joint submission in favor of new stip

8/12/2019 Joint Submission in Favor of New Stip

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK------------------------------------------------------------

UNITED STATES OF AMERICA,

Plaintiff,

v.

DISTRICT COUNCIL OF NEW YORK CITYAND VICINITY OF THE UNITEDBROTHERHOOD OF CARPENTERS ANDJOINERS OF AMERICA, et al.,

Defendants.

90 Civ. 5722 (RMB)

------------------------------------------------------------

Joint Memorandum in Support of Entry of the Proposed Stipulation and Order Regarding

the Appointment of an Independent Monitor

ZUCKERMAN SPAEDER LLP

Attorney for the District Council of New York City

and Vicinity of the United Brotherhood

of Carpenters

BARBARA S. JONES

1185 Avenue of the Americas, 31st FloorNew York, New York 10036-2603

Telephone: 646.746.8838

Fax: 212.704.4256

E-mail: [email protected]

KAUFF MCGUIRE & MARGOLIS LLP

Attorney for Benefit Funds

RAYMOND MCGUIRE

950 Third Avenue, 14th Floor

New York, New York 10022-2705

Telephone: 212.909.0711

Fax: 212.694.1936

Email: [email protected]

PREET BHARARAUnited States Attorney for theSouthern District of New YorkAttorney for the United States

BENJAMIN H. TORRANCETARA M. La MORTE

Assistant United States Attorneys86 Chambers StreetNew York, New York 10007Telephone: 212.637.2703, .2746

Fax: 212.637.2702E-mail: [email protected]@usdoj.gov

Case 1:90-cv-05722-RMB-THK Document 1522 Filed 05/28/14 Page 1 of 28


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TABLE OF CONTENTS

BACKGROUND .................................................................................................................2

A. The June 3, 2010, Stipulation and Order RegardingAppointment of a Review Officer................................................................2

B. Progress Under the Review Officers Oversight .........................................4

1. The District Council .........................................................................4

2. The Benefit Funds ............................................................................7

C. The Need for Continued Oversight and Monitoring ..................................10

THE PROPOSED STIPULATION AND ORDER ...........................................................16

THE COURTS AUTHORITY TO ENTER THE STIPULATION .................................19

IN THE EVENT THE COURT IS UNABLE TO DECIDE THE PARTIES

JOINT MOTION BY JUNE 3, 2014, THE PARTIES REQUEST ENTRY

OF AN INTERIM ORDER ...............................................................................................23

CONCLUSION ..................................................................................................................24



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TABLE OF AUTHORITIES

CASES PAGE

Bano v. Union Carbide Corp.,

273 F.3d 120 (2d Cir. 2001)...............................................................................................21

City of New York v. Exxon Corp.,697 F. Supp. 677 (S.D.N.Y. 1988) ....................................................................................21

Davis v. Blige,505 F.3d 90 (2d Cir. 2007).................................................................................................21

Janneh v. GAF Corp.,

887 F.2d 432 (2d Cir. 1989)...............................................................................................21

Kozlowski v. Coughlin,

871 F.2d 241 (2d Cir. 1989)...............................................................................................19

McReynolds v. Richards-Cantave,

588 F.3d 790 (2d Cir. 2009)...............................................................................................21

Plaut v. Spendthrift Farm, Inc.,

514 U.S. 211 (1995) ...........................................................................................................20

Rufo v. Inmates of Suffolk County Jail,

502 U.S. 367 (1992) ...........................................................................................................20

Sierra Club v. U.S. Army Corps of Engineers,

732 F.2d 253 (2d Cir. 1984)...............................................................................................20

United States v. District Council of Carpenters,

1996 WL 221584 (S.D.N.Y. 1996) ......................................................................................3

United States v. International Brotherhood of Teamsters ("Senese & Talerico"),

941 F.2d 1292 (2d Cir. 1991).............................................................................................21

United States v. Lauersen,

348 F.3d 329 (2d Cir. 2003)...............................................................................................20

United States v. Local 1804-1,90 Civ. 0963 (S.D.N.Y.) ....................................................................................................22



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United States v. Mason Tenders District Council of Greater, N.Y.,

No. 94 Civ. 6487 (S.D.N.Y.) .............................................................................................22

Wellman v. Dickinson,

497 F. Supp. 824 (S.D.N.Y. 1980), aff'd, 647 F.2d 163 (2d Cir. 1981) ............................21

Zhou v. Peng,

286 F. Supp. 2d 255 (S.D.N.Y. 2003)................................................................................21

STATUTES

18 U.S.C. 1961 ............................................................................................................................20

18 U.S.C. 1964 ......................................................................................................................19, 20

RULES AND REGULATIONS

Fed. R. Civ. P. 54(b) ......................................................................................................................20

Fed. R. Civ. P. 60 1946 advisory comm. note ...............................................................................20

Fed. R. Civ. P. 60(b) ......................................................................................................................19



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The government, the District Council of Carpenters, and the Benefit Funds respectfully

submit this memorandum in support of their joint application for entry of the proposed Stipulation

and Order Regarding the Appointment of an Independent Monitor (the Stipulation).1 Dennis

Walsh, the current Review Officer, has informed the parties that he does not intend to serve in any

monitoring capacity beyond December 31, 2014, but will be available to consult with the parties,

the Independent Monitor, and the Court.

After months of careful consideration, the government, the District Council, and the Benefit

Funds agree that the continued presence of a Court-appointed monitor to oversee the District

Council and the Benefit Funds is necessary to ensure that the significant progress achieved over

the past four years under the current Review Officer is not undermined. While corruption no

longer pervades the union or the Funds, the parties expect that a continued period of supervision

will allow the reforms already in place to take firmer root in the culture of the District Council and

the Funds, from the top leadership down to rank-and-file union members, and is necessary to

ensure the effective implementation of other structural reforms that are needed to safeguard

against the resurgence of corrupt forces. Continued supervision will further allow the union,

under its recently elected leadership and under the leaders to be chosen in the election late this

year, to demonstrate that it can govern itself effectively, democratically, and in the best interests of

its members, without unlawful influence. Conversely, an abrupt end to this Courts oversight at

this critical stage could put the achievements of the past four years and the unions relatively new

reforms at risk.

As detailed below, the Stipulation vests the Independent Monitor with slightly reduced

oversight powers than those vested in the Review Officer pursuant to the June 3, 2010, Stipulation

1 The Stipulation has been submitted to this Courts orders and judgments clerk, and acopy is attached to this memorandum for the Courts reference.



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and Order (the June 2010 Stipulation and Order). The powers, authorities, and responsibilities

vested in the Independent Monitor are designed to enable him to effectively monitor the status of

the reform efforts and take action if those efforts are in any way underminedwhile at the same

time providing the union and the Funds with additional flexibility to govern themselves and

demonstrate their independence and integrity.

Accordingly, the parties respectfully urge the Court to enter the Stipulation.

Background

A. The June 3, 2010, Stipulation and Order Regarding Appointment of a Review OfficerThe June 2010 Stipulation and Order was designed to effectuate far-reaching and

long-lasting reform in response to the drastically corrupt state of the District Council at that time.

Among the numerous incidents prompting the Stipulation were drug use by former officers and

employees of the District Council, out-of-work list violations, embezzlement from local unions,

and an indictment unsealed in August 2009. That indictmentwhich charged the unions top

officer, the president of its largest local, the executive director of a major employers association

(all three of whom were also trustees of the unions Benefit Funds), and seven others with

extensive and longstanding racketeering schemes resulted in guilty pleas and convictions, which

followed on the numerous other convictions involving the District Council in the preceding years.

The indictment, the convictions, the evidence behind them, the drug use, and the findings of the

United Brotherhood of Carpenters (UBC) pursuant to its trusteeship of the District Council

demonstrated that corruption and racketeering continued to pervade the union. See Memo. dated

June 3, 2010, at 3-4 (Dkt. No. 990).

All parties and Judge Haight recognized that extraordinary remedies were necessary to

surmount these seemingly intractable problems. See id. at 4-5, 8. As the Court is aware, the June



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2010 Stipulation and Order thus installed a new Court-appointed Review Officer, with sweeping

powers not only to investigate and remedy wrongdoing, but to address systemic, structural, and

cultural issues that have permitted corruption to thrive. Of note:

The 2010 Stipulation and Order granted the Review Officer broad review and investigatorypowers and access to information, to permit him to exercise the traditional authority ofcourt-appointed monitors: to detect corruption and discipline the perpetrators. June 2010Stip. & Order 5.be. For example, the District Council was required to give the ReviewOfficer prior notice of each and every proposed expenditure, contract (except for collectivebargaining agreements), change to the by-laws, and appointment to office or employment,see id. 5.b.i; the Review Officer was empowered to veto any action, proposed action, orlack of action that he determined met one of a number of criteria, subject to a right ofjudicial review by the aggrieved party, see id. 5.b.iii; and the District Council and BenefitFunds were obligated to provide the Review Officer with reasonable advance notice of

their respective meetings, see id. 5.c.i.

By their consent, the June 2010 Stipulation and Order applied to the Benefit Funds.2From a corruption-eradication perspective, this was vital. The Fordeindictment named asdefendants three of the Funds then-trusteesfully one quarter of the boardanddescribed how those defendants participated in the affairs of the District Council and theFunds3 to embezzle from and defraud the Funds; how they accepted bribes to influencetheir decisions related to the Funds, particularly related to the collection of requiredcontributions; and how another defendant offered to have his daughter, a Funds employee,destroy records at the Funds to cover up wrongdoing. United States v. Forde, IndictmentS3 08 Cr. 828 (S.D.N.Y.), e.g. 2529, 3940, 4344, 77. Thus, the Review Officers

ability to investigate matters concerning the Funds and to assess their process for collectionof contributions was critical to preventing this type of embezzlement and, more generally,to the elimination of racketeering for the benefit of union members and legitimateemployers.

With an eye toward longer-term and more systemic reform, the June 2010 Stipulation and2 The government was and remains of the view that the Funds have been held by the

Court to be bound by the 1994 Consent Decree, 1996 WL 221584, at *4*5 (S.D.N.Y. 1996), andtherefore should be bound by any stipulation that enforces and implements that Decree.However, the agreement of the Funds to the June 2010 Stipulation and Order and the proposed

Stipulation and Order (both of which the Funds expressly decline to concede that they are boundby the Consent Decree) obviates the need for litigating that issue, and the government does notcontend in this application that the Decree applies to the Funds.

3 The enterprise defined in the Fordeindictment for RICO purposes included thesame entities covered by the Stipulation: the District Council, its locals, and the Benefit Funds.United States v. Forde, Indictment S4 08 Cr. 828 (S.D.N.Y.) 8.



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Order directed the Review Officer to conduct thorough assessments of many issues,including the job referral rules, the electoral process, the structure of the local unions, andthe Funds collection processes. June 2010 Stip. & Order 5.h. These assessments, andthe reports and recommendations they generated, were intended to (and did) allow theReview Officer to go beyond simply purging those who would enrich themselves at the

expense of union carpenters, but assisted in reshaping the union and implementing changesto prevent criminals from again controlling or influencing the union and stealing from itsmembers.

Finally, the June 2010 Stipulation and Order empowered the Review Officer to superviseDistrict Council elections, including the power to prescribe candidate qualifications and toapprove candidates, in order to prevent the perpetuation of corruption at the top level of theunion through the election of racketeers or those influenced by racketeers. Id. 5.k.

In short, the goal of the June 2010 Stipulation and Order implemented a comprehensive

system of Court and government oversight of the union and Funds.

B. Progress Under the Review Officers OversightExercising the powerful authorities bestowed by the June 2010 Stipulation and Order, the

Review Officer has been largely successful in purging the District Council and Funds of corrupt

actors and instituting structural reforms designed to prevent and deter corruption from regaining

hold.

1. The District CouncilShortly after commencing work, the Review Officer observed that previous efforts to

achieve systemic reform have been trampled by the seemingly limitless capacity of racketeers to

blithely disregard the orders of this Court and the risk of criminal prosecution as they pursue

wealth, political power, and satisfy their sybaritic yearnings. 1st Rep. at 4. In the four years

since, with the involvement of the Review Officer, the District Council has dramatically changed

its ways of doing business, successfully implementing redundant safeguards that are specifically

designed to deter and detect corruption, and enable the union to operate much more efficiently.

For example:



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Implementation of Multiple Internal Financial Controls. The District Council now hasseveral layers of meaningful financial oversight. Specifically, the union (1) hired a ChiefAccountant to oversee the day-to-day financial operations of the union; (2) retained anindependent accounting firm to perform audits, prepare all necessary Department of Laborand IRS filings, perform quarterly reviews of the unions internally prepared financial

statements, and identify any deficiencies in internal controls; and (3) established an AuditCommitteecomprising two elected delegates, the Inspector General, Chief ComplianceOfficer, General Counsel, a representative from the UBC, and an additional independentaccounting firmto, among other things, review District Council financial policies andprocedures to ensure best practices, check for fraudulent activities, and monitorcompliance with the by-laws. See generally4th Rep. at 20-22; see also 5th Rep. at 15-16(assessing initial progress); see also Declaration of Matthew Walker, Director ofOperations, dated May 27, 2014, (Walker Decl.) 11 (chief accountant), 12 (auditcommittee). Moreover, all District Council expenditures are reviewed by the ChiefAccountant, the Director of Operations, and the Trustees, who must then recommend to theExecutive Committee and Delegate Body whether to approve, disapprove, or request more

information regarding each expenditure. 4th Rep. at 22; Walker Decl. 9 (discussingnumerous checks and balances regarding expenditures of union funds). According to theReview Officer, [f]iscal discipline and prudent budgeting have taken firm hold at theDistrict Council (and the local unions). 3d Rep. at 5; see id. at 13; 4th Rep. at 43; 5thRep. at 24; see also Walker Decl. 5-8 (detailing implementation of policies to ensureunion funds are appropriately spent).

Creation of the Office of the Inspector General. The Office of the Inspector General hasbeen established to conduct investigations of corruption and malfeasance involving theDistrict Council. 1st Rep. at 20; see also Declaration of Scott C. Danielson, InspectorGeneral, dated May 27, 2014, (Danielson Decl.) 1. The current Inspector General has

law enforcement experience and working relationships with federal and state lawenforcement, as well as experience in working on labor racketeering matters andprosecutions with the United States Attorneys Office for the Southern District of NewYork. Danielson Decl. 3. Among other things, the Inspector General supplements thework of the Business Representatives by conducting unannounced job site visits and citingcorrupt practices and contract violations, including manning and other complianceviolations. Id. 1, 5; see also id. 5-9 (detailing various duties and responsibilities).The Inspector Generals Office maintains a 24/7 hotline for members and Councilemployees to report concerns without fear of retaliation. See id. 5. The Review Officeris encouraged by the development of this Office, 2d. Rep. at 49, while still offeringsuggestions for improvement, see 7th Rep. at 19-20.

Retention of a Chief Compliance Officer. The District Council has retained a ChiefCompliance Officer (CCO), who is charged with implementing and enforcing aneffective compliance and ethics program. See Declaration of F. Josiah Leicht, ChiefCompliance Officer, dated May 27, 2014 (Leicht Decl.) 1, 5-6, 8. The CCO providesperiodic compliance training to all District Council employees, see 5th Rep. at 19-20;Leicht Decl. 7, performs audits to measure compliance with District Council by-laws,Accounting Procedures and Human Resources Policy, and has created a Compliance link



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to major policy documents on the District Council website. Seeid. 5, 9-10.

Implementation of a Human Resources Function. The District Council now has apersonnel office and Human Resources Director as well as a Personnel Handbook that setsthe rules for hiring, promotions, salary schedules, record retention, and discipline and

termination of employees. 2d Rep. at 8-9, 52; 3d Rep. at 11; see also Walker Decl. 9 &Ex. A. Among other functions, these policies are intended to deter any corruption orcronyism in connection with hiring and salaries.

Overhaul of Business Representatives Operations. As the Review Officer noted, thebusiness reps are in the front line of anti-corruption efforts at the Council, as they areresponsible for policing the entire jurisdiction of the Council . . . . 7th Rep. at 8; seealso id.at 12; 1st Rep. at 36. In view of the importance of their anti-corruption role, theReview Officer recommended overhauling business representative operations by, amongother things, (1) providing business representatives with their assignments electronicallyinstead of requiring them to attend time-consuming morning and afternoon debriefings; (2)

training all business representatives about all jurisdictions and all collective bargainingagreements; and (3) partnering specialty representative with non-specialtyrepresentatives. 4th Rep. at 16-17; 5th Rep. at 16-17; 7th Rep. at 7, 11-12. After a periodof inaction under the Bilello leadership, see 5th Rep. at 16-17, the District Council hasenacted the first two of these recommendations. See Tr. dated Mar. 3, 2014, at 9, 10. Allbusiness representatives now have successfully transitioned to a remote reporting systemwhich captures data from job site visits on a near real-time basis, which permits timelymanagerial oversight and fosters transparency. All reps are provided training inleadership, ethics, and business practices on a yearly basis.

Transition to Electronic Reporting at Job Sites: As the Review Officer observed, [o]neof the most important responsibilities of the District Council and its Benefit Funds is toensure that employers pay appropriate wages to and benefits for union members in a timelyfashion. Maintaining accurate records . . . is an important tool to fulfilling thisresponsibility. 4th Rep. at 23-24. Prior to the Review Officers tenure, the DistrictCouncil relied upon hand-written shop steward reports to log job-site information,including who worked on the job and the number of hours worked. 4th Rep. at 24. Thissystem was woefully deficient and easily exploited. 4th Rep. at 24-31. Accordingly, theReview Officer recommended that an electronic system be used to record and transmitjob-site information in a timely fashion, pointing out that such a system would serve as animportant hedge against corruption. 2d Rep. at 50; 4th Rep. at 31-32; 5th Rep. at 9 (Itappears to me that if the program is correctly implemented, it will represent a great leap

forward in the fight against fraud . . . .). Since then, the District Council hasimplemented a program of electronic reporting, including a feature allowing rank-and-filemembers to verify the accuracy of the data captured and reported. See Dkt. Nos. 1330,1359, 1381, 1409, 1431, 1456, 1472, 1487, 1500, 1508, 1509. This program was initiallyrolled out with the Courts oversight in connection with collective bargaining agreementsproviding for so-called full mobility, allowing employers greater flexibility to selectunion workers. See 6th Rep. at 7-8, 17-18; Dkt. Nos. 1315, 1332, 1358, 1378, 1386, 1394,1426, 1434, 1481, 1497. While there are substantial additional technological reforms that



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need to be accomplished, the District Council has worked to ensure the accuracy of the datacollected under this program, and is expanding the program to include collectivebargaining agreements not subject to the Courts supervision. See Tr. dated Mar. 3, 2014,at 7, 8, 10, 13.

Implementation of By-laws. New by-laws took effect on August 5, 2011. 3d Rep. at 5.The by-laws provide for unprecedented transparency and accountability of employees andofficials and an array of functions founded on best business practices. 3d Rep. at 6; seealso 5th Rep. at 7.

As a result of all of these changes, the business and administration of the District Council

remain on a sound footing. 5th Rep. at 1; see also id.at 41 (I recognize and applaud the progress

that this institution has made since the UBC supervision ended in January.). As to the presence

of organized crime and corruption, the Review Officer has determined that the District Council is

currently free of organized crime influence. 4th Rep. at 14. Virtually none of the calls placed to

the Review Officers hotline in recent times involve serious allegations of corruption. See, e.g.,

2d Rep. at 53; 3d Rep. at 17; 5th Rep. at 23; 6th Rep. at 14; 7th Rep. at 36.

2. The Benefit FundsAt the outset of his tenure, the Review Officer observed, among other things, that the

Funds workforce has been subject to cronyism, 1st Rep. at 5; see also id.at 51, and that the

Funds have also suffered over the last decade from the impact of criminal fraud and the failure to

collect delinquent contributions from a plethora of contractors, id. at 6; see also generally id.at

48-69. The Review Officer thus urged the Trustees to implement a number of reform measures,

including (but not limited to):

Hiring a compliance officer and implementing an effective compliance and ethics programthat comports with Chapter Eight of the U.S. Sentencing Guidelines; Crafting andimplementing a thorough document retention policy; Compiling and utilizing objective criteria in selecting able and efficient collections

counsel;



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Hiring a Human Resources manager and creating a human resources department to defineemployee functions and objectively hire, terminate, and monitor and assess theperformance of the employees of the Funds; and

Upgrading the deficient IT system.1st Rep. at 6-7; see also id. at 52; 2d Rep. at 24; Declaration of Ryk Tierney dated May 27, 2014,

(Tierney Decl.) 2 App. 1 (attached as Ex. B to the First Declaration of Raymond G. McGuire

dated May 27, 2014, (First McGuire Decl.)). The goal of this endeavor was to implement a

system that is bigger and more powerful than any person or group of confederates who might seek

to enrich themselves at the expense of the Funds. 1st Rep. at 54; see, e.g., 2d. Rep. at 23 (noting

that reforms are critical hedge[s] against corruption); 3d Rep. at 30. With the Review Officers

supervision, the Funds have successfully adopted each one of these recommendations, see, e.g.,3d

Rep. at 28-29; 4th Rep. at 45-51; 6th Rep. at 24-27; 7th Rep. at 36-42; see generally Tierney Decl.

& App. 1; Declaration of Julie Block, Compliance Officer, dated May 27, 2014 (attached as Ex. D

to First McGuire Decl.), resulting in tremendous improvement in the Funds operations. See, e.g.,

7th Rep. at 36 (observing that the Benefit Funds is being run professionally and a number of

important improvements are being made); 4th Rep. at 18-19 (noting that the administration of the

Funds continues to be greatly improved). To take just one example, the Funds hired Virginia &

Ambinder as collections counsel to address the longstanding and critical problems regarding

collections of employer contributions (or lack thereof). As the Review Officer reports, Virginia

& Ambinder has dramatically chang[ed] the professionalism and efficacy of collections

practices. 3d Rep. at 34; see id.at 39-44; see also generally Declaration of Charles Virginia

dated May 27, 2014 (attached as Ex. C to First McGuire Decl.).

In addition, as the Court is aware, the Board of Trustees of the Benefit Funds is charged

with prudently managing the Funds assets. The Board of Trustees of the Funds are assisted in



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developing an investment strategy by Gallagher Fiduciary Advisors LLC, a large multi-national

financial services firm that oversees the investment portfolios of numerous Taft-Hartley plan

clients. See Second Declaration of Raymond G. McGuire dated May 27, 2014, (Second

McGuire Decl.) 6, 14 (attached as Ex. A to First McGuire Decl.). Specifically, the Funds

works with Frank Lily, who served as the Chief Executive Officer of the Funds previous advisory

firm before it merged with the Funds current advisory firm. Id. 7. Earlier in his career, Mr.

Lily was Chief Legal Counsel with the Department of Labor. Id.

Specifically, the Funds manage five Taft-Hartley, multi-employer fringe benefit

fundsthe Pension Fund, the Welfare Fund, the Vacation Fund (which is part of the Welfare

Fund), the Training Fund, and the Annuity Fund. Id. 2. These funds are in good health.

According to the Funds counsel, the Pension Fund had assets of $2,492,975,025 as of December

31, 2013. Id. 4. As of the Pension Funds most recent actuarial evaluation, which was for the

year beginning July 1, 2013, the Pension Fund had assets with a market value of $2,416,857,686,

and had 10,969 active participants, 4,494 inactive vested participants, and was paying benefits to

13,366 retired participants and beneficiaries. Id. The Pension Fund is projected to be certified

under the Pension Protected Act as in the green zone for the year beginning July 1, 2014. Id.

9. Finally, the performance of the Pension Funds investments ranks above the median for all

Taft-Hartley funds for the trailing 1, 3, 7, and 10 year periods ending December 31, 2013. Id.

11; see also 7th Rep. at 42-43 (describing health of Pension Fund).

The Welfare Fund is a self-insured medical services plan providing benefits to an average

of 12,770 active participants and their dependents and to an average of 7,739 retired participants

and their dependents for the year ending June 30, 2013. Second McGuire Decl. 12. According

to the Funds counsel, between December 31, 2010, and December 31, 2012, the market value of



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the Welfare Funds assets fell from $243,641,885 to $199,733,595. Id. 15. However, by July

1, 2013, the assets had increased to $213,095,609, and as of December 31, 2013, had risen further

to $225,150,310. Id. 15, 16.

As of June 30, 2013 (the date of the most recent operating and budget projections), the

Welfare Funds assets represented a continuation value reserve of 11.8 months of 2014

projected expenses. Id. 16; see also id. 18 (projecting continuation value reserve of 11.9

months as of June 30, 2015).4 Based on these recent projections, the Welfare Fund is expected to

have an operating surplus for the year ending June 30, 2014, of approximately $26,677,400. Id.

16. In terms of investment results, the Welfare Fund has outperformed its policy index in three

of the past five calendar years and is ahead of the policy index for the 1, 3, and 5 year periods. Id.

9; see also 7th Rep. at 42-43, 44 (describing condition of Welfare Funds).5

C. The Need for Continued Oversight and MonitoringWhile the District Council and the Benefit Funds have made tremendous improvements

under the Review Officer, abruptly ending oversight on June 3 would place the entire reform

undertaking at risk.

As the Review Officer aptly observed over a year ago, the District Council is still a

fledgling. When fully matured, it will surely soar to new heights. But now, it still faces grave

dangers from external forces and risks from within. It still has problems to solve. There is much

4 To put this in context, a broad rule of thumb is that 12 months reserve constitutes awell-reserved fund.

5 As of December 31, 2013, the Annuity Fund had assets worth $1,860,257,359.Second McGuire Decl. 2. Since the Annuity Fund is actually a collection of self-directed 401(k)accounts managed by the account holders, the Funds Trustees have fewer responsibilities inconnection with that Fund. Id. The Training Fund is the smallest of the five funds and also hasadequate assets to discharge its responsibilities. Id.



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at stake, even the very future of the Union. 5th Rep. at 39. This observation remains true today,

and succinctly states the rationale for continued oversight.

First, the District Council and Benefit Funds need time to test the long-term sustainability of

the institutional controls enacted during the Review Officers tenure. Through auditing and

testing, a Court-appointed officer must ensure that the reforms are in fact capable of continuing to

keep corruption and racketeering out of the union. See 7th Rep. at 1 (expressing concern

regarding the governance and fundamental business practices of the District Council); Tr. dated

Mar. 3, 2014, at 28-29 (explaining necessity of additional time to determine whether reforms are

sustainable); Declaration of Joseph Geiger, Executive Secretary-Treasurer, dated May 27, 2014,

(Geiger Decl.) 8 (recognizing that union needs to show that internal controls and enforcement

mechanisms will continue to function effectively); see also id. 11; Danielson Decl. 11; Leicht

Decl. 9-11 .

Second, more time is needed for the entire model of institutional reform to become standard

operating procedure. See Walker Decl. 13 (noting that union is not well practiced in

self-management and that a new monitor with more limited oversight authority would be a

tremendous benefit to ensure that reforms are set in stone prior to release from federal

oversight); Leicht Decl. 12 (noting that while union had made great strides in developing a

culture of compliance, compliance program is still relatively new and much work remains to

be done to ensure compliance becomes embedded); see id. 10 (auditing of by-laws and

accounting manual has revealed areas of non-compliance); Danielson Decl. 12. Throughout his

tenure, the Review Officer has expressed serious concerns with the functioning of the unions

Delegate Body, commented upon the desire of certain union members to return to outdated and

inefficient methods (methods which have been proven easily exploitable), and recognized the



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unwillingness of certain leaders at the District Council and Funds to embrace recommended

reforms. See, e.g., 7th Rep. at 20 (Previous reports have documented concerns about the

democratic process at the District Council and what must be accomplished for an acceptable,

racketeering-resistant paradigm to be achieved. My concerns have not abated. As a democratic

institution, the Council has made little progress in the last two years.); 4th Rep. at 14 (noting

desire of some union members to revert back to old ways of doing business); id.at 22-23 (noting

that delegates voted to bar rank-and-file members from attending future meetings of the delegate

body (which the Review Officer vetoed)); 5th Rep. at 2-3 (noting that Human Resources Director

of Benefit Funds was terminated for unsatisfactory progress in developing the human resources

program and hiring colleagues who were acquaintances rather than through best practices); 6th

Rep. at 19 (noting that former EST demonstrated no interest in implementing recommended

reforms regarding business representatives). Yet for this endeavor to succeed, the importance of

vigilant compliance and forward thinking needs to be institutionalized at all levels of the union and

Funds. Much of the progress is at risk if members do not take seriously their responsibility to

ensure adherence to the institutional controls and thoughtfully consider how to improve upon

them. See, e.g., 3d Rep. at 5, 6 (noting risks); id. at 11 (The apathy of so many members serves

only to enable those resolute few who will always seek some selfish advantage when no one is

paying attention.); 5th Rep. at 1 (recognizing that while the business and administration of the

District Council and Benefit Funds remain on a sound footing, identifying member apathy as

one of the serious challenges facing the union); id. at 3-4 (noting delegates are unprepared and

not well informed to meaningfully participate in Delegate Body meetings to the detriment of

protecting their constituents); 7th Rep. at 20-21 (describing problems with delegate body

governance).



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Third, there are additional critical structural reforms that still need to be implemented. Most

importantly, on September 16, 2013, the Review Officer filed a motion with the Court with the

goal of requiring the union to adopt his recommendations regarding the improvement of the

unions IT system and its business practices. See Dkt. No. 1397. Significantly, both

recommendations are imperative steps in insulating the District Council from corruption and

racketeering. 7th Rep. at 4; see id.at 5-7 (detailing recommendations). While the District

Council has made some headway in effectuating these recommendations, see, e.g., Tr. dated Mar.

3, 2014, at 2, 4, 9, 10, substantially more remains to be done, see, e.g. id.at 8-9 (estimating two

years to complete IT upgrade); see also Geiger Decl. 9, 10 (acknowledging that a lot of work

needs to be done on these tasks, and that the continued guidance of a monitor is essential to the

process). Each of these projects, when completed, will provide transparency in the conduct of the

business of the union and enhance the anti-corruption compliance initiatives already begun. In

particular, business protocols will provide each department of the District Council with sound

policies and best practices to follow, thus providing a roadmap for management. The IT program

will aid in performing and monitoring the compliance measures of the District Council. This will

include timely electronic reporting of job hours to more efficiently detect discrepancies with

employers time keeping and delinquencies in benefits payments. The presence of a

Court-appointed officer for continued guidance and assistance as these critical efforts are moved to

final implementation is essential. See Geiger Decl. 9, 10; see also Leicht Decl. 11, 12

(identifying additional areas where presence of Independent Monitor would be particularly

helpful); Danielson Decl. 11.

Fourth, while organized crime no longer has influence in the District Council, they have

made attempts throughout the past four years to regain a foothold in the union. See, e.g., 3d Rep.



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at 12 (Organized crime, predominantly through the Genovese family (though other families

continue to have interests and turf) remains active in its efforts to corruptly influence the District

Council and particularly some of its local unions.); 4th Rep. at 3 (The specter of organized crime

continues to loom large over all aspects of the construction industry in New York City.); id. at 4

(while [t]he District Council and its local unions have been purged of such associates and agents,

. . . because there is so much money at stake, the obsession of the Genovese family with the work

of the Carpenters and its membership has not abated); id. at 8 (noting that potential rival union

was formed to facilitate the restoration of the Genovese familys control of the industries

currently served by the District Council); 5th Rep. at 11 (I also note that I continually collect

information regarding a small number of members suspected of having ties to Cosa Nostra. I

routinely forward information to law enforcement agencies . . . .).

Indeed, even at present, the Review Officer continues to investigate attempts of racketeers to

infiltrate and exercise control in the District Council. 7th Rep. at 18. Ceasing judicial oversight

of the union and Funds at this critical juncture unduly risks facilitating organized crimes reentry

and undoing all of the hard work of the past four years. Indeed, the past history of corruption in

this union has shown that unless institutional controls are fully realized and engrained in union and

Fund operations, organized crime and other corrupt elements will reassert control. See, e.g., Dkt.

No. 990, at 2; 5th Rep. at 1 (identifying challenges that need to be addressed with the knowledge

that any failure will likely be exploited by opportunistic racketeers and their associates.);

Danielson Decl. 12 (opining that presence of a monitor will deter those seeking to undermine

reform effort).

The District Council and Funds are at a critical juncture. While the institutional controls

in place are still fairly new, neither the union nor the Funds has had the benefit of continuous



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leadership.6 Indeed, another round of union elections is scheduled to take place later this year.

The leadership may change over yet again to individuals either unfamiliar with the new ways of

conducting business or unwilling to commit to them. With a new leadership regime comes new

risk. As the Review Officer recognized,

The last, best hope for the happy future of this Union will be lost forever if democracyhands the keys of this house over to charlatans, buffoons, or minions of a caporegime in theGenovese family, without having built it upon a foundation of the surest granite.

2d Rep. at 2; see also Walker Decl. 14 (recognizing that having a monitor in place to vet potential

candidates to ensure that the District Council continues to develop in the right direction is

critical); Danielson Decl. 12 (observing that results of next election cycle may well be critical

to the continued commitment to compliance and reform).

With corrupt elements waiting to exploit any opportunity to regain influence in the union

and the Funds, safeguarding the gains made is of paramount importance. It is important that the

next round of elections be supervised and that the newly installed regime commence leadership

under the oversight of a Court-appointed monitor. See 6th Rep. at 3 ([C]ompliance must be

embraced and indeed trumpeted by the leadership of the Union in order for it to take hold.).

Undeniably, there has been a tremendous investment in reform by the government, the

District Council, the Funds, and the Court. This progress made must be protected. The parties

agreement reflects their recognition that notwithstanding significant improvements, it is simply

6 The District Council has seen three ESTs in the past four years, including Frank

Spencer (as the UBCs trustee), Michael Bilello, and Joseph Geiger. 4th Rep. at 9, 11; 6th Rep. at3; see also, e.g.,5th Rep. at 1-2 (President resigned upon receiving Notice of Possible Action fromthe Review Officer pertaining to lying to the Review Officer). The Benefit Funds have had threeExecutive Directors in the past four years, including Stuart Grabois, Joseph Epstein, and RykTierney. See 2d Rep. 14, 19-20; 3d Rep. at 27; 6th Rep. at 22-23. Partly as the result of theturnover in the unions leadership, there has also been substantial turnover among the FundsTrustees. See, e.g.,2d Rep. at 13-14.



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too soon to proceed without the benefit of a Court-appointed monitor.

The Proposed Stipulation and Order

The proposed Stipulation and Order is carefully calibrated to provide the Court-appointed

Independent Monitor with the powers and authorities necessary to guide the union through its

continued development and implementation of important initiatives while ensuring that corrupt

influences remain at bay. Indeed, the parties Stipulation only modestly reduces the powers of the

Independent Monitor from those vested in the Review Officer by the June 2010 Stipulation and

Order, in ways calibrated to allow the union to operate independently and to demonstrate its ability

to accomplish its mission lawfully and with integrity. See Geiger Decl. 11; Walker Decl. 13;

Danielson Decl. 11. The Stipulation also updates the June 2010 Stipulation and Order to take

into account events that have transpired during the Review Officers term. Material differences

between the June 2010 Stipulation and Order and the proposed Stipulation and Order include:

Whereas Clauses. The Whereas clauses have been modified to acknowledge thatnumerous reforms have been implemented during the Review Officers tenure, and that theparties agree that the continuing presence of a Court-appointed monitor, albeit with more

limited oversight authority, is advisable. See also Stip. 4.c. (noting that appointment ofthe new monitor is intended to permit the union and the Funds to demonstrate thefulfillment of the Stipulations goals and to permit the monitor to ascertain whether thegoals set out in the Stipulation, the June 2010 Stipulation and Order, and the 1994 ConsentDecree have been attained).

Appointment of Glen G. McGorty as the Independent Monitor. The parties share the viewthat Glen G. McGorty of the law firm Crowell & Moring would serve as an excellentIndependent Monitor. Currently, Mr. McGorty is consulting with a port terminal operatoron a project involving the implementation of compliance protocols and anti-corruptionreforms in an international labor union. And as a former AUSA in this district, he has

substantial experience in investigating and prosecuting federal crimes, including organizedcrime, money laundering, and RICO enterprises. The Stipulation provides that beginningon June 4, 2014, the Review Officer will begin the process of preparing for the transfer ofhis duties and responsibilities to the Independent Monitor, and that the IndependentMonitor will assume the authority provided in the Stipulation on September 30, 2014 (thetransition date). See Stip. 3. Notwithstanding this transition date, the IndependentMonitor will exercise all authority over elections pursuant to paragraph 5.j. of theStipulation. Stip. 3.c.



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Review and Oversight Authority. In accordance with the Courts Order dated March 17,2014, which eliminated the Review Officers authority to receive prior notice of certainDistrict Council activities (expenditures, contracts (except collective bargainingagreements), proposed appointments to office or employment, and proposed changes to the

by-laws and other rules, policies, or practices), the Stipulation retains those modifications.Stip. 5.b.i. As to the Benefit Funds, the Stipulation continues to allow review of all ofthe Funds expenditures and investments, but includes the proviso that the IndependentMonitor, in exercising such authority, will not question the Funds reliance on adviceprovided by retained investment professionals, unless he has reason to believe that theFunds reliance on such professionals is tainted by corruption or other improperinfluences. Stip. 5.b.ii.(1). This proviso simply makes express the understanding thatwhile the mission of the Court-appointed monitor includes instituting structural reform andpurging corrupt influences, it does not otherwise include making substantive investmentdecisions best left to financial experts. Finally, in lieu of the Review Officers powerfulauthority to veto actions he determines meet certain criteria, see June 2010 Stip. & Order

5.b.iii., the Stipulation expressly provides that a meet-and-confer type process take placebefore any petition to the Court. Specifically, if the Independent Monitor determines thata matter reviewed meets one of the listed criteria, he shall notify the union or Funds, as thecase may be, and the relevant entity then has five days to provide a response. In the eventthe Independent Monitor does not receive a timely response, or receives a response butnonetheless determines that a reasonable basis for the action (or lack thereof) has not beenestablished, he may petition the Court to take appropriate corrective action. See Stip. 5.b.iii.

Access to Information. While the Independent Monitor retains the authority to attend allDistrict Council meetings, the Stipulation no longer provides the authority to attend all

meetings of the Benefit Funds. Stip. 5.c.i. This change is consistent with the ReviewOfficers positive assessment of the Funds governance.

Investigative Powers. While the Stipulation grants the Independent Monitor all of theinvestigatory powers possessed by the Review Officer, this section is modified to requirethe Independent Monitor to provide notice of any interview or deposition to the DistrictCouncil through its counsel, unless doing so would be prejudicial to the investigation.Stip. 5.d.i. In that case, the Independent Monitor must provide the Court and thegovernment with his justification for conducting the interview or deposition without suchnotice. Id. This modification to the June 2010 Stipulation and Order is intended to helpeffectuate the District Councils transition to full self-governance.

Disciplinary Authority. The June 2010 Stipulation and Order charged the Review Officerwith ensuring that the District Council develop, implement, and maintain fair and effectivedisciplinary procedures, and set out a timeline for doing so. See June 2010 Stip. & Order 5.f. The Review Officer has successfully done so. See Stip. 5.f.; 7th Rep. at 33.Accordingly, this section is revised to empower the Independent Monitor to ensure theDistrict Council continues to implement the adopted disciplinary procedures in a fair andeffective manner. Stip. 5.f.



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Litigation Authority. The authority to authorize the initiation of civil actions on behalf ofthe District Council to recover damages arising from any actions within the monitorsauthority has been removed. See June 2010 Stip. & Order 5.g. The powerwhich hadnever been exercised by the Review Officerwas deleted to accord the union more

autonomy to effect self-governance.

Assessments, Changes, and Recommendations. The June 2010 Stipulation and Orderdirected the Review Officer to make a number of specific assessments, see June 2010 Stip.& Order 5.h., which he has fully accomplished. In light of the fact that the DistrictCouncil and Benefit Funds have implemented a number of structural reforms, theStipulation requires the Independent Monitor to periodically assess these reforms, as wellas to examine the unions progress in implementing its IT upgrade and enhanced businesspractices and procedures. See Stip. 5.g.

Supervision and Conduct of Elections. As noted previously, the Independent Monitor isempowered to supervise all phases of any union election conducted by the District Councilduring his tenure. Stip. 5.j. However, because election rules and procedures havealready been drafted and incorporated into the unions by-laws, the Independent Monitor(unlike the Review Officer) is not charged with proposing any election rules andprocedures, although he is empowered to assess the existing rules effectiveness andrecommend changes. Stip. 5.j.vi. In addition, unlike the June 2010 Stipulation andOrder, the proposed Stipulation and Order specifies a list of factors that preclude approvalof a member for candidacy, if the Independent Monitor determines, in his final andnon-reviewable discretion, that one of the factors applies. Stip. 5.j.iv. In sum, thesefactors are (1) the member is not eligible to run pursuant to the UBC Constitution; (2) themember is prohibited from holding office pursuant to the Labor-Management Reporting

and Disclosure Act; (3) the member fails to demonstrate basic knowledge of the positionsought and the basic competence necessary to perform the duties of the position; and (4)the members service as an officer of the union or in any other elected position of the unionwas previously vetoed by the Review Officer for a violation of the June 2010 Stipulationand Order or the 1994 Consent Decree; or the member was found by the unions TrialCommittee to have committed any such violation; or there is clear and convincing evidencethat the member has committed such a violationabsent clear and convincing evidence ofrehabilitation. Stip. 5.j.iv.(4). With the exception of the fourth factor, these factorsessentially codify the primary reasons that the Review Officer has vetoed potentialcandidates for office. Notably, these factors are not exhaustive and do not otherwise limitthe Independent Monitors discretion to supervise elections. See Stip. 5.j.iv.

Records Retention. As the District Council and Benefit Funds have developed recordsretention schedules under the Review Officer, the Independent Monitor may simplyrequest that the union and Funds notify him prior to the destruction of any record orcategory of records. Stip. 5.k.

Reports to the Court. The Stipulation requires the Review Officer to file a final, closingreport to the Court on or before December 3, 2014. Stip. 5.l.ii. As was required of the



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Review Officer, the Independent Monitor may report to the Court in his discretion, butmust file written reports no less than every six months. Stip. 5.l.iii.

Toll-Free Hotline. The Independent Monitor must maintain the toll-free hotlineestablished by the Review Officer. Stip. 6. The June 2010 Stipulation and Orders

provisions regarding the Independent Investigator preceding the Review Officer have beendeleted as irrelevant.

Compensation & Hiring Authority. Pursuant to the Stipulation, the District Council isresponsible for continuing to pay the Review Officer and Independent Monitor forspecified work done before and after the transition date. Stip. 8.b.ii., iii. Consistentwith the Review Officers budget, the expenses of the Independent Monitor are presumedto be approximately $75,000 per month. Stip. 8.b.i.

Term. The term of the Independent Monitor is 18 months, effective on the transition date.Stip. 8.c. The government is expressly permitted to petition the Court to reduce the

Independent Monitors powers or end his tenure if the union has achieved compliance.Stip. 8.c.ii. If the government makes that same determination with respect to the BenefitFunds, in consultation with the Independent Monitor, then the Independent Monitorsauthority over the Funds will cease, subject to reinstatement upon a petition by thegovernment to the Court. Stip. 8.c.iii.

Modification of the June 2010 Stipulation and Order. Provisions regarding modificationof the June 2010 Stipulation and Order have been deleted as no longer applicable.

Miscellaneous Provisions. Miscellaneous provisions concerning the authority of theUBC Trustee and the amendment of the by-laws to conform with the June 2010 Stipulation

and Order have been deleted as obsolete.The Courts Authority to Enter the Stipulation

As recited in the Stipulation, the Court has the authority to enter the agreement by virtue of

any or all of the following: the Courts inherent power, including the inherent power to enforce

compliance with the Consent Decree and the June 2010 Stipulation and Order; Fed. R. Civ. P.

60(b); and RICOs remedial provision, 18 U.S.C. 1964. Indeed, both the Courts authority to

enter the Stipulation, as well as the advisability of the Stipulation itself, are uncontested.

With respect to the 1994 Consent Decree, [i]f a federal court can validly enter a consent

decree, it can surely enforce that decree. Kozlowski v. Coughlin, 871 F.2d 241, 244 (2d Cir.

1989). The Consent Decree, among other things, contained a permanent injunction against acts



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of racketeering as defined in 18 U.S.C. 1961, which in turn incorporates the federal criminal

prohibitions on various types of fraud, bribery, embezzlement, obstruction of justice, and

violations of labor law. Here, the Stipulation is part of the governments continuing effort to

remedy past acts of racketeering brought to light in the 2009 Forde indictment and ensure that they

do not recur, and thus enforce the injunctive provisions of the Consent Decree. Indeed, the

Stipulation expressly states that the Independent Monitors powers include the authority to ensure

compliance with the injunctions set forth in the Consent Decree, Stipulation 5.a; requires

violations of the Consent Decree to be reported to the Review Officer, 5.e.i; and in numerous

other places refers to achieving or furthering the objectives of the Decree, e.g., 4.a, 4.c, 5.g,

5.j.iv, 8.c.ii, iii, 11.e. The Decree itself, of course, was a settlement of a RICO action and thus

was grounded in the Courts statutory authority to impose equitable remedies under 18 U.S.C.

1964; that same authority permits the Court to act again to address racketeering, as alleged in the

Fordeindictment, by extending the Decrees remedies as spelled out in the Stipulation. Finally,

Rule 60(b)which reflects and confirms the Courts inherent power to modify judgments, Plaut

v. Spendthrift Farm, Inc., 514 U.S. 211, 23334 (1995)applies to consent decrees, and

implements a flexible standard for modifying them. Rufo v. Inmates of Suffolk County Jail, 502

U.S. 367, 378, 380 (1992).

In addition, with respect to the effect of the Stipulation on prior orders of the Court,

particularly the June 2010 Stipulation and Order, the Court has the power to modify those orders in

the manner set out in the Stipulation. Unlike the Consent Decree, which as a final order is

subject to restrictions on modification, a non-final order is subject to the complete power of the

court to modify or vacate it. Fed. R. Civ. P. 60 1946 advisory comm. note; accordFed. R. Civ.

P. 54(b); United States v. Lauersen, 348 F.3d 329, 338 (2d Cir. 2003); Sierra Club v. U.S. Army



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Corps of Engineers, 732 F.2d 253, 25657 (2d Cir. 1984);Zhou v. Peng, 286 F. Supp. 2d 255,

26061 (S.D.N.Y. 2003).

Under these authorities, the Court should enter the Stipulation. There is a strong judicial

policy in favor of settlements. McReynolds v. Richards-Cantave, 588 F.3d 790, 803 (2d Cir.

2009) (internal quotation marks omitted);Davis v. Blige, 505 F.3d 90, 104 (2d Cir. 2007). One

reason for that policy is to avoid needless and costly litigation, thus promoting both financial and

judicial economy. Bano v. Union Carbide Corp., 273 F.3d 120, 12930 (2d Cir. 2001) (internal

quotation marks omitted);Janneh v. GAF Corp., 887 F.2d 432, 43435 (2d Cir. 1989) (under

strong judicial and public policies favoring out-of-court settlement . . . costs of litigation are

reduced and crowded dockets are relieved), abrogated on other grounds, 511 U.S. 863 (1994).

The Stipulation here achieves that, avoiding possibly substantial litigation over such issues as the

need for further enforcement of the Decree and the June 2010 Stipulation and Order, and the effect

of the Decree on the Benefit Funds. In addition, the presumption in favor of settlement is

particularly strong where, as here, a government agency committed to the protection of the

public interest has participated in and endorsed the agreement. City of New York v. Exxon

Corp., 697 F. Supp. 677, 692 (S.D.N.Y. 1988) (quoting Wellman v. Dickinson, 497 F. Supp. 824,

830 (S.D.N.Y. 1980), affd, 647 F.2d 163 (2d Cir. 1981)). The public interest here in strong

anti-corruption, anti-racketeering measures is undeniable and of paramount importance. United

States v. Intl Bhd. of Teamsters(Senese & Talerico), 941 F.2d 1292, 1297 (2d Cir. 1991)

(public has a compelling interest in eliminating the public evils of crime, corruption, and

racketeering in union activity).

Indeed, other courts in this district have relied upon these authorities to modify orders and

consent decrees in a manner similar to that being proposed here, i.e., reducing the power of a



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court-appointed monitor in light of progress achieved by the supervised union, in recognition of

the unions fragile state and the concomitant risk that corrupt elements will resurface. For

example, in United States v. Mason Tenders District Council of Greater N.Y., No. 94 Civ. 6487

(S.D.N.Y.), a civil RICO action culminating in a consent decree appointing a monitor to oversee

the union, its Executive Board, and the unions trust funds, the court-appointed monitor

determined that the union and its constituent locals had made excellent progress in achieving the

purposes of the consent decree, which included the elimination of corruption and organized crime

and running the union and funds in a democratic manner. See Order dated February 4, 1999

(attached as Exhibit A to the Declaration of Tara M. La Morte, dated May 27, 2014 (La Morte

Decl.)). However, recognizing that in the experience of the Government, organized crime often

attempts to reassert its influence into enterprises from which it has been removed, and that the

parties sought to further the purposes of the consent decree and protect against the infiltration

of corruption and organized crime influences, the court entered a supplemental consent decree to

enable the union and funds to continue to consult with a court-appointed officer about the

operations of the union for a period of three years. Id. While the court-appointed officers

powers were reduced from those granted by the original consent decree, compare La Morte Decl.

Ex. A with id. Ex. B, the officer retained significant authority to monitor the affairs of the union

and funds and ensure that corrupt elements did not reemerge. See La Morte Decl. Ex. A. And in

United States v. Local 1804-1, 90 Civ. 0963 (S.D.N.Y.), another civil RICO action culminating in

the appointment of a court-appointed Administrator to oversee ILA Local 1588, the court modified

its order appointing the Administrator to extend the Administrators term for an additional 18

months, while eliminating the Administrators veto authority in light of the unions progress under



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the monitorship. See Order dated December 8, 2008 (attached as Exhibit C to the La Morte

Decl.).

The proposed Stipulation advances the public interest with the governments endorsement.

Moreover, both the union7 and the Benefit Funds have agreed to the Stipulation to advance the

shared interest in ensuring the eradication of racketeering. For those reasons, the Stipulation

should be approved.

In the Event the Court Is Unable to Decide the Parties Joint Motion by June 3, 2014, the

Parties Request Entry of an Interim Order

As the Court is aware, the term of the Review Officer under the 2010 Stipulation and Order

is scheduled to expire on June 3, 2014. In the event the Court is unable to reach a decision on the

instant application by that time, the parties respectfully request that the Court enter the enclosed

interim order.

7 On May 22, 2014, the delegates voted overwhelmingly to approve the proposedStipulation and Order. There was only a single no vote.



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Conclusion

For all those reasons, with the consent of the parties and the Benefit Funds, the Court should

enter the Stipulation.

Respectfully submitted,

Dated: New York, New YorkMay 27, 2014

Dated: New York, New YorkMay 27, 2014

ZUCKERMAN SPAEDER LLP

Attorney for the District Council

By: /s/ Barbara S. JonesBARBARA S. JONES

1185 Avenue of the Americas, 31st Floor


Telephone: 646.746.8838

Fax: 212.704.4256

E-mail: [email protected]

KAUFF MCGUIRE & MARGOLIS LLP

Attorney for Benefit Funds

By: /s/ Raymond McGuire

RAYMOND MCGUIRE

950 Third Avenue, 14th Floor


Telephone: 212.909.0711

Fax: 212.694.1936

Email: [email protected]

PREET BHARARAUnited States Attorney for the SouthernDistrict of New YorkAttorney for the United States

By: /s/ Tara M. La MorteBENJAMIN H. TORRANCETARA M. La MORTEAssistant United States AttorneysTelephone: 212.637.2703, .2746Fax: 212.637.2702E-mail: [email protected]

[email protected]


joint submission in favor of new stip

Documents