Illinois Police And Sheriff’s News © 1999 All rights reserved. Not for republication on the internet.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNITED STATES OF AMERICA, and 
LABORERS' INTERNATIONAL UNION 
OF NORTH AMERICA by and through
ROBERT LUSKIN, in his official
capacity as General Executive
Board Attorney,

Plaintiffs,

V.

CONSTRUCTION & GENERAL LABORERS'
DISTRICT COUNCIL OF CHICAGO AND
VICINITY, an affiliated entity of 
the Laborers' International Union
of North America,

Defendant.

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MAGISTRATE JUDGE GUZMAN

99 Ct

RECEIVED
AUG 11, 1999

 

MICHAEL W.DUBBINS
CLERK, U.S. DISTRICT COURT,

COMPLAINT

INDEX

 

PAGE

 

I

INTRODUCTION

 

 

¶¶ 1-5

 

II.

JURISDICTION

4

 

¶ 6

 

III

VENUE 

4

 

¶¶ 7-8

 

IV.

LA COSA NOSTRA

4

 

Introduction
¶ 9

5

 

a. The LCN Commission
¶ 9 a.

5

 

b. LCN Families 
¶ 9 b.

6

 

c. Judicial Authority for the
Existence of the LCN
¶ 9 C.

6

V.

THE PARTIES

 

 

The Plaintiffs.
¶ 10

7

 

Defendant Chicago Laborers
District Council 
¶ 11

8

 

a. Composition of Membership
¶ 11 a.

9

 

b. Purpose and Operation of a
District Council
¶ 11 b.

9

 

c. Potential for Abuse
¶ 11
C.

10

 

d. Composition of the CLDC
¶ 11 d.

10

 

e. Officers of the CLDC
  11 e

11

 

f . Operations of the CLDC 
¶  11 f 

11

 

g. Funds Affiliated with
the CLDC 
 ¶ 11 g.

12

VI. 

THE TRUSTEESHIP ACTION

13

 

Introduction.
 ¶12

13

 

LIUNA's Internal Reform Program 

13

 

a. Democratic Practices 
¶ 13 a.

14

 

b. Financial Practices  
¶ 13 b.

14

 

c. Health, Welfare and
Retirement Funds 
¶ 13 c.

14

 

d. Business and Financial
Activities of Union Officials 
¶ 13 d

15

 

e. Barred Conduct
¶ 13 e.

15

 

The Trusteeship Complaint 
¶ 14

16

 

CLDC Officers and the Outfit
 
¶ 15

18

 

The Trusteeship Hearing
 ¶ 16
 

20

 

The Trusteeship Decision
  ¶ 17

 21

 

Implementation of the Trusteeship
 ¶ 18

24

 

Actions of the Trustee
 ¶ 19

24

 

Other Reform Actions  
 
¶  20

 

VII.

CO-CONSPIRATORS NOT NAMED AS DEFENDANTS
  ¶ 21

27

VIII.

CORRUPTION OF THE CHICAGO LABORERS
DISTRICT COUNCIL 
  
¶ 22-23

 

IX.

THE DOMINATION AND CONTROL OF THE
CHICAGO LABORERS' DISTRICT COUNCIL
BY THE LA COSA NOSTRA
   ¶ 24

54

 

a. Selection of officers to
Control LIUNA 
 ¶ 24 a.

55

 

(1) Outfit Selection of International
Union Officials
 ¶  24 a.(1)

55

 

(2) Selection of Chicago District
Council and Local Officials
 
24 a.(2)

59

 

b. Cronyism and Nepotism in the CLDC
 ¶  24 b.

63

 

c. Appointment and Retention of Corrupt
Individuals to control the CLDC
 ¶ 24 c.

69

 

d. Lack of Democratic Practices
 
  24 d.

72

X.

FIRST CLAIM FOR RELIEF: CONSPIRACY
TO VIOLATE 18 U.S.C.
S 1962(b)

82

 

Conspiracy to Acquire and Maintain Control of CLDC 
 ¶¶ 25-26

 83

 

The Chicago Laborers' District Council Enterprise
 
¶ 27

 

 

Manner and Means
 
¶ 28-36

 

 

Overt Acts
 
¶ 37

 

XI.

SECOND CLAIM FOR RELIEF: CONSPIRACY
TO VIOLATE 18 U.S.C. S 1962(c)

92

 

Conspiracy to Conduct the Affairs of the
Enterprise Through a Pattern of Racketeering
Activity 
  ¶ 38-39

92

 

The Chicago District Council/La Cosa 
Nostra Enterprise
 
¶ 40

93

 

Manner and Means
 
¶ 41-46

95

 

Overt Acts
 
¶ 47

96

XII.

THE FAILURE OF LIUNA OFFICIALS TO SATISFY
OBLIGATIONS IMPOSED BY LAW

 

 

Legal and Ethical Obligations of CLDC Officials 
  ¶ 48

 

 

Notice of Corruption within LIUNA
and the CLDC
 
  49

104

XIII.

PRESENT STATUS Of THE CHICAGO LABORERS
DISTRICT COUNCIL
  
50-53

105

XIV

DEMAND FOR RELIEF 
 
  54

 106

 

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

 

UNITED STATES OF AMERICA and

)

 

LABORERS' INTERNATIONAL UNION

)

 

OF NORTH AMERICA by and through 

)

 

ROBERT LUSKIN, in his official

)

 

capacity as General Executive

)

 

Board Attorney,

)

 

Plaintiffs,

)

 

V.

)

No.

CONSTRUCTION & GENERAL LABORERS'

)

 

DISTRICT COUNCIL OF CHICAGO AND

)

 

VICINITY, an affiliated entity of

)

 

the Laborers' International Union

)

 

of North America,

)

 

Defendant.

 

 

COMPLAINT

    The United States of America, by and through Scott R. Lassar, United States Attorney for the Northern District of Illinois, and the Laborers' International Union of North America (hereafter "LIUNA"), by and through Robert Luskin in his official capacity as General Executive Board Attorney of LIUNA (hereafter "GEB Attorney"), for their complaint, allege as follows:

I

INTRODUCTION

    1 .       This action is brought against the Construction & General Laborers' District Council of Chicago and vicinity (hereafter "Chicago Laborers District Council," or the "CLDC") to rid the district council of domination and influence by members and associates of organized crime. The CLDC is a group of 21 local unions affiliated with LIUNA. The Chicago Laborers District Council has been infiltrated by corrupt individuals and organized crime figures who have exploited their control and influence over the district council for personal gain and to the detriment of the CLDC.

    2.     As a result of the strong, pervasive ties to organized crime, officers and employees of the CLDC and its constituent locals and affiliated funds have been chosen and controlled by various members and associates of organized crime. Consequently, the rights of the members of the union to control the affairs of the union have been systematically abused. Those union members who might have opposed this corrupt state of affairs have been intimidated into silence by economic coercion and by the well-known ties between corrupt union officials and organized crime.

    3.    In 1995, LIUNA, acting through its General Executive Board (hereafter "GEB") , which has authority and control over all of the executive and judicial powers of the union, entered into an oversight agreement with the United States Department of Justice, As part of that agreement, LIUNA has adopted an Ethical Practices Code ("EPC") designed to root out corruption from LIUNA and its affiliated entities and an Ethics and Disciplinary Procedure, which created an independent structure consisting of the GEB Attorney and the LIUNA Inspector General to investigate and prosecute potential violations of the EPC and an Independent Hearing and an Appellate officers to adjudicate these charges. In February 1998, the

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Chicago Laborers District Council was placed into trusteeship by LIUNA as a result of that internal reform program.

 

    4    The United States and LIUNA, by and through Robert Luskin its GEB Attorney, bring this suit so the United States can obtain equitable relief and for injunctive relief pursuant to the Racketeer Influenced and Corrupt Organizations statute, Title 18, United States Code, Sections 1961 through 1968, (hereafter "RICO") , to support and advance the actions taken pursuant to the internal reform program in order to put an end to systemic and long-standing corruption and the involvement of organized crime in the affairs of the CLDC and to restore control of its affairs to the delegates and officers of the CLDC and the rank and file members of its constituent local unions.

    5     . The United States and LIUNA, by and through Robert Luskin its GEB Attorney, allege that there has been a conspiracy to acquire and maintain control of the CLDC as well as a conspiracy to conduct the affairs of the CLDC through a pattern of racketeering activity. This pattern of racketeering activity has consisted of multiple acts indictable under Title 18, United States Code, Section 1951 involving Hobbs Act extortion, in that the CLDC, through its officers, 'members, agents and representative, together with various members and associates of organized crime have extorted and attempted and conspired to extort the rights of union members to, among other things, select officers, vote without intimidation, and be loyally and faithfully represented by union officers and benefit plan trustees.

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II

JURISDICTION

 

    6     . Jurisdiction in this action is predicated upon Title 18 United States Code, Section 1964(b); and Title 28, United states Code, Sections 1331, 1345, and 2201.

III

VENUE

7.   Venue for this action is predicated upon Title 18, United States Code, Section 1965(a) ; and Title 28, United States Code, Section 13 91 (b) .

8.   The United States and LIUNA invoke the expanded service of process provisions of Title 18, United States Code, Section 1965(b).

IV


LA COSA NOSTRA

9.       Introduction: La Cosa Nostra (hereafter referred to alternatively as "the LCN," "the mafia," "the mob," or the "outfit"), which name is based on a phrase which translates into English from the Italian language as "this thing of ours" or "our thing," is a nationwide criminal organization which operates in various cities throughout the United States. The LCN is composed of groups of men of Italian descent who are organized into units which are referred to as a "family," or, in the Italian language, "il borgata." A person becomes a member of an LCN family through

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a ceremony which is conducted in a manner designed to keep it, and the existence of the family, secret from persons who are not members of the LCN. Each family of La Cosa Nostra is headed by a boss" who is assisted by an "Underboss" and a "consigliere," or counselor. The family conducts its criminal activities through entities known as "crews." A crew is headed and supervised by a person referred to variously as a "street boss," a "Crew boss," a "caporegima," a "capodecina," a "capo" or some other such name. Each crew consists of formally inducted members of the family who are commonly referred to as "soldiers" or "made members" and persons who are not members, but who knowingly participate and cooperate in the activities of the family, who are referred to as "associates." Persons who have been formally inducted into membership in an LCN family are often referred to as having been "made," "straightened out," or as being a "made member."

a.       The LCN Commission: The affairs of the LCN are governed by a "commission" (hereafter "the Commission") which is composed of the bosses of the most significant families. The boss of the LCN family in Chicago has served as a member of the Commission. The Commission serves as the national ruling council of the LCN families. Among other matters, the Commission has regulated, facilitated and controlled relationships and settled disputes between and among the LCN families. The Commission also has approved the admission of new members to the various LCN families and the selection of the bosses of the families. To

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frustrate law enforcement scrutiny, the Commission meets infrequently.

b.       LCN Families: Each family of La Cosa Nostra is identified by the name of its boss, the name of a former boss, or by the city in which it is located. The Chicago family is headquartered and operates in the area of Chicago, Illinois, in the Eastern Division of the Northern District of Illinois, in other areas of Illinois, and in various locations in Florida and the western part of the United States. The Chicago family is commonly referred to as "The outfit." Historically, the Chicago Laborers District council has had strong ties to the Chicago Outfit, in particular, the North Side/Rush Street Crew, the 26th street/ Chinatown Crew, the Chicago Heights Crew and the Grand Avenue Crew.

C.       Judicial Authority for the Existence of the LCN: The existence of the LCN has been proved in a number of cases including, among others: United States v. _Infelise, et al. 90 CR 87, in the United States District Court for the Northern District of Illinois, affirmed in United States v. DiDomenico, 78 F. 3d 294 (7th Cir.) , cert. denied, 117 S. Ct. 507 (1996) ; United States v. Carlisi, 92 CR 1064 in the United States District Court for the Northern District of Illinois, affirmed in United States v. Zizzo, 120 F.3d 1338 (7th Cir. 1997) ; United States v. Salerno, et al., No. SSS85 Cr. 139 (RO) , in the United States District Court for


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the Southern District of New York, affirmed in 868 F. 2d 524, 534-538 (2d Cir.), cert. denied, 493 U.S. 811 (1989) (hereafter "Salerno I" or "the Commission case") ; United States v. Salerno, et al., No. 86 Cr. 245, in the United States District Court for the Southern District of New York (hereafter "Salerno III' or the "Genovese family case") ; United States v. Angiulo, et al., No. Cr. 83-235, in the United States District Court for the District of Massachusetts, affirmed in United States v. Angiulo, 897 F.2d 1169 (1st Cir.), cert. denied, 498 U.S. 845 (1990); United States v. Scarfo, et al., No. 88-00003-1-19, in the United States District Court for the Eastern District of Pennsylvania, affirmed in United States v. Pungitore, 910 F. 2d 1084, 1148-1149 (3d Cir. 1990) , cert. denied, 500 U.S. 915 (1991).

V

THE PARTIES

10. The Plaintiffs:

a.       The United States of America, plaintiff herein, is a sovereign and body politic. The Attorney General of the United States, pursuant to Title 18, United States Code, Section 1964(b), has authority to seek equitable and injunctive relief under RICO.

 

b.       Plaintiff LIUNA is a "labor organization", as that term is defined in Title 29, United States Code, Section 402(I),

7

that is, a labor organization engaged in an industry affecting commerce which exists for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours and other terms and conditions of employment. Robert Luskin is the General Executive Board Attorney for LIUNA. As part of the Ethics and Disciplinary Procedure adopted by LIUNA in January 1995, all of the investigative and disciplinary powers described in the LIUNA Constitution, the Uniform District council Constitution and the Uniform Local Union Constitution were delegated to Robert Luskin, as the GEB Attorney, for the purpose of fulfilling the mandate of the GEB and the General President to rid LIUNA of all corrupting influences. Pursuant to Title 18, United States Code, Section 1964 (c) , LIUNA, as an entity "injured in its business or property by reason of a [RICO] violation" has authority to sue and "recover threefold the damages it sustains and the cost of the suit, including a reasonable attorney's fee."

 

11. Defendant Chicago Laborers District Council: The defendant Chicago Laborers District Council consists of and oversees the operation of 21 constituent local unions (hereafter, the "Locals") in the Chicago metropolitan area affiliated with LIUNA. The CLDC is organized under and operates pursuant to LIUNA's International Union Constitution, the Uniform District Council Constitution and the Uniform Local Union Constitution. The CLDC therefore is a

 

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"labor organization," as that term is defined in Title 29, United States Code, Section 402 (1) , that is, a labor organization engaged in an industry affecting commerce which exists for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours and other terms and conditions of employment - The Chicago Laborers District Council is also an employee organization representing employees engaged in commerce and in an industry and activity affecting commerce within the meaning of Title I of the Employee Retirement Income Security Act of 1974 ( ( ( "ERISA" ).

 

a.       Composition of Membership: LIUNA represents a variety of general laborers, including masons' helpers, general construction laborers, municipal workers, highway construction laborers, pipeline laborers, excavators, watchmen, asbestos removers, pavers, and stone cutters.

b. Purpose and Operation of a District Council: Under LIUNA's Uniform District Council Constitution, the members of the Chicago Laborers District Council consist of delegates from the locals affiliated with the district council. Under Article XIX of the International union Constitution, I affiliated local unions may be combined into an area district council. District councils may be created either at the discretion of LIUNA's General Executive Board or the General President and General Secretary-Treasurer or upon application by a group of local unions. They are formed in order to combine economic power, effort and

 

9

strength into a unit which would tend to enhance, promote and conserve the welfare and interest of themselves and their members. " Article I, Section 1 of the Uniform District Council Constitution. District councils have broad powers to negotiate collective bargaining agreements with employers and to determine and levy a per capita tax, initiation fee, readmission fee, or other lawful fee or assessment on its affiliated Locals to defray council expenses. In effect, the district councils supervise all of the activities of their constituent local unions.

c.       Potential for Abuse:          While district councils can serve a worthwhile purpose, they can also be used by corrupt elements as tools of control in that domination of the district council entails control of the constituent locals. The rank and file members of the union do not directly participate in the actions of the district council. The members of the district councils are the elected delegates from the constituent local unions. Uniform District Council Constitution Article IV, Section 1.

d. Composition of the CLDC: The Chicago Laborers District Council is headquartered at 6121 West Diversey Avenue in Chicago, Illinois. The 21 constituent Locals represent approximately 19,000 members in the greater Chicago metropolitan area. The 21 constituent Locals comprising the CLDC are: Locals 1, 2, 4, 5, 6, 25, 75, 76, 96, 118, 149, 152, 225, 269, 288, 582, 681, 1001, 1006, 1035 and

 

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1092. Each Local has jurisdiction over a particular geographical area within Cook, Lake, DuPage, Will, McHenry, Kane and Grundy Counties. The members of the CLDC consist of approximately 70 delegates, with each affiliated local sending two to five delegates (the "Delegates") based on the size of its membership. These delegates, in turn, elect the CLDC officers, including the seven members of the District Council Executive Board (the "Executive Board"). 

e.       Officers of the CLDC: Pursuant to Article V, Section 1(a) of the Uniform District Council Constitution, the officers of the CLDC consist of the President, vice President, Secretary-Treasurer, Business Manager, Sergeant at-Arms and three auditors. The CLDC is governed by an Executive Board that consists of the CLDC President, Vice President, Secretary -Treasurer, Business Manager, and three additional delegates from the Locals.

f.        Operations of the CLDC: Pursuant to Article VII, Section 4, of the Uniform District Council constitution, the day-to-day affairs of the district council are managed by a business manager who, as the official representative of the district council, hires and supervises field representatives, who are also referred to as "business agents" (hereafter referred to as "business agents"). The business agents are the union officials who handle the day to-day business with employers of LIUNA members.

 

11

g. Funds Affiliated With the CLDC: Members and employees of the CLDC, and members of its 21 Local Unions, participate in various affiliated employee benefit funds: (1) the Laborers' Pension Fund (hereafter referred to as "the pension fund") with net assets of over one billion dollars; (2) the Pension Plan for the Funds' Office Staff of the Chicago District Council of Laborers' Health and Welfare and Pension Funds; (3) the Health and Welfare Department of the Construction and General Laborers' District Council of Chicago and Vicinity (hereafter referred to as "the Welfare Fund") with net assets of over 500 million dollars; (4) the Construction and General Laborers I District Council of Chicago and vicinity Training Trust Fund; and (5) the Laborers' Political League, a political action fund; as well as the recently developed (6) Construction and General Laborers' District Council of Chicago and Vicinity Apprenticeship Fund; and (7) the Chicago Area Laborers-Employers Cooperation & Education Trust. (These funds will hereafter be collectively referred to as the "affiliated funds"). The CLDC has the authority and responsibility to appoint individuals to certain positions on the affiliated employee benefit funds pursuant to the governing documents of the affiliated funds, and through such appointments exercises influence over the selection of employees and service providers of these funds.

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VI

THE TRUSTEESHIP ACTION

12.     Introduction;         In February of 1995, the Department of Justice entered into an three-year agreement with LIUNA designed to rid the International Union and its affiliated entities of the influence of organized crime. This agreement was extended for additional one-year periods in January of 1998 and again in January 1999, and is currently set to expire on January 31, 2000. As part of this agreement, LIUNA entered into a civil RICO consent decree that agrees to the appointment of court officers to supervise the reform of the International Union. The Department of Justice, in turn, has agreed to hold that consent decree in abeyance and permit the union to institute internal reforms. Under the current extension of this oversight agreement with LIUNA, the Department of Justice can implement the consent decree if "the Assistant Attorney General for the Criminal Division reasonably concludes that the failure to impose the consent decree would substantially interfere with accomplishing the purposes of the Agreement, after giving LIUNA an opportunity to be heard." As part of this internal reform program, LIUNA has amended its constitutions to implement an Ethics and Disciplinary Procedure and an Ethical Practices Code, has instituted reforms of its job referral and election procedures, and has hired a team of former federal investigators and prosecutors to administer the internal reform process.

 

13      . LIUNA's Internal Reform Program: The Ethical Practices Code adopted as part of the Ethics and Disciplinary Procedure

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(hereafter the "EDP") defines basic standards of conduct applicable to all members and employees of LIUNA. The Ethical Practices Code (hereafter the "EPC") deals with five areas of activity;

a.       Democratic Practices:        The EPC recognizes every member's right to participate fully in union affairs. It reaffirms their democratic rights to freedom of speech and participation in the election process. It also cautions that every LIUNA member must respect the rights of every other member, and that no member has the right to undermine the Union or subvert its essential policies. Among its provisions; regular meetings must be conducted in an atmosphere of fairness; Union rules must be applied uniformly without favoritism or discrimination; and corruption of any kind is banned.

b.       Financial Practices:                   These will be the same as other well-run institutions and will utilize competitive bidding for major contracts. There will be no contracts or investments that result in financial advantage to any officer or representative of the Union, and no Union subsidiary shall make any loans to officers, representatives or employees or their families for private purposes.

c.       Heath, Welfare and Retirement Funds:   Responsibilities and obligations of Union officials who are also benefit fund trustees have been defined to prohibit the payment of any salaries or fees for serving as a trustee (other than

 

14

reimbursement of expenses), as well as any financial connection between a benefit fund and any vendor or service provider who does business with a benefit fund. The EPC also requires union trustees to request or, if necessary, demand regular audits of their funds, and to file these audit reports with the International Union and make them available to the fund's beneficiaries at least once a year. 

d.       Business and Financial Activities of union officials:     The EPC prohibits actual and potential conflicts of interest. The restriction includes keeping confidential all mailing lists of union members; prohibiting any personal financial interest that conflicts with Union duties; and prohibiting any financial interest by a union official in any business with which the Union bargains collectively. Any compensation to a union official, whether in the form of a kickback, valuable gift, lavish entertainment or anything of substantial value, made by an employer with which the Union bargains, or by a vendor or service provider with which the Union does business, is prohibited.

e.       Barred Conduct:      Four types of conduct are clearly prohibited:

(1) committing any act of racketeering, which includes crimes such as bribery, extortion, fraud, accepting kickbacks, bookmaking and other felonies;

 

15

(2) knowingly associating with any member or associate of an organized crime family or syndicate. "Knowingly associate" means that the individual knows that the other person is a member or associate of organized crime; that the association relates directly to Union affairs; and that the association is more than a casual relationship;

(3) knowingly allowing any organized crime member or associate to influence an officer of the Union; and

(4) interfering in any way with the operation of the Disciplinary Procedure and the persons responsible for its administration.

Violations of the EPC are subject to a full disciplinary process under the EDP administered by the following independent officers: the Inspector General, who investigates charges; the General Executive Board Attorney, who prosecutes charges; an Independent Hearing Officer (hereafter, the "IHO"), who hears cases brought under the internal reform process; and an Appellate officer (hereafter, the "AO") , who adjudicates appeals from decisions made by the Independent Hearing officer.

 

    14.   The Trusteeship Complaint:        on June 13, 1997, the GEB notified the CLDC of his intent to place the CDLC into trusteeship pursuant to section 3 of the EDP and Article IX, Section 7 of the LIUNA Constitution and the provisions of Title III of the Labor -Management Reporting and Disclosure Act ("LMRDA"),

 

16

Title 29, United States Code, Sections 461-66 because such action was needed to rid the CLDC of the influence of organized crime and to restore democratic procedures. The complaint for trusteeship, a copy of which is attached as Exhibit A, alleged:

For at least the past twenty-five years, the leadership of the Chicago District Council has had strong, discernable ties to the leadership of organized crime in Chicago. Organized crime has exerted influence over the Chicago District council by placing and retaining mob members, mob associates and relatives of mob members in positions of leadership in the Chicago District Council and a number of its affiliated locals and funds. Control over leadership positions in the Chicago District Council benefits organized crime in Chicago by providing mob members, mob associates and relatives of mob 'members with: (1) significant sources of income and the appearance of legitimate jobs; (2) political and economic power;(3) control and influence over the finances of the Chicago District Council and its affiliated locals; and (4) influence over affiliated union pension, health & welfare, training and political action funds through power of appointment.

a.       The trusteeship complaint stated that evidence of organized crime's influence over the Chicago Laborers District Council includes: (1) leadership of the Chicago Laborers District Council by mob members, mob associates and relatives of mob members; (2) a lack of democratic practices; (3) financial malpractice; (4) the appointment of mob members, mob associates and relatives of 'mob members to positions of authority over the affiliated funds of the Chicago Laborers District Council; and (5) a failure to challenge mob influence or to examine allegations of mob control within the Chicago Laborers District Council and

 

17

 

its affiliated entities. The complaint listed 23 individuals with ties to the Chicago Outfit who have served as CLDC officers, delegates, or trustees, and listed 10 such individuals who have been arrested, indicted and/or convicted of organized crime activity.

 

b. The trusteeship complaint stated that a trusteeship was necessary to rid the Chicago Laborers District Council of the corrupting influence of organized crime, to end the undemocratic practices that have allowed corruption to flourish, to correct financial malpractice, and to carry out the legitimate objects of the Chicago Laborers District Council and its affiliated locals and funds.

15. CLDC Officers and The Outfit:

a. The top elected positions of the CLDC are the business manager, secretary-treasurer, president, vice president and sergeant-at-arms. Over at least the past twenty-five years, these leadership positions at the CLDC have been held by and transferred to organized crime members, associates or their relatives through uncontested nominations and appointments. All of these CLDC officers

have come from just six of the 21 CLDC affiliated local unions, Locals 1, 2, 5, 225, 1001 and 1006, which account for approximately 50% of the union membership under the umbrella of the CLDC. Moreover, all of the organized crime related CDC delegates and officers identified during the course of the trusteeship hearings have been members of and

18

delegates from these same six local unions, all of which historically have been controlled by the Chicago Outfit,

b. At the time the GEB Attorney notified the CLDC of his intent to place the CLDC into trusteeship, the following four individuals with ties to the Chicago Outfit held the principal offices in the Chicago Laborers District council: John "Pudgy" Matassa, Jr., a made member and current boss of the North Side Crew of the Chicago organized crime family, was CLDC vice president and trustee of three affiliate employee benefit funds as well as president and business manager of Local 2; Bruno Caruso, a member or associate of the Chicago LCN family and the son of late Chicago LCN capo Frank "Skids" Caruso and brother of Frank M. "Toots" Caruso, a made member of the 26th Street Crew, was CLDC president and business manager and trustee of two affiliated employee benefit funds as well as president and business manager of Local 1001; Joseph A. Lombardo, Jr., the son of co-conspirator and Chicago LCN capo Joseph A. Lombardo, Sr., was CLDC secretary-treasurer and trustee of four affiliated employee benefit funds; and Leo Caruso, an associate of the Chicago LCN family and the nephew of late Chicago LCN capo Frank "Skids" Caruso and cousin of Bruno Caruso and Frank Caruso, was CLDC sergeant-at-arms and a trustee of an affiliate employee benefit fund as well as president and business manager of Local 1006.

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c. In addition to these officers, Frank M. "Toots" Caruso, a made member of the Chicago LCN and top lieutenant in the 26th Street Crew and son of late Chicago LCN capo. Frank "Skids" Caruso, held the position of director of the CLDC affiliated Pension Fund at that time, having been promoted to that position in 1995 after he resigned his LIUNA membership and his positions as CLDC sergeant-at-arms and a pension fund trustee rather than submit to a sworn deposition by the GEB Attorney. In addition, James DiForti, a made LCN member and boss of the 26th Street Crew, resigned his positions as a delegate and the coordinator of committees to the CLDC and secretary treasurer of Local 5 in June 1997 following his indictment for first degree murder allegedly committed in an unsuccessful effort to collect a mob "juice loan." DiForti replaced John Matassa as coordinator of committees, who had succeeded Vincent Solano a capo in the Chicago LCN and boss of the North Side crew, in that position following Solano's death in 1992.

 

 

16.      The Trusteeship Hearing: The hearing on the trusteeship complaint commenced before LIUNA's Independent Hearing Officer (hereafter the "IHO") on July 16, 1997. During the course of the 19 trial days needed to complete the hearing, the GEB Attorney introduced over 200 exhibits and presented the testimony of 45 witnesses, including the testimony of a former special agent of the Federal Bureau of Investigation who related information and hearsay

20

statements from eight additional named individuals and 11 others he characterized as reliable, confidential informants. The picture which emerged from that hearing was devastating. The evidence clearly established that for at least the previous thirty years, the leadership of the CLDC has had strong, pervasive ties to the leadership of the Chicago Outfit. The CLDC was proven to be a "safe haven" for the employment of organized crime figures, associates and their -relatives. Organized crime had exerted influence over the CLDC by placing and retaining organized crime members, associates and their relatives in positions of leadership in both the CLDC and its constituent locals and in the CLDC affiliated benefit funds. As a result of this sustained pattern of organized crime influence and control over the central governing body of LIUNA in the Chicago area, the rights of rank and file union members were subverted, democratic practices were ignored and charges of organized crime control were left uninvestigated and unremedied.

 

17.      The Trusteeship Decision: On February 7, 1998, the IHO issued a 91-page decision ruling that a trusteeship was necessary to eliminate organized crime from the CLDC. In Re: Trusteeship Proceedings Chicago District Council, 97-30T, Order and Memorandum, dated February 7, 1998 (hereafter "CLDC Order") - A copy of the IHO's decision is attached hereto as Exhibit B and is incorporated herein by reference.

a.       The IHO found that the imposition of a trusteeship over the CLDC was warranted in order "to expel the influence of

 

21

organized crime, to restore democratic procedures and otherwise carry out the legitimate business of the union-" CLDC Order at 2. In reaching this conclusion, the IHO found that the evidence presented by the GEB Attorney chronicled a history of organized crime "association and domination [over the CLDC that] dates from at least the 1960s" (Id. at 86) and that this "knowing association [by certain delegates and officers of the CLDC) with organized crime has had a direct and indirect effect on democratic process and the selection of District Council officers and trustees to affiliated benefit funds" (Id. at 2) In this regard, the IHO specifically found that 11[i]n the past twenty-five years at least 13 members or associates of organized crime . . . had been delegates to the District Council." Id. at 87. For example, the evidence established that during the '11970's and 1980's two District Council officers [Vincent Solano and Alfred Pilotto] were also high-ranking bosses in the Chicago Outfit, who oversaw the Chicago Outfit's illegal money-making activities in their geographic areas" (Id. at 86) and that 11[c]urrently three made members or associates of the Chicago Outfit [John Matassa, Jr., Bruno Caruso and Leo Caruso) are officers of the District Council (Id.) , all of whom had also served at various times as trustees on the CLDC's employee benefit funds (Id. at 88).

22

 

b. The IHO further found that the selection by the Chicago outfit of District Council officers has ensured that certain individuals remain in the District Council to maintain the Chicago Outfit's control over LIUNA's labor jurisdiction. CLDC Order at 87. This corruption of the democratic process by organized crime is clearly manifested in the lack of contested elections in the CLDC over at least the last twenty-five year. As the IHO found, "[n]o officer has retired from office at the end of his term; all vacancies occurred by an officer resigning during his term, thus giving the [organized crime controlled] Executive Board the opportunity to appoint "a successor satisfactory to the Chicago Outfit. _Td. Not surprisingly, no CLDC delegate who testified, for example, had any idea "how the Executive Board determines who becomes an officer, nor could they describe how a delegate who wants to become a member of the Executive Board can bring his name to the attention of the appointing officers." Id.

 

c. Moreover, the IHO found that despite the obvious adverse impact of organized crimes' control over the District Council, the CLDC delegates and officers had failed to take steps to investigate allegations of organized crime influence and violations of law by its affiliates and members. District Council records reveal no investigations into or even discussions about the numerous arrests, indictments or convictions of various CLDC

23

officers and delegates or the numerous public and media reports of the alleged organized crime affiliation by certain CDC officials. CLDC order at 83-86. As a result, "organized crime members and associates have [over the years and continuing until the time of the trusteeship] received the benefits of union membership and the privileges of holding union office and acting as trustees over union funds worth more than $1 billion." Id. at 2.

18.      Implementation of the Trusteeship: In February 1998, Robert Bloch, a Chicago labor attorney, was appointed by the GEB Attorney to administer the affairs of the CLDC. The GEB Attorney and Mr. Bloch filed a complaint in United States District Court to enjoin interference with the imposition of the trusteeship. LIUNA v. Chicago District Council, 98 C 0825 (N.D. 111. Judge Moran) . A copy of the GEB Attorney's Complaint is attached hereto as Exhibit C and is incorporated herein by reference. The GEB Attorney obtained a Temporary Restraining Order from United States District Court Judge Castillo on February 10, 1998, and obtained a preliminary injunction from Judge Moran on April 6, 1998, upholding the validity of the trusteeship. Copies of the TRO and Judge Moran's temporary injunction are attached hereto as Exhibits D and E, respectively, and are incorporated herein by reference. On January 6, 1999, Judge Moran granted the GEB Attorney's motion for summary judgment and dismissed all counterclaims filed by the defendants. Defendants thereafter appealed this decision to the

 

24

Seventh Circuit. A copy of Judge Moran's Order and defendants' Notice of Appeal are attached hereto as Exhibits F and G, respectively and are incorporated herein by reference.

19.      Actions of the Trustee: Since taking office in February of 1998, Mr. Bloch has removed the officers of the CLDC, has worked with the constituent locals of the CLDC to institute reform policies, and has negotiated a new labor agreement for the District Council. Mr. Bloch negotiated this historic three-year labor contract, effective June 1, 1998, with the direct participation of all the constituent Locals and not just the small group of local unions that traditionally had been controlled by the outfit. Through this more democratic negotiation process the new labor agreement: 1) provides for the highest wages and benefits ever negotiated by the CLDC; 2) implements for the first time a grievance procedure that permits the enforcement of contracts through arbitration; 3) establishes an apprenticeship program; 4) provides for the placement of an outside, trained steward on the job of any contractor that commits a serious wage violation; and 5) requires that every subcontractor performing Laborers work must sign a Laborers' Union contract or pay Laborers' Union wages and benefits. Under federal labor law, Mr. Bloch's term as trustee is presumed valid only until August 7, 1999.

20.     Other Reform Actions: Since the implementation of the trusteeship against the CLDC, the GEB Attorney has placed Local 2 and Local 225 into trusteeship. See In Re: Trusteeship Proceedings Local 2, 99-25T, Order and Memorandum, dated July 29, 1999 and In

25

 

The Matter Of Local 225 Trusteeship, 97-54T, order and Memorandum, dated March 17, 1998. Copies of the IHO's decisions together with the GEB Attorney's Trusteeship Complaint for each Local are attached hereto as Exhibits H and I, respectively and are incorporated herein by reference. In addition, Local 5 in Chicago Heights was placed under supervision for financial irregularities. Moreover, the GEB Attorney has obtained the resignations of two individuals and has entered into settlement agreements with three others, which include provisions permanently terminating the membership rights of each. The Independent Hearing officer also has issued orders permanently revoking the membership rights of two former CLDC officials, including former CLDC vice president and organized crime street boss John "Pudgy" Matassa, Jr. Matassa, however, has appealed this decision which only becomes effective if upheld by the LIUNA Appellate Officer. See In the Matter of: John Matassa, Jr., Local Union 2, 98-43D, Order and Memorandum, dated May 12, 1999 (hereafter "Matassa Order") . Copies of the IHO's decision together with the GEB Attorney's disciplinary charges are attached hereto as Exhibit J and are incorporated herein by reference. Charges are pending against five others, including former CLDC officials and organized crime associates or members Bruno, Frank and Leo Caruso and James DiForti. A copy of the GEB Attorney's charges against these former CLDC officials is attached hereto as Exhibit K and is incorporated herein by reference. No action, however, has as yet been taken by the GEB Attorney to charge former CLDC secretary-treasurer Joseph Lombardo, Jr., or to

 

26

place into trusteeship Locals 1, 1001 or 1006, which have historically been controlled by organized crime in Chicago.

VII

CO-CONSPIRATORS NOT NAMED AS DEFENDANTS

21. Co-Conspirators: In addition to the CLDC, the following persons, along with others whose names are both known and unknown, are named as co-conspirators, but not defendants in this case:

a. JOHN "Pudgy" MATASSA, JR. is the current boss of the North Side Crew of the Chicago Outfit. At the time the LIUNA GEB Attorney imposed the trusteeship in February of 1998, Matassa was the vice president of the Chicago District Council as well as a trustee of the CLDC pension fund, training fund and laborers' political league. He had been a delegate and auditor of the CLDC since 1987 and also had served as the Coordinator of Committees for the CLDC, replacing co-conspirator Vincent Solano, a capo in the Chicago Outfit and boss of the North Side Crew, in that position following Solano's death in 1992. Matassa became a LIUNA member in 1985 and was immediately appointed as a field representative of Local 2 and in 1987, a mere two years after his initial membership, was elected business manager of Local 2 and appointed to the position of auditor of the CLDC. In 1989, he became president/business manager of Local 2 and in 1994 vice president of the CLDC. In his CLDC trusteeship order, the IHO expressly found that


27

 

Matassa was "a made member of the Chicago Outfit" (CLDC order at 71) and that his numerous and acknowledged meetings with high-ranking made members of the Chicago Outfit, including co-conspirators Fred Roti, John Monteleone, Alfonso Tornebene and Michael Marcello, "indicate that he is deeply involved with organized crime in his daily activities" (-Td. at 72). For example, Matassa was surveiled by law enforcement officers on at least f our occasions during 1995 and 1996 meeting with known members of the Chicago Outfit, including co-conspirators Alfonse Tornebene and Michael Marcello. In addition, Matassa was surveiled meeting with co-conspirators. and Chicago Outfit it bosses John Monteleone and Alphonse Tornebene on March 12, 1998, following his attendance that morning at a hearing regarding the CLDC trusteeship before Judge ~ Moran in Laborers' International v. Caruso, No. 98 C 825. (Matassa Order at 34). As the IHO found in addressing the GEB Attorney I s disciplinary charges against Matassa: "Matassa I s rapid rise in LIUNA is no accident and is not due to his skill in the labor movement. By virtue of his LCN membership, he is required to do nothing to inhibit the influence of organized crime figures, or to acknowledge their presence to the hierarchy of LIUNA." (Id. at 40). However, despite these findings by the IHO and Matassa's removal from his CLDC positions as a result of the trusteeship and the subsequent decision by the IHO


28

 

permanently revoking his LIUNA membership rights for barred conduct, Matassa remained the president and business manager of Local 2, without challenge, until the local was placed into emergency trusteeship in late May 1999. Matassa remains a member of LIUNA, having recently appealed the IHO's disbarment decision, which only becomes effective if upheld by the LIUNA Appellate Officer. (See Exhibit J) . These internal disciplinary charges were also the subject of the litigation in Matassa v. LIUNA, 98 C 7333 (N.D. Ill. Judge Bucklo).

b.       BRUNO CARUSO is a member or associate of the Chicago Outfit. Caruso is the nephew of co-conspirator Fred Roti and the son of the late Chicago LCN capo Frank "Skids" Caruso, the boss of the 26th Street crew from the late 1950's through the 1970's. Caruso was the president and business manager of the CLDC at the time the CLDC trusteeship was imposed in February of 1998 as well as a trustee on the CLDC welfare fund and chairman of the laborers' political league. He had been a delegate to the CLDC since at least 1982. In the CLDC trusteeship order, the IHO determined that Caruso "is at least an associate of the Chicago Outfit." CLDC Order at 45. Moreover, the IHO expressly found that the contacts between Bruno Caruso and co-conspirators John Monteleone and Angelo LaPietra and other known Chicago Outfit associates such as former First Ward Alderman Fred Roti and reputed Mob fixer Pat Marcy

29

 

have been "too numerous and too repetitive to be accidental" and that Caruso's testimony regarding his lack of knowledge of these individuals was "not credible." Id. at 44-45. Despite Caruso's removal from his CLDC positions as a result of the trusteeship and the subsequent filing of charges by the GEB Attorney seeking his permanent removal from the union for barred conduct, (See Exhibit K), Caruso retains his position as president and business manager of Local 1001 and remains a delegate to the CLDC. Caruso also continues to serve as the CLDC's delegate to the Chicago Building and Construction Trades Council and the Greater Chicago Port Council.

c. JOSEPH LOMBARDO, JR. was the secretary-treasurer of the CLDC and a trustee of four affiliated employee benefit funds at the time the LIUNA GEB Attorney implemented the CLDC trusteeship in February of 1998. He is the son of coconspirator and former Chicago Outfit street crew boss Joseph Lombardo, Sr. Lombardo, Jr. was employed as a business agent for the CLDC prior to his selection to be secretary-treasurer of the CLDC in 1987. Lombardo was appointed unanimously and without dissent even though at the time he was ineligible to hold the office because he was not then a delegate to the CLDC as required by Article VI of the Uniform District Council Constitution. Lombardo was appointed to this position to replace Chicago Outfit associate James Caporale who was ultimately forced to


30

 

resign as a result of his incarceration on a RICO conspiracy conviction for looting over $2 million from the CLDC health and welfare fund on which he sat as a trustee. since his removal from office pursuant to the CLDC trusteeship, Lombardo, Jr. ran unopposed and was elected to the positions of vice president and CLDC delegate of Local 1. A protest of Lombardo's nomination has been lodged with the IHO by the LIUNA Inspector General charging that Lombardo, Jr. was again ineligible to hold this particular office since at the time of his nomination he had not then been working at the calling, as required by Article V, Section 4 of the Uniform Local union Constitution. This protest is pending.

d. LEO CARUSO is an associate of the Chicago outfit and the cousin of co-conspirators Bruno and Frank Caruso. At the time the CLDC trusteeship was imposed in February of 1998, Caruso, a delegate to the CLDC since 1986, was the CLDC sergeant-at-arms as well as a trustee to the CLDC pension fund, having replaced co-conspirator and Chicago Outfit member Frank "Toots" Caruso in these positions in 1995. In the CLDC trusteeship order, the IHO specifically found Leo Caruso to be "an associate of the Chicago Outfit." CLDC Order at 47. In 1991, Leo Caruso "resigned" from his street sweeping job with the City of Chicago's streets and sanitation department by whom he had been employed for over 25 years during the pendency of a "no-

31

show jobs" investigation which implicated Caruso as well as a number of other city workers, including Frank Caruso and CLCC delegate and Caruso cousin, Nick Gironda. Despite Caruso's removal from his CLDC positions and the subsequent filing of charges by the GEB Attorney seeking his permanent removal from the union for barred conduct, (See Exhibit K) , he remains president and business manager of Local 1001 and a delegate to the CLDC.

e. FRANK "Toots" CARUSO is an member of the Chicago Outfit and the brother of Bruno Caruso and the nephew of coconspirator Fred Roti. Caruso was publicly identified as a member of the Chicago Outfit and 26th Street crew in a 1983 Senate hearing on organized crime. CLDC Order at 41. At the time the CLDC trusteeship was imposed in February of 1998, Frank Caruso was the director of the CLDC pension fund having previously resigned his union membership and CLDC positions rather than submit to a deposition by the GEB Attorney. Despite the circumstances of his resignation from LIUNA, Caruso retained his position as a paid employee of the CLDC affiliated pension fund for an extended period of time notwithstanding the repeated efforts by the GEB Attorney to convince the trustees of that fund, which included co-conspirators; John Matassa, Jr. and Leo Caruso, to remove him for his organized crime associations. In the CLDC trusteeship order, the IHO specifically found Frank Caruso to be "at least an associate of the Chicago Outfit."

 

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CLDC order at 42. Caruso resigned as a LIUNA member in April 1995 and was eventually removed from his position as director of the CLDC pension fund in 1998. Although he no longer holds any official position with the CLDC or Local 1006, Caruso maintains his right to reinstate his membership in LIUNA. Accordingly, charges were recently brought by the GEB Attorney seeking Caruso's permanent removal from the union for barred conduct (See Exhibit K).

  f. JAMES DiFORTI is an member of the Chicago outfit currently under indictment for an alleged organized crime related murder. Beginning in 1985, DiForti served as a business agent for Caruso Locals 1001 and 1006 before being designated as a business agent for Local 5 in Chicago Heights in March 1994 and shortly thereafter being appointed to fill a vacancy as secretary-treasurer and delegate to the CLDC. Within days of becoming a CLDC delegate, DiForti was appointed to succeed John Matassa, Jr. , another Chicago Outfit member, as CLDC coordinator of committees, a position he still held at the time the CLDC trusteeship was filed in June 1997. Evidence was presented at the CLDC trusteeship hearing that DiForti was a trusted lieutenant to Chicago Outfit boss John Monteleone in charge of gambling and juice loan and street tax collections for the 26th Street crew and that he had been dispatched on orders of Monteleone to take over Local 5 in Chicago Heights and to conduct organized crime operations in the

33

south suburbs. CLDC Order at 57 This testimony is corroborated by a March 2, 1994 surveillance of a meeting involving DiForti and co-conspirators John "Apes' Monteleone, Bruno Caruso and Frank Caruso as well as 2C h Street crew member, Joseph 'Shorty" Lamantia, the day before DiForti resigned his position in Local 1006 so he could transfer to Local 5. Although DiForti resigned as a CLDC official and a LIUNA member in July 1997, following his indictment on murder charges, he maintains his right to reinstate his membership in LIUNA. Accordingly, charges were recently brought by the GEB Attorney seeking DiForti Is permanent removal from the union for barred conduct. (See Exhibit K).

 

g. ANTHONY JOSEPH ACCARDO, also known as "Joe Batters," was, at various times from at least the late 1960's up to the date of his death on May 27, 1992, the boss or the consigliere of the Chicago LCN family. Anthony Joseph Accardo controlled and directed the activities of coconspirators Alfred Pilotto and Angelo Fosco and others with respect to LIUNA and the Chicago Laborers District Council and its affiliated local unions and funds. In 1981, in the case of United states v Anthony Accardo, et al., No. 81-230-CR-JWK, in the United States District Court for the Southern District of Florida, Anthony Accardo was indicted along with then LIUNA General President Angelo Fosco and CLDC officials and affiliated fund trustees

34

 

Alfred Pilotto and James Caporale and others for RICO conspiracy involving the payment and receipt of kickbacks related to the sale of insurance plans to the CLDC Welfare Fund on which Pilotto and Caporale were trustees. Although Accardo was acquitted of the charges by the jury, substantial evidence was presented during the trial that a portion of this kickback money was received by Accardo as boss of the Chicago Outfit for approving and facilitating the kickback scheme. Accardo also directly participated in interfering with the rights of the members of LIUNA in the selection of their officers and officials in that he engineered the selection of Angelo Fosco as General President of LIUNA and improperly influenced the appointment of CLDC officers acceptable to organized crime, including Joseph Spingola. and his son-in-law, Ernest Kumerow.

h. JOSEPH JOHN AIUPPA, also known as "Joey O'Brien" and "Joey Doves," was, from at least 1978 to at least 1985, the boss of the Chicago LCN family. As the boss of the Chicago LCN family, Joseph Aiuppa controlled LIUNA local union affairs in Southern Illinois and in the area of St. Louis Missouri, as well as in Chicago, Illinois. Aiuppa also had a familial relationship with Dominick Christopher, former president of Local 2, and his son Michael Christopher, the secretary-treasurer of Local 2 until the recent imposition of trusteeship. In addition, Michael Christopher's son,

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Mike Christopher, has been employed as a business representative for the CLDC employee benefit funds since at least 1993. In 1986, in the case of United States v. De Luna, et al., No. 83-00124-07-W-8, in the United States District Court for the Western District of Missouri, Joseph Aiuppa was convicted along with co-conspirators, Angelo LaPietra and Joseph Lombardo, Sr. and other high-level LCN bosses of conspiracy to travel in interstate commerce in aid of racketeering, in violation of Title 18, United States Code, Sections 371 and 1952, arising out of the skimming of gambling proceeds from certain Las Vegas casinos which through the exertion of influence by Aiuppa had originally been financed by the Central States, Southeast and Southwest Areas Pension Funds associated with the International Brotherhood of Teamsters. Joseph Aiuppa was sentenced to serve twenty and one-half years in prison. Aiuppa' s conviction was affirmed in United States v. Cerone, 830 F. 2d 938 (8th Cir. 1987), cert. denied, 486 U.S. 1006 (1988) ("the Argent casino skimming case"). Joseph Aiuppa subsequently was permanently barred from influencing the affairs of the International Brotherhood of Teamsters in United States v. International Brotherhood of Teamsters, etc. et al., No. 88 Civ. 4486 (DNE) , in the United States District Court for the Southern District of New York. Aiuppa was released from prison in January 1996


36

 

 

and acted as an advisor to the Chicago Outfit until his death on February 24, 1997.

 

i. JAMES CAPORALE was, from at least 1970 to 1987, a CLDC executive board member and delegate from LIUNA Local 1, which historically was controlled by long-time president and Chicago Outfit street crew boss, Vincent Solano. During this time period, Caporale served as secretary -treasurer of the CLDC. He also held the position of business manager of the CLDC from 1982 until 1987 and served as a trustee on the CLDC pension and health and welfare Funds from 1970 at least until his conviction on RICO conspiracy charges in 1982. From at least 1970 until 1987, Caporale was an associate of the Chicago LCN family. CLDC Order at 52. In 1981, in the case of United States v. Anthony Accardo, et al., No. 81-230-CR-JWK, in the United States District Court for the Southern District of Florida, James Caporale along with then CLDC vice-president and Chicago LCN capo Alfred Pilotto was indicted for RICO conspiracy for agreeing to multiple acts of receiving kickbacks relating to influencing the sale of insurance plans to the CLDC welfare fund for which he was a union side trustee. The indictment alleged that a portion of the kickback money was paid to high level organized crime figures, including Chicago LCN boss Anthony Accardo, in return for their support of the kickback scheme. Caporale was convicted of these charges in 1982 and sentenced to a

37

 

 

twelve year term of imprisonment and ordered to forfeit all union positions pending appeal. Caporale's conviction was affirmed in United States v. Caporale, 806 F.2d 1487 (11th Cir. 1986), cert. denied, 463 U.S. 1021 (1967). Despite his conviction for looting the CLDC welfare fund of over $2 million and the court-ordered forfeiture of his union offices, Caporale was permitted to retain his position as s secretary-treasurer of the CLDC and in 1982 was unanimously appointed as business manager, positions he held until his incarceration in 1987. Caporale's. son-in-law, Vincent DiVarco, the son of convicted Rush Street crew member Joe "Cesar" DiVarco, as a CLDC delegate and recording secretary of Local 2 until the recent imposition of trusteeship. In addition, Caporale's grandson, Joe Gilloran, has been employed as a business representative of the CLDC employee benefit funds since at least 1990.

 

j. SAMUEL A. CARLISI, also known as "Black Sam" and "Wings," at various times from at least the late 1970'st headed the Carlisi street crew of the Chicago Outfit which controlled illegal gambling operations, loan sharking and other illegal activities in the Cicero, Melrose Park and Countryside area. Carlisi also operated as underboss of the Chicago LCN under Joseph Aiuppa. Following the conviction and incarceration of Aiuppa in 1986, Carlisi took over as acting boss in Aiuppa' s absence, a position he held at least until his own incarceration in 1992. In


38

 

1993, in the case of United States v. Carlisi, et al., No. 92 CR 1064, in the United States District Court for the Northern District of Illinois, Samuel A. Carlisi, his crew's underboss James J. Marcello and six upper echelon members of Carlisi's organized crime street crew were convicted of RICO conspiracy involving conducting an illegal gambling business, loan sharking, extortion and conspiracy to commit murder and arson. Carlisi was sentenced to serve twelve and one-half years' imprisonment but died in prison on January 1, 1997, while his conviction was on appeal. The convictions of Carlisi's co-defendants were affirmed in United States v. Zizzo, 120 F.3d 1338 (7th Cir. 1997). Carlisi directly participated in interfering with the rights of the members of LIUNA and the CLDC in that he engineered and improperly influenced the placement of Chicago LCN members and associates as well as certain of his relatives, including his nephews Nicholas and Dominick DiMaggio, in the CLDC and its constituent locals and the CLDC's Training Center and other affiliated funds.

k. ANGELO FOSCO was the General President of the LIUNA from October 1975 up to the date of his death on February 19, 1993. Fosco became the General President of LIUNA, succeeding his father, the late Peter J. Fosco, through the corrupt actions of LCN members, including Chicago LCN boss Anthony Accardo. Prior to his appointment as General President, Fosco had served as an International Vice-

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President and regional manager of" the Chicago Regional Office of LIUNA. Fosco's actions in these positions were controlled by Chicago LCN capo and long-time Local 1 president, Vincent Solano. In 1981, in the case of United State.5 v. Anthony Accardo, et al., No. 81-230-CR(JWK), in the United States District Court for the Southern District of Florida, Angelo Fosco was indicted along with Chicago organized crime boss Anthony Accardo and CLDC officials and affiliated fund trustees Alfred Pilotto and James Caporale and others for RICO conspiracy involving the payment and receipt of kickbacks related to the sale of insurance plans to the CLDC welfare fund on which Pilotto and Caporale were trustees. Although Fosco was acquitted of these charges by the jury, substantial evidence was presented during the trial indicating that illegal kickbacks were received by Angelo Fosco for exerting his influence as a high-level LIUNA official in furtherance of the kickback scheme. Following his acquittal in that case, Angelo Fosco appeared before the President's Commission on organized Crime on or about April 22, 1985, and, asserting his privilege against self incrimination, refused to answer the questions of the President's Commission on organized Crime relating to whether members of organized crime were involved in LIUNA in Chicago and New York. Fosco also refused to answer the questions of the President's Commission regarding his imposition of trusteeships against local unions and about


40

 

his associations with the LCN. Angelo Fosco was the third successive General President of LIUNA who carried membership in a CLDC local union and was only the fourth LIUNA General President since 1908.

 

1. ANGELO LaPIETRA, also known as "The Hook," a long-time. member of the Chicago Outfit, was, from at least 1983 until his incarceration in 1986, a capo and street boas of the 26th Street/Chinatown Street Crew, having succeeded longtime street boss Frank "Skids" Caruso, the father of coconspirators Bruno and Frank Caruso. In 1986, in the case of United States v. DeLuna, et al. No. 83-00124-07-W-8, in the United States District Court for the Western District of Missouri, Angelo LaPietra was convicted along with co-

conspirators Joseph Aiuppa and Joseph Lombardo, Sr., of conspiracy to travel in interstate commerce in aid of racketeering, in violation of Title 18, United States Code, Sections 371 and 1952, arising out of the skimming of gambling proceeds from certain Las Vegas casinos originally financed by the Central States Pension Fund of the International Brotherhood of Teamsters and sentenced to sixteen years' imprisonment. LaPIETRA s conviction was affirmed in United States v. Cerone, 830 F. 2d 938 (8th Cir. 1987), cert. denied, 486 U.S. 1006 (1988) ("the Argent casino skimming case"). Angelo LaPietra subsequently was permanently barred from influencing the affairs of the International Brotherhood of Teamsters in United States v.

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International Brotherhood of Teamsters, etc. et al., No. 88 Civ. 4486 (DNE) , in the United States District Court for the Southern District of New York. Angelo LaPietra named his brother James LaPietra as the interim crew boss but continued defacto control of the street crew while in prison. When released from prison, LaPietra acted as an advisor to Chicago Outfit until his recent death on March 28, 1999.

 

m . JOSEPH LOMBARDO, SR., also known as "The Clown", a long-tire member of the Chicago Outfit, was, at least until his incarceration in 1982, and capo and street crew boss of the Grand Avenue Crew. In 1982 , in the case of United States v. Allen M. Dorfman, et al., No. 81 CR 269.1 in the United States District Court for the Eastern District of Illinois, Joseph Lombardo, Sr., was convicted along with former International Brotherhood of Teamsters President Roy Williams and others of conspiracy, wire fraud and interstate transportation in aid of racketeering in connection with a scheme to bribe former United States Senator Howard Cannon in an effort to influence proposed trucking legislation. Lombardo was sentenced to serve 15 years in prison. Also in 1986, in the case of United States v. De Luna, et al., No. 83-00124-07-W-8, in the United States District Court for the Western District of Missouri, Joseph Lombardo, Sr., was convicted along with co-conspirators Angelo LaPietra and Joseph Aiuppa and

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others of conspiracy to travel in interstate commerce in aid of racketeering, in violation of Title 18, United States Code, Sections 371 and 1952, arising out of the skimming of gambling proceeds from certain Las Vegas casinos originally financed by the Central States Pension Fund of the International Brotherhood of Teamsters obtained through the influence of Lombardo and co-defendant Joseph Aiuppa. Lombard received a sentence of 16 years' imprisonment to run concurrent to his previous sentence. Joseph Lombardo's conviction was affirmed in United States v. Cerone, 830 F. 2d 938 (8th Cir. 1987), cert. denied, 486 U.S. 1006 (1988) ("the Argent casino skimming case") , Thereafter, Lombardo, along with other leaders of the Chicago LCN family and members of the LCN Commission, was permanently barred from influencing the affairs of the International Brotherhood of Teamsters in United States v. International Brotherhood of Teamsters, etc. et al. , No. 88 Civ. 4486 (DNE) , in the United States District Court for the Southern District of New York. Lombardo was released from prison in November 1992 and has acted in the capacity  as an advisor to the Chicago outfit since that time. Lombardo' son, Joseph Lombardo, Jr., was appointed to the position of secretary-treasurer of the CLDC in 1987, even though he was constitutionally ineligible at the time to hold that office.

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n. JAMES J. MARCELLO, also known as "Little Jimmy," from at least 1979 until his arrest and incarceration in 1992 acted as the underboss of the Carlisi Street Crew headed by Samuel Carlisi. With Carlisi's ascent to acting boss of the Chicago Outfit following the incarceration of Joseph Aiuppa in 1986, Marcello took over the role of boss of the Carlisi Street Crew and served as Carlisi's underboss of the Chicago Outfit. In 1993, in the case of United States v. Carlisi, et al., No. 92 CR 1064, in the United States District Court for the Northern District of Illinois, James Marcello, Samuel Carlisi and six upper echelon members of Carlisils organized crime street crew were convicted of RICO conspiracy involving conducting an illegal gambling business, loan-sharking, extortion and conspiracy to commit murder and arson. Marcello, was sentenced to serve twelve and one-half years in prison. His conviction was affirmed in United States v. Zizzo, 120 F.3d 1338 (7th Cir. 1997). Marcello, is the uncle of former CLDC delegate and Local 225 business manager John Galioto, who permanently resigned his membership in LIUNA following the recent imposition of a trusteeship over Local 225 and the filing of disciplinary charges against him by the GEB Attorney. In addition, Marcello's son, Rocco Marcello, has been employed as a field representative for the CLDC benefit funds since approximately 1994. Marcello has directly participated in interfering with the rights of the

44

members of LIUNA and the CLDC in that he has improperly influenced the placement of Chicago LCN members and associates as well as certain of his relatives in the CLDC and its constituent locals and the CLDC's Training Center and other affiliated funds.

0. MICHAEL MARCELLO is the brother of incarcerated former Chicago Outfit underboss James Marcello. Prior to the conviction and incarceration of James Marcello, Michael Marcello assisted James Marcello in the operation of the Carlisi street crew's gambling operations. Michael Marcello has since risen to assume the role as a lieutenant to Joe Andriacchi, the former brother-in-law of Joseph Lombardo, Sr. and a current Chicago LCN underboss in charge of the Elmwood Park and North Side Crews. During the course of his testimony at the CLDC trusteeship hearing, John Matassa, Jr., the former vice president of the CLDC, admitted that he regularly met with Michael Marcello on almost a weekly basis. Matassa Order at 33. Law enforcement surveillances confirmed a number of these meetings. Id. at 31-32.

 

p. JOHN MONTELEONE, also known as "Johnny Apes," a longtime member of the Chicago LCN family, has, since the recent conviction and incarceration of many high-level Chicago organized crime figures, risen to the position of underboss of the Chicago Outfit, assuming control of operations for the south side of Chicago and the south and

45

part of the western suburbs and replacing the 'Late Chicago LCN capo Vincent Solano as the "overseer" of the Laborers Union in Chicago. In 1985 in the case of United States v. Monteleone, No. 65 CR 40, in the United States District Court for the Eastern District of Wisconsin, John Monteleone was convicted of criminal contempt for his refusal in 1963 and 1984 to give testimony before a federal grand jury following a judicial grant of immunity, which had resulted in Monteleone's incarceration for a period of approximately three months for civil contempt. The grand jury at that time was investigating possible obstruction of justice charges in connection with Monteleone's 1979 refusal to testify before a previous grand jury concerning his knowledge of the 1977 contract bombing murder of an LCN associate in Milwaukee. Following his conviction by a jury on these charges, Monteleone was sentenced to a term of four years' incarceration. Monteleone's conviction was affirmed in United States v. Monteleone, 804 F.2d 1004 (7th Cir. 1986), cert. denied, 480 U.S. 931 (1987). Evidence presented during the course of the disciplinary hearing of John Matassa, Jr., the former vice president of the CLDC, established that Matassa continued to met with Monteleone even after the IHO's findings in the CLDC trusteeship proceeding that Monteleone and Alphonse Tornebene were top mob figures, including a two hour meeting immediately following a hearing before Judge Moran in connection with

46

 

the CLDC trusteeship. Matassa Order at 34. Monteleone has directly participated in interfering with the rights of the members of LIUNA in the selection of their officers and officials in that he has improperly influenced the selection of officers of the CLDC and its constituent locals as well as employees of the CLDC's affiliated funds, including the employment of his son, August Monteleone, by the CLDC's Training Center.

 

q. ALFRED PILOTTO was, from at least 1970 to 1982, the president of LIUNA Local 5, located in Chicago Heights, Illinois. From 1975 to 1982, Pilotto also served as a Special International Representative of LIUNA and vice-president of the Chicago Laborers' District Council and a trustee of the CLDC's welfare fund. From at least 1970 to 1982, Alfred Pilotto also was a capo in the Chicago LCN family. In 1982, in the case of United States v. Anthony Accardo, et al., No. 81‑230‑CR‑JWK, in the United States District Court f or the Southern District of Florida, Alf red Pilotto along with then CLDC secretary‑treasurer James Caporale was convicted of RICO conspiracy by agreeing to multiple acts of receiving kickbacks relating to the sale of insurance plans to LIUNA‑related benefit funds. Pilotto reportedly was the target of a botched organized crime hit approximately a month after he was indicted in that case. On September 14, 1982, Pilotto was sentenced to serve twenty years in prison and shortly thereafter resigned his

 

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positions in the CLDC and in Local 5. Pilotto I s conviction was affirmed in United State‑­v. Caporale, 806 F. 2d 1487 (11th Cir. 1986), cert. denied, 483 U.S. 1021 (1987).

 

Pilotto died on July 20, 1999.

 

r. FRED B. ROTI, a politically powerful former Chicago First Ward alderman, is the uncle of former CLDC president/ business manager Bruno Caruso and former CLDC official and Pension Fund Director Frank "Toots" Caruso. In 1992, in the case of United States v. Pat Maxey, et al. 90 CR 1045 (N.D. Illinois), Fred Roti was convicted of RICO conspiracy, bribery and extortion regarding the fixing of criminal cases in the Circuit Court of Cook County, including murder cases involving organized crime members or associates and was sentenced to 48 months' imprisonment. Roti was released from prison in 1997. As First Ward alderman, Roti was a key political patronage boss and, along with his co‑defendant Pat Marcy, a fixer for the Chicago Outfit. Roti has directly participated in interfering with the rights of the members of LIUNA in the selection of their officers and officials in that he has improperly influenced the selection of officers of the CLDC and has been responsible for the pervasive hiring of LaPietra crew members and associates at the Chicago streets and sanitation department. Roti is a made member of the Chicago Outfit.

 

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s.       JOHN SERPICO is a longtime organized crime associate of the Chicago LCN family. Serpico has served as an International vice-president of LIUNA and the assistant to the president under former LIUNA General President Angelo Fosco as well as trustee on various LIUNA affiliated International employee benefit funds. Following Fosco's death in 1993, Serpico was de8ignated by newly appointed General President Arthur A. Coia as chairman of the influential General Executive Board hearing panel which hears and makes recommendations regarding all appeals, charges, trusteeships and other disciplinary matters within the judicial power of the General Executive Board. Serpico was also president and business manager of LIUNA Local 8 in Chicago. While Serpico's local was in the territorial jurisdiction of the Chicago District Council, Local 8, in direct contravention of specific provisions of the LIUNA constitution, was permitted to affiliate with the Serpico controlled Central States Joint Board, an amalgamation of Local 8 and various local unions of the International Union of Allied Novelty and Production Workers, AFL-CIO. In April 1985, John Serpico appeared before the President's commission on Organized Crime. While Serpico acknowledged during his testimony that he personally knew and socialized with numerous individuals publicly identified as associated with organized crime, including former Chicago outfit boss Joseph Aiuppa and street crew bosses Vincent Solano, Fifi

49

Buccieri, James "Turk" Torello, Joseph Feriolla and Ernest "Rocky" Infelise, he denied that either he or his union was dominated or influenced by organized crime. On January 18, 1995, John Serpico was suspended from his positions on LIUNA's General Executive Board and subsequently charged under the then newly enacted Ethics and Disciplinary Procedure with barred conduct for knowing association with members and associates of organized crime and with permitting such persons to exercise control and influence in the affairs of LIUNA. Serpico resigned his International positions prior to the completion of his disciplinary hearing on these charges and agreed to step down from his local union offices effective January 1996. From the date of his suspension until his final resignation from all positions with LIUNA over 85 percent of the membership of Local 8 was "transferred" without notice to LIUNA to various locals of the organized crime influenced Central States Joint Board controlled by Serpico. On August 4, 1999, in the case of United States v John Serpico, et al., No. 99 CR 570, in the United States District Court for the Northern District of Illinois, John Serpico was charged in an 11-count indictment along with another former LIUNA Local 8 official with racketeering, fraud and other offenses, alleging that they controlled the affairs of the Central States Joint Board, of which Local 8 was affiliated, for their personal benefit through a

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pattern of criminal activity that included multiple acts of nail fraud, bank fraud, labor kickbacks, money laundering and the illegal structuring of currency transactions. During his tenure with LIUNA, the decisions and actions of John Serpico with respect to LIUNA were influenced by organized crime. Despite his resignation from LIUNA, disciplinary charges have been filed against Serpico and another former Local 8 officer seeking their permanent bar from LIUNA membership for obstructing LIUNA's investigation into the affairs of Local 8.

t.        VINCENT SOLANO was, from at least 1977 to the date of his death on November 16, 1992, a capo in the Chicago LCN family in charge of illegal gambling and vice activities on the near North side of Chicago. He also was the long time president and business agent of LIUNA Local I and from the 1970's until his death in 1992 served as a delegate to the CLDC and the CLDC's coordinator of committees as well as a trustee to the affiliated pension fund. Beginning in approximately 1982, Vincent Solano had the responsibility, on behalf of the LCN, to control co-conspirator Angelo Fosco with respect to Angelo Fosco's actions, decisions, and other matters relating to his service as General President of LIUNA. Vincent Solano appeared before the President's Commission on Organized Crime on April 22, 1985, and, asserting his privilege against self incrimination, refused to answer the questions of the

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President's Commission on Organized Crime relating to whether members of organized crime had influence over LIUNA matters in Chicago. Solano also refused to answer the questions of the President's Commission regarding his associations and conversations with Ken Eto, an LCN associate of Solano I s who was the target of an unsuccessful Mob hit ordered by Solano. In 1987, Solano arranged for the appointment of his son, Anthony Solano, as administrator of the newly created Chicago Laborers' Training Center. Since its inception, the Training Center has provided employment for a number of relatives of Chicago Outfit members, including a nephew of coconspirator Sam Carlisi and the sons of current Chicago LCN bosses John Monteleone and Alfonse Tornebene.

 

U. ALFONSO TORNEBENE, a cousin of former Chicago Outfit boss Sam Carlisi, is a long-time organized crime -member and current capo of the former Carlisi street crew and top lieutenant to Outfit underboss John Monteleone. Evidence presented during the course of the disciplinary hearing of John Matassa, Jr., the former vice president of the CLDC, established that Matassa had met with Tornebene on various occasions and continued to met with him even after the IHO's findings in the CLDC trusteeship proceeding that John Monteleone and Tornebene were top mob figures, including a two hour meeting immediately following a hearing before Judge Moran in connection with the CLDC trusteeship.

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Matassa Order at 34. Tornebene has directly participated in interfering with the rights of the members of LIUNA in the selection of their officers and officials in that he has improperly influenced the selection of his son, Roy Tornebene, as an employee of the CLDC's Training Center.

 

VIII

CORRUPTION OF THE CHICAGO DISTRICT COUNCIL

 

22.      As set forth in paragraph 11 above, the Chicago Laborers District Council is the central governing body of the 21 constituent local unions in the greater Chicago metropolitan area and has supervisory powers on all matters relating to the Locals. The CLDC enters into collective bargaining agreements on behalf of its constituent local unions with private employers and the City of Chicago and also holds and controls the CLDC's $1.5 billion employee benefit funds through the appointment of union‑side fund trustees. The rank and file do not directly participate in the process of governing the district council; nor does the rank and file have the right to approve or reject actions taken by the CLDC, including the negotiation of collective bargaining agreements. Thus, the officers of the Chicago Laborers District Council are entrusted with, and have ultimate power over, the fundamental contractual and statutory rights of the union members.

 

2 3.     For decades, officers and delegates to the Chicago Laborers District Council from certain local unions, specifically Locals 1, 2, 5, 225, 1001 and 1006, have abused this trust and power. These

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CLDC officials, sore of whom are themselves members or associates of organized crime, have assisted and facilitated the LCN's domination and control of the CLDC and its constituent locals and affiliated funds through a pattern of abuse, including: (1) the avoidance of elections through uncontested nominations; (2) repeated transfer of power through the filling of vacancies between elections; and (3) the longstanding failure to address allegations of organized crime influence within the CLDC and to investigate and discipline union corruption involving the CLDC, its members and its constituent locals and affiliated funds. By affirmative misconduct, by failure to fully carry out their fiduciary obligations and by their deliberate refusal to exercise the CLDC's supervisory powers, these officers and delegates of the Chicago Laborers District Council created an environment in which decisions regarding the CLDC and its constituent locals and affiliated funds were made by members of organized crime and fostered a regime of corruption, extortion and intimidation at all levels of the union throughout the Chicago metropolitan area. This regime, as stated below, rested on a pattern of racketeering activity in violation of RICO.

IX

THE DOMINATION AND CONTROL OF THE

CHICAGO LABORERS' DISTRICT COUNCIL BY THE LA COSA NOSTRA

24. At various times relevant to this complaint, the Chicago organized crime family of the LCN, an organized crime group that operated in the Northern District of Illinois and elsewhere, infiltrated, and sought to control and dominate the Chicago

 

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Laborers District Council, its constituent local unions and the affiliated trust funds. By virtue of their relationship with various officers, delegates and agents of defendant Chicago Laborers District Council -- certain of whom have themselves been members or associates of organized crime -- the co-racketeers identified in paragraph 21 above endeavored to influence, dominate and control and conduct the affairs of the enterprises defined in paragraphs 27 and 40 below through the manner and means, among others, set forth below.

a. Selection of Officers to Control LIUNA: LCN control of the Chicago Laborers District Council and other elements of LIUNA is demonstrated by its influence in the selection of officers at every level of the union as illustrated by the facts set forth below:

(1) Outfit Selection of international Union Officials:
(a) The LIUNA Draft Complaint: In the fall of 1994, the Department of Justice sent a copy of a draft civil RICO complaint against LIUNA to officials of the international union. The Department informed the union that the case would be filed in United States District Court for the Northern District of Illinois if the officials did not enter into an agreement whereby corruption in LIUNA (a) The LIUNA Draft Complaint: In the fall of 1994, the Department of Justice sent a copy of a draft civil RICO complaint against LIUNA to officials of the international union. The Department informed the union that the case would be filed in United States District Court for the Northern District of Illinois if the officials did not enter into an agreement whereby corruption in LIUNA was eliminated. Venue for the suit in Chicago was based on the fact, among other matters, that the Chicago LCN

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family historically had controlled the highest officer in the union, the General President.

(b) The General President: In 1926, the late Joseph V. Moreschi was elected as General President of LIUNA. Since that time there have been only three other General Presidents of LIUNA: the late Peter J. Fosco, General President of LIUNA from 1968 until his death in 1975; Peter J. Fosco's son, Angelo Fosco, who was the General President of LIUNA from October 1975 until his death in February 1993; and Arthur Armand Coia, the current General President, who was elected General President by the General Executive Board upon the death of Angelo Fosco. The three former General Presidents were members of LIUNA local unions in Chicago, Illinois, which have historically been controlled or influenced by organized crime. Joseph Moreschi was a member of LIUNA Local 1; Peter J. Fosco and Angelo Fosco both were members of Local 2 of LIUNA.

(c) The Death of Peter Fosco: In the summer of 1975, it became known that Peter Fosco was ill and might soon die. In order to maintain control over the affairs of LIUNA, co-conspirator Anthony Accardo, also known as "Joe Batters,"

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who was at that time either the boss or the consigliere of the Chicago LCN family, ordered that co-conspirator Angelo Fosco, Peter Fosco's son and then the regional manager of the Chicago Regional Office of LIUNA, would become the General President of LIUNA. These orders were followed by Angelo Fosco and others because Anthony Accardo was a leading figure in the Chicago LCN family.

 

(d) The Selection of Angelo Fosco: Peter Fosco died in October 1975. At a meeting of the General Executive Board held at the Rodeway Inn in Chicago, Illinois for the purpose of selecting the new General President, the name of Angelo Fosco was placed in nomination by the late Michael Lorello, then an International vice-President and the regional manager of the LIUNA's New York-New Jersey Regional Office and an associate of the Genovese LCN family. Accardo arranged to have a Board member flown in at the last moment to attend this meeting so that the deciding vote could be cast for Angelo Fosco.

(e) Arthur E. Coia: In the middle 19801s, Arthur E. Coia began an effort to challenge Angelo Fosco for reelection as General President

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of LIUNA. Coia undertook this campaign because he lacked respect for Fosco and believed that Fosco's conduct harmed LIUNA and the LCN's control of LIUNA. Shortly before the 1986 General Convention of LIUNA, Arthur E. Coia met with Joseph A. Todaro, Sr. , the boss of the Buffalo LCN family, who advised Arthur E. Coia that he should abandon his effort to challenge Fosco because the Chicago LCN family would not yield its control of the position of the General Presidency of LIUNA. In addition, shortly before the 1986 General convention of LIUNA, Arthur E. Coia was instructed by unknown LCN figures to stop his effort to challenge Fosco, and he complied. Angelo Fosco was reelected General President of LIUNA without opposition at the 1986 General Convention.

 

(f) Arthur A. Coia: In 1989, Arthur A. Coia sought to take his father's place as Secretary Treasurer of LIUNA. When Arthur A. Coia sought Angelo Fosco's approval for this maneuver, Fosco stated that the move was fine with him, but that Coia needed to obtain the approval of John Serpico, a member of the General Executive Board of LIUNA and a native of Chicago. Serpico arranged for a meeting in Chicago where Coia met

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with Vince Solano, the business manager of Local 1 and also the boss of the North Side LCN crew. Solano informed Coia that he could take his father's place as the number two man in LIUNA, but that the Chicago Outfit controlled the presidency of the international.

(g) "We made you...": The control and domination by the LCN of the General Presidency of LIUNA is best illustrated by the following statement made to then General President Angelo Fosco by Chicago organized crime street crew boss and co-conspirator Alfred Pilotto, referred to at paragraph 21 q. above: "We made you General President, we made your father General President before you and we made Moreschi General President before him. We can unmake you General President just as fast." See Exhibit B, CLDC Order at 49.

(2) Selection of Chicago District Council and Local Officials; 

(a) CLDC Officers and The Outfit: In June 1997, when LIUNA's GEB Attorney notified the CLDC of his intent to place the CLDC into trusteeship, the following members or associates of the Chicago organized crime family were the principal officers of the Chicago Laborers

 

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District Council: John "Pudgy" Matassa, Jr., was CLDC vice president and trustee of three affiliate funds; Bruno Caruso was CLDC president and business manager and trustee of two affiliated funds; Joseph A. Lombardo, Jr., the son of co-conspirator and Chicago LCN capo Joseph A. Lombardo, Sr., was CLDC secretary treasurer and trustee of four affiliated funds; Leo Caruso, was CLDC sergeant-at-arms and a trustee of an affiliate fund; James DiForti was the coordinator of committees to the CLDC and Frank M. "Toots" Caruso held the position of director of the CLDC affiliated pension fund.

(b) The Trusteeship Hearing: Evidence presented at the CLDC trusteeship hearing demonstrated that no less than 14 members and associates of organized crime in Chicago have at various times served as officers of or delegates to the CLDC and/or as trustees, officers or employees of the CLDC affiliated employee benefit funds. In addition, at least 11 other individuals who are close relatives of Chicago organized crime members or associates were then serving or had previously served as officers of or delegates to the CLDC and/or as trustees, officers or

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employees of the CLDC affiliated employee benefit funds.

(c) Pilotto and Caporale: Co-conspirator Alfred Pilotto, a made member of the Chicago LCN and boss of the Chicago Heights crew, served as vice-president of the CLDC and a trustee of an affiliated fund until 1982 when he resigned following his conviction for participating in a conspiracy to loot millions of dollars from the affiliated welfare fund on which he served as a trustee. James Caporale, an associate of the Chicago LCN, served as business manager and secretary-treasurer of the CLDC and as a trustee to two affiliated funds until 1987 when, after a lengthy appeal process, he was incarcerated for participating in a conspiracy together with coconspirator Alfred Pilotto and others to loot millions of dollars from the affiliated welfare fund on which he also served as a trustee. Caporale was replaced as business manager by then CLDC President Ernest Kumerow, the son-in-law of co-conspirator Anthony Accardo, the boss of the Chicago LCN family, and as secretary treasurer by Joseph Lombardo, Jr., the son of co-conspirator and Chicago LCN capo Joseph A. Lombardo, Sr. Caporale's son-in-law, Vincent

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DiVarco, the son of Joe "Ceasar" DiVarco, a convicted felon and member of the Chicago LCN North Side crew, until recently served as a delegate to the CLDC from Local 2. In addition, Joe Gilloran, the step son of Vince DiVarco and grandson of Caporale, has been employed as a field representative for the CLDC employee benefit funds since 1990.

(d) The Palermos*. Dominick Palermo, a high level member or associate of the Chicago Heights crew under co-conspirator Alfred Pilotto and business agent for Local 5, and Frank DeMonte, a made member of the Chicago LCN and an officer in Local 1, served as delegates to the CLDC. In addition, positions with the CLDC or its affiliated funds were held at various times by Chicago LCN members or associates including Dominick DiMaggio, a nephew of Chicago Outfit boss Sam Carlisi, Salvatore Gruttadauro, Joseph Mazza, Nicholas Guzzino and Michael Palermo, the brother of Dominick Palermo and son-in-law of former Chicago Outfit boss Anthony Accardo.

b. Cronyism and Nepotism in the CLDC: one objective of the LCN in perpetuating its control of labor organizations is to ensure that its members, associates and relatives have ostensibly legitimate employment, either as a source

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of actual income or as a cover for work done on behalf of the LCN. More importantly, however, nepotism and cronyism in the selection of officials and the hiring of employees ensures that "cooperative" individuals are in positions of authority to make hiring, promotion and operational decisions of benefit to the LCN. The creation and continuation of such "divided loyalties" is essential to maintaining and perpetuating the illicit control of a labor organization by the LCN. As recognized by the court in United States v. International Brotherhood of Teamstezs, Chauffeurs, Warehousemen & Helpers, 792 F. Supp. 1346, 1353 (S.D.N.Y.), aff1d, 981 F-2d 1362 (2d Cir. 1992): "In any given situation, an officer with ties to LCN will be tempted to place the interests of organized crime ahead of the welfare of the general membership." The following examples illustrate the use of nepotism and cronyism to achieve those objectives in the CLDC:

(1) The Kumerows: Ernest Kumerow is a past president and business manager of the Chicago Laborers District Council and, until his retirement in 1994, was the president and business manager of LIUNA Local 1001, the County and Municipal Employees', Supervisors' and Foremen's Union, which represents the city of Chicago Streets and Sanitation waste collectors, asphalt workers and other laborers. Kumerow is the son-in-law of co-conspirator and late Chicago LCN boss, Anthony

63

Joseph Accardo. Craig Kumerow, the son of Ernest Kumerow and the grandson of co-conspirator Anthony Joseph Accardo, is a field representative for Local 1001 and has served as a delegate to the CLDC since 1989. Michael Palermo, another son-in-law of coconspirator Anthony Accardo, is the vice-president of Local 1001 and has served as a delegate to the CLDC since 1984. Gorton Lund, who recently retired as supervisor of field representatives of the CLDC employee benefit funds, is Ernest Kumerow's brother in-law.

(2) Joseph A. Lombardo, Jr.: Joseph A. Lombardo, Jr., the son of co-conspirator Joseph A. Lombardo Sr., a capo in the Chicago Outfit, was the pre-trusteeship secretary-treasurer of the Chicago Laborers District Council and a trustee of four funds affiliated with the CLDC. Lombardo, Jr. also served as a business agent for the CLDC from at least 1983 until his appointment as CLDC secretary-treasurer in 1987, succeeding James Caporale, who went to prison. Lombardo's "election" to succeed Caporale was unanimous even though he was ineligible to hold the position since he was not then a delegate to the CLDC as required by Article VI of the Uniform District Council Constitution. Since the imposition of the CLDC trusteeship, Lombardo has been elected unopposed

64

to the position of vice president and CLDC delegate from Local 1, even though he again may have been ineligible to hold such office under Article V, section 4 of the LIUNA Uniform Local Union Constitution.

(3) The Carusos: As referred to above, the Caruso family has a long tradition of mixing CLDC employment with Mob ties. Both of former Chicago LCN capo Frank "Skids" Caruso's sons, Bruno and Frank "Toots" Caruso, have held important officer positions with the CLDC and its affiliated employee benefit funds as well as with Locals 1001 and 1006. The cousin of Bruno and Frank, Leo Caruso, an officer of Local 1006, took the place of Frank Caruso as CLDC sergeant-at-arms when "Toots" needed to escape the limelight of the CLDC for the safety of an administrative position on the CLDC pension fund. Another cousin of Bruno's and Frank's, Nicholas Gironda, has been a CLDC delegate since 1993. and has held positions at Local 1001 for many years. (4) John "Pudgy" Matassa: As referred to above, another cousin of the Carusos', John "Pudgy" Matassa, served as the vice president of the CLDC and president/business manager of Local 2. Matassa's father-in-law, Maurice "Moll Tallon was employed from 1991 until his recent retirement on July 1, 1999, as

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a field representatives for the CLDC employee benefit funds.

(5) The Solanos; In 1987, co-conspirator Vincent Solano, a capo in the Chicago LCN family and long-time president and business agent of LIUNA Local 1, used his influence to establish the Construction and General Laborers' District Council of Chicago and vicinity Training Fund and to appoint his son Anthony Solano as administrator of the Chicago Laborers' Training Center in Carol Stream, Illinois. At the time of his son's appointment by the Training Fund trustees, Vincent Solano had been publicly identified by the President's Commission on organized Crime as a territorial boss of the Chicago Outfit and as the man who ordered the ill-fated murder attempt on organized crime associate Ken Eto.

(6) The DiMaggios: Nicholas DiMaggio, referred to in sub-paragraph c. (1)) of this paragraph below, was, at the time of his death in October 1994, the chief instructor of the Chicago Laborers' District Council Training Center, Carol Stream, Illinois, and a former business agent and vice president of Chicago Local 225. DiMaggio's chief assistant at the training center was his brother-in-law, Tony Hocin, who held that position until his death in January 1993. Dominick DiMaggio, Nicholas' brother, served as vice

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president of LIUNA Local 2 and a delegate to the CLDC until the recent imposition of an emergency trusteeship over Local 2. DiMaggio was initially employed as a field representative for Local 2 in 1990 on the recommendation of business manager John Matassa and officials of the CLDC. The DiMaggios are the nephews of co-conspirator Samuel Carlisi, who was the boss of the Chicago LCN family at the time the Dimaggios obtained their various positions with the CLDC and its affiliated local unions and funds.

(7) Vincent DiVarco: Vincent DiVarco was a CLDC delegate and recording secretary of Local 2 until the recent imposition of an emergency trusteeship over Local 2. He also held the position of business representative of Local 2 during 1988 and 1989. Vincent DiVarco is the son of convicted felon Joe "Cesar" DiVarco, a crew boss under Vincent Solano in the 1970s and 1980s. Vincent DiVarco is also the son in-law of LCN associate and former Chicago Laborers' District Council official James Caporale. In addition, DiVarco's step son, Joe Gilloran, has been employed as a field representative for the CLDC employee benefit funds since 1990.

(8) John Galioto: John Galioto was the business manager for Local 225 and a delegate to the CLDC between 1995 and 1998, when he was removed from his

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position by virtue of a trusteeship imposed upon Local 225 in March 1998. (See Exhibit 1) . Internal disciplinary charges were subsequently brought against Galioto charging a number of violations including embezzlement of union funds, which resulted in Galioto agreeing to permanently terminate his membership rights in LIUNA. He is the nephew of co-conspirator James Marcello who served as an underboss in the Chicago outfit reporting to then Mob boss Sam Carlisi. (9) The Foscos: Prior to becoming General President of LIUNA, co-conspirator Angelo Fosco had been an International vice president and the regional manager of the Chicago Regional Office of LIUNA. In 1975, Angelo Fosco was succeeded as Chicago regional manager by his son, Peter J. Fosco, who occupied this office from 1975 to 1985, when he resigned. He was later appointed by his father to be the regional manager for the New Orleans Region. Peter J. Fosco was succeeded as regional manager for the Chicago Region by Joseph Mazza, Angelo Fosco's chauffeur, who was controlled with respect to his LIUNA duties by co-conspirator Vincent Solano, a capo in the Chicago LCN family. In 1993, Joseph Mazza was named to be assistant director of the Hazardous Waste Division of LIUNA. He was replaced as regional manager for the Chicago Region of LIUNA by Terrence Healy, the son-in-law of Angelo

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Fosco, who previously had been the assistant regional manager. Angelo Fosco's stepson, Bruce Monaco is a LIUNA international representative and his grandson Peter A. Fosco also holds a position with LIUNA. Peter J. Fosco, now an International vice president and regional manager of the South Central Region, is currently charged under the LIUNA Ethics and Disciplinary Code with financial misconduct, breach of fiduciary duty and obstruction of the reform process.

c;. Appointment and Retention of Corrupt Individuals to Control the CLDC: Persons with known criminal histories or organized crime ties have repeatedly been appointed to union offices and union employment and corrupt officials have been allowed to remain in office, as is illustrated by the following examples:

(1) Nicholas DiMaggio: In 1986, in the case of United States v. Nicholas Dimaggio, No. Cr. 85-00067 01, in the United States District Court for the Western District of New York, Nicholas DiMaggio, then training director of LIUNA Local 210 in Buffalo, New York, was convicted of willfully subscribing false income tax returns, in violation of Title 26, United States Code, Section 7206(l). On August 25, 1986, DiMaggio was sentenced to serve one year and one day in prison, with the sentence suspended and the


69

defendant placed on probation for one year. After moving to Chicago, Illinois, DiMaggio, a nephew of then Chicago organized crime boss Sam Carlisi, was hired as a business agent of LIUNA Local 225 and, until his death in October 1994, was the chief instructor at the Chicago Laborers' District Council Training Center, Carol Stream, Illinois. Nicholas Dimaggio also is the nephew of Roy Carlisi, a former capo of the Buffalo family of the LCN.

(2) Francis J. DeMonte: In 1982, the late Francis J. DeMonte, also known as "Babe," then an assistant business agent of LIUNA Local 1 in Chicago, Illinois and an associate of the Chicago LCN family, was incarcerated for contempt of court for failing to respond to questions concerning gambling and loan sharking activities before a special grand jury empanelled in the United States District Court for the Northern District of Illinois. Co-conspirator Vincent Solano, then president of LIUNA Local 1, permitted DeMonte to retain his position in Local 1. Following his release from custody upon the expiration of the grand jury in March 1983, DeMonte assumed the positions of recording secretary for Local I and delegate to the CLDC, which he held until his death in 1992. DeMonte also served as a LIUNA special international representative. DeMonte held these

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positions despite his indictment in December 1963, along with Joseph "Caesar" DiVarco, a high-ranking Chicago LCN family member and a close associate of coconspirator, Vincent Solano, and John Matassa, Jr., the pre-trusteeship president of LIUNA Local 2 and vice president of the Chicago Laborers' District Council, for extortion and conspiracy to extort monthly "protection" payments from near north side Chicago bar and lounge owners and his public identification in both a 1983 Senate Subcommittee Report and the 1995 PCOC Report as a member of the North Side Crew of the Chicago Outfit. (3) James Caporale and Alfred Pilotto: In 1982, in the case of United States v. Anthony Accardo, et al., No. 81-230 CR-JWK, in the United States District Court for the Southern District of Florida, James Caporale, secretary-treasurer of the LIUNA Chicago District council, a special international representative of LIUNA, and an associate of the Chicago LCN family, was convicted with Chicago Outfit capo Alfred Pilotto of RICO conspiracy and receiving welfare plan kickbacks, in violation of Title 18, United States Code, Sections 1954, 1962(d), and 1963. On September 14, 1982, Caporale was sentenced to serve twelve years in prison. Caporale's conviction was affirmed in United States v. Caporale, 806 F.2d 1487 (11th Cir. 1986),

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cert. denied, 483 U.S. 1021 (1987). After being convicted, Caporale was permitted to retain his position as secretary-treasurer of the CLDC and was further appointed as business manager, positions he held until 1987, when he entered prison. Caporale was replaced as CLDC business manager on his own recommendation by Ernest Kumerow, the son-in-law of Chicago outfit boss Anthony Accardo, and as secretary treasurer by Joseph A. Lombardo, Jr., the son of Chicago LCN family capo, Joseph A. Lombardo, Sr.

d. Lack of Democratic Practices: The Chicago Outfit has been able to control the Chicago Laborers' District Council on many levels. Over at least the past 25 years, the significant leadership positions in the CLDC have been held exclusively by delegates from only six of the 21 local unions within the CLDC. As demonstrated in paragraphs 17 and 21 above, each of these CLDC officials have had discernible ties to organized crime in Chicago. Significantly, over this time period there has never been a contested election for any of these leadership positions. Instead, the principal offices of the CLDC have been held by and transferred to members or associates of organized crime or their close relatives through uncontested nominations and unanimous appointments. These transfers of power are clearly illustrated in the CLDC time line chart and events listing submitted by the GEB Attorney during the

72

course of the trusteeship hearings, copies of which are attached as Exhibit L and incorporated by reference herein. Retirements or other departures from the CLDC Executive Board have occurred only mid-term in the election cycle, thereby enabling a series of LCN-dominated executive boards to appoint replacement officers "acceptable" to organized crime. These practices were never challenged by the other members of the CLDC Executive Board or by any of the CLDC delegates despite their constitutional authority and responsibility to do so. This pattern of abuse coupled with the longstanding failure of CLDC officers and delegates to address allegations of organized crime domination of the CLDC, its constituent locals and affiliated funds has enabled the Chicago LCN family to maintain a virtual stranglehold on the CLDC and its affiliated funds for almost three decades. The following examples, among others, illustrate the pattern of undemocratic practices within the CLDC:

(1) Appointment of Ernest Kumerow (1982): On June On June 31,1981, co-conspirator Anthony Accardo, then the boss of the Chicago LCN family, was indicted along with CLDC officials James Caporale and co-conspirator Alfred Pilotto and others for RICO conspiracy involving the looting of millions of dollars in illegal kickbacks from the CLDC's welfare fund, a portion of which was alleged to have been received by Accardo as payment

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for supporting the kickback scheme. While this indictment was pending, Anthony Accardo' s son-in-law, Ernest Kumerow, was unanimously appointed, between elections, as both president of the CLDC and as a trustee of the CLDC's welfare fund, the very fund that was the subject of the indictment, to replace Joseph Spingola, who previously had been placed in office due to the intervention of Anthony Accardo.

(2) Retention and Promotion of James Caporale(1982): On June 29, 1982, CLDC secretary-treasurer James Caporale was convicted along with co-conspirator Alfred Pilotto and others of looting millions of dollars in illegal kickbacks from the CLDC's welfare fund. Despite an order by the trial court forfeiting Caporale's union offices, the CLDC unanimously promoted Caporale to the position of business manager, replacing the retiring Joseph Spingola, who himself had been appointed in the late 1960's to fill a CLDC vacancy on the instructions of then Chicago LCN boss Anthony Accardo, and permitted him to retain the position of secretary-treasurer of the CLDC, offices he held until his incarceration in 1987.

(3) Appointment of Frank Caruso (1982): On On December 161 1982, Frank Caruso was indicted on charges that he participated in the collection of an extortionate extension of credit or "juice loan" made by the

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Chicago LCN. Caruso was identified in the indictment as a member of organized crime. While under indictment on the charges, Frank Caruso was unanimously selected by the delegates to be the sergeant-at-arms of the CLDC, a position that he held until April 1995, when he resigned rather than be deposed by LIUNA's internal reform officers.

(4) Operation of the CLDC (1983-1987): From 1983 to 1987, delegates and officers of the CLDC, including Bruno Caruso, Frank Caruso, John Matassa, Jr. and Ernest Kumerow, permitted James Caporale to retain the offices of business manager and secretary-treasurer, the CLDC's top two elected positions, and collect over $500,000 in salary despite his felon conviction for conspiring to loot the CLDC's welfare fund on which he had served as a trustee. During this period, Caporale participated in the selection and appointment of a number of high ranking CLDC officials with ties to organized crime, including Chicago LCN member Frank Caruso as CLDC sergeant-at-arms and Dominick DiMaggio, the nephew of co-conspirator Sam Carlisi, as a CLDC field representative. In addition, in 1987, shortly before his incarceration on his 1982 RICO conspiracy conviction, Caporale resigned his positions with the CLDC and orchestrated the selection of his successors to the CLDC's top two elected offices. At a special

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executive board meeting, Caporale, exercising the historical prerogative of the business manager to name his successor, sought the appointment of Ernest Kumerow, the son-in-law of Chicago LCN boss Anthony Accardo, as business manager, which was unanimously approved by the executive board. Kumerow, in turn, then made a motion to appoint Joseph Lombardo, Jr., the son of convicted Chicago LCN street crew boss Joseph Lombardo, Sr., as secretary-treasurer, who despite being ineligible to hold this position, was unanimously approved by the CLDC executive board. Kumerow ultimately served as a trustee on three of the affiliated funds and Lombardo, Jr. served as a trustee on four of the affiliated funds.

(5) Transfer of Coordinator Of Committees Position (1992-1997): The position of "Coordinator of Committees' of the CLDC by tradition has been a designated organized crime position which over the years has been transferred from one member of the Chicago Outfit to another. Co-conspirator Vincent Solano, street boss of the North Side crew, held this position from at least 1972 until his death in 1992. Solano was succeeded as coordinator of committees by John Matassa, Jr., a made member of the Chicago LCN fami1y who replaced Solano as a street boss for the North side crew. In 1994, when Matassa was appointed

 

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to the position of vice-president of the CLDC, he resigned as coordinator of committees and was replaced by James DiForti, another member of the Chicago LCN, who was later forced to resign from this position in July 1997 following his indictment for an organized crime related murder. Following the resignation of James DiForti, the CLDC, through secretary-treasurer Joseph Lombardo Jr., sought to have DiForti replaced in this position with Frank Colianni, a long-time Local 1 official and close associate of former Local 1 business manager /president and Chicago LCN street crew boss Vincent Solano. In view of Colianni's background, LIUNA's GEB Attorney refused to approve this appointment on the grounds that it would be inconsistent with the purposes of the Ethics and Disciplinary Procedure and the Ethical Practices Code.

 (6) Appointment of John Matassa, Jr. (1992-1994): During John Matassa's ascension in the Chicago LCN family leadership following the death of coconspirator Vincent Solano Matassa was unanimously appointed to fill vacancies in the following positions in the CLDC: CLDC coordinator of committees; CLDC vice-president; and trustee of the CLDC's affiliated pension fund, political league and training fund.

(7) Appointment of Bruno Caruso (1994): In August 1994, Ernest Kumerow's nomination to continue as

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president and business manager of the CLDC was uncontested and he was unanimously approved for another f our year term. However, approximately one month into his new tern of office, Kumerow retired. This resignation coincided with the death of his father-in-law Anthony Accardo. Kumerow thereafter nominated Chicago LCN associate Bruno Caruso to succeed him as president and business manager of the CLDC, and Caruso was then unanimously appointed outside the election process to hold those offices for the balance of the four year term. After taking office as CLDC president and business manager, Bruno Caruso also was unanimously appointed as a trustee to both the CLDC welfare fund and the Laborers I political league.

(8) Resignation of Frank Caruso and Appointment of Leo Caruso (1995): In 1995, Frank Caruso, the son of former Chicago LCN capo Frank "Skids" Caruso and himself a member of the 26th Street crew of the Chicago LCN, "retired" from his positions as president and business manager of Local 1006, CLDC delegate and sergeant-at-arms and trustee of the CLDC pension f und, the day following his receipt of notice from the LIUNA GEB Attorney to take his sworn deposition concerning his affiliation with organized crime in Chicago. Caruso, however, retained his position as a paid

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employee of the affiliated pension fund and held that position for an extended period of tine despite repeated efforts by the GEB Attorney to convince the trustees of that fund to remove him. Frank Caruso's cousin, Leo Caruso, identified during the CLDC trusteeship hearings as an associate of the 26th Street crew, took over Frank Caruso's positions at Local 1006 and was unanimously appointed by the CLDC to replace Frank Caruso as sergeant-at-arms and as a trustee of the CLDC's affiliated pension fund.

(9) Pre-Scripted Minutes of CLDC Meetings: As demonstrated at the CLDC trusteeship hearings, minutes of CLDC meetings often have been prepared in advance of scheduled meetings. CLDC order at 79. These "prescripted" minutes contain the substance of motions with blanks left for the names of the individuals purportedly making these motions, along with the notation that the motions passed unanimously. For example, minutes of the special meeting of the CLDC held on October 5, 1995, to consider a severance package for departing CLDC president and business manager Ernest Kumerow reflect that the motion to ratify and approve the executive board's recommendation of this favorable severance package was passed by "unanimous vote of the entire body" of delegates, despite the fact that the minutes were

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prepared at least two days before this meeting. Such a procedure offers a clear illustration the lack of true, open democracy within the CLDC.

(10) Improper Appointment of Trustees to CLDC Affiliated Funds: under the governing trust agreements of the various affiliated funds, the CLDC appoints the employee side trustees to each of the affiliated funds. The following individuals with organized crime affiliations at various times have been unanimously placed in trustee positions by the organized crime dominated CLDC: Chicago LCN members Alfred Pilotto, John Matassa, Jr. and Frank Caruso; Chicago LCN associates James Caporale, Bruno Caruso and Leo Caruso; and Ernest Kumerow and Joseph Lombardo, Jr., close relatives of high-level Chicago organized crime figures. Such unanimous appointments gave these individuals significant control over the $1.5 billion CLDC affiliated benefit funds.

(11) Absence of Discussion or Dissent: Testimony presented by the CLDC at the trusteeship hearing clearly established the total lack of discussion about organized crime infiltration of or influence over the CLDC and its officials at any CLDC meeting or during any CLDC election. Not one of the CLDC witnesses presented could recall even a single discussion over the prior 25 years about possible organized influence

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over the CLDC or its constituent locals or affiliated benefit funds despite: public reports by two Senate Subcommittees and the President's Commission on Organized crime exposing direct connections between CLDC officials and the Chicago LCN family; no less than ten indictments of delegates or officers of the CLDC; the conviction of two high level CLDC officials and affiliated fund trustees for participating in an organized crime related kickback scheme to loot millions of dollars from the CLDC's welfare fund; and widespread media reporting of organized crime activity in the Chicago area alleging direct links between Chicago organized crime members and CLDC officials. CLDC Order at 73-74. The complete lack of discussion, challenge or dissent by any of the CLDC' s officers and delegates in the face of these widespread allegations of organized crime influence over the CLDC and its constituent locals and affiliated funds clearly demonstrates the incredible chilling effect the presence of organized crime has had over CLDC delegates and the complete lack of democratic opportunity which existed within the Chicago Laborers District Council.

X

FIRST CLAIM FOR RELIEF:
CONSPIRACY TO VIOLATE 18 U.S.C. S 1962(b)

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IN VIOLATION OF 18 U.S.C. q 1962(d)

25.      Paragraphs 1 through 23 above are repeated, realleged and incorporated by reference as if fully set forth herein,

 

    26.   Conspiracy to Acquire and Maintain Control of CLDC: From at least the mid-1970 ' s, and continuing up to and including the date of the filing of this complaint, in the Northern District of Illinois and elsewhere, defendant herein, the Chicago District Council, by and through its officers, members, agents and representatives, did unlawfully, knowingly and intentionally combine, conspire, confederate and agree together with the coconspirators identified in paragraph 21 above, and with others, including members and associates of the LCN, whose names are both known and unknown, to commit an offense against the United States, to Witt to violate Title 18, United States Code, Section 1962(b), that is, to acquire and maintain, directly and indirectly, an interest in and control of the Chicago Laborers' District Council Enterprise as defined in paragraph 27 below, which was engaged in and the activities of which affected interstate and foreign commerce, through a pattern of racketeering activity, as that term is defined in Title 18, United States Code, Section 1961, said pattern of racketeering activity consisting of multiple acts indictable under Title 18, United States Code, Section 1951 involving Hobbs Act extortion, that is, wrongfully obstructing and attempting to obstruct, delay and affect commerce, as that term is defined by Title 18, United States Code, Section 1951(b)(3), and the movement of articles and commodities in commerce, by extortion,

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as that term is defined in Title is, United States Code, Section 1951 (b) (2) , and conspiracy to do so, in violation of Title is, United States Code, Sections 1951.

 

27.      The Chicago Laborers' District Council Enterprise: At all times material to this complaint, the Chicago Laborers District council, and its constituent local unions and affiliated employee benefit funds, collectively, have constituted an "enterprise," as that term is defined in Title 18, United States Code, Section 1961(4), that is, a group of individuals associated in fact, which enterprise was engaged in, and the activities of which affected, interstate and foreign commerce. The enterprise has been, and continues to be, a captive labor organization which has been continuously and systematically controlled, exploited, and dominated in the conduct of its affairs by the LCN and its members and associates in the manner and means which are described herein.

 

28.      Manner and Means: Paragraph 24 above is incorporated by reference and realleged as if fully set forth herein.

 

29.      It was part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the coconspirators identified in paragraph 21 above, and with others known and unknown, each agreed to acquire and maintain, directly and indirectly, an interest in and control of the Chicago Laborers, District Council enterprise's affairs through the commission of multiple acts of racketeering.

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30.      It was further part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the co-conspirators identified in paragraph 21 above, and with others known and unknown would obtain and attempt and conspire to obtain property from the delegates of the Chicago Laborers' District Council and the membership of its twenty-one constituent local unions, said property consisting of the right of union members to free speech and democratic participation in internal union affairs, as guaranteed by the Labor Management Reporting and Disclosure Act, as amended, Title 29, United States Code, Section 411.

 

31.      It was further part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the co-conspirators identified in paragraph 21 above, and with others known and unknown would obtain and attempt and conspire to obtain property from the delegates of the Chicago Laborers' District Council and the membership of its twenty-one constituent local unions, said property consisting of the right of union members to be candidates for and to hold union office and to support the candidate or candidates of their choice as guaranteed by Title 29, United States Code, Section 481(e).

 

32.      It was further part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the co-conspirators. identified in paragraph 21 above, and with others

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known and unknown would obtain and attempt and conspire to obtain property from the delegates of the Chicago laborers' District Council and the membership of its twenty-one constituent local unions, said property consisting of the right of union members to loyal and faithful representation by their union officers, agents, shop stewards and other representatives, as guaranteed by Title 29, United States Code, Section 501(a).

 

33.      It was further part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the co-conspirators identified in paragraph 21 above, and with others known and unknown would obtain and attempt and conspire to obtain property from the delegates of the Chicago Laborers' District Council and the membership of its twenty-one constituent local unions, said property consisting of the right of union members as participants in the various employee welfare benefit and pension benefit plans affiliated with LIUNA to loyal and responsible representation by the fiduciaries of such employee welfare benefit plans and pension benefit plans, as guaranteed by the Employee Retirement Income Security Act of 1974, as amended, Title 29, United States Code, Sections 1104 and 1106.

 

34.      It was further part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the co-conspirators identified in paragraph 21 above, and with others known and unknown employed the wrongful use of actual and


85

threatened force, violence and fear of physical and economic injury in order to create a climate of intimidation and fear within the enterprise to induce, and to attempt and conspire to induce, the members of the CLDC and the rank and file members of the CLDC's constituent local unions to consent to the surrender of property as described above by various means including, but not limited to, the allegations set forth in paragraphs 23 and 24 above, which are incorporated by reference and realleged as if fully set forth herein.

 

35      . It was further part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents, and representatives, together with the co-conspirators identified in paragraph 21 above, and with others known and unknown did misrepresent, conceal, and hide, and cause to be misrepresented, concealed, and hidden, acts done in furtherance of the conspiracy and the purpose of those acts.

 

36.      It was further part of the conspiracy that the defendant Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the coconspirators identified in paragraph 21 above, and with others known and unknown, agreed that a conspirator would acquire and maintain, directly or indirectly, an interest in and control of the enterprise through the commission of at least two acts of racketeering.

37.      Overt Acts: In furtherance of the conspiracy and to effect the objects thereof, the following overt acts, among others,  

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were committed by the co-conspirators. within  the Northern District of Illinois and elsewhere

        a.                   From at least the mid-1970's through the imposition of the trusteeship in February 1999, not a single contested election of officers of the CLDC was held. All principal offices of the CLDC have been held either by members or associates of the Chicago outfit or their relatives. No vacancy has ever occurred at the end of a candidate's term; all vacancies occur by resignation immediately before each scheduled election, and the vacancies are then filed by a unanimous vote of the Executive Board. CLDC Order at 73.

 

        b.          During this same time period, no opposition candidate has ever been nominated to run against an incumbent officer of the CLDC. Nor has any process been established by which a delegate to the CLDC could bring himself to the attention of the Executive Board as a potential candidate for a vacancy on the Board, even though the Executive Board has filed approximately 20 vacancies over the last 20 years. Id. at 73-74.

        c.                   On or about February 11, 1982, Joseph Spingola resigned as pres i dent/ secretary-treasurer of the CLDC. Spingola, who in the late 1960's had himself been selected by the LCN to fill the vacant CLDC offices of president and secretary-treasurer on the "instructions" of then Chicago Outfit boss Anthony Accardo, "recommended" that Ernest Kumerow, the son-in-law of Anthony Accardo, be appointed president and James Caporale, who at that time was under indictment for allegedly participating in a scheme

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with Acrcardo and others to defraud the CLDC health and welfare fund, be appointed business manager in addition to the position of secretary-treasurer which he already held. The Executive Board voted unanimously to appoint Caporale and Kumerow as recommended by Spingola. Id. at 74-75.

            d. On or about February 22, 1982, Spingola also resigned his position as trustee on the CLDC employee benefit funds and was replaced as trustee by Ernest Kumerow, the son-in-law of Chicago Outfit boss Anthony Accardo. _Id.

            e. On or about October 5, 1982, following Caporale's conviction and sentencing for RICO conspiracy for looting over $2 million from the CLDC health and welfare fund, the CLDC, in defiance of an order by the sentencing court forfeiting all of his union positions, promptly and unanimously reappointed Caporale by a "standing vote of applause', as secretary-treasurer and business manager of the CLDC, positions which he held unchallenged until July 1987, when he was incarcerated after his 1982 conviction was upheld by the appellate court. Id.

      f. On or about August 3, 1983, the regularly scheduled CLDC elections were held. The nominations of all current officers, including Business Manager James Caporale and President Ernest Kumerow who had replaced the retiring Joseph Spingola in February 1982 as well as Joseph Neroni (Local 5) who had replaced Alfred Pilotto (Local 5) as vice president following Pilotto's racketeering conviction in 1982, were uncontested and all officers retained their previously held positions.

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      g.   In approximately the summer of 1986, an election of CLDC officers was inexplicably held a year earlier than the scheduled August 1987 elections. Among others, James Caporale, whose appeal from his RICO conspiracy conviction was still pending, was re-elected as business manager / secretary-treasurer. _Td. at 76.

      h.  On or about December 31, 1986, the appellate court affirmed Caporale's RICO conspiracy conviction. No action was taken by the CLDC Executive Board at that time to remove Caporale from office. Id. at 77.

      I    . On or about July 22, 1987, following the United States Supreme Court's denial of Caporale's petition for certiorari, Caporale resigned his CLDC offices and moved the Executive Board to appoint Ernest Kumerow, the son-in-law of Anthony Accardo, as his successor as business manager, which passed unanimously. Kumerow then moved to appoint Joseph Lombardo, Jr., the son of coconspirator and Chicago Outfit street boss, Joseph Lombardo, Sr., as secretary-treasurer surer. This motion also passed unanimously, even though Lombardo was not a delegate to the district council at that time as required by Uniform District Council Constitution and therefore not qualified to hold this or any other elected position. That same day, the CLDC unanimously accepted the Executive Board's appointments. Id.

      j.   The regularly scheduled August 3, 1987, CLDC elections did not occur having purportedly taken place one year previously during which all current officers, including Business Manager/

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Secretary-Treasurer James Caporale, were nominated and retained without opposition.

      k.            On or about August 15, 1990, the regularly scheduled CLDC elections were held. Again, the nominations of all current officers were uncontested and all officers retained their previously held positions, including President/ Business Manager Ernest Kumerow and Secretary-Treasurer Joseph Lombardo, Jr., who had replaced the incarcerated James Caporale.

      1.           In or about November 1992, Chicago Outfit capo Vincent Solano died, leaving vacancies in the positions of trustee to the CLDC pension fund and coordinator of the committees. On November 18J. 1992, the Executive Board voted unanimously to appoint John "Pudgy" Matassa, Jr. , who replaced Solano as boss of the North Side crew, to both of these positions. Id. at 78.

m.                  On or about March 9, 1994, Matassa resigned his position as coordinator of committees and thereafter on March 16, 1994, following the resignation of Joseph Neroni, on the nomination of Joseph Lombardo, Jr., was appointed vice president of the CLDC. At the same time, the Executive Board also approved the appointment of co-conspirator and Chicago Outfit member or associate James DiForti as coordinator of committees replacing Matassa. Td.

      n. on or about August 17, 1994, the regularly scheduled CLDC elections were held. The nominations of all current officers, including John Matassa, Jr., who had recently replaced the retiring Joseph Neroni as vice president, were uncontested and all officers retained their previously held positions.

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      o.           On or about September 27, 1994, Ernest Kumerow, following the death of his father-in-law, Chicago Outfit boss Anthony Accardo, and approximately one month after being reelected, resigned as president/business manager of the CLDC and trustee of the health and welfare fund and the Executive Board, based on the "recommendation" of Kumerow, appointed co-conspirator Bruno Caruso to replace Kumerow in all of these positions. Id.

      p.           On or about October 1, 1994, co-conspirator Frank "Toots" Caruso resigned as trustee of the pension fund and was replaced by his cousin and co-conspirator Leo Caruso. Id.

        q. On or about October 18, 1994, Bruno Caruso resigned as trustee of the CLDC Training Fund and the Executive Board thereafter appointed John Matassa, Jr. as his replacement. Td. at 79.

      r.            On April 10, 1995, Frank Caruso was served with a notice of deposition by the GEB Attorney in connection with the GEB Attorney's investigation of organized crime influence over the CLDC. On or about April 11, 1995, Frank Caruso resigned all of his union positions and gave up his membership in LIUNA, but retained his recently obtained employment as director of the CLDC pension fund. Id.

All in violation of Title 18, United States Code, Section 1962 (d).

XI

 

SECOND CLAIM FOR RELIEF:


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CONSPIRACY TO VIOLATE 18 U.S.C. S 1962(c)
IN VIOLATION OF 18 U.S.C, q 1962(d)

 

38. Paragraphs I through 25 above are repeated, realleged. and incorporated by reference as if fully set forth herein.

         39. Conspiracy to Conduct the Affairs of the Enterprise Through a Pattern of Racketeering Activity: From at least the mid1970's up to and including the date of the filing of this complaint, in the Northern District of Illinois and elsewhere, defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, being a person employed by and associated with an enterprise, that is, the Chicago Laborers' District Council/La Cosa Nostra Enterprise as defined in paragraph 40 below, which enterprise engaged in and the activities of which affected interstate and foreign commerce, did unlawfully, knowingly and intentionally combine, conspire, confederate, and agree together and with the co-conspirators. identified in paragraph 21 above, and with others whose names are both known and unknown, to commit an offense against the United States, to wit, to violate Title 18, United States Code, Section 1962(o), that is, to conduct and to participate, directly and indirectly, in the conduct of the affairs of the aforementioned enterprise through a pattern of racketeering activity, as that term is defined in Title 18, United States Code, Section 1961, said pattern of racketeering activity consisting of multiple acts indictable under Title 18, United States Code, Section 1951 involving Hobbs Act extortion, that is, wrongfully obstructing and attempting to obstruct, delay and affect

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commerce, as that term is defined by Title 18, United States Code, Section 1951 (b) (3) , and the movement of articles and commodities in commerce, by extortion, as that term is defined in Title 18, United States Code, Section 1951 (b) (2) , and conspiring to do so, all in

violation of Title 16, United States Code, Sections 1951.

        40.         The Chicago District Council/La Cosa Nostra Enterprise: At all times material to this complaint, the Chicago Laborers District Council, by and through its officers, members, agents and representatives, together with the LCN member and associate co-conspirators identified in paragraph 21 above, and others known and unknown, have constituted an "enterprise, 11 as that term is defined in Title 18, United States Code, Section 1961(4), that is, a group of individuals associated in fact, which enterprise was engaged in, and the activities of which affected, interstate and foreign commerce..'' The enterprise consists of the captive labor organization as well as the LCN and its members and associates who have continuously and systematically controlled, exploited, and dominated the conduct of the affairs of the CLDC and its constituent local unions and affiliated employee benefit funds in the manner and means which are described herein.

      41.          Manner and Means: Paragraph 24 above is incorporated by reference and realleged as if fully set forth herein.

      42.          It was part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the coconspirators identified in paragraph 21 above, and with others

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known and unknown, each agreed to conduct and to participate in the conduct of the Chicago District Council/La Cosa Nostra enterprise's affairs through the commission of multiple acts of racketeering indictable under Title 18, United States Code, Section 1961.

      43.          It was further part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the co-conspirators identified in paragraph 21 above, and with others known and unknown would obtain and attempt and conspire to obtain property from the delegates of the Chicago Laborers, District council and the membership of its twenty-one constituent local unions, as set forth in paragraphs 30 through 33 above which are incorporated by reference and realleged as if fully set forth herein.

      44.          It was further part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the co-conspirators identified in paragraph 21 above, and with others known and unknown employed the wrongful use of actual and threatened force, violence and fear of physical and economic injury in order to create a climate of intimidation and fear within the enterprise to induce, and to attempt and conspire to induce, the members of CLDC and the rank and file members of the constituent local unions to consent to the surrender of property as described above by various means including, but not limited to, the

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allegations set forth in paragraphs 23 and 24 above, which are incorporated by reference and realleged as if fully set forth herein.

      45. It was further part of the conspiracy that the defendant, the Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the co-conspirators identified in paragraph 21 above, and with others known and unknown did misrepresent, conceal, and hide, and cause to be misrepresented, concealed, and hidden, acts done in furtherance of the conspiracy and the purpose of those acts.

      46. It was further part of the conspiracy that the defendant Chicago Laborers' District Council, by and through its officers, members, agents and representatives, together with the co-conspirators identified in paragraph 21 above, and with others known and unknown, agreed that a conspirator would commit at least two acts of racketeering in the conduct of the affairs of the enterprise.

       47. Overt Acts: In furtherance of the conspiracy and to effect the objects thereof, the overt acts, among others, set forth in paragraph 37 above, which are repeated, realleged and incorporated by reference herein, were committed by the conspirators within the Northern District of Illinois and elsewhere.

All in violation of Title 18, United States Code, Section 1962 (d).

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XII

 

THE FAILURE OF LIUNA OFFICIALS

TO SATISFY OBLIGATIONS IMPOSED BY LAW

    48-           Legal and Ethical Obligations of CLDC Officials: Delegates and officers of the defendant CLDC, including the members of its executive board, are obliged by the LIUNA Constitution and the Ethics and Disciplinary Procedure (EDP), the Ethical Standards of the AFL-CIO, and various provisions of law to faithfully carry out their duties for the sole benefit of the union membership, to ensure the union membership's rights to fully participate in the union election process and to express their views about union affairs, and to take appropriate measures to eliminate corruption in the union's affairs, including eliminating anyone who is a "crook (or] racketeer" from positions of union leadership. The defendant CLDC, through its delegates and officers, was on notice of numerous arrest and/or convictions of various CLDC officials and employees and their organized crime cohorts. In addition, the defendant was on notice of pervasive corruption within the CLDC and the influence of the LCN in the affairs of LIUNA and the CLDC from news media accounts and well publicized official government reports of such corruption. Nevertheless, the CLDC delegates and officials have failed to take adequate measures to investigate and discipline corrupt union officials and to eliminate and address such corruption and organized crime influence, and thereby violated their known legal and ethical obligations. Set forth below is a

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description of the obligations imposed by law and internal procedures upon all LIUNA officials:

a. Obligations Imposed by LIUNA Constitutions:

(1) Pursuant to Article II, Section I(a) of the LIUNA Uniform District Council Constitution, the defendant CLDC, by and through its officers, members, agents and representatives, was and is under a duty to fulfill the objects of the International Union as specified in Article II, Section I of the International Union Constitution, including the objects set forth in the LIUNA Ethical Practices Code ("EPC") and the LIUNA Ethics and Disciplinary Procedure ("EDP"), which form part of the International Constitution;

(2) Pursuant to Article 11, Section l(h) of the LIUNA Uniform District Council Constitution, the defendant CLDC, by and through its officers, members, agents and representatives, was and is under a duty to promote and foster respect for and compliance with the constitution of the International, the Uniform District council Constitution and the Uniform Local Union Constitution and all of the rules, regulations, policies, practices and lawful orders and decisions adopted and promulgated in the furtherance and administration of said Constitution;

(3) Pursuant to Article II, Section l(i) of the LIUNA Uniform District Council Constitution, the defendant

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CLDC, through its business manager, was and is under a duty to promote respect for, compliance with, and observance of all the provisions of agreements by it and its affiliated Local Unions and the members thereof;

(4) Pursuant to Article II, Section 1(a) of the LIUNA International Union constitution, all LIUNA officers were and are under a duty to unite under [LIUNA's] banner all persons engaged in work within its jurisdiction . . . for their mutual benefit, aid, and protection;

(5) Pursuant to Article II, Section l(j) of the LIUNA International Union Constitution, all LIUNA officers were and are under a duty to conduct their offices in such a 'manner to promote a better understanding by government and the general public of the aims of LIUNA and the labor movement as a whole; and

(6) Pursuant to Article II Section I(r) of the LIUNA International Union Constitution, all LIUNA officers were and are under a duty to conduct the affairs of their offices and to take all such action as may tend to conserve and promote the welfare of LIUNA, its affiliates, and its members.

b. Ethical Practices and Disciplinary Code: In 1995, LIUNA adopted an Ethical Practices Code ("EPC") and an Ethics and Disciplinary Procedure ("EDP"), which form part

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of the International Constitution. The EPC sets forth certain ethical practices and reinforces standards of conduct in five specific areas, the provisions of which are set forth in detail in Paragraph 13 above, that "shall apply to the International Union, all District Councils, every Local Union, all subordinate bodies, and every employee, member and officer thereof, and every union trustee and employee of any benefit fund or political action committee." Of particular relevance to the present case are the following:

(1) Pursuant to the EPC, Democratic Practices Section, all LIUNA officers were and are under a duty to protect the democratic rights of LIUNA's members to participate fully, without fear, abuse, or intimidation in all Union affairs; to ensure that each member shall have the right to run for office, to nominate through duly established constitutional procedures, and to vote in free, fair and honest elections; to ensure that the union's operations shall be conducted in a democratic and fair manner; and to ensure that corruption, discrimination or anti-democratic procedures shall not be permitted under any circumstances; and

(2) Pursuant to the EPC and EDP, Barred Conduct Sections, all LIUNA officers were and are under a duty to make meaningful efforts to eradicate corruption and prohibit barred conduct, which is defined to include:

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committing any act of racketeering, knowingly associating with any member or associate of organized crime, knowingly permitting any member or associate of organized crime to exercise control or influence over the affairs of the Union, or obstructing or interfering with the operation of the Disciplinary Procedure and the persons responsible for its administration. The breadth and extent of this affirmative duty of all union officials and 'members to act in the best interest of the union and its membership has been clearly delineated by LIUNA' s Appellate Officer in interpreting and applying the EPC:

Rather, an officer's failure to do all he can to purge the taint of corruption from the union casts grave doubts on whether that officer's conduct is consistent with the requirements of the EPC and EDP. No LIUNA official, confronted with reports or suggestions of LCN influence within the union, has the option simply to disbelieve or ignore such reports. The untenability of that position as a matter of law was treated in depth in the Appellate officer's decision in (Matter of Fresina, et al., 1998 A.0. 115, 152-55), and need not be restated at length here. Every union officer has an affirmative obligation to investigate any report of LCN influence in the union and to take whatever corrective actions are warranted by the facts their investigation reveals. See [Fresina at 152-551. An officer's failure to take such steps is itself evidence of, at a minimum, an improperly hospitable attitude toward LCN, and at worst, corruption of that officer himself.

Matter of Local 210F 1998, A.0. 279, 309 (98-017-IHO)

c. Ethical Standards of the American Federation of Labor-Congress of Industrial Organizations (hereafter 'AFL-

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CIO"): In 1956, LIUNA adopted the ethical standards of the AFL-CIO which are set forth in Article XII of the Constitution of the AFL-CIO (hereafter "the Ethical Standards"), which require all LIUNA officers to keep LIUNA free from any taint of corruption by imposing the following duties, among others, upon union officials, as follows:

(1) Code III of the Ethical Standards requires LIUNA to bar any person known to be a crook or racketeer from holding any office in LIUNA;

(2) Code V of the Ethical Standards prohibits the use of any union funds as loans or investments for the personal profit or investment of any LIUNA official; and

(3) Code II of the Ethical Standards prohibits all LIUNA officers from any personal ties with any outside agency doing business with an employee benefit plan.

d. Obligations Imposed by Statute: All LIUNA officers occupy positions of trust with respect to LIUNA and its affiliated entities of which they were and are officials. These obligations are as follows:

(1) All CLDC officers, are and were under a duty to comply with the labor bill of rights that provide for the democratic rights of union members, pursuant to Title 29, United States Code, Section 411;

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(2) All CLDC officers are and were under a duty to hold the money and property of LIUNA, the CLDC and all of its affiliated entities solely for the benefit of LIUNA, the CLDC and its rank and file membership and to manage, invest, and expend the same in accordance with the pertinent constitutions and by-laws and any resolutions promulgated thereunder, pursuant to Title 29, United States Code, Section 501(a);

(3) All CLDC officers are and were under a duty to refrain from dealing with LIUNA and its affiliated entities of which they are officials as an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of LIUNA and its affiliated entities of which they are officials, pursuant to Title 29, United States Code, Section 501 (a) ; and most importantly with respect to the present case,

(4) All LIUNA members and officials are and were under a broad and affirmative duty to protect their union from the influence of organized crime, pursuant to Title 29, United States Code, Section 501 (a) . See United States v. International Brotherhood of Teamsters (Sansone), 792 F. Supp. 1346, 1353 (S.D.N. Y) , aff Id , 981 F.2d. 1362 (2d Cir. 1992) ("Every IBT officer must, with unstinting effort and steely resolve, wage an active

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campaign to purge the Union of the hideous influence of organized crime . . . . Half-hearted responses to any information suggesting mafia influence in the IBT constitutes a breach of fiduciary duty. An impotent reaction to all allegations that a mob leader holds Union office is nothing less than a gross abdication of responsibility and a blatant betrayal of the membership's trust."); United States v. IBT, 708 F. Supp. 1388, 1401 (S.D.N.Y. 1989) (holding that the defendant International Union officers, as fiduciaries of the members, had "a duty to disclose and remedy wrongdoing" within the Union.) Thus, in United Sates v. District Council of New York and Vicinity of the United Bhd. of Carpenters & Joiners ("New York District Council, UBC11), 778 F. Supp. 738, 749-50 (S.D.N.Y) .1991, the court stated:

While the defendants in this case vigorously deny that the Constitution and By-Laws of the District Council give them any legal duties to investigate corruption, there can be no dispute that federal labor law does impose such a duty.

.... [citing and quoting 29 U.S.C. S 501(a)]

Thus, 29 U.S.C. S 501(a) imposes a fiduciary duty on officials of labor organizations which even their own governing instruments cannot waive.

778 F. Supp. At 749-50 (footnote omitted) . Thus, regardless of the terms of a union's constitution, or its obligation under a contract or court judgment,

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federal law that has been in effect since 1959 places a fiduciary duty on union officials that includes an obligation to take aggressive, affirmative action to protect their organizations from organized crime influence.

(5) All LIUNA officers or members, including officers or members of the CLDC, serving as appointed union-side trustees to or other decision-making personnel of any employee benefit plan sponsored by and affiliated with LIUNA or the CLDC are fiduciaries of such plans and are required to carry out their responsibilities in accordance with Title I of ERISA and specifically Sections 404 and 406, Title 29, United States Code, Sections 1104 and 1106.

        49. Notice of Corruption within LIUNA and the CLDC: Since at least 1970, a number of officials affiliated with the Chicago Laborers' District Council have been indicted and/or convicted of federal and state offenses. Public reports issued by federal and state governmental bodies, including the President's Commission on Organized Crime (the "PCOC") as well as numerous articles appearing in newspapers and periodicals nationally and in the Chicago area have reported extensively on these prosecutions and the widespread corruption and organized crime influence within the LIUNA and the CLDC and its constituent local unions. Despite notice and knowledge, the CLDC, by and through its executive board and delegates, has failed to take appropriate investigative and

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remedial action to rid the CLDC and its affiliated local unions and benefit funds of domination by organized crime.

XIII

PRESENT STATUS OF THE DISTRICT COUNCIL

        50. Although the GEB Attorney has initiated and successfully prosecuted a trusteeship action against the Chicago Laborers, District Council for the purpose of eliminating the influence of the Chicago Outfit over the affairs of the CLDC, that remedy is inadequate under the circumstances to fully address the unique problems presented in this case. Following the imposition of the trusteeship over the CLDC in February 1998, the GEB Attorney appointed Robert Bloch, a Chicago labor attorney, to administer the affairs of the CLDC. since taking office, Mr. Bloch has removed all former officers of the CLDC, worked closely with the constituent local unions of the CLDC to institute reform policies, and, for the first time with the direct participation of all constituent locals, negotiated a new labor agreement for the District Council's constituent Locals. Certain limitations, however, are inherent in Mr. Bloch's office. Specifically, a trustee appointed solely by the International union lacks the authority conferred by court appointment, does not possess subpoena power, and can be subject to charges of recrimination and political vendetta. Federal law enforcement agencies are statutorily prohibited from disclosing certain information to a union trustee or to the union's own internal disciplinary process that is

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essential to any effective reform effort. Furthermore, the period of the trusteeship is presumed valid only for a period of 18 months and therefore will presumptively expire on August 7, 1999. In the case of the CLDC, the pervasive nature of the corruption which had existed for over three decades will take far longer to address. It is unrealistic to believe that the organized crime elements which have so tightly and effectively controlled the CLDC for so many years will merely concede defeat and permit the developing leadership of the CLDC to assume control over the district council, its employment opportunities and its billion dollar employee benefit funds without challenge, whether direct or indirect, legal or violent. In light of organized crimes' historical control of the CLDC and the failure or at least reluctancy of the CLDC leadership to affirmatively and aggressively challenge organized crime control and influence within the CLDC, it is necessary for this Court to appoint a Trustee to oversee the operations of the District Council until at least such time as a rank and file, secret ballot election can be held to elect directly a new Executive Board of the CLDC that will be responsive to the union membership, and until such time as a Court appointed Monitor, with the power to exercise the investigatory and disciplinary powers of LIUNA and federal labor law, determines that the CLDC can operate free from the influence and control of the LCN.

        51. These violations of Title 18, United States code, section 1962, as well as numerous other violations of criminal and civil laws, have occurred and will continue to occur in connection with

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the affairs of the CLDC unless this Court implements the relief requested below.

        52. The members of the CLDC and its affiliated local unions have been injured by these violations of Title 18, United States Code, Section 1962. The members have been deprived of the rights of all union members to select officers, vote without intimidation, and be loyally and faithfully represented by union officers and benefit fund trustees.

            53. The CLDC has been and will continue to be a captive labor organization unless and until this Court orders the relief requested below.

XIV

DEMAND FOR RELIEF

            54. Therefore, in order to end and to remedy the above violations of Section 1962 of Title 18 of the United States Code, the United States asks, pursuant to the provisions of Title 18, United States Code, Section 1964, that the court grant the following preliminary and permanent relief:

        a. Enjoin and restrain all current and future officers, representatives, members and employees of the CLDC and its affiliated entities and all persons acting in concert with them from committing any acts of racketeering, as defined in Title 18, United States Code, section 1961(l), and from knowingly associating, directly or indirectly, with any members or associates of the Chicago Outfit or any other LCN family;

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        b. Appoint court liaison officers, pendente lite to run and administer the affairs of the CLDC, to conduct investigations of LCN and other corrupt activity, to institute removal actions of any individuals associated in any way with the CLDC or its affiliated entities, to appoint trustees to any of the funds affiliated with the CLDC, to restore democratic processes within the CLDC, and to review practices or procedures of the CLDC and to petition the Court for an order altering any such practice or procedure when the court liaison officers deem it necessary to protect the rights of the members of locals affiliated with the CLDC consistent with the provisions of Title 29 of the United States Code and the LIUNA Constitutions, and to take other reasonable and appropriate action to prevent the perpetuation of LCN or other criminal influence in the affairs of the CLDC or any of its affiliated entities and funds;

        c. Enjoin and restrain anyone affiliated with the Chicago Laborers' District Council and any entity associated with the CLDC in any way from any interference with the court liaison officers in the execution of their duties as court liaison officers;

                d. Provide that the expenses of the court liaison officers be paid out of the funds of the Chicago Laborers' District Council and its affiliated locals;

        e. Award the United States the costs of this suit together with such other and further relief as may be necessary and appropriate to prevent and restrain further violations of Title 18, United States code, section 1962, and to end organized crime's control

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over and exploitation of the Chicago Laborers' District Council and its constituent local unions and affiliated employee benefit funds.

 

Respectfully submitted,

SCOTT R. LASSAR

United States Attorney

Northern District of Illinois

 

By :s/Thomas Walsh_____

THOMAS P. WALSH

Assistant United States Attorney

Chief, Civil Division

 

 s/Robert D. Luskin

ROBERT D. LUSKIN

General Executive Board Attorney

 

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Laborers for JUSTICE © 1999 All Rights reserved.

Laborers for JUSTICE
Attn: Jim McGough
2615 W Peterson Av
Chicago. Il 60659
773-878-1002 (Tel)
(fax) 773-409-1503 james.mcgough@comcast.net