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Jim McGough to electronically publish the transcripts of the Coia Hearings and
provide an analysis that will clearly demonstrate the IHO's decision was not in
accord with the evidence and Eggleston's decision is based on both unsound legal
and ethical principles.
Respondent.
Laborers' International Union of North America
Appellate Officer
99-004-IHO
Argued July 8, 1999
Decided August 6, 1999
The General Executive Board ("GEB") Attorney for the Laborers' International Union of North America ("LIUNA") appeals from certain portions of a decision of the LIUNA Independent Hearing Officer ("IHO"). In the decision under review, the IHO rejected most of the charges the GEB Attorney had brought against Respondent Arthur A. Coia, the current General President of LIUNA. The GEB Attorney has appealed the IHO's decision on two of the principal allegations against Mr. Coia, specifically, the allegation that lie inadequately investigated allegations of corruption within LIUNA made by a former local union officer; and second, the allegation that he facilitated the influence of organized crime within LIUNA by appointing a suspected organized crime associate to be the Chairman of the GEB Hearings Panel.
For the reasons stated below, the Appellate Officer affirms the IHO's decision on the particular subset of charges that are at issue on this appeal.
I.
Background and Prior Proceedings
The case the GEB Attorney originally brought against Mr. Coia involved a number of additional allegations that are not at issue oil this appeal. Although the IHO ruled in Mr. Coia's favor on all but one of the charges, the GEB Attorney has appealed only a portion of
1
2
Matter of Coia
the IHO's decision to the Appellate Officer. Accordingly, the factual recitation of this section will focus chiefly on the facts material to the charges that are before the Appellate Officer for review. Facts that are material only to charges the GEB Attorney has not appealed will not be recounted in detail herein, except as necessary to provide context. The charges the GEB Attorney has not appealed involve the following allegations:
Accordingly, these matters are not before the Appellate Officer and need not be considered further in this opinion.
Additionally, the IHO ruled against Mr. Coia on Charge 14, involving a transaction with Viking Oldsmobile that the IHO found to be tainted by a conflict of interest. Mr. Coia has not appealed the IHO's decision on this charge, and accordingly, it, too, is not before the Appellate Officer and need not be further addressed.
Those charges that remain before the Appellate Officer for review fall into two broad subject-matter categories. The first of these arises out of a set of widely publicized allegations of LCN influence within LIUNA made by former LIUNA officer Ron Fino. In Charges 7-9, the GEB Attorney alleged that Mr. Coia permitted LCN influence over LIUNA by failing to ensure that an adequate investigation was undertaken of Mr. Fino's allegations. The gist of these three charges is the GEB Attorney's allegation that Mr. Coia, who served at the relevant time as LIUNA's General Secretary-Treasurer, "authoriz[ed] and approv[ed] the expenditure of substantial Union funds to attack the credibility of Ron Fino, but not to determine in good faith the
3
Matter of Coia
truth or falsity of Fino's allegations[.]" (IHO Opinion ("Op.") 50 (quoting Charge 7)).
The second broad issue presented in this appeal concerns Mr. Coia's dealings with former LIUNA Vice President John Serpico, whom Mr. Coia appointed to be Chairman of the LIUNA GEB Hearings Panel even though, the GEB Attorney alleges, Mr. Coia knew Mr. Serpico to be connected to LCN. Charges 10-13 accused Mr. Coia of various violations of the Ethical Practices Code ("EPC") and LIUNA Constitutions arising out of his appointing Mr. Serpico as Chairman of the Hearings Panel. The GEB Attorney has appealed the adverse decision of the IHO with respect to Charges 10, 11, and 13, but not as to Charge 12. (GEB Principal Brief ("Br.") 5). The Appellate Officer will summarize below the facts relevant to each set of charges in turn, drawn chiefly from the detailed findings of the IHO.'
A. LIUNA's Response to Mr. Fino's AllegationsRon Fino is the son of Joe Fino, the former "boss" of the Buffalo Family of LCN, which for many years controlled LIUNA Local Union 210. See Matter of LIUNA Local 210, 1998 A.O. 279, 28183 (98-017-IHO, 98-022-IHO, 98-033-IHO) ("Bifulco"
).2 Ron Fino joined LIUNA, and was promoted to various positions of responsibility within Local 210, with the aid of his father and other members of LCN. Id. at 282. He ran for, and was elected, Business Manager of Local 210 in 1973 after negotiating for, and securing, LCN support for his candidacy. Id. He thereafter ran Local Union 210 and its affiliated funds essentially as directed by members of LCN. Id. at 282-86.Mr. Fino was secretly an FBI informant for eighteen years. When knowledge of his informant status became public in 1988, lie left Buffalo. He has since testified as a witness in various proceedings regarding his knowledge of LCN. See Bifulco, 1998 A.O. at 288-89 (citing United States v. Riggi, 951 F.2d 1368, 1372-73 (3d Cit. 1991); Administration's Efforts Against the Influence of Organized Crime in the Laborers' International Union of North America: Hearings Before the Subcomm. on Crime of the House Comm. on the Judiciary, 104th Cong., 2d Sess. 81-108 (1996) (Serial No. 116)).
____________________
'In this case,
deference to the IHO's role as "the Union's fact-finder," Claro v. Marques,
1998 A.O. 203, 204 (98-023-IHO), supports reliance in appellate proceedings
on the findings rendered by the IHO. See, e.g., Matter of Herod and Ventura,
1999 A.O. -, slip op. 2-5 (98-027-IHO & 98-053-IHO, June 8, 1999).
2 The proceedings involving allegations of LCN influence in Local 210 are, in the interest of brevity, and to avoid confusion with the Appellate Officer's other decisions involving Local 210, collectively referred to herein as the Bifulco hearings, after the name of one of the charged parties in that case. See Matter of Falzone, 1999 A.O. -, slip op. 2 n.2 (98-024-IHO, June 3, 1999).
4Matter of Coia
A series of newspaper articles in February 1989 brought Mr. Fino's allegations to the direct attention of LIUNA's officers, including Mr. Coia, who served at the time as the Union's General Secretary-Treasurer. (IHO Op. 52). According to these articles, Mr. Fino had told the FBI, among other things, "that the '.. . Mafia controlled the parent union's operation across the country." (Id. (quoting R. Ex. 78)).
Allegations that LIUNA was under LCN control presented a very real risk of litigation, as the IHO determined. At the time Mr. Fino's allegations became public, the federal government had embarked on "an aggressive program to rid labor unions of LCN corruption using the civil provisions of the Racketeer Influence[d] and Corrupt Organizations Act ('RICO')," and had already achieved some noteworthy successes. (IHO Op. 52). Indeed, Mr. Coia himself and other LIUNA officials had previously been indicted on charges arising out of alleged misconduct in connection with the award of a union contract to all insurance company operated by an FBI informant named Hauser. (-Td. at 53). Although these earlier charges against Mr. Coia were dismissed by a federal district court, it is hardly surprising that, when even more serious allegations were made by Mr. Fino, the Union and its officers took steps to assess their potential exposure to RICO and other forms of liability.
The IHO found that the Union, or those acting at its direction, undertook "two separate investigations" into Mr. Fino's allegations. (IHO Op. 54). First, attorney David Elbaor, a law partner of LIUNA's then-General Counsel, conducted an extensive legal audit "to determine the substance, truth or falsity of Fino's allegations[.]" (Id.).3 Second, attorney Anthony Traini conducted a separate investigation of Mr. Fino's "background and credibility for use as future impeachment material." (1d.).
For purposes of this appeal, only the facts behind Mr. Elbaor's investigation are material. The reason for this rests on what the IHO characterized as a shift in position by the GEB Attorney. Before the IHO, the GEB Attorney presented evidence regarding only the investigation by Mr. Traini, not the investigation by Mr. Elbaor. (IHO Op. 51). The proof of Mr. Elbaor's investigation was introduced by counsel for Mr. Coia. (1d.). Before the IHO, the GEB Attorney's position appeared to be that Mr. Traini's investigation, standing alone, was an inadequate response to Mr. Fino's allegations. Mr. Coia's introduction of the evidence concerning Mr. Elbaor's audit was aimed at showing that Mr. Traini's investigation had not,
__________________________
3 The IHO's
opinion carefully recounted Mr. Elbaor's background and concluded that he "was
well qualified to conduct the legal audit into Fino's allegations." (IHO Op.
56). The Appellate Officer does not understand either party to challenge this
conclusion oil appeal.
Matter of Coia
5
in fact, constituted the Union's entire response to Mr. Fino's allegations. The introduction of substantial evidence of Mr. Elbaor's investigation prompted what the IHO characterized as the GEB Attorney's shift in its theory of the case. The IHO stated that "[i]n his post-hearing briefs, the GEB Attorney abandoned his original position and argued that Coia was more concerned with following the investigation into Fino's credibility than the investigation conducted by the General Counsel." (1d.) .4
On appeal, the GEB Attorney's principal argument is that the investigation conducted by Mr. Elbaor did not discharge Mr. Coia's legal duty to investigate allegations of corruption within LIUNA. Thus, the sufficiency or insufficiency of the investigation Mr. Traini conducted into Mr. Fino's credibility is not ultimately material to the charges under review, and need not be elaborated upon herein.
Mr. Elbaor conducted a legal audit' of Mr. Fino's allegations. The steps Mr. Elbaor took bear on the sufficiency of his investigation, and accordingly, the Appellate Officer will summarize the principal components of Mr. Elbaor's investigation as recounted in the IHO's opinion.
Mr. Elbaor first made arrangements to review the FBI's interview memoranda (recorded on standard forms commonly referred to as "FBI 302s") with Mr. Fino. (IHO Op. 54-55). Although FBI 302 forms are not public information, they are shared with defense counsel in cases where the witness may testify at trial. (-Td. at 55). In this case, Mr. Elbaor was contacted by Harold Boreanaz, a defense attorney from Buffalo, New York, whose client was a defendant in a federal criminal case in which Mr. Fino was expected to testify, and who, accordingly, had access to Mr. Fino's FBI 302s. (-Td. at 54).
_________________________________________________
4 Although the GEB
Attorney's Office does not concede that its post-hearing argument before tile
IHO represented a change in its legal theory, it does not direct the Appellate
Officer's attention to any evidence it introduced suggesting that it knew of
tile substance of Mr. Elbaor's investigation before evidence of that
investigation was introduced by counsel for Mr. Coia.
5 The Appellate Officer adopts the IHO's characterization of this term, which tile parties do not dispute oil appeal:
6
Matter of Coia
Mr. Elbaor, after conferring with LIUNA's General Counsel,' agreed to Mr. Boreanaz' s proposal to share information regarding Mr. Fino, including the FBI 302s in Mr. Boreanaz' s case. (Id. at 55). Mr. Elbaor obtained copies of Mr. Fino's FBI 302s from Mr. Boreanaz in April 1990, and subsequently forwarded copies of the FBI 302s to LIUNA officials, including Mr. Coia. Id..).
Mr. Elbaor reviewed the FBI 302s and cataloged the various allegations Mr. Fino reportedly made. (IHO Op. 57). He also reviewed the testimony Mr. Fino gave during two federal criminal trials involving racketeering-related crimes. (1d.). Mr. Elbaor reported that from this stock of raw allegations, lie selected those that were subject to confirmation or falsification using objective evidence. Id..). He kept the members of the LIUNA GEB apprised of the status of the investigation with a series of written memoranda. (1d.). The IHO made the following findings with respect to Mr. Elbaor's final report on Mr. Fino's allegations:
- On March 5, 1991 after
completing his investigation of the Fino allegations that lie determined were
capable of verification, Elbaor submitted his audit report to the GEB for its
review. R. Ex. 173. In the introductory letter accompanying the report, Elbaor
stated,
With respect to the methodology of the audit, its intent was not to destroy Fino's overall credibility, but to neutrally examine his allegations against interviews and records generated contemporaneously with events in question. There proved in this process sufficient information to justify serious doubt and critical enquiry about Fino's credibility, and his motivations for making his allegations in the first place. But delving into that, and reporting on it, would have required an inordinate amount of time and resources, and would have required a far lengthier audit having a conclusion probably identical to that readily extrapolated from the present audit report.
- The audit as embodied in
its report focuses on allegations affecting the International Union,
6 Mr. Elbaor and the General Counsel agreed that it would be in the interests of LIUNA, as their client, to investigate Mr. Fino's allegations, including the statements included in his FBI 302s, because of the risks that "Fino may be a resurrected and improved Joe Hauser," ail informant in a previous case involving allegations of corruption, and because Mr. Fino's "accusations may be the springboard for a RICO civil action against LIUNA, or its Regions, or its District Councils." (IHO Op. 55) (quoting R. Ex. 122).
Matter of Coia
7
- not its affiliate
Local 210, nor other affiliates or businesses.
Id. Elbaor was of the opinion that Fino's testimony was broad, vague and contained few verifiable details regarding his contacts with individuals in the labor union. R. Ex. 134 at 2. The record reflects that neither Coia nor anyone else ever attempted to impede or improperly influence Elbaor's work.
( IHO Op. 57-58). From this evidence, the IHO concluded that "the GEB Attorney's assertion that an investigation of the substance, truth or falsity of Fino's allegations was not conducted is contradicted by the record." (Id. at 58).
B. The Appointment of Mr. Serpico as Chairman of the GEB Hearings PanelThe other set of charges at issue on this appeal involve Mr. Coia's appointment in 1993 of John Serpico, whom the GEB Attorney alleged to have been connected with organized crime, as Chairman of the GEB Hearings Panel.
Before the adoption of the Union's ethical and disciplinary reforms in 1995, intra-union disputes commonly were resolved by hearings panels convened under the LIUNA Constitutions and appointed by the GEB. See, e.g., Matter of Dolcimascolo, et al., 1998 A.0. 213, 221 (98-019-IHO); Matter of Gutierrez, 1997 A.0. 139, 141-43 (97-015-1110) (party disciplined for submitting falsified documents to hearings panel). The charges at issue here are based on the fact that, when lie became General President of LIUNA in 1993, Mr. Coia appointed Mr. Serpico, who was then a LIUNA Vice President, as Chairman of the GEB Hearings Panel, which made recommendations to the GEB as to how to resolve disputes brought before it. 7 The IHO found that Mr. Coia appointed Mr. Serpico to this post "to facilitate [Mr. Serpico's] removal from the Union." (IHO Op. 71). The IHO supported this conclusion by recounting pertinent aspects
____________________________________
7 The IHO described the operation
of the GEB Hearings Panel as follows:
- Serpico almost always
sat oil a Hearings Panel with another Intel-national Vice President and was
always accompanied by a member of the International Union's legal staff. R.
3584. The legal staff member always wrote the recommendation which was
submitted to the GEB. R. 3585. The GEB had the final authority to either
approve or deny the Panel's recommendation. Id. If the GEB did not accept the
recommendation of the Hearings Panel, it could reverse the Panel's
recommendation or table the recommendation for further deliberations and
review of the record. R. Ex. 346 at 8.
8
Matter of Coia
of the history of Mr. Coia's dealings with Mr. Serpico. The Appellate Officer will turn next to a summary of these findings.
1. Initial Contact Between Mr. Coia and Mr. SerpicoMr. Serpico was, at all times relevant to the accusations against Mr. Coia, an elected International Vice President of LIUNA and a member of the Union's General Executive Board. (IHO Op. 65). He was and is politically well connected in Chicago, and has been reappointed as Chairman of the Chicago Port Authority by three successive Governors of Illinois. (Id. at 77).
Mr. Coia's contact, and political rivalry, with Mr. Serpico dates to late 1988, when Mr. Coia was the Regional Manager for New England and Eastern Canada, and Mr. Serpico was Assistant to the LIUNA General President. (IHO Op. 65). At that time, Mr. Coia began seeking support from members of LIUNA's General Executive Board to succeed his father, whose health was failing, as General Secretary-Treasurer of LIUNA. (1d.). Acting at the direction of LIUNA's then-General President Angelo Fosco, Mr. Coia traveled to Chicago to meet with Mr. Serpico. (1d.).
The IHO gave the following description of what happened when Mr. Coia reached Chicago:
Matter of Coia
9
In 1992, then-General President Fosco, whose health was in decline, "began to 'casually' discuss retiring as General President." (IHO Op. 67). Both Mr. Coia and Carl Booker, then an International Vice President and Assistant to the General President, worked to dissuade General President Fosco from endorsing Mr. Serpico as his successor. (1d.). In the end, Mr. Coia prevailed upon Mr. Fosco to remain in office, on the understanding that Mr. Coia would assume the responsibilities and duties of the General Presidency himself. (Id. at 68). Mr. Fosco's health worsened during 1992, and late in the year, Mr. Coia judged it clear that a permanent successor for Mr. Fosco would soon be needed. (1d.). He began soliciting support from the members of the GEB to succeed Mr. Fosco as General President. (1d.).
Mr. Fosco died in February 1993 while the other members of the General Executive Board were meeting in Florida. (IHO Op. 68). At Mr. Coia's request, Mr. Booker consulted with Mr. Fosco's widow about the timing of the succession election for tile General Presidency. Mrs. Fosco said that she would prefer the election to be held immediately, rather than after the funeral, to minimize tile potential disruption of Mr. Fosco's wake by Union campaigning. (1d.). Mr. Coia, pursuant to Article VI, Section 5 of the LIUNA International Constitution, set the election for General President for the following morning. (Id. at 68-69).'
Mr. Coia and Mr. Serpico spoke shortly after Mr. Fosco's death. In this conversation, Mr. Serpico conceded that Mr. Coia had the necessary votes to succeed Mr. Fosco as General President of LIUNA. (IHO Op. 69). Mr. Serpico asked whether Mr. Coia would endorse him for the position of General Secretary-Treasurer. (1d.). Mr. Coia refused, and indeed, told Mr. Serpico "that he wanted him off the General Executive Board entirely." (1d.).
The morning of the day of the election, Mr. Coia met again with Mr. Serpico at Mr. Serpico's request. At this meeting,
____________________________________________
8 At the time of these
events, the Union's General Executive Board selected the General President. The
evidence before the IHO showed that
10
Matter of Coia
- Serpico again asked
Coia for a job with the International Union. R. Ex. 387 at 1114-15. He stated
that lie wanted to build up his pension since lie would be retiring in two
years when lie turned 65. _Td. at 1114. Coia told him that lie would
think about it. _Td. at 1115.
(IHO Op. 69). Mr. Coia was elected General President of LIUNA later that day. (1d.).
Mr. Coia and Mr. Serpico spoke again a few days later at Mr. Fosco's wake in Chicago. At that time, Mr. Coia told Mr. Serpico that lie had decided to appoint Mr. Serpico to the position of Chairman of the GEB Hearings Panel. (IHO Op. 70). As Chairman, Mr. Serpico would earn essentially the same salary as a LIUNA Regional Manager, a position the IHO found to be of comparable rank within the Union. (Id. at 71). The IHO noted:
(IHO Op. 70). During Mr. Fosco's wake, Mr. Coia told Mr. Booker "that lie had Just gotten rid of Serpico."' (1d.) (citation omitted).
3. Subsequent Efforts to Remove Mr. Serpico from LIUNA
The record reflects a consistent awareness and concern on Mr. Coia's part with Mr. Serpico's reputed connections with organized crime. The confrontation with Mr. Solano in the Chicago airport could hardly have failed to raise a red flag. (See IHO Tr. 5165). Mr. Serpico had also testified before the President's Commission on Organized Crime ("PCOC") and, according to the ("PCOC") Report, had candidly "admitted that lie is a friend or a personal acquaintance of virtually every important organized crime leader in Chicago." PRESIDENT~S COMM'N ON ORGANIZED CRIME, THE EDGE: ORGANIZED CRIME, BUSINESS AND LABOR UNIONS 147 (1986). When Mr. Fosco first began to discuss stepping down as LIUNA General President and suggested that Mr. Serpico would succeed him, Mr. Coia confronted Mr. Fosco and "'yelled' at him, stating
'[Y]011 know the problems that this union has had in the past ... how can you allow, even think of bringing [in] John Serpico and replacing you in this position?'" (IHO Op. 67). The IHO recounted another disturbing encounter between Mr. Coia and Mr. Serpico in 1993:Matter of Coia
11
Serpico and John Matassa ("Matassa"), a made member of the Chicago LCN and, at that time, a high ranking LIUNA official in Chicago, approached [Mr. Coia] at his father's funeral in March of 1993 in Rhode Island. Matassa told him that, "lie didn't like and the boys here [referring to 'the boys' in Chicago] did not like what [Coia] did by stealing and taking the Presidency from Chicago." R. Ex. 387 at 1122.
The adoption of the Union's ethical and disciplinary reforms in 1995 conferred new emergency powers on the General President of LIUNA to move summarily against organized crime influence within the Union. Mr. Serpico and Samuel Caivano, then also a Vice President, refused to sign the new Ethics and Disciplinary Procedure when it was adopted by the GEB.9 "On the same day the EDP was adopted, Coia suspended Serpico and Caivano pursuant to the new emergency powers granted him by the EDP." (IHO Op. 74). The GEB Attorney thereafter brought disciplinary charges accusing Mr. Serpico of being an associate of organized crime. (1d.). "Coia testified at Serpico's disciplinary hearing as the GEB Attorney's key witness" against Mr. Serpico. (_Td.). The IHO found that:
C. Charges and Proceedings Before the _TH0
The GEB Attorney brought sixteen charges against Mr. Coia involving various types of alleged misconduct. As mentioned previously, many of these charges are no longer at issue in this appeal, and the Appellate Officer deems it unnecessary to recount them in detail.
T he IHO held a thorough hearing over 22 days in the spring and summer of 1998, compiling a record that included over 5500 transcript pages of testimony and over 500 exhibits. (IHO Op. 1).
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9 Mr. Serpico and Mr. Caivano later
brought ail unsuccessful lawsuit challenging the legality of the Ethics and
Disciplinary Procedure. See Serpico v. LIUNA, 97 F.3d 995 (7th Cir. 1996).
Matter of Coia
The IHO also received post-hearing briefing from the parties during the fall of 1998. (1d.).
The IHO issued a decision on March 8, 1999, ruling in Mr. Coia's favor on fifteen of the charges the GEB Attorney had brought. With respect to the charges arising out of the Union's investigation of Mr. Fino's allegations, the IHO found that Mr. Coia, as the then General Secretary-Treasurer, "only had the authority and responsibility to approve [then-General President] Fosco's direction and supervision of the General Counsel," under whose auspices the Fino investigations occurred. (IHO Op. 60). The IHO ruled that "Coia cannot be faulted for failing to monitor or direct an investigation of Fino and his allegations because lie was not constitutionally required to do so." (Id. at 61). The investigation conducted by LIUNA's General Counsel, the IHO concluded, contradicted the GEB Attorney's contention that Mr. Coia had not fulfilled his fiduciary obligation to determine the truth or falsity of Mr. Fino's allegations. (Id. at 62). The IHO also concluded that Mr. Coia had not interfered with the Union's investigations and had no obligation to do more than lie did to advance the investigations. (Id. at 62-63). Based on these conclusions, the IHO ruled in Mr. Coia's favor on Charges 7-9.
With respect to the charges arising out of Mr. Coia's appointment of Mr. Serpico to chair the GEB Hearings Panel, the IHO found that Mr. Coia could not, before the adoption of the Union's ethical reforms, legally have forced Mr. Serpico, who was an elected officer and a member of the GEB, out of LIUNA. (IHO Op. 76). Additionally, given Mr. Serpico's position and political influence both inside and outside the Union, the IHO found that "[[ Coia to attempt to take on Serpico without recourse to disciplinary procedures such as those now provided for in the EDP would have resulted in certain failure." (Id. at 77). The GEB Attorney's settlement of the disciplinary charges against Mr. Serpico, which included a monetary payment to Mr. Serpico and which allowed him to remain in LIUNA, only underscored that "even with the EDP, removing Serpico was not an easy task." (Id. at 75, 77). The IHO concluded that "Coia's appointment of Serpico to the post of Chairman of the Hearings Panel was not intended to permit organized crime influence over LIUNA, and Serpico's appointment did not result in organized crime influence over LIUNA but was intended to facilitate Serpico's removal from LIUNA." (1d.). The IHO characterized Mr. Coia's dealings with Mr. Serpico as "adversarial" and as "necessitated by Serpico's position in LIUNA[.]" (Id. at 78). Based on these conclusions, the IHO ruled in Mr. Coia's favor on Charges 10-13.10
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l0 The IHO ruled against Mr. Coia oil Charge
14, which found that Mr. Coia had engaged in a financial transaction that
created a potential conflict of interest and appearance of impropriety. (IHO Op.
101-02). For this disciplinary violation,
Matter of Coia
13
D. Proceedings Before the Appellate OfficerThe GEB Attorney appealed to the Appellate Officer those portions of the IHO's opinion involving Mr. Fino's allegations and Mr. Serpico's appointment to the GEB Hearing Panel. The Appellate Officer set the case for expedited review and established an agreed briefing schedule. Matter of Coia, 1999 A.0. - (99-004-IHO, Mar. 26, 1999).11 The Appellate Officer heard argument in Washington, D.C. on July 8, 1999. Counsel for Mr. Coia, who attended the hearing, and for the GEB Attorney both appeared and presented argument.
II.
Discussion
The legal standards applicable to the Appellate Officer's resolution of the issues presented in this appeal are, by this point in the development of the Union's internal disciplinary apparatus, well understood.
First, the Appellate Officer reemphasizes the sharply limited scope of review applicable to factual determinations tendered by the IHO.
The IHO is the Union's fact-finder. His mission is "to weigh conflicting evidence and decide which evidence is more likely correct." [Matter of Gutierrez, 1997 A.0. 139, 161 (97-015-IHO).] In discharging that function, lie is free to believe one side's witnesses over another, or to discount one side's testimony in the light of other evidence developed during the proceeding. See id.; see also Matter of Fresina, et al., 1998 A.0. 115, 137 (98-019-IHO) (citing Matter of Guinn, 1997 A.0. 109, 124-25 (97-005-IHO); Matter of Garcia, 1996 A.0. 105, 128 (96-010-IHO)); Francella v. Fresina, 1997 A.0. 59, 64, recons. denied, 1997 A.0. 105 (97-006-IHO); cf. Gruchacz v. Nowicki, 1997 A.0. 129, 132 (97-011-TB) ("[i]t is not a violation of Mr. Nowicki's rights for the Trial Board to conclude that Mr. Gruchacz's witnesses, not Mr. Nowicki's, gave more credible testimony"). The IHO has broad power to admit or exclude evidence and to decide which items_________________________
the IHO fined Mr. Coia $100,000, payable
over a period of two years. (Id. at 107). Mr. Coia expressly has not appealed
the IHO's decision oil this charge (Respondent's ("Resp.") Br. 3-4 11.2). The
issue is, accordingly, not before the Appellate Officer, and the IHO's decision
on this charge remains unaffected by this decision.
11 The Appellate Officer also issued an interim order regarding access to the proceedings and case record by non-parties, given the extent of interest in the case both within and without LIUNA. Matter of Coia, 1999 A.0. - (99-004-1110, May 24, 1999).
14Matter of Coia
- of proof are most
persuasive. The IHO may reject any or all of a party's evidence, and generally
may even do so without specific explanation. In such instances, the Appellate
Officer will "presume that the [IHO] considers all the evidence, and relies on
so much of it as supports the finding and rejects what does not support the
finding, unless the [IHO] states otherwise." Fresina, 1998 A.0. at 140
(quoting Western Pacific Fisheries, Inc. v. SS President Grant, 730
F.2d 1280, 1285 (9th Cir. 1984)).
In discharging the comparatively limited functions assigned to him, "[t]he Appellate Officer does not sit to re-try facts found by the IHO or to inquire whether, presented with the same record, the Appellate Officer would have rendered the same findings." Fresina, 1998 A.0. at 138. "The mere presence of conflicting testimony is insufficient to command reversal of the IHO's decision." Gutierrez, 1997 A.0. at 161. Rather, the IHO's factual determinations will be upheld in every case as long as they are "supported by 'substantial evidence,' that is, such relevant evidence as reasonable minds might accept as adequate to support a conclusion." Id. (quoting Marray v. Laborers' Union Local 324, 55 F.3d 1445, 1452 (9th Cir. 1995)).
Claro v. Marques, 1998 A.0. 203, 204-05 (98-023-IHO). The burden rests on a party challenging the IHO's factual conclusion to demonstrate that it is unsupported by substantial evidence. Matter of Falzonc, 1999 A.0. -, slip op. 6 (98-024-IHO, June 3, 1999); Fresina, 1998 A.0. at 139. Determinations involving the credibility of witnesses lie solely within the IHO's province. Fresina, 1998 A.0. at 137. As the GEB Attorney takes pains to emphasize, however, factual "[f]indings that are unconnected to the record, conclusory, or 'skeletal' warrant heightened skepticism on review," as do "findings resting on an obvious misapprehension of the record." Bifulco, 1998 A.0. at 306 (citations omitted). Furthermore, "factual determinations that rest on, or were induced by, erroneous applications of the law receive diminished deference on appeal." _Td. at 306-07 (citations omitted) -
The Appellate Officer reviews de novo the IHO's interpretations of law, including the applicable provisions of the LIUNA Constitutions, EPC, and Ethics and Disciplinary Procedure ("EDP"). Falzonc, 1999 A.0. at -, slip op. 7. Additionally, the IHO's "application of the facts to draw legal inferences or conclusions is subject to de novo review." Bifulco, 1998 A.0. at 307 (citation omitted).
Matter of Coia
15
A. The Union's Investigation of Mr. Fino's AllegationsThe Appellate Officer turns first to an assessment of the IHO's ruling regarding Mr. Coia's response to Mr. Fino's allegations of LCN influence within LIUNA. On appeal, the sole issue presented is whether the IHO evaluated Mr. Coia's conduct under the proper legal standard. The GEB Attorney states in its brief that "[t]he IHO's findings regarding Coia's conduct in response to Fino's allegations were limited and essentially are not in dispute[.]" (GEB Br. 45). Notwithstanding the use of the lawyerly qualifier "essentially," which carries the suggestion that there could, in fact, be factual disputes, the GEB Attorney has not directed the Appellate Officer's attention to a single material factual finding the IHO made that may be unsupported by substantial evidence. The IHO's factual findings truly are undisputed; the sole question is whether, as counsel for the GEB Attorney suggested at oral argument, the Appellate Officer may reverse the IHO's legal conclusions on the basis of the IHO's own determinations of fact. (AO Tr. 11).
The GEB Attorney's argument is that all LIUNA officials have a duty to investigate allegations of corruption within the Union; that Mr. Coia's actions in response to Mr. Fino's allegations were insufficient to discharge this duty; and that discipline must follow. Thus, the questions presented on this appeal involve both the existence and scope of the duty to investigate (a legal question), and the question whether Mr. Coia's conduct satisfied whatever duty existed (a question involving the application of law to the undisputed facts as found by the IHO).
The GEB Attorney relies principally (although not exclusively) on two authorities to establish the existence, and delimit the scope, of a Union officer's duty to investigate allegations of corruption. The authorities on which the GEB Attorney chiefly relies include the Appellate Officer's decision in Matter of Fresina, et al., 1998 A.0. 115 (98-019-IHO)," and a federal case on which the Appellate Officer relied in Fresina, United States v. IBT (Sansone), 792 F. Supp.. 1346 (S.D.N.Y.), aff'd, 981 F.2d 1362 (2d Cit. 1992) .13 (GEB Br. 50-55).
___________________________
12 The Appellate Officer's decision in the
Fresina appeal resulted in a remand of the case to the IHO for further
proceedings. The IHO's penalty decision oil the remand was subsequently
affirmed, Matter of Doicimascolo, et al., 1998 A.0. 213
(98-019-1110).
13 The GEB Attorney devotes lesser attention to a number of other authorities, including the Appellate Officer's decision in Bifulco, and several decisions of the federal courts, including United States v. 1BT (Raimondi and Bertino), 829 F. Supp. 608 (S.D.N.Y. 1993); United States v. 1BT (Coli), 803 F. Supp. 748 (S.D.N.Y. 1992); United States v. 1BT (Crapanzano and Lanza), 803 F. Supp. 740 (S.D.N.Y. 1992); United States v. District Council of N. Y. and Vicinity of the United Brotherhood of Carpenters & Joiners, 778 F. Supp. 738 (S.D.N.Y. 1991); United States v. IBT, 708 F. Supp. 1388 (S.D.N.Y. 1989); and United
16Matter of Coia
The Appellate Officer notes that most of the authorities on which the GEB Attorney relies to establish the applicable standards of conduct were decided after Mr. Coia's actions, in 1989-1991, that are the basis for the charges. The LIUNA Ethical Practices Code and Ethics and Disciplinary Procedure, by their terms, apply to an accused's conduct even if it occurred before the enactment of the EPC and EDP. EDP ~ 3; Matter of Crincoli, 1999 A.0. -, slip op. 8-9 (98-018-IHO, May 6, 1999). Nevertheless, the degree of notice that accused individuals receive regarding the permissibility or impermissibility of their conduct plainly is relevant to the fairness and legality of proceedings seeking to impose discipline on those individuals. See 29 U.S.C. ~ 411(a)(5); see also LIUNA Uniform Local Union Constitution Art. III, ~ 2(h) (protecting each member's rights to "proper notice" in disciplinary proceedings). To the extent that the GEB Attorney's subsequently decided authorities illuminate the information available to Mr. Coia at the time lie acted regarding the extent of his duty, they are particularly relevant and helpful; to the extent that they fail to do so, the reverse is true.
Accordingly, it is pertinent to assess each of the GEB Attorney's principal authorities' contribution to an understanding of the relevant legal standard. To begin with, the Appellate Officer's decision in Fresina discussed in some detail each LIUNA officer's obligation to investigate allegations of corruption within the Union. The charged parties in Fresina were four union officers who served as trustees of a LIUNA-affiliated fund. The charges against them arose out of their conduct after the administrator of the fund, Salvatore Lanza, was charged with racketeering in 1995. Fresina, 1998 A.0. at 117-18. The trustees had actual or constructive knowledge of the charges, and were warned by high-ranking LIUNA officials against associating themselves or the fund with Mr. Lanza. _Td. at 118-19. In 1996, Mr. Lanza was found "guilty of multiple counts of racketeering, obstruction, and knowing association with members of La Cosa Nostra." Id. at 121 (citation omitted). Even after this finding, however, the trustees continued to employ Mr. Lanza as the administrator of the fund. Finally, when told by the LIUNA GEB Attorney that they must terminate Mr. Lanza, the trustees arranged for him to receive a lump-sum severance payment in excess of $200,000, and actively sought to conceal this payment from discovery by the Union. See id. at 123-30.
On appeal, the trustees defended their actions by arguing that they had acted as reasonable fiduciaries in preserving the fund's assets against the potential threat of even greater liability if a court
_______________
States v. Local 560, IBT, 581 F. Supp. 279 (D.N.J. 1984), aff'd, 780
F.2d 267 (3d Cir. 1985). The Appellate Officer has reviewed these authorities in
connection with this decision.
Matter of Coia
17
later found their termination of Mr. Lanza to be unlawful. Fresina, 1998 A.0. at 151. Rejecting this argument, the Appellate Officer concluded that the trustees' actions were
- entirely inconsistent with
their fiduciary duty resolutely to aid the Union in purging itself of the
abhorrent influence of organized crime. Respondents' fundamental error was in
treating as a friend or trusted business associate an individual whose
interests were utterly and irreconcilably inimical to those of the Union.
Fresina, 1998 A.0. at 152. The Appellate Officer then summarized the applicable case law "bear[ing] on the duties of a union official when dealling with an individual the official has reason to know may be connected with organized crime." Id. (footnote omitted). The common thread linking all these cases was their insistence that a union officer, confronted with evidence that a fellow union officer was corrupt, was obliged to take appropriate measures to determine the truth of the allegations. The Appellate Officer found a portion of the court's decision in United States v. IBT (Sansone), 792 F. Supp. 1346 (S.D.N.Y.), aff'd, 981 F.2d 1362 (2d Cir. 1992), particularly persuasive:
Half-hearted responses to any information suggesting mafia influence in the IBT constitute a breach of fiduciary duty. An impotent reaction to 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.
Fresina, 1998 A.0. at 115 (quoting Sansone, 792 F. Supp. at 1353). The Appellate Officer emphasized that an officer's response to allegations that a fellow Union official was corrupt were not adequate if they simply ensured the preservation of the status quo. Id. at 154, 155 (citing Sansone, 792 F. Supp. at 1354; United States v. IBT (Crapanzano and Lanza), 803 F. Supp. 740, 747 (S.D.N.Y. 1992)). Nor was it sufficient for an officer to "investigate" merely by asking the allegedly corrupt official whether the allegations of corruption were true. Id. at 152, 155 (citing Sansone, 792 F. Supp. at 1350; Crapanzano and Lanza, 803 F. Supp. at 747). In light of these authorities, the Appellate Officer specified the misconduct that was the basis for the imposition of discipline on the trustees:
- From the moment Respondents
learned of the charges against Mr. Lanza, they were required to distance
themselves from him and to minimize his involvement in any
Matter of Coia
- affairs of the fund.
Accepting his self-serving denials at face value, far from discharging
Respondents' fiduciary duty, only served to compound their breach. And
Respondents' conduct after the issuance of the MTDC Monitor's decision in the
fall of 1996 amounts to a sustained dereliction of their obligations,
breathtaking in its variance from the conduct that would have marked the
actions of a reasonable fiduciary. Knowing Mr. Lanza had been found guilty of
associating with organized crime, Respondents preserved him in his position of
trust, from which he could manipulate the PAC's finances .... allowed him to participate in meetings that
determined the actions and policies of the PAC .... [and] engaged in multiple payments to him of amounts totaling in
excess of $200,000 on the basis of a paper-thin theory of contractual
obligation.
The GEB Attorney also places particular reliance on one of the precedents the Appellate Officer discussed in Fresina, United States v. _IBT (Sansone), 792 F. Supp. 1346 (S.D.N.Y.), affd, 981 F.2d 1362 (2d Cir. 1992). Sansone involved a set of disciplinary charges brought under the International Brotherhood of Teamsters ("IBT') reform process, alleging that Robert Sansone, the President of IBT Local 682, responded inadequately to allegations that his own Local Vice President, Anthony Parrino, was an LCN member.
Sansone received a tremendous quantity of verifiable information over a nine-year period concerning Parrino's contacts with LCN. Published media reports beginning in 1980 had named several known or suspected LCN members with whom Parrino routinely associated. Sansone, 792 F. Supp. at 1349. One of the many published articles dealing with Parrino labeled him "as both a target of the FBI investigation and 'a high ranking member of the St. Louis organized crime family of the late Anthony Giordano."' Id. When one Trupiano, an LCN member, was prosecuted in the mid-1980s, Parrino's name was mentioned during the trial. The testimony of witnesses, recounted in contemporaneously published sources, identified Parrino as "'a longtime associate of organized crime figures"' and "as a consigliere, or advisor, to Giordano's crime family." _Td. (citation omitted). Sansone also received a copy of an allegation made to the FBI by former IBT General President Jackie Presser stating that "Sansone 'answered up' to Parrino, who had links to organized crime in St. Louis." Id. Parrino was later charged with being an LCN member, but Sansone apparently took no action, despite being advised by the Local's attorney to do so. Id. at 1351.
Matter of Coia
19
Sansone confronted Parrino on two occasions about the reports. Both times, Parrino denied the allegations. Sansone, 792 F. Supp. at 1350. Sansone also sought legal advice on his potential personal liability, and allegedly discussed the Parrino allegations with some members of the Local Union. Id. It also appeared that lie had "considered requesting Parrino's resignation or firing Parrino" on one occasion. Id.
The IBT Independent Administrator found, and reviewing courts agreed, that Sansone had "'deliberately ignor[ed] the evidence and fail[ed] to investigate the serious and persistent allegations that Parrino was an LCN member.'" Sansone, 792 F. Supp. at 1351 (citation omitted). The reviewing judge stressed that every union officer stands in a fiduciary relationship to the membership; that this includes an obligation to protect the members' interests in a corruption-free union, id. at 1353; and continued that:
Id. at 1354. This was so, the court explained, because all of Sansone's actions shared a "guaranteed inability to verify or refute the allegations." Id. Because "Sansone's conduct ... did not bring him closer to the truth and ensured that the status quo remained intact," id., it could not discharge the duty incumbent on him as a union officer. The court recounted a litany of alternative responses offered by the IBT Independent Administrator, who suggested that Sansone
Matter of Coia
- ing information about
the allegations. Sansone instead opted to remain passive.
Sansone, 792 F. Supp. at 1354 (citation and internal quotations omitted) -
A few observations about the precedents the GEB Attorney cites are in order. First, the decision in Sansone, as the quotation above makes clear, does not purport to dictate any specific response by a Union officer who receives information that a fellow officer may be linked to organized crime. The court is careful to recognize that "appropriate responses will vary given the unique facts of different situations[.]" Sansone, 792 F. Supp. at 1353. The court also noted that, although Sansone had a duty to investigate, lie had no duty to employ any "one set of investigative techniques," but rather, "Sansone enjoyed a fair amount of discretion in choosing appropriate methods." _Td. at 1355.
Second, none of the pertinent authorities, including Fresina and Sansone, stands for the proposition that a Union officer's duty to investigate allegations of corruption is nondelegable-that is, that the officer must personally investigate and may not retain or direct others to do so. Indeed, Sansone expressly recognizes that an officer may choose to respond to reports of a fellow officer's possible corruption by, for example, "hir[ing] a private investigator ... or ask[ing] his advisors to investigate and develop the facts of the case for his review." Sansone, 792 F. Supp. at 1354. Thus, although the GEB Attorney at times appears to argue that Mr. Coia should have conducted his own individual inquiry into Mr. Fino's allegations (GEB Br. 57-58), the case law supports the proposition that Mr. Coia could have discharged his duty to investigate Mr. Fino's allegations by, for example, relying on the LIUNA General Counsel to investigate and report back to him. Such a technique plainly would be permissible under Sansone.
Indeed, it is not difficult to see that a nondelegable duty to investigate could have the perverse consequence of hindering, rather than advancing, the Union's interest in full discovery of the facts. Where, as here, allegations of corruption are publicly reported and made known to the Union's entire Executive Board, it would verge on the farcical to require each officer immediately to launch his or her own personal inquisition. Witnesses possessed of the relevant facts would soon tire of the repeated and overlapping requests for information that would inevitably follow from having a dozen or more simultaneous investigations of the same subject matter operating on parallel tracks, and might respond by refusing to cooperate altogether, to the detriment of the investigations' truth-seeking objective. And imposing a personal duty to investigate on a Union officer not trained in
Matter of Coia
21
such activity and already overburdened with significant official responsibilities could readily amount to a prescription for neglect. Instead, a permissible course for a Union sincerely desiring to uncover the truth includes the one taken in this case-to retain all experienced professional, skilled in such activity, and delegate to him or her the full task of uncovering the truth and reporting back to the Executive Board.
Third, although the GEB Attorney's rhetoric attacks Mr. Traini's investigation into Mr. Fino's credibility (GEB Br. 39-42), which proceeded separately from Mr. Elbaor's investigation of the substance of his allegations, it is easy to see that no investigation of alleged corruption would be complete without consideration of the credibility of the source of the allegations. An allegation stemming from the personal knowledge of a credible, trustworthy source is tantamount to a call to action-as indeed were Mr. Fino's allegations concerning his first-hand knowledge of LCN influence within his own Local Union 210. See Bifulco, 1998 A.0. at 289 (recounting IHO's summary of evidence corroborating Mr. Fino's account and tending to buttress his credibility). On the other hand, parties may make vexatious and frivolous allegations solely for political gain or to harass or coerce Union officials. See Matter of Plennevaux, 1998 A.0. 197, 199-200 (98-004-IHO) (party drained the Union's resources by repeatedly making baseless allegations against the Union, requiring the Union to defend itself in court and distracting Union official from performing his constitutional duties). Indeed, the record of decisions the Appellate Officer has rendered since 1995 is replete with examples of allegations that appear to have been motivated less by any actual wrong suffered by the charging party than by personal friction or a political disagreement. See, e.g., Torres, et al. v. Rascon, 1997 A.0. 25, 26 (97-007-DC) (persons not affected by local union officer's decision nevertheless brought charges against the officer and asked that he be ejected from office). The Union certainly is not obliged to ignore the source of an allegation when considering an appropriate response. Rather, it is entirely reasonable and proper to explore whether a person making an allegation has some motive to be untruthful, and such conduct does not contravene, but rather advances, the Union's need to ascertain the truth or falsity of the allegation. 14
_______________________
14 0f course, a determination oil
credibility must be ail informed one; it is not within an officer's prerogative
simply to choose, without evidence, not to believe ail allegation of corruption
within tile Union. See Bifulco, 1998 A.0. at 311.
The GEB Attorney also attacks (GEB Br. 42-44) what it characterizes as tile Union's sharing of tile results of Mr. Traini's investigation with outside lawyers. Given that the investigation itself was proper, the Appellate Officer sees no constitutional prohibition oil tile Union's sharing with others tile results of its inquiry, assuming for the sake of argument (in the absence of a finding by the IHO)
22Matter of Coia
With these principles in mind, the Appellate Officer turns to an evaluation of Mr. Coia's response to the allegations made by Mr. Fino.
The information the Union received from third-hand accounts of Mr. Fino's allegations differed both in quantity and in detail from the information that was available to the union officials in the Fresina and Sansone disputes. In Fresina, the officers knew at the time they ordered a six-figure severance payment to Mr. Lanza that he had been found guilty of racketeering and associating with LCN, and indeed, the officers themselves had been expressly warned by the GEB Attorney against engaging in precisely the conduct for which they were charged. Nothing in the record in this case suggests that Mr. Coia, or any other Union official, had comparable information available to them. In Sansone, the charged party received a nearly continuous stream of reports from multiple sources over a nine-year period identifying Parrino, by name, as an LCN member. Indeed, the information available to Sansone included the fact that Parrino had been charged with being an LCN member and forced to resign from the IBT. Again, the record in this case contains nothing comparable to the information available to the charged party in Sansone at the time he failed to take sufficient investigative action.
The initial information available to Mr. Coia and the other Union officials that first gave rise to a duty to investigate amounted to a small number of local newspaper articles published in February 1989, which purported to recount allegations Mr. Fino had made, not to the newspaper, but to the FBI. (IHO Op. 52). At least as excerpted in the IHO's decision, these accounts appear to have been far less specific than the information available to the parties in Fresina and Sansone, and included statements that could not conceivably have been within Mr. Fino's personal knowledge. Unlike the allegations at issue in both Fresina and Sansone, the newspaper articles did not appear to make verifiable allegations of any individual union officer being associated with LCN, with the exception of Mr. Fino himself.
The adequacy of Mr. Coia's response must be considered in the light of the information brought to light by the newspaper reports described by the IHO. See Sansone, 792 F. Supp. at 1353 ("unique facts of different situations" will demand varying responses by an officer). It would be improper to judge the sufficiency of the Union's investigative response based on, for example, the far more extensive statements recounted in Mr. Fino's FBI 302s, because those reports themselves became available only through the Union's own diligence in conducting the investigation. That is to say, the reasonableness of an officer's decision must be judged according to the information
_______________that that is what occurred.
Matter of Coia
23
the officer possessed at the time the decision was made, not in light of information the officer's investigation later uncovered.
Despite the generality of the allegations reported in the newspaper accounts, however, the Union, no doubt in part due to a height cited sensitivity following the Joe Hauser lawsuit in which Mr. Coia was exonerated, immediately launched not one, but two investigations into the allegations. The more important of these for present purposes was the investigation Mr. Elbaor conducted. Mr. Elbaor, who was eminently qualified, relied on accepted investigative techniques (including the much fuller factual development allowed by Mr. Elbaor's obtaining Mr. Fino's 302s) and in what amounted to a reasonable application of the scientific method, singled out for scrutiny those allegations that could be objectively verified or refuted. He kept Mr. Coia and the Union's other officials apprised of the investigation's progress15 and delivered a lengthy final report. This investigation was reasonable.
Conceding before the Appellate Officer that the Union conducted a legal audit of Mr. Fino's allegations (GEB Br. 60-62), the GEB Attorney nevertheless suggests that Mr. Coia played too small a role in the audit to escape discipline. The GEB Attorney complains, in essence, that Mr. Coia's role in Mr. Elbaor's investigation was too attenuated. The GEB Attorney acknowledges the IHO's finding (IHO Op. 58) that "neither Coia nor anyone else ever attempted to impede or improperly influence Elbaor's work." While attacking this finding as "conclusory," the GEB Attorney points to no contrary evidence in the record. (GEB Br. 59). Instead, it argues that the IHO failed to find, owing to what the GEB Attorney believes would be a lack of evidence, "that Coia attempted to assist, direct, monitor, or even acquire information about Elbaor's work." (GEB Br. 59).
This argument is essentially unmoored from the precedents oil which the GEB Attorney relies, none of which involved an ethical obligation "to assist, direct, monitor, or acquire information about" an investigation into allegations of corruption. To the extent that the GEB Attorney is suggesting that Mr. Coia had some obligation to shadow the Union's investigation with one of his own, the sugges-
_________________
15 The IHO found that Mr. Elbaor copied Mr. Coia
and other Union officials oil various memoranda documenting tile course of his
investigation. (IHO Op. 55 n.13). Although the GEB Attorney disputes this
finding (GEB Br. 58 n.23), the record supports tile IHO's conclusion. Indeed,
tile GEB Attorney's own exhibits make tile IHO's point. Tile GEB Attorney's
Exhibit 73, attached at Tab 8 to tile Appendix to tile GEB Attorney's principal
brief, is a lengthy memorandum from Mr. Elbaor discussing tile allegations made
in Mr. Fino's FBI 302s, and includes at tile last page, tile notation "cc:
Angelo Fosco, Arthur A. Coia." The GEB Attorney's Exhibit 69, attached at Tab 9,
is a cover memorandum reflecting that copies of tile Fino 302s and other reports
were delivered from Mr. Elbaor to Mr. Coia. Exhibit R173, attached as Tab 17 of
tile GEB Attorney's Appendix, is Mr. Elbaor's audit report, which is addressed
to all the general officers of LIUNA.
Matter of Coia
tion is contrary to Sansone and the precedents previously addressed. Instead, having established that Union officers may, and should, delegate to independent, disinterested professionals the task of investigating allegations of misconduct within the Union, it is not difficult to conclude that the benefits of such an independent investigation may readily be lost if the officers attempt to involve themselves officiously in the investigators' day-to-day pursuit of the matter.
Indeed, an officer's direct involvement in the investigation could easily be perceived as an improper attempt to influence the investigators' direction or conclusions, leading to possible jeopardy for the officer and ultimately hampering, rather than advancing, the Union's overarching interest in seeing the investigation carried out effectively. An officer who pressures the investigator to pursue a particular issue or a particular individual may call his or her own motives into question, causing the investigator to discount what could otherwise be a promising avenue of inquiry. Conversely, an officer who informs the investigator that a particular path is not worth pursuing, or who otherwise discourages the investigator from exploring particular subjects or individuals, may leave himself open to an allegation of obstruction, even if the advice was sincerely meant as an effort to prevent Union resources from going to waste in the pursuit of frivolous allegations. 16
Rather than Mr. Coia placing himself in the middle of the investigation, it was a permissible course under the circumstances instead to allow the impartial investigators to do the job for which they had been hired. To the extent that an investigator needs information from an officer, that information must, of course, be forthcoming. But this is a far different principle than the one for which the GEB Attorney here contends: that Mr. Coia's failure to direct Mr. Elbaor's investigation was so wrongful as not only to support, but to compel, the imposition of discipline. Neither the Appellate Officer, nor any court, has ever so ruled, and for the practical reasons stated above, the Appellate Officer believes such a rule would be ill-conceived.
For these reasons, the Appellate Officer cannot conclude that the IHO erred in holding that Mr. Coia's conduct in the Union's investigation of Mr. Fino's allegations was not a violation of his duty to investigate reports of corruption within the Union. Accordingly, the IHO's decision with respect to Charges 7-9 is affirmed.
_________________________
16 To
take a related example, counsel for Mr. Coia posited
that Mr. Coia himself possessed personal knowledge that some of Mr. Fino's
allegations regarding Mr. Coia's father were inaccurate. Despite this knowledge,
Mr. Coia never said to Mr. Elbaor, "don't waste your time exploring those
allegations about my father, I think you should just ignore those," which
plainly could have invited Mi.. Elbaor to draw adverse inferences about Mr.
Coia's motives.
Matter of Coia
25
B. Mr. Coia's Dealings With Mr. SerpicoThe Appellate Officer next turns to Charges 10, 11, and 13, which accuse Mr. Coia of furthering the influence of LCN within LIUNA by appointing John Serpico as Chairman of the GEB Hearings Panel.
The Appellate Officer need not recount in great detail the standards applicable to an evaluation of the challenged conduct. Both sides appear to agree that the same authorities previously discussed, represented principally by the Appellate Officer's decision in Fresina and the court's ruling in Sansone, establish the relevant standards. The question on appeal, then, is whether Mr. Coia's dealings with Mr. Serpico satisfied his ethical obligation to combat corruption within LIUNA.
The IHO made detailed and specific findings that Mr. Coia's actions were intended to remove Mr. Serpico from the Union, not to perpetuate or expand his influence, and that this ultimate result was, indeed, achieved. Absent some colorable basis for suggesting that these findings are unsupported by substantial evidence, the GEB Attorney is left with a record strongly contradicting its theory of the case. Furthermore, even with the aid of hindsight, it is difficult to perceive an alternative course of action reasonably open to Mr. Coia at the time that would have been more effective in diminishing Mr. Serpico's influence than the actions Mr. Coia actually took. Where the measures actually undertaken by Mr. Coia were at least as effective in achieving the GEB Attorney's stated goals as its own proposed alternative, there would appear to be especially little justification to conclude that Mr. Coia's failure to do what the GEB Attorney now believes lie should have done was not only wrong, but necessarily disciplinable.
The Appellate Officer's decision in Fresina and the federal court's decision in Sansone, among the pertinent authorities, stand for the undisputed proposition that Union officers must combat corruption within the Union and must take appropriate measures to ensure that corrupt individuals cannot exert influence within the organization. (GEB Br. 14-19). To state this standard is only to begin the inquiry, however, not to end it. Here, the IHO found that Mr. Coia was working to diminish Mr. Serpico's influence within LIUNA-and, indeed, ultimately to "facilitate [Mr. Serpico's] removal from the Union." (IHO Op. 71). In other words, the IHO found Mr. Coia's actions furthered, rather than hampered, the objective of purging tile abhorrent influence of LCN from the Union.
The GEB Attorney's arguments on appeal take scant notice of the IHO's findings. The GEB Attorney criticizes the IHO for "focusing solely on th[e] question" of Mr. Serpico's salary and whether it 'was commensurate with that of other high-level International of-
26Matter of Coia
ficials." (GEB Br. 21). But the IHO was not so single-minded as the GEB Attorney suggests. Rather, the IHO recounted a great deal of evidence concerning Mr. Coia's persistent efforts to marginalize, and finally to remove, Mr. Serpico and diminish his influence within LIUNA. Even if the GEB Attorney were to point to contradictory evidence in the record, which it does not, that would not discharge its burden on appeal, for "[t]he mere presence of conflicting testimony is insufficient to command reversal of the IHO's decision." Matter of Gutierrez, 1997 A.0. 130, 161 (97-015-IHO).
The pertinent findings of the IHO, which the GEB Attorney does not allege to lack the support of substantial evidence, are entirely consistent with the view that Mr. Coia acted reasonably in his actions to diminish the influence of Mr. Serpico, a powerful and entrenched figure, within LIUNA. These include the IHO's findings that:
The difficulty for the GEB Attorney is that all these actions are harmonious with the duty of a Union officer to purge the taint of corruption from the Union. This is the relevant context surrounding the appointment of Mr. Serpico as Chairman of the GEB Hearings Panel.
The GEB Attorney focuses exclusively on Mr. Coia's appointment of Mr. Serpico to be Chairman of the GEB Hearings Panel, portraying this as proof that Mr. Coia allowed a person suspected of
Matter of Coia
27
LCN affiliation to exercise influence within LIUNA. The Appellate Officer is not free, however, to disregard the factual context of the appointment, which the IHO found to be part of Mr. Coia's broader effort to curtail, rather than expand, Mr. Serpico's influence. If the appointment of Mr. Serpico to a largely ceremonial poSt17 worked to hasten his departure from the Union-as the IHO concluded it did-then it furthered the Union's interest in combating corruption and satisfied Mr. Coia's ethical obligations.
The IHO's findings that Mr. Coia did, in fact, work to diminish Mr. Serpico's role and ultimately to force him out of LIUNA weigh strongly in favor of the IHO's decision. The other principal factor weighing against reversal of the IHO is the absence of an apparent alternative course of action Mr. Coia should have pursued that would have been more effective in reducing Mr. Serpico's influence within the Union.
The IHO found that, because Mr. Serpico was a duly elected International Vice President of LIUNA, Mr. Coia lacked the authority before the adoption of the Union's ethical reforms to remove Mr. Serpico from the GEB or expel him from the Union. (IHO Op. 70, 72). Instead, any charges Mr. Coia wished to bring against Mr. Serpico would have to have been filed at the Local Union level, in the Local Union of which Mr. Serpico was a member, by a member of that Local. (-Td. at 72). Given Mr. Serpico's influence within his Local Union, it is not difficult to imagine the fate that would have awaited an attempt to impose discipline on him through this mechanism. Furthermore, the IHO observed, it is far from clear that allegations of LCN association would even have given rise to a cognizable disciplinary offense under the terms of the Union Constitutions as they existed before the 1995 ethical reforms. (-Td. at 73-74).
The GEB Attorney contends that Mr. Coia had an alternative open to him under Article IX, Sections 6 and 7 of the LIUNA International Union Constitution." (AO Tr. 26; GEB Br. 24-25). Section
______________________
17 Although tile GEB Attorney sought to compare
Mr. Serpico's role to that of the Appellate Officer (Transcript of Appellate
Hearing (11AO R.") 111), the record does not bear this analogy out. Unlike the
Appellate Officer, the Chairman of tile GEB Hearings Panel did not actually
possess tile power to resolve with finality any dispute, but only made
recommendations to the GEB (which included Mr. Coia) for tile Board's approval
or rejection. (IHO Op. 70). Mr. Serpico did not in fact prepare tile
recommendations; that task fell to ail attorney in tile LIUNA General Counsel's
office who accompanied Mr. Serpico to the hearings. (Id. at 70-71). Tile
position carried responsibilities and a salary commensurate to those of a LIUNA
Regional Manager (id. at 71), a level distinctly below tile positions of
General President and General Secretary-Treasurer to which Mr. Serpico aspired.
18 The text of these provisions as they existed at tile time Mr. Coia became General President was attached at Tab 5 of tile Appendix to tile GEB Attorney's principal brief. Article IX, Section 6 provided:
28Matter of Coia
6 refers to the General President's power to investigate whether LIUNA's subordinate bodies, officers, or employees are violating the
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The General President shall have the authority and power to investigate the affairs of a subordinate body when, upon information or complaint or when, in his opinion, he finds it necessary to determine whether the affairs of a subordinate body or the activities of any of its officers or members are being conducted in violation of the Constitution.
Pursuant to said authority, lie shall have the power, cither personally or through a representative selected and designated by him, to investigate and inquire into the manner in which the affairs are administered by the subordinate bodies, their officers or members and to examine the books, records, papers, accounts, securities, purported agreements or understandings or any other documents in the custody of said subordinate bodies or any officer, official, employee or member thereof and require personal appearance of any officer, official, employee or member as he, in his judgment, may deem necessary to such investigation or inquiry.
In connection therewith, he
may employ the services of a Certified Public Accountant or other services as
lie may deem advisable or necessary. After such investigation or inquiry, the
General President shall take such action as lie may deem necessary or
appropriate, including the temporary suspension of an officer or employee
pending a hearing to be conducted within thirty (30) days before the General
Executive Board on charges filed by the General President. In pertinent part, Article IX, Section 7
(which is captioned "Trusteeship") provided:
When the General
President finds, in his opinion, that action by him is necessary for the
purpose of correcting corruption or financial malpractice, assuring the
performance of collective bargaining agreements or other duties of a
bargaining representative, restoring democratic procedures or otherwise
carrying out the legitimate objects of such subordinate body or the
International Union, or to protect the organization as an institution, he may
file charges against any officer or member with the General Secretary-
Treasurer for hearing before the General Executive Board, or appoint a
temporary trustee or, in his sole discretion, a supervisor to take control of
the affairs of such subordinate body; provided, however, that prior to the
appointment of such trustee or supervisor lie shall cause to be issued a
notice setting a time and place for hearing for the purpose of determining
whether such temporary trustee or supervisor shall be appointed, but provided
further, however, that where in the judgment of the General President ail
emergency situation exists within the subordinate body, a temporary trustee or
supervisor may be appointed prior to such hearing, but such hearing shall then
commence within 30 days and a decision made within 60 days after the
appointment of such temporary trustee or supervisor; and further provided in
all cases the subordinate body shall be advised of the reasons for the
proposed or actual appointment of a trustee or supervisor, and that adequate
notice of a hearing thereon at least 10 days prior to the date of the hearing
shall be given to the subordinate body involved.
Matter of Coia
29
Constitution, and after such investigation, to bring charges against an officer or employee before the GEB. Section 7 refers to the General President's power to impose a trusteeship or supervision arrangement over a subordinate body when necessary to combat corruption.
Both Sections 6 and 7 of Article IX appear to require certain factual predicates to be satisfied before the General President may exercise the powers conferred therein. The Appellate Officer finds it unnecessary to determine whether these predicates were met in this case, however, for the reason that these provisions had, at the time Mr. Coia acted, never been used for the purpose the GEB Attorney suggests they should have been, and were not commonly understood to reach as far as the GEB Attorney suggests. Rather, the GEB Attorney's view of Article IX, Sections 6 and 7 represents a novel interpretation that stands at variance from the way those provisions were understood at the time Mr. Coia became General President.
The GEB Attorney conceded that there was apparently no precedent at the time for using the cited sections to attack individuals suspected of affiliation with LCN. (AO Tr. 22). A number of witnesses, including the Union's General Counsel, testified, apparently without contradiction, that Article IX, Sections 6 and 7 had been understood respectively as the bases for the Union's auditing and trusteeship functions, not as a basis for discipline on individual officers for affiliating with LCN. (See Resp. Br. 27 29 & n. 9 (collecting authorities)) - The text of Section 6, for example, refers to the General President's power to inspect a subordinate body's "books, records, papers, accounts, securities, purported agreements or understandings or any other documents[.]" The interpretation the GEB Attorney advances is one that is not at all apparent from the constitutional text, and varies significantly from the understanding of the relevant provisions that existed at the pertinent time.
This is, of course, not to say that the interpretation the GEB Attorney advances is necessarily incorrect or would have faced certain rejection if challenged. In combating corruption, innovation is prized, and the use of established powers in creative ways can significantly advance the Union's central objective of purging itself of any taint of affiliation with LCN. The question for present purposes, though, is not whether the GEB Attorney's interpretation was arguably correct, but whether Mr. Coia's failure to adopt that interpretation was so egregious a violation as not only to support, but to require, the imposition of discipline.
Neither the Appellate Officer, nor any court, has previously held that an officer's failure to adopt a novel and strained interpretation of the Union constitution requires discipline. Although the path laid out by the GEB Attorney might, despite the consensus of contrary opinion, have in fact been open to Mr. Coia, his failure to perceive it
30Matter of Coia
and to blaze a new trail cannot plausibly be said to have represented such an egregious departure from the applicable standards of conduct as to require the imposition of discipline. The Appellate Officer does not believe that the course suggested by the GEB Attorney was so clearly superior to the path Mr. Coia took as to be constitutionally required.
The IHO found that Mr. Coia's actions were intended to, and did, have the effect of curtailing Mr. Serpico's influence within the Union. Because Mr. Coia's actions were reasonable and met the Union's objectives, they satisfied the applicable standard of conduct, and provided no basis for the imposition of discipline. Accordingly, the IHO's decision with respect to Charges 10, 11, and 13 is affirmed.
III.
Conclusion
For the reasons stated, the Appellate Officer affirms in all respects the portions of the IHO's decision that have been appealed to him.
- s/W. NEIL
EGGLESTON
W. NEIL EGGLESTON
- LIUNA
APPELLATE OFFICER
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