Peter J. Fosco, a regional vice president
for the Laborers' International Union of North America, has been
ordered to repay various union entities amounts totaling $80,286
for his work as a "consultant" and has been stripped
of union membership in an Oct. 14 ruling by LIUNA's independent
hearing officer.
Hearing officer Peter F. Vaira found Fosco
guilty of 11 of 13 counts of conduct proscribed by federal law
and LIUNA's ethical practices code. The charges arose over consulting
fees he allegedly charged to several of the union's district councils
and local unions for work he did not perform or for which he already
was being paid. "This case is a classic example of the
abusive and corrupt practices in union administration" that
led to passage of the Labor-Management Reporting and Disclosure
Act, Vaira said in his 70-page opinion.
Vaira found it "disturbing" that
such practices still exist and said it was "more disturbing
that the perpetrator is a high-ranking international union officer
and a member of the general executive board." Fosco's actions are "blatant examples
of misuse of power, manipulation of subordinates, and greed,"
according to Vaira. "No one can seriously doubt that these
abuses would not have been exposed and prosecuted," he said,
without passage by the union of its ethical practices code and
its ethical and disciplinary procedure.
The case also is "an argument for the
necessity of the LIUNA reform machinery," Vaira said. The
disciplinary charges are a function of a four-year-old internal
reform effort established under an agreement between the Department
of Justice and the union. Under the agreement, the Justice Department
agreed not to sue the union under the Racketeer Influenced and
Corrupt Organizations Act if it proceeded to rid itself of the
influence of organized crime.
The disciplinary charges were filed Nov.
24, 1998, against Fosco by Robert Luskin, the prosecuting attorney
for LIUNA's general executive board. Vaira conducted hearings
in New Orleans on April 6-9, 1999, and May 3-6, 1999. Luskin said Oct. 15 he was "gratified
by the decision" and believes it is "strongly supported
the evidence."
LIUNA announced Oct. 15 that the opinion
had been released but made no further comment.
Fosco has the right to appeal the decision
within 10 days to W. Neil Eggleston, LIUNA's appellate officer.
James O'Connor, the attorney representing Fosco, did not return
calls seeking a comment on the ruling.
The misconduct was alleged while Fosco was
regional manager of LIUNA's south central region. Fosco is the
son Angelo Fosco and grandson of Peter Fosco, both of whom served
as union presidents.
Fosco joined LIUNA Local 2 in Chicago in
1966 and moved up through the union ranks to become an assistant
regional manager of the Chicago region in 1976. He held the position
until he resigned in 1984 and was inactive in the union for several
years.
Regional Office in New Orleans
When his father was re-elected to another
term as president in 1986, Fosco resumed his active role in the
union and opened a regional office in New Orleans at his father's
recommendation, according to Vaira. He transferred his membership
to Local 692 in Baton Rouge. He was elected in 1996 as one of
the union's vice presidents. At all times covered by the charges,
he received a full-time salary from LIUNA as a regional manager,
most recently $165,000 per year, and was covered by the union's
staff pension plan. There was no written job description for his
position.
Vaira found that during this period Fosco
"devised a scheme" in which the union's district councils
in Kentucky and Louisiana and Local 692 paid him consulting fees
and pension contributions for which he performed no services.
Vaira further found that Fosco created a plan in which the three
organizations paid him outside compensation by other methods,
"in direct contradiction of the General President's directive"
to stop receiving consulting fees.
These payments, Vaira said, included cash
and pension fund contributions for services not performed as a
sergeant at arms, payment of cellular phone bills, and payment
for delegate fees.The GEB attorney presented evidence that consulting
fees and outside compensation to Fosco between 1990 and 1999 totaled
$93,829.
Vaira also found that Fosco sought monthly
cash payments from his staff for a "staff fund" that
started at $25 a month per person and increased to $50, "clearly
a breach of fiduciary duty." According to Vaira, Fosco "pursued
those who fell in arrears" and "made all decisions regarding
how much money to collect and how to spend the funds.
In addition, Vaira found that between 1989
and 1997 Fosco received "substantial personal gifts"
from the three organizations that asked Fosco to select a gift
of his choice. "Fosco well knew that the gifts were excessive,
and the gift givers well know that Fosco expected them to provide
significant gifts," Vaira said. Vaira added that he found
the practice of a senior executive selecting his own gift "an affront" to the union's ethical
practices code.
Vaira upheld charges that Fosco obstructed
the investigation of his case by LIUNA's inspector general and
misled an inspector regarding work he claimed to have performed
in exchange for his consulting fees. As a penalty, Vaira determined that Fosco
must repay the three labor organization $53,340 for fees he collected
as a consultant and $26,946, the total salary paid to him for
serving as a sergeant-at-arms for the Kentucky Laborers District
Council.
Discretion was left with the GEB attorney
to negotiate a repayment schedule. The union's inspector general
was assigned to determine whether Fosco is entitled to pension
fund credits resulting from the unauthorized consulting agreements.
Vaira "permanently revoked" Fosco's
membership in LIUNA and permanently barred him from holding an
office or being employed by LIUNA or any affiliated entity.
By Brian Lockett