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UNITED STATES v. INTERNATIONAL BHD. OF TEAMSTERS

June 10, 1993

UNITED STATES OF AMERICA, Plaintiff,
v.
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, AFL-CIO, et al., Defendants. IN RE: APPLICATION CXI 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 of an action commenced by plaintiff United States of America (the "Government") against defendants International Brotherhood of Teamsters (the "IBT" or the "Union") and the IBT's General Executive Board (the "GEB") embodied in the voluntary consent order 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 that culminated in the 1991 election for International 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.

 This Memorandum & Order represents the final resolution of all issues presented by Applications XCIX and CXI of the Independent Administrator concerning Respondents John T. Burke, Jr., President of IBT Local 868 and 917; Harold Wolchok, Secretary-Treasurer of IBT Local 868 and 917; Mario Abrego, Vice President of IBT Local 917 and Trustee of IBT Local 868; Robert Ottman, Trustee of IBT Local 917 and business agent of IBT Local 868; Langston McKay, Recording Secretary of IBT Local 917 and business agent for Local 868; Walter Cahill, Trustee of IBT Local 868 and 917; Saul Brechner, Vice President of IBT Local 868; and, Walter Simmons, Trustee of Local 917 and business agent for Local 868. In Application XCIX of the Independent Administrator, the first Application in connection with this matter, this Court issued an Opinion & Order, dated March 5, 1993, that affirmed in part, and reversed and remanded in part, the decision of the Independent Administrator. Application XCIX presented for this Court's review the decision of the Independent Administrator finding that the Investigations Officer had proven charges filed against Respondents. This Court affirmed the Independent Administrator's finding that the Investigations Officer had proven that Respondents breached their fiduciary duties to the members of IBT Locals 868 and 917 in violation of Article II, Section 2(a) and Article XIX, Section 6(b) of the IBT Constitution *fn1" by executing a scheme, under the guise of an associate membership program, to enrich themselves (the "Associate Membership Program Charge"). *fn2" The penalty imposed on two of the respondents, Mr. Burke and Mr. Wolchok, was also affirmed. However, this Court vacated and remanded for reconsideration the penalty imposed by the Independent Administrator on Respondents Abrego, Ottman, McKay, Cahill, Brechner and Simmons. See March 5, 1993 Opinion & Order at 24. The Court stated that:

 
Both this Court and the Second Circuit have held that the Independent Administrator, who presides over disciplinary hearings pursuant to the Consent Decree, is best situated to determine and fix the penalty to be imposed upon IBT members who violate the Consent Decree's disciplinary provisions. See United States v. IBT, 978 F.2d 68. In doing so, he is entitled to great deference. See United States v. IBT, 981 F.2d 1362; United States v. IBT, 978 F.2d 68. This is a matter of critical importance. The Independent Administrator, a former federal district judge, conducts the hearings and thus is best equipped to evaluate the demeanor, credibility and, ultimately, the culpability, of those who appear before him. See id.; Feb. 9, 1993 Opinion & Order, slip op., at 47 (S.D.N.Y. 1993). It follows that he is also uniquely situated to evaluate what weight to accord various aggravating and mitigating factors in a given case, and thus, to chose an appropriate penalty.
 
Thus, Respondents' claim that the penalties imposed in the instant matter are arbitrary and capricious because they are "severe" or "harsh" is unpersuasive. Yet, the instant matter deserves a second look. While other disciplined IBT members have challenged penalties based on an analysis of penalties imposed in unrelated matters, Respondents in this case have challenged their penalties in light of the conduct and penalties of individuals involved in the same matter. In other words, there exists a common baseline. While Mr. Sansone, for instance, cited penalties imposed in wholly unrelated matters, Messrs. Abrego, Ottman, McKay, Cahill, Brechner, and Simmons raise questions of proportionality in light of the penalties imposed on Mr. Burke and Mr. Wolchok. Not only is there such a common baseline here, but all Respondents enjoy similar mitigating factors. Thus, they ostensibly differ only in their degree of culpability. In light of the fact the Messrs. Abrego, Ottman, McKay, Cahill, Brechner, and Simmons appear to be less culpable than Mr. Burke and Mr. Wolchok, it is not clear why identical sanctions have been imposed on all Respondents. A group of respondents in the same matter, with similar mitigating circumstances but differing degrees of culpability, received the same penalty. In the absence of further explanation, this Court can only conclude that the sanctions imposed on Messrs. Abrego, Ottman, McKay, Cahill, Brechner, and Simmons are arbitrary and capricious.
 
On remand, the Independent Administrator may conclude that, in light of the seemingly greater wrongdoing perpetrated by Mr. Burke and Mr. Wolchok, Messrs. Abrego, Ottman, McKay, Cahill, Brechner, and Simmons should be accorded a more lenient penalty. Alternatively, the Independent Administrator may conclude that, in light of the level of culpability of each of the Respondents and other mitigating evidence, a uniform penalty is warranted. On remand, the Independent Administrator shall reconsider the penalty to be imposed on Respondents Abrego, Ottman, McKay, Cahill, Brechner, and Simmons in light of this opinion.

 March 5, 1993 Opinion & Order, at 21-4.

 On remand, the Independent Administrator accepted further submissions from Respondents Abrego, Ottman, McKay, Cahill, Brechner, and Simmons and reconsidered the penalty to be imposed on these six Respondents. The Independent Administrator found that Respondents Abrego, Ottman, McKay, Cahill, Brechner, and Simmons should receive a lesser penalty than that which was imposed on Respondents Burke and Wolchok. Accordingly, the Independent Administrator ordered that

 
for a period of two years, Abrego, Ottman, McKay, Cahill, Brechner and Simmons are barred from holding, or drawing any compensation from, any IBT-affiliated officer or trusteeship positions. These six Respondents may, however, retain their IBT membership.
 
During [this] two-year period . . . they shall also be barred from working, in any capacity, with IBT-affiliated entities. . . . Without such a restriction, I would be inviting IBT-affiliated entities to dole out patronage positions to members upon whom I have imposed employment disabilities.

 Ind.Admin.Dec. at 4-5. In addition, the Independent Administrator ordered that any contributions made by any IBT-affiliated entity to sustain benefits on behalf Respondents Abrego, Ottman, McKay, Cahill, Brechner, and Simmons *fn3" as a result of their having served as officers or trustees of IBT-affiliated entities cease during the two-year disability period. Id. at 5-6. Finally, the Independent Administrator prohibited these six Respondents from receiving reimbursement for legal expenses incurred in connection with this disciplinary action. Id. at 6. Application CXI presents for this Court's review the modified penalty that the Independent Administrator has imposed on Respondents Abrego, Ottman, McKay, Cahill, Brechner, and Simmons.

 This Court repeatedly has recognized that, in reviewing decisions of the Independent Administrator, the findings of the Independent Administrator "are entitled to great deference." United States v. IBT, 905 F.2d 610, 616 (2d Cir. 1990), aff'g March 13, 1990 Opinion & Order, 743 F. Supp. 155 (S.D.N.Y. 1990). This Court will overturn the findings of the Independent Administrator when it determines that they are, on the basis of all the evidence, "arbitrary or capricious." United States v. IBT, 964 F.2d 1308 (2d Cir. 1992); August 27, 1990 Opinion & Order, 745 F. Supp. 908, 911 (S.D.N.Y. 1990), aff'd, 941 F.2d 1292 (2d Cir.), cert. denied, 112 S. Ct. 76 (1991); March 13, 1990 Opinion & Order, 743 F. Supp. 155, 165 (S.D.N.Y. 1990), aff'd, 905 F.2d 610 (2d Cir. 1990); see also July 14, 1992 Opinion & Order, slip op., at 10-12 (S.D.N.Y. 1992); October 16, 1991 Memorandum & Order, 777 ...


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