The Independent Review Board ("IRB") refers the below report to Joint Council 73 and

Transcription

1 To: Members of IBT Joint Council 73 From: Members of the Independent Review Board Re: Local 522 Principal Officer Michael Ianniello Date: August 20, 2002 I RECOMMENDATION The Independent Review Board ("IRB") refers the below report to Joint Council 73 and recommends that charges be filed against Local 522 principal officer Michael Ianniello ("Ianniello") for failing to cooperate with the IRB by twice refusing to appear for scheduled IRB sworn examinations on July 3, 2002 and July 16, In conjunction with an ongoing investigation of Local 522, the Chief Investigator sent notices of sworn examination to the members of the Local 522 Executive Board, including Ianniello. Ianniello failed to appear for his sworn examination on July 3, 2002 and failed to contact either the Chief Investigator or the Local's attorney about his absence. Ianniello was the only member of the Local 522 Executive Board to not appear for his sworn examination. On July 9, 2002, the Chief Investigator sent Ianniello and the Local's attorney a second notice scheduling Ianniello's IRB sworn examination for July 16, Ianniello failed to appear on that date and provided no explanation to the Chief Investigator or the Local's attorney for his absence. By his actions, it appears that, while an IBT member and Local officer, Ianniello violated Article II, Section 2(a) and Article XIX, Section 7(b)(1) and (2) and Section 14(i) of the IBT Constitution by obstructing, interfering and unreasonably failing to cooperate with the duties of the IRB as set forth in Paragraph G of the March 14, 1989 Consent Decree in United States v. International Brotherhood of Teamsters. 88 Civ (S.D.N.Y.) ("Consent Decree"). II. JURISDICTION Pursuant to Article XIX, Section 14(c) of the IBT Constitution, this disciplinary matter is 1

2 within the original jurisdiction of Joint Council 73. Paragraph G(e) of the March 14, 1989 Consent Decree in United States v. International Brotherhood of Teamsters, 88 Civ (S.D.N.Y.) and Paragraph 1(6) of the Rules and Procedures for Operation of the Independent Review Board ("the IRB Rules") require that within 90 days of the IRB's referral of a matter to an IBT entity, that IBT entity must file with the IRB written findings setting forth the specific action taken and the reasons for that action. Pursuant to Paragraph 1(9) of the IRB Rules, not meeting this deadline may be considered a failure to cooperate with the IRB. m. BACKGROUND A. Local 522 Local 522 is located in Jamaica, New York, and represents approximately 1,800 members consisting primarily of lumber drivers, warehousemen, handlers and roofers in the New Jersey and greater New York metropolitan areas. (Ex. 1) B. LCN Influence on Local 522 The Luchese La Cosa Nostra ("LCN") Family is an organized crime group headquartered in New York City. Its members and associates have had a history of involvement in organized crime activities, such as gambling, loansharking, thefts, fraud, extortion, murder and labor racketeering. (Ex. 2) There is a history of contact between LCN families and Local 522. In 1999, following a disciplinary hearing on IRB-recommended charges, the IRB permanently barred former Local 522 principal officer John Ferrara ("Ferrara") for associating with Luchese LCN family members Steven Crea ("Crea") and Joseph DiNapoli ("DiNapoli"). (Ex. 3) In Re: John Ferrara, Application LXIV. Opinion and Decision of the Independent Review Board (April 14, 1999). affirmed United States v. IBT Application LXIV'1, 88 Civ (S.D.N.Y.) (DNE) (Memorandum and Order, June 3, 1999) (Ex. 4) According to admitted Luchese Family member Alphonse D'Arco ("D'Arco"), Crea was at one time the acting consigliere of the Luchese Family 2

3 and once controlled the Luchese Family. (Ex. 2 at 4 & 5) The FBI considered DiNapoli a member of the Luchese LCN Family. (Ex. 2 at 6) In 1991, D'Arco informed the FBI that DiNapoli was a member of the Luchese LCN Family who reported to Crea. ( Id ) During 1993 and 1994, surveillance by the Organized Crime Control Bureau of the New York City Police Department, in the course of an investigation of illegal activities in the construction industry by members and associates of the Luchese and Gambino LCN families, revealed that Ferrara, while the Local 522 Secretary-Treasurer, on at least four occasions met with members of the Luchese and Gambino members and associates including Crea and DiNapoli. (Ex. 2 at 6-9) In the past, Local 522 had employees who were members of the Luchese LCN Family. Anthony DiLapi ("DiLapi"), considered by the FBI to be a member of the Luchese Family, had been an organizer for Local 522 from 1975 to 1979 and a Local Trustee in (Ex. 2 at 5) The Permanent Subcommittee on Investigations of the United States Senate, in its 1988 report entitled "Organized Crime: 25 Years After Valachi", identified Joseph Capra ("Capra") as a Luchese LCN family member. (Ex. 5) In 1975, Capra was a Local 522 organizer. (Ex. 73) In 1994, Local 522 members John Martinelli, Robert Martinelli and Vincent Martinelli were alleged to be Luchese LCN associates, and all three were permanently barred from the IBT for failing to cooperate with the IRB. (Ex. 6) In 1994, Ferrara hired John Akalski ("Akalski"), Crea's son-in-law, to be the Local 522 accountant. Akalski had become a member of the Local the month before he obtained his employment with the Local. He had no prior experience working with a labor organization. (Exs. 7 & 8) On March 6, 1995, Ferrara appointed Akalski to fill a vacancy as the only salaried Trustee position at Local 522. On February 25, 1997, the IBT permanently barred Akalski on charges the IRB-recommended for Akalski's failure to cooperate with the IRB. (Ex. 9) C. Michael Ianniello Ianniello is currently a member and Secretary-Treasurer of IBT Local Union 522, and a 3

4 Trustee of the Local 522 Benefit Funds. (Exs. 1, & 18 at 8). In 1989, Ferrara hired Ianniello as an auditor for Local 522. Ianniello is the son-law of Anthony Baratta, the former underboss of the Luchese LCN Family. (Ex. 2 at 5; Ex. 18 at 19; Ex. 19 at 48) See United States v. Liborio Bellomo, James Ida et. al. 176 F.3d 580 at 594 (2d Cir. 1999) In 1996, after already serving a 12-year sentence on racketeering charges, Baratta pled guilty in federal court in Brooklyn, New York, to charges of attempted murder and agreed to serve a further four-year prison sentence. (Ex.20) Ianniello claimed that he obtained his job at the Local by answering a want ad for the position. (Ex. 18 at 5) Like Akalski, Ianniello had no prior experience working for a labor organization and never worked for an employer of Local 522. Ianniello was elected Local Trustee in an uncontested Local officer election in 1991 and appointed Recording Secretary in Since at least 1993, Ianniello worked as a Local business agent. (Ex. 18 at 4-8) In 1999, the Local Executive Board appointed Ianniello Secretary-Treasurer after the IRB permanently barred Ferrara. (Ex. 74) D. Local 522 Benefit Funds Affiliated with Local 522 were five Local Benefit funds: the Local 522 Pension Fund (Exs. 13 & 23-26), the Local 522 Welfare Fund (Exs. 14 & 27-30), the Local 522 Welfare Fund of New York and New Jersey (Exs. 15 & 31-34), the Local 522 Roofers Division Pension Plan (Exs. 16 & 35-38), and the Local 522 Roofers and Sheet Metal Crafts Welfare Fund (Exs. 17 & 39-42). According to Forms 5500 filed for the Benefit Funds, each of these Funds was located at the offices of Benserco, aka Benefit Services, located at 2185 LeMoyne Avenue, Fort Lee, New Jersey. (Exs & 23-42) Ianniello, Vice President Robert Deloatch ("Deloatch") and business agent Robert Moore ("Moore") were union trustees for these Funds. (Ex. 12; Ex. 18 at 8; Ex. 21 at 12; Ex. 22 at 15) Ianniello, a union Trustee of the Benefit Funds since 1993, signed the 2001 Forms 5500 for the Local 522 Pension Fund and the Local 522 Welfare Fund. (Exs. 13 & 14) 4

5 Before 1996, all five funds had been located at the Local 522 offices in Jamaica, New York. Before 1996, the Local administered the Funds which in turn reimbursed the Local for administration costs. (Ex. 72 at 21) In January 1996, the Benefit Funds hired a third party administrator, Benefit Services, to administer all five funds. 1 The Benefit Funds operations including its records were then moved to Benefit Services offices in Fort Lee, N. J. In 1997, 1998, 1999, 2000 and 2001, the Benefit Funds in total paid the third party administrator $526,651, $644,304, $782,056, $772,348 and $678,042 respectively for "third party administration" of the Benefit Funds. (Exs , & 75) Despite these payments, the Benefit Funds also still continued to reimburse the Local for administrative services. For instance, in 1997, 1998, 1999, 2000 and 2001, these total reimbursements were $198,024, $193,708, $194,996, $152,957 and $160,582 respectively. (Exs. 1, 13-17, & 75) According to allocation schedules the Benefit Funds and Local accountant prepared, the reimbursement allocation apparently included portions for rent, telephone and salaries for Local employees. (Exs ) During their sworn examinations, neither Moore nor Deloatch could explain how the reimbursements were calculated nor did they know the amount the Local received from the Funds. (Ex. 21 at 28-32; Ex. 22 at 27-31) Additionally, neither Moore nor Deloatch was aware of a June 10, 2000 letter from IBT General Secretary-Treasurer Keegel ("Keegel letter") to all Local unions advising Locals which received payments from their Funds to have a written cost sharing agreement and records documenting the time union employees worked for the Funds. (Ex. 21 at 33; Ex. 22 at 30-31; Ex. 64) Local 522 did not have a cost sharing agreement with its Benefit Funds. Nor did the Local apparently keep records of hours their employees allegedly worked for the Benefit Funds. The Chief Investigator intended to question Ianniello concerning 1 According to a letter from Ferrara to the IBT dated April 22, 1996, " the administrative functions previously handled internally by a full clerical staff,... are now handled outside by third party administration. This outside administration, which also administers our Health and Pension Funds, has enabled the Union to reduce the number of employees and operate more efficiently at lower cost." (Ex. 63) 5

6 these reimbursements at his scheduled sworn testimony. IV. EVIDENTIARY SUMMARY At Ianniello's sworn examination, the Chief Investigator intended to question Ianniello on recent associations with members and associates of organized crime as well as the administrative reimbursements the Benefit Funds made to the Local. In previous sworn examinations on October 29, 1993 and December 12, 1996, the IRB questioned Ianniello about associations with members of organized crime including his father-in-law, Baratta. (Ex. 18 at & 27-29; Ex. 19 at & 48) Ianniello testified that he was familiar with the charges that the IRB recommended against former Local 522 members, including the Martinellis, for refusing to cooperate with the IRB. (Ex. 19 at 8, 49) On June 20, 2002, the IRB sent a notice of sworn examination to Ianniello at his home located at 3289 Polo Drive, Bronx, New York, scheduling Ianniello's examination for July 3, (Ex.65) Ianniello received the notice on June 21, (Ex. 66) In addition, the Chief Investigator sent notices to every member of the Local Union Executive Board as well as the Local's clerical staff scheduling their sworn examinations for July 2 and July 3, Ianniello failed to appear for his July 3, 2002 sworn examination and did not contact the Local's attorney, Joel C. Glanstein ("Glanstein"), who was present and representing the Local and the employees individually, or the Chief Investigator to account for his absence. (Ex. 67) The other Local officers served with notices of sworn examination appeared for their sworn examinations. After Ianniello failed to appear, Glanstein subsequently sent Ianniello a notification advising Ianniello that the Chief Investigator would contact Ianniello to arrange a second opportunity to appear. Glanstein subsequently received a telephone message from Ianniello's office indicating Ianniello was ill and would "get back to [Glanstein] in a few days to discuss a mutually available satisfactory date for his attendance." (Ex. 68; Ex. 69 at 4) On July 9, 2002, the Chief Investigator sent Ianniello and Glanstein a second notice rescheduling Ianniello's sworn examination for July 6

7 16, 2002 in New York. (Ex. 70) The Chief Investigator sent notices to Ianniello at his home and the Local. Both copies were received on July 10, (Ex. 71) The Chief Investigator informed Ianniello that while the other members of the Local 522 Executive Board had appeared for their sworn examinations he failed to appear or explain his absence to the Chief Investigator or the Local's attorney. (Ex. 70) The Chief Investigator further instructed Ianniello that if he failed to appear for the second scheduled sworn examination on July 16, 2002, he would recommend to the IRB that charges be recommended against him for failing to cooperate with the IRB. (Ex. 70) On July 16, 2002, Ianniello again failed to appear. (Ex. 69) Glanstein again appeared. Glanstein, who stated he had not heard from Ianniello directly, did not know his whereabouts and did not know if he would appear. According to Glanstein, after he received a copy of Ianniello's July 9, 2002 notice of sworn examination, he forwarded a copy to Ianniello at the Local. On July 15, 2002, Glanstein telephoned the Local to ascertain if Ianniello would appear at the IRB sworn examination. He did not reach Ianniello. The Local's bookkeeper informed Glanstein that she would attempt to reach Ianniello who had been at the Local earlier to conduct Local union business but had left. (Ex. 69 at 4-5) Ianniello never contacted Glanstein. V. ANALYSIS The Rules and Procedures for Operation of the Independent Review Board for the International Brotherhood of Teamsters ("IRB Rules") empowered the IRB Chief Investigator "to take and require sworn statements or sworn in-person examinations of any officer, member, employee, representative, or agent of the IBT, provided that the IRB has given the person to be examined at least ten (10) days advance notice in writing and also provided that the person to be examined has the right to be represented by an IBT member or legal counsel..." (IRB Rules, Paragraph H.3(c); H.7) Further, the IRB Rules and March 14, 1989 Consent Order in United States v. IBT. 88 Civ (S.D.N.Y.) further empowered the IRB with the authority to investigate any failure to cooperate fully with the IRB. Additionally, Article XIX Section 14(i) of 7

8 the IBT Constitution provides: All officers, members, employees, and representatives of the International Union and its affiliated bodies shall cooperate fully with the Independent Review Board in the course of any investigation or proceeding undertaken by it. Unreasonable failure to cooperate with the Review Board shall be deemed to be conduct which brings reproach upon the Union, and which is thereby within the Review Board's investigatory and decisional authority. It is well-settled that failure to cooperate with the IRB is grounds for disciplinary charges against IBT members. For instance, several members of Local 522 were permanently barred from the IBT for failing to cooperate with the IRB by failing to appear for their IRB sworn examinations. See e.g. Local 522 Executive Board Decision in the matter of the charges against John Akalski, dated February ); Local 522 Executive Board Decisions in the matter of the charges against Local 522 members Angela Paolino, Angelo Paolino, Thomas Paolino, Michael DiGangi and Robert Wachtel, dated November 7, 1996); Local 522 Executive Board Decisions in the matter of the charges against John Martinelli, Robert Martinelli and Vincent Martinelli. dated August 5, 1994). Indeed, in previous sworn examinations, lanniello admitted he was familiar with these charges. (Exs. 6 & 9; Ex. 19 at 20 & 49-51) lanniello twice, on July 3, 2002 and July 16, 2002, failed to appear for a scheduled IRB sworn examination and then made no effort to contact the Chief Investigator or the Local's attorney to explain his absence. VI. CHARGE RECOMMENDATION Based on the foregoing, it is recommended that Michael lanniello be charged as follows: While an officer of Local 522 and a member of Local 522 and the IBT, you brought reproach upon the IBT in violation of Article II, Section 2(a) and Article XIX, Section 7(b)(1) and (2) and Section 14(i) of the IBT Constitution and obstructed, interfered and unreasonably failed to cooperate with the duties of the Independent Review Board as set forth in Paragraph G 8

9 of the March 14, 1989 Consent Decree in United States v. International Brotherhood of Teamsters. 88 Civ (S.D.N.Y.), to wit: On July 3, 2002 and July 16, 2002, you willfully and without justification refused to appear for your scheduled sworn in-person examinations pursuant to Paragraph H.3 (c) of the Rules and Procedures for Operation of the Independent Review Board for the International Brotherhood of Teamsters. 9

10 EXHIBITS TO THE CHARGE REPORT INVOLVING MICHAEL IANNIELLO 1 Form LM-2 of Local 522 for Declaration of FBI Special Agent Louis DiGregorio dated February 12, IRB Decision re John Ferrara 4 Memorandum & Order of Judge David N. Edelstein re John Ferrara 5 Excerpt from Hearings Before the Permanent Subcommittee on Investigations 6 Decision of IBT Permanently Barring John Martinelli, Robert Martinelli and Vincent Martinelli 7 Local 522 Application Card for John Akalski 8 Executive Board Meeting Minutes of Local 522 for October 3, Decision of IBT Permanently Barring John Akalski dated March 11, Dues Record for Michael Ianniello 11 IBT Roster of Officers of Local IBT Listing of Positions Held by Michael Ianniello and Bobby Deloatch 13 Form Local 522 Pension for Form Local 522 Welfare Fund for Form Local 522 Welfare Fund of New York and New Jersey for Form Local 522 Pension Plan - Roofers Division for Form Local 522 Ind Roofing & Sheetmetal Crafts Welfare Fund for Sworn Examination of Michael Ianniello dated October 29, Sworn Examination of Michael Ianniello dated December 12, News Article re Guilty Plea of Anthony Baratta 21 Sworn Examination of Bobby Deloatch dated July 2, Sworn Examination of Robert Moore dated July 2, Form Local 522 Pension Fund for Form Local 522 Pension Fund for Form Local 522 Pension Fund for

11 26 Form Local 522 Pension Fund for Form Local 522 Welfare Fund for Form Local 522 Welfare Fund for Form Local 522 Welfare Fund for Form Local 522 Welfare Fund for Form Local 522 Welfare Fund of New York and New Jersey for Form Local 522 Welfare Fund of New York and New Jersey for Form Local 522 Welfare Fund of New York and New Jersey for Form Local 522 Welfare Fund of New York and New Jersey for Form Local 522 Pension Plan - Roofers Division for Form Local 522 Pension Plan - Roofers Division for Form Local 522 Pension Plan - Roofers Division for Form Local 522 Pension Plan - Roofers Division for Form Local 522 Ind Roofing & Sheetmetal Crafts Welfare Fund for Form Local 522 Ind Roofing & Sheetmetal Crafts Welfare Fund for Form Local 522 Ind Roofing & Sheetmetal Crafts Welfare Fund for Form Local 522 Ind Roofing & Sheetmetal Crafts Welfare Fund for Form LM-2 of Local 522 for Form LM-2 of Local 522 for Form LM-2 of Local 522 for Form LM-2 of Local 522 for Letter and Survey dated October 2, 1995 from Accountant for Local Local 522 Allocation Schedule - 8/1/95 to 1/31/96 49 Local 522 & Affiliated Funds Survey as of 7/31/96 50 Letter and Survey dated January 2, 1997 from Accountant for Local Local 522 Allocation Schedule - 8/1/96 to 1/31/97 11

12 52 Local 522 Allocation Schedule - 2/1/97 to 7/3 1/97 53 Local 522 & Affiliated Funds Survey as of 7/3 1/97 54 Letter and Survey dated October 31, 1997 from Accountant for Local Local 522 Allocation Schedule - 8/1/97 to 1/31/98 56 Local 522 Allocation Schedule dated October 2, Local 522 Survey Results as of July 31, Local 522 Allocation Schedule - 2/1/99 to 7/31/99 59 Local 522 Allocation Schedule - 8/1/99 to 1/31/00 60 Local 522 Allocation - 2/1/00 to 7/31/00 61 Local 522 Allocation - 8/1/00 to 1/31/01 62 Local 522 Allocation - 2/1/01 to 7/31/01 63 Letter dated August 22, 1996 from Local 522 to IBT 64 Letter dated June 15, 2000 from IBT to All Affiliates 65 Notice of Sworn Examination Letter dated June 20, 2002 from the IRB to Michael Ianniello 66 U. S. Post Office Notification that Michael Ianniello Received the Letter on June 21, Failure to Appear for Sworn Examination Statement for the Record re Michael 1 Ianniello dated July 3, IRB Memorandum dated July 9, Failure to Appear for Sworn Examination Statement for the Record re Michael Ianniello dated July 16, Notice of Sworn Examination Letter dated July 9, 2002 from the IRB to Michael Ianniello 71 U. S. Post Office Notification that Michael Ianniello Received the Letter on July 10, Sworn Examination of Anya Reid dated July 2, Form LM-2 of Local 522 for Local 522 Executive Board Meeting Minutes of January 13, Schedule of Payments to Benserco and Local

13 Chief Investigator: Charles M. Carberry, Esq. 17 Battery Place, Suite 331 New York, NY Administrator: John J. Cronin, Jr. SENT BY UPS OVERNIGHT MAIL INDEPENDENT REVIEW BOARD 444 North Capitol Street, NW, Suite 528 Washington, DC (202) Facsimile (202) Corruption Hotline (800) CALL IRB January 10, 2003 Board Members: Benjamin R. Civiletti, Esq. Venable, Baetjer, Howard & Civiletti 1201 New York Avenue, NW, Suite 1000 Washington, D.C Joseph E. digenova, Esq. digenova & Toensing th Street, NW, Suite 430 Washington, D.C William H. Webster, Esq. Milbank, Tweed, Hadley & McCloy 1825 Eye Street, NW, Suite 1100 Washington, D.C Donald DiLeo, President Joint Council Morris Avenue Union, New Jersey Dear Mr. DiLeo: Re: Decision on Charges Against Former Local 522 Principal Officer Michael Ianniello The Independent Review Board has reviewed the decision clarified by Joint Council 73 on January 7, 2003 in the abovecaptioned matter. The Board finds the decision to be not inadequate. Very truly yours, Members of the. Independent /I?evie i Board By: Cronin, Jr. strator cc: Patrick J. Szymanski, General Counsel Mr. Michael Ianniello (w/copy of JC-73 Decision) Teamsters Local Union 522 «Pursuant to the Consent Order of the United States District Court, S.D.N. Y. United States -v- International Brotherhood of Teamsters 88 CIV (LAP)

14 TEAMSTERS JOINT COUNCIL NO. 73 AFFILIATED WITH THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS / j Morris Avenue Union, New Jersey Phone: (908) Fax: (908) DONALD DI LEO, President ALPHONSE RISPOLI, JR., Vice President DONATO DE SANTI, Secretary-Treasurer GREGORY LUCIDI, Recording Secretary MARK McENTEE, Trustee JOHN HUMPHREY, Trustee ANTHONY ARTIFICIO, Trustee January 7, 200,2 ^ John J. Cronin, Jr., Administrator Independent Review Board 444 North Capitol Street, NW Suite 528 Washington DC RE: Expulsion of Michael Ianniello Dear Mr. Cronin: The Joint Council No. 73 Executive Board hereby clarifies its decision to permanently bar Michael Ianniello from the IBT and any IBT entity to state: Sincerely, "Michael Ianniello is permanently expelled from membership in the union; permanently barred from participating in any manner in any of the activities or affairs of Local 522 or any other IBT entity; permanently barred from holding any union office; permanently barred from holding any other employment, office, position or consulting or similar relationship, whether paid or unpaid, with Local 522 or any other IBT entity; permanently barred from seeking or accepting from Local 522 or any other IBT entity any salary, severance payment, allowance, fee, payment for unused vacation, or compensation of any kind except fully vested pension and fully vested welfare benefits; permanently barred from the date of expulsion from having any contributions made on his behalf by Local 522 or any other IBT entity to any pension, health and welfare, severance or other benefit fund." Donald DiLeo, President DDL/rc Cc: Bill Nugent, IRB Robert Moore, Local 522