of New York. R. Ex. 137.
14.In a series of memoranda, Elbaor detailed
Fino's testimony during the Guarnieri and Riggi trials,
as well as his testimony before a Grand Jury in Newark, New Jersey.
See R. Ex. 134-138.
15.On March 5, 1991, after completing his
investigation of the Fino allegations that he determined were
capable of verification, Elbaor submitted his audit report to
the GEB for its review. R. Ex. 173. In the introductory letter
accompanying the report, Elbaor stated,
The audit as embodied in its report focuses
on allegations affecting the International Union, not its affiliate
Local 210, nor other affiliates or businesses.
With respect to the methodology of the audit,
its intent was not to destroy Fino's overall credibility, but
to neutrally examine his allegations against interviews and records
generated contemporaneously with events in question. There proved
in this process sufficient information to justify serious doubt
and critical enquiry about Fino's credibility, and his motivations
for making his allegations in the first place. But delving into
that, and reporting on it, would have required an inordinate amount
of time and resources, and would have required a far lengthier
audit having a conclusion probably identical to that readily extrapolated
from the present audit report.
Id. Elbaor
was of the opinion that Fino's testimony was broad, vague and
contained few verifiable details regarding his contacts with individuals
in the labor union. R. Ex. 134 at 2. The record reflects that
neither Coia nor anyone else ever attempted to impede or improperly
influence Elbaor's work.
Traini's Investigation
2.The International Union, on Coia's recommendation,
employed Traini to conduct an investigation into Fino's
background for the purpose of defending the International Union
in the event the DOJ used him as a witness to prosecute a civil
RICO case against it. Tr. 2271, 5188, 5192-93.
3.Philip D. Smith ("Smith") testified herein on April 29, 1998. Tr. 2268. Smith, an investigator with the office of LIUNA's IG, interviewed Traini in April of 1997. Tr. 2270. Traini told Smith that Coia assigned him the duty of investigating Fino in order to obtain background material which could be used to impeach him in the event that he ever testified against the International Union or its officials. Tr. 2271