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UNITED STATES v. INTERNATIONAL BHD. OF TEAMSTERS

June 22, 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 CVI 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 who supervised 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 influence of organized crime through the election and disciplinary provisions.

 Application CVI presents for this Court's review the decision of the Independent Administrator finding that the Investigations Officer had proven that Nicholas A. DiGirlamo, bookkeeper for IBT Local 41 in Kansas City, Missouri and for IBT Joint Council 56, brought reproach upon the IBT by knowingly associating with members of the Kansas City La Cosa Nostra ("LCN").

 BACKGROUND

 The Investigations Officer alleged that Mr. DiGirlamo violated Article II, Section 2(a) and Article XIX, Section 7(b) of the IBT Constitution by knowingly associating with Charles Moretina ("C. Moretina"), James Moretina ("J. Moretina"), Peter Joseph Simone ("Simone") and Frank Anthony Tousa ("Tousa"), members of La Cosa Nostra. 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 7(b) is a non-exhaustive list of disciplinary charges that may be filed against IBT members. Charges listed thereunder include violation of the IBT membership oath or the IBT Constitution, and knowing association with a member of a criminal organization. See Article XIX, §§ 7(b)(1), (2), (9).

 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 receiving briefs from the parties to this action and conducting a hearing at which Mr. DiGirlamo was represented by counsel, the Independent Administrator issued a twenty-four page decision. The Independent Administrator found that the Investigations Officer had sustained his burden of proving that Mr. DiGirlamo had "knowingly associated" with C. Moretina, J. Moretina, Simone and Tousa.

 As a penalty for this conduct, the Independent Administrator permanently banished Mr. DiGirlamo from the IBT, stating that "an individual like DiGirlamo, who counts among his associates members of organized crime, has no place in the IBT." Ind.Admin.Dec. at 22. Furthermore, the Independent Administrator exercised his authority to impose sanctions upon Mr. DiGirlamo's employee benefits. *fn1" See December 28, 1990 Memorandum & Order, 753 F. Supp. 1181 (S.D.N.Y. 1990), aff'd, 941 F.2d 1292 (2d Cir.), cert. denied, 112 S. Ct. 76 (1991). The Independent Administrator prohibited the IBT or any affiliate from contributing funds on Mr. DiGirlamo's behalf to any third-party plan of which Mr. DiGirlamo is a member. *fn2" Moreover, the Independent Administrator directed that the IBT or IBT-affiliated entities not make payment of any benefits to Mr. DiGirlamo. This prohibition includes such items as bonuses, local-controlled severance plans or similar payments. Finally, the Independent Administrator prohibited the IBT and IBT-affiliated entities from contributing to Mr. DiGirlamo's legal expenses in connection with the instant disciplinary action.

 Mr. DiGirlamo appeals to this Court the decision of the Independent Administrator. In addition, Mr. DiGirlamo requests that this Court stay imposition of the penalties imposed by the Independent Administrator. This Court finds that the opinion of the Independent Administrator is fully supported by the evidence, and that Mr. DiGirlamo's arguments are devoid of merit. Accordingly, the opinion of the Independent Administrator is affirmed in its entirety. Furthermore, because Mr. DiGirlamo has failed to demonstrate that a stay of the imposition of penalties is appropriate, no stay will issue.

 DISCUSSION

 In reviewing decisions of the Independent Administrator, it is well settled that 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 July 14, 1992 Opinion & Order, slip op., at 10-12 (S.D.N.Y. 1992); July 13, 1992 Opinion & Order, slip op., at 10-12 (S.D.N.Y. 1992); July 9, 1992 Opinion & Order, slip op., at 6-8 (S.D.N.Y. 1992); May 15, 1992 Opinion & Order, slip op., at 13-14 (S.D.N.Y. 1992); April 27, 1992 Memorandum & Order, slip op., at 8-9 (S.D.N.Y. 1992); February 11, 1992 Memorandum & Order, slip op., at 9 (S.D.N.Y 1992); January 20, 1992 Memorandum & Order, 782 F. Supp. 256, 259 (S.D.N.Y 1992); January 16, 1992 Memorandum & Order, slip op., at 6-7 (S.D.N.Y. 1992); November 8, 1991 Memorandum & Order, slip op., at 4-5 (S.D.N.Y. 1991); October 29, 1991 Opinion & Order, 776 F. Supp. 144, 152-53 (S.D.N.Y. 1991), aff'd, 954 F.2d 801 (2d Cir. 1992), cert. denied, 60 U.S.L.W. 3746 (U.S. June 22, 1992); October 25, 1991, Order, slip op., at 4-5 (S.D.N.Y. 1991); October 24, 1991 Memorandum & Order, 777 F. Supp. 1133, 1136 (S.D.N.Y. 1991); October 16, 1991 Memorandum & Order, 777 F. Supp. 1130, 1132 (S.D.N.Y. 1991), aff'd, No. 91-6280 (2d Cir. May 27, 1992); October 11, 1991 Memorandum & Order, 777 F. Supp. 1127, 1128 (S.D.N.Y. 1991), aff'd, No. 91-6292, unpublished slip. op. (2d Cir. Jan. 28, 1992); October 9, 1991 Memorandum & Order, 777 F. Supp. 1123, 1125 (S.D.N.Y. 1991); August 14, 1991 Memorandum & Order, slip op., at 4 (S.D.N.Y. 1991); July 31, 1991 Memorandum & Order, slip op., at 3-4 (S.D.N.Y. 1991), aff'd, No. 91-6200, unpublished slip op. (2d Cir. Jan. 31, 1992); July 18, 1991 Memorandum & Order, slip op., at 3-4 (S.D.N.Y. 1991), aff'd, No. 91-6198, unpublished slip op., (2d Cir. Jan. 31, 1992); July 16, 1991 Opinion & Order, slip op., at 3-4 (S.D.N.Y. 1991); June 6, 1991 Opinion & Order, 775 F. Supp. 90, 93 (S.D.N.Y. 1991), aff'd in relevant part, 948 F.2d 1278 (2d Cir. 1991); May 13, 1991 Memorandum & Order, 764 F. Supp. 817, 820-21 (S.D.N.Y. 1991); May 9, 1991 Memorandum & Order, 764 F. Supp. 797, 800 (S.D.N.Y. 1991) aff'd, No. 91-6144, unpublished slip. op. (2d Cir. Jan. 28, 1992); May 6, 1991 Opinion & Order, 764 F. Supp. 787, 789 (S.D.N.Y.), aff'd, 940 F.2d 648 (2d Cir.), cert. denied, 112 S. Ct. 76 (1991); December 27, 1990 Opinion & Order, 754 F. Supp. 333, 337 (S.D.N.Y. 1990); September 18, 1990 Opinion & Order, 745 F. Supp. 189, 191-92 (S.D.N.Y. 1990); January 17, 1990 Opinion & Order, 728 F. Supp. 1032, 1045-57, aff'd, 907 F.2d 277 (2d Cir. 1990).

 1. Admission of Hearsay Statements

 Mr. DiGirlamo argues that the Independent Administrator's decision was arbitrary and capricious because the Independent Administrator considered hearsay evidence in reaching his decision. However, it is beyond reasonable dispute that "hearsay evidence, if reliable, is admissible in IBT disciplinary proceedings." Oct. 16, 1991 Memorandum & Order, 777 F. Supp. 1130, 1133 (S.D.N.Y. 1991) (citing United States v. IBT, 745 F. Supp. 908, 914-15 (S.D.N.Y. 1990), aff'd, 941 F.2d 1292, 1297 (2d Cir. 1991)). The Independent Administrator carefully considered the hearsay statements in the instant case and found them reliable in that they corroborated each other or were corroborated by independent and reliable sources. For example, while the Independent Administrator considered newspaper reports detailing various individuals' ties to organized crime, he did so only in those situations where several newspaper accounts corroborated each other and were corroborated by information from other sources. Moreover, Mr. DiGirlamo characterizes certain testimony as hearsay -- such as that of FBI Special Agent Scott, see Brief of Nicholas A. DiGirlamo in Opposition to the Decision of the Independent Administrator ("Brief in Opposition") at 10 -- in spite of the fact that Special Agent Scott was available for cross-examination. After examining the hearsay evidence considered by the Independent Administrator, this Court finds that all such evidence considered was intrinsically reliable and was corroborated by independent and unrelated sources. Accordingly, this Court finds that the Independent Administrator's admission of hearsay statements does not render his decision arbitrary and capricious.

 2. Sufficient Evidence Supports the Independent Administrator's Finding That Respondent Knowingly Associated With Individuals Associated With the LCN

 Mr. DiGirlamo next argues that the Independent Administrator's decision was arbitrary and capricious because the evidence adduced at the disciplinary hearing did not show that Mr. DiGirlamo brought reproach on the Union by knowingly associating with members of organized crime. Mr. DiGirlamo presents a two-pronged attack on the Independent Administrator's decision. First, Respondent avers that insufficient evidence was adduced to demonstrate that C. Moretina, J. Moretina, Simone and Tousa are members of La Cosa Nostra. Second, Mr. DiGirlamo contends that any association that he had with C. Moretina, J. Moretina, Simone and Tousa was innocent or familial and therefore did not rise to the level of prohibited "knowing association." Respondent's argument is without merit. The evidence adduced at Mr. DiGirlamo's hearing amply supports the Independent Administrator's finding that Mr. DiGirlamo knowingly associated with these organized crime figures.

 Prohibited knowing association with an organized crime figure is established when contact is purposeful and not incidental or fleeting. See Aug. 27, 1990 Opinion & Order, 745 F. Supp. 908, 918 (S.D.N.Y. 1990), aff'd, 941 F.2d 1292 (2d Cir. 1991), cert. denied, 112 S. Ct. 1161 (1992). Purposeful contacts are prohibited even if no illegal purpose is demonstrated. See April 27, 1992 Memorandum & Order, 791 F. Supp. 421 (S.D.N.Y. 1992). Purposeful contacts may occur in either a business or a social setting. See Aug. 27, 1990 Opinion & Order, 745 F. Supp. 908 (S.D.N.Y. 1990). An examination of the record demonstrates that the Independent Administrator was well within his discretion in finding that Mr. DiGirlamo brought reproach upon the Union by knowingly associating with C. Moretina, J. Moretina, Simone and Tousa in violation of Article II, Section 2(a) and Article XIX, Section 7(b) of the IBT Constitution.

 A. Charles Moretina, James J. Moretina, Peter Joseph Simone and Frank Anthony Tousa Are ...


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