OFFICE OF THE INDEPENDENT HEARING OFFICER
LABORERS' INTERNATIONAL UNION OF NORTH AMERICA
IN THE MATTER OF: ) DOCKET NO.
ARTHUR A. COIA ) 97-52D
ORDER AND MEMORANDUM
This Order and Memorandum addresses the disciplinary charges of November 6, 1997, as amended on March 23 and April 8, 1998, filed by the Laborers’ International Union of North America (“LIUNA” or “International Union”) General Executive Board Attorney (“GEB Attorney”) against Arthur A. Coia (“Coia” or “Respondent Coia”), the International General President of LIUNA.
The Independent Hearing Officer (“IHO”) held a hearing which began on April 14, 1998 and ended on June 23, 1998. There were 22 hearing days. The transcripts from the hearing total over 5500 pages, and over 500 exhibits were submitted into evidence. Both the GEB Attorney and counsel for Coia submitted post-hearing briefs on September 25, 1998 and post-hearing responsive briefs on November 24, 1998.
Coia has been charged with sixteen charges arising out of five separate subject categories which may be described as follows: Coia’s Knowing Association with a Member of La Cosa Nostra’s (“LCN”) New England Crime Family; Coia’s Role in the Trusteeship of Local 66; Coia’s Role in the International Union’s Investigation of Ronald Fino’s Allegations; Coia’s
Appointment of John Serpico as Chairman of the GEB Hearings Panel; and Coia’s Dealings with Viking Oldsmobile.
The incidents in question span the time period from 1981 to the present and involve periods of Coia’s career from his early involvement in LIUNA to his ascent to the offices of International General Secretary-Treasurer and International General President.
In this matter, the GEB Attorney has presented much evidence which is far outside the scope of the charges. The IHO has dealt with these occasions as they arose and has made no blanket prohibitions.
General Legal Standards
The following standards apply to the charges.
Pursuant to the LIUNA Ethics and Disciplinary Procedures (“EDP”) and the LIUNA Ethical Practices Code (“EPC”), union officers are prohibited from engaging in “barred conduct,” which is defined to include --
a) committing any act of racketeering, as defined in 18 U.S.C. § 1961(1);
b) knowingly associating with any member or associate of the organized crime syndicate known as La Cosa Nostra (LCN);
c) knowingly permitting any member or associate of the LCN to exercise control or influence in the conduct of the affairs of the Union; or
d) obstructing or interfering with the LIUNA Inspector General, the GEB Attorney, or the Independent Hearing Officer . . . .
EDP, Section 1, Ethical Practices Code; EPC, Barred Conduct.
Knowing Association with the LCN and Permitting LCN Influence on the Union
According to the EDP and the EPC, “knowing association” occurs when --
a) an individual knows that the person with whom he or she is associating is a member or associate of the LCN;
b) the association relates directly or indirectly to the affairs of the Union; and
c) the association is more than fleeting or casual.
EDP, Section 1, Ethical Practices Code; EPC, Barred Conduct. See also In the Matter of Rocco J. Napoli and Thomas Fallacara, IHO Order and Memorandum, 96-65D at 5-6 ¶ 19 (September 25, 1997)(defining “knowing association”).
Knowledge is established if an individual: (a) had actual knowledge that the person with whom he was associating was an LCN member; (b) reasonably should have known that the person with whom he was associating was an LCN member; or (c) deliberately remained ignorant of facts that would demonstrate that the person with whom he was associating was an LCN member. Fallacara, IHO 96-65D at 7.
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 undesirable individuals to have easy access to the union officers and members in the total atmosphere of the labor union operation. See In the Matter of Trusteeship Proceeding Chicago Dist. Council, IHO Order and Memorandum, 97-30T at 9 (February 7, 1998). See also Fallacara, IHO 96-65D at 6 ¶ 20.
The GEB Attorney must also demonstrate that the charged party’s association was “more than fleeting or casual.” See generally United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 824 F. Supp. 410, 414 (S.D.N.Y. 1993); United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 745 F. Supp. 908, 917-18 (S.D.N.Y. 1990), aff’d, 941 F.2d 1292 (2d Cir. 1991), cert. denied, 502 U.S. 1091 (1992)(contact that was “knowing, purposeful and not fleeting” was enough to constitute “knowing association”).
The EDP and EPC incorporate certain exceptions to the definition of “knowing association” which are contained in a Consent Decree entered in the case of United States v. District Council of New York City and Vicinity of The United Bhd. of Carpenters and Joiners of Am., No. 90 Civ. 5722 (CSH), 1993 WL 364443 at *3-4 (S.D.N.Y. 1993) (“the Carpenters’ Consent Decree”). Those exceptions would permit a LIUNA officer to —
1) Meet or communicate with a “barred person” who is an employer to discuss the negotiation, execution or management of a collective bargaining agreement, or a labor dispute, when the officer represents, seeks to represent, or would admit to membership the employees of that employer.
2) Meet or communicate with a “barred person” who is a representative of a labor organization to discuss union matters.
3) Meet or communicate with an officer, employee or member of LIUNA and its constituent locals.
The Carpenters’ Consent Decree also permits a “member” who holds no elected, appointed or salaried position in the union, or any constituent local, to meet or communicate with “barred persons regarding matters unrelated to the union or any constituent local.” Id. at 4.
“A ‘barred person’ is (1) any member or associate of any La Cosa Nostra crime family or any other criminal group, or (2) any person prohibited from participating in Union affairs.” EDP, Appendix B.
Obstruction of the GEB Attorney and Inspector General
The LIUNA Appellate Officer has determined that in “obstruction” cases involving false testimony during depositions, the GEB Attorney must show that the testimony was material and would have impeded the Inspector General’s (“IG”) investigation by being misleading and intentionally deceptive. See In Re Martire, 1997 A.O. 81 (97-008D). In order for a statement to be considered material, “the statement must have a ‘natural tendency to influence, or [be] capable of influencing, the decision making body to which it was addressed’.” United States v. Gaudin, 515 U.S. 506, 509 (1995), citing, Kungys v. United States, 485 U.S. 759, 770 (1988).
Title 29 U.S.C. § 501(a)
The GEB Attorney also cites the following statutory provision in support of his claims:
The officers, agents, shop stewards, and other representatives of a labor organization occupy positions of trust in relation to such organization and its members as a group. It is, therefore, the duty of each such person, taking into account the special problems and functions of a labor organization, to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder, to refrain from dealing with such organization as an adverse party or in behalf of an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization. A general exculpatory provision in the constitution and bylaws of such a labor organization or a general exculpatory
resolution of a governing body purporting to relieve any such person of liability for breach of the duties declared by this section shall be void as against public policy.
29 U.S.C. § 501(a)(1959).
The IHO has determined that section 501(a) was intended to prevent misuse of union funds and to forbid union officials from receiving payments from third parties or making a private profit from union contracts. Thus, the statute pertains only to financial transactions. See In the Matter of Baker, IHO Order and Memorandum, 97-55D at 13 (July 21, 1998). See also, Guarnaccia v. Kenin, 234 F. Supp. 429, 442 (S.D.N.Y. 1964), aff’d sub nom. Gurton v. Arons, 339 F.2d 371 (2d Cir. 1964) (ruling 29 U.S.C. § 501(a) not a catch-all for breaches of fiduciary duty).
The Uniform Local Union Constitution
Article III, Section 3(d) of the LIUNA Uniform Local Union Constitution requires that all members refrain from “interfering with the proper conduct of all the business of the Organization.” Uniform Local Union Constitution, Article III, Section 3(d).
In Baker, the IHO determined that, in order to establish a violation of Article III, Section 3(d) of the Constitution, the GEB Attorney must show that the charged member committed a deliberate affirmative act which would constitute interference with the proper conduct of union business. Baker, IHO 97-55D at 11. Mere nonfeasance on the part of the member is insufficient.
II. KNOWING ASSOCIATION WITH A MEMBER OF THE NEW ENGLAND LCN
Charge I alleges:
Barred Conduct — Knowing Association with LCN Member: From in or about 1981 until in or about 1987, ARTHUR A. COIA knowingly associated with a member of the Patriarca Family, Raymond Patriarca, Jr., in violation of the barred conduct provisions of the LIUNA EDP and EPC.
Charge II alleges:
Barred Conduct — Permitting LCN Influence: In or about 1987, ARTHUR A. COIA knowingly permitted a member of the Patriarca Family, namely Raymond Patriarca, Jr., to exercise control or influence over the conduct of Union affairs, to wit: at the behest of Raymond Patriarca, Jr., Coia assisted Nino Cucinotta in joining Local 271 and in receiving job referrals, in violation of the barred conduct provisions of the LIUNA EDP and EPC.
Charge III alleges:
Breaching Constitutional Duties of LIUNA Members and Officers: In knowingly associating with an LCN member and/or permitting him to influence Union affairs, as alleged more specifically above in Charges I and II, ARTHUR A. COIA failed to honor his obligation as a LIUNA member to refrain from interfering with the proper conduct of LIUNA business, and breached his duty as an Executive Board member of Local 271 to see to it that the affairs and business of his Local Union were properly conducted, in violation of Article III, Section 3(d) and Article IV, Section 4(H)(9) of the Uniform Local Union Constitution.
The following chronology is relevant to understanding the context of the above charges:
• In the late 1950s, at the age of 13, Thomas Hillary (“Hillary”) met Raymond Patriarca, Jr. (“Patriarca, Jr.”) in Providence, Rhode Island. Patriarca, Jr. is the son of Raymond Patriarca, Sr. (“Patriarca, Sr.”), an LCN member.
• Hillary dropped out of school at age sixteen in order to spend his time at the Patriarca family headquarters known as “the Office.”
• Patriarca, Jr. married in the mid 1960s and Patriarca, Sr. moved out of the Patriarca family home. Thereafter, Hillary and Patriarca, Sr. lived together in a one bedroom apartment.
• Patriarca, Sr. went to prison in 1969 and remained there until 1973.
• In the early 1970s, Hillary rendered some minor assistance to a political campaign in which Albert Lepore, Jr. (“Lepore, Jr.”) was a candidate for Rhode Island State Representative. Lepore, Jr. was Coia’s law partner.
• In 1974, Hillary moved to Las Vegas, Nevada where he remained until 1980.
• Hillary moved to Boston, Massachusetts in 1980.
• In 1981, Coia and his father, Arthur E. Coia (“Coia, Sr.”), were indicted, along with Lepore, Jr. and Patriarca, Sr. in Miami, Florida.
• In 1982, Patriarca, Sr.’s case was severed from the Florida prosecution and was transferred to the District of Rhode Island due to his illness.
• Antonino “Nino” Cucinotta (“Cucinotta”) became Patriarca, Jr.’s driver in 1981 and continued in that role until approximately 1986.
• Between 1981 and 1984, Patriarca, Jr., on behalf of his father, visited Coia’s law office, Coia & Lepore, to meet with defense attorneys working on the case in Florida.
• Sometime between 1981 and 1984, Coia and Patriarca, Jr. attempted to breed one of Coia’s champion male Rottweilers with one of Patriarca, Jr.’s champion female Rottweilers at Coia’s kennel, Southwind Farms, in Rehoboth, Massachusetts.
• Patriarca, Sr. died in 1984.
• The case in Florida was dismissed against Coia and the other defendants in December of 1984.
• Hillary moved to Palm Springs, California in 1985.
• Hillary returned to Boston in 1988.
Charges I and III are based upon the following three alleged incidents:
• Patriarca, Jr. visited Coia’s law firm, Coia & Lepore, between July of 1984 and April of 1986.
• Coia allegedly represented Patriaria, Jr. in a legal matter.
• In 1982 or 1983, Patriarca, Jr. attempted to breed his champion female Rottweiler with Coia’s champion male Rottweiler at Coia’s kennel, Southwind Farms.
The GEB Attorney alleges that Coia knowingly associated with Patriarca, Jr., a member of the LCN, from 1981 through 1987, in violation of the EPC, EDP and the LIUNA International Union Constitution (“International Constitution”).
In addition, the GEB Attorney alleges certain other incidents which occurred outside of this 1981 to 1987 time period. These incidents are:
• In the early 1970s, Coia participated in his law partner’s campaign for a seat in the Rhode Island State Legislature and, during this campaign, an LCN member assisted with one of the campaign’s advertising projects.
• In the late 1980s, Coia and Patriarca, Jr. allegedly had a brief conversation on a construction site in Rhode Island.
• In 1990, Coia allegedly had a conversation with Hillary regarding a young man who was engaged to Coia’s daughter.
In his opening statement on April 14, 1998, the GEB Attorney asserted that the core of the evidence on Charges I through III would come from the testimony of Cucinotta, but that the context of the charges -- the “relationship” between the Patriarca family and the Coia family -- would come from Hillary. Transcript (“Tr.”) 11. The GEB Attorney further asserted that, “[A]t every point of tangency between Tommy Hillary and Nino Cucinotta, Mr. Hillary [would] confirm Mr. Cucinotta in every significant respect.” Tr. 15.
As demonstrated below, Hillary failed to corroborate Cucinotta on any material point.
In his post-hearing briefs, the GEB Attorney informed the IHO that Cucinotta was not credible on some points. GEB Attorney Response Brief (“GEB Resp. Br.”) at 2. He specifically abandoned his reliance on Cucinotta and conceded that “Cucinotta’s testimony should be credited only in certain respects” but not all respects as originally intended. See id. (emphasisadded). The GEB Attorney failed to identify what those “certain respects” were other than to say that Cucinotta’s description of the inside of Coia & Lepore was extremely detailed. Id. at 5. The GEB Attorney also dropped Charge II, which was based on Cucinotta’s testimony. GEB Br. at 52 n.2. The evidentiary effect of these concessions will be discussed, infra at ¶¶ 63-4.
Findings of Fact
The Hillary Allegations
21907540. Coia has been a member of LIUNA since 1957. General Executive Board Attorney Exhibit (“GEB Ex.”) 200, Tab B at 7. During the time period of 1981 through 1987, Coia served as LIUNA’s Assistant Regional Manager for the New England Region, the Business Manager for the Rhode Island Laborers’ District Council and the Vice President of Local 271. GEB Ex. 200, Tab B at 7-8, Tab E at 31-32. He and Lepore, Jr. were also partners during this same time period in the law firm of Coia & Lepore located in Providence, Rhode Island. Tr. 4804.
21907541. Hillary became friends with Patriarca, Jr. in the late 1950s, when they were both 13 years old. Tr. 394-95.
21907542. Hillary also knew Patriarca, Sr. very well and regularly visited the Patriarca home. Tr. 397-98. Patriarca, Sr. grew to like Hillary and confided in him. Tr. at 397.
21907543. Hillary quit school in the early 1960s when he was 16 years old and moved into the Patriarca home in Providence. Tr. 397. Patriarca, Sr. told Hillary that he was having trouble with “the Feds” and asked him to take care of his wife who was dying of cancer. Tr. 399-400. Hillary took care of Mrs. Patriarca every day until she died in the mid 1960s. Tr. 400. He went to her funeral in the Patriarca family car. Tr. 401.
In the mid 1960s, Hillary was the best man for Patriarca, Jr. at his wedding. Tr. 401.
When Patriarca, Jr. married, his father moved out of the family home and turned it over to Patriarca, Jr. and his new wife. Tr. 401-02. Hillary and Patriarca, Sr. then moved into a one bedroom apartment, where they lived together for about a year. Tr. 402-03.
21907544. Hillary, who is currently in the Federal Witness Protection Program, testified herein on April 15 and 16, 1998. Tr. 382-825. The GEB Attorney asserted in his opening statement that Hillary was called as a witness for two purposes: to establish the “context” of the Patriarca-Coia connection and to corroborate Cucinotta’s testimony. Tr. 11-15.
21907545. Patriarca, Sr. was the Boss, or the head, of the New England LCN family and conducted his illicit mob operations from the premises of his family business, Coin-o-matic Distributers, National Cigarette Service (“Coin-o-matic”) located on Atwells Avenue in Providence, Rhode Island. Tr. 404. The family referred to the Coin-o-matic location as “the Office.” Id. Hillary and Patriarca, Jr. frequented “the Office” whenever they were not in school. Tr. 397.
21907546. Hillary was at “the Office” every day from the early 1960s until Patriarca, Sr. went to jail in 1969. Tr. 404-05.
21907547. Hillary testified that Patriarca, Sr. and Coia, Sr. were good friends, and he saw Coia, Sr. at “the Office” on a regular basis. Tr. 411-12.
21907548. The GEB Attorney portrayed Hillary as a person with knowledge of the inner workings of the Patriarca family, its members and associates. He characterized Hillary as a “surrogate son to Raymond Patriarca, Sr. and . . .very well the son that Raymond Patriarca, Sr., wished he had had.” Tr. 12.
21907549. Hillary’s testimony was offered to show Coia’s purported connection with Patriarca, Jr. and he testified to three events which, according to the GEB Attorney, demonstrated this illicit association. Those events are set out below.
Coia’s Association with Hillary During Lepore, Jr.’s Campaign
21907550. Hillary testified that, in the early 1970s, Lepore, Jr., Coia’s law partner, ran for a seat in the Rhode Island State Legislature. Tr. 441, 657, 717-31.
21907551. Lepore, Jr. had participated in Rhode Island politics for a number of years prior to this campaign. Tr. 3736-37.
21907552. Hillary testified that his contribution to the campaign consisted of renting a trolley and driving it around Providence as a means to promote Lepore, Jr.’s candidacy. Tr. 451-53, 724, 729.
21907553. Hillary stated that he saw Coia “around” during the campaign but no testimony was offered as to what activity Coia performed during the campaign. Tr. 453.
21907554. The GEB Attorney concedes in his responsive brief that there was “nothing sinister” about Hillary’s supposed contact with Coia during Lepore’s political campaign. See GEB Resp. Br. at 3.
21907555. The conclusion one is to draw from these facts is unclear. It appears the GEB Attorney is alleging some connection between Coia and Patriarca, Jr. due to the fact that Hillary had some minor participation in the same political campaign as Coia. Aside from this vague suggested connection, Hillary’s testimony on this matter was sharply contradicted on all major points, including the year of the campaign and who the candidate was. Tr. 730-31. There was no evidence that Coia and Hillary actually met or spoke during the campaign.
21907556. The fact that Coia and Hillary may have had some unspecified contact during a political campaign in the early 1970s carries little, if any, weight in the factual determination of this matter.
The Kendall Estates Incident
21907557. In 1988, Hillary returned to New England after a three year absence. Tr. 465-66.
21907558. Hillary testified that, sometime in the late 1980s, he was with Patriarca, Jr. at Kendall Estates, which was a housing development Patriarca, Jr. was building outside of Providence, Rhode Island. Tr. 468-70, 656, 697.
21907559. While at Kendall Estates, Hillary testified that he saw a car operated by Coia drive onto the site and that Patriarca, Jr. allegedly approached the vehicle and spoke briefly to Coia, before the car drove away. Tr. 698-701.
21907560. At the time in question, Hillary had not seen Coia in approximately fifteen years and could not explain how he identified him as the driver. Tr. 701, 708-09. The record further reflects that Hillary --
• was unable to provide any distinguishing characteristics about the driver;
• heard none of the conversation involved;
• did not discuss the matter with Patriarca, Jr. after the car departed;
• could not remember whether anyone else was in the car at the time; and
• could not remember what kind of car it was.
Tr. 699-700; 708-09.
21907561. Hillary stated that this incident at Kendall Estates was the only time he saw Coia with Patriarca, Jr. Tr. 656.
21907562. Hillary’s testimony concerning the Kendall Estates incident carries little, if any, weight in the factual determination of this matter.
The Union House Incident
21907563. During the late 1980s, Philip Ottavianni, Jr. (“Ottavianni, Jr.”) was a LIUNA International Representative and his family owned the Union House Restaurant located in the same building as the Massachusetts District Council. Tr. 473, 736. Ottavianni, Jr., was also engaged to marry Coia’s daughter. Tr. 732-33.
21907564. Hillary testified that, during an evening in 1989 or 1990, he was in the bar of the Union House when he encountered Coia, whom he had not seen in approximately fifteen years. Tr. 476-77. Ottavianni, Jr. was also present in another area of the bar. Tr. 476.
21907565. Hillary told Coia that he had “taken over” the Framingham area and Coia’s response was “good.” Tr. 478.
21907566. Coia allegedly asked Hillary about the reputation of Ottavianni, Jr. and was told that the young man was financially indebted to many people and that he was involved in gambling and drug usage. Tr. 478-79.
21907567. The entire conversation between Hillary and Coia in the bar at the Union House lasted only a few minutes. Tr. 478-79.
21907568. From this short conversation between Hillary and Coia, the GEB Attorney argues that 1) Coia had knowledge of Hillary’s mob connections and 2) Coia had sought the advice of a mob figure. The GEB Attorney further asserts that Hillary’s testimony shows that Coia was “part of an overall network of quid pro quos, of favors, of back scratching” between Coia and the LCN. Tr. 15-16.
21907569. Even if this event took place, the conversation between Hillary and Coia is hardly indicative of an LCN-related encounter in which favors were exchanged.
21907570. Hillary’s comment that he had “taken over” the Framingham area, and Coia’s alleged response of “good,” is meaningless in this context. There is no evidence to give it a sinister connotation.
21907571. The IHO does not find Hillary’s testimony concerning this incident to be indicative of any relationship between Coia and the LCN, nor does such testimony establish any association between Coia and any organized crime associate or element.
Coia’s Meetings With Patriarca, Jr. at the Offices of Coia & Lepore
Meetings During the Time Period From 1981 Through 1984
21907572. In September of 1981, Coia was indicted along with his father, Lepore Jr. and Patriarca, Sr. in United States v. Coia, No. 81-417-CR-JLK (S.D. Fla.) (the “Hauser case”). See Respondent’s Exhibit (“R. Ex.”) 32.
21907573. Coia and Lepore, Jr. were indicted for allegedly accepting a $30,000 legal fee from a Florida insurance company as a ruse to transfer a bribe from that company to Coia, Sr. who, at the time, was LIUNA’s General-Secretary Treasurer. Tr. 4809.
21907574. Due to his illness, Patriarca, Sr.’s case was severed and was transferred to the District of Rhode Island in February or March of 1982. See R. Ex. 32, 32A.
21907575. Attorneys for the defendants in the Hauser case held joint defense meetings at the law offices of Coia & Lepore. Tr. 3752, 3994-95, 4550. Patriarca, Jr. attended these meetings on behalf of his father who was ill and unable to attend. Tr. 4815. Coia met Patriarca, Jr. for the first time at these meetings. Tr. 4813.
21907576. The Hauser case was dismissed in December of 1984 on a Rule 29 motion at the end of the government’s case. R. Ex. 124 at 2716-17.
21907577. The GEB Attorney concedes that Coia, as a defendant in a criminal matter, could properly associate with Patriarca, Jr. for the purposes of the joint defense meetings held at Coia & Lepore. See GEB Br. at 58.
21907578. The IHO finds that Coia’s meetings with Patriarca, Jr. at Coia & Lepore for purposes of the joint defense were not an association amounting to “barred conduct.”
Meetings Between 1984 and 1987
21907579. The GEB Attorney further argues that Coia and Patriarca, Jr. continued to meet after the Hauser case was resolved and that, during this time period, Coia performed legal work for Patriarca, Jr. GEB Br. at 57. These alleged meetings, he contends, were “barred conduct.”
21907580. The GEB Attorney attempted to prove that these alleged meetings occurred through Cucinotta’s testimony. Tr. 19.
21907581. Cucinotta, who is currently incarcerated and in the Federal Witness Protection Program, testified herein on April 16 and 17, 1998. Tr. 839-1059.
21907582. Cucinotta testified that he was Patriarca, Jr.’s driver for approximately five years and that he drove Patriarca, Jr. to the offices of Coia & Lepore two to four times a week for a period of two years from July of 1984, after Patriarca, Sr. died, until April of 1986. Tr. 875-76 (testifying that he drove for Patriarca, Jr.), Tr. 884-86 (testifying that he drove Patriarca, Jr. to Coia & Lepore), Tr. 963-65 (indicating dates he drove Patriarca, Jr. to Coia & Lepore). See also R. Ex. 49. Cucinotta stated that he waited for Patriarca, Jr. inside the law offices and, while waiting, he spoke briefly to the secretaries and often fell asleep in a chair near where the secretaries were working. Tr. 885-86, 965.
21907583. Cucinotta was born on January 1, 1942 in Sicily. Tr. 839-40. He has a fifth grade education and began work as a butcher when he was eight years old. Tr. 840-01. In 1961, when he was 19 years of age, he came to the United States and continued to work as a butcher. Tr. 841.
21907584. Cucinotta met the Patriarcas for the first time in 1975. Tr. 846-47. He knew the Patriarcas were mobsters, but began spending time at the Coin-o-matic in order to make money. Tr. 846-49. He sold sandwiches, coffee and sodas at the Bradford Club, located above the Coin-o-matic, and Patriarca, Jr. gave him a cut of the money that was collected from card games played there. Tr. 848-49.
21907585. In 1994, Special Agent William Shay of the Federal Bureau of Investigation (“FBI”) reported to the local police that “Cucinotta was brought over from Italy years ago to do a hit for [the] Patriarca [family], and after the hit he became a made man and [Patriarca’s, Jr.’s] driver.” R. Ex. 45 at 2. This same story was told by Shay to Luigi Reali (“Reali”), a former Rhode Island State Trooper, who testified herein. Tr. 4278.
21907586. During the more subdued portions of Cucinotta’s testimony, he attempted to portray himself as a reluctant mob member and a gentleman gangster who ended up in the LCN by accident. When asked if he spoke to a certain secretary at Coia & Lepore, he said, “I just show all kind of respect to any lady.” Tr. 966.
21907587. Cucinotta related an incident that took place in either 1975 or 1976, in which Patriarca, Jr. told him to go to a restaurant and tell a man named Johnny Carr (“Carr”) that Jackie Sisilini (“Sisilini”) wanted to see him in his office. Tr. 849-50. Cucinotta delivered this message and Carr was killed when he went to the location. Later, when discussing Carr’s murder, Cucinotta was told “another guy went to California” (had been murdered) by Sisilini, Billy “Blackjack” DelSanto and Frankie “Bo Bo” Maurapisi. Tr. 853-56. Cucinotta claimed that he had no idea Carr was being set up for the hit when he delivered the message. Tr. 857. The IHO finds this statement not credible.
21907588. Cucinotta stated that, after this incident, he felt afraid and he came to realize that he was getting involved in the mob. Tr. 857-58. The IHO finds this statement not credible as well.
21907589. Cucinotta was inducted into the LCN during a formal ceremony in October of 1977. Tr. 861-66. He testified, however, that he was unaware the ceremony would take place; he was simply called to a meeting and, once there, found out that he was to be inducted. See id. The IHO does not find credible Cucinotta’s testimony that he was inducted into the LCN by surprise.
21907590. In 1988, Cucinotta sustained a head injury which apparently caused the onslaught of certain psychiatric problems which remain to this day. Tr. 920-21 (describing head injury). In fact, he stated at the hearing herein that his “head [was] not right” and that it had not been right since 1988. Tr. 993-1000.
21907591. Cucinotta admitted he has a history of psychiatric problems consisting of depression, feelings of hopelessness, suicidal tendencies, anxiety attacks, persistent headaches and difficulty with concentration. Tr. 993-1000; R. Ex. 48. These conditions are corroborated by medical records from the Rhode Island Workers’ Compensation Board. Id.
21907592. Cucinotta began suffering from depression in 1989 and once admitted to a doctor that he felt like going to the highest bridge and jumping. Tr. 993-1000. He has contemplated suicide and often breaks down and cries. (He broke down at least twice on the witness stand in this case). See id. Cucinotta testified that he sometimes became so confused while driving his car that he was unable to find his way home. Tr. 996. When this happened, he would park the car “and just stay there and break down and cry.” Id.
21907593. When questioning Cucinotta about his criminal history, the GEB Attorney asked him if he had committed a double murder on April 1, 1994. Tr. 922.
21907594. Cucinotta described the night he committed the double murders of Ronald Capola (“Capola”) and Peter Scarpallini (“Scarpallini”) in shocking detail. His narrative reminded one of an actor performing the Stanislavsky method of using mental recall of past experience to portray the present. The drama with which he related the story of the night he murdered the two men was chilling. He had clearly removed himself from reality and then recounted the murders as though they had happened only moments before. As he stood in the witness box, the story flowed from him with mixed emotions of intense anger, sadness, regret, bitterness and defeat and, once he began to speak, he was not to be stopped until his confession was complete. Tr. 923-37.
21907595. Cucinotta’s testimony about the murders is summarized as follows: On April 1, 1994, he was at the St. Mary’s social club in Johnston, Rhode Island with his close friend Nicky Leonardo, whom he referred to as “Nicole.” Tr. 925. Capola, whom Cucinotta referred to as a long time “close friend,” was also at the club. Tr. 926. Cucinotta testified that he was getting a beer from behind the bar when he was interrupted by Scarpallini who told him that Capola no longer wanted him in the club. Tr. 929. This infuriated Cucinotta. He left the club, retrieved a handgun, then returned and shot Capola and Scarpallini to death. Tr. 929-37.
21907596. On May 2, 1995, Cucinotta pled guilty to second degree murder for the Capola and Scarpallini killings. R. Ex. 46-47. He was sentenced to an aggregate term of 120 years in prison. Id.
21907597. After Cucinotta finished his testimony concerning the murders, the IHO put the following statement on the record:
[D]uring the last 10 minutes of this testimony, [Cucinotta] was standing and it is my impression that he was very emotional, his voice broke a number of times. He did not sit and was extraordinarily agitated, and I think the record ought to reflect that the testimony was not in a peaceful manner. He stood up and was extremely agitated, gestured a lot and hammered the table and broke down several times.
21907598. In December of 1994, as part of a plea agreement, Cucinotta was scheduled to testify at the sentencing hearing in a federal criminal case involving Patriarca, Jr. Prior to that hearing in October of 1994, the trial Judge examined him for two days in camera and the transcripts of that examination remain under seal. R. Ex. 36. In a published opinion, however, United States District Court Judge Wolf stated that, “Cucinotta, while competent for the purpose of deciding whether to cooperate with the government, was emotionally very fragile and plainly vulnerable to being effectively impeached.” United States v. Patriarca, 912 F. Supp. 596, 630 (D. Mass. 1995). See R. Ex. 37. Cucinotta did not testify at the sentencing hearing.
21907599. When questioned about a cooperation agreement into which he had entered with the government in the Patriarca, Jr. matter and his concomitant motions for sentence reduction, Cucinotta denied having any knowledge of them. Tr. 1003-04, 1017-18; R. Ex. 39, 41, 42. He tried to explain that “I got the fifth grade [education]. . . . I know how to just read and write in Italian. . . . I don’t know how to read and write in English.” Tr. 1004. When pressed further about the existence of his 1995 motion for sentence reduction, he stated “They didn’t make no deal with me. . . I don’t know. I don’t know if yes, if not, I don’t know.” Tr. 1018.
21907600. In his responsive brief, the GEB Attorney candidly concedes that Cucinotta’s evidence does not establish “the frequency of meetings” between Coia and Patriarca, Jr. GEB Resp. Br. at 2 n.1. This concession should be considered with the GEB Attorney’s dismissal of Charge II. Cucinotta’s testimony was to be the evidence to support that charge also. Cucinotta’s bizarre performance on the witness stand and his severe psychiatric problems, in combination with the GEB Attorney’s concession and his dismissal of Charge II, leads to the conclusion that, as a witness, Cucinotta is not credible.
21907601. Cucinotta’s testimony was contradicted by additional credible evidence, including:
• The FBI surveillance files of Patriarca, Jr. at Coia & Lepore;
• The testimony of former Rhode Island State Trooper Reali;
• The testimony of certain former secretaries at Coia & Lepore;
• The testimony of Armand Sabitoni (“Sabitoni”); and,
• The IHO’s site visit to the offices of Coia & Lepore.
These will be discussed seriatim.
The FBI Surveillance Files
21907602. On April 16, 1998, counsel for Coia received a letter from Assistant United States Attorney Craig Oswald regarding a review of the FBI surveillance files of Patriarca, Jr. GEB Ex. 7.
21907603. The FBI surveillance files produced by the Department of Justice (“DOJ”) reveal that Patriarca, Jr. was seen at the offices of Coia & Lepore on only four occasions: March 3, 1982, June 2, 1982, June 7, 1982 and June 9, 1982. R. Ex. 33.
21907604. Reali has been the Director of Security for LIUNA since July 1, 1995. Tr. 4208-09. Although he often works as Coia’s bodyguard, his testimony was independently corroborated by at least six other witnesses, as well as other credible evidence. The IHO finds Reali’s testimony to be credible.
21907605. Reali was a member of the Rhode Island State Police for 18 years from 1971 through 1989 and was a member of the department’s organized crime intelligence unit from 1983 until his retirement in 1989. Tr. 4209-11.
21907606. From January of 1985 through May of 1985, Reali was the head of a squad detailed to surveil Patriarca, Jr.’s movements 24 hours a day, 7 days a week. Tr. 4213. This surveillance was later scaled back to the daylight hours from May of 1985 though September of 1985. Tr. 4215-16.
21907607. Reali testified that neither he nor his squad ever saw Patriarca, Jr. at the law firm of Coia & Lepore during this surveillance and never saw Patriarca, Jr. meet with Coia. Tr. 4215.
21907608. In January of 1986, a task force created among the Rhode Island State Police, the FBI, and the Providence Police placed a listening device, “a bug,” in Patriarca, Jr.’s car. Tr. 4219. The bug was placed in the vehicle in January of 1986 and it required continuing surveillance of Patriarca, Jr.’s car. Tr. 4220-21.
21907609. Reali stated that the Rhode Island State Police worked closely with the FBI on a daily basis from September of 1985 through 1986 and that he was unaware of any sightings of Patriarca, Jr. visiting Coia & Lepore or any contact between Coia and Patriarca, Jr. during this time. Tr. 4224-25, 4285-86.
21907610. In response to a Court Order, the legal counsel to the Rhode Island State Police sent Coia a letter which stated,
. . . please be advised that the Rhode Island State Police files specifically relating to Arthur A. Coia, Arthur E. Coia, Raymond Patriarca, Jr. or the Laborers International Union of North America covering the period 1984 to 1986 do not contain any documents that would tend to indicate that Patriarca, Jr. visited several times per week for many weeks with Arthur A. Coia or at the Arthur E. Coia building at 226 South Main Street, Providence, Rhode Island.
R. Ex. 363.
21907611. Affidavits were submitted herein by Richard Tamburini, the head of the Providence Police Department’s Organized Crime Division from 1981 to 1988 and the current Chief of Police in Johnston, Rhode Island, and John Scuncio, a former member of the Rhode Island State Police Intelligence Unit and currently the Chief of Police in Hopkington, Rhode Island. R. Ex. 364, 365. The affidavits indicate that they have no knowledge of any association between Coia and Patriarca, Jr. or that any regular meetings between Coia and Patriarca, Jr. took place at Coia & Lepore or elsewhere from 1984 through 1986. See id. The IHO credits these affidavits.
The Former Secretaries of Coia & Lepore
21907612. Nancy R. Hermiz (“Hermiz”), Lisa Aceto (“Aceto”), Linda Moretti (“Moretti), Anna Menna (“Menna”), and Ramona Santos (“Santos”) testified herein on June 10-11, 1998 in Providence, Rhode Island.
21907613. They were employed by Coia & Lepore in the following capacities:
Hermiz Full-time Secretary June, 1975-April, 1986
Aceto Full-time Secretary April, 1981-1983
Moretti Full-time Secretary 1977-1986
Menna Full-time Secretary 1981-June, 1986
Santos Receptionist then September, 1983-March, 1998
Tr. 4091, 4115-16, 4151, 4184, 4207.
21907614. Menna, Hermiz, Aceto, and Moretti all remembered the Hauser case and recalled that the defense attorneys visited Coia & Lepore to prepare for the trial. Tr. 4115-16 (Aceto recollecting Hauser case); Tr. 4091 (Hermiz recollecting Hauser case); Tr. 4151 (Moretti recollecting Hauser case); Tr. 4184 (Menna recollecting Hauser case).
21907615. Hermiz saw Patriarca, Jr. at Coia & Lepore two or three times prior to, but never after, August of 1984. Tr. 4093.
21907616. Moretti testified that she may have seen Patriarca, Jr. at Coia & Lepore six or seven times prior to, but not after, August of 1984. Tr. 4152-53.
21907617. Menna stated that Patriarca, Jr. visited Coia & Lepore five or six times prior to, but not after, August of 1984. Tr. 4186-87.
21907618. Aceto, Moretti and Menna recalled that Patriarca, Jr. was always accompanied to Coia & Lepore by Cucinotta. Tr. 4126 (Aceto testifying to Cucinotta’s presence with Patriarca, Jr.), 4154 (Moretti testifying to Cucinotta’s presence with Patriarca, Jr.), 4188 (Menna testifying to Cucinotta’s presence with Patriarca, Jr.).
21907619. Santos was a receptionist from September of 1983 until March of 1984 when she became a full-time secretary. Tr. 4204-05. After March of 1984, her desk was located in the common area of the office space. She testified that she never saw Patriarca, Jr. at Coia & Lepore and that she would have noticed him at the office had he visited. Tr. 4206-07. See R. Ex. 359 (map of office).
21907620. Although all five women are former employees of Coia, they corroborated one another, and their testimony is consistent with other credible evidence herein. As such, the IHO finds them to be credible witnesses.
21907621. Sabitoni, International Vice President and New England Regional Manager, testified herein on June 2-3, 1998 in Washington, D.C. Tr. 3727-4049.
21907622. Sabitoni was an associate attorney at Coia & Lepore in the early 1980s and became a partner in August of 1986. Tr. 3731.
21907623. Sabitoni testified that he recalled the Hauser case and the joint defense meetings that were held at Coia & Lepore. Tr. 3750 (recollecting Hauser case); Tr. 3752 (recollecting defense meetings). He was present at the firm during one of these meetings and learned from the secretaries that there had been others. Tr. 3752-55.
21907624. During the 1980s, Sabitoni spoke with Coia several times a day since their offices were only about 30 feet apart, and he would have known if Patriarca, Jr. had been a regular visitor to the firm. Tr. 3762-70, 3816-18. Sabitoni stated that between August of 1984 and April of 1986, Patriarca, Jr. did not visit Coia & Lepore. Tr. 3769.
21907625. Although Sabitoni now works closely with Coia as an International Vice President, and has had a personal friendship with him for many years, his testimony is corroborated by Reali, the five former secretaries of Coia & Lepore, and the FBI surveillance files. The IHO finds his testimony to be credible.
The IHO’s Site Visit to Coia & Lepore
21907626. On June 10, 1998, the IHO and all counsel made a site visit to the law firm of Coia & Lepore. Tr. 4173-78. The firm’s office suite consists of a reception area and a separate office enclave in which the individual attorney’s offices open onto a central area containing the secretaries’ cubicles. These cubicles are approximately four feet high and a secretary seated behind one could easily see the entire office space.
21907627. If Cucinotta sat in the inner office area which he described, he would have been plainly visible to everyone in the office. The room is such that any person passing through would be seen by all of the secretaries. Sabitoni stated during the site visit that the center office space was “wide open” in the early 1980s because only four secretaries cubicles were there at the time, rather than the six currently there. Tr. 4172-73. Sabitoni also stated that the area was not as congested then as it was during the IHO’s site visit. Tr. 4174.
21907628. Based upon the site visit, the IHO finds that Patriarca, Jr. could not have visited Coia & Lepore on a regular basis without the secretaries and other attorneys in the office being aware of it. As such, their testimony is inconsistent with Cucinotta regarding the frequency of meetings both prior to and after 1984.
21907629. The IHO places no weight on Cucinotta’s testimony and credits the testimony of the office personnel and the other sources of information.
Legal Work Performed by Coia & Lepore for Patriarca, Jr.
21907630. The GEB Attorney alleges that Coia performed legal work for Patriarca, Jr. and, indeed, it appears that Coia & Lepore incorporated one of Patriarca, Jr.’s companies. Tr. 4855-58; GEB Ex. 213. When asked about this work, James Lepore, another attorney in the firm, stated that the matter comprised only five or six hours of billable time. GEB Ex. 213; R. Ex. 389. The invoice sent to Patriarca, Jr. for this work was in the amount of $711.85 and it reflected that the services and costs involved were: the incorporation of a business, filing fees, a corporate kit, and the preparation of the annual report and minutes. GEB Ex. 213, R. Ex. 389.
21907631. Coia testified that he never worked on the file and that he only learned of its existence when he was preparing for one of his depositions in this case. Tr. 4855-56.
21907632. The IHO does not find the evidence of any legal work performed by the law firm probative as to a “business relationship” between Coia and Patriarca, Jr. or to Coia’s alleged relationship with the LCN.
Coia’s Association with Patriarca, Jr. and the Rottweiler Breeding
21907633. From the early 1980s until either 1990 or 1991, Coia and his wife owned a dog breeding kennel known as Southwind Farms. R. Ex. 369. This facility had been recognized by the American Kennel Association and was renowned for producing champion Rottweilers. Tr. 4823, 4827. See R. Ex. 369-377A-C.
21907634. Coia testified that, during the preparation of the joint defense in the Hauser case, Patriarca, Jr. saw pictures of Coia’s champion Rottweilers in his office at Coia & Lepore. Tr. 4850. Patriarca, Jr. was also a Rottweiler enthusiast and he sent one of his own dogs to be bred at Southwind Farms in 1982 or 1983. Tr. 4852-53. Coia’s wife and a dog handler conducted the breeding, which was unsuccessful. Tr. 4854.
There is no indication that Coia had any contact with Patriarca, Jr. during the course of the breeding.
Patriarca, Jr.’s FBI 302 Statement
21907635. An FBI report (commonly known as a “FBI 302") of an interview, given by Patriarca, Jr. to the FBI on August 8, 1996, (the “Patriarca 302"), was offered into evidence during the hearing. R. Ex. 49A. The Patriarca 302 was made available to Coia by the DOJ.
21907636. The Patriarca 302 contains the following language
. . . [although] Coia, Sr. and [Patriarca, Jr.’s] father had a long term business relationship, he never had such a relationship with Arthur A. Coia. Patriarca added that ‘no one who reports to him [Patriarca, Jr.] has any such relationship to Arthur A. Coia’, and added that ‘Arthur [A. Coia] does not have the balls to be a gangster.
R. Ex. 49A.
A complicating factor in determining Charges I and III is the relationship between Coia, Sr. and Patriarca, Sr. It is a factual element which confuses the analysis of the charges. In this proceeding and others heard by the IHO, there was testimony that Coia, Sr. had a relationship with Patriarca, Sr. as well as other LCN members across the country. Some allegations are credible, others are patently incorrect. Coia, Sr. died in March of 1993, and no issue regarding his activities has been presented to the IHO for a determination. Nevertheless, allegations of certain acts or relationships of Coia, Sr., correct or incorrect, are necessarily present in the chronology of this and other cases.
The problem for the fact finder with the background presence of Coia, Sr. is that events are often described with him being the actor, with an inference that his son, who was also in the union hierarchy at the time, shared responsibility or knowledge of them. Indeed, the GEB Attorney often makes the statement that Coia was “the son of a legendary Rhode Island labor leader within LIUNA and himself an heir apparent for high office within LIUNA.” GEB Br. at 58-59. See GEB Resp. Br. at 6. Another example of this appears in the testimony of Hillary and Cucinotta, both of whom stated that persons were sent to Local 271 by the Patriarcas to obtain jobs and that, allegedly, Coia, Sr. made the arrangements. No witness, however, implicated Respondent Coia in obtaining jobs for them at Local 271 and, indeed, the GEB Attorney abandoned this allegation. In reading the transcript, however, the questioning by the GEB Attorney of certain witnesses implied that Respondent Coia was deeply involved in arranging jobs for Patriarca family members and associates merely by invoking the name Coia, Sr.
The GEB Attorney’s position on Patriarca, Jr.’s visits to Coia & Lepore should be viewed in a historical spectrum. At the outset, the GEB Attorney contended in his opening statement that Coia met regularly with Patriarca, Jr. from 1984 through 1987 at Coia & Lepore. These meetings were to be proven by Cucinotta and then corroborated by Hillary although Hillary had no firsthand knowledge of these matters. The GEB Attorney said that the core of the evidence would be from Cucinotta and Hillary would confirm Cucinotta in every significant respect. Tr. 11, 15.
Both parties agree there were visits to Coia & Lepore by Patriarca, Jr. during the pendency of the Hauser case. The problem arose that Cucinotta, perhaps out of simple mistake, perhaps out of his desire to testify somewhere in order to obtain a sentencing reduction, or perhaps a combination of both, testified that the visits continued for far beyond the period of time that any other witness recalled. As determined above, this testimony runs contrary to the surveillance evidence, witness testimony, and common sense.
Moreover, Cucinotta’s bizarre performance on the witness stand, and his impeachment during cross examination, caused the GEB Attorney to distance himself from him. In fact, the GEB Attorney stated in his post-hearing brief that the evidence did not establish .” . . the frequency of meetings between Coia and Raymond, Jr. after 1984 as recalled by Raymond, Jr.’s driver, Anthonio [sic] Cucinotta.” GEB Resp. Br. at 2 n.1. In other words, although Cucinotta is the GEB Attorney’s witness, one cannot believe everything he said. As noted earlier, Hillary made no contribution to the proof of this matter. Although asserted to be probative by the GEB Attorney in his opening statement, the Hillary/Cucinotta combination simply disintegrated once both witnesses appeared on the witness stand, and there is no evidence of Patriarca, Jr. and Coia meeting after 1984.
Nevertheless, the GEB Attorney argues in his post-hearing briefs that, due to Coia’s position in the 1980s as an up and coming LIUNA labor leader and Patriarca, Jr.’s position as a made member of the LCN and the son of the Boss of the New England LCN family, “any contact between Coia and Raymond, Jr. conveyed the unmistakable message that the LCN had significant influence within LIUNA.” GEB Br. at 59 (emphasis omitted). See GEB Resp. Br. at 5-6. He further argues that the “unique positions” of Coia and Patriarca, Jr. send a message to the union membership that the LCN has “easy access to the Union officers and members in the total atmosphere [of the] labor union operation.” GEB Br. at 60, citing, Fallacara, IHO 96-65D at 6, ¶ 210. This argument flies in the face of his concession that the joint defense meetings between Coia and Patriarca, Jr. were proper.
The GEB Attorney also relies extensively on the Patriarca family influence at Local 271. Although, historically, the Patriarcas may have had influence at that Local during Coia, Sr.’s tenure, it is not relevant to the charges here against Respondent Coia and will not be considered by the IHO in rendering his final decision.
The GEB Attorney also implicitly argues that there was an improper relationship between Local 271 and the law firm of Coia & Lepore since it shared office space with the Local and did extensive legal work for it. This argument does not have any probative value relative to the charges in this matter.
The GEB Attorney, citing the Fallacara test for “knowing association,” also contends that the mere appearance of mob access to the union is sufficient to discipline a union official. See supra pp. 2-3. There is no indication in the record, however, that Patriarca, Jr. had access to the union. He visited Coia at Coia & Lepore on only a few occasions. No credible evidence was put forth to show that he and Coia were together at any other time.
Teamsters Case Law
The GEB Attorney offers a number of cases decided by the Court appointed Independent Administrator of the International Brotherhood of Teamsters (“IBT” or “Teamsters”) as well as certain federal court decisions to support his position, but the language quoted therefrom is taken out of context. All of those cases deal with Teamster union officials who either invited LCN figures into their union, regularly socialized with them, or sought their assistance in union affairs. An examination of the facts in those cases reveals far different fact patterns than the one presented here.
In all of the Teamsters’ cases cited by the GEB Attorney, the relationships between the charged persons and the LCN members and associates continued for a number of years, on regular social and business levels.
In United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. (“DiGirlamo”), 824 F. Supp. 410 (S.D.N.Y. 1993), DiGirlamo was the bookkeeper for IBT Local 41 in Kansas City, Missouri and the evidence therein established that he associated with four men -- Charles Moretina, James Moretina, Peter Simone (“Simone”), and Frank Tousa (“Tousa”) -- whom he knew to be members of the Kansas City LCN. Id. at 414-416 (discussing association with C. Moretina, J. Moretina, P. Simone and F. Tousa).
DiGirlamo’s car was observed by the FBI outside of Charles Moretina’s house during working hours. He also attended Charles Moretina’s criminal trial and visited him several times in prison. Id. at 416. James Moretina and Simone hired DiGirlamo as an accountant for their business -- Be Amused Vending Company-- and he would occasionally go to Simone’s illegal gambling hall to pick up the company’s books. In fact, during his tenure as the company’s accountant, the FBI seized illegal gambling equipment which the company owned, and James Moretina and Simone were eventually convicted for money laundering and illegal gambling. Id.
DiGirlamo also visited James Moretina’s home and spoke with him daily on the telephone. Id.
DiGirlamo and Simone had known each other since childhood. They had participated in community sporting and charity events together, and had spent time at one another’s homes. Id.
DiGirlamo had also prepared Tousa and his wife’s personal tax returns and had spent time in the Tousas’ home while doing so. Id.
In United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. (Adelstein), 998 F.2d 120 (2d Cir. 1993), Adelstein held the positions of Secretary-Treasurer of IBT Local 813, President of IBT Local 1034, and Secretary-Treasurer of the Executive Board of IBT Joint Council 16.
There was evidence that he had “decades-long relationships with an entire cast of characters who were members of organized crime’.” Id. at 123-24 (quoting Independent Administrator). Adelstein assisted Gambino family member James Failla (“Failla”) in the mob’s control of both the garbage industry and of IBT Local 813 in New York City. Id. at 122. He was an associate of the Gambino family and answered to Failla. He and Failla often attended the same social affairs, charity affairs, and funerals. Id. at 125.
In United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. (Yager), 761 F. Supp. 315 (S.D.N.Y. 1991), the Independent Administrator prevented the appointment of Yager to the IBT’s General Executive Board since there was evidence that he had been seen with members of the LCN. Id. at 320. Moreover, the LCN had a history of influence over the IBT Central States Pension Fund, of which Yager was an officer, and had once engaged in a scheme to bribe a former United States Senator using pension fund assets. Id. The Independent Administrator concluded that Yager knew of this, yet did nothing to stop it. Id.
The GEB Attorney also cites Judge Edelstein’s statement in United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. (Cozza), 764 F. Supp. 797, 813 (S.D.N.Y. 1991), that “there is no such thing as a purposeful, yet innocent or non-reproachful association of an Union leader and an underworld figure.” The facts of that case, however, are far different from those herein. There, Cozza admitted that he knowingly associated with five members of the Pittsburgh LCN. This association included daily visits with John S. LaRocca, who was the Boss of the Pittsburgh family from 1956 until his death in 1984. Id. at 806.
In a case brought under the Carpenters’ Consent Decree, United States v. District Council of New York City (Fiorino), 941 F.Supp. 349 (S.D.N.Y. 1996), Fiorino knowingly associated with two members of the Genovese family, Liborio Bellomo and Ralph Coppola. Id. at 357. Although Bellomo was married to Fiorino’s sister, the Court found that their relationship went beyond the ordinary contacts of family members. Id. at 368. For example, there were 372 telephone calls made in a ten month period from Bellomo’s home to Fiorino’s beeper. Id. at 369. Fiorino also admitted that he had met with Coppola on the street, visited him at home, and spoke with him on the telephone. Id.
The contact alleged by the GEB Attorney herein is of a far different character than that found in the above cases. In this matter, there was no credible evidence presented to show any contact between Patriarca, Jr. and Coia at any time except for the joint defense meetings at Coia & Lepore.
21907637. The GEB Attorney has not proved by a preponderance of the evidence that an ongoing social or business relationship existed between Coia and Patriarca, Jr. which constituted barred conduct.
21907638. The IHO finds that the GEB Attorney has not proved Charges I and III by a preponderance of the evidence. As noted above, Charge II has been withdrawn.
III. THE TRUSTEESHIP OF LOCAL 66
Charge IV alleges:
Barred Conduct — Permitting LCN Influence: From in or about April, 1990 through 1994, ARTHUR A. COIA knowingly permitted members and/or associates of the LCN to exercise control or influence over the affairs of the Union, to wit: by his actions and failures to act, he allowed officers of Local 66 who were influenced and controlled by the LCN to remain in power, thereby allowing the LCN to continue its control and influence over Local 66.
Charge V alleges:
Violation of Duty of Loyalty: From in or about 1990 until in or about 1994, ARTHUR A. COIA violated the obligation of undivided loyalty incumbent upon all members, officers, and employees of LIUNA, including but not limited to those duties set forth in 29 U.S.C. § 501(a) and the LIUNA Ethical Practices Code, to wit: through his actions and failures to act, he did not take adequate steps to investigate and remedy organized crime corruption at Local 66, and he participated in a course of conduct that permitted and facilitated the continuation of that corruption during and after the time that LIUNA placed Local 66 under trusteeship in 1990 through 1992.
Charge VI alleges:
Constitutional Duties of LIUNA Members: In permitting the LCN to exercise influence over Union affairs, as alleged more specifically above in Charge IV, ARTHUR A. COIA failed to honor his obligation as a LIUNA member to refrain from interfering with the proper conduct of LIUNA business, in violation of Article III, Section 3(d) of the Uniform Local Union Constitution.
In Charges IV through VI, the GEB Attorney asserts that Coia failed to take adequate measures to ensure that LCN influence was eradicated from LIUNA Local Union 66 (“Local 66") after he was appointed as the Hearings Panel Officer to rule upon an emergency trusteeship for the Local.
Findings of Fact
21907639. Local 66 is located in Melville, New York. See GEB Ex. 32.
21907640. From 1985 through December of 1989, the following persons served as officers of Local 66:
Michael LaBarbara, Jr. (“LaBarbara, Jr.”)
James Abbatiello, Sr. (“Abbatiello, Sr.”)
Assistant Business Manager and Recording Secretary;
Peter Vario (“Vario”)
Vice President of Local 66 and Administrator of Local 66's Benefit Funds;
Benjamin DeLucia (“DeLucia”)
Santo Ippolito (“Ippolito”)
Executive Board Member and Field Representative;
Frank Chimento (“Chimento”)
Executive Board Member;
James Abbatiello, Jr. (“Abbatiello, Jr.”)
Executive Board member;
Michael LaBarbara, III (“LaBarbara, III”)
Gerald Losquadro (“Losquadro”)
Bruno Leone, Jr. (“Leone”)
See R. Ex. 120.
21907641. On December 12, 1988, a 51 count federal indictment was returned against three officers of the Local 66 Executive Board (“the Board”) -- Vario, LaBarbara, Jr., and Abbatiello, Sr. -- charging them with using Local 66 to engage in a course of racketeering activity for the benefit of the Luchese crime family. GEB Ex. 10.
21907642. At the January 26, 1989 Local 66 Board meeting, the remaining members of the Board voted to pay for the legal expenses incurred by Vario, LaBarbara, Jr., and Abbatiello, Sr. in their defense against the indictment. GEB Ex. 9, Tab 23; R. Ex. 110. In all, Local 66 would eventually pay approximately $400,000 in legal expenses on their behalf. GEB Ex. 9, 11.
21907643. The Local’s attorney, Jeffrey S. Dubin (“Dubin”), advised the Board that it was legal for the Local to pay the attorneys’ fees. Tr. 1100-01. This advice was incorrect. Tr. 1237-38; GEB Ex. 41.
21907644. On December 14, 1989, LaBarbara, Jr. and Abbatiello, Sr. resigned from the Board and, as severance packages, the Local gave each a new Lincoln Town car. GEB Ex. 17-18 (resigning from posts), 21-23 (receiving automobiles from Local). Vario was given a cash payment of $35,769.50 in lieu of a car. GEB Ex. 24, 25. Dubin had advised the Board that it could make this cash award to Vario. GEB Ex. 9, Tab 28.
21907645. On September 26, 1989, LaBarbara, Jr. and Abbatiello, Sr. pled guilty to various federal charges and, on December 15, 1989, they were each sentenced to 14 months in prison, two years probation, and fines of approximately $37,000. GEB Ex. 14, 19, 20. On March 29, 1990, Vario was convicted and sentenced to 46 months in prison, three years probation, and a fine of $106,360. GEB Ex. 30, 32.
21907646. On January 8, 1990, Samuel Caivano, the Regional Manager in whose jurisdiction Local 66 was located, wrote a letter to General President Angelo Fosco ("Fosco") requesting that Local 66 be placed under trusteeship. GEB Ex. 26. Samuel Caivano said:
Because of circumstances surrounding the conviction and incarceration of several key local union officials, I strongly recommend that emergency trusteeship be placed over Local Union 66, Melville, New York.
This Regional Office has been monitoring the current situation at Local Union 66, and I believe that the only way to guarantee quality representation for the membership as well as restoring the integrity of the Local Union is through the immediate imposition of emergency trusteeship.
Your immediate attention to this problem would be appreciated.
21907647. On March 15, 1990, in response to Samuel Caivano’s recommendation, Fosco placed Local 66 under emergency trusteeship pursuant to Article IX, Section 7 of the International Constitution which authorizes the General President to do so when necessary to correct corruption or financial malpractice, assure the performance of collective bargaining agreements, restore democratic procedures, carry out the legitimate objects of the local union or protect the organization as an institution. International Constitution, Article IX, Section 7. See R. Ex. 31, 54, 58, 59.
21907648. In conformance with Article IX, Section 7, Fosco convened a Special Hearings Panel (“the Panel”) to determine if the emergency trusteeship over Local 66 was properly imposed and if it should be continued. R. Ex. 60. Such a Panel usually consisted of one or more International Vice Presidents who acted as Hearing Officers. International Constitution, Article VIII, Section 2(a-vii). They were assisted by one or more attorneys from the LIUNA General Counsel’s office. Tr. 3584. Coia, who was then the International General Secretary-Treasurer, was appointed to sit as the sole member of the Local 66 Panel. Tr. 1175-76. Two attorneys from the General Counsel’s office, David Elbaor (“Elbaor”) and Ted Green (“Green”), accompanied him to the hearing See id.
21907649. As the Hearing Officer assigned to the Local 66 Panel, Coia’s sole duty was to determine whether the trusteeship was properly imposed and whether a good faith basis existed to continue it. See International Constitution, Article IX, Section 2(a-vii), Section 7. See id. Article X, Section 4.
21907650. The hearing was convened on April 10, 1990 and evidence was presented to the Panel regarding financial malpractice and corruption at Local 66. See generally R. Ex. 63. An audit report revealed that approximately $400,000 of the Local’s funds had been spent on legal fees for Vario, LaBarbara, Jr., and Abbatiello, Sr. See id. at 4, 6, 39.
21907651. As was the practice at that time, the Panel’s report was drafted by the attorneys who accompanied Coia to the hearing. Tr. 1431, 3585, 4587, 4590. Coia approved the report, signed it, and submitted it to the GEB for its approval. GEB Ex. 34. The report made the following findings:
1. In December, 1989, the Business Manager/Secretary-Treasurer, and the Recording Secretary/Assistant Business Manager of the Local Union pled guilty to indictments alleging numerous violations of RICO and Section 302 of the Taft-Hartley involving the taking of money from contractors for personal benefit. The Business Manager and Recording Secretary/Assistant Business Manager immediately resigned from office. In March, 1990, the Vice President, who was also an Organizer of the Local Union and the Administrator of the Local Union Funds, was convicted for his part in the same course of conduct.
2. The Local Union has paid the legal expenses of all three officers.
3. The former Vice President and Fund Administrator has interfered with the conduct of Local Union business following the resignation of the Business Manager/Secretary-Treasurer and the Recording Secretary/Assistant Business Manager in December, 1989 up to and beyond the point at which his own trial was conducted.
4. The trustee has taken various steps to rectify the situation. A full audit of Local Union affairs is being conducted and appropriate remedial action will be taken. Through its trustees, the Local Union will see to it that the funds not retain, as an employee or agent, any person disqualified by ERISA. Other action is being taken to see that appropriate collective bargaining procedures are restored.
5. Under the circumstances it is clear that the Local Union was facing an emergency condition when the General President imposed trusteeship on [March 15], 1990.
21907652. The Panel report recommended “[t]hat the General President’s decision to impose an emergency trusteeship be ratified and that a continuation of the trusteeship be authorized.” GEB Ex. 34. The GEB adopted the recommendation. GEB Ex. 39.
21907653. At the time, it was the accepted policy and practice of the International Union to appoint the Regional Manager as the trustee of a local placed in receivership, or to defer to the Regional Manager’s recommendation when selecting an alternative trustee. Tr. 3667-68. Regional Managers, as a general rule, were and still are, very protective of their regions and the prerogatives and procedures that go along with their position. Tr. 3519-23, 3819-23.
21907654. Daniel Caivano was appointed the interim trustee upon the recommendation of his uncle, Samuel Caivano, the Regional Manager. GEB Ex. 31; R. Ex. 57. As Local 66's trustee, Daniel Caivano was “authorized to take full charge of the affairs of the [Local] . . . and to take such other action as, in [his] . . . judgement, [was] necessary for the preservation of the [Local] and its interests.” See International Constitution, Article IX, Section 7. Only General President Fosco was constitutionally authorized to remove him from his post. Id.
21907655. Daniel Caivano exercised his authority as trustee to appoint DeLucia and LaBarbara, III as deputy trustees with power only to co-sign the checks Daniel Caivano wrote for Local 66. R. Ex. 103 at 83. He also appointed DeLucia, LaBarbara, III, Losquadro, and himself as trustees of the Local 66 Funds, while Abbatiello, Jr. became the Administrator of the Funds. Id. at 72-73, 75-76.
21907656. Upon learning of these appointments, Coia admonished Samuel Caivano and Fosco regarding the negative perception which arose from retaining the sons of the convicted felons as Local 66 officials. Tr. 4931-33, 5313. Coia testified that he and Samuel Caivano had an argument on this subject but that Samuel Caivano persisted by stating, “[T]he sins of the fathers should not be put on to the kids.” Tr. 4933.
21907657. Daniel Caivano said he appointed Abbatiello, Jr. and LaBarbara, III to positions of authority at Local 66 because they had never been accused of engaging in any wrongdoing. R. Ex. 103 at 95.
21907658. In his opening statement, the GEB Attorney stated that the handling of the Local 66 matter was a “museum quality example of how local unions were corrupted and controlled by organized crime and how the international union sustained that corruption through the illusion of intervention.” Tr. 22-23. He argued that Coia, “had a legal and ethical duty to make every effort to protect the members of Local 66 from continued corruption, and he failed to do so.” GEB Resp. Br. at 7.
21907659. The GEB Attorney contends that Coia violated his fiduciary duty by not doing more to eradicate LCN influence from Local 66 after he sat as the Hearing Officer at the emergency trusteeship hearing. The GEB Attorney’s argument fails to recognize the institutional makeup of the International Union at that time, prior to the adoption of the EDP.
Pre-Reform Trusteeship Procedure
21907660. Prior to the adoption of the EDP, the International Union was governed solely by federal law and the International and Local Union Constitutions. At the time, the International Union’s control over the local unions was limited to its power to place the local union into trusteeship pursuant to 29 U.S.C. § 462.
21907661. Article IX, Section 7 of the International Constitution conformed to 29 U.S.C. § 462 and a trusteeship could be imposed on a local union to correct corruption or financial malpractice, assure the performance of collective bargaining agreements or other duties of a bargaining representative, restore democratic procedures, carry out the legitimate objects of the local union or protect the organization as an institution. International Constitution, Article IX, Section 7.
21907662. A trusteeship is presumed valid for 18 months. 29 U.S.C. § 464(c).
21907663. Aside from its statutory and constitutional authority to impose a trusteeship, the International Union had no control over the local unions.
21907664. Historically, a parent labor organization and its affiliates do not always share common interests. The parent organization is limited by federal law and its constitution when exercising its authority over a subordinate affiliate. See generally Laborers’ Int’l Union of N. Am. v. National Post Office Mail Handlers, Watchmen, Messengers and Group Leaders Div. of the Laborers’ Int’l Union of N. Am., 880 F.2d 1388 (D.C. Cir. 1989). The relationship between an international union and its local unions cannot be compared to the business arena where the head organization controls subordinate entities, but is more analogous the United States Government’s concept of our nation’s federalism and separation of powers. See Ann B. Whitley, Note, Collective Institutional Guilt: The Emergence of International Unions’ RICO Liability for Local Union Crimes, 21 Am. J. Crim. L. 291 (1994).
21907665. The GEB Attorney has based Charges IV through VI to a great extent on the fact that the sons of the convicted officers remained in positions of power after the continuation of the trusteeship, and Coia did nothing to remove them.
21907666. As the Hearing Officer, Coia had no authority to participate in the operation of the trusteeship and had no power to appoint or even recommend a trustee for Local 66. See generally International Constitution, Article IX, Section 7 (discussing process of appointing trustee). Unlike a judicial trusteeship, where the judge has continuing oversight, the Hearing Officer merely confirms or denies the need for the trusteeship. Id. The General President then assumes the role of the judge and supervises the trustee. The Hearing Officer is similar to a Special Hearing Master whose job is to find facts with respect to very specifically defined issues.
21907667. Coia’s only constitutional role as the Hearing Officer at Local 66 was to determine whether the emergency trusteeship should be continued. He did all that he was legally required to do in this position. He could not appoint or remove the trustee and he had no legal authority over the actions of the trustee; this power was reserved for the General President who, at the relevant time herein, was Fosco.
21907668. Even today, the IHO, when sitting as the Hearing Officer in a trusteeship proceeding pursuant to his powers under the EDP, cannot choose, remove, or intercede in the activities of a trustee once that person has been appointed. The IHO has informally recommended that certain persons be appointed or removed as trustees without success. It is unreasonable to think that Coia, in the International Union structure as it existed prior to the enactment of the EDP, could have constitutionally or legally done more.
21907669. The GEB Attorney’s argument regarding the supervision of the trusteeship is more properly directed at General President Fosco and his supervision of the trustee, Daniel Caivano. Coia did not become LIUNA’s General President until February of 1993, long after the Local 66 trusteeship had ended. At that time, a local union was autonomous and the International Officers had very limited power over it once a trusteeship had ended.
21907670. The Regional Manager’s ability to dictate that the two sons remain as deputy trustees was a reflection of the ineffective LIUNA organization that existed prior to the reform. Today, such a decision would have been overridden by the IG or the GEB Attorney, but Coia cannot now be held legally responsible for Samuel Caivano’s actions.
The Local 66 Bonding Claim
21907671. As a defense to Charges IV and V -- permitting the LCN to influence Local 66 and failing to eradicate LCN corruption at Local 66 -- Coia placed over 30 documents into the record to show that efforts were made to protect the interests of the Local by filing a bonding claim with Eberts & Harrison, Inc., the International Union’s bonding company, to recover the $416,078.79 in attorneys’ fees paid to the three indicted, and later convicted, officers’ attorneys. See R. Ex. 68-100.
21907672. The GEB Attorney, in rebuttal, attacked Coia’s handling of the claim.
21907673. In February of 1993, Coia became the General President and Norwood became the General Secretary-Treasurer of LIUNA. The final settlement of the bonding claim was handled by Norwood in his capacity as the General Secretary-Treasurer in April of 1994, four years after Coia sat as Hearing Officer at Local 66.
21907674. The evidence of the bonding claim, and the rebuttal thereto, are irrelevant to the Local 66 charges and will not be discussed further.
21907675. After Coia made his recommendation to the GEB to continue the trusteeship at Local 66, he had no further constitutional duties that permitted or required him to appoint the trustee(s) or oversee the operation of the trusteeship.
21907676. The evidence in the record does not prove that Coia committed “barred conduct” in violation of the EDP by allowing the LCN to continue its control and influence over Local 66 after he recommended the continuation of the trusteeship in April of 1990.
21907677. The GEB Attorney does not offer any suggestions as to how Coia breached his fiduciary duty, except to assert that he could have done more. The IHO finds that Coia did not breach his fiduciary duty during or after the Local 66 trusteeship hearing.
21907678. The GEB Attorney has failed to prove that Coia interfered with the proper conduct of Local 66's union business after he recommended the continuation of the trusteeship in April of 1990.
21907679. The IHO finds that the GEB Attorney has not proven Charges IV through VI by a preponderance of the evidence.
IV. THE INVESTIGATION OF RONALD FINO’S ALLEGATIONS
Charge VII alleges:
Barred Conduct — Permitting LCN Influence: From in or about April 1990 until in or about 1992, ARTHUR A. COIA knowingly permitted members and/or associates of the LCN to exercise control or influence over the affairs of the Union, to wit: through Coia’s actions, LIUNA supported the defense of LCN members and associates who had corrupted LIUNA by authorizing and approving the expenditure of substantial Union funds to attack the credibility of Ronald Fino, but not to determine in good faith the truth or falsity of Fino’s allegations, when Coia knew or should have known that at least some of Fino’s allegations of LCN influence over LIUNA were credible and true.
Charge VIII alleges:
Violation of Duty of Loyalty: From in or about 1990 until in or about 1992, ARTHUR A. COIA violated the obligation of undivided loyalty incumbent upon all members, officers, and employees of LIUNA, including but not limited to those duties set forth in 29 U.S.C. § 501(a) and the LIUNA Ethical Practices Code, to wit: he authorized and approved the expenditure of substantial Union funds for legal aid investigative work which benefited LCN members and associates, to the detriment of LIUNA and its members, and failed to authorize or approve the use of Union resources to determine in good faith the truth or falsity of Fino’s allegations of LCN control over LIUNA.
Charges IX alleges:
Constitutional Duties of LIUNA Members: In permitting the LCN to exercise influence over Union affairs as alleged more specifically above in Charge VII, ARTHUR A. COIA failed to honor his obligation as a LIUNA member to refrain from interfering with the proper conduct of LIUNA business, in violation of Article III, Section 3(d) of the Uniform Local Union Constitution.
Initially, the GEB Attorney charged Coia with permitting the LCN to influence LIUNA by authorizing the expenditure of International Union funds to attack the credibility of Ronald Fino (“Fino”), the former Business Manager of LIUNA Local Union 210 (“Local 210"), after the media reported that Fino had been exposed as an FBI informant and was alleging LCN infiltration at the highest levels of LIUNA. The GEB Attorney contended that the International Union’s attorneys were deployed by Coia to investigate Fino for the sole purpose of discrediting him and allowing their information to be shared with attorneys representing known LCN members. Tr. 43-45. Furthermore, he charged Coia with failing to authorize the expenditure of Union funds to determine the veracity of Fino’s allegations which had surfaced in media reports, in his testimony in a criminal proceeding in New York, and in FBI 302 reports obtained by the International Union. See Charges VII through IX, supra at 47-48.
In his case in chief, the GEB Attorney presented evidence that only one investigation, conducted by attorney Anthony Traini (“Traini”), took place after Fino surfaced as an FBI informant and this investigation was designed solely to impugn Fino. He asserted that the International Union should have conducted an investigation into the substance, truth or falsity of Fino’s allegations. The defense then countered and presented substantial evidence that an extensive investigation, or “legal audit,” had in fact been conducted by the LIUNA General Counsel’s Office into the substance of Fino’s allegations. See R. Ex. 122, 125-26, 128, 130, 135-41, 143-63, 168-73
In his post-hearing briefs, the GEB Attorney abandoned his original position and argued that Coia was more concerned with following the investigation into Fino’s credibility than the investigation conducted by the General Counsel. GEB Br. at 95, 100.
Findings of Fact
Fino’s Allegations and LIUNA’s Response Thereto
21907680. Fino served as the Business Manager of Local 210, in Buffalo, New York from 1973 until he retired in 1988. Tr. 2316 (undertaking Business Manager position), Tr. 2322 (retiring in 1988).
21907681. In February of 1989, the Buffalo news media reported that Fino had been an FBI informant during his entire 15 years as the Business Manager of Local 210 and had provided the FBI with substantial information of LCN infiltration of LIUNA. Tr. 1627-28. The media further reported that Fino provided information to the FBI that the .” . . Mafia controlled the parent union’s operation across the country.” R. Ex. 178 (Michael Beebe, Fino Goes Into Hiding, Says He Had Been FBI Informer, The Buffalo News, February 2, 1989, at A1.). See also R. Ex. 181 (Michael Beebe, Fino’s Double Life Recalls Father’s Warning on Mob, The Buffalo News, April 17, 1989 at A1)(reporting familial involvement of Fino with mob), R. Ex. 182 (Dan Harback, Masked FBI Agent Acts as Decoy as Threatened Fino Enters Court, The Buffalo News, March 23, 1989 at A1)(reporting Fino’s FBI contract and mob threats against Fino) .
21907682. LIUNA’s General Counsel was aware that the federal government was conducting an aggressive program to rid labor unions of LCN corruption using the civil provisions of the Racketeer Influence and Corrupt Organizations Act (“RICO”). Tr. 3407-08. During the late 1980s and early 1990s, for example, the DOJ embarked upon a campaign of filing civil RICO suits against numerous international and local labor unions, with the object of placing them under government trusteeship. At the time the Fino allegations came to light, this movement was well underway. The DOJ had been successful in placing IBT Local 560 in New Jersey under trusteeship. United States v. Local 560, Int’l Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 581 F. Supp. 279 (D. N.J. 1984). The DOJ also filed a civil RICO complaint against the International Brotherhood of Teamsters on June 28, 1988 and, after a year of intense litigation, entered into a voluntary Consent Decree with the international union in March of 1989, placing it under trusteeship. See United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 831 F. Supp. 278 (S.D.N.Y. 1993). The trusteeship over Local 560 was lifted in February of 1999; the trusteeship over the Teamsters remains in place. Similar suits were also filed against the Roofers Union, United States v. Local 30, United Slate, Tile, and Composition Roofers Damp and Waterproof Workers Ass’n, 686 F. Supp. 1139 (E.D. Pa. 1988); the Carpenters Union, United States v. District Council of New York and Vicinity of the United Brotherhood of Carpenters & Joiners of America, 778 F. Supp. 738 (S.D.N.Y. 1991); and the International Longshoremens’ Association, United States v. Local 1804-1 International Longshoremens’ Ass’n, 812 F. Supp. 1303 (S.D.N.Y. 1993). Each of these suits resulted in some form of trusteeship over the defendant union.
21907683. Also relevant at this time was LIUNA’s experience in 1981 in what is described as the Hauser case wherein Coia, his father, Lepore, Jr. and Patriarca Sr. were indicted for allegedly receiving kickbacks in return for awarding a union contract to a Florida insurance company operated by Joseph Hauser. United States v. Coia, 81-417-King (S.D. Fla. 1984.) See also R. Ex. 124. Hauser surfaced in the early 1980s as an FBI government witness and had testified in a number of federal prosecutions, including United States v. Accardo, No. 81-23-CR-JWK, (S.D. Fla. June 7, 1982), which involved the receipt of kickbacks from a LIUNA welfare fund. R. Ex. 123 at 1 n.1. In the case involving Coia, the court dismissed the charges. R. Ex. 124.
21907684. In response to Fino’s allegations and in anticipation of possible litigation filed by the DOJ, LIUNA began two separate investigations in April of 1990. Elbaor, on behalf of LIUNA’s General Counsel, began an inquiry to determine the substance, truth or falsity of Fino’s allegations and Traini commenced an investigation into Fino’s background and credibility for use as future impeachment material. These two investigations ran simultaneously but on separate tracks, and will be discussed seriatim.
21907685. During 1990 and 1991, the General Counsel of LIUNA was Robert Connerton of the Connerton firm. Tr. 1631. Elbaor, an experienced labor lawyer and former prosecutor, was employed by the Connerton firm. Tr. 2981.
21907686. On April 5, 1990, Elbaor held a telephone conference with Harold Boreanaz (“Boreanaz”), an attorney in Buffalo, New York. R. Ex. 122 at 1. Boreanaz represented Joseph Rosato (“Rosato”), a steward at Local 210, who was a defendant in a federal criminal case in Buffalo. Tr. 1631. Fino was scheduled to be a witness against Rosato. Boreanaz told Elbaor that he would be willing to supply the International Union with copies of eighteen FBI 302s on Fino, in exchange for assistance from the International Union in investigating Fino. R. Ex. 122 at 1.
21907687. As reflected in his memorandum to Connerton on April 6, 1990, Elbaor emphasized to Boreanaz that the International Union was his client and he would only participate in the proposed sharing of information if it would serve the institutional interests of the International Union. R. Ex. 122 at 2.
21907688. It should be noted that FBI 302s are not public documents of the FBI or the DOJ. Pursuant to 18 U.S.C. § 3500, they are only given to defense counsel in criminal cases where a witness, whose interview is the subject of the 302, testifies at trial. Since Fino was under FBI protection and unavailable, the only legitimate means of obtaining his allegations were from the 302s which were provided to defense counsel in cases where Fino was scheduled to testify. Moreover, the 302s released to these defense counsel were generally limited to the subject matter of that particular trial. Id.
21907689. Elbaor recommended to Connerton that they meet with Boreanaz for two reasons: (1) “Fino may be a resurrected and improved Joe Hauser,” and (2) “his [Fino’s] accusations may be the springboard for a RICO civil action against LIUNA, or its Regions, or its District Councils.” R. Ex. 122 at 3.
21907690. On April 10, 1990, Connerton and Elbaor met with Boreanaz in Buffalo and obtained all of the Fino 302s that Boreanaz had in his possession. R. Ex. 125. Boreanaz told Elbaor and Connerton that he had obtained the 302s from Paul Cambria (“Cambria”), another criminal defense attorney in Buffalo, who had received them from a prosecutor during pre-trial discovery in an unrelated case. Id.
21907691. On April 12, 1990, Elbaor sent a memorandum to Coia and Fosco with copies of Fino’s FBI 302s. R. Ex. 126.
21907692. After Elbaor received the Fino 302s, he recommended to Connerton that the General Counsel’s office conduct a “legal audit of the International [to] see what we can learn.” Tr. 3047. Elbaor’s task was to .” . . identify what [Fino’s] allegations were, [and] see which ones were capable of verification.” Id.
21907693. A “legal audit,” also known as an internal investigation, is a recognized concept in which a corporation, partnership, labor union or other business entity utilizes a lawyer or law firm to investigate internal matters under the protection of the attorney client privilege. See e.g., Corporate internal investigations, Webb, Tarun, Molo, Law Journal Seminar Press (1990); Stephen F. Black, Internal Corporate Investigations, Business Law Monographs Vol. C5, Matthew Bender Co., Inc. (1998). The attorney’s task is to investigate the matter in question and report to the entity’s officers with findings and legal advice. Id. A substantial body of case law has developed involving the techniques and use of this procedure, which is widely employed by corporations. Id.
21907694. A legal audit was an acceptable tool for Elbaor to utilize when conducting his investigation into Fino’s allegations.
21907695. Elbaor was well qualified to conduct the legal audit into Fino’s allegations. From 1976 through October of 1980, Elbaor worked at DOJ headquarters in Washington, D.C. as a trial attorney in the General Crimes Section, and he also served on temporary duty for a six month period as a Special Assistant in the U.S. Attorney’s office in the Eastern District of Virginia. Tr. 2983. In addition, he was assigned to the Labor Unit of the Criminal Division where he investigated and prosecuted both labor union and ERISA cases. Tr. 2984. Later, he joined the Organized Crime and Racketeering Section of the Criminal Division in a special unit known as Strike Force 18, which specialized in RICO investigations, including those involving labor racketeering. Tr. 2985. He joined the Connerton firm in 1980 where he became a partner and, in 1994, began his own practice. Tr. 2981-82. Currently, he works on civil RICO litigation matters and bonding claims for LIUNA. 2986-87.
21907696. Elbaor reviewed the FBI 302s and compiled a catalogue of the allegations made by Fino therein. GEB Ex. 72, 121; R. Ex. 130.
21907697. Elbaor monitored Fino’s testimony during the trial of John M. Riggi, John J. Riggi, Vincent Riggi, Salvatore Timpani and Girolamo Palermo. Tr. 3367; R. Ex. 134. John M. Riggi was a LIUNA local union officer who had been charged with various counts of labor racketeering. Id.; GEB Ex. 114. Elbaor also read the transcript of Fino’s March 7, 1990 testimony in U.S. v. Guarnieri before Judge McAvoy in the Northern District of New York. R. Ex. 137.
21907698. In a series of memoranda, Elbaor detailed Fino’s testimony during the Guarnieri and Riggi trials, as well as his testimony before a Grand Jury in Newark, New Jersey. See R. Ex. 134-138.
21907699. On March 5, 1991, after completing his investigation of the Fino allegations that he determined were capable of verification, Elbaor submitted his audit report to the GEB for its review. R. Ex. 173. In the introductory letter accompanying the report, Elbaor stated,
With respect to the methodology of the audit, its intent was not to destroy Fino’s overall credibility, but to neutrally examine his allegations against interviews and records generated contemporaneously with events in question. There proved in this process sufficient information to justify serious doubt and critical enquiry about Fino’s credibility, and his motivations for making his allegations in the first place. But delving into that, and reporting on it, would have required an inordinate amount of time and resources, and would have required a far lengthier audit having a conclusion probably identical to that readily extrapolated from the present audit report.
The audit as embodied in its report focuses on allegations affecting the International Union, not its affiliate Local 210, nor other affiliates or businesses.
Id. Elbaor was of the opinion that Fino’s testimony was broad, vague and contained few verifiable details regarding his contacts with individuals in the labor union. R. Ex. 134 at 2. The record reflects that neither Coia nor anyone else ever attempted to impede or improperly influence Elbaor’s work.
21907700. The IHO finds that a legal audit of Fino’s allegations was conducted by LIUNA and the GEB Attorney’s assertion that an investigation of the substance, truth or falsity of Fino’s allegations was not conducted is contradicted by the record.
21907701. Traini is an attorney from New England whose practice is concentrated in the area of criminal defense. Tr. 4645. He participated on the defense team which successfully represented both Coia and Coia, Sr. in the Hauser case in Florida in the early 1980s. Tr. 5192.
21907702. The International Union, on Coia’s recommendation, employed Traini to conduct an investigation into Fino’s background for the purpose of defending the International Union in the event the DOJ used him as a witness to prosecute a civil RICO case against it. Tr. 2271, 5188, 5192-93.
21907703. Philip D. Smith (“Smith”) testified herein on April 29, 1998. Tr. 2268. Smith, an investigator with the office of LIUNA’s IG, interviewed Traini in April of 1997. Tr. 2270. Traini told Smith that Coia assigned him the duty of investigating Fino in order to obtain background material which could be used to impeach him in the event that he ever testified against the International Union or its officials. Tr. 2271.
21907704. Traini noted that, in light of Fino’s allegations against the International Union and “of the government’s long history of attempting to indict and convict officers of the Laborer’s Union and to take control of the International, . . . a need may arise in the future to question the believability of Fino before a jury, particularly in the context of a civil RICO case.” R. Ex. 183 at 9. See also GEB Ex. 92 He undertook his investigation in an .” . . attempt to discover facts and circumstances which might be relevant to undermining Fino’s credibility.” R. Ex. 183 at 9. Traini characterized “Fino [as] a prime weapon in the government’s arsenal against the union.” Id.
21907705. Traini examined the potential credibility of a key prosecution witness, a task that criminal defense attorneys are hired to do.
21907706. In light of the evidence of Elbaor’s investigation, it appears that Traini was providing LIUNA with only one branch of dual investigations and was preparing for anticipated litigation. There is no evidence that Traini was asked to destroy evidence or create false testimony.
21907707. The GEB Attorney’s argument that Traini was not impartial, was paid too much money, or that Coia did not render the same level of assistance to Elbaor and did not disclose the details of Traini’s investigation to Elbaor, carry little weight in the factual determination of Charges VII, VIII, and IX, in view of the dual investigations and Traini’s role as a possible defense counsel.
Coia’s Responsibility to Investigate Fino’s Allegations
21907708. The investigation of Fino’s allegations was conducted under the auspices of LIUNA’s General Counsel. See generally R. Ex. 173.
21907709. Article IX, Section 19 of the International Constitution sets forth the duties of the General Counsel and states:
The General President, with the approval of the General Executive Board, shall retain the services of a General Counsel and such Associate Counsel as may be deemed necessary and proper.
The General Counsel shall perform his duties under the supervision and direction of the General President with the approval of the General Executive Board.
International Constitution, Article IX, Section 19 (emphasis added).
21907710. At the time Fino’s allegations became public, Fosco was the International General President and, pursuant to Article IX, Section 19 of the International Constitution, it was Fosco’s duty to direct and supervise the General Counsel.
21907711. Coia, along with the other members of the GEB, only had the authority and responsibility to approve Fosco’s direction and supervision of the General Counsel. International Constitution, Article IX, Section 19.
21907712. As the record reflects, Coia, in his capacity as General Secretary-Treasurer, along with Fosco and Connerton, approved the legal bills from Connerton’s firm regarding the Fino investigation. See GEB Ex. 97, 98, 116; R. Ex. 127-29, 131-33, 141,146,158-58A, 163-65, 167, 170-71.
21907713. Coia cannot be faulted for failing to monitor or direct an investigation of Fino or his allegations because he was not constitutionally required to do so.
The Fino “Information Swap”
21907714. The GEB Attorney contends that Coia permitted union resources to be used in an “information swap” with attorneys representing LCN members when, as General Secretary-Treasurer, he authorized the payment of legal fees to Elbaor and Traini for gathering the information on Fino which was allegedly shared in the “swap.” Tr. 45-46.
21907715. There is no indication Elbaor supplied Boreanaz or any other attorney in Buffalo with anything other than public documents or material. Elbaor testified that he gave “very little” information to the attorneys in Buffalo. Tr. 3360. No confidential or internal union information was ever exchanged. See R. Ex. 194. The best source of Fino’s allegations at the time were the Fino 302s, which, as discussed above, were obtainable only from the defense counsel in cases where Fino was to testify. Technically, defense counsel are not permitted to share 302s with persons not associated with the litigation wherein they were originally surrendered by the DOJ.
21907716. The GEB Attorney’s assertion that Traini “shared investigative information with one member of a family whom Fino had identified as being involved in LCN corruption” is not supported by the evidence. GEB Resp. Br. at 23. In support of this contention, the GEB Attorney cites a letter from Traini to attorney Lawrence P. Giardina dated August 23, 1990, wherein Traini thanked Giardina for his assistance in Buffalo. GEB Ex. 94; see also GEB Br. at 96. This hardly establishes that Traini “shared investigative information” with Giardina. Also, an addendum supplied by the GEB Attorney to his Exhibit 94 specifically states that “there is no known information to indicate that Lawrence P. Giardina is connected to any of the LCN families.” GEB Ex. 94.
21907717. The IHO finds that there was no impropriety with regard to Traini’s contact with Giardina or anyone else.
21907718. The record does not support the GEB Attorney’s allegation in Charge VII that Coia allowed the LCN to influence the affairs of the Union by spending the Union’s funds to attack Fino’s credibility, disseminating this information to LCN defense attorneys, and failing to investigate the veracity of Fino’s allegations.
21907719. The GEB Attorney’s argument that Coia breached his fiduciary duty pursuant to 29 U.S.C. § 501(a) and the EPC by not authorizing union funds to determine the truth or falsity of Fino’s claims is contradicted by the General Counsel’s investigation. It is apparent that a substantial amount of funds were expended in determining the veracity of Fino’s allegations and, therefore, Coia did not breach his fiduciary duty under § 501(a).
21907720. Coia had neither the authority nor the duty to control Elbaor’s investigation; that responsibility was borne solely by the International General President -- Angelo Fosco. See International Constitution, Article IX, Section 19. Coia’s conduct regarding the investigations of both Traini and Elbaor was proper and he fully satisfied his duties as the General Secretary-Treasurer.
21907721. The allegation in Charge IX -- Coia’s failure to honor his obligation to refrain from interfering with the proper conduct of union business -- is not supported by record. There is no evidence that Coia interfered in any way with the course of Elbaor’s investigation, or that his recommendation that LIUNA hire Traini interfered with the proper conduct of union business. As such, the GEB Attorney has failed to prove a violation of Article III, Section 3(d) of the Uniform Local Union Constitution.
21907722. The IHO finds that the GEB Attorney has not proven Charges VII through IX by a preponderance of the evidence.
V. THE APPOINTMENT OF JOHN SERPICO AS CHAIRMAN OF THE GEB HEARINGS PANEL
Charge X alleges:
Barred Conduct — Permitting the LCN to Exercise Influence Over Union Affairs: From 1993 to 1995, ARTHUR A COIA permitted the LCN to exercise control or influence over Union affairs, to wit: COIA appointed John Serpico to be Chairman of the GEB Hearings Panels and permitted Serpico to act as the Union’s chief judicial officer, knowing that Serpico was an instrument of organized crime influence over LIUNA, in violation of the barred conduct provisions of the EPC and EDP.
Charge XI alleges:
Violation of Duty of Loyalty: From in or about 1993 until in or about 1995, ARTHUR A. COIA violated the obligation of undivided loyalty incumbent upon all members, officers, and employees of LIUNA, including but not limited to those duties set forth in 29 U.S.C. § 501(a) and the LIUNA Ethical Practices Code, to wit: as LIUNA’s General President, he appointed John Serpico to serve as Chairman of the GEB Hearings Panels, and authorized the expenditure of Union funds to increase Serpico’s annual International salary by more than $100,000, knowing that Serpico was an instrument of organized crime influence over LIUNA.
Charge XII alleges:
Barred Conduct — Knowing Association: From in or aournd the latter part of 1992 until 1995, ARTHUR A. COIA knowingly associated with LCN members and associates, including John Serpico, in violation of the barred conduct provisions of the EDP and EPC.
Charge XIII alleges:
Constitutional Duties of LIUNA Members: In permitting the LCN to exercise influence over Union affairs, as alleged more specifically above in Charge X, and in knowingly associating with LCN members and associates, as alleged more specifically above in Charge XII, ARTHUR A. COIA failed to honor his obligation as a LIUNA member to refrain from interfering with the proper conduct of LIUNA business, in violation of Article III, Section 3(d) of the Uniform Local Union Constitution.
The GEB Attorney charges that Coia permitted the LCN to exercise influence over LIUNA by appointing John Serpico (“Serpico”) to be the chief judicial officer of LIUNA in February of 1993 and that Coia associated with organized crime associates from 1992 through 1995.
In order to understand these charges, a recitation of the events surrounding Coia becoming General Secretary-Treasurer, his ascent to the General Presidency and ultimately his suspension of Serpico must be examined. The facts will be set out below in detail.
Findings of Fact
Coia’s Early Contacts with Serpico
21907723. In 1988, Coia was the Regional Manager of the New England and eastern Canada regions. Tr. 4874.
21907724. In late December of 1988 or early January of 1989, Coia began seeking support from the GEB members to succeed his father, who was ill, as LIUNA’s General Secretary-Treasurer. Tr. 5159; R. Ex. 387 at 1061. He met with General President Fosco at LIUNA headquarters to discuss the possibility of him succeeding his father. R. Ex. 387 at 1061-62. Fosco directed him to discuss the matter with Serpico who, at that time, was the Assistant to the General President and an International Vice President from Chicago. Id. at 1062-64; R. Ex. 328 at 396. Curiously, although Serpico held the position of Assistant to the General President, there was no public acknowledgment of Serpico holding this post. Tr. 3656-58, 5340-42.
21907725. Coia contacted Serpico and agreed to meet with him in Chicago. Tr. 5160; R. Ex. 387 at 1064.
21907726. When Coia arrived at Chicago’s O’Hare Airport, Serpico led him to a small coffee shop inside the terminal and introduced him to Vincent Solano (“Solano”), whom Coia knew to be either the President or Business Manager of one of LIUNA’s large Chicago local unions. Tr. 5160-61; R. Ex. 387 at 1066-71. Solano told Coia to sit with him and directed Serpico to go to another area of the coffee shop. Id. at 1066. Solano then acknowledged that Coia could become the next LIUNA General Secretary-Treasurer, but told Coia, “I want you to understand this - that John Serpico will be the next General President of this union. He pounded on the table and pointed over [to Serpico]. . . . we’re grooming that man there to be the next General President.” Id. at 1007. Solano then concluded the conversation, Serpico returned, and Coia returned to Rhode Island on the next flight. Id. at 1068-69.
21907727. According to the LIUNA Constitution, when a vacancy occurs on the GEB, or in the two General Officer positions, that vacancy is filled by the GEB. International Constitution, Article XI, Section 5.
21907728. Coia was elected the General Secretary-Treasurer of LIUNA in February of 1989 by the GEB. R. Ex. 387 at 1073.
Coia’s Ascension to the Office of the General President
21907729. Angelo Fosco was from Chicago, as was his father who preceded him as General President. See Chicago District Council, IHO 97-30T at 49 ¶ 80. The record is clear from statements made by Fosco to others that he felt compelled to comply with the dictates of persons he characterized as the “guys in Chicago,” including their demand that he support Serpico’s candidacy to succeed him as General President when he retired. R. Ex. 328 at 355, 369.
21907730. In early 1992, Fosco began to “casually” discuss retiring as General President. R. Ex. 387 at 1083, 1086. Coia testified during Serpico’s disciplinary hearing in May of 1995 that Fosco’s decision to retire was based on the fact that his LCN benefactor in Chicago, Vincent Solano, had recently died and, as a result, he had “no one to turn to.” R. Ex. 387 at 1088. Coia testified that he understood this to mean “that . . . someone else was calling the shots, [whom Fosco] did not have a friendly relationship with.” R. Ex. 387 at 1089.
21907731. Carl Booker (“Booker”), who at the time of the hearing was an International Vice President and Assistant to the General President, attempted to dissuade Fosco from endorsing Serpico for the General Presidency on at least a dozen occasions. R. Ex. 328 at 376; Tr. 3505. Booker told Fosco that Coia was more qualified for the job, but Fosco told him that Serpico would be nominated for the General Presidency because that was what the guys in Chicago wanted. R. Ex. 328 at 374-75.
21907732. During this same time period, Fosco told his secretary, Mary Devella (“Devella”), that he was going to retire and Serpico would replace him as General President. R. Ex. 387 at 1086. Devella became extremely upset upon learning this information. Id. at 1088. When Coia was apprised of this, he confronted Fosco and, in his words, “yelled” at him, stating “[Y]ou know the problems that this union has had in the past . . . how can you allow, even think of bringing [in] John Serpico and replacing you in this position?” Id. at 1087-88. Coia requested that Fosco stay on as General President and offered to assume the responsibilities of the office for him. Id. Coia warned Fosco that if Serpico did become the General President, he would resign and “take the key people back to New England with [him] . . . people that made the operation run effectively.” Id. at 1089.
21907733. Fosco relented, remained in office, and Coia assumed all of the responsibilities and duties of the General Presidency as Fosco’s health deteriorated. R. Ex. 387 at 1089.
21907734. In November of 1992, Fosco became gravely ill and it became clear to Coia that a successor to Fosco would soon be required. R. Ex. 387 at 1091. He began to actively seek support from the GEB members to replace Fosco as LIUNA’s General President. R. Ex. 387 at 1090, 1101.
21907735. A GEB meeting was held in Florida in early February of 1993 and, although Fosco was too ill to attend, he flew to Florida in a private plane and stayed nearby in his Florida residence. R. Ex. 387 at 1102-03. On the third or fourth day of the meeting, the GEB members were informed that Fosco had died. Id. at 1103.
21907736. Booker was with the Fosco family when Fosco died and Coia instructed him to ask Fosco’s wife whether she would prefer that the election for the next General President be held immediately or after the funeral. R. Ex. 387 at 1107. She told Booker that she wanted the election to be held immediately, so there would not “be any distractions” at Fosco’s wake in Chicago. Id.
21907737. At an informal meeting of the GEB held shortly after Fosco’s death, Coia, pursuant to his authority under Article VI, Section 5 of the International Constitution, announced that the election would take place the following morning. International Constitution, Article VI, Section 5; R. Ex. 387 at 1110-11.
21907738. Coia wanted the election for General President to be held quickly for two reasons. He did not want an election to be held in Chicago after Fosco’s burial for fear of a repeat of what he described as the “bad politicking” that took place in 1975 during Fosco’s election. R. Ex. 1106-07. Secondly, he wanted to respect Mrs. Fosco’s wish to have no campaigning at her husband’s wake and funeral. Id. at 1107. Coia also feared that, if too much time passed, the influence of LIUNA’s Chicago faction would prevail. Id.
Serpico’s Appointment as Chairman of the Hearings Panel
21907739. Within hours of Fosco’s death, Serpico acknowledged that Coia had the votes necessary to be elected General President and he asked Coia to endorse him for the post of General Secretary-Treasurer. R. Ex. 387 at 1110-12. Coia declined this request based on the mob-related “baggage” which Serpico had acquired as a result of his inclusion in the President’s Commission on Organized Crime Report. Id. at 1112-13; Tr. 5333-34 In fact, Coia told Serpico that he wanted him off the General Executive Board entirely. Tr. 4983.
21907740. At Serpico’s request, Coia met with him again the morning after Fosco’s death, and Serpico again asked Coia for a job with the International Union. R. Ex. 387 at 1114-15. He stated that he wanted to build up his pension since he would be retiring in two years when he turned 65. Id. at 1114. Coia told him that he would think about it. Id. at 1115.
21907741. Later that day, the GEB met and elected Coia General President of LIUNA. Tr. 5320.
21907742. At Fosco’s wake in Chicago several days later, Coia told Serpico he would appoint him to the position of Chairman of the Hearings Panel. R. Ex. 387 at 1116. At one point during the wake, Coia informed Booker that he had “just gotten rid of Serpico.” Tr. 4989.
21907743. Coia testified that his sole motivation in appointing Serpico to the position of Chairman of the Hearings Panel was to ensure that Serpico would retire from the International Union in two years. Tr. 4986. Coia intended to remove him from that post if the two year period expired and Serpico was still in office. Tr. 4989. At that time, Serpico was an elected International Vice President, a member of the GEB, and could not be removed by Coia by means of a mere personnel termination.
21907744. During Serpico's disciplinary hearing in May of 1995, Coia testified that Serpico and John Matassa (“Matassa”), a made member of the Chicago LCN and, at that time, a high ranking LIUNA official in Chicago, approached him at his father's funeral in March of 1993 in Rhode Island. Matassa told him that, “he didn’t like and the boys here [referring to “the boys” in Chicago] did not like what [Coia] did by stealing and taking the Presidency from Chicago.” R. Ex. 387 at 1122.
21907745. Pursuant to Article VIII, Section 2(a-vii) of the International Constitution, all recommendations of the Hearings Panel must be submitted to the GEB for approval. Coia, as General President, sits on the GEB.
21907746. Serpico almost always sat on a Hearings Panel with another International Vice President and was always accompanied by a member of the International Union’s legal staff. Tr. 3584. The legal staff member always wrote the recommendation which was submitted to the GEB. Tr. 3585. The GEB had the final authority to either approve or deny the Panel’s recommendation. Id. If the GEB did not accept the recommendation of the Hearings Panel, it could reverse the Panel’s recommendation or table the recommendation for further deliberations and review of the record. R. Ex 346 at 8.
21907747. Serpico was given an annual salary of $100,000 for the post of Chairman of the Hearings Panel. This was the same salary as a LIUNA Regional Manager. Tr. 3664. Prior to this post, Serpico was the Assistant to General President Fosco at an annual salary of approximately $80,000.
21907748. The IHO finds that the salary of the Chairman of the Hearings Panel was commensurate with the salary of a LIUNA Regional Manager, a job of comparable International Union rank.
21907749. The IHO finds that Coia appointed Serpico to the post, not to perpetuate Serpico’s organized crime influence on the Union, but as a method to facilitate his removal from the Union.
21907750. The IHO finds that the move was not, in this regard, a breach of Coia’s duty authority. The IHO notes that the GEB Attorney made a monetary settlement with Serpico to cause Serpico to abandon his defense of the disciplinary charges and to cause him to step down as an International Vice President.
LIUNA’s Disciplinary Procedure Prior to the Adoption of the EDP
21907751. As stated above, Coia had no authority to remove Serpico from the GEB since Serpico was a duly elected International Vice President. Tr. 4986-87.
21907752. Prior to the adoption of the EDP, disciplinary actions against members were limited to the filing of Trial Board charges at the local level pursuant to Article XII, Sections 1-8 of the Uniform Local Union Constitution. Article XII permitted a member of a local union to file charges against another member of that same local. Those charges were then heard by the Executive Board of the local or, in the event that the Executive Board was disqualified, the charges were heard by the local’s District Council. See generally Uniform Local Union Constitution, Article XII, Sections 1-8.
21907753. No provision existed at the International level to file disciplinary charges against an International officer. In order to do so, Trial Board charges had to be filed in the local union of which the officer was a member, by another member of that local union. See Uniform Local Union Constitution, Article XII, Sections 1-8.
21907754. Prior to the adoption of the EDP, disciplinary charges were limited to violations of the Constitution. See Uniform Local Union Constitution, Article XII, Sections 1-8. Associating with organized crime figures had never been a subject of disciplinary charges. The IHO’s independent research has found no charges brought in any union for associating with unsavory or underworld figures prior to the Consent Decree arising out of the litigation between the DOJ and the Teamsters. The Consent Decree instituted a very detailed procedure for investigating and prosecuting disciplinary proceedings by an Investigations Officer in hearings before an Independent Administrator whose decisions were enforced by a federal judge. See United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 831 F. Supp. 278 (S.D.N.Y. 1993). The Consent Decree which empowered an International Officer to bring charges against local union officials was a departure from the protections afforded local unions in the LMRDA and the case law at the time. Judge Edelstein, in litigation arising from the decree, felt that existing law was useful only by analogy. See United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 728 F. Supp. 1032, 1045 (S.D.N.Y. 1990).
21907755. The Teamsters’ Investigations Officer was empowered by the Consent Decree to bring charges against any member for violating the union’s constitution.
21907756. The Teamsters’ constitution provides that a member shall not bring disrepute on the International Union. See Constitution of IBT, Article II, Section 2(a), Membership Oath. The Independent Administrator has construed this provision as encompassing a prohibition against associating with members of organized crime. No equivalent provision existed in the LIUNA Constitutions prior to the adoption of the EDP.
21907757. Coia approved the adoption of the EDP in late January of 1995. The EDP instituted an investigation procedure similar to that contained in the Teamster Consent Decree. The EDP created the positions of GEB Attorney, the Inspector General, the IHO and the Appellate Officer. It made associating with organized crime a disciplinary offense. The members of the GEB, with the exception of Serpico and Samuel Caivano, signed the EDP on February 13, 1995. See EDP, Agreement, Laborers’ International Union of North America -- United States, pp. 55-57. On the same day the EDP was adopted, Coia suspended Serpico and Caivano pursuant to the new emergency powers granted him by the EDP. The GEB Attorney, a position created with the adoption of the EDP, filed disciplinary charges shortly thereafter and charged Serpico with being an associate of organized crime. Coia testified at Serpico’s disciplinary hearing as the GEB Attorney’s key witness in May of 1995. See generally R. Ex. 387.
21907758. Michael Bearse (“Bearse”), now LIUNA General Counsel, testified that, during the time Coia was General Secretary-Treasurer, there were no effective disciplinary procedures at the International level of the Union to remove a member or officer for wrongdoing. Tr. 4570-71. He contrasted this situation with the present day, post-reform procedures:
Prior to reform, the actual practical ability and power and authority of the international union to intercede into the affairs of the local union was . . . extremely restricted and limited. We did have authority under the constitution and under Title 3 of the LMRDA to try and assert a supervision or trusteeship, assuming we had evidence to establish the legal grounds for such, but otherwise both the constitution and . . . applicable labor law in the normative models within the
labor relations community were to recognize that local unions are separate, distinct, and independent entities.
* * *.
[P]rior to the enactment of the LIUNA reforms, the code of ethics and all that’s come with it, there was no ability effectively to investigate an associational [with the LCN] issue even if there had been . . . a basis to do that -- but . . . there would have been no basis to look into association as some kind of prohibited misconduct. Certainly if there were a discrete act of wrongdoing, if there had been improper selling of jobs or extortion or something of that kind, some discrete act, a local union could have looked into that and if appropriate remedied it, or perhaps the international might have come in with a supervision or trusteeship.
* * *
[O]ne of the major purposes in LIUNA in enacting the code [of ethics] and the reforms that have come with it and the particular provisions in terms of barred conduct was to enable LIUNA to address just that kind of issue, and it seems to me that necessarily that means that, before we had the tools that came with the code, before we had the code of ethics, before we had the policies, before we had a whole army, virtually, of ex-FBI agents, before we had a GEB Attorney with the ability to take depositions, before we had a provision that essentially waived the Fifth Amendment, we had no effective either method or basis to address or remedy that kind of discrete associational issue.
21907759. After several hearing days in the Serpico Disciplinary Matter, the GEB Attorney and Serpico reached a settlement. Serpico left his post as International Vice President, but remained a member of Local 8 in Chicago. Although the agreement is confidential correspondence, the IHO takes notice that the GEB was constrained to pay a sum of money to effectuate Serpico’s final removal.
IHO makes note of this merely to emphasize that even, with the EDP, removing Serpico was not an easy task.
The GEB Attorney argues that Coia’s appointment of Serpico as the Chairman of the Hearings Panel meets the criteria for permitting an organized crime influence to continue in LIUNA, yet he fails to indicate how Coia was empowered to do more to remove Serpico under the LIUNA procedures in force at the time.
To view this and the other charges relating to knowing association with any objectivity, one must examine the disciplinary machinery available to Coia at the relevant time.
In 1993, there was no EDP or EPC, no IG, and no GEB Attorney. The only provision in the Constitutions which permitted any disciplinary action against a union member was Article XII, Sections 1 through 8 of the Uniform Local Union Constitution, which permitted a member of the local in which the putative defendant belonged to file “Trial Board” charges against the defendant. Thus, Coia would have had to convince a member of Local 8 in Chicago, where Serpico was a member, to file Trial Board charges against him. This would have been virtually impossible as a union political matter. The Trial Board would have been made up of the remaining Local 8 Executive Board members or, if they disqualified themselves, the members of the Chicago District Council. There would have been no likelihood of success in this venture and, in fact, the member who brought the charges would have then been at the mercy of the Local Executive Board for jobs and other benefits.
Until the adoption of the EDP in 1995, the charge of association with a member of organized crime was not grounds for dismissal from LIUNA.
It must be kept in mind that Serpico was unlike other LCN associates. He did not assert the Fifth Amendment before the President’s Commission on Organized Crime and he had his own LIUNA power base. He was a powerful political figure in Chicago and had been appointed and re-appointed Chairman of the Chicago Port Authority by three Illinois governors. At his disciplinary hearing, he was defended by a nationally well respected law firm. For Coia to attempt to take on Serpico without recourse to disciplinary procedures such as those now provided for in the EDP would have resulted in certain failure.
It should be further noted that, following the passage of the EDP, Coia immediately suspended Serpico for his association with organized crime. Tr. 5371-72. Part of the basis for the suspension, and a great part of the GEB Attorney’s case, was the Chicago airport incident among Coia, Serpico and Solano, as related by Coia during Serpico’s Disciplinary Hearing in May of 1995. -- the chief witness of the GEB Attorney.
Moreover, after several hearing days, Serpico and the GEB Attorney settled the matter. As part of the settlement, there was a monetary payment to Serpico, indicating that removal of Serpico was a difficult matter, despite the provisions of the newly adopted EDP.
21907760. Coia’s appointment of Serpico to the post of Chairman of the Hearings Panel was
not intended to permit organized crime influence over LIUNA, and Serpico’s appointment did not result in organized crime influence over LIUNA but was intended to facilitate Serpico’s removal from LIUNA.
21907761. Coia did not violate Title 29 USC 501(a) by appointing Serpico to the post of
Chairman of the Hearings Panel. The salary was commensurate with the salary of a Regional Manager a comparable LIUNA post.
21907762. Coia’s dealings with Serpico during 1992 through 1995 were necessitated by Serpico’s position in LIUNA and not by Coia promoting Serpico’s influence in LIUNA. Their dealings were adversarial and, in addition, were permitted by the Carpenters’ Exception to barred conduct.
21907763. The IHO finds that the GEBAttorney has not proved Charges X through XIII by a preponderance of the evidence.
VI. COIA’S DEALINGS WITH VIKING OLDSMOBILE
The three Charges relating to Coia’s dealings with Viking Oldsmobile-Cadillac-GMC, Inc. (“Viking”) and its President and CEO Carmine Carcieri (“Carcieri”) must be considered as one subject. The IHO views Charges XIV, XV, and XVI as one transaction. The IHO will apply the labor arbitrators’ technique of examining the evidence as a whole and will focus his inquiry on what the IHO believes to be the key issue presented by these three charges. See Edna Elkouri & Frank Elkouri, How Arbitration Works, 322-23 (Marlin M. Volz & Edward P. Goggin eds., 5th Ed. 1997).
Obstruction of the GEB Attorney
Charge XV alleges:
Barred Conduct — Obstruction of the GEB Attorney and Inspector General: On or about November 29, 1995, August 2, 1996 and January 29, 1997, ARTHUR A. COIA obstructed and/or interfered with the GEB Attorney and Inspector General, to wit: Coia provided inaccurate, misleading, and false deposition testimony to the GEB Attorney when he denied any knowledge of a 1993 bid by PH&H Fleet America to lease automobiles to LIUNA and its affiliates, despite fully knowing that he had been briefed on the competing PH&H Fleet America and Viking bids, and that he had an obligation to answer all questions fully and truthfully, in violation of the LIUNA barred conduct sections of the Ethics and Disciplinary Procedures and the LIUNA Ethical Practices Code.
The following chronology is relevant to understanding the context of the above alleged charge:
• Thomas Needham (“Needham”) became LIUNA’s Comptroller in 1968 and remained in this position until he retired in 1995.
• In 1968, then-General President Peter Fosco and Needham implemented an automobile “fleet leasing” program.
• In 1989, Coia replaced his father as LIUNA’s General Secretary-Treasurer.
• In 1989, Coia introduced Carmine Carcieri (“Carcieri”), the President and CEO of Viking, to then-General President Angelo Fosco.
• In 1990, LIUNA awarded its fleet leasing contract to Viking.
• In February of 1993, Coia replaced the late Angelo Fosco as LIUNA’s General President and Norwood became LIUNA’s General Secretary-Treasurer. Carcieri met with Needham and Norwood at LIUNA’s headquarters in Washington, D.C. in May of 1993 and, subsequent to this meeting, Carcieri sent Needham Viking’s proposal for the 1994 fleet leasing contract.
• In late May or early June of 1993, Needham received a competing bid from PHH Fleet America (“PHH”) for the 1994 fleet leasing contract.
• After receiving the bids from PHH and Viking, Needham prepared a cost comparison spread sheet and met with Coia to discuss the price differential.
• In June of 1993, Needham received an unsolicited new bid from Viking, which had lowered its prices to match PHH’s prices.
• Viking retained LIUNA’s fleet leasing contract for 1994.
• In 1995, Viking began to be phased out as LIUNA’s fleet leasing vendor.
In his opening statement to Charge XV, the GEB Attorney made lengthy comments concerning the history of LIUNA’s fleet leasing vendors and the 1993 bidding competition between two of those vendors, Viking and PHH, for the International Union’s 1994 fleet leasing contract. He stated that Charge XV “is a charge of obstruction, and that is a charge that Mr. Coia gave false and misleading testimony in his depositions by flatly denying his knowledge of the PHH bid when, in fact . . . he not only knew about the bid, but obviously furnished it to Viking so that they could preserve their contract in 1994.” Tr. 64-65.
The GEB Attorney infers that Coia, or someone at the behest of Coia, improperly furnished the incumbent fleet leasing vendor with a competitor’s prices in order to give the incumbent vendor an advantaged opportunity.
Findings of Fact
LIUNA’s Relationship with Viking and PHH
21907764. Needham, who is no longer a LIUNA employee and not subject to the IHO’s subpoena power, was LIUNA’s Comptroller for 27 years, from 1968 until his retirement in 1995. Tr. 2494, 4370. Needham did not testify herein but acceded to interviews with associate GEB Attorney Michael A. Hammer (“Hammer”) and attorney Gilbert O. Greenman (“Greenman”) of the law firm representing Coia. These attorneys then testified concerning their interviews with Needham. The IHO will note where the testimony of these two attorneys differs.
21907765. During Needham’s career as LIUNA’s Comptroller, virtually all executive financial decisions were made by the International General President. Tr. 2494.
21907766. In the late 1960s, the International Union did not have an automobile leasing or “fleet leasing” program. Tr. 2499. Needham instituted the fleet leasing program in order to control the International Union’s automobile travel expenses. Tr. 2499-500.
21907767. Needham handled all correspondence between the International Union and the fleet leasing vendors. He disclosed the rates of all bidders and dictated the rate that needed to be offered by the incumbent vendor to retain the contract. See R. Ex. 228A, 231.
21907768. The International Union has never had a practice or policy of “blind bidding” for its automobile leasing contracts. Disclosing competitive prices to the incumbent vendor was the International Union’s general practice. Tr. 4375. Booker testified that there was no prohibition on seeking lower bids by negotiating with an incumbent vendor. Tr. 3613. In fact, this “was encouraged to get the best price for the best deal.” Id.
21907769. In 1990, when Coia was General Secretary-Treasurer, he introduced Carcieri, the President and CEO of Viking, to Angelo Fosco. Viking then became LIUNA’s automobile fleet lessor. Tr. 2505. In February of 1993, Coia became General President and Norwood succeeded him as General Secretary-Treasurer.
21907770. In May of 1993, Needham and Norwood met with Carcieri and Joe Picozzi (“Picozzi”), the sales operations contact at Viking. Picozzi represented that Viking’s 1994 rates would remain the same or be lower than its 1993 rates. Tr. 2511-12. This statement proved inaccurate. R. Ex. 252.
21907771. Upon receiving Viking’s 1994 proposal, Needham sent a memo to Norwood and, referring to the proposal, stated, “I want you to know that this is an insult to our intelligence. . . . This turns out to be a real ‘con job’. . . [W]e have to do some real negotiating on this proposal if we are to stay with Viking. If we can’t get them to come off this overloaded proposal, we should start taking bids from other companies.” R. Ex. 252.
21907772. According to Hammer, a bid was secured from PHH but Norwood told Needham that General President Coia would want to stay with Viking. Tr. 2520; R. Ex. 253, 256. It was the general practice of the International Union to remain with the incumbent vendor.
21907773. According to Hammer, Needham analyzed PHH’s bid and determined that it was approximately $85,000 per year lower than Viking’s proposal and approximately $169,000 lower over the course of the two year contract. Tr. 2522; GEB Ex. 196.
21907774. Coia told Needham to calculate how much higher Viking’s 1994 contract bid was than the one it had submitted for the previous year’s contract. Tr. 5048.
21907775. Needham presented documents to Coia who, upon seeing them, became angry. Tr. 2527-28. (according to Hammer). See also Tr. 4383-84. (according to Greenman). According to Hammer, Coia asked Needham to leave the information with him. Tr. 2529.
21907776. Needham told Hammer that he took both a summary cost-out sheet and the bids of Viking and PHH to Coia’s office; but he told Greenman that he only took the proposals to Coia. Tr. 2527-28 (showing bid and cost out sheet to Hammer); 4383 (showing proposal to Greenman). The IHO has no reason to doubt that both attorneys correctly related what Needham told them.
21907777. Coia returned PHH’s bid and summary cost-out sheet to Needham but, according to Needham (as related by Hammer), Coia kept Viking’s original bid. Tr. 2531.
21907778. According to Needham (as related by Greenman), after the initial conversation with Coia, he never had any other conversation with Coia about the 1993 leasing decision. Tr. 4384-85. Needham thereafter received his instructions from Norwood. See id.
21907779. In time, Needham received a new, unsolicited bid from Viking which he stated matched the PHH bid “dollar for dollar” but, in fact, the new Viking bid did not match the PHH bid for the 1994 contract “dollar for dollar” on any car. Tr. 2529-30. Viking’s prices were either slightly higher or lower than PHH’s prices on the various automobiles although, overall, Viking’s bottom line price met that of PHH. R. Ex. 255.
21907780. Viking retained LIUNA’s fleet leasing contract for 1994. Tr. 2530.
21907781. When R. P. “Bud” Vinall (“Vinall”) succeeded Norwood as General Secretary-Treasurer of LIUNA, the practice of revealing price differentials and rates of competitors to the incumbent vendor continued. See e.g. R. Ex. 261. Norwood died sometime in 1994.
21907782. Viking lost the International Union’s fleet leasing contract in 1995 when it was unable to secure the kind of financing which would allow it to remain competitive in the fleet leasing business. Tr. 4411-12.
Coia’s Deposition Testimony in Question
21907783. The GEB Attorney originally argued that Coia obstructed the GEB Attorney’s investigation of him by falsely stating in his depositions of November 29, 1995, August 2, 1996 and January 29, 1997 that he had no knowledge of the bid which PHH submitted to LIUNA for the 1994 fleet leasing contract.
21907784. The record contains the following deposition testimony by Coia on November 29, 1995 . Although the GEB Attorney cited the November 29, 1995 deposition in Charge XV and submitted it into evidence, he did not offered any argument in his post-hearing briefs regarding the probative value of this deposition. The IHO finds certain portions of the November 29, 1995 deposition to be particularly enlightening on this Charge:
[BY THE GEB ATTORNEY:]
Q: Now, in 1993, you described a minute ago what you perceived to be problems [with the cost of the fleet leasing]. What steps did you take to change the manner in which the union leased vehicles, the International Union?
A: I got together with Jim Norwood. And then I assigned him to get more involved into developing some bid specifications so that we could lower the cost either by . . . providing certain maintenance on the cars . . . [or] raising the residual. Whatever methods there were.
He was really in charge -- I put him in charge of that aspect of it.
* * *
A: Jim Norwood was quite good with that.
Q: And did Mr. Norwood then prepare a revised bid package, if I could call it that?
* * *
A: It changed.
Q: And when was that?
A: That had to be in -- that had to be in the mid-to later part of ‘93, again as part of my restructuring of the organization.
Q: And was that changed bid package put out for bid in 1993?
A: I’m not sure if it was or not. I can’t say that for certain. I would have to get that record back.
* * *
Q: And were -- have those new set of options been, since 1993, put out for competitive bid from among different vendors of vehicles -- suppliers of leased vehicles....
A: Since that time we have noticed other inequities in the bid process, because the more you do this, the better you get. And we have recently drafted a new specification to be put out for bid.
Q: I’m now asking about the specifications that were developed by Mr. Norwood in ‘93.
Q: Were they ever put out for competitive bid so that different suppliers of leased vehicles could provide bids on supplying those vehicles to the International Union?
A: I don’t think so. No. I don’t think so.
* * *
A: You got to understand one thing. When it went into effect, lets say the end of ‘93, one year goes by. We’re into the process of it. We’re developing new ideas. So it’s more appropriate now to do that for the first of -- January of 1996.
There are only so many times you keep putting these cars out to bid because -- or anything else for that matter. You get into a way that you’re comfortable with a firm, the way they do business, and all of a sudden, you got maybe 20 cars out with one firm and then possible ten out with another one and -- ties and maintenance and insurance and everything else becomes a problem.
Q: To your knowledge, after this -- my understanding is, and you can stop me if I’m wrong here, sometime after Mr. Carcieri had a meeting with Mr. Fosco, there was a bid process and Viking was the successful bidder. Is that correct?
Q: And when was that, to your knowledge?
A: It may have been the first -- let’s say January 1st of 1990.
* * *
Q: Okay. And since that time, have competitive bids ever been sought again from among different bidders?
A: I think one other time.
Q: Do you recall when that was?
A: I would have to say -- you know, I hate to make a statement -- I’m uncertain to it, but it may have been in ‘92.
Q: All right.
A: The best way of handling it is to just check with Tom Needham.
* * *
Q: All right. And since you became the General President in February of ‘93, have the leased vehicle specifications, whatever they are, been put out to bid?
A: No. They will be put out to bid.
Q: And when the specifications were put -- well, since you don’t know whether they were or not, to your knowledge, has Viking continued to supply the leased vehicles to the International since sometime around 1990?
Q: Whether or not they were successful or not successful, in a second bid, you don’t know whether that actually happened?
[BY MR. GUTMAN- DEFENSE COUNSEL:]
If they had not been successful in the second bid, would they have --
[BY MR. COIA:]
A. They wouldn’t have kept it, no.
[BY MR. GUTMAN:]
So if there was a second bid they --
[BY THE GEB ATTORNEY:]
Q. Right. If there was a second bid, they were successful?
[BY MR. COIA:]
You see --
[BY MR. GUTMAN:]
And if there wasn’t, they won the last one?
[BY MR. COIA:]
A: In my restructuring, Bob, I put different people in charge of different operations. It was different before that and before 1993.
The General President had all the decision-making process, or the handling of these things. So when you talk about bids and nonbids since 1993 and specifications, the Secretary-Treasurer was in charge of that. . . .
So I may seem uncertain as to certain things. I’d have to get my staff in here and let them answer the question, and then I could give you a better answer.
GEB Ex. 200, Tab C at 209-216 (emphasis added). Coia’s testimony at the November 29, 1995 deposition demonstrates that, upon becoming General President, he restructured the operation of that position and delegated responsibility in many areas to other persons. Norwood and Needham were given authority over LIUNA’s fleet-leasing operation and specific questions concerning that operation had to be directed to them.
21907785. Coia testified about the delegation of authority over LIUNA’s fleet leasing program in his deposition of August 2, 1996 as well.
21907786. The record contains the following deposition testimony by Coia on August 2, 1996. The GEB Attorney bases his charge on the highlighted sections of this testimony:
[BY GEB ATTORNEY:]
Q: . . . .There was a bid process for LIUNA’s rental car lease in 1993, correct?
* * *
A: I’m not sure if there was one in ‘93. When I was -- the first bid process of which Viking was involved I think was in 1990 when they were the low bidder and got the lease arrangement with LIUNA, and then there were two subsequent ones after that, whether the were in ‘91, ‘92 or ‘93, I’m not sure.
Q: Let me see if I can place you in time here a little bit. . . I’m handing you an exhibit. It’s marked Exhibit 2, and why don’t you just take a look at that.
A: Right, I’m familiar with this, yes.
* * *
Q: To clarify, this Exhibit 2 purports to be a May 19, 1993 memorandum to James Norwood from Thomas Needham regarding Viking proposal for new fleet lease program and 1994 cars, and I take it from your statement that you’re familiar with this memorandum?
Q: Did this memorandum come to you for viewing at a certain point in time in or around May of 1993?
A: It had to be around there because I was aware of it.
* * *
Q: And as you’ve already testified, in May of 1993 your position was the general president of LIUNA?
A: Yes. See, normally this type of proposal or review would be done -- when I say ‘normally’ by my predecessor, which would have been the general president. [Fosco]. I divided and tried to delegate work and authority to others within the building. . . . Cars was Norwood . . . I tried to, again, put more responsibility in delegation of authority to others within the operation so it could be more [efficiently] run. That’s how Norwood was involved with the leasing, to review it and to make it better.
* * *
Q: I am going to show you a one-page document, which has been marked as Exhibit 3. . . .I would ask you to [take] a look at that and tell me when you’re done.
* * *
Q: This is a document that is marked May 21, 1993, a memorandum to James Norwood from Thomas Needham.
Q: Do you recognize that document?
A: Yes. I recall this -- when I discussed this with Norwood to have him get back to Needham to find out what those cost factors really would be, and I believe that’s how this memorandum came about.
Q: So this . . . is a document that was generated at your request to further clarify the information?
A: Yes. The first memorandum when this came back to me showed that this was going to be significant cost increase from the last proposal that we had, and I wanted to get back exactly what the cost was going to be, and that is how this one came about.
* * *
A: This is a new proposal submitted to us by Viking. This was their proposal to us for the upcoming year. We reviewed it, Norwood, Needham, and myself. I’m not sure exactly, but I reviewed it, got back to Needham with respect to coming up exactly what these figures would be in real dollars, and the second memorandum... reflected what those additional costs would be if we . . . accepted the Viking proposal, which we did not.
* * *
[BY THE GEB ATTORNEY:]
Q: Are you familiar with that document [the PHH bid]?
A: I don’t recall ever seeing this document.
Q: Do you recall a competing leasing proposal being made around the June 1993 period which offered a different bid than the offer provided by Viking?
A: No. This is the first time - this is the first time I’ve seen this document.
Q: This document being Exhibit 4?
A: Being June 11, 1993, yeah. I might add to the best of my recollection.
* * *
Q: Were you aware back in June of 1993 that a competing bid was made to the Viking proposal for leasing?
* * *
A: Let me add -- I want to just add something. If I was aware of this . . . I would have interviewed these people [at PHH] and found out why and how this was developed with bid specs and so forth because as you go from this May 21 memorandum with Viking, we then sat down to come up with better figures with Viking as to residuals and buyouts and certain type cars. We changed our process to lower our cost, and they never were interviewed, PHH. Based on this they should have been.
* * *
Q: Tell me what you recall about discussing Viking’s bid proposal in May of 1993 with Tom Needham? Do you recall having a meeting --
A: I’m not sure exactly with Tom Needham alone, or with Jim Norwood and Tom Needham, but I can tell you my recollection of the Viking new bid -- we will call it -- which is the May 19 proposal. No bid, proposal, which was significantly high. Then we got the actual dollar factor as to what that would be.
Then Norwood and myself sat down to review the entire leasing program. . . .
GEB Ex. 200, Tab D at 67-76 (emphasis added).
21907787. The GEB Attorney also cites to Coia’s January 29, 1997 deposition where the following exchange occurred between him and the GEB Attorney. The GEB Attorney bases his Charge on the highlighted testimony.
[BY THE GEB ATTORNEY:]
Q: . . . . Let me ask you a few questions about the Viking Leasing contract, just to clear up a couple of points . . .
Viking first started to lease cars to the International in approximately 1989 or 1990? I am referencing some of your prior testimony. I am just trying to create a context here.
[BY MR. COIA:]
* * *
Q: And Viking ultimately submitted a bid, and arranged for the contract.
Prior to Viking submitting their proposal, did you provide Mr. Carcieri or anyone else at Viking with the rates that were being charged to . . . [PHH], . . . another entity in the bidding process?
Q: Okay. Let me show you . . . Exhibit No. 4 from [the August 2, 1996 deposition]. And I just want to refer to you the second page, which is a breakdown of a cost comparison of the bid proposals of Viking and this [PHH], and I will ask --
A: Was this a bid?
* * *
A: I thought we went over this before. I never knew that this PHH submitted any proposal to the Laborers.
Q: Okay. I understand that. I am not asking you that question over again. What I am asking you is on the second page, if you know whose handwriting that is; I don’t think I asked you that before. In other words, that is not your handwriting?
Q: Do you know whose handwriting it is?
A: I think it is Tom Needham’s.
Q: Okay. And it is your testimony that you don’t recall PHH providing a proposal at all; is that what you just . . .
* * *
A: I don’t know. I think in my testimony, I think, I don’t know if Tom Needham solicited this on his own or whether it was part of a bid process. I was not aware of it.
GEB Ex. 200, Tab H at 208-211 (emphasis added).
The GEB Attorney argues in his post-hearing brief that Coia cast aside his affirmative duty to cooperate fully with the GEB Attorney and IG’s investigation of his conduct, and callously disregarded all LIUNA members’ duty to provide the full and complete truth to the GEB Attorney and IG by falsely stating that he had never seen or could not recall seeing the bid from PHH. GEB Br. at 161-62.
In his responsive brief, the GEB Attorney states that the “core issue” of Charge XV is: “Did Coia tell the truth during his deposition testimony when he testified that he had never seen the bid PHH submitted for the 1994 fleet leasing contract with LIUNA?” GEB Resp. Br. at 62. He characterizes Coia’s testimony as “unadorned obstruction” and states that “[t]he answer [to charge XV] is as clear as the matter is simple: Coia lied under oath.” Id.; GEB Br. at 162 (characterizing testimony as unadorned obstruction).
In order to show that Coia’s deposition testimony in question was obstructive, the GEB Attorney must show the testimony was material, misleading, and intentionally deceptive. See In re Martire 1997 A.O. 81 (97-008D).
When viewed in the context of the entire depositions and the rather disjointed question and answer procedure utilized by the GEB Attorney, however, it is clear that the GEB Attorney has not established that Coia attempted to mislead. Coia testified that he had delegated responsibility for LIUNA’s fleet leasing to Norwood and Needham and the record reflects that he did not involve himself in the day-to-day operations of the International Union’s vehicle leasing program. Indeed, at one point during his November 29, 1995 deposition, he recommended that the GEB Attorney refer a certain question to Needham. GEB Ex. 200, Tab C at 214.
Moreover, the GEB Attorney has not demonstrated how these alleged misstatements were material to an investigation being conducted by the GEB Attorney. Although the object of the investigation was not clear from any evidence in the record, the Attorney’s post-hearing brief suggests that Coia was attempting to avoid testifying that persons at Viking were shown the PHH bid. The GEB Attorney further argues that Coia acted improperly by revealing PHH’s bid to Viking, thus giving Viking the opportunity to submit a more favorable proposal. This flies in the face of substantial evidence in the record.
The record reflects that the International Union does not currently have and has never had a practice or policy of blind bidding. It negotiates with incumbent vendors to obtain the lowest rates on services provided to the Union by soliciting competitive bids and continually sharing the price differentials to the incumbent.
As a final note, the IHO would point out that the key evidence on this charge consists of Needham’s recollections regarding the bidding on the 1994 leasing contract. These recollections were received by way of the hearsay testimony of attorneys Hammer and Greenman. While there is no doubt that these gentleman faithfully related what Needham told them, Needham himself was not subjected to cross-examination. Under these circumstances, cross examination of Needham in the presence of the IHO would have been very helpful.
21907788. The GEB Attorney has not proved by a preponderance of the evidence that Coia intended to mislead the GEB Attorney.
21907789. The GEB Attorney has not shown that Coia’s alleged statements are material to an investigation by the GEB Attorney.
21907790. The IHO finds that Charge XV is not proven by a preponderance of the evidence.
21907791. The overall importance of Charge XV is that it is really a stepping stone to Charge XIV which, as will be seen, is far more substantial. The IHO will utilize the recognized technique of labor arbitrators and will refocus the evidence and the issue. See Edna Elkouri & Frank Elkouri, How Arbitration Works, 322-23 (Marlin M. Volz & Edward P. Noggin eds., 5th Ed. 1997). The IHO will utilize the information relating to Viking’s favored incumbent status provided in support of Charge XV in assessing Coia’s and Carcieri’s actions in Charge XIV.
Coia’s Business Relationship with Viking
Charge XIV alleges:
Ethical Practices Code -- Business and Financial Activities of Union Officers: From on or about July 12, 1991, to in or about February 1994, ARTHUR A. COIA, while a member and officer of LIUNA, that is, General Secretary-Treasurer or General President, received and accepted something of value from a professional enterprise with which the Union conducted business, to wit: Coia caused or allowed Viking to structure the transfer to him of a 1991 Ferrari F40 automobile, Vehicle Identification Number ZFFMN34A6M0089653, in such a manner as to foster the misleading appearance that Viking maintained ownership of the automobile and to avoid transferring the Manufacturer’s Certificate of Origin (“MCO”), thereby allowing Coia to maximize the value of the automobile on resale, and to avoid the payment of at least $77,750 in taxes, in violation of the LIUNA Ethical Practices Code, “Business and Financial Activities of Union Officials,” Section 4.
The GEB Attorney has charged Coia with violating the EPC, Business and Financial Activities of Union Officials, Section 4 by receiving something of value from a union vendor. Specifically, it is alleged that Coia was given an opportunity to purchase a Ferrari F40 automobile (“Ferrari” or “F40") in a joint venture with Viking, the International Union’s fleet leasing vendor, and profit from its sale.
The EPC, Business and Financial Practices, Section 4 states in pertinent part:
every officer and representative must avoid any outside transaction which creates an actual or potential conflict of interest. . . .
(4) No officer or representative shall accept “kickbacks,” under-the-table payments, valuable gifts, lavish entertainment or any personal payment of any kind . . . from a business or professional enterprise with which the Union does business.
Findings of Fact
21907792. As discussed supra in the Findings of Fact and Conclusions relating to Charge XV, from 1990 to 1995, Viking was the automobile fleet lessor for LIUNA. Coia and Carcieri, the President and CEO of Viking, were long time friends. Tr. 4412-13.
21907793. In December of 1987, Carcieri traveled to Ferrari headquarters in Italy to meet with Giovanni Battista Razzelli (“Razzelli”), the Directore Generale of the company, to attempt to become a franchised Ferrari dealer. Tr. 4416-18. Razzelli did not grant Carcieri a franchise, but agreed to sell him a Ferrari F40. Id. at 4416. See R. Ex. 296, 297.
21907794. A Ferrari F40 is a limited edition exotic car which Ferrari began developing in 1987 or 1988 as an anniversary car, commemorating 40 years of being in business. Tr. 5135-36. Only three to four hundred F40s were originally scheduled for production. Id.
21907795. Carcieri and Ferrari of Italy corresponded over the next few years about his acquisition of an F40 but, ultimately, Carcieri never received an F40 directly from Italy. See R. Ex. 298-313.
21907796. Coia testified that he was aware that Carcieri had spent a great deal of time attempting to acquire the F40 from Italy but, in April or May of 1991, Carcieri told him that he was considering canceling the deal. Tr. 5105. Carcieri offered Coia the opportunity to join him in obtaining an F-40 and requested that Coia take the financial risk on the car, in exchange for an opportunity to profit on it. Coia agreed to this arrangement. Id.; Tr. 5109-10.
21907797. In July of 1991, Coia and Viking purchased a Ferrari F40 for $450,000 from Autohaus, a Ferrari dealership located in Cohasset, Massachusetts. Tr. 3095 (cost of F40), Tr. 4426-27, 5111-12; GEB Ex. 135 (stating price paid for F40) and 200, Tab D at 84-85. Carcieri canceled his order on the F40 he was expecting from Italy.
21907798. The entire down payment on the F40 was comprised of a cash payment by Coia and the trade-in of two vehicles supplied by Coia. GEB Ex. 135, 138. Carcieri secured a $300,000 loan from GMAC on the Viking floor plan for the balance of the F40 cost. GEB Ex. 136, 137. The F40 was purchased in Viking’s name.
21907799. For the entire time the car was carried in Viking’s name, Coia paid all of the carrying costs on the vehicle including the monthly finance charges, maintenance fees and insurance. Tr. 5096-96, 5403. See also GEB Ex. 141, 143, 145, 154-61, 163-88.
21907800. At the time of the F40 transaction, Coia was LIUNA’s General Secretary-Treasurer.
Preservation of the Manufacturer’s Certificate of Origin (“MCO”)
21907801. The terms MSO and MCO are interchangeable and refer to a “statement from the manufacturer that a vehicle has never been titled in any state and that the person who is receiving the vehicle or titling the vehicle would be the initial title owner.” Tr. 2837, 2832 (discussing interchangeable nature of terms).
21907802. Coia testified in his depositions on November 29, 1995 and August 2, 1996 that the Ferrari F40 was titled in Viking’s name in order to preserve the MCO and thereby maintain the value of the car. GEB Ex. 200, Tab C at 221; Tab D at 88-91.
21907803. Ordinarily, once an automobile has been sold, the dealer signs the MCO to the customer and then presents it to the state transportation authorities to receive a title to the vehicle. Tr. 2838.
21907804. A titled or pre-owned automobile would have a lower resale value than an automobile that retained its MCO and had never been titled. Tr. 2838. In the exotic car market, there is a certain “cachet” to being the first owner. Tr. 2839.
21907805. Coia testified that the effect of his transaction with Viking was that the dealership retained nominal ownership of the F40 so that, when it was resold, it would appear as though the vehicle was an untitled new car. GEB Ex. 200, Tab C at 223-24. Viking’s name appeared on the F40's MCO. R. Ex. 318.
21907806. Viking designated the Ferrari F40 as a demonstration vehicle so that Coia could use it pursuant to a temporary loan agreement that Coia and Viking had entered into. GEB Ex. 139, 147. Coia’s use of the car was nominal. Among exotic car enthusiasts, cars such as the F40 are not driven for pleasure. They are only used for purposes of demonstration and to keep the engine in lubricated condition. When the car was sold it had 1,500 miles on it.
21907807. The Ferrari F40 was kept on Viking’s premises, as well as in Coia’s personal garage, and was shown at car exhibitions in Florida. Tr.4518-19; 5112-14.
21907808. The F40 was ultimately sold through a broker in New York in 1994. Tr. 4520. By that time, the demand for the F40 had dropped substantially.
21907809. Coia received a total of $380,000 on the sale of the F40, which resulted in a loss to him of $70,000. Tr. 5097 (testifying loss of $70,000); GEB Ex. 153 (receipt of $380,000); GEB Ex. 192. Coia also paid a total of $35,000 in interest and carrying costs on the F40. Tr. 5096-98; GEB Ex. 154-161.
21907810. Carcieri earned a $15,000 commission on the sale of the F40. Tr. 4519-21.
21907811. At the time of the sale of the F40 in 1994, the Federal luxury tax was paid to the IRS by Viking, the seller of the automobile, after collecting it from the buyer. Tr. 2777.
21907812. Coia, on his own, could have purchased the car on the open market from Autohaus but the joint venture with Carcieri offered him the opportunity to buy it with the added financial resources supplied by Carcieri’s relationship with GMAC.
21907813. The joint venture with Carcieri also offered Coia the opportunity to sell the car with the enhanced value of a new vehicle which still had its MCO.
21907814. The way in which the F40 transaction was structured between Coia and Viking permitted Coia, as a partner of Viking, to, in essence, act as the wholesale dealer of the vehicle and avoid the payment of the luxury tax on the car. This tax was ultimately borne by the person to whom the F40 was transferred after Coia and Viking. This is a one time tax. This is another benefit presented to Coia by Viking which would not have been available to him with any other dealership.
21907815. Coia was given this unique opportunity by virtue of Carcieri. Although Carcieri was an old friend, he was also a major vendor of the Union.
21907816. Coia would not have been afforded this same opportunity on the open market.
21907817. Although no union funds were involved, there were no kickbacks or payments, nor any direct effect on the union, there was a definite conflict of interest and an appearance of impropriety.
21907818. The EPC strictly prohibits any outside transactions which create a potential conflict of interest. EPC, Business and Financial Practices, Section 4. It also prohibits officers from receiving personal benefits of any kind from a business enterprise with which the union does business. Id.
21907819. The spirit of the EPC and basic fiduciary law prohibit such transactions.
21907820. The IHO finds it was a conflict of interest for Coia to receive the favorable opportunity to participate in the venture.
21907821. It is irrelevant that Coia lost money on the deal; in point of fact, he was provided favorable terms and had the opportunity to make a large profit from the F40. It is this opportunity, which was enhanced by Carcieri’s financing arrangement with GMAC, the avoidance of the luxury tax and Carcieri’s retention of the MCO, that reflected a personal benefit prohibited by the EPC. The ethical propriety of the venture cannot be based upon whether the participant makes a profit.
21907822. Coia’s joint venture with Carcieri to purchase the F40 was a direct conflict of interest to his position as General Secretary Treasurer and Carcieri’s position as a major LIUNA vendor.
21907823. Although there were no union funds involved and there was no direct effect on the union as a result of this joint venture, Coia was offered an opportunity to make a substantial profit from the sale of the F40. This venture was in violation of the EPC.
21907824. The GEB Attorney has proved Charge XIV by a preponderance of the evidence.
Evasion of Federal Luxury Tax
Charge XVI alleges:
Commission of a Felony Under Federal Law — Tax Evasion: In or about 1991 in Rhode Island and elsewhere, ARTHUR A. COIA committed a felony violation under federal law, to wit: Coia did knowingly and willfully attempt to evade and defeat the payment of approximately $42,000 in federal luxury taxes due and owing by him to the United States of America under 26 U.S.C. § 4001 on the purchase of a 1991 Ferrari automobile bearing Vehicle Identification Number ZFFMN34A6M0089653 for $450,000, all in violation of Title 26, United States Code § 7201.
In Charge XVI, the GEB Attorney alleges that Coia willfully evaded the payment of $42,000 in federal luxury tax on the purchase of the Ferrari F40 in violation of 26 U.S.C. § 4001. This was an amended charge, added months after the original charges were filed.
The LIUNA EDP permits the GEB Attorney, in his discretion, to bring a disciplinary charge against a LIUNA member based upon any felony conviction of the member in state or federal court. The EDP also permits the GEB Attorney to bring a disciplinary charge based upon evidence that would indicate an individual has committed a federal or state felony, even though that individual has not been charged by the state or federal authorities. See EDP, Section 3, The GEB Attorney.
In the instance where no federal or state charges have brought against the member, the IHO has the authority to determine whether the member has committed a felony where the application of the criminal statute is clear and there are no peculiar executive branch policies which must be considered before charges are brought. The IHO has found that individuals have committed state and federal criminal violations, although the violations were not charged by the proper authorities. See In the Matter of Amarel, IHO Order and Memorandum, 96-45D (December 9, 1996)(assault in violation of Canadian law); In the Matter of Beck, IHO Order and Memorandum, 98-15D (August 10, 1998)(embezzlement in violation of 29 U.S.C. § 501(c)); But see In the Matter of Proto, IHO Order and Memorandum, 97-09D (March 26, 1998)(IHO refused to find violation of New Jersey racketeering statute).
In the case of a violation of a federal tax statute, whether an individual owes the federal tax, and whether the person will be charged with a criminal violation of that tax statute, is a decision within the initial discretion of the Internal Revenue Service (“IRS”). Only the Commissioner of the IRS and his delegate can decide whether a tax is due and whether the failure to pay a tax constitutes a criminal offense. 26 U.S.C. §§ 7401, 9801. The decision is not simply a factual determination. For example, a failure to file a personal income tax return may not result in a criminal charge, even for failing to file returns for several years.
The IRS has guidelines to determine whether it will consider if a civil tax is due and owing and whether the IRS will recommend criminal charges if there was a failure to pay the tax. For example, the Criminal Investigation Standards and Policies section of the IRS Practices and Procedures states that in tax evasion cases, prosecution is recommended only if (1) the average yearly additional tax for criminal purposes is $2,500 or more, and (2) an uncomplicated fact pattern is involved. See IRS Practices and Procedures, Criminal Investigation Standards and Policies ¶ 12.03[a](Michael Saltzman ed., 2d ed. 1991)(emphasis added).
Moreover, the DOJ cannot bring criminal tax charges unless the IRS first makes a recommendation. The IRS has primary jurisdiction in this area, and it is strictly an executive function. See Pseudonym Tax Payer v. Miller, 497 F. Supp. 78, 81 (D. N.J. 1980). Even after a recommendation is made by the IRS, the DOJ Tax Division may decline prosecution. 28 U.S.C. § 547(a). The DOJ Tax Division also applies its own unwritten informal guidelines.
In summary, the decision whether circumstances indicate that tax is owing and whether the act constitutes a criminal tax violation is not for the IHO to make. The IHO has no knowledge of the IRS guidelines or the current policy of the IRS on criminal prosecutions, especially in cases involving complicated statutes and fact patterns such as those involved here. The matter is further complicated by the fact that the luxury tax is a one time tax and has been paid by the person who purchased the F40 from Viking.
The IHO is unpersuaded by the testimony of GEB Attorney witness Robert Russo (“Russo”). He was never a member of the IRS Regional Counsel staff, which make such decisions, but was a special agent field investigator. See United States v. LaSalle Nat’l Bank, 437 U.S. 298, 315 (1980)(“while the special agent is an important actor in the process of referring a matter for criminal prosecution his motivation is hardly dispositive”). The Regional Counsel of the IRS has broad discretion in determining whether to assess a tax deficiency or prosecute a tax violation criminally. A labor arbitrator cannot pretend to assume the application of such discretion, especially in the very complicated fact pattern presented in this case. Moreover, there is no precedent in this area. The IHO’s independent research has disclosed no reported criminal cases for failure to pay luxury tax and the GEB Attorney’s witness, Russo, testified he know of none. Tr. 2801. Moreover, the IHO notes that the luxury tax was paid by the person who purchased the car from Coia.
If Coia was required to pay luxury tax on the F40 and his failure to do so was a result of fraud, as the GEB Attorney contends, there is no statute of limitations on civil tax fraud. Tr. 2801-02. The report of the GEB Attorney in this matter can easily be referred to the IRS, an organization always eager to collect taxes. The IHO would be surprised if such referral has not already been made.
Charge XVI is dismissed as not being within the province of a labor arbitration.
The GEB Attorney has voluntarily dismissed Charged II.
The GEB Attorney has not proved Charges I and III through XIII by a preponderance of the evidence.
The IHO has considered Charges XIV, XV, and XVI as a group. Based upon this grouping, the IHO finds that Charge XV has not been proved by a preponderance of the evidence, but the evidence submitted in support of Charge XV has been considered in support of Charge XIV. Based upon the evaluation of the evidence of both Charges XIV and XV, the IHO finds:
The GEB Attorney has proved Charge XIV by a preponderance of the evidence.
The GEB Attorney has not proved Charge XV by a preponderance of evidence.
Charge XVI is dismissed as beyond the province of a labor arbitration.
The penalty is based on Charge XIV.
Although Coia actually lost money on the venture with Carcieri, he was offered the
unique opportunity to make a large profit and received favorable terms on the purchase of the vehicle. The conflict of interest in this matter occurred at the highest level of the Union, between the Chief Financial Officer and a major vendor to LIUNA.
The reform process is about more than organized crime; it is about financial integrity in the labor movement. The adoption of EPC was meant to bring an awareness of financial integrity to all LIUNA officers, from the Business Manager of a small local union with 200 members to the General Executive Board members in Washington, D.C.
If the EPC is to have any relevance to LIUNA officers at the local and International Union level in the future, there should be a penalty commensurate with the benefits improperly obtained to demonstrate that such conduct will not be tolerated in LIUNA at any level. The penalty must be one that is remedial and a deterrent.
Coia is assessed a fine of $100,000. The fine may be paid over a two year period.
This Order takes effect in ten days unless a notice of appeal is filed with the Appellate Officer within ten days.
The Appellate Officer is:
W. Neil Eggleston, Esq.
1299 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2402
(202) 383-6610 (facsimile).
PETER F. VAIRA
INDEPENDENT HEARING OFFICER
Dated: March 8, 1999
Robert Luskin, Esq.
Brendan V. Sullivan, Jr., Esq.
Howard Gutman, Esq.
Micheal Bearse, Esq.
Laborers for JUSTICE© 1999 as to original work. To be published on www.liuna.org because of complaints and briefs of Laborers for JUSTICE. If you have documents you want other laborers to see, call Jim McGough at 847-202-3838
The language set forth here differs from the language set forth in Appendix B of the EDP. These differences, however, have no bearing on the present case.
On September 25, 1998, in a footnote in his post-hearing brief, the GEB Attorney withdrew Charge II against Coia. GEB Attorney Post-hearing Brief (“GEB Br.”) at 52 n.22.
Citations to the record for this chronology will be supplied infra in the Findings of Fact.
The history and structure of the LCN were discussed at length in Fallacara, IHO 96-65D at 2-4; Chicago District Council, IHO 97-30T at 6; and, In the Matter of Franco, IHO Order and Memorandum, 98-04D at 10-12 (October 6, 1998).
A “made member” is an individual who has been accepted and inducted into an LCN family. Induction into the LCN is referred to as “getting made.” To be inducted, a member must undergo a formal initiation ceremony, followed by all of the LCN families, in which the proposed member swears his allegiance to the family. See Fallacara, IHO 96-65D at 4.
An associate of the LCN is a person who is not a made member of an LCN family but who participates in, cooperates with, or facilitates the LCN’s activities. Associates are of two types: (1) criminals who are taken into the fold by the members or (2) persons who work at legitimate businesses, but perform tasks, provide services, or assist members in their illegal activities. Id. at 3.
Hillary could not remember which incident took place first, the one at Kendall Estates or the one at the Union House. Tr. 701.
This case is frequently referred to throughout the record as the “Hauser case,” since Joseph Hauser (“Hauser”) was the government’s key witness.
These were during the period when the joint defense meetings occurred, the propriety of which has already been conceded by the GEB Attorney. See GEB Br. at 58.
 In the Matter of Bifulco, IHO Order and Memorandum, 96-48D (March 17, 1998); Chicago District
Counsel, IHO 97-30T.
Gifts such as these must now be approved by the IG but, at the time, were purely a matter of discretion on the part of the local union Executive Board.
 Robert Connerton of the law firm of Connerton, Ray & Simon (“the Connerton firm”) was retained by LIUNA as attorney Robert Connerton was the General Counsel.
In his deposition taken by the GEB Attorney on February 9, 1995, Daniel Caivano stated that his main objective as the Local 66 trustee was to immediately remove Vario as the Funds Administrator. R. Ex. 103 at 92. See also R. Ex. 56. Vario submitted his letter of resignation upon confrontation by Daniel Caivano. R. Ex. 103 at 73.
Curiously, although Fino had been a government informant for at least 15 years inside Local 210, he had never been called upon to testify about his activities in running that Local before testifying before the IHO in the Bifulco case in August of 1996.
During his investigation into Fino’s allegations, Elbaor periodically copied Coia on his memoranda to Connerton or sent memoranda directly to Coia keeping him apprised of the investigation. See R. Ex. 127, 138, 140.
The GEB Attorney avers that Giardina’s father is a made member of the LCN. GEB Ex. 94.
Solano was the President and Business Manager of Local 1 in Chicago and a delegate to the Chicago District Council from 1970 until his death in 1992. Chicago District Council, IHO 97-30T at 61 ¶ 141.
Coia first appeared as a witness against Serpico at a hearing before the IHO on May 19, 1995 after Coia suspended him from office pursuant to his new powers under the EDP. Tr. 5371-72. There, Coia testified to his Chicago meeting with Solano and the struggle for the presidency with Serpico which is related infra at pp. 65-67.
Booker has since been elected the International General Secretary-Treasurer.
Matassa was the Vice President of the Chicago District Council and the President and Business Manager of Local 2 in Chicago. See generally Chicago District Council, IHO 97-30T at 66 ¶¶ 172-192.
 Article XII, Section 1 of the Uniform Local Union Constitution states:
An officer or member in good-standing may prefer charges against any other officer or member of a Local Union, by filing written charges in duplicate with the Recording Secretary of the Local Union. These charges must be signed by the person preferring the charges and indicate the provisions of the Constitution to be relied upon, or the agreement or rule alleged to have been violated, and must set forth the specific violation or wrong charged and the date on which it allegedly occurred.
Article XII, Section 3 of the Uniform Local Union Constitution states in relevant part:
The members of the Executive Board of the Local Union shall constitute the Trial Board; except that neither the charging party nor the accused nor any member directly interested or involved in the charges may sit as a member of the Trial Board.
The lack of precedent is evidenced by the fact that, prior to the Consent Decree with the IBT, none of the union trustees who were installed by the suits filed pursuant to the RICO Act filed disciplinary charges against officers for associating with organized crime. See United States v. IBT (Local 560), 581 F. Supp. 279 (D.N.J. 1984); Roofers (Local 30), 686 F. Supp. 1139 (E.D. Pa. 1988); ILA, 812 F. Supp. 1303 (S.D.N.Y. 1993).
The Chicago District Council was placed under trusteeship in 1998 for being under the influence of Organized Crime. See Chicago District Council, IHO 97-30T.
Charge XV is being dealt with prior to Charges XIV and XVI due to the direct correlation between them and the history which is set forth relating to them in Charge XV.
Citations to the record for the items listed in this chronology will be supplied infra in the Findings of Fact.
During this same time, Coia, Sr. was LIUNA’s General Secretary-Treasurer but Respondent Coia did not yet have a position with the International Union.
Coia and Carcieri have known one another for many years and remain friends to this day. Tr. 4412-13; GEB Ex. 200, Tab C at 193-94.
Coia did not attend this meeting but made an appearance to show his support for Viking. Tr. 2511.
The GEB Attorney also alleges that Coia and Carcieri did not pay $33,750 in Rhode Island state tax on the F40, but failed to provide any evidence to support this allegation including the tax statue involved. The IHO, therefore, will not reach the merits of this allegation. The allegation appears to suffer the same effect as the charge of failure to pay the luxury tax as alleged in Charge XVI.
26 U.S.C. § 4001 states in pertinent part:
(a) Imposition of tax. -- (1) In general. There is hereby imposed on the 1st retail sale of any passenger vehicle a tax equal to 10 percent of the price for which so sold to the extent such price exceeds the applicable amount. (2) Applicable amount. (A) In general. Except as provided in subparagraphs (B) and (C), the applicable amount in $30,000.
26 U.S.C. § 7201 states:
Attempt to evade or defeat tax. Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more that $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.