OFFICE OF THE INDEPENDENT HEARING OFFICER
LABORERS' INTERNATIONAL UNION OF NORTH AMERICA
|.IN RE:TRUSTEESHIP PROCEEDINGS||: DOCKET NO|
|CHICAGO DISTRICT COUNCIL||: 97-30T|
ORDER AND MEMORANDUM
This Order and Memorandum addresses the Complaint for Trusteeship ("Complaint") filed on June 13, 1997, by the Laborers' International Union of North America ("LIUNA" or International Union") General Executive Board Attorney (GEB Attorneys) against the Construction & General Laborers' District Council of Chicago and Vicinity ("District Council"). The GEB Attorney brought the Complaint pursuant to Section 3 of the LIUNA Ethics and Disciplinary Procedure ("EDP'') and Article IX, Section 7 of the LIUNA Constitution.
The Complaint arises out of the District Council's alleged association with organized crime in Chicago. In four counts, the Complaint makes general allegations that imposition of a trusteeship is necessary to: ( 1 ) correct corruption and eradicate the influence of organized crime from the District Council; (2) restore democratic procedures; (3) correct financial malpractice; and (4) carry out LIUNA's legitimate objects.
In 18 numbered paragraphs, the Complaint alleges facts that demonstrate a knowing association between the District Council leadership and that of the Chicago organized crime syndicate, the "Chicago Outfit." The Complaint avers that the District Council acts to benefit Chicago Outfit members, associates and relatives by placing and retaining them in union positions, giving them unauthorized Dual salary payments, and committing other financial abuses that inure to the benefit of the Chicago Outfit. Finally, the Complaint alleges that the association of the District Council and Chicago Outfit leadership has resulted in the District
Council's failure to hold democratic elections, to properly appoint trustees to affiliated employee benefit funds, to attempt to rid itself of organized crime or otherwise to comply with the EDP and the LIUNA Constitution.
For the reasons set forth herein, I find that imposition of a trusteeship over the District Council is warranted. The GEB Attorney has established by a preponderance of the evidence, that three current District Council officers are associates or made members of organized crime. Further, the evidence chronicles a history of organized crime influence over the District Council that spans at least 25 years. The knowing association with organized crime has had a direct and indirect effect on democratic process and the selection of District Council officers and trustees to affiliated benefit funds. As a result, organized crime members and associates have received the benefits of union membership and the privileges of holding union office and acting as trustees over union funds worth more than $1 billion.
A trusteeship is necessary to expel the influence of organized crime, restore democratic procedures and otherwise carry out the legitimate business of the union as alleged in the Complaint.
The rulings on the specific allegations of the Complaint are as follows:
The GEB Attorney has proved by a preponderance of the evidence that officers and delegates of the District Council have been or are associates or made members of the Chicago Outfit, as alleged in ¶¶7-8 of the Complaint.
'The factual allegations of the Complaint are set forth in 18 numbered paragraphs, but I have grouped them in my findings to simplify this Order and Memorandum.
The GEB Attorney has not proved that the District Council made threats or attempted bribery to discourage LIUNA's investigation into organized crime, as alleged in¶ 9 of the Complaint.
The GEB Attorney has proved by a preponderance of the evidence that there has been and there is a failure of democratic process in the District Council, as alleged in¶¶ 10-14 of the Complaint.
The GEB Attorney has not proved that the District Council made unauthorized Dual salary" payments, as alleged in ¶ 15 of the Complaint.
The GEB Attorney has not proved that the City of Chicago "no-show" investigation affected the integrity or operation of the District Council, as alleged in ¶ 16 of the Complaint.
The GEB Attorney has proved by a preponderance of the evidence that corrupt individuals were appointed to employee benefit funds affiliated with the District Council, as alleged in ¶11 17 of the Complaint.
The GEB Attorney has proved by a preponderance of the evidence that the District Council has failed and continues to fail to take steps to investigate or eradicate the influence of organized crime from the District Council, as alleged in ¶ 18 of the Complaint.
I. PROCEDURAL HISTORY
The GEB Attorney filed the Complaint on June 13, 1997.
The hearing on the Complaint (trusteeship Hearings) lasted for 19 days, beginning July 16, 1997, and continuing intermittently through October 23, 1997. The record contains 4433 pages of transcript and approximately 250 exhibits offered by the GEB Attorney and the District Council. Both parties filed extensive post-hearing briefs. The District Council was represented
by an experienced and able Chicago labor lawyer. The GEB Attorney was represented by a team of able attorneys. Both parties acquitted themselves well.
II. THE CHICAGO DISTRICT COUNCIL
The District Council represents 21 affiliated local unions throughout the greater Chicago area. The District Council engages in collective bargaining with private contractors and the City of Chicago on behalf of the local unions and their membership. The District Council manages several affiliated benefit funds, worth more than $ 1 billion, on behalf of the members.
III. ORGANIZED CRIME AND THE LABOR MOVEMENT
The issue in this proceeding is whether the District Council has developed close ties with organized crime, and, as a result, organized crime is in a position to control the District Council and dictate decisions affecting the District Council's operation.
There is no doubt that organized crime exists in the United States. Its existence is no longer a shadowy subject alluded to by fiction writers, but a powerful force in the economic marketplace of America.
Although there were reports of organized crime in various areas of the United States dating from the early 1920s, the existence of a national organized crime structure gained media attention in 1957, when a number of individuals were arrested while attending a secret meeting in Appalachia, New York. Sixty-two organized crime leaders from across the United States attended what appeared to be a national conference at the home of Joseph Barbara. Among the attendees was Sam Giancana of Chicago. See Symposium--Perspectives on Organized Crime, 16 Rutgers L. J. 439, 443 n.21 (1985) (hereinafter Symposium). Other attendees included Joseph Bonanno and Vito Genovese of New York City; Antonio Magaddino of Buffalo, New York;
Russell Bufalino of northeast Pennsylvania; and Santos Trafficante of Tampa, Florida. They all were high-ranking members of organized crime. See GEB Ex. 3 (FBI Organized Crime Report. 25 Years After Valachi (1988 ) (hereinafter "Valachi Report")). The investigative efforts that followed revealed an organized crime network that extended across the United States.
Congress held hearings on organized crime in 1967-68 which resulted in the enactment of the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1961, et seq. In passing the RICO statute, Congress made the following findings:
(1) organized crime in the United States is a highly sophisticated, diversified, and widespread activity that annually drains billions of dollars from America's economy by unlawful conduct and the illegal use of force, fraud, and corruption; (2) organized crime derives a major portion of its power through money obtained from such illegal endeavors as syndicated gambling, loan sharking, the theft and fencing of property, the importation and distribution of narcotics . . .; (3) this money and power are increasingly used to infiltrate and corrupt legitimate business and labor unions and to subvert and corrupt our democratic processes; (4) organized crime activities in the United States weaken the stability of the Nation's economic system. . . _
Pub. L. No. 91-452, 1970.
Organized crime's use of labor unions is well-documented. Through control of labor unions, organized crime has directly affected the shipping and construction industries. See,, eg, GEB Ex. 1 (Decl. of Alphonse D'Arco, United States v. Mason Tenders District Council of Greater New York, 94 Civ. 6487 (S.D.N.Y. Oct. 5, 1994)); GEB Ex. 167. In the 1980s, the FBI concluded that the International Longshoremen's Association ("ILA"), Hotel Employees and Restaurant Employees International Union ("HEREIU"), the Intentional Brotherhood of Teamsters ("Teamsters" or "IBT" and LIUNA were substantially influenced and/or controlled
by organized crime." GEB Ex.4(President's Commission on Organized Crime, Report to the President and the Attorney General, The Edge: Organized Crime. Business. and Labor Unions, 98th Congress, 1st and 2d Sess. 208 (1983-84) (hereinafter "PCOC Report")).
As recently as 1996, congressional hearings highlighted the influence of organized crime on labor unions: "La Cosa Nostra placed a lot of individuals in positions of importance like this, and from there they were able to establish themselves in union office-holder positions. Once they gained union office-holder positions, their democratic removal was almost impossible from within the union." Administration's Efforts Against the Influence of Organized Crime in the Laborers' International Union of North America Hearings Before the Sub Comm. on Crime of the Comm. on the Judiciary. House of Rep., 104th Cong., 2d Sess. 37 (statement of Jim E. Moody, former Assistant Director, Federal Bureau of Investigation) (hereinafter I 1996 Judiciary Hearings").
Utilizing the RICO statute, the United States Department of Justice has brought many indictments charging organized crime families as RICO enterprises. See, e g, United States v. Pungitore, 910 F.2d 1084, 1097 (3d Cir. 1990) (involving the Scarfo organized crime family of Philadelphia); United States v. Salerno, 868 F.2d 524, 528 (2d Cir. 1989) (involving a Commission of a number of New York organized crime families).
That there is a national Commission of La Cosa Nostra (FILCH) leaders was dramatically proved in Salerno. In that case, LCN was named as an illegal racketeering enterprise in violation of the RICO statute. Court-authorized electronic surveillance of organized crime leaders revealed that the Commission of LCN existed and acted as a unit for coordinating joint ventures and settling disputes among organized crime units across the country. Salerno, 868 F.2d at 528.
In 1988, the Department of Justice brought a civil RICO suit against the Teamsters alleging that the union was influenced by organized crime. United States v. IBT, 88 Civ.4486 (S.D.N.Y. 1988). On March 14, 1989, the Teamsters and the United States entered into a voluntary consent decree ("Teamsters Consent Decree".) establishing a mechanism and procedure for disciplining union officials who were associated with organized crime. The concept of using civil process to discipline or remove individuals from unions for associating with organized crime was established. As a result, many Teamster officials were removed from office and suspended or expelled from union membership. See, e,g,, United States v. IBT (DiGirlamo), 19 F.3d 816 (2d Cir. 1994); United States v. IBT (Sansone), 981 F.2d 1362 (2d Cir. 1992); United States v. IBT (Cimino), 964 F.2d 1308 (2d Cir. 1992);aff'd United States v. IBT (Cimino) 777 F. Supp. 1130 (S.D.N.Y. 1991); United States v. IBT (Senese & Talerico), 941 F.2d 1292 (2d Cir. 1991), Dog United States v. IBT (Senese & Talerico!, 745 F. Supp. 908 (S.D.N.Y. 1990); United States v. IBT (Friedman & Hughes), 905 F.2d 610 (2d Cir. 1990).
The Department of Justice also used civil sanctions against the ILA, HEREIU and the United Brotherhood of Carpenters and Joiners of America ("Carpenters Union") on both the international and local union levels, for associations with LCN. United States v HEREIU, Civil Action No. 95-596 (GEB) (D.N.J. 1995); United States v ILA, 812 F. Supp. 1303 (S.D.N.Y. 1993); United States v. District Counsel of New York and Vicinity of the Carpenters Union, 90 Civ. 5722 (S.D.N.Y. 1990).
In 1995, LIUNA entered into a voluntary agreement with the United States to reform the union and remove the influence of organized crime. " Agreement" (Feb. 13, 1995). Pursuant to that agreement, LIUNA adopted the Ethical Practices Code ("EPC") and EDP and amended the
LIUNA Constitution to effect these changes. The positions of GEB Attorney, Inspector General ("IG") Independent Hearing Officer ("IHO") were created by these changes. See, LIUNA, Innovation at Work (1996). The present Complaint was filed pursuant to the reform effort.
IV. TRUSTEESHIP REQUIREMENTS
The Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. §§ 461466, empowers an international union to place its member organizations in trusteeship to correct certain problems, provided that the union constitution provides for such procedure and the union follows the procedures The GEB Attorney must establish the grounds for a trusteeship by a preponderance of the evidence. The language of the LIUNA Constitution mirrors that of the LMRDA provision. LIUNA Constitution, art. IX, sec. 7.
The Complaint alleges generally that a trusteeship is necessary to rid the District Council of the influence of organized crime. The EDP permits LIUNA to impose a trusteeship over a subordinate body of LIUNA to correct mismanagement and corruption caused by individuals' barred conduct, including knowingly associating with organized crime.
2Section 462 of the LMRDA provides:
Trusteeships shall be established and administered by a labor organization over a subordinate body only in accordance with the constitution and bylaws of the organization which has assumed trusteeship over the subordinate body and for the purpose of correcting corruption or financial malpractice, assuring the performance of collective bargaining agreements or other duties of a bargaining representative, restoring democratic procedures or otherwise carrying out the legitimate objects of such labor organizations.
3"barred conduct" includes: ( I ) committing any racketeering act as defined under RICO; (2) knowingly associating with a member or associate of LCN; (3) knowingly permitting LCN
Under the EDP, the term "knowingly associate" means that: (a) an individual knew that the person with whom he or she was associating was a member or associate of LCN; (b) the association related directly or indirectly to the affairs of the union; and (c) the association was more than fleeting or casual. EDP, Section 1. An association related directly or indirectly to the affairs of the union was further defined by the IHO in In the Matter of Napoli and Fallacara, IHO 96-65D (1-2) (Sept. 25, 1997) (hereinafter "Fallacara".). There the IHO stated:
The requirement that the association be directly or indirectly related to the affairs of the union will be liberally construed by the IHO to effect the purpose of the EDP. It is apparent from the agreement between LIUNA and the Department of Justice and the text of the EDP and the EPC that the major aim of the reform process is to rid the union of the influence of organized crime. It follows that the drafters of the agreement would not expect that the reform effort will be subjected to unduly restrictive definitions, so as to thwart the plain purpose of the initiative. The phrase directly and indirectly related to the affairs of the union will be construed to encompass any reasonable relationship to the affairs of the union, its members, or its officers.. The relationship to the affairs of the union need not on its face affect the operation of the union; it need only reflect that the "knowing association" permits the undesirable individuals to have easy access to the union officers and members in the total atmosphere of the labor union operation.
Fallacara at 6, ¶ 20.
In the litigation under the Teamsters Consent Decree, the term Knowingly associate" is used as it is in the law governing restrictions on the activities of individuals on parole after conviction. DiGirlamo, 19 F.3d 816. The restrictions on parolees are not limited to associations that involve improper activities, but are designed to penalize the parolees' Calculated choice" to
influence over union affairs; or (4) interfering with the activities of the IG, GEB Attorney or IHO. See EPC, Barred Conduct; EDP, Section 1.
associate with a particular, designated class of prohibited persons
Id at 822.
The International Union previously has placed a large local union under supervision after alleging the local was under the influence of organized crime. In 1995, LIUNA filed a complaint for trusteeship against Local Union 210, Buffalo, New York. See Complaint, In re Local Union 21Q, IHO 95-35T (Dec. 18, 1995). That complaint resulted in a settlement agreement between Local Union 210 and the GEB Attorney, under which the parties agreed to a supervision by an outside supervisor, which is still in effect. See Order, In re Local Union 210 (Feb. 26, 1996); Settlement Agreement (Feb. 22, 1996).
The District Council argues in its post-hearing brief that imposition of a trusteeship is improper because LIUNA's motivating purpose is reprisal against District Council President/Business Manager Bruno Caruso for running against Arthur A. Coia in 1996 for the office of LIUNA General President. See Post Hearing Memorandum for District Council at 109 (hereinafter "CDC Brief,'). The GEB Attorney, however, has alleged and proved by a preponderance of the evidence that a trusteeship is warranted for more than one proper purpose as alleged in the Complaint. A union need establish only one proper purpose to impose a trusteeship. Mason Tenders District Council v. LIUNA, 884 F. Supp. 823, 836 (S.D.N.Y. 1995). Here, as set forth below in Section Vl, the GEB Attorney has established that a trusteeship is necessary to rid the District Council of the influence of organized crime, restore democratic procedures and otherwise carry out the legitimate business of the union.
V. EVIDENTIARY CONSIDERATIONS
The District Council argues in its post-hearing brief that it was denied a full and fair hearing because the GEB Attorney failed to produce prior statements of its witnesses in a procedure similar to that required by the Jencks Act, 18 U.S.C. § 3500. See CDC Brief at 10001. The Jencks Act, however, applies only to criminal proceedings brought by the United States. 18 U.S.C. § 3500(a). The United States Department of Justice is not a party to this proceeding, and no federal or state action is implicated.
It is well-established that a trusteeship hearing "need not include all of the formalities of a judicial proceeding." Becker . Industrial Union of Marine and Shipbuilding Workers of America. AFL-CIO, 900 F.2d 761, 770 (4th Cir. 1990). Moreover, in labor arbitrations such as this, there is no right to discovery as in a formal civil case or even an administrative hearing. Hardy v. International Brotherhood of Boilermakers. Iron Ship Builders. Blacksmiths. Forgers. and Helpers, 682 F. Supp. 1323, 1328-29 (E.D. Pa. 1988); Order, In re Local Union 210 (Jan. 23, 1996). In an analogous matter, a federal appeals court has held that Procedural Due Process concepts applicable to criminal cases do not apply to union disciplinary proceedings.See Senese & Talerico, 941 F.2d at 1296-98.
B. Stale evidence
The District Council notes that a trusteeship is proper only to correct "an existing cause," not past improprieties. CDC Brief at 7. The District Council emphasizes that much of the GEB Attorney's proof involves events that occurred before 1987 and that imposition of a trusteeship is improper because the GEB Attorney submitted insufficient proof of current Chicago Outfit
influence over the District Council. Contrary to the District Council's assertions, however, the GEB Attorney offered sufficient competent evidence to establish the Chicago Outfit's substantial presence on the District Council today. Em ink. Section VI,¶¶ 36- 195.
Evidence regarding events that occurred in the 1970s through the late 1980s, while not determinative, does have probative value. First, the duration and quality of the contacts over the years between current members of the District Council and known Chicago Outfit figures is evidence of an improper association with organized crime. Senese & Talerico, 745 F. Supp. at 918; Fallacara, supra. Second, the 25-year pattern of undemocratic procedures, in which several of the current District Council officers with organized crime ties have played a role, is evidence that the Chicago Outfit is embedded in the District Council to this day. ~ infra. Section VI, 197-224. Once established, the strong influence of organized crime does not undergo a sea change and suddenly disappear of its own volition. 1996 Judiciary Hearings at 37-39, 71 (statements of Moody).
C. Hearsay evidence
The IHO, like all labor arbitrators, must base his decision on reliable evidence. As is the practice and custom of labor arbitrators, the IHO must engage in a thorough review of what is probative and reliable. The fact that a document or certain testimony admitted during the proceeding does not guarantee that, after the close of the record, it will be deemed probative.
Certain criteria will be followed in this evaluation process.
Reliable hearsay evidence is admissible in labor arbitrations. Associated Cleaning Consultants and International Brotherhood of Printing and Allied Trades Local 327. 94 LA 1246 (1990); Order and Memorandum, In the Matter of Joseph P. Crincoli, IHO 97-04D (Oct. 27,
1997); Elkouri and Elkouri, How Arbitration Works (4th ed. 1994). Hearsay evidence has been admitted regularly in union disciplinary proceedings arising under the Teamsters Consent Decree. Cimino, 964 F.2d at 1312; Senese & Talerico, 941 F.2d at 1297. The test is whether the evidence is reliable. Senese & Talerico. 941 F.2d at 1298 (citing Richardson v. Perales, 402 U.S. 389, 402 (1971)).
In Cimino, 964 F.2d at 1312, the court gave evidentiary weight to hearsay declarations of three LCN members that were related by an agent of the Federal Bureau of Investigation ("FBI"). The court used a number of factors to evaluate the reliability of the statements. The court noted that the statements corroborated each other in crucial respects, the reports painted a consistent picture of the relationship of the individuals, and the statements matched the FBI agent's declaration in the same subject matter. The court held that these declarations constituted relevant evidence that a reasonable mind might accept on the subject of association with organized crime.
In a LIUNA trusteeship hearing, the same reliability criteria for hearsay apply as in a disciplinary hearing; however, in some particular circumstances, information from a confidential informant related by a witness is also admissible. ~ Crincoli, supra. The information must be related by a current or former law enforcement professional, and the informant must be qualified as reliable by a recognized method for testing reliability. Id (discussing the difference between reliable testimony from a qualified informant and testimony from a witness who merely refuses to be named).
Contrary to the District Council's assertion that the GEB Attorney was required to disclose the identities of the confidential sources, maintaining the secrecy of informants'
identities is appropriate under these circumstances. Here, the GEB Attorney witness, a former agent of the FBI, qualified each confidential informant using accepted standards, requiring that each be a proven, reliable witness who has inside information about organized crime. Tr. 232. These circumstances are distinguishable from those of Crincoli, supra, where the witness merely summarized the testimony of several unidentified witnesses without demonstrating their reliability.
D. Academic Opinion Evidence
During the Trusteeship Hearing both parties called as a witness a labor law professor. Tr. 1848-1939, 4343-4423. The witnesses' credentials were impressive, and the lengthy testimony of each was interesting. In the end, the professors' testimony did not advance either party's position and was not helpful.
E. Credibility of Certain Witnesses
The GEB Attorney called, among others, John O'Rourke, Thomas Bohling, John Dineen, Robert Pecoraro, Gene Scaramella, Ronald M. Fino, Robert Cooley, Charles Francis Bills and Michael Corbitt. The GEB Attorney also relied upon statements of Ken Eto, a former high-ranking Chicago Outfit associate who became a government witness after a failed attempt on his life. Their backgrounds require comment for a better understanding of their testimony.
John O'Rourke served with the FBI for more than 25 years. Tr. 219-21. From 1973 through 1995, O'Rourke worked in the FBI Chicago office investigating organized crime. Id. After retiring from the FBI in 1995, O'Rourke spent 18 months as an inspector in the Cook County Sheriff s Office, assigned to the FBI task force primarily engaged in investigating
organized crime in Chicago. Id O'Rourke testified in this proceeding in the capacity of an expert in criminal investigations and organized crime matters. This technique has been accepted in similar union disciplinary matters. See. eg, Senese, 745 F. Supp. at 914-15.
In his investigation, O'Rourke used tested and accepted investigative techniques to verify the credibility of the informants whose information he related. Tr. 231-32. O'Rourke related information and hearsay statements of eight named individuals and 11 others he defined as reliable, confidential informants. Tr. 287-333. Before concluding that an individual named in the Complaint was an associate or made member of the Chicago Outfit, O'Rourke required the independent statement of two reliable witnesses who themselves were mob associates. Tr. 231. When O'Rourke used information from confidential informants to corroborate statements of named witnesses, he relied upon no fewer than five confidential informants. See infra ¶¶ 50, 70, 90, 146, 170, 189. This corroboration renders O'Rourke's conclusions reliable.
I find that O'Rourke is a qualified witness, expert in criminal investigations and organized crime matters, and his testimony, in conformance with accepted investigative techniques, is reliable.
O'Rourke related information given to him by eight named individuals, all of whom, with the exception of one, have cooperated with federal authorities. It is appropriate that their background and experience be examined at this point.
Joseph Granata is a member of the Cicero Crew4 and the son of Frank Granata Sr., a Chicago Outfit member who operated the Galewood Funeral Home. Tr. 289. Granata's brother, Frank Granata Jr., also is a member of the Chicago Outfit. Id, Granata became a cooperating witness for the FBI and wore a recording device during conversations with narcotics dealers and individuals involved in murder for hire. Tr. 289-90. O'Rourke spoke to Granata as recently as July 14, 1997. Tr. 289-91. Granata's information has been verified independently and has been found to be reliable by O'Rourke and other law enforcement agents.
James Peter Basile
James Peter "Duke" Basile was a collector and enforcer for the Cicero Crew and worked with Jerry Scarpelli, Tony Borsellino, Butch Petrocelli, Michael Sarno and several other members of the Crew. Tr. 294. Basile agreed to cooperate with the FBI in an undercover capacity for two years between 1986-88 and wore a concealed body recorder at meetings with Chicago Outfit members. Tr. 294-95. Basile gave inside information on robberies and murders. His information was always reliable as he was in a position to observe the criminal activities of the Chicago Outfit. O'Rourke spoke to Basile about Chicago Outfit activities in 1996. Tr. 29496. Basile's information has been verified independently and has been found to be reliable by O'Rourke and other law enforcement agents.
4The description of the Chicago Outfit, including the makeup and operation of the crews, is set forth infra Section VI,¶¶ 12-35.
Leonard Patrick was an associate of the Chicago Outfit for more than 50 years. Tr. 297. At the direction of mob boss Sam Giancana, Patrick reported to Gus Alex. Id Patrick was a conduit for major bookmakers on the West Side, and then later on the North Side of Chicago. Tr. 297-98.
In 1991, Patrick was indicted, along with Mario Rainone, Gus Alex and Nicholas Gio, on RICO charges alleging acts of arson, intimidation and extortion by the North Side Crew. Tr. 298; GEB Ex. 19 (United States v. Rainone, 32 F.3d 1203 (7th Cir. 1994)). In that case, Patrick pled guilty and testified against his co-defendants. Rainone, 32 F.3d at 1205. Patrick thereafter testified in other criminal cases in which convictions were obtained, including the prosecution of Sam Carlisi and more than a dozen co-defendants.5 Tr. 292, 298. O'Rourke debriefed Patrick extensively during 1990-91 about the structure of organized crime in Chicago. Tr. 297-300. This information has been verified independently and has been found to be reliable by O'Rourke and other law enforcement agents.
James La Valley
James LaValley was a collector and enforcer for the Chicago Outfit. Tr. 291. He worked for Leonard Patrick, Mario Rainone and Gus Alex; his partner was Nick Gio. ~ LaValley was indicted after an FBI investigation and agreed to cooperate. Tr. 291-92. He provided information and testified in several trials, including Rainone, supra. LaValley also testified in the Sam Carlisi trial. Tr. 292. Beginning in 1988 and as recently as September 1996, LaValley
5The case is described infra ¶ 15.
provided O'Rourke with information on the structure of organized crime in Chicago. Tr. 292-94. This information has been verified independently and has been found to be reliable by O'Rourke and other law enforcement agents. I5L
Umberto Fillippi was born in Italy and came to live in Chicago. Tr. 301. Fillippi was a professional waiter and a friend of Sal Mango (also known as Sal Termini). Id Fillippi became Mango's confidant, driver, cook and helper when Mango became terminally ill with cancer. Id While in Mango's company, Fillippi saw Mango meet with many Chicago organized crime figures. Fillippi provided information on organized crime issues as recently as 1996. Id This information has been verified independently and has been found to be reliable by O'Rourke and other law enforcement agents.
Richard Mara is a former resident of the 26th Street neighborhood and ex-member of the 26th Street Crew. Tr. 262. Mara was a burglar, armed robber and cartage thief who operated in the 1960s and 1970s. Ii Mara testified in a theft from interstate shipment case in federal court and was a cooperating witness in an investigation in which he was a subject. Tr. 263. Because of Mara's cooperation and testimony, all of the defendants entered guilty pleas before trial. ~ Mara entered the witness protection program in the early 1980s. Tr. 263-64. Mara's information has been verified independently and has been found to be reliable by O'Rourke and other law enforcement agents.
William Wemette was a member of the North Side Crew, operated a pornographic bookstore, and was an FBI informant for approximately 20 years. Tr. 302. He collected street tax payments for the Chicago Outfit and later testified at the federal trial of Frank Schweihs and Mandy Daddino, both of whom were convicted and given prison sentences. Tr. 302-03. In 1994-95, O'Rourke interviewed Wemette about organized crime activities. Id Wemette's information has been verified independently and has been found to be reliable by O'Rourke and other law enforcement agents.
Sam Louis is a former Chicago police officer (1971-81) and former business agent for the HEREIU. Tr. 303-05, 413-15. In 1997, O'Rourke interviewed Louis about organized crime activities and testified in this proceeding about statements Louis allegedly made during those interviews. ~
The District Council called Louis as a witness to contradict O'Rourke's testimony that Louis told him that James DiForti and John Matassa Ir. were made members of the Chicago Outfit. Louis denied having made the statement to O'Rourke. Tr. 433640. The District Council argues that this testimony casts doubt on all of O'Rourke's testimony regarding informants. Louis' denial does not carry such weight. Louis admitted to speaking with O'Rourke on at least two occasions, and admitted to knowing Matassa, but denied knowing or hearing of DiForti. Tr. 4338-39. Louis' direct and cross examinations indicate he was a reluctant witness who was evasive, and at times purposely unresponsive. Tr. 4320-43. His cross examination testimony, though evasive, indicates he knew many of the respondents in this
matter, and that he was in a position to know whether they were associates of organized crime. Tr. 432340. I find that Louis did make the statements to O'Rourke, but repudiated them when his identity was revealed.
Although I do not find that Louis' denials undercut the testimony of O'Rourke, I will not rely upon Louis' testimony at the hearing or any of the statements attributed to Louis by O'Rourke.
William Jahoda was a Chicago Outfit member in the 1 980s in charge of the gambling operations for the Cicero Crew. Tr. 305. Jahoda then became a cooperating witness, was debriefed extensively by the Internal Revenue Service and FBI, and wore a concealed body recorder. Id. Jahoda testified against Rocco Infelise and approximately 20 members of the Cicero Crew, all of whom were found guilty. United States v. Infelise, 835 F. Supp. 1466 (N.D. III. 1993). Jahoda has provided information to the FBI about the structure of the Chicago Outfit. Tr. 307. Jahoda provided information to O'Rourke on September 9, 1996. Tr. 301-07. This information has been verified independently and has been found to be reliable by O'Rourke and other law enforcement agents.
O'Rourke testified about 11 confidential informants, upon which he relied to form some of his opinions contained in his testimony. As seen below, O'Rourke did not use consecutive numbers to identify the confidential informants.
Confidential Informant 1 is a Chicago Outfit associate who had conversations over a period of 40 years with Anthony Accardo, Joseph Aiuppa and Joseph Ferriola6 and who provided information to O'Rourke from 1988 to 1996. Tr. 318-20.
Confidential Informant 2 is a mob associate and former burglar and jewel thief who knew Tony Spilotro and Joseph Lombardo Sr. Tr. 321. This informant has provided information to O'Rourke from 1968 to the present. Tr. 321-22.
Confidential Informant 5 is a mob associate who was affiliated with the Cicero Crew, has worked in the past as a burglar, armed robber, and enforcer and is currently employed by the City of Chicago. Tr. 322. He provided information to O'Rourke before and after O'Rourke left the FBI. Id
Confidential Informant 6 is a mob associate who worked in the 26th Street/Chinatown Crew's gambling operations, worked in connection with the Cicero Crew and was in regular contact with Michael Sarno, Sal Gruttadauro, Duke Basile, and Jerry Scarpelli. Tr. 323. O'Rourke testified that Confidential Informant 6 has provided information from 1985 to the present. Ill. His information was used to obtain search warrants and Title III wiretaps which resulted in the arrest and conviction of mob members in the Infelise case. Id.
Confidential Informant 7 is a mob associate who worked for Cook County and was in contact with Al Pilotto, Al Tocco, Jerry Scarpelli, Jerry Scalise, Duke Basile, Salvatore Molly" Delaurantis and Rocco Infelise over a number of years. Tr. 324-25. This informant's
6The organized crime figures listed in this subheading will be described further in findings 12-195, infra.
information was used to support search warrants and Title III affidavits over a number of years and led to the arrest of several Cicero Crew members. Id.
Confidential Informant 9 provided O'Rourke with information only for this proceeding. O'Rourke stated that Confidential Informant 9 is from the 26th Street/Chinatown area and has limited knowledge of organized crime. Tr. 325.
Confidential Informant 10 is an organized crime associate familiar with the North Side Crew and has been an FBI informant since the late 1970s. Tr. 325-26. Confidential Informant 10 provided information to O'Rourke only for this proceeding. Id
Confidential Informant 11, although not a mob associate, has personal knowledge of organized crime activity through his direct contacts with several organized crime members. Tr. 326-27. He provided accurate information to the FBI over a period of years. Ii He provided information to O'Rourke before and after O'Rourke left the FBI.
Confidential Informant 12 is a mob associate who was affiliated with the Elmwood Park Crew. Tr. 327. He was in personal contact with Chicago Outfit members Marco D'Amico, John DiFronzo and Peter DiFronzo, among others. Id He provided information to O'Rourke before and after O'Rourke left the FBI. Id
Confidential Informant 13 is an associate of the Elmwood Park Crew who provided information to both O'Rourke and the FBI in the 1990s and as recently as July 1997. Tr. 328.
Confidential Informant 14 had contact with high-ranking Chicago Outfit members such as Joseph Aiuppa and Tony Spilotro. id, He provided information to O'Rourke before and after O'Rourke left the FBI.
Thomas Bohling has been commanding officer the Cook County Sheriff's Office for approximately three years involved in, among other duties, organized crime cases. .Tr. 531 -32. Prior to his position with Cook County, Bohling spent approximately 20 years with the Chicago Police Department investigating prostitution, obscenity and gambling, and acquired an understanding of the influence of organized crime in those areas. Tr. 532-37. In particular, Bohling's work in pornography investigations brought him into contact with Michael Glitta and Tommy Matassa. Tr. 538-42.
John Dineen was a member of the Chicago Police Department for 38 years, from 1959 until his retirement in 1997. Tr. 674. In 1963, Dineen was promoted to detective and worked in the homicide section on the West Side of Chicago, and in 1967 began work in the intelligence division where he concentrated on organized crime-related matters. Tr. 675-76. In that capacity, Dineen worked as a street officer conducting surveillance of suspected Chicago Outfit associates. , Dineen also worked in the gambling squad in the late 1960s and early 1970s. Tr. 676-77. From 1979 through 1993, Dineen was president of the Fraternal Order of Police, and during that period of time did not participate in regular police duties. Tr. 677-78. In 1993, he returned to intelligence work, which involved conducting surveillance of known or suspected organized crime figures, coordinating his efforts with the Cook County Sheriff's Office and the FBI. Tr. 677-79.
Robert Pecoraro became an FBI special agent in 1970. Tr. 621 -22. He spent his first 18 months in Louisville, Kentucky, and Oklahoma City, transferred to New York City in 1972, and then moved to Chicago in 1978, where he worked until his retirement in 1993. Tr. 622. Beginning in 1972, Pecoraro worked as an agent in the organized crime unit, first in New York. and then in Chicago. Id. From 1978 until approximately 1981, Pecoraro was assigned to the downtown Chicago organized crime squad, and then covered the south suburbs until his retirementinl993. Tr.622-23.
Pecoraro's work included various RICO and other cases leading to convictions of organized crime figures. Tr. 622. For the past two years, Pecoraro has been employed by a major insurance carrier in its special investigations unit. Tr. 616.
Gene Scaramella has been in law enforcement for 16 years. Tr. 757-58. From 1981 -86 he served in the Arlington Heights Police Department, and then served in the Chicago Police Department as a patrol officer from 1986-91. Tr. 758. In 1991, Scaramella became a detective in the organized crime division where he conducted surveillance of suspected and reputed Chicago Outfit members. Tr. 758-59. At the request of the commander of the intelligence division and with the help of Dineen, over an 18-month period Scaramella updated all of the police records concerning the Chicago Outfit. Tr. 755.
As a result of his police work and his project compiling Chicago Outfit members, Scaramella has an in-depth understanding of the Chicago Outfit. Tr. 762-63.
Currently Scaramella is a detective for the Cook County Sheriff's Office the special operations unit and is also the director of the Office of Organized Crime Research. Tr. 757. He is an adjunct professor in the criminal justice department of the University of Illinois. Id
Ronald M Fino
Ronald M. Fino became a LIUNA member in 1964 and was Business Manager of Local Union 210, Buffalo, from 1973 until early 1988. Tr. 1411-13; see a1so 1996 Judiciary Hearings at 80-81. In the 1970s, Fino's father was the acting boss of the Buffalo crime family. Fino became an FBI informant in 1971, and provided the FBI with information regarding Local 210 for 18 years, including the entire time he was Local 210 Business Manager. Tr. 1410-12.
Fino testified extensively in In the Matter of Bifulco. et al., IHO 95-48D (I -28) (1995), a LIUNA disciplinary hearing involving 28 LIUNA members. The decision in that matter is pending. Fino's position in LIUNA Local 210 and his access to the highest-ranking members of the Buffalo mob, as well as other families in other cities, including Chicago, give his testimony credibility in this matter. His information has been verified independently and has been found to be reliable.
Robert Cooley testified extensively during the Trusteeship Hearing regarding the structure of organized crime, First Ward politics, and the involvement of several of the District Council members in organized crime matters. Cooley was a Chicago police officer from 1962 to 1970. Tr. 825. Over five years while working as a full-time police officer, Cooley attended law school at night and became a licensed Illinois attorney in 1970. Tr. 84648. Cooley is now in the federal witness protection program. Tr. 821.
Cooley's position as a police officer the 1960s and 1970s, and then as an attorney during the 1970s and 1980s, gave him access into the world of organized crime and made him privy to a wealth of information. Cooley took bribes as a police officer.. Tr. 824-25. During his legal career, Cooley worked for various members of the Chicago Outfit and, from the beginning of his practice, "fixed" court cases. Tr. 1066-67. In the mid- 1970s, Cooley's law partner was John D'Arco Jr.7 Tr. 857-58.
Cooley's initial contact with the Department of Justice lends credibility to his testimony. Cooley had no compelling reason to contact the Department of Justice and confess his illegal activities. Tr. 1016-20. When Cooley began cooperating with the Department of Justice he was not the subject of any investigations, warrants, or criminal complaints. Id Although the District Council suggests that an outstanding gambling debt was the motivation for Cooley's cooperation, I find that Cooley's debt was, relatively speaking, not significant enough to be considered a catalyst for Cooley's actions. Tr. 1093-96.
Most important, Cooley's long-term cooperation with the Department of Justice, beginning in 1986, led to many federal convictions. Tr. 806- 19. Cooley surreptitiously recorded conversations for the FBI for approximately three years in a project known as "Greylord." At. More than 100 tape recordings were made. Tr. 819. He cooperated at great personal risk. He
7D'Arco Jr. is the son of John D'Arco Sr., a First Ward Alderman in the 1950s who had close ties to the Chicago Outfit. See infra 30-33.
testified in seven trials regarding corruption in the court system and organized crime in the City of Chicago. In each all of the defendants were convicted.8 Tr. 806-19.
Based on the foregoing, I find that Cooley's position as a police officer, and later as a lawyer, the manner of his cooperation, and the quality and quantity of his testimony in several major federal trials qualify Cooley as a credible witness. His information has been verified independently and has been found to be reliable.
Charles Francis Bills
Charles Francis "Guy" Bills was born and raised in Chicago. Tr. 1106-07. Bills' father, Charles "Duckie" Bills, was a bookmaker associated with the 26th Street Crew. Tr. 1119-21. For years Duckie Bills was a friend of Gus Alex, who ran organized crime activities in the Chicago Loop area and was influential in Chicago's First Ward in the 1970s. Tr. 1121-23. Bills' father was shot and wounded by Angelo LaPietra. later the head of the 26th Street Crew, after a fistfight with LaPietra. Tr. 1233-34, 1280-81.
Bills has a long history of criminal activity. In the early 1970s, Bills served time for trafficking in stolen goods. Tr. 1116. He was also convicted of transporting stolen automobiles over state lines and was later convicted of a RICO offense. Tr. I 117- 18.
8Cooled testified in United States v. Lee On Leong, United States v. John D'Arco. Jr., United States v. Stillo, United States v. Lucious Robbinson, United States v. Tom Maloney and Robert McGee, United States v. Pat Marcy and Fred Roti and United States v. David Shields and Pat DeLeo.
Bills was associated with the 26th Street Crew. Tr. 1110, 1236. Bills made juice loans for LaPietra, collected street tax from car thieves and chop shop operators and was involved in gambling.9 Tr. 124245. Bills testified that he owned, and stole cars for, a chop shop. Tr. 1115.
Bills was prepared to testify in United States v. Frank Calabrese. Sr., but Calabrese pled guilty. GEB Ex. 24. In Spring 1997, Bills provided testimony against Philip J. Fiori, who was found guilty. Tr. 1186, 1191. Bills' information has been verified independently and has been found to be reliable.
Michael Corbitt was a Willow Springs, Illinois, police officer beginning in 1965, and police chief from 1973 through 1981. Corbitt Tr. 8-10. After leaving the police force, Corbitt worked as an investigator for the Clerk of Court of Cook County until 1987, when he was indicted on RICO charges related to his participation in organized crime chop shop and bookmaking operations. Corbitt Tr. 5-9. He was convicted on those charges in 1988. He was convicted in a second prosecution on RICO conspiracy charges related to his part in hiding the body of Diane Masters, the wife of a politically influential south suburban businessman, after she was murdered.10 Corbitt Tr. 5-6. At the time he testified before the IHO at a federal correctional facility, Corbitt had served 10 years of a 20-year sentence. He will be eligible for parole in less than two years. Corbitt Tr. 7.
9UJuice loan," chop shop" and street tax" are defined infra ¶11 .
10Corbitt testified that he assisted in covering up the murder by putting Masters' body in a Cadillac and dumping the car into a canal. Corbitt Tr. 125.
Corbitt admittedly associated with the Chicago Outfit from his first day on the job with the Willow Springs police force. Corbitt Tr. 11. Corbitt testified that Sam Giancana, head of the Chicago Outfit at the time, secured Corbitt's job as a policeman, and said "[w]ell, if it works out good, just remember your friends, just remember who put you in this position." Corbitt Tr. 1920.
Corbitt testified at the Trusteeship Hearing that he agreed to cooperate with the GEB Attorney's investigation because he believes that the Chicago Outfit has turned against him. Corbitt Tr. 115-16. Although the GEB Attorney has offered to inform Corbitt's sentencing judge of Corbitt's cooperation in this matter, it is unlikely that the GEB Attorney's offer influenced Corbitt's testimony, inasmuch as Corbitt already has served most of his sentence.
Corbitt's testimony detailed his associations with and activities of several individuals affiliated with the Chicago Outfit, including Sam Giancana, Vincent Solano, Al Pilotto, Pat Marcy, Fred Roti and Bruno Caruso. His testimony is corroborated by other evidence of record and by other witnesses in material aspects. Based on Corbitt's detailed testimony, close association with the mob and the corroboration of his testimony, I find that Corbitt's testimony in this matter is credible.
Ken Eto was long-recognized by law enforcement authorities as a high-ranking mob associate in the North Side Crew. Tr. 365. On February 10, 1983, Eto was shot three times in the back of the head by John Gattuso and Jasper Campise. GEB Ex. 4, Tab "Ken Eto Testimony"; GEB Ex. 73. He survived the shooting and became a government informant,
providing the FBI with details about the inner-workings and structure of the North Side Crew. Id.
Eto told authorities that he, Gattuso and Campise had been on their way to meet Vincent Solano for dinner when Gattuso and Campise shot him. Eto testified that he believed that Solano ordered Eto killed because Solano suspected Eto was cooperating with the government. GEB Ex. 73. On July 14, 1983, the mangled bodies of Campise and Gattuso were found in the trunk of a car in Naperville, Illinois. GEB Ex. 73.
Eto has provided testimony in several trials and before the President's Commission on Organized Crime ("PCOC"). See GEB Ex. 4, Tab "Ken Eto Testimony." Based upon his former position in the organized crime hierarchy, and the manner in which he began to cooperate, I find his testimony is credible. His information has been verified independently and has been found to be reliable.
VI. FINDINGS OF FACT
Structure of Organized Crime
1. La Cosa Nostra is a tightly structured criminal organization which operates in various cities throughout the United States. It is in the business of crime for a profit.
2. The LCN of today had its origins in secret societies formed in Sicily and southern Italy in the late 1 9th Century. See Symposium at 440. Similar secret societies emerged in the United States toward the end of the 1 9th Century. LL These societies were the antecedents of the present LCN. Id at 441.
3. In the late 1 930s, one criminal group attempted to form an alliance of all the groups involved in bootlegging. See jet, at 441 (citing D. Cressey, Theft of the Nation: The
Structure and Operations of Organized Crime in America (1969)). A power struggle erupted between Sicilian and non-Sicilian groups. The struggle led to a violent, private vendetta known as the Castellammarese War in New York. Id, .
4. The war began in April 1931 and lasted through September 1931. During September 1931, in a three-day period, 40 Italian or Sicilian organized crime leaders were murdered. Id. at 442. The structure of the Italian-Sicilian organized crime organization in the United States today was created by a peace treaty ending the Castellammarese War. The resulting confederation became known as LCN. Id.
5. La Cosa Nostra is comprised of groups of individuals organized into entities called families.
6. A number of such families are located across the country, including New York City, Buffalo, and Milwaukee. In Chicago, the group is not known as a family, but the Chicago Outfit.
7. The hierarchy of the leadership of each LCN family consists of the head (the "Boss"), his assistant (the "underboss"), and an advisor (the "consigliere"). The boss, underboss, and consigliere oversee the activities of LCN members and their associates.
8. La Cosa Nostra members within the family operate in small groups called "crews" which are headed by men called "capon or Crew bosses."
9. A "made member" has undergone an initiation ceremony conducted with specific rituals and formalities. Tr. 185, 226; Fallacara at 4, ~ 12-13. Members share in the profits of the organization and have the ability to operate their own crews. Tr. 226.
10. A mob "associate" is one who works on behalf of made members and facilitates mob activities. Associates either run day-to-day illegal operations for the mob or are in legitimate business under the control and influence of organized crime. Tr. 227-28; Fallacara at 3,¶ 11.
11. As used in this opinion, Street tax" is extortionate money paid to the Chicago Outfit by individuals involved in illegal activities. Tr. 233. A Chop shop" is a salvage yard where stolen cars are dismantled and their parts sold in an illegal market. Id A "juice loan" is an illegal loan made at extraordinary rates, the interest on which is collected weekly with threats of physical harm for non-payment. Tr. 234-35.
Structure of the Chicago Outfit11
12. The Chicago Outfit is headed by a boss who oversees the activities of a number of crews defined geographically. Each crew's territory is fairly well-defined, although the areas have expanded, contracted or overlapped somewhat over the years.
13. Sam Giancana was the boss of the Chicago Outfit from approximately 1956 until 1968, when he fled to Mexico after being jailed for a year for refusing to testify before a federal grand jury during his leadership of the Chicago Outfit. Giancana was described by one writer as The most powerful archcriminal in the worlds when he was the head of the Chicago Outfit. Ovid Demaris, Captive City at 4 (1969). Giancana returned to Chicago in 1974, but was killed shortly thereafter when he attempted to return to power in the Chicago Outfit.
11Additional support for findings 12 through 35 is supplied in findings 36 through l9S,
14. In the mid- to late-1970s, Anthony Accardo headed the Chicago Outfit, aided by two underbosses, Joseph Aiuppa and Jack Cerone Sr. GEB Ex. 4, Tab "Ken Eto Testimony"; Tr. 85, 686. In the mid-1980s, Accardo retired and Aiuppa succeeded him. Tr. 266. In 1986, Aiuppa and Cerone were sentenced to prison after being convicted of interstate gambling charges; at the time, Joseph Ferriola briefly took Aiuppa's place as head of the Chicago Outfit. GEB Ex. 167 at 81.
15. After Aiuppa was convicted and Ferriola became ill, Sam Carlisi took over as head of the Chicago Outfit, aided by underboss James Marcello. Tr. 261, 720, 1560; see 61~ GEB Ex. 49. James' brother, Michael Marcello, assisted James with gambling operations. Tr. 721. In 1992, Carlisi and James Marcello were indicted on RICO charges arising out of their illegal gambling, juice loan and street tax collection activities. GEB Ex. 27. Both were convicted. James Marcello is still in prison; Carlisi died there. Carlisi was the brother of Roy Carlisi, who was, until his death, a high-ranking member of the Buffalo LCN. Tr. 1507.
16. Historically, the Cicero Crew has encompassed Cicero and the western suburbs of Chicago. Tr. 236. In the mid- to late-1970s, Joseph Ferriola became the boss of the Cicero Crew. ~ Infelise, 835 F. Supp. at 1478. After Ferriola became debilitated with heart disease, Rocco Infelise became crew boss. GEB Ex. 49; Infelise, 835 F. Supp. at 1480. Members or associates have included Joe Granata, Duke Basile, William Jahoda and Solly Delaurantis.
Granata and Jahoda have been government informants and supplied information to O'Rourke for this proceeding. Delaurantis, an enforcer, is serving a prison sentence for a RICO conviction. Tr. 696.
17. The Elmwood Park Crew is based in a nearby western suburb of Chicago. John DiFronzo was the crew boss as of 1988. GEB Ex. 49. Other members or associates have included Marco D'Amico, Frank Granata (brother of Cicero Crew associate Joseph Granata), Roland Borelli, and Joseph Spadavecchio. Tr. 256, 289, 328, 417, 696, 830, 852, 997-98, 1182. D'Amico referred mob-related clients to Robert Cooley when Cooley was a practicing lawyer. Tr. 848-50. D'Amico was second-in-command until his guilty plea to RICO charges arising in 1994 from his organized crime activities. GEB Ex. 31. Spadavecchio, an Elmwood Park Crew supervisor, was an associate of Donald Angelini and Dominick Cortina, both of whom were convicted of gambling offenses. Tr. 696. In 1995, Borelli pled guilty to bookmaking offenses involving D'Amico, Robert Abbinanti, Cooley and others. GEB Ex. 22, 23.
18. The Grand Avenue Crew encompasses a neighborhood in western Chicago near North Grand Avenue. Joseph Lombardo Sr. was the boss of the Crew in the mid- to late- 1970s until he was convicted on federal charges and sentenced to prison. Tr. 261, 341; GEB Ex. 49. Other members or associates included Tony Spilotro, William Wemette and Joseph "Caesar" DiVarco. Tr. 268, 274.
19. The Rush Street or North Side Crew encompasses the Near North Side of Chicago. Dominic DiBella was boss of the Crew until his death, when Vincent Solano took over, continuing as boss through the mid- to late-1980s. Tr. 336; Corbitt Tr. 71; GEB Ex. 49. Solano was also the President of LIUNA Local I and a member of the District Council. At the time, members and associates of the North Side Crew included Caesar DiVarco, Joe Arnold, Jaspar Campise, Johnny Gattuso and Michael Glitta. Tr. 274, 538.
20. Apparently, there is some overlap in the jurisdiction of the Grand Avenue and North Side crews. For example, Wemette and DiVarco have been identified with both crews. Tr. 274, 302.
21. In the 1980s, Michael Glitta was the street boss of the North Side Crew working under Solano and collecting street tax for the Chicago Outfit from pornographic bookstores. Tr. 538, 709; GEB Ex 5 at 177; GEB Ex. 98 at 2.
22. Beginning in approximately the 1970s, John Matassa became affiliated with the Chicago Outfit and the North Side Crew; he became a made member by at least 1989. Tr. 397, 418-19. At the time, Sal Gruttadauro and Frank "Babe" DeMonte, also LIUNA officials, were members. Corbitt Tr. 98. Ken Eto was an associate of the North Side Crew until 1983, when Campise and Gattuso shot him in a murder attempt believed to have been ordered by Solano. GEB Ex. 4.
23. The evidence set forth below establishes that in 1992, Matassa, a current officer of the District Council, succeeded Solano as the boss of the North Side Crew as well as President/Business Manager of Local 2, and two appointed positions affiliated with the District Council. See infra ¶¶172-92, 216.
24. The South Suburban or Chicago Heights Crew encompasses Chicago Heights, Calumet City and parts of Lake County, Indiana, areas southeast of Chicago. Tr. 259. In the mid- to late-1970s, Al Pilotto was the boss of the Chicago Heights Crew. Pilotto also was President of Local 5 and a District Council member until his conviction, along with James Caporale, another LIUNA member, on RICO charges related to a LIUNA employee benefit plan. See infra ¶73-82.
25. After his incarceration in 1981, Pilotto was succeeded as boss of the Chicago Heights Crew by Al Tocco. GEB Ex. 49. Other members or associates of the Chicago Heights Crew included Nicholas Guzzino, an employee of a District Council affiliated benefit fund, who was a crew boss under Tocco. Tr. 767, 1688; Corbitt Tr. 97. Dominick Palermo was a member of Local 5 and also was affiliated with the Crew. Tr. 626, 1199. Dominick's brother, Michael Palermo, has been a LIUNA member since 1982, was a District Council Delegate until 1995 and currently is Vice President of Local 1001.
26. The South Side or Chinatown or 26th Street Crew (hereinafter the U26th Street Crews) encompasses the old Italian neighborhood at 26th Street and Princeton Avenue in southwest Chicago. GEB Ex. 49. Beginning in the 1950s, Bruno Roti headed the 26th Street Crew and was succeeded by Frank "Skids" Caruso (hereinafter "Skids Caruso"), father of Frank Toots" Caruso (hereinafter "Toots Caruso"). In the 1970s or early 1980s, Angelo LaPietra became the boss of the 26th Street Crew. Tr. 431 -32. Other members or associates included James LaPietra, Richard Mara and Guy Bills. Joseph LaMantia was an enforcer under Skids Caruso. Tr.271.
27. In the 1980s, members or associates of the 26th Street Crew included Ronnie Jarrett, Frank Calabrese, Angelo Imperato, Anthony Imperato, James Cordovano, Jerry Scalise and Jerry Scarpelli. Corbitt at 101. Currently, John Monteleone is the boss of the 26th Street Crew and also runs gambling operations on the Chicago's west side. Tr. 432, 722. Alphonso Tournabene, Sam Carlisi's cousin, is an underboss to Monteleone. Tr. 721-22.
28. James DiForti, associated with the Chicago Outfit at least since 1988 and currently affiliated with both the Cicero Crew and the 26th Street Crew, was an officer of Local 5
and a District Council Delegate until his arrest for murder in July 1997. Tr. 513, 728, 768; Corbitt Tr. 102.
29. The evidence set forth below establishes that Bruno Caruso and Leo Caruso, current officers of the District Council, are either members or associates of the 26th Street Crew. See infra 53-72.
30. To understand the relationship among the District Council, Chicago politics and organized crime, one must be aware of the significance of Chicago's First Ward and its leaders. The Chicago Outfit, and the 26th Street Crew in particular, was long aligned with Chicago's First Ward. In the 1950s through 1962, during his tenure as First Ward Alderman, John D'Arco Sr. was closely associated with Chicago Outfit members such as Anthony Accardo and Gus Alex. Captive City at 151 -52; Tr. 432.
31. In 1965, a grand jury investigating organized crime subpoenaed several Chicago politicians; D'Arco Sr. and Pat Marcy, an officer of the First Ward Democratic Organization, refused to testify. ~ Captive City at 160. Marcy remained an influential political figure until his indictment in 1991 on RICO charges related to his role in fixing criminal trials, civil cases, zoning changes and judicial appointments. GEB Ex. 40.
32. In the 1970s the First Ward maintained a reserved table at Counselor's Row, a restaurant across the street from the Chicago City Hall and downstairs from the First Ward offices. Tr. 953. The restaurant was a known meeting place for Chicago politicians, union officials and mob figures. At the First Ward table, D'Arco Sr., Marcy and Alderman Fred Roti conducted business. Tr. 954-55.
33. The testimony of Robert Cooley and Michael Corbitt details the operations of the First Ward officials at Counselor's Row. In a hallway, D'Arco Sr., Marcy and Roti had private conversations with various individuals. Tr. 955, 959. Over the years, several individuals associated with the Chicago Outfit and LIUNA were often seen at the First Ward table and also meeting in the hallway with Marcy and Roti. Tr. 975-82. Two of the current District Council officers, Bruno Caruso and Leo Caruso, were often seen at Counselor's Row having private discussions with Marcy. Tr. 976-78.
34. As an attorney, Cooley began to represent organized crime figures in criminal matters in the 1970s. Cooley fixed mob-related bench trials, often working with Marcy, who arranged payments to judges. Tr. 887-89.
35. In the mid-1980s, Cooley began cooperating with the government in an investigation of the First Ward's connection to organized crime and fixing cases, which became known as "Greylord." Tr. 806-19. His cooperation resulted in several convictions, including that of Alderman Fred Roti.
Allegations of Specific Individuals' Ties to Organized Crime
(Complaint ¶¶ 7-8)
36. The Complaint alleges that several former and current members of the District Council are associates or members of the Chicago Outfit and that several of these have been arrested, indicted and/or convicted of organized crime-related offenses. Complaint ~ 7-8. Definitions of "associate" and "member" are set forth herein supra ¶¶ 9- 10.
37. The Complaint also alleges that several individuals who are relatives of organized crime figures have positions with the District Council or benefit funds affiliated with the District
Council. Complaint ¶ 7 A son or near relative of an organized crime figure should not be penalized for the activities of his family member, unless he has been an active participant with the relative in prohibited activities.
38. In the context of this proceeding, one may question why the sons or nephews of organized crime figures are drawn to this union, especially if they have little or no prior experience in the labor movement. A legitimate inference may be drawn, based upon the actual organized crime associates and the sons and nephews of organized crime figures in the District Council, that this union is a safe haven for the employment of relatives of organized crime figures.
Frank "Toots" Caruso
39. Frank "Toots" Caruso was President of Local 1006 from at least 1986 to the early 1990s, was a Delegate to the District Council from at least 1982 through April 1995 and served as the Sergeant at Arms for the District Council from at least 1983 until April 1995. GEB Ex. 117; 116 at D001170, D002694. He was a Trustee to the District Council Laborers' Pension Fund ("Pension Funds") from 1984 to 1994 and Trustee of another affiliated benefit fund from 1990 to 1994. GEB Ex. 126-34.
40. Toots Caruso is the son of Skids Caruso, his uncle is former Alderman Fred Roti, and his brother is Bruno Caruso, as described below. Tr. 431 -32, 680-82, 113840, 1286; GEB Ex. 5 at 179. There is substantial testimony from John O'Rourke, John Dineen, Robert Cooley and Guy Bills that Skids Caruso was the boss of the 26th Street Crew from the 1950s to the 1970s. Tr. 431 -32, 680-82, 1138-40, 1286; GEB Ex. 5 at 179. Upon Skids Caruso's death in the early 1980s, Angelo LaPietra became the boss of the 26th Street Crew. Tr. 271, 431.
41. Cooley was introduced to Toots Caruso through Robert Abbinanti, a member of the Chicago Outfit. Tr. 867-68. Cooley said that Toots Caruso and Abbinanti had a close relationship. Tr. 874. Cooley stated that Toots Caruso often sat at Pat Marcy's table at Counselor's Row. Cooley said that he, Toots Caruso, Abbinanti, Marco D'Amico and Richie Catazone, as a group, frequented various Rush Street establishments. Tr. 872-78. Catazone told Cooley that at two of the restaurants (which were named at the Trusteeship Hearing) the group received free drinks. Tr. 875-76. Cooley observed that Toots Caruso and Catazone were treated with great deference by the staff at these two establishments.
42. Bills had a close relationship with Toots Caruso as a teenager and in his early twenties. Tr. 1130-37. Bills testified that, in the early 1960s, he and Toots Caruso socialized and were participants in some bar fights as the result of their socializing. Tr. 114647. Bills also testified that the two participated in various illegal activities together for a short period of time. Tr. 1142-44.
43. Bills testified that, on four occasions, from 1979 until the early 1980s, Toots Caruso brought four "give-up" cars 12 to Bills' chop shop to be dismantled. At the time, Bills worked for the 26th Street Crew. Tr. 1142-44.
44. Bills testified that he, Toots Caruso and Bills' cousin burglarized a dress shop on Wentworth Avenue. Tr. 1138-39, 1164-65. The day after the burglary, Toots Caruso informed Bills that his father, Skids Caruso, ordered them to return the goods. ~ Bills then returned the
12A "give-up" car is an automobile that the owner reports stolen and disposes of to collect insurance money.
dresses to Toots Caruso's home. Id. Caruso warned Bills he was not to do any illegal jobs in the neighborhood without first speaking to him. Id..
45. According to Bills, in the 1970s, Toots Caruso obtained a job with the City of Chicago through Gus Alex. Tr.1155. Alex was not affiliated with the City. Id Toots Caruso also obtained a LIUNA position through LaPietra. Tr. 1156. LaPietra was not affiliated with LIUNA. ~
46. Richard Mara informed O'Rourke that he had been involved in an armed robbery of a wealthy Chinese businessman, Peter Pons, which had been set up and participated in by Toots Caruso. Tr. 467-68.
47. Mara advised the FBI that Toots Caruso and Larry Pusiteri owned the Hungry Hound Restaurant, located at 300 W. 26th Street, and that various LCN-related activities occurred there. GEB Ex. 73 at 28-50. Mara said that Toots Caruso set up robberies with his associates via a telephone at the restaurant, and that Pusiteri and Toots Caruso operated a juice loan and bookmaking operation from the restaurant. Id Larry Pusiteri also informed Cooley that Toots Caruso had an ownership interest in the Hungry Hound dice game. Tr. 905-07.
48. Michael Corbitt corroborated Mara's statement that Toots Caruso was involved in the juice loan business. Corbitt Tr. 92. Also, he saw Toots Caruso with LaPietra, John Monteleone and several other Chicago Outfit figures at a restaurant named at the hearing. Id
49. Toots Caruso was publicly identified as a member of the Chicago Outfit and 26th Street Crew in a 1983 Senate hearing on organized crime. GEB Ex. 5 at Tab "Chart"
50. O'Rourke testified chat Toots Caruso was a member of the 26th Street Crew based on information provided by Mara, Joseph Granata, James LaValley, Duke Basile, William Jahoda and eight confidential informants. Tr. 468-90.
51. On April 10, 1995, Toots Caruso received a notice of deposition from the GEB Attorney in relation to the investigation of the District Council and, on April 11, 1995, resigned his position as District Council Delegate and Sergeant at Arms, as well as all positions at Local 1006. GEB Ex. 190-91. At the same time, however, Toots Caruso retained his position as Associate Director of the District Council Pension Fund. GEB Ex. 130 at D002573.
52. There is proof by a preponderance of the evidence that Toots Caruso is at least an associate of the Chicago Outfit.
53. Bruno Caruso is currently the President/Business Manager of the District Council and the President/Business Manager of Local Union 1001. Bruno Caruso has been a Delegate to the District Council since November 1982, serves as a Trustee of the Laborers' Welfare Fund, and is the Chairman of the Laborers' Political League.13 See Tr. 3487; GEB Ex. 116 at D001015; GEB Ex. 132.
54. Bruno Caruso is the son of Skids Caruso, brother of Toots Caruso and cousin of Leo Caruso. Tr. 431-32, 680-82, 113840, 1145, 1286.
55. Robert Cooley stated that he was very well-acquainted with the 26th Street Crew. Tr. 938-39. On several occasions Cooley had conversations with Dirge" Imperato, an associate
13The record does not reflect the purpose or nature of the Laborers' Political League.
of the Crew, in which Imperato implied that both Bruno and Leo Caruso ranked above Imperato in the Crew's hierarchy. Tr. 922-23.
56. In 1993, Joseph LaMantia entered a guilty plea to federal extortion charges. In the plea colloquy, LaMantia admitted that he was a supervisor of the 26th Street Crew, heading up the illegal gambling operations and collecting gambling debts, juice loans and street tax. GEB Ex. 74 at 4. Guy Bills said he often saw Bruno Caruso with LaMantia. Tr. 1154-55.
57. Cooley attended the Hungry Hound dice game run by Larry Pusiteri approximately a dozen times over a period of three years beginning in 1978-79 and saw Bruno Caruso there with Pusiteri and Richie Catazone. Tr. 939-50, 1154. Bills corroborated this information, saying he often saw Bruno Caruso with other Chicago Outfit associates, including Pusiteri, LaMantia, Donny Catazone, Captain D" DiFazio, and Leo Caruso, at different Chicago restaurants and the Hungry Hound dice game. Tr. 1153-55, 1170-71, 1275.
58. Michael Corbitt considered himself a "very close associate" of Pat Marcy, and, over a period of six to seven years, he delivered large sums of money from the Chicago Outfit to Marcy as part of the First Ward machine at Counselor's Row. Corbitt Tr. 85-86. On a number of occasions, Corbitt saw Bruno Caruso in Marcy's booth when he arrived at Counselor's Row. Corbitt Tr. 92-93. On two occasions, Corbitt saw Bruno Caruso pass an envelope to Marcy. Id
59. On a number of occasions, Corbitt saw Bruno Caruso sitting with Angelo LaPietra at bars on Chicago's Near North Side. Corbitt Tr. 81 -82.
60. In the early to mid- 1970s, Corbitt was involved in illegal activities with John Monteleone, a member of the 26th Street Crew who has since ascended to 26th Street Crew boss.
Tr. 721-22. On one occasion, when Corbitt met Monteleone in a restaurant on Rush Street, Bruno Caruso was at the table. Corbitt Tr. 101-02.
61. John O'Rourke identified Bruno Caruso as a member of the 26th Street Crew based on information from four witnesses: Duke Basile, Richard Mara, James LaValley and Joseph Granata. Tr. 493. Mara has known Bruno Caruso for 30 years, grew up in the same neighborhood with him, and is familiar with the entire Caruso family. Tr. 499-501. He said Bruno Caruso was involved in keeping organized crime's influence in the unions. Tr. 501. LaValley and Granata corroborated that statement. Tr. 493-99.
62. On June 16, 1997, Bruno Caruso was served with the Complaint for Trusteeship in this matter in the parking lot of the Old Oak Country Club in Orland Park, Illinois. Tr. 77276. At that time, he was under surveillance by the Cook County Sheriff's Office. Id Approximately an hour after receiving the Complaint, Bruno Caruso left the country club in a car followed by fellow LIUNA member Nicholas Gironda, and traveled to the home of former First Ward Alderman Fred Roti. Tr. 773-75; GEB Ex. 53-54. Roti, a powerful figure in the First Ward Machine, is Bruno Caruso's uncle and was convicted in 1982 on racketeering and other charges based upon testimony by Cooley. GEB Ex. 41. Although Bruno Caruso testified that he went to his mother's house, next door to Roti's, to read the Complaint in the quiet of her home, Tr. 3605-06, I do not find this testimony credible.
63. At the Trusteeship Hearing, Bruno Caruso testified that he knew Angelo LaPietra through the Italian-American Club but was not aware of the circumstances surrounding LaPietra's imprisonment. Tr. 3618, 3658-60. He said that, although he had known LaMantia for years, he was not aware of his occupation or his criminal affiliations with LaPietra or his own
relatives, Skids and Toots Caruso. Tr. 3661-65. Bruno Caruso also stated that, although he knew Larry Pusiteri and Dirge Imperato, he was not aware of their line of work. Tr. 3682. I do not find this testimony credible.
64. Cooley testified that he saw Bruno Caruso at the Italian-American Club socializing with various members of the Chicago Outfit. Tr. 94042. The District Council has argued that it is unfair to conclude that a LIUNA member is associating with LCN because the union and LCN members belong to the same ethnic social club. I am aware of the danger of finding such meetings as evidence of an active association because ethnic groups socialize together at such clubs, which many honest, hard-working individuals attend. The mere meeting of any suspect individuals at a function open to all is not evidence of any such association. I do not, therefore, give any weight to evidence of meetings at a public function at a social club.
65. The contacts between Bruno Caruso and the mob are too numerous and too repetitive to be accidental. The testimony of witnesses who were well-situated in the Chicago Outfit is well-corroborated. Caruso's testimony regarding his lack of knowledge of the individuals is not credible. There is proof by a preponderance of the evidence that Bruno Caruso is at least an associate of the Chicago Outfit.
66. Leo Caruso has been a District Council Delegate since 1986, is currently Sergeant at Arms for the District Council and is a Trustee to the District Council Pension Fund. Leo Caruso is also President/Business Manager of Local Union 1006. GEB Ex. 116 at D001353, D002774; GEB Ex. 117.
67. Leo Caruso is the cousin of Bruno and Toots Caruso and the nephew of Skids Caruso. Tr. 1145.
68. Robert Cooley has known Leo Caruso for more than 20 years. Cooley saw Leo Caruso meet with Pat Marcy in Counselor's Row during the period 1976-80. Tr. 975-81, 110103. Cooley also observed Leo Caruso with Richie Catezone and Larry Pusiteri at the Hungry Hound dice game. Tr. 903-07. Pusiteri told Cooley that Leo Caruso had an ownership interest in the game. Id.
69. Guy Bills corroborated Cooley's testimony about the dice game. Bills had a close relationship with Leo Caruso over a number of years and testified that, on his first visit to the Hungry Hound dice game, he witnessed Leo Caruso and Joseph LaMantia listening to a police radio and acting as Look-outs" for the dice game. Tr. 768, 785, 1148-54.
70. John O'Rourke testified that Leo Caruso was an associate in the Chicago Outfit. Tr. 509. O'Rourke based his conclusion on information from Richard Mara, Joseph Granata, James LaValley, Duke Basile and eight confidential informants. Tr. 506-09. Mara stated that he had known Leo Caruso for more than 30 years and that he was an associate in the 26th Street Crew working in the gambling business. Tr. 506-07. Granata corroborated Mara's testimony. Tr. 508-09.
71. At the Trusteeship Hearing, Leo Caruso denied the existence of or attending the dice game. Tr. 4041. Although Leo Caruso admired knowing Catazone, Pusiteri, LaMantia and Captain D" DiFazio, all members of the Chicago Outfit, he denied having a social relationship with any of them. Tr. 4042-44. Leo Caruso stated that there was no such entity as the Chicago
Outfit and people who make such accusations are discriminating against Italian-Americans. Tr. 4054-69. Caruso's statements in this regard are not credible.
72. There is proof by a preponderance of the evidence that Leo Caruso is an associate of the Chicago Outfit.
73. Al Pilotto served as District Council Vice President from at least 1979 until 1982 and was a Trustee of the District Council Welfare Fund from 1976 until 1982. Pilotto was also President ofLocal5 from 1970to 1982. GEB Ex. 116atD000672,D001015;GEBEx. 117.
74. John O'Rourke stated that Pilotto was a boss and made member of the Chicago Heights Crew in charge of loan sharking, gambling and street tax for approximately 20 years, until he was convicted on racketeering charges in 1981. Tr. 339.
75. Michael Corbitt. mob associate and former police chief of Willow Springs, said that Pilotto ran the Chicago Heights Crew and that, in the late 1960s, Pilotto personally gave payoffs to Corbitt. Corbitt Tr. 46-52. Corbitt testified that the Chicago Outfit maintained a group of bookmaking and prostitution operations in Willow Springs and that the Willow Springs police aided the Chicago Outfit in maintaining peace at these establishments. Il The police chief and the mayor of Willow Springs each received separate envelopes of money in exchange for protecting the Chicago Heights operations in their community. I5L
76. In 1970, the District Council engaged a consulting firm, Consultants and Administrators ("C&A"), to perform dental and vision services for the District Council Health and Welfare Fund. Tr. 1357-61; GEB Ex 11. Consultants & Administrators was started by Dan Milano Sr., a LIUNA International Auditor. ~ The firm was a thinly disguised mechanism to
provide kickbacks to union officials and Chicago Outfit members from the profits obtained by C&A. Id
77. Dan Milano Jr., the son of Dan Milano Sr., was himself a former C&A dental plan officer. Tr. 1366-68 and Exhibit 17. Milano began to cooperate with the government after a disagreement with his father resulted in violence against Milano by members of the Chicago Outfit, at the direction of Milano's father. hi, His cooperation led to a search warrant executed at the C&A headquarters, which eventually led to a federal indictment of Pilotto, James Caporale and others in Florida on June 3, 1981 in United States v. Accardo, 81 Cr. 230 (S.D. Fl. 1981). GEB Ex. 11.
78. In 1981, while serving as District Council Vice President and Trustee of the Health and Welfare Fund, Pilotto was indicted in Accardo for conspiring to defraud LIUNA funds of approximately $2 million. GEB Ex. 11. The indictment alleged that Pilotto, Caporale and others collected kickback money from the contractor, C&A, to distribute to others. Id The kickbacks were paid from proceeds received from LIUNA trust funds. Ii
79. Milano testified in Accardo and provided a sworn declaration to the Department of Justice in 1994. Tr. 1358-65; GEB Ex. 17 at 4-5. The declaration tracked Milano's testimony in Accardo and detailed the kickback scheme between the leaders of the District Council and the Chicago Outfit, including Pilotto:
I was instructed by my father to deliver sums of money to James Caporale, Angelo Fosco and Alfred Pilotto in return for their having assisted C&A in obtaining the CLDC [Chicago Laborers District Council] contract. I personally delivered sums of money ranging between S 1,200 and S 1,800 to Angelo Fosco between January of 1972 and June of 1976. I delivered similar amounts to James Caporale during the same period. Often, after I told Mr.
Caporale that these were the papers I was to deliver, he would say that he had to take the papers rout Weston The term rout West" was a term commonly used around our offices among C&A employees and the CLDC people with whom we had the most contact. That term was commonly understood among the C&A and CLDC people to refer to Anthony Accardo who lived in River Forest, Illinois on the near west side of Chicago.
80. Milano also detailed the influence of the Chicago Outfit over LIUNA:
During the time I worked for C&A, I often went to dinner with Angelo Fosco and other employees of C&A and Alfred Pilotto. I specifically recall that on one of these dinner engagements in l 975 either Agostino's or Armando's restaurant in the Rush Street area of Chicago, Angelo Fosco, James Norton, and James Caporale were present with Alfred Pilotto and me. During the evening, Norton, Caporale and Fosco began bragging about who had done the most to get CLDC dental contracts awarded to C&A. The disagreement was resolved when Pilotto said that he had been the person responsible for getting the CLDC dental contracts awarded to C&A and afterwards said to Fosco 'we made you General President. we made your father General President before you and we made Moreschi General President before him. We can unmake you General President just as fast ' After that Fosco and Norton were quiet on the subject. I found the tone of Pilotto's voice when he made these comments to be frightening.
GEB Ex. 17 at 5 (emphasis added); see BISQ Tr. 1264-65.
81. Pilotto survived a murder attempt, stood trial and, on June l 8, 1982, was convicted on RICO charges, in Accardo, supra, and sentenced to 20 years in prison.15 GEB Ex.
14Angelo Fosco was acquitted of the charges in Accardo; Albert Pilotto and James Caporale were convicted. See ink ~ 81, 89.
15In July l 981, after his indictment, Pilotto was shot by Daniel Bounds in a botched murder attempt. Bounds confessed to the FBI, entered the witness protection program, and cooperated with the government.
12, 15. Shortly after his conviction, Pilotto retired as District Council Vice President, Trustee of the Health and Welfare Fund and Local 5 President. GEB Ex. 4; 12; 15; 116 at D001015; 117.
82. I find there is proof by a preponderance of the evidence that Pilotto was, prior to his incarceration, a member of the Chicago Outfit and boss of the Chicago Heights Crew.
83. James Caporale served as the Secretary-Treasurer of the District Council from sometime prior to 197016 until 1987. Caporale was the Business Manager/Secretary-Treasurer of the District Council from 1982 to 1987 and served as a Trustee to two affiliated benefit funds from sometime prior to 1970 until at least 1982. GEB Ex. 116 at D002378.
84. According to John Dineen, Caporale was seen regularly by Chicago police meeting with Chicago Outfit members Jack Cerone, Dominick Cortina and Donald Angelini at a retail gasoline station on North Harlem Avenue. Tr. 727. All three individuals ran syndicated gambling rings for the Chicago Outfit and each was convicted of interstate gambling. Tr. 696.
85. Michael Corbitt testified that, from the late 1960s to early 1980s on Wednesday nights, Anthony Accardo and Joseph Aiuppa, then the highest-ranking members of the Chicago Outfit, met regularly in the private dining room at a restaurant in Norwood, Illinois, which was named in the record. Corbitt Tr. 73-78. Corbitt was frequently a guest at these dinners and recognized all of the dinner guests as members of organized crime. Id., On several occasions,
16In this proceeding, the GEB Attorney introduced LM-2 forms, required by federal law to be filed annually, only as far back as 1970.
Corbitt saw Caporale in the private dining room with Accardo and Aiuppa, and, on at least three of these occasions, saw Caporale give a package to Accardo. Corbitt Tr. 79.
86. On March 27, 1986, Cerone, Aiuppa and many others were convicted of conspiring to skim proceeds from Las Vegas gambling casinos and were sentenced to prison. Cerone and Aiuppa both died in jail. GEB Ex. 5 at 169; GEB Ex. 30.
87. In 1981 Caporale was indicted with Al Pilotto and others in United States v. Accardo. See supra ¶78.
88. On February 17, 1982, while under indictment, Caporale, then the District Council Secretary-Treasurer, was unanimously appointed as District Council Business Manager by the Executive Board, upon the recommendation of District Council President Joe Spingola, despite Caporale s outstanding indictment in Florida. GEB Ex. 116 at D001049.
89. On June 18, 1982, Caporale and Pilotto were convicted of RICO charges in Accardo. GEB Ex. 15. On September 14, 1982, Caporale was sentenced to 12 years in prison. GEB Ex. 13. On October 6, 1982, the court ordered Caporale to forfeit all of his District Council positions pending appeal. GEB Ex. 14. The Executive Board then promptly reappointed Caporale to his posts despite the fact that Caporale s convictions centered around kickbacks received to the detriment of LIUNA members. The District Council permitted Caporale to continue as District Council Business Manager/Secretary-Treasurer until his appeal was decided in 1987.17 Tr. 1372-77, 1727-34.
17The GEB Attorney and the District Council presented conflicting evidence on the issue of Caporale s relinquishment of his Trustee positions in the District Council after his 1982 felony conviction. The District Council, through attorney Hugh Arnold, introduced evidence that Caporale had resigned from the affiliated benefit funds after his conviction in 1982. Tr. 1727-28;
90. John O'Rourke testified that Caporale was an associate of the Chicago Outfit and North Side Crew based upon information he received from two identified witnesses and five confidential informants. Tr. 348.
91. There is proof by a preponderance of the evidence that, while he was a member of the District Council, Caporale was an associate of the Chicago Outfit.
92. Nicholas Guzzino was Field Representative to the Laborers' Pension Fund from at least 1978 until 1980. GEB Ex. 115. Guzzino was also a member of Local 5's Executive Board. GEB Ex. 117; Tr. 1688-89.
93. Michael Corbitt stated that Guzzino was a Chicago Heights Crew member working under Al Pilotto. Corbitt Tr. 97.
94. Guy Bills corroborated Corbitt's testimony. Bills testified that he knew Guzzino through Al Tocco and Billy Dauber, a notorious and violent individual who ran chop shops and was murdered for failing to pay street tax. Tr. 640-41; GEB Ex. 109. Bills testified that Guzzino was a crew boss under Pilotto in the late 1970s. Tr. 1177-78. Gene Scaramella testified that Guzzino was a high-ranking member of the Chicago Heights Crew that controlled Chicago Outfit activities in the southern suburbs of Chicago as well as northwest Indiana. Tr. 767.
95. In 1988 Al Tocco was indicted on charges arising from his organized crime activities. GEB Ex. 109. The indictment alleged the involvement of Tocco, Bills and others in multiple acts of murder, extortion and arson, including the murder of Dauber and his wife. Id
2003-04. Nothing in the minutes, however, establishes that Caporale resigned either of his Trustee positions until his imprisonment in 1987.
96. On May 14, 1990, Al Tocco was convicted and sentenced to 200 years. GEB Ex. 112. Information leading to Tocco's conviction was provided by Tocco's wife, Betty. Tr. 65560. In a 1989 interview with FBI agents, Betty Tocco recalled an incident on June 16, 1986, that involved Tocco, Guzzino and Dominick Palermo. Betty Tocco stated that she received a telephone call from Tocco to pick him up approximately 50 miles from their home at a location along Route 41 in northern Indiana. Id Betty Tocco said that when she reached Tocco, he was irate and said that he, Guzzino, Palermo and Chuckle Roviero had buried the Spilotro brothers the previous night. Id
97. Tony and Michael Spilotro were notorious members of the Chicago Outfit who had been murdered days before. Tr. 653-55. Tocco told his wife that, after the burial, something had frightened the group, and they split up and left Tocco stranded along Route 41 without transportation to return to Chicago. Tr. 655-60. The geographic location in Indiana where Betty Tocco met her husband was one mile from the site where the bodies of the Spilotro brothers were found buried in a shallow grave. Tr. 661; GEB Ex. 109-114.
98. On January 11, 1991, Guzzino was indicted with Palermo and others in a federal racketeering case which involved the collection of street tax and juice loans in Indiana. GEB Ex. 107.
99. Both Guzzino and Palermo were convicted and sentenced to lengthy federal prison terms for their crimes. GEB Ex. 108. Guzzino was fined $ 185,000. IN
100. Gino and Palermo were the subjects of electronic surveillance prior to their arrests. Excerpts of these conversations were played at Guzzino's trial. GEB Exhibit 108. The excerpts revealed that in the 1980s, Bernard J. Morgano was the central gambling figure for the
Chicago Outfit in northwestern Indiana. Id He traveled to Illinois frequently to meet with Palermo and Guzzino at a restaurant in Calumet City. Id. These meetings were electronically monitored by the government. Id The taped conversations revealed that Palermo was Morgano's boss and the person to whom Morgano delivered the street tax he collected. AL Guzzino assisted Morgano's efforts to collect street tax, serving as Morgano's second-in command. Id
101. There is proof by a preponderance of the evidence that, while he was a Field Representative to the District Council Pension Fund, Guzzino was an associate of the Chicago Outfit.
102. Dominick Palermo was a District Council Delegate and Local 5 Field Representative from sometime prior to 1970 until 1991. GEB Ex. 121. Palermo served as an officer of Local 5 until his conviction with Nicholas Guzzino on RICO charges. See supra ¶ 99
103. Guy Bills identified Dominick Palermo as a Chicago Heights mob boss in the 1978-79 time period. Tr. 1178-79. Bills stated that he met Al Tocco on various occasions and, on one occasion, met with Tocco at a lounge near Route 30. Id Palermo was there discussing how much street tax a new owner of a Chicago Heights brothel should pay the Chicago Outfit.Id.
104. Gene Scaramella stated that Palermo was a high-ranking member of the Chicago Heights Crew who controlled LCN activities in the south suburbs and northwest Indiana. Tr. 767-68.
105. Michael Corbitt testified that he had known Palermo for 30 years. Corbitt Tr. 96. Palermo was involved with organized crime, was one of HI Pilotto's guys" and was also associated with Angelo LaPietra. Id
106. In May 1990, Palermo was implicated in the Tocco trial in the gangland-style murder and burial of the Spilotro brothers.See supra ¶ 96.
107. In 1991, Palermo was indicted on racketeering charges involving the collection of juice loans and street tax, and he was convicted. See supra ¶¶ 98-99.
108. Robert Pecoraro stated that, based on his familiarity with both the Tocco and Palermo criminal cases, Palermo was a made member of the Chicago Outfit. Tr. 671-72.
109. There is proof by a preponderance of the evidence that, while he was a member of the District Council, Dominick Palermo was at least an associate of the Chicago Outfit.
110. Michael Palermo has been a District Council Delegate since 1984 and has been the Local 1001 Vice President since 1989. GEB Ex. 116.
111. Michael Palermo is the brother of Dominick Palermo. Tr. 1181.
112. James DiForti became a District Council Delegate in 1989 and the Coordinator of Committees in 1994.18 GEB Ex. 116 at D002513. Beginning in 1985, DiForti served as an officer or Business Agent at three different LIUNA local unions, each affiliated with the District
18The record does not reflect the nature of the duties of the Coordinator of Committees."
Council. DiForti held office in Local 1002, Local 1006, and finally, Local 5. GEB Ex. 117 at 000376. At Local 5, he was Secretary-Treasurer. GEB Ex. 121.
113. Michael Corbitt testified that he met DiForti on several occasions on Rush Street and that he knew DiForti put juice loans son the streets in the mid 1970s to early 1980s. Corbitt Tr. 102-03. Corbitt also saw DiForti meeting with John Monteleone, Vincent Solano and Angelo LaPietra. Id
114. On December 8, 1993, John O'Rourke, who was then an FBI agent, interviewed John Evans, a cooperating witness for the FBI and Evans recounted via a handwritten statement an incident in February 1988. Tr. 520-523 and Exhibit 83. Evans stated that he and James DiForti participated together in various clothing and jewelry store burglaries. ID Evans stated that he knew DiForti was a business agent for a union. Id.
115. Evans recounted a night in February 1988 when DiForti awakened him in his Chicago home. GEB Exhibit 83. DiForti had been shot twice, in the forehead and his right side. DiForti stated The guy owed us a lot of money, he wouldn't pay and he was going to go the Feds.... [W]e had an argument and the guy shot me, so I shot himyou've got to help me." Il At DiForti's insistence, the two men returned that night to the crime scene and Evans entered the building twice to retrieve DiForti's gun, attache case and pager. Id While inside, Evans saw the slumped body of a person he knew as Bill The pallet man," DiForti's close friend. "The pallet man" is the same person described as the murder victim in DiForti's arrest report, described below. Id
116. Evans stated that, after the incident, DiForti resided with him for several days to nurse his wounds. GEB Exhibit 83. DiForti told Evans that he had "ok'd" his friend Bill "the
pallet man" to receive a juice loan and, when Bill failed to pay, DiForti had to "stand good" for the money owed. Id. Evans stated that "the pallet man" owed DiForti approximately $50,000. Id Evans said that DiForti "led me to believe he was a member of Organized Crime" in Chicago. Id
117. Walter Zischke was also a cooperating witness for the FBI. Tr. 513-14. Zischke told O'Rourke he had committed burglaries with Evans and DiForti, and that DiForti used his union car in the commission of burglaries in the Chicago suburbs. Id Zischke corroborated Evans' account of the February 1988 incident and said that Evans had recounted the same incident to him as stated above. Id
118. On July 11, 1997, DiForti was arrested by Chicago police for the 1988 first-degree murder of Billy J. Benham, the owner of the B&S Pallet Company. GEB Exhibit 84. The arrest report alleges that the murder occurred on February 13, 1988, and DiForti "shot and killed Benham in a dispute over a $100,000 'juice loan.'" ~ On the day of his arrest, DiForti resigned from his LIUNA positions. GEB Ex. 84, 170. He was indicted for the murder during the Trusteeship Hearing, and he awaits trial. GEB Ex. 182.
119. O'Rourke testified that Confidential Informant 5 told him that:
DiForti was a lieutenant reporting to [John] Monteleone, that he was in charge of gambling and juice and street tax collections for the 26tb Street Chinatown Crew, a long-time member of that crew, and also involved with the Cicero Crew, that both had been placed under John Monteleone and that DiForti being a trusted lieutenant had been dispatched on orders of John Monteleone out to Chicago Heights to take over Local 5 and to conduct organized crime operations in the south suburban, Chicago Heights area.
120. There is proof by a preponderance of the evidence that, while he was a member of the District Council, DiForti was an associate of the Chicago Outfit.
121. Salvatore Gruttadauro was a District Council Delegate from sometime prior to 1970 until 1984. GEB Ex. 116 at D001022, D001048, D001015. During that same time period, he was also Vice President of LIUNA Local Union I under President Vincent Solano. GEB Ex. 119.
122. During Senate hearings on organized crime on March 4, 1983, Gruttadauro was identified as a member of the Chicago Outfit working under crew boss Joseph Ferriola. GEB Ex. 5.
123. Ken Eto testified before the PCOC in 1985 that Gruttadauro was a member of the Chicago Outfit. GEB Ex. 4, Tab "Ken Eto Testimony" at 42.
124. In 1985, while an officer at Local 1, Gruttadauro was indicted for receiving illegal payments from a union contractor in violation of 29 U.S.C. § 186(b)(1). Gruttadauro was convicted on March 24, 1986, and sentenced to two years' probation and fined $22,000. GEB Ex. 102, 103. His conviction was affirmed on May 7, 1987. GEB Ex. 106.
125. There is proof by a; preponderance of the evidence that, while he was a member of the District Council, Gruttadauro was an associate of organized crime.
126. John Galioto has been a District Council Delegate since 1995 and currently is the Local 225 Business Manager. GEB Ex. 116 at D002752, D002977.
127. Galioto is the nephew of James Marcello, identified by John Dineen as being the underboss of the Chicago Outfit before his conviction. 19 Tr. 720, 4432; GEB Ex. 28.
128. The GEB Attorney presented evidence that Galioto is involved in an illegal gambling operation. Tr. 767. There is a separate complaint for trusteeship filed against Local 225, and these same allegations were put forth in that proceeding. ~ Complaint for Trusteeship, In the Matter of Local 225, IHO 97-54T (Nov. 14, 1997). These allegations are being addressed in the Local 225 trusteeship proceeding.
129. Nicholas DiMaggio was an employee of the District Council affiliated Training Fund from 1991 to 1993 and a Local 225 member from 1988 to 1993. GEB Ex. 144.
130. Ron Fino, the son of the former underboss of the Buffalo LCN, testified that he successfully ran for Business Manager of Local 210 in Buffalo in 1973, the only contested election in the history of Local 210. Tr. 1421 -28. Fino testified that DiMaggio, then a member of Local 210, publicly opposed Fino during the election campaign. Id Shortly after the election, Fino was forced to appoint DiMaggio as an instructor on the Local 210 Training Fund by Roy Carlisi, DiMaggio's uncle and a capo in the Buffalo crime family. 151.
131. In the rnid-1970s, Fino owned a snow plowing business with DiMaggio. Tr. 1430-33. Fino testified that DiMaggio acquired a 50-percent financial interest in the company because Fino's father insisted that Fino take DiMaggio as a partner. ~ The partnership ended
19James Marcello is the brother of Michael Marcello, an active member of the Chicago Outfit. Dineen testified that, in February 1995, Michael and James Marcello were seen associating with District Council Vice President John Matassa Jr. at a restaurant on Cumberland and Lawrence avenues. Tr. 720.
in 1978. Id. Fino gave DiMaggio $30,000 in cash and equipment as part of the settlement. Id. In 1985, based on this payment, DiMaggio was indicted and convicted of submitting a false income tax return and was sentenced to three years' probation. Tr. 1430-33; GEB Ex. 32.
132. Shortly after his conviction, DiMaggio moved to Chicago and obtained a LIUNA position arranged by his uncle, Roy Carlisi. Tr. 1438. DiMaggio became a Local 225 member in 1988. Id
133. There is proof by a preponderance of the evidence that, while he was an employee of the Training Fund, Nicholas DiMaggio was an associate of the Chicago Outfit.
134. Dominick DiMaggio has been a District Council Delegate since 1992 and served as a District Council Field Representative from 1987-89. GEB Ex. 144. Dominick is currently the Vice President of Local 2 under President John Matassa Jr. GEB Ex. 117 at 000499.
135. Dominick DiMaggio is the nephew of Sam Carlisi. Carlisi was a Chicago Outfit boss until his conviction on RICO charges. GEB Ex. 27, 28. He died in prison. Tr. 720.
136. Joe Mazza was a Delegate to the District Council from 1987 until 1995, and the LIUNA International Regional Manager for the Chicago area. GEB Ex. 116. He was Business Manager of Local 225 from 1986 until 1995. GEB Ex. 122.
137. In June 1987 at a LIUNA International meeting in California, Ron Fino, who at the time was Business Manager of Local 210 in Buffalo, testified that, at Mazza's request, he went for a car ride around Lake Tahoe with Mazza and LIUNA International Vice President John Serpico. Tr. 1512- 16. During the ride, Mazza told Fino that LCN was concerned about Fino
because he spoke without permission from LCN. Id. Mazza told Fino that he must receive permission from Buffalo LCN boss Joe Todaro Sr. when dealing with LIUNA matters. Id Mazza stated that he and Serpico at one time had to clear their LIUNA decisions with James Caporale and later with Vincent Solano. Id. At the time of this meeting, Solano was President of Local Union 1 and ranked far below both Serpico and Mazza in the LIUNA hierarchy. Id.
138. Fino testified that, in his opinion, "this is organized crime that ran the Laborers' International and we answered to them." Tr. 1517.
139. Mama resigned his union positions in 1995 after LIUNA undertook its reform efforts and the IG's office began to investigate the District Council. GEB Ex. 144.
140. There is proof by a preponderance of the evidence that, while he was a member of the District Council, Mazza was an associate of the Chicago Outfit.
141. Vincent Solano was a District Council Delegate and Coordinator of Committees from sometime prior to 1970 until his death in 1992. GEB Ex. 144. Solano was also the Local I President and Business Manager during the same time period. GEB Ex. 119. Solano served as a Trustee to the District Council Pension Fund from 1978 until his death. GEB Ex. 144.
142. In the 1983 Senate hearings, Solano was identities as "the capo in charge Of the north side who had succeeded Dominick DiBella. GEB Ex. 5. John Serpico, LIUNA International Vice President and Local 8 President, testified before the PCOC in 1985 that Solano was a territorial boss who reported to Joseph Aiuppa and Jack Cerone. GEB Ex. 4.
143. Ken Eto said that he believed Solano had ordered John Gattuso and Jasper Campise to kill him when he suspected Eto of cooperating with the government. GEB Ex. 73. Soon after Gattuso and Campise botched the killing, they were murdered. Tr. 374..
144. Eto reported to Solano for almost a decade. GEB Ex. 4. After the attempt on his life, Eto testified before the PCOC. That report summarized Eto's testimony regarding Solano:
Solano controlled all forms of illegal gambling, including poker, bolita, zinganetta, horse bookmaking and sports bookmaking in his area. Solano also ran extortion rackets against bars, restaurants, topless clubs, pornographic bookstores, and massage parlors, and supplied these businesses with vending machines, such as cigarette and jukeboxes. Solano used the local's headquarters as a contact point for his criminal organization.... Solano confirmed meetings at prearranged locations near the union hall and met with members of his crew to receive payoffs, give directions, and, in the words of Eto, receive "respect" from those who worked for him. Eto personally paid Solano a share of the proceeds of his illegal gambling operations. At Solano's direction Eto made regular payments to other LCN members.
145. Michael Corbitt testified that, from the 1960s to 1987 as a police officer working for the Chicago Outfit, he used garbage bags to deliver large amounts of cash to several top Chicago Outfit bosses, including Solano. Corbitt Tr. 56, 72-74.
146. John O'Rourke testified that, based on his interviews with five witnesses and 11 confidential informants, and consistent with the FBI's classification, Solano was the boss of the North Side Crew in the Chicago Outfit. Tr. 336-38.
147. Thomas Bohling and John Dineen corroborated O'Rourke's testimony. Tr. 543, 687-88.
148. There is proof by a preponderance of the evidence that, while he was a member of the District Council, Solano was a member of the Chicago Outfit and the boss of the North Side Crew.
149. Anthony Solano has been the Administrator of the District Council Training Fund since 1986. GEB Ex. 142.
150. Anthony is the son of Vincent Solano, who was the boss of the Chicago Outfit North Side Crew. See supra ¶¶141-48.
151. Ernest Kumerow served as District Council President/Business Manager from 1987-94, following District Council President Joe Spingola and District Council Business Manager James Caporale. GEB Ex. 116. Kumerow was a Trustee of the District Council Welfare Fund from 1982-94, a Trustee of the District Council Training Fund from 1988-93, and Chairman of the Laborers' Political League from 1993-94. GEB Ex. 144. Additionally, Kumerow was Local 1001 President and Business Manager from 1982-94. GEB Ex. 123.
152. Kumerow was the son-in-law of Anthony Accardo. Tr. 363.
153. Michael Corbitt saw Kumerow in the private dining room of a restaurant with Anthony Accardo and Joseph Aiuppa on at least three or four occasions from the early 1970s to the early 1980s. Corbitt Tr. 73-79. Corbitt also observed Kumerow at Accardo's Palm Desert home and the Brookwood golf course. Corbitt Tr. 80. He also saw Kumerow meeting with Vincent Solano, Pat Marcy, John Spano and John Serpico. Corbitt Tr. 80-81. Corbitt saw Kumerow with Solano at several restaurants. Corbitt Tr. 136-37. Based on his observations and
his own work within the Chicago Outfit, Corbitt stated that Kumerow was associated with organized crime. Corbitt Tr. 81.
154. It is reasonable to infer that Kumerow's rise through the ranks of the District Council has been because of the support of his father-in-law, Accardo. Shortly after Accardo died, Kumerow left the union. GEB Ex. 116 D001100-01; GEB 117 at 006143.
155. There is proof by a preponderance of the evidence that, while he was a member of the District Council, Kumerow was an associate of the Chicago Outfit.
156. Craig Kumerow has been a District Council Delegate since 1989. GEB Ex. 116.
157. Kumerow is the son of Ernest Kumerow and the grandson of Anthony Accardo. Tr. 363.
158. Joseph Abate was a Delegate to the District Council from 1993, and Local 225 President from 1996 until his suspension in June 1997. GEB Ex. 144.
159. On March 3, 1997, the Chicago police searched Abate's apartment and discovered evidence leading to Abate's arrest and felony charge for syndicated gambling in violation of Illinois law. GEB Ex. 7-8. He awaits trial.
160. Pursuant to the LIUNA Ethics and Disciplinary Procedure, Abate is currently suspended from his LIUNA positions. See GEB Ex. 117 at 000248.
161. Since 1990, Vincent DiVarco has been a Delegate to the District Council and the Recording Secretary for Local Union 2 under President John Matassa Jr. GEB Ex. 116, 144.
162. DiVarco is the son of Joseph "Caesar" DiVarco, Tr. 364, a boss of the North Side Crew who worked under Vince Solano in the 1970s and 1980s and who died in prison. Tr. 27475; Corbitt Tr. 59; GEB Ex. 4, Tab "Ken Eto Testimony. at 18- 19; GEB Ex. 92-93.
163. DiVarco is the son-in-law of Chicago Outfit associate James Caporale. Tr. 3901-02.
164. Frank "Babe" DeMonte was a District Council Delegate from sometime prior to 1970 until his death in 1992. GEB Ex. 116. DeMonte was also a Local 1 Business Agent under Vincent Solano for the same period of time. GEB Ex. 119.
165. During the PCOC hearings in 1985, DeMonte's father was identified as a member of the Chicago LCN. GEB Ex. 4.
166. In statements to the government, Ken Eto identified DeMonte as a member of Vincent Solano's Crew and stated that DeMonte, along with Vic Arrigo and John Matassa Jr., was responsible for making the initial calls to North Side businesses to collect street tax. GEB Ex. 97, 98.
167. Michael Corbitt corroborated Eto's testimony, saying that he had known DeMonte for 25 years and identifying him as a juice loan collector. Corbitt Tr. 98.
168. Arrigo is a self-admitted member of the Chicago Outfit who entered the witness
protection program in 1986. GEB Ex. 73 at 32. Arrigo supplied information to the FBI and
said that he and DeMonte were sponsored for membership into the Chicago Outfit at the same
169. Joseph Granata informed John O'Rourke that DeMonte was a lieutenant to Solano in the North Side Crew and had been a made member of the Chicago Outfit since the late 1970s or early 1980s. Tr. 409. James LaValley and Leonard Patrick corroborated Granata's information. Tr. 409-10.
170. O'Rourke testified that, in his opinion, based on his interviews with five named witnesses and eight confidential informants, DeMonte was a made member of the Chicago Outfit. Tr. 405-09.
171. There is proof by a preponderance of the evidence that, while he was a member of the District Council, DeMonte was a made member of the Chicago Outfit.
Hahn Matassa Jr.
172. John Matassa Jr. is District Council Vice President and has been a District Council Delegate since 1987. Tr. 3775-84, 3963-64; GEB Ex. 116, 126-34. Matassa served as an auditor of the District Council in 1987 and as a Coordinator of Committees of the District Council in 1992. GEB Ex. 144. Matassa has been a Trustee of the District Council Pension Fund since 1992, a Trustee to the Laborers' Political League since 1993 and Trustee to the District Council Training Fund since 1994. 1~ Matassa became a LIUNA member and field representative of Local Union 2 in 1985 and in 1987, two years after his initial membership, was selected as Business Manager of Local Union 2. GEB Ex. 120. In 1989, Matassa became President/Business Manager of Local 2. hi,
173. Ken Eto identified Matassa as an enforcer and collector for the North Side Crew working under Vincent Solano win Joe Arnold, Mike Glitta, Jasper Campise, Caesar DiVarco
and Frank DeMonte. GEB Ex. 97; GEB Ex. 98. Eto stated that, prior to becoming a Chicago Outfit boss, Matassa was a member of the North Side Crew working for Solano and DiVarco. Id
174. Matassa admitted to associating with Campise. Tr. 3903-04. Matassa stated that he was only aware through television news reports, however, that Campise had been murdered. Tr. 3904-14. Matassa testified that, after Campise's murder in July 1983, he gave hair and fingerprint samples to the FBI, but that, during these procedures, he was not aware of what crime was under investigation. Tr. 3912-14.
175. Thomas Bohling testified that, during the 1980s, while conducting police surveillance, he regularly saw Matassa driving Glitta around Chicago. Tr. 593. Bohling further testified that Matassa's cousin, Tommy Matassa, was the manager of a pornography store, the Cupboard on Hubbard on West Hubbard Street in Chicago. Tr. 540-41. Based on his own observations and a review of police databases, Bohling believes that Matassa was in the "middle management to upper management" of organized crime and involved in the adult pornography business. Tr. 546.
176. Matassa admitted that he drove Glitta around Chicago on a daily basis in the 1970s and 1980s. Tr. 3804-07. Matassa testified that he ate several daily meals with Glitta and that he and Glitta often met DeMonte, DiVarco and Arnold for coffee at a restaurant. Tr. 388385. Matassa also stated that he helped Glitta and his wife stock the shelves for the Cupboard on Hubbard, but testified that he did not have an ownership interest in the establishment. Tr. 380607. Matassa testified that, although he saw Arnold two to three times a week during the period he was driving Glitta around, he did not know what Arnold did for a living, and, in particular, was not aware of Arnold's activities with the Chicago Outfit. Tr. 3884-92.
177. Arnold, DiVarco, DeMonte and Glitta were well-known organized crime figures.
178. Umberto Fillippi told John O'Rourke that he was introduced to Matassa in 1989 by his friend and employer Sal Mango. Tr. 421-22. Mango told Fillippi that Matassa was a member of the North Side Crew. Tr. 422. Fillippi further said that he cooked breakfast for Sal Mango in his home and he observed that, in 1993-94, Matassa, his cousin Tommy Matassa and John Serpico, a LIUNA International Vice President, met with Mango on a monthly basis to discuss a company called Health Marketing, Inc. Tr. 422-23. Mango ran the company, which provided services to labor unions, including LIUNA. Tr. 423. Fillippi said that, at these monthly meetings, Mango provided kickback payments to Matassa, Tommy Matassa and Serpico. Tr. 423-24.
179. Matassa admitted knowing Fillippi and Mango but denied any involvement with them in illegal matters. Tr. 3799-3803. Matassa said that he had met Fillippi at a dinner meeting with Mango and Tommy Matassa at a restaurant where Fillippi was a waiter. Id. Matassa said he was only slightly acquainted with Fillippi. Id Matassa said that he met Mango at a lunch with his cousin Tommy. I`L Although Matassa admitted being in Mango's house on at least one occasion during Mango's illness, he denied ever being at Mango's house with Serpico or being involved in a kickback scheme. Id
180. James LaValley told O'Rourke that Matassa is a made member of the Chicago Outfit. Tr. 420-21. LaValley stated that, in the early 1980s, he had seen Matassa with Jack Cerone at the Brookwood Country Club.Id.
181. John Dineen, relying on Chicago police surveillance reports, stated that Matassa was seen with known mob members in the Chicago Outfit. Tr. 695; GEB Ex. 100. Dineen said
that police reports indicated that Matassa was seen meeting with Joseph Spadavecchio in February 1988 at a restaurant which was named in this proceeding. Tr. 696. Spadavecchio gambler and Chicago Outfit supervisor in the Elmwood Park area Tr. 710. Matassa was seen in March 1990 at a restaurant at Diversey and Naragansett with DeMonte and Robert Dominic. Tr. 710. DeMonte, when alive, was a Chicago Outfit member working in the North Side area. See supra ¶¶164-71. Dineen stated that Dominic is an associate of the Chicago Outfit who was involved in the pornography business. Tr. 706.
182. Matassa admitted meeting Dominic one time in a restaurant (named in the record) while accompanied by DeMonte. Tr. 3882-86. Matassa also testified that he Could have" eaten a meal at the same restaurant with Glitta and Solano and admitted to socializing with Michael Marcello. Tr. 3832-35. Dineen testified that Marcello is an active member of the Chicago Outfit who has taken over gambling operations for his brother, convicted underboss James Marcello. Tr. 720-21.
183. Matassa admitted meeting DeMonte with his uncle at a restaurant on Rush Street. Matassa also admitted to collecting money from a bar on behalf of DeMonte, but denied that this collection was a street tax, and instead characterized the money collection as a loan. Tr. 389598. DeMonte was a made member of the Chicago Outfit.See supra ¶¶164-71.
184. Dineen, as a Chicago police officer, personally conducted surveillance of Matassa in 1995 and 1996. Tr. 719. Dineen testified that in February 1995, Matassa met with Michael Marcello at a restaurant named in the record. Tr. 719-21.
185. In October 1995, Matassa met with Michael Marcello and Alphonso Tournabene at a restaurant on Harlem Avenue in Elmwood Park. Tr. 721 -23. In April 1996, Matassa again
was seen meeting with Marcello and Tournabene at the restaurant. Tr. 723. Dineen testified that, when the three exited the restaurant, Tournabene drove away and Matassa and Marcello engaged in a conversation in the parking lot. Id. On May 2, 1996, Dineen saw Matassa meeting with Tournabene and Marcello at a restaurant on Roosevelt Road in Forest Park, Illinois. Tr. 72326. Dineen testified that Matassa and Marcello sat on one side of the booth, Tournabene on the other, and Matassa and Tournabene were pointing at each other in a heated argument. Id. Dineen stated that the meeting lasted two hours. Id. Dineen testified that he believes Matassa is a made member of the Chicago Outfit and boss of the North Side Crew reporting to Tournabene. Tr. 723-32.
186. Matassa admitted meeting with Marcello and Tournabene at a restaurant named in the record. Tr. 3840-43. Matassa testified that the meeting was not planned and he initially was in the neighborhood involved in a work project, and went into the restaurant to use the restroom. IN He saw Tournabene and Marcello there and sat down with them and ate a banana split. Id.
187. As set forth above, Matassa admitted to meeting with Tournabene. Tr. 3835-40. He claimed, however, that he was simply ordering pizzas from Tournabene's shop, and, as a courtesy, the pizzas were brought to Tournabene's home so that Matassa would not need to travel to Tournabene's store.Id.
188. O'Rourke related information he obtained from six witnesses and 10 confidential informants regarding Matassa. Tr. 411412. O'Rourke stated that Matassa was a made member of the Chicago Outfit and replaced Solano as the boss of the North Side Crew after Solano's death in 1992. Id.
189. Confidential informant 12, an Elmwood Park Crew associate, told O'Rourke that Matassa was a made member of the Chicago Outfit based on his conversations with Solly Delaurantis and other mob members. Tr. 415-20. The informant told O'Rourke that, in the Fall of 1989, Delaurantis informed him that he, along with Matassa, had recently become a made member of the Chicago Outfit. Id O'Rourke and Dineen both identified Delaurantis as a Chicago Outfit member who is currently in federal prison for racketeering. Tr. 419-20, 696.
190. Matassa stated that he had no knowledge of any Chicago Outfit connections within LIUNA and did not know that any of the people with whom he associatedVincent Solano, Michael Glitta, Frank DeMonte, Joe Arnold, Caesar DiVarco, Jasper Campise, Michael Marcello, James Marcello, Alphonse Tournabene, Sam Carlisi, John DiFronzo, Rocco Infelise and Marco D'Amicowere involved with the Chicago Outfit. Tr. 3940. Matassa also testified that, although he had known James Caporale since childhood, he did not know why Caporale was imprisoned in 1987 and did not ask anyone on the District Council. Tr. 3873.
191. Matassa testified that the mob did not exist in Chicago. In particular, Matassa testified that he was unfamiliar with the occupations of Anthony Accardo and Al Capone, both infamous Chicago Outfit figures. Tr. 3940-44. Matassa's statements in this regard are not credible.
192. Matassa's meetings and associations with the various known mob figures are too numerous to be accidental. His day-to-day job of driving Glitta, a known mobster, about Chicago, is proof in itself of an association with the mob. I find there is proof by a preponderance of the evidence that Matassa is a made member of the Chicago Outfit. The
meetings with high-ranking made members of the Chicago Outfit indicate that he is deeply involved with organized crime in his daily activities.
Joseph Lombardo Jr.
193. There is no evidence in this record to indicate that Joseph Lombardo Jr. is a member or associate of the Chicago Outfit.
194. There was credible evidence presented at the Trusteeship Hearing that Lombardo is a hard worker who has ascended the ranks by doing a good job. Every witness who was questioned indicated that Lombardo Jr. is knowledgeable about union business and dedicated to his job. See Tr. 2703, 2834-35, 3070-71, 3789; CDC Ex. 44A-R (letters attesting to Lombardo Jr.'s character).
195. The evidence set forth in findings 36-194 establishes that the association of the District Council members with the Chicago Outfit, past and present, affects the integrity and operation of the District Council under the standards set out in Fallacara supra.
Allegation of Threats of Violence and Use of Bribes by District Council Members
(Complaint ¶ 9?
196. The GEB Attorney offered as evidence of threats a phone message received by LIUNA Inspector General Doug Gow at the beginning of the investigation into the District Council. ~ GEB Ex. 58B. Although the phone message was a very vocal and explicit threat aimed at Gow, there is no other evidence that the threat was instigated by the District Council or was related to the District Council investigation.
Allegations of Failure of Democratic Process in the District Council
(Complaint¶¶ 10- 14)
197. The records of the District Council establish that, from 1979 through 1995, not a single contested election of officers held. See GEB Ex. 116; Tr. 2157. No opposition candidate has ever been nominated to run against an incumbent officer. No vacancy has ever occurred at the end of a candidate's term; all vacancies occur by resignation before a scheduled election, and the vacancies are then filled by a vote of the Executive Board. The vote of the Executive Board is always unanimous.
198. Clearly, the Executive Board has authority under the Uniform District Council Constitution ("UDCC~) to fill vacancies as they occur. See UDCC, art. VI, sec. 3(a). Here, however, for 25 years the District Council Executive Board has filled vacancies immediately preceding each scheduled election. This is one indication that someone or some entity has absolute power over the District Council and that democratic process is nonexistent.
199. Witnesses called by the District Council testified that dissenters always have had the opportunity to offer opposition candidates, but that the spirit of unity within the District Council is so great that all of the Delegates agree with the Executive Board's choices to fill the vacancies that occur. See, eg., Tr. 3274.
200. These same witnesses were unable to describe the process by which the Executive Board interviews or selects potential officers, or the process by which a member may bring himself to the attention of the Executive Board as a potential candidate. Em, em, Tr. 3278-79. The record contains no evidence of interviews or meetings with the Executive Board by any prospective officer.
201. None of the Executive Board members or Delegates of the District Council who testified could describe how the Executive Board decides to fill a vacancy in its own ranks, even though it has filled vacancies approximately 20 times in 20 years.
202. Statements of cooperating witness Joseph Granata provide insight into the selection of District Council officers. Granata told John O'Rourke that, in the late 1960s, the office of Business Manager became vacant. Frank Granata Sr. and some other members of the District Council wanted Thomas Crivellone to be appointed. Tr. 355. Anthony Accardo, then the head of the Chicago Outfit, selected Joe Spingola. Tr. 355-58. A meeting was held by organized crime leaders in the basement of the Galewood Funeral Home, which was operated by Frank Granata Sr., the father of Joseph Granata. Id Accardo sent Jack Cerone to the meeting to convey his decision to select Spingola. Joseph and Frank Granata Sr. both attended. Spingola was kept waiting upstairs in the funeral home. Later, Joseph Granata was sent to bring Spingola to the meeting where he was told he would be appointed President and Business Manager of the District Council. Id.
203. In 1969 charges were filed against Spingola for wilfully failing to file LM-2 reports for several years for Local 1001, of which he was Secretary-Treasurer. GEB Ex. 44. A jury convicted him, but the conviction was reversed on appeal, because the trial judge failed to instruct the jury on Spingola's good-faith defense. GEB Ex. 45; Tr. 566-67; United States v. Spingola. 464 F.2d 909 (7th Cir. 1972). Although Spingola was the Business Manager of a 5,000-member local, his defense was that he knew nothing about LM-2 reports and, over a 10year period, was incapable of preparing the reports himself. Spingola, 464 F.2d at 911.
204. On February 11, 1982, Spingola resigned as President/Business Manager of the District Council. .GEB Ex. 116 at D001097. Spingola suggested "installing" Caporale as District Council Business Manager and Secretary-Treasurer and appointing Ernest Kumerow as President. ~ Kumerow was Anthony Accardo's son-in-law. Tr. 363. At the time, Caporale was under indictment, accused of participating in a scheme to defraud a benefit fund affiliated with the District Council. GEB Ex. 11. The Executive Board voted unanimously to appoint Caporale and Kumerow as suggested. GEB Ex. 116 at D001097.
205. On February 22, 1982, Spingola resigned from his positions on the Health and Welfare Fund. GEB Ex. 116 at D00109S. On the same day, Caporale informed the administrator of the Health and Welfare Fund that Kumerow had been appointed Trustee of the fund, replacing Spingola On all Committees in the same capacity as Mr. Spingola served." GEB Ex. 116 at D0001094.
206. Caporale was convicted in June 1982. GEB Ex. 13. The District Council minutes reflect that, on October 5, 1982, two weeks after Caporale's sentencing, the District Council called a special meeting To support Br. James Caporale as acting Secretary-Treasurer and Business Manager upon motion . . . and standing vote of applauseunanimous approval." GEB Ex. 116 at D001022. The U.S. District Court ordered Caporale to forfeit his union position. GEB Ex. 14. The District Council then promptly voted to reappoint Caporale to his same position. GEB Ex. 116. Caporale continued as Secretary-Treasurer/Business Manager until July 1987, when the appellate court affirmed his conviction. See supra 11 89. No member of the District Council raised the issue of Caporale's fitness to continue.
207. The officers of the District Council breached their fiduciary duty to the membership by failing-to raise the issue of Caporale's conviction and continued service.
208. In 1986 an election of District Council officers was held a year earlier than scheduled. A regular election was scheduled for August 1987. GEB Ex. 118, Tab "P". There was no indication in any of the District Council minutes of 1986 that the 1986 election occurred.
209. Despite the filing of an LM-2 form in March 1987, which indicated an election would be held in August 1987, the failure to record the 1986 election was not discussed until January 1988. At that time, Hugh Arnold, attorney for the District Council, could locate no minutes for a nomination meeting or election. Tr. 2167. Arnold testified that, to rectify the situation, he personally interviewed all members of the District Council who were present at the August 1986 election who remembered what occurred. Tr. 2168-70.
210. In a letter to Kumerow on January 19, 1988, Arnold explained that the special nomination meeting and election of officers occurred in 1986, One year prior to the necessity for such a meeting...." GEB Ex. 116 at D001395. Arnold concluded that, because the incumbent officer for each position was renominated, no officer was prejudiced by serving less than the required time. Tr. 2177-78. At the hearing, upon questioning by the IHO, Arnold stated that none of the members he interviewed who attended the nomination and election meeting could give an explanation as to why the election was held one year ahead of schedule. Tr. 2168-72.
211. The holding of an election one year ahead of schedule without offering an explanation or obtaining a waiver from the LIUNA General President is indicative of the cavalier attitude the District Council has for democratic process. The fact that there was no mention of the meeting in the minutes raises an inference that the purported election 1986 never occurred.
At the time of the reconstruction of the minutes, in January 1988, John Matassa, Bruno Caruso and Leo Carusoall current District Council officerswere delegates to the District Council. See supra ¶ 53, 66, 172
212. One of the officers reelected a year early was James Caporale, SecretaryTreasurer/Business Manager, whose conviction for defrauding the LIUNA Health and Welfare Fund was on appeal. See supra ¶ 89
213. On December 31, 1986, the appellate court affirmed Caporale's conviction. See United States v Caporale, 806 F.2d 1487 (11th Cir. 1986). On July 9, 1987, the United States Supreme Court denied Caporale's petition for certiorari. See GEB Ex. 166.
214. On July 22, 1987, at a special District Council Executive Board meeting,
Caporale moved the Executive Board to appoint Ernest Kumerow as Business Manager. GEB
Ex. 116 at D002378. The motion passed unanimously. Id Kumerow moved to appoint Joseph Lombardo Jr. as Secretary-Treasurer. Id The motion passed unanimously. Id The same day, the District Council unanimously accepted the Executive Board's appointments. Id at D001456.
215. Lombardo Jr. became Secretary-Treasurer even though he was not a Delegate to the District Council as required by the UDCC, art. Vl, sec. 1. Nothing in the records of Local 1 or the District Council indicates that Lombardo Jr. was ever a Delegate to the District Council. Hugh Arnold, attorney for the District Council, testified that LIUNA General President Angelo Fosco told him informally that appointing Lombardo Jr. to the position in this manner was proper. Tr. 1979. Arnold relied upon that conversation and took no steps to follow proper procedure in electing Lombardo. Id
216. In 1992, Vincent Solano died, leaving vacancies in the positions of Trustee to the Pension Fund and Chairman of the North and South Side Committee. See supra 11141. On November 18, 1992, the Executive Board voted unanimously to appoint Matassa to both positions. GEB Ex. 116 at D002036. This appointment coincides with Matassa's replacement of Solano as boss of the North Side Crew. See supra 1111 189.
217. On March 9, 1994, Matassa resigned his positions as District Council Trustee and Chairman of the District Council Committees. GEB Ex. 116 at D002281. A day later, Joseph Neroni resigned his position as Vice President and Matassa was installed in his place. Id. at D002515. The Executive Board also unanimously approved James DiForti as Matassa's replacement as Chairman of the District Council Committees.20 Id at D002519.
218. On September 27, 1994, Ernest Kumerow resigned as Trustee of the Health and Welfare Fund. GEB Ex. 116 at D002407. On the same day, he resigned as President of the District Council, and the Executive Board appointed District Council Business Manager Bruno Caruso to replace Kumerow as President, resulting in Caruso's dual offices of President and Business Manager. Id.. at D002368.
219. On October 1, 1994, Toots Caruso resigned as a Trustee of the Pension Fund. GEB Ex. 116 at D002342. He was replaced by Leo Caruso on October 5, 1994. I5i. at D002339.
20As a member of Local 1006 from 1989-94, DiForti was a Delegate to the District Council. GEB Ex. 116. In March 1994, DiForti became a member of Local 5. Nothing in the records of Local 5 or the District Council show that DiForti was actually appointed Delegate in Local 5; however, District Council records indicate DiForti served as Delegate from Local 5 until after his indictment in 1997. Local Union 5 records do indicate that, upon his becoming a member of the local, DiForti was appointed Secretary-Treasurer without dissent. GEB Ex. 117 at 000376.
220. On October 18, 1994, Bruno Caruso resigned as Trustee of the Training Fund. GEB Ex. 116 at D002341. On October 19, 1994, the District Council Executive Board appointed John Matassa Jr. to replace him. Id at D002351.
221. At the District Council meeting on February 15, 1995, Bruno Caruso "mentioned that Br. Frank Caruso will assume the position of Director of the Pension Fund and Assistant Treasurer." GEB Ex. 116 at D002573.
222. On April 11, 1995, Toots Caruso resigned as District Council Delegate and Sergeant at Arms. GEB Ex. 116 at D002681. On September 20, 1995, the District Council Executive Board appointed Leo Caruso Sergeant at Arms. Id. at D002774.
223. On September 20, 1995, the District Council Executive Board voted to Keep with past practice and coordinate both Welfare and Training Fund's Labor Trustee appointments . . . That is, have all current Trustees automatically renew every three years without any further action from the District Council Executive Board or the Delegates." GEB Ex. 116, D002775. The failure to adhere to three-year terms violates the trust agreements. GEB Ex. 130.
224. District Council attorney Hugh Arnold acknowledged that the District Council often prepares minutes of meetings before the meetings occur; the scripted minutes describe motions as if they have already passed, but leave spaces for the names of moving and seconding parties, which are then filled in during the meeting. Tr. 2175-79. The GEB Attorney offered GEB Exhibit 116 D002394, as an example of the pre-scripted minutes. This practice highlights the lack of democratic process within the District Council.
Allegations of Unauthorized Union Salary (Complaint ¶15!
225. The UDCC and Uniform Local Union Constitution ("Uniform Local Constitution") require approval of the LIUNA General President before a member may serve as an officer or employee of a local union and another LIUNA body and receive a salary for both. UDCC, art. V, sec. 3; Uniform Local Constitution, art. IV, sec. 3.
226. Through present day, various District Council officers, including current officers John Matassa, Bruno Caruso and Leo Caruso, also served as officers of local unions and received Dual salaries" without obtaining formal approval of the LIUNA General President. Tr. 1793-95, 3846.
227. The officers who testified indicated they were unaware of the approval requirement. See, e g., Tr. 3591, 4080.
228. The officers' acceptance of dual salaries without receiving formal approval demonstrates a general lack of vigilance; however, there has been sufficient confusion union wide on this practice that prevents a finding of improper intent. The issue of dual salaries is left to the trustee to clear up the confusion and to follow the dictates of the constitutions.
Allegations of Misconduct Related to the City of Chicago No Show" Investigation
229. In 1991, the City of Chicago Inspector General's Office investigated al that certain city workers failed to work during work hours.
230. During the No-show investigation,. Nick Gironda, at the time a District Council Delegate, was demoted and suspended from his City job for failure to manage his employees properly. Tr. 1780-81; GEB Ex. 158 at 142-45.
231. Shortly after Gironda was suspended from his City position, on September 19, 1991, his status at Local 1001 was changed from part-time to full-time on a motion by Ernest Kumerow and Bruno Caruso, and the minutes reflect that his salary was to be Whatever Ernie and Bruno Caruso decides." GEB Ex. 117, BN 005126.
232. From 1965 until 1991, Leo Caruso worked for the City of Chicago in the streets and sanitation department, first as a garbage collector, and then, after an accident, carrying Light duty" as a street sweeper for approximately two years. Tr. 4020-24.
233. Leo Caruso was a LIUNA member throughout his City employment. Tr. 4024.
234. In 1965, Leo Caruso joined Local 1001. Tr. 4025. In approximately 1985, he switched to Local 1006 to take a job as a part-time Field Representative. Tr. 4025-29. Leo Caruso testified that he received this position through the help of Local 1001 Business Manager Ernest Kumerow, and his cousin, Local 1006 Business Manager Frank Caruso. Id. He remained a part-time Field Representative from 1985 to 1989. Id
235. In 1989, in addition to his Field Representative duties, Leo Caruso obtained another union job as Local 1006 Secretary-Treasurer. Tr. 4028-29; GEB Ex. 125. Despite Leo Caruso's admittedly increased hours working for Local 1006, he continued to hold his full-time City position. Tr. 4025-34.
236. Guy Bills testified at the Trusteeship Hearing that Leo Caruso often abandoned his City job duties during the day. Tr. 506-07; 1157-59.
237. Leo Caruso was suspended pending the outcome of the no-show investigation. Tr. 4032; CDC Ex. 47. At the Trusteeship Hearing, Leo Caruso testified that he resigned from
his post during the investigation because of rumors that the afternoon was being abolished, and that his resignation had nothing to do with the investigation. Tr. 4030-33.
238. The connection of the no-show investigation to the operation of the District Council is tenuous at best; the evidence presented by the GEB Attorney fails to demonstrate the influence of the Chicago Outfit on the operation of the District Council.
Allegations of the Appointment of Corrupt Individuals to Affiliated Funds
(Complaint ¶ 17!
239. Of the individuals found in ¶¶36- 195, I, to be either associates or members of the Chicago Outfit, the following have held, or currently hold, positions of trust within the employee benefit funds affiliated with the District Council: Alfred Pilotto, James Caporale, Vincent Solano, John Matassa Jr., Bruno Caruso, Frank Caruso and Leo Caruso.
240. The District Council offered testimony of several consultants and account managers that the affiliated benefit funds are healthy and well-administered. See generally Tr. 2239-2402, 2457-92, 250641, 2554-82, 2590-2640.
241. Under questioning of the GEB Attorney and the IHO, an outside consultant to the Pension Fund and the Health and Welfare Fund admitted that it was not a consultant's job to determine how the fund trustees complied with their fiduciary duties, whether they engaged in any prohibited transactions, or even whether the trustees were required to file financial forms related to prohibited transactions. Tr.2408-10.
242. Two District Council witnesses also testified that, in their opinion, it would not be appropriate for members of organized crime to act as trustees to the affiliated benefit funds. Tr. 2444, 2495.
Allegations of a Failure to Take Steps to Investigate or Eradicate Mob Influence from the District Council (Complaint 11 18)
243. The District Council argues in defense of its membership that it merely accepts the Delegates put forth by the affiliated local unions. Tr. 175-76; CDC Brief at 10.
244. While District Council Delegates are selected at the local level, once an individual becomes a delegate to the District Council, the officers and other delegates have a fiduciary duty to ensure that the District Council membership is acting in the best interests of the District Council, the affiliated local unions and each affiliated LIUNA member, including a duty to ensure its membership is not influenced by organized crime. See EPC, "Business and Financial Activities of Union Officials."" The burden is on the District Council to monitor its membership.
245. In 1982 Toots Caruso was indicted with Joseph LaMantia, Fred Bruno Barbara and Aldo Piscitelli Jr. on charges of extortion GEB Ex. 70. At the time, Toots Caruso was a Local 1006 Business Representative and District Council Delegate. See supra 11 39. A review of the District Council records reveals no investigation into or discussion of the charges by the District Council, even though Toots Caruso was appointed Sergeant at Arms only nine days after his arrest. Tr. 1747. Toots Caruso was acquitted of the charges and continued as Local 1006 President/Business Manager and District Council Sergeant at Arms until his resignation from both positions in April 1995. Tr. 1748; GEB Ex. 191.
246. In 1983 John Matassa and Frank DeMonte were indicted on charges of extorting money from North Side bars. GEB Ex. 87. At the time, Matassa was not yet a LIUNA member, but DeMonte was Local 1 Recording Secretary and a District Council Delegate. GEB Ex. 119,
247. Nothing in the District Council records reflects any investigation into or discussion of the charges against DeMonte.
248. In 1984 Matassa and DeMonte were acquitted. Matassa became a LIUNA member and Local 2 Field Representative in 1985, and a District Council Delegate in 1987. See supra ¶ 172.
249. In 1985, the PCOC subpoenaed DeMonte to testify at the Chicago hearing. DeMonte refused to testify, invoking the Fifth Amendment. GEB Exhibit 4. The PCOC concluded DeMonte was a member of the Chicago Outfit. Id
250. A review of the District Council records reveals no investigation into or discussion of DeMonte's refusal to testify before the PCOC or alleged membership in the Chicago Outfit. DeMonte continued as Local 1 Recording Secretary and Delegate to the District Council until his death in 1992 See supra ¶164.
251. In 1985 the PCOC subpoenaed Vincent Solano, then-President/Business Manager of Local 1, Delegate to the District Council, and Trustee of the District Council Pension Fund, to testify at the Chicago hearing. GEB Ex. 4. Solano exerted his Fifth Amendment privilege and refused to testify. Id
252. The PCOC concluded that Solano was a territorial boss of the Chicago Outfit. GEB Ex. 4.
253. Chicago area media widely reported on Solano's affiliation with the Chicago Outfit. GEB Ex. 56B.
254. Despite the extensive publicity of Solano's alleged role in the Chicago Outfit, a review of the District Council records reveals no investigation into or discussion of Solano's
activities. Solano remained Local 1 President/Business Manager, District Council Delegate and Pension Fund Trustee until his death in 1992. See supra ¶ 141.
255. In the mid- to late-1970s, Sal Gruttadauro was associated with the North Side Crew of the Chicago Outfit. See supra ~ 121 -25. He also was an officer of Local I and a District Council Delegate from 1970 through 1984. Id,
256. In 1985 the PCOC subpoenaed Gruttadauro to testify at the Chicago hearing. GEB Ex. 4. Gruttadauro refused to testify, challenging the subpoena power of the PCOC. The PCOC concluded that Gruttadauro was a member of the Chicago Outfit. Id
257. In 1985, a federal grand jury indicted Gruttadauro on charges of receiving improper payments from an employer in Gruttadauro's role as union official and employee representative in violation of 29 U.S.C. § 186. GEB Ex. 101.
258. A review of the District Council records reveals no investigation into or discussion of the charges by the District Council. Nothing in the records reflects that Gruttadauro's union membership ended after the charges were filed. Gruttadauro was convicted of all counts on March 24, 1986. GEB Ex. 102. The United States Circuit Court for the Seventh Circuit affirmed his conviction in May 1987. GEB Ex. 106.
259. Al Pilotto and James Caporale were indicted in 1981 on charges that they participated in a RICO conspiracy to receive kickbacks from a consulting company which had contracted to provide dental and vision care services to the affiliated Health and Welfare Fund. GEB Ex. 11. At the time, Pilotto was President of Local 5, Vice-President of the District Council and a Trustee of the Health and Welfare Fund. S~ supra 11 73. Caporale was Secretary-Treasurer of the District Council and a Trustee of-the Health and Welfare Fund. See supra ¶ 83.
260. While under indictment, Pilotto was shot by Daniel Bounds in an attempted mob hit approved by Anthony Accardo, a co-defendant of Pilotto and Caporale. GEB Ex. 4.
261. A review of the District Council records reveals no investigation into or concern about the charges against Pilotto or Caporeale.
262. Several current District Council delegates and officers are associates or members of the Chicago Outfit. See supra ¶¶36-195. In particular, the President/Business Manager, Vice President Sergeant-at- Arms are all associates or members of the Chicago Outfit. See supra ¶¶53, 72, 172-92. Their presence establishes that the District Council continues to fail to attempt to rid itself of the influence of organized crime.
1 . The GEB Attorney has proved by a preponderance of the evidence That members of the District Council have been and currently are associates of the Chicago Outfit, and that association has had a direct and indirect affect on the operation of the District Council under the standards of Fallacara, supra page 8.
2. The GEB Attorney presented credible evidence that the District Council has a relationship with the Chicago Outfit. The history of the Chicago Outfit's association and domination date from at least the 1960s. In the 1970s and 1980s two District Council officers were also high-ranking bosses in the Chicago Outfit; who oversaw the Chicago Outfit's illegal money-making activities in their geographic areas.
3. Currently three members or associates of thc Chicago Outfit are officers of the District Council . In the past 25 years at least 13 members or
associates of organized crime named in the Complaint have been delegates to the District Council.
4. The GEB Attorney has proved by a preponderance of the evidence that, as a result of the influence of the Chicago Outfit, there has been and there is a failure of democratic process in the District Council.
5. The Chicago Outfit has selected officers on the District Council, ensuring that certain individuals remain in the District Council to maintain the Chicago Outfit's control over LIUNA's labor jurisdiction.
6. The District Council has not held a contested election for more than 25 years. No Officer has retired from office at the end of his term; all vacancies have occurred by an officer resigning during his term, thus giving the Executive Board the opportunity to appoint his successor.
7. In 1986 the election of officers for the District Council was held one year ahead of schedule; yet it was not discovered by the attorney for the District Council until more than one year later. District Council meeting minutes did not reflect that an election occurred. The attorney for the District Council testified that he reconstructed the election by interviewing all of the members who were present at the meeting in question. No explanation was given why no one questioned the deviation from the ordinary election schedule.
8. District Council delegates who testified had no idea how the Executive Board determines who becomes an officer, nor could they describe how a delegate who wants to become a member of the Executive Board can bring his name to the attention of the appointing officers.
9. The GEB Attorney has proved by a preponderance of the evidence that the District Council has appointed individuals associated with the Chicago Outfit as trustees to the affiliated benefit funds.
10. The members or associates of the Chicago Outfit are approved as trustees to these funds in the same manner as officers are selected for the Executive Board of the District Counsel. District Council records establish that trustees' terms renew automatically, in violation of the trust agreement. The District Council has control over pension and welfare funds worth more than $1 billion.
11. Although the trustees have retained highly qualified outside investment managers for the funds, the trustees file no disclosure forms regarding their possible conflicts of interest or prohibited transactions which are prescribed by federal law.
12. The International Union has jurisdiction over the acts of LIUNA trustees to affiliated benefit funds, and may bring disciplinary charges against trustees for mismanagement. Order, In the Matter of Fresina. et al., IHO 9746D (Jan.- 7, 1998).
13. The trustee appointed as the result of this Order should require all trustees of the affiliated benefit funds to file extensive financial disclosure forms aimed at discovering conflicts of interest or prohibited transactions. Failure to do so would frustrate the effectiveness of the trusteeship.
14. The GEB Attorney has not proved by a preponderance of the evidence that members of the District Council used threats of violence against the LIUNA Inspector General.
15. The GEB Attorney has not proved by a preponderance of the evidence that the members of the District Council intended to award unauthorized Dual salary payments.
Although such payments are prohibited by the LIUNA Constitution absent approval from He General President, the union-wide practice regarding these payments is unclear, and the clarification of this matter is left to the trustee.
16. The City of Chicago no-show investigation revealed wrongdoing by two District Council delegates. The GEB Attorney has not proved by a preponderance of the evidence, however, that their misconduct had any affect on the integrity or operation of the District Council.
17. The GEB Attorney has proved by a preponderance of the evidence that District Council delegates and officers have failed to take steps to investigate positive allegations of organized crime influence and violations of the law by its officers and members. Over the years, delegates and officers were put on notice by indictments or convictions of District Council members, often for crimes of violence, loan sharking, syndicated gambling, or frauds on union funds, and often resulting in lengthy prison sentences. Members have been publicly named by congressional and other government committees as being members of or associated with organized crime. The minutes of the District Council reflect no inquiry into these events in the past 25 years.
18. The day has long passed when unions can regard investigations of their members by the government or the media as Us against them. or as attacks against the solidarity of the labor movement. If labor is to remain a viable force in the marketplace today, it cannot rely upon the government, which has limited facilities and often limited labor experience, to effect a clean up. It is the responsibility of this union to clean its own house; this should be the highest priority
in the labor movement today. The labor movement can no longer close its eyes to corruption within.
19. The GEB Attorney alleged in Count III of the Complaint that a trusteeship is necessary to correct financial malpractice. In support of this allegation, the Complaint refers generally to allegations that members or associates of the Chicago Outfit are serving as officers of the District Council and trustees of the affiliated benefit funds and that these members and associates continue to appoint each other to these positions. The Complaint also refers to "dual salary" payments made to District Council officers.
20. Financial malpractice is a definitive term generally indicating financial losses, imprudent investments, and improper or gross overpayments for expenses or salaries.
21. The fact that organized crime members or associates are officers of the District Council or trustees of the affiliated benefit funds standing alone does not constitute financial malpractice. This fact may be troubling from an administrative standpoint, and in light of the fact that the Chicago Outfit is in the business of crime for a profit, but on this record there is no evidence that the District Council's finances are unstable, or that the benefit funds are in jeopardy.
22. I have found that the GEB Attorney has failed to prove that the officers intentionally made improper Dual salary payments based upon the lack of standard application of this policy union-wide. I also have found that the GEB Attorney has failed to prove a relationship between the no-show investigation and the District Council. Without such evidence of actual wrongdoing within the District Council, the GEB Attorney has not proved by a
preponderance of the evidence that a trusteeship proceeding is necessary to correct financial malpractice.
23. The GEB Attorneys concerns regarding possible financial malpractice are matters that should be pursued actively by the trustee and accounting professionals he may retain.
A trusteeship is warranted to correct corruption and remove the influence of organized crime, to restore democratic procedures and to carry out LIUNA's legitimate objects.
s/Peter F. Vaira
PETER F. VAIRA
INDEPENDENT HEARING OFFICER
Date: February 7, 1998
Sherman Carmell, Esquire
Dwight P. Bostwick, Esquire
Digital Copyright 1998 Illinois Police and Sheriff's News