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© 1999


U. S. Department of Justice

United States Attorney
Northern District of Illinois

____________________________________________________________________________
Scott R Lassar
United States Attorney 
Dirksen Federal Building
219 South Dearborn Street, Fifth Floor
Chicago, Illinois 60604
(312) 353-5300
 

FOR IMMEDIATE RELEASE 
THURSDAY AUGUST 12,1999

 

 

PRESS CONTACTS:
AUSA Craig Oswald (312) 886-9080
AUSA David Buvinger (312) 353-1110
PIO Randall Samborn (312) 353-5318

  CONSENT DECREE ALLOWS FEDERAL COURT TO SUPERVISE PURGE OF ORGANIZED CRIME FROM 19,000 MEMBER CHICAGO LABORERS' COUNCIL

    CHICAGO -- A consent decree providing for federal court supervision of ongoing efforts to end the influence of organized crime in the affairs of the 19,000-mernber Chicago Laborer's District Council was filed today, settling a civil racketeering lawsuit against the CLDC, the Justice Department and the Laborers' International Union of North America (LIUNA) announced. The agreement represents an unprecedented cooperative effort between the government, one of the nation's largest labor unions and one of the union's largest local governing bodies in working together to preserve the progress that has already been made to purge organized crime influence from the union, said Scott R. Lassar, United States Attorney for the Northern District of Illinois. Delegates representing the 21 local affiliates of the CLDC voted overwhelmingly yesterday to approve the consent decree.

 

    The case, in which the United States and LIUNA's General Executive Board Attorney are co-plaintiffs, is the first time here that court supervision is being obtained in the Justice Department's four-year-old effort to rid LIUNA of the influence of organized crime. Since 1995, the Justice Department has been overseeing internal efforts by LIUNA to rid itself of organized crime influence

 

and the government continues to hold in abeyance filing a signed consent decree that would have court-appointed officers responsible for reforming the international union. LIUNA has accomplished substantial progress, according to the consent decree, but the government and LIUNA agreed that La Cosa Nostra "influence of the CLDC presents special problems associated with endemic, longterm corruption that requires additional measures," which include the court appointment of officers with expanded powers to assure that the council and its $1.5 billion employee benefit funds are operated democratically and free of corruption.

 

    According to the civil racketeering complaint filed yesterday and unseated today, the CLDC, which consists of 21 local unions affiliated with LIUNA and has approximately 19,000 members in northeast Illinois, "has been infiltrated by corrupt individuals and organized crime figures who have exploited their control and influence over the district council for personal gain." In February 1998, the CLDC, located at 6121 West Diversey Ave., Chicago, was placed into trusteeship by LIUNA as a result of the internal reform process.

 

    LIUNA which claims over 800,000 members and over 600 locals, is one of the nation's 10 largest labor unions. Law enforcement efforts have been focused on Chicago because organized crime in Chicago has traditionally controlled the international leadership of the Laborers. Among the trades LIUNA represents are masons' helpers, general construction laborers, municipal workers, highway construction laborers, pipeline laborers, excavators, watchmen, asbestos removers, pavers and stone cutters.

 

"The trusteeship has made substantial progress in removing the influence of organized crime over the district council and the consent decree will ensure that organized crime is prevented from reasserting its influence in the future when an election is held to select officers by secret ballot in a 2

 

free, democratic process," Mr. Lassar said. "The CDC delegates deserve credit for choosing to join in the consent decree. Their action is unprecedented and shows their commitment to democratic practices," Mr. Lassar added.

 

    Mr. Lassar announced the consent decree with Robert D. Luskin, LIUNA's General Executive Board Attorney, who is responsible for spearheading the union's internal reform; Robert Bloch, the CLDC trustee and a Chicago labor lawyer, Kathleen McChesney, Special Agent-in-Charge of the Chicago Field Division of the Federal Bureau of Investigation; and J.D. Nichols, Regional Inspector General for Investigations of the U.S. Department of Labor, Office of Inspector General.

 

    The decree calls for the court appointment of three officers for at least two-year terms: a monitor, an adjudications officer, and a trustee/supervisor. The monitor will investigate and prosecute charges to remove organized crime members and associates from having any influence in the affairs of the CLDC and its affiliates. The adjudications officer will conduct hearings and decide the cases brought by the monitor as well as appeals from any elections issues that arise. The trustee/supervisor will administer daily operations of the CLDC, as well as conduct elections sometime between six and 12 months after the decree is approved by a federal judge. After the election, the trustee will have his title changed to supervisor and he will supervise the actions of the elected officials. The monitor and the adjudication officer have not yet been named, but Mr. Lassar and Mr. Luskin announced that they will petition the court to name Mr. Bloch the trustee/supervisor.

 

    Since taking office, Mr. Bloch has removed all former CLDC officers, worked closely with the local union affiliates to institute reform policies, and, for the first time with the direct participation of all of the locals, negotiated a three-year labor contract for the 21 constituent locals. Under the consent decree, the monitor would possess subpoena power and be empowered to receive 

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confidential law enforcement information that is essential to accomplishing effective reform. In addition, the trusteeship is presumed valid for only 18 months, which has now passed, and "the pervasive nature of the corruption which had existed over the decades will take far longer to address," according to the complaint.

 

    The trusteeship was imposed after a three-week hearing in 1997 in which the General Executive Board Attorney proved extensive involvement of local organized crime in the council's affairs. The complaint is based on much of the evidence that was presented in that hearing, The consent decree adopts LIUNA's ethical practices code and internal disciplinary procedure as the foundation for its basic framework. It contemplates that in many cases, LIUNA's GEB attorney and inspector general will investigate and prosecute cases under the decree.


    The complaint, which was brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), alleges that since the mid-1970s the CLDC has been and continues to be "a captive labor organization which has been systematically controlled, exploited, and dominated" by organized crime members and associates through a pattern of illegal racketeering activity. During that time, not a single contested election of officers has been held and all principal officers have either been members or associates of Chicago organized crime, known as the "Outfit," or their relatives. All of the officers have come from just six of the 21 local union, Locals 1, 2, 5, 225, 1001 and 1006, which historically have been controlled by the Outfit. During the last three decades, at least 14 members and associates of the Outfit have served as officers, trustees or delegates of the CLDC or its affiliates and 11 other individuals who were relatives of Outfit members or associates have served in similar capacities.

 

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    The complaint describes the role of 21 Outfit members or associates in the affairs of LIUNA and the CLDC, including the four individuals who held CLDC offices at the time the trusteeship took effect: John "Pudgy" Matassa, Jr., vice president; Bruno Caruso, president; Joseph A. Lombardo, Jr., secretary-treasurer; and Leo Caruso, a cousin of Bruno Caruso who was sergeant-at-arms. The complaint alleges that rights of rank and file union members were subverted, democratic processes were ignored and charges or organized crime control were left uninvestigated as a result of the sustained pattern of organized crime influence and control over the governing body of LIUNA in the Chicago area.

    In February 1995, the Justice Department entered into a three-year agreement with LIUNA designed to rid the international union of the influence or organized crime. The agreement was extended for additional one-year periods in January 1998 and again in January 1999, and is currently set to expire on Jan. 31, 2000. Under the oversight agreement, LIUNA has pursued an internal reform program designed to remove the influence of organized crime from the union. In return, the Justice Department has agreed to refrain from filing a signed consent decree that provides for the court-appointment of officers to supervise the reform process, as was accomplished by a similar consent decree that the Justice Department entered into with the International Brotherhood of Teamsters. The LIUNA oversight agreement has given the union the opportunity to create an internal reform system administered by former federal prosecutors and law enforcement agents to accomplish what court appointed officers did in the Teamsters case.

 

As a result of the union's internal reform program, the union has adopted an ethics and disciplinary code, has instituted reforms in the manner it assigns members to work, and has changed its contracting procedures. The union has placed entities in Chicago, Buffalo and New York City

 

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under trusteeship, and has launched investigative initiatives in Washington, D.C., New England, and New Jersey. In addition, a number of local and international union officers have been charged with misconduct pursuant to LIUNA's internal disciplinary process.

    The LIUNA oversight agreement produced the first ever contested, nationwide, direct rank and file election for LIUNA's principal officers. As part of the 1996 election, the rank and file membership overwhelmingly passed a referendum which gives members the right to elect all international officers by rank and file vote, The union has agreed that its next international election in 2001 will also be supervised by an independent officer.

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Scanned by Laborers for JUSTICE as a public service to LIUNA members and the public 

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