allegations of criminal activity and LCN associations of Local 727 officials.
3. Coli's Conduct Regarding Talerico
Coli knew that Talerico was twice imprisoned on federal charges of civil and criminal contempt in Las Vegas. Once Coli knew, or had reason to know, of Talerico's incarceration, Coli had a fiduciary duty to inquire into the events and circumstances surrounding Talerico's incarceration. Had Coli done so, he would have discovered that Talerico transported skimmed funds for LCN and had ties to organized crime.
Coli, however, did no investigation whatsoever into the facts and circumstances that lead to these two terms of imprisonment. Coli did not even take the obvious and simple step of questioning Talerico about his criminal conduct in Las Vegas. When Coli was asked during his 1988 deposition whether Talerico elaborated on his problem with the Government, Coli responded, "I didn't ask him to." (IO Ex. 2 at 41). Moreover, Coli made no effort to obtain public court records in Las Vegas concerning Talerico, which included a November 25, 1981 sworn affidavit by Michael J. Glass, a Special Agent of the FBI. This affidavit detailed Talerico's meetings with Ponto in which envelopes were exchanged, described the clandestine manner in which Talerico travelled to Las Vegas, identified the false names used by Talerico during his travels, and detailed Talerico's actions as a courier of skimmed money. (IO Ex. 13). In addition, Coli knew there were articles discussing Talerico's "problem with the Government." (IO Ex. 2 at p. 47). Indeed, a number of articles in Las Vegas newspapers and the June 6, 1982, Chicago Tribune article discussed Talerico's involvement in LCN's skimming operation from Las Vegas casinos and referred to public documents that corroborated these allegations. Moreover, Coli, an attorney, chose not to commission any investigation into the nature of Talerico's illegal activities and prohibited associations.
At a minimum, Coli should have known of Talerico's criminal activities and of his association with LCN. Rather than conduct an inquiry, however, Coli chose to sanction Talerico's conduct by granting Talerico two leaves of absence during his periods of incarceration and then allowing him to resume his position at Local 727 each time he was released from prison.
In light of Coli's admitted total failure to act when Coli's fiduciary duty required him to do so, the Independent Administrator's finding that Coli breached his fiduciary duty and thereby brought reproach upon the IBT is supported by the evidence and is neither arbitrary nor capricious. The IBT will only be free from the taint of corruption when its officers are committed to investigating and acting with respect to IBT members who are involved in criminal activity or have ties to organized crime. See May 15, 1992 Opinion & Order, slip opinion at 26-27. IBT officers who fail to exercise such vigilance -- and thereby allow IBT members who engage in criminal activity and associate with organized crime to remain in the union -- breach their fiduciary duty to the rank and file and bring reproach upon the IBT.
B. Excuses for Inaction
Coli offers two excuses for his inaction. First, he argues that he relied on the advice of counsel. Second, he argues that an investigation would have been futile. These arguments are without merit.
1. Reliance On Advice of Counsel
Coli raised the "advice of counsel" defense before the Independent Administrator, who rejected it. The Independent Administrator found that Coli should not have been satisfied with Calihan's meager disclosure concerning Talerico's "problem with the Government." (Ind. Admin. at 13). Far from insulating Coli from responsibility, Calihan's disclosure was so minimal that it cried out for further investigation. Once alerted to Talerico's problem, Coli was obligated to take action. Calihan's advise was also deficient because he had an obvious conflict of interest in representing both Talerico and Local 272. As an attorney, Coli should have been keenly aware of this conflict.
The Independent Administrator also rejected Coli's alleged reliance on Burns' and Orlove's advice because their opinions were premised on Calihan's assertions that Talerico's problem did not involve the IBT. However, as the The Independent Administrator stated, "any time [an IBT] officer is involved in activity such as that Talerico was involved with, the [IBT] is necessarily involved and, at a minimum, an a investigation is required." Id. at 14. In addition, the Independent Administrator rejected Coli's alleged reliance on Burns' and Orlove's advice because Coli knew that they did not investigate the circumstances surrounding Talerico's imprisonment or his ties to organized crime.
The Independent Administrator's rejection of Coli's "advice of counsel" defense was neither arbitrary nor capricious. When the principal officer of a Local -- who is charged with the fiduciary duty to investigate and remedy wrongdoing knows that a fellow union official has been twice imprisoned" while holding union office, both common sense and fiduciary duty dictate an inquiry into the circumstances surrounding the incarceration. It is disingenuous for Coli, an attorney, to argue that he relied on the advice of counsel.
2. The "Futility" of an Investigation
Coli argued before the Independent Administrator that any attempt to investigate Coli prior to 1990 would have been futile. The Independent Administrator rejected this argument. In doing so, the Independent Administrator pointed to the June 6, 1982 Chicago Tribune article, which stated that FBI agents had observed meetings between Talerico and Ponto and one meeting between Talerico and Aiuppa. The Chicago Tribune article disclosed that FBI affidavits regarding the surveillance of Talerico were available to the public. These affidavits were available to the public as early as 1982. Coli could have retrieved these records. In addition, he could have easily obtained accounts of Talerico's activities from Nevada newspapers. Far from being futile, even a cursory investigation would have disclosed the circumstances surrounding Talerico's criminal contempt and his association with organized crime. It was neither arbitrary nor capricious for the Independent Administrator to reject this defense.
C. The Penalty
Coli argues that the penalty imposed by the Independent Administrator was unduly harsh and unfair. In imposing a penalty, the Independent Administrator considered the many letters received on Coli's behalf from members of Coli's community and the Government. The Independent Administrator, however, found that by failing to act, Coli proved that "he is not fit to serve in any officer or representative positions in the IBT or any of its affiliates." (Ind. Admin. at 18). Given Coli's conduct and acknowledging the letters submitted on Coli's behalf, the penalty imposed by the Independent Administrator was neither arbitrary nor capricious.
IT IS HEREBY ORDERED that Coli's objections to the Independent Administrator's decision are denied; and
IT IS FURTHER ORDERED that the decision of the Independent Administrator is affirmed in its entirety; and
IT IS FURTHER ORDERED that the stay of penalties imposed by the Independent Administrator is dissolved, effective immediately.
Dated: July 14, 1992
New York, New York
David N. Edelstein