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UNITED STATES v. INTERNATIONAL BHD. OF TEAMSTERS

July 13, 1992

UNITED STATES OF AMERICA, Plaintiff,
v.
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, AFL-CIO, et al., Defendants. IN RE: APPLICATION LXXIII OF THE INDEPENDENT ADMINISTRATOR


Edelstein


The opinion of the court was delivered by: DAVID N. EDELSTEIN

EDELSTEIN, District Judge:

 This opinion emanates from the voluntary settlement in the action commenced by the plaintiff 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 over entered March 14, 1989 (the "Consent Decree") The Consent Decree provides for three Court appointed officials: the Independent Administrator to oversee the Consent Decree's remedial provisions, the Investigations Officer to bring charges against corrupt IBT members, and the 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 disciplinary provisions.

 Application LXXIII presents for this Court's review the decision of the Independent Administrator regarding disciplinary charges brought by the Investigations Officer against Patrick Crapanzano ("Patrick" or "Crapanzano"), the President of IBT Local Union 27, *fn1" which is located in New York City, and Louis Lanza ("Lanza"), the Vice President of Local 27. *fn2" The Independent Administrator found that Crapanzano and Lanza (the "respondents") brought reproach upon the IBT by disregarding their fiduciary duty to investigate and act with respect to allegations and evidence that Pasquale "Patsy" Crapanzano ("Patsy") and Liborio "Robert" Crapanzano ("Robert") former members of the Executive Board of Local 27, were members of La Cosa Nostra. *fn3" For this violation of the IBT Constitution, the Independent Administrator permanently barred Crapanzano and Lanza from the IBT. The Independent Administrator also prohibited IBT-affiliated entities from making contributions on respondent's behalf to employment benefit plans, though the Independent Administrator did not alienate their vested benefits. Finally, the Independent Administrator prohibited any IBT-affiliated entity from paying Crapanzano's and Lanza's attorneys fees, and he stayed imposition of his penalty pending this Court's decision.

 Respondents argue that the decision of the Independent Administrator is not supported by substantial evidence and, as a result, is arbitrary and capricious. This Court finds that respondents' arguments are without merit and that the decision of the Independent Administrator is fully supported by the evidence. Accordingly, for the reasons stated below, the decision of the Independent Administrator is affirmed.

 I. BACKGROUND

 The Investigations Officer charged that respondents brought reproach upon the IBT in violation of Article II, Section 2(a) and Article XIX, Sections 6(b)(1) and (2) of the IBT Constitution by failing to investigate whether Patsy and Robert, former Local 27 officers, were members of La Cosa Nostra ("LCN"). Article II, Section 2(a) is the IBT membership oath, which provides in relevant part that every IBT member shall "conduct himself or herself in a manner so as not to bring reproach upon the Union." Article XIX, Section 6(b) is a non-exhaustive list of disciplinary charges that may be filed against IBT members. Two such charges are: (1) violating the IBT Constitution, a Local Union by law or other Union rule; and (2) violating the IBT membership oath. See Article XIX, §§ 6(b)(1)-(2).

 Pursuant to paragraph F.12(c) of the Consent Decree, the Independent Administrator must decide disciplinary hearings using a "just cause" standard. The Investigations Officer has the burden of establishing just cause by a preponderance of the evidence. December 27, 1990 Opinion & Order, 754 F. Supp. 333, 337 (S.D.N.Y. 1990). After conducting a hearing (the "hearing"), where respondents were represented by counsel, and receiving post hearing briefs, the Independent Administrator issued a 22-page decision. The Independent Administrator found that the Investigations Officer satisfied his burden of proving that respondents breached their fiduciary duty by failing to investigate or otherwise act in connection with allegations of Patsy's and Robert's membership in organized crime. (Decision of the Independent Administrator ("Ind. Admin. Dec.") at p. 18).

 Specifically, the Independent Administrator found that beginning in 1984 and continuing through 1991, the respondents received a great deal of information surrounding Patsy's and Robert's affiliation with organized crime. In fact, respondents admitted in the hearing that they were aware of the numerous allegations about Patsy's and Robert's ties to organized crime.

 The Independent Administrator found that Patrick learned of the allegations surrounding his father and brother in 1984 or 1985, after reading an article in the Miami Herald that reported on his family's connections to organized crime. Patrick also knew of a 1989 article that reported on his father's and brother's LCN connections. Aside from media coverage of Patsy's and Robert's LCN ties, Patrick had other information indicating that his fellow IBT officers were members of organized crime. Patrick knew of the Investigations Officer's inquiry into Patsy's and Robert's mafia links, and he knew that Robert resigned from the IBT rather than confront the Investigations Officer's charge that he was a member of the Gambino crime family.

 The Independent Administrator found that Lanza learned of the allegations in 1983 or 1984, and that Patrick had alerted him to the Miami Herald article that discussed Patsy's and Robert's ties to LCN. Lanza also read about Robert's crime ties in another daily periodical, the Staten Island Advance, in 1983 or 1984, and in an August 1989 edition of New York Newsday. In addition, Lanza read the Investigations Officer's charges against Robert and Patsy in the October 1990 issue of The International Teamster magazine.

 B. Responses to the Allegations

 The Independent Administrator found that respondents were aware of allegations concerning ties between LCN and Local 27, and that they breached their fiduciary duty by failing to take appropriate action. In fact, during sworn in person testimony before the Investigations Officer, Lanza attested to his awareness of the allegations of Patsy's and Robert's ties to LCN. He stated, however, that he did not discuss the allegations with the Executive Board or with the rank and file, nor did he take any other action with respect to these allegations. He also attested to his belief that he had no obligation to undertake any type of inquiry into the allegations:

 IO: You said you read articles in S.I. Advance . . . . Didn't they mention the Crapanzanos?

 Lanza: He just showed me an article about my uncle and I don't believe that article. I am not saying -- what I am saying is there would be no reason for me to ask anything about a newspapers clipping being reputed in the so-called -- in the newspapers. I have to take what I know as factual in my mind and apply it.

 IO: After seeing any articles, did you ever ask the Crapanzanos if any of ...


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