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UNITED STATES v. INTERNATIONAL BHD. OF TEAMSTERS

August 25, 1992

UNITED STATES OF AMERICA, Plaintiff, - v - INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, AFL-CIO, THE COMMISSION OF LA COSA NOSTRA, ANTHONY SALERNO, a/k/a "Fat Tony," MATTHEW IANNIELLO, a/k/a "Matty the Horse," ANTHONY PROVENZANO, a/k/a "Tony Pro," NUNZIO PROVENZANO, a/k/a "Nunzi Pro," ANTHONY CORALLO, a/k/a "Tony Ducks," SALVATORE SANTORO, a/k/a "Tom Mix," CHRISTOPHER FURNARI, SR., a/k/a "Christie Tick," FRANK MANZO, CARMINE PERSICO, a/k/a "Junior," "The Snake," GENNARO LANGELLA, a/k/a "Gerry Lang," PHILIP RASTELLI, a/k/a "Rusty," NICHOLAS MARANGELLO, a/k/a "Nicky Glasses," JOSEPH MASSINO, a/k/a "Joey Messina," ANTHONY FICAROTTA, a/k/a "Figgy," EUGENE BOFFA, SR., FRANCIS SHEERAN, MILTON ROCKMAN, a/k/a "Maishe," JOHN TRONOLONE, a/k/a "Peanuts," JOSEPH JOHN AIUPPA, a/k/a "Joey O'Brien," "Joe Doves," "Joey Aiuppa," JOHN PHILLIP CERONE, a/k/a "Jackie the Lackie," "Jackie Cerone," JOSEPH LOMBARDO, a/k/a 'Joey the Clown," ANGELA LAPIETRA, a/k/a "The Nutcracker," FRANK BALISTRIERI, a/k/a "Mr. B," CARL ANGELO DELUNA, a/k/a "Toughy," CARL CIVELLA, a/k/a "Corky," ANTHONY THOMAS CIVELLA, a/k/a "Tony Ripe," GENERAL EXECUTIVE BOARD, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, JACKIE PRESSER, General President, WELDON MATHIS, General Secretary-Treasurer, JOSEPH TREROTOLA, a/k/a "Joe T," First Vice President, ROBERT HOLMES, SR., Second Vice President, WILLIAM J. McCARTHY, Third Vice President, JOSEPH W. MORGAN, Fourth Vice President, EDWARD M. LAWSON, Fifth Vice President, ARNOLD WEINMEISTER, Sixth Vice President, JOHN H. CLEVELAND, Seventh Vice President, MAURICE R. SCHURR, Eight Vice President, DONALD PETERS, Ninth Vice President, WALTER J. SHEA, Tenth Vice President, HAROLD FRIEDMAN, Eleventh Vice President, JACK D. COX, Twelfth Vice President, DON L. WEST, Thirteenth Vice President, MICHAEL J. RILEY, Fourteenth Vice President, THEODORE COZZA, Fifteenth Vice President, DANIEL LIGUROTIS, Sixteenth Vice President, SALVATORE PROVENZANO, a/k/a "Sammy Pro," Former Vice President Defendants.


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, inter alia, 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"). Pursuant to Section K.16 of the Consent Decree, the Independent Administrator and the Government made an application to this Court involving Section G of the Consent Decree, which provides for the establishment of an Independent Review Board (the "IRB," "Review Board," or "Board"). Specifically, after an impasse was reached in selecting the third member of the IRB, the Independent Administrator and the Government sought the appointment of Judge William H. Webster as the third member of the IRB. After a hearing on this issue on August 4, 1992, this Court granted the application and appointed Judge Webster to the IRB. (Transcript of August 4, 1992 Hearing, pp. 35-36). This Opinion supplements that order.

 I. BACKGROUND1

 A. The Government's Suit

 On June 28, 1988, the Government filed this civil action pursuant to the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq., against the IBT, its GEB, the individual members of the GEB, the Commission of La Cosa Nostra, and 26 alleged members of La Cosa Nostra. The Government alleged that the Union suffered from rampant corruption and La Cosa Nostra domination. In order to purge the IBT of these nefarious influences and restore union democracy, the Government sought sweeping relief, including the appointment of court liaison officers vested with certain powers of the IBT General President and the GEB and with authority to supervise general elections for IBT International Union Office.

 On the eve of trial, March 14, 1989, the IBT and the Government settled the action and entered into the Consent Decree. In the precatory paragraphs of the Consent Decree, the IBT admits "that there have been allegations, sworn testimony and judicial findings of past problems with La Cosa Nostra corruption of various elements of the IBT." Consent Decree, at p. 2 (fourth Whereas clause). Based on this admission, the IBT agrees "that there should be no criminal element or La Cosa Nostra corruption of any part of the IBT." Id. (fifth Whereas clause). Moreover, the IBT agrees "that it is imperative that the IBT, as the largest trade union in the free world, be maintained democratically, with integrity and for the sole benefit of its members without unlawful outside influence" Id. (sixth Whereas clause). The framework of re form sought by the Government in its Complaint was preserved in the Consent Decree in order to achieve these goals.

 B. The Court-Appointed Officers

 Pursuant to section F of the Consent Decree, this Court appointed three officers: an Independent Administrator, an Investigations Officer, and an Election officer (collectively, the "Court-Appointed Officers"). In May 1989, this Court appointed Frederick B. Lacey to serve as the Independent Administrator, Charles M. Carberry to serve as the Investigations Officer, and Michael H. Holland to serve as the Election Officer.

 The Independent Administrator is vested with a broad range of powers under the Consent Decree, including: (1) the disciplinary powers of the General President and the GEB, which he may use to eradicate corruption within the IBT and to appoint temporary trustees for distressed Locals; (2) the power to review all disciplinary and trusteeship decisions of the General President and the GEB; and (3) the authority to veto proposed or actual expenditures, contracts, and appointments if he believes that such conduct furthers an act of racketeering. Consent Decree, §§ F.12(A)-(B). The Investigations Officer has authority to investigate corruption in the IBT and to bring disciplinary charges before the Independent Administrator. Id., § F.12(A). The Consent Decree also provides for the first direct rank-and-file secret ballot election for International Union Officers and authorizes the Election Officer to supervise it. Id., § F.12(D). Any Court-Appointed Officer, as well as any party, may make an application to this Court to resolve an issue involving the Consent Decree. Id., §§ F.12(I), K.16.

 In fulfilling his mandate under the Consent Decree, the Investigations Officer has filed charges against 185 individuals and three Local Unions. These charges resulted from investigations that entailed examining books and records, interviewing and taking testimony from union officers and members, reviewing information supplied by IBT members, and taking sworn statements. The Independent Administrator has conducted at least 73 hearings on disciplinary charges brought by the Investigations Officer, rendered numerous decisions, imposed at least 9 trusteeships on IBT Locals, and decided over 250 appeals from decisions of the Election Officer on election protests. The Independent Administrator has also reviewed appointments, expenditures, the handling of funds, and transfer of assets, and has communicated with the membership through the IBT magazine while also supervising the magazine's publication. The Election Officer supervised all aspects and stages of the first IBT secret ballot rank-and-file election, including the election of delegates to the IBT Convention from the over 600 IBT Local Unions, the nominations for International Union Office at the IBT Convention, and the approximately 1.5 million member rank-and-file general election of International Union Officers. The Election Officer certified the results of the election on January 22, 1992, which saw Mr. Ronald C. Carey elected IBT General President.

 C. The Independent Review Board

 The certification of the election results marks a point of transition in the Consent Decree. The termination of the Court-Appointed Officers' authority is related to this event, and indeed, their terms of office will soon end. See Consent Decree, § B.3(2). Certification of the election results, however, also heralds the birth of the Independent Review Board, which is the subject of this application. The Consent Decree provides that "following the certification of the 1991 election results, there shall be established an Independent Review Board." Id., § G.

 The IRB is to consist of three members, one chosen by the Attorney General of the United States on behalf of the Government, one chosen by the IBT, and a third person chosen by the Attorney General's and the IBT's designees. Id., § G. The Attorney General chose Frederick B. Lacey, currently the Independent Administrator, as his designee on March 8, 1992. The IBT chose Harold E. Burke, Special Assistant to IBT General President Ronald C. Carey, as its designee on April 9, 1992. This Opinion involves this Court's resolution of an impasse reached by Judge Lacey and Mr. Burke in selecting the third member of the IRB. At a hearing on August 4, 1992, this Court confirmed the nomination of William H. Webster to serve as the third member of the IRB. (Transcript of August 4, 1992 Hearing, pp. 35-36).

 The Consent Decree addresses various aspects of IRB operation, including general matters of IRB administration, the IRB's disciplinary powers, and the investigatory and disciplinary process. As to general administration, for instance, the Consent Decree touches upon such matters as funding and staffing. Section G(1) states that "the IBT shall pay all costs and expenses of the [IRB] and its staff (including all salaries of [IRB] members and staff)." Consent Decree, § G(1) (emphasis added). In addition, the IRB may hire a staff of investigators and attorneys to assist in the performance of its duties. Id, § G(a).

 The Consent Decree also sets forth the IRB's investigatory and disciplinary powers, and a process for acting on the results of its investigations. The IRB is vested with the same investigatory authority as enjoyed by the General President and the General Secretary-Treasurer under the IBT Constitution and applicable law. Id., § G(b). The IRB must use this authority to investigate, inter alia, (1) "any allegations of corruption," (2) "any allegations of domination or control or influence of any [part of the] IBT . . . by La Cosa Nostra or any other organized crime group, and (3) "any failure to cooperate fully with the Independent Review Board." Id., § G(a).

 Upon completing an investigation, the IRB must issue a written report (the "Investigative Report") setting out its charges, findings, and recommendations concerning a disciplinary or trusteeship matter. Id., § G(d). The Investigative Report is then referred to an appropriate IBT entity, which must "promptly take whatever action is appropriate under the circumstances." Id., § G(e). "Within 90 days of the referral, the IBT entity must make written findings setting forth the specific action taken and the reasons for such action." Id.

 The IRB's role in a particular matter does not end upon this referral to an IBT entity. Instead, the IRB must monitor its referrals. If the IRB determines that the IBT entity has not pursued a referred matter in "a lawful, responsible, or timely manner," or that the IBT entity's proposed resolution "is inadequate under the circumstances," the IRB must notify the relevant IBT entity of its determination and the reasons for it. Id., § G(f). Within 10 days of the IRB's notice, the relevant IBT entity must "set forth in writing any and all additional actions it has taken and/or will take to correct the defects set forth in the notice and a deadline by which said action may be completed." Id., § G(g). The IRB shall "immediately thereafter" issue a written determination "concerning the adequacy of the additional action taken and proposed by the IBT entity." Id. If the IRB finds that the IBT entity has not remedied the defects specified in the IRB's notice, the IRB promptly shall convene a hearing. Id.

 The IRB assumes an adjudicatory role at this hearing, which is meant to determine an appropriate course of action in a particular matter. After conducting a "fair hearing" pursuant to the rules and procedures generally applicable to a labor arbitration hearing, the IRB must issue a written decision, which "shall be final and binding." Id., §§ G(h), (i). The GEB must then take whatever action is necessary to implement the decision, "consistent with the IBT Constitution and applicable Federal laws." Id., § G(i). The IRB, however, is empowered to examine and review the GEB's implementation of the IRB's decisions; if the IRB is dissatisfied with the GEB's efforts, the IRB has "the authority to take whatever steps are appropriate to insure proper implementation" of its decision. Id., § G(j).

 In addition to initiating an investigation, which results in the filing of an Investigative Report and the process just described, the IRB also may review the GEB's own disciplinary and trusteeship decisions. Id., § G(k). After such review, the IRB may make a determination, which is final and binding, that affirms, modifies, or reverses any such GEB decision. Id.

 In sum, Section G of the Consent Decree empowers the IRB to eradicate corruption in the IBT on its own initiative and to monitor IBT efforts to purge corruption in the Union. In this way, the IRB may be considered a successor to the Investigations Officer and the Independent Administrator. Its activities, however, are limited to the disciplinary sphere of union activity; it has no involvement in the day-to-day operations of the Union.

 II. DISCUSSION

 At a hearing before this Court on July 30, 1992, this Court learned that Judge Lacey, the Attorney General's designee to the IRB, and Mr. Burke, the IBT's designee to the IRB, had reached an impasse in selecting the third member of the IRB as required by the Consent Decree. This Court directed both Judge Lacey and Mr. Burke to appear before the Court on August 4, 1992 to resolve the matter. In the interim, Judge Lacey attempted to resolve the impasse by nominating Judge William H. Webster for the third seat on the IRB. This attempted resolution failed when Mr. Burke and the IBT rejected Judge Webster's nomination. The impasse stemmed from conflicting views of the role of the IRB and the qualifications necessary for IRB service. At the August 4, 1992 hearing, this Court found that the Consent Decree reveals that the IRB's mandate to eradicate corruption from the IRB includes investigative and adjudicative tasks and requires a background in these areas. This Court then resolved the impasse by selecting the most qualified candidate for IRB membership nominated by Judge Lacey and by Mr. Burke and the IBT: Judge Webster.

 A. The Attorney General's Designee and the IBT's Designee Reached an Impasse over Appointment of the Third Member of the IRB That Required Resolution By This Court

 1. The Impasse

 a. The July 30, 1992 Hearing

 At a hearing before this Court on July 30, 1992 that addressed the promulgation of rules for IRB operation, at which both Judge Lacey and Mr. Burke were present, Judge Lacey informed the Court of his and Mr. Burke's attempts to agree on the third member of the IRB. (Transcript of July 30, 1992 Hearing, pp. 89-90). Judge Lacey stated that he had presented Mr. Burke with the names of several individuals he thought suitable for the position. Mr. Burke rejected these names. Mr. Burke then Suggested three individuals for the position. Judge Lacey rejected them because he did not believe they had the necessary experience for the position. Subsequently, Judge Lacey rejected three additional suggestions made by Mr. Burke. Having reached an impasse, Judge Lacey indicated that he would try to find someone of "unchallengeable, national reputation, background and experience." Id. at 90. Judge Lacey then stated that if Mr. Burke rejected this suggestion, he would have to bring an application before this Court. See id. at 91. In response, this Court directed Judge Lacey and Mr. Burke to attend a hearing the following Tuesday, August 4, 1992, to resolve the matter: "I don't know what your schedule is or Mr. Burke's, but unless you change my mind, I will expect you here on Tuesday, [August 4, 1992,] no later than 11:00 o'clock, to resolve this matter. I hate vacuums." Id.

 b. Judge Lacey's Nomination of Judge Webster: Judge Lacey's and Mr. Burke's Correspondences

 In a letter dated July 31, 1992, Judge Lacey attempted to resolve the impasse by proposing to Mr. Burke that Judge William H. Webster serve as the third member of the IRB. In the letter, Judge Lacey referred to Judge Webster's background and to the stature his appointment would give the IRB:

 As you will see, [Judge Webster] has served as United States Attorney, a United States District Judge, a Judge on the United States Court of Appeals, has been the Director of the Federal Bureau of Investigation and thereafter Director of the Central Intelligence Agency. He is now practicing law in Washington. In addition to everything else, he is readily available for meetings in office space that we will occupy in Washington.

 His designation would give tremendous stature to the Independent Review Board and I hope that you -- and anyone with whom you see fit to confer -- will find him acceptable.

 Letter from Judge Lacey, Member of the IRB, to Harold E. Burke, Member of the IRB (July 31, 1992) (on file with the Southern District of New York). Judge Webster's curriculum vitae was attached to Judge Lacey's letter.

 In another letter dated July 31, 1992, Judge Lacey informed the Attorney General of the United States, William P. Barr -- who appointed Judge Lacey to the IRB ...


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