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U.S. v. INT'L. BROTH. OF TEAMSTERS

March 13, 1990

UNITED STATES OF AMERICA, PLAINTIFF,
v.
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, AFL-CIO, ET AL., DEFENDANTS. IN RE APPLICATION VII BY THE INDEPENDENT ADMINISTRATOR.



The opinion of the court was delivered by: Edelstein, District Judge:

OPINION & ORDER

This opinion emanates from the voluntary settlement in the action commenced by the plaintiffs United States of America (the "Government") against the defendants International Brotherhood of Teamsters (the "IBT") and the IBT's General Executive Board (the "GEB") embodied in the voluntary consent order entered March 14, 1989 (the "Consent Decree"). The remedial provisions in the Consent Decree provided for three Court-appointed officials; the Independent Administrator to oversee the remedial provisions, an Investigations Officer to bring charges against corrupt IBT members, and an Election Officer to oversee the electoral process leading up to and including the 1991 election for International Officers (collectively, the "Court Officers"). The goal of the Consent Decree is to rid the IBT of the hideous influence of organized crime through the election and prosecution provisions.

On January 11, 1989, the Independent Administrator submitted Application VII to this Court. Through the vehicle of this Application, the Independent Administrator presents for this Court's review his decision dated January 11, 1990 (the "January 11, 1990 Decision of the Independent Administrator") on the long-pending charges against two IBT officials, Harold Friedman and Anthony Hughes ("Friedman and Hughes"). Paragraph F.12.(A)(e) of the Consent Decree permits a party to a disciplinary hearing fourteen days to seek the review of this Court. Through Application VII, the Independent Administrator sought review of his January 11, 1990 decision in order to expedite the process. Friedman and Hughes did not object to appealing the decision in this manner, and in their replies cross-moved this Court for a preliminary injunction.

I. Background

This Application culminates the long series of confrontations between Friedman and Hughes, and the Court Officers and the Government over their disciplinary hearings. Friedman and Hughes, the first two IBT officials charged, tried, and now found guilty under the remedial scheme created by the Consent Decree, have vehemently and actively fought these charges. While this Court will review the background leading up to Application VII with varying detail, this Court is familiar with Friedman and Hughes' histories up to this point. For the purposes of completing the record, attention should also be directed to the September 29, 1989 decision of the Independent Administrator, the November 2, 1989 Memorandum and Order of this Court deciding Application III, 725 F. Supp. 162 (S.D.N.Y. 1989) (the "November 2, 1989 Opinion"), and the November 29, 1989 Order of this Court denying reconsideration of Application III.

A. The Defendants

Harold Friedman was a named defendant in the original RICO lawsuit filed on June 28, 1988 and a signatory to the Consent Decree. At that time, Friedman was a member of the GEB, being the Eleventh Vice-President of the IBT. In addition, Friedman was President of Local 507 located in Cleveland, Ohio, and President of the Ohio Conference of Teamsters. In the intervening time, Friedman has since left the GEB, but continues to serve as President of Local 507 and the Ohio Conference of Teamsters. Friedman was re-elected to his current post as President of Local 507 in 1987.

Anthony Hughes is currently the Recording Secretary of Local 507 in Cleveland. He was neither a party to the original RICO suit, nor a signatory to the Consent Decree. Hughes was re-elected to his current post of Recording Secretary of Local 507 in 1987.

Friedman, Hughes, and the late Jackie Presser were co-defendants in a criminal indictment in the Northern District of Ohio eventually tried as United States v. Friedman, et al., 86 Cr. 114 (White, J.). The charges involved allegations that the defendants embezzled from certain unions through a "ghost employee" scheme. Friedman and Hughes were convicted of the charges in that indictment and sentenced by Judge White to a four-year term of probation, and separation from all IBT-related activity for a concurrent four-year period. Judge White stayed the imposition of the sentence pending the outcome of Friedman and Hughes' appeals of their convictions to the United States Court of Appeals for the Sixth Circuit.

B. The Charges

The Investigations Officer filed charges against Friedman and Hughes on July 26, 1989, comprising the group of allegations termed "Charge I" by the Independent Administrator. Charge I alleged in substance that the conduct which formed the basis of their criminal convictions on racketeering charges also violated specific provisions of the IBT Constitution. From the beginning, Friedman and Hughes emphatically denied these charges, as well as the underlying convictions. The Independent Administrator held hearings on Charge I on December 13, 1989, and January 4, 1990. On September 20, 1989, the Investigations Officer filed additional charges against Friedman alone, alleging that he breached the IBT Constitution by associating with known organized crime figures, which the Independent Administrator has termed "Charge II." No hearing has yet been held on Charge II.

Charge I specifically alleged that Friedman violated the IBT Constitution by:

1.  Violating Article II, Section 2(a) of the International
    Brotherhood of Teamsters Constitution by conducting
    yourself in a manner to bring reproach upon the
    International Brotherhood of Teamsters, to wit: by
    embezzling funds from Bakery, Confectionery and Tobacco
    Workers International Union, Local

    19, in 1981. This conduct was the basis for your
    conviction for embezzling union funds in violation of
    29 U.S.C. § 439 in the United States District Court for the
    Northern District of Ohio, 86 Cr. 114.
2.  Violating Article II, Section 2(a) of the International
    Brotherhood of Teamsters Constitution, by conducting
    yourself in a manner to bring reproach upon the
    International Brotherhood of Teamsters, to wit: by
    conspiring to and conducting the affairs of an enterprise
    through a pattern of racketeering from 1978 through 1981
    in violation of 18 U.S.C. § 1962(c) and (d). This conduct
    formed the basis for your conviction on Counts I and II of
    the Indictment, 86 Cr. 114, in the Northern District of
    Ohio.
3.  Violating Article II, Section 2(a) of the International
    Brotherhood of Teamsters Constitution, by conducting
    yourself in a manner to bring reproach upon the
    International Brotherhood of Teamsters, to wit: by filing
    a false form LM-2 with the Department of labor for the
    Bakery, Confectionery and Tobacco Workers International
    Union, Local 19, in 1982. This criminal conviction formed
    the basis for your conviction on Count IV of the
    Indictment, 86 Cr. 114, in the United States District
    Court for the Northern District of Ohio.

Hughes was charged with the following:

1.  Violating Article II, Section 2(a) of the International
    Brotherhood of Teamsters Constitution, by conducting
    yourself in a manner to bring reproach upon the
    International Brotherhood of Teamsters, to wit: by
    embezzling funds from Bakery, Confectionery and Tobacco
    Workers International Union, Local 19, in 1981. This
    conduct was the basis for your conviction for embezzling
    union funds in violation of 29 U.S.C. § 439 in the United
    States District Court for the Northern District of Ohio, 86
    Cr. 114.
2.  Violating Article II, Section 2(a) of the International
    Brotherhood of Teamsters Constitution, by conducting
    yourself in a manner to bring reproach upon the
    International Brotherhood of Teamsters, to wit: by
    conspiring to and conducting the affairs of an enterprise
    through a pattern of racketeering from 1978 through 1981
    in violation of 18 U.S.C. § 1962(c) and (d). This conduct
    formed the basis for your conviction on Counts I and II of
    the Indictment, 86 Cr. 114, in the Northern District of
    Ohio.

The allegations filed by the Investigations Officer treat Friedman and Hughes' criminal convictions as the underlying conduct which forms the basis of their violations of Article II, section 2(a) ("§ 2(a)") of the IBT Constitution. Section 2(a), the IBT oath of office, enumerates obligations incumbent upon all members. In relevant part, § 2(a) requires that members "conduct himself or herself at all times in such a manner as not to bring reproach upon the Union . . ." What behavior violates this prohibition has become the subject of considerable disagreement.

C. Pre-hearing Litigation Involving Friedman and Hughes

Events involving Friedman and Hughes first came before this Court through Application III by the Independent Administrator, submitted October 3, 1989. In Application III, the Independent Administrator sought review of the September 29, 1989 Decision, in which he established his jurisdiction to hear the charges filed against Friedman and Hughes. In response to Application III, Friedman and Hughes jointly and separately moved this Court for a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure, which asked this Court to rule the Independent Administrator had no jurisdiction to hear the charges.

The injunction by Friedman and Hughes essentially sought consideration of the issues adversely decided by the September 29, 1989 Decision (and already before the Court by way of Application III). Hughes alone argued that since unlike Friedman he was neither a party to the original lawsuit nor a signatory of the Consent Decree, he should not be bound by its strictures or changes to the IBT Constitution.

The substance of Application III and the injunction in opposition were among the issues considered at a hearing held October 13, 1989. Since Application III involved issues which, if decided, would influence the merits of Friedman and Hughes' injunction, a further hearing to specifically consider these issues was held on October 16, 1989.*fn1

The November 2, 1989 Opinion affirmed the Independent Administrator's September 29, 1989 Decision in all respects, in particular establishing his jurisdiction to hold hearings on the disciplinary charges against Friedman and Hughes. This Court denied the injunctions for lack of irreparable harm, since they ultimately could seek review of any decision by the Independent Administrator in this Court. Finally, this Court found that Hughes was bound by the strictures of the Consent Decree.

Friedman and Hughes both appealed the November 2, 1989 Opinion to the United States Court of Appeals for the Second Circuit. The Second Circuit preserved Friedman and Hughes' rights to appellate review of the decisions, but refused to stay the ruling of this Court, effectively allowing the hearings before the Independent Administrator to go forward.

In addition to Friedman and Hughes' direct litigation before this Court, Local 507 filed suit in the Northern District of Ohio alleging that the Independent Administrator, the Investigations Officer, and the IBT with breaches of the IBT Constitution resulting from the implementation of the Consent Decree. Friedman also brought a motion for a temporary restraining order against the hearing before his pending an interpretation of the stay issued in his criminal conviction. This Court subsequently enjoined both Cleveland actions, and the Government alleged that Friedman was in contempt of the permanent injunction located at ¶ E.10 of the Consent Decree against obstructing with its implementation. The events surrounding the suits are more fully discussed in the January 17, 1989 Opinion and Order of this Court (the "January 17, 1990 Opinion").

In connection with the actions in Cleveland, the Government also prosecuted separate contempt charges against Friedman. After a series of hearings on alleged contumacious conduct by Friedman, the collateral suits in Cleveland were withdrawn. After further factual submissions, the question of Friedman's contempt is still ...


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